Changing Contexts and Shifting Roles of the Indian State: New Perspectives on Development Dynamics [1st ed.] 978-981-13-6890-5;978-981-13-6891-2

Table of contents :
Front Matter ....Pages i-xvii
Changing Contexts, Shifting Roles, and the Recasting of the Role of the Indian State: An Introduction (Anthony P. D’Costa, Achin Chakraborty)....Pages 1-21
Front Matter ....Pages 23-23
From Passive Beneficiary to ‘Rights Claimant’: What Difference Does It Make? (Achin Chakraborty)....Pages 25-38
Emerging Regimes of Market Citizenship: The Politics of Social Policy in Contemporary India (Priya Chacko)....Pages 39-55
An Examination of Indian State in the Post-planning Period (Anjan Chakrabarti, Soumik Sarkar)....Pages 57-79
Front Matter ....Pages 81-81
Including the Excluded: Inclusive Economic Growth in India After 2004 (Matthew McCartney)....Pages 83-104
Social Protection and the State in India: The Challenge of Extracting Accountability (Salim Lakha)....Pages 105-125
Compressed Capitalism and a Critical Reading of the State’s Employment Challenges (Anthony P. D’Costa)....Pages 127-153
Distinctively Dysfunctional: ‘State Capitalism 2.0’ and the Indian Power Sector (Elizabeth Chatterjee)....Pages 155-171
Front Matter ....Pages 173-173
Re-reading the ‘Auto-revolution’ in India with a Labour Lens: Shifting Roles and Positions of State, Industry and Workers (Babu P. Remesh)....Pages 175-189
Engaging Rural Indian Interventions: Constructing Local Governance Through Resource Access and Authority (Siddharth Sareen)....Pages 191-205
Penetrative or Embracive? Exploring State, Surveillance and Democracy in India (P. Arun)....Pages 207-230
Back Matter ....Pages 231-236

Citation preview

Dynamics of Asian Development

Anthony P. D’Costa Achin Chakraborty Editors

Changing Contexts and Shifting Roles of the Indian State New Perspectives on Development Dynamics

Dynamics of Asian Development Series Editor Anthony P. D’Costa, College of Business, The University of Alabama, Huntsville, AL, USA

Editorial Board Tony Addison, UNU-WIDER, Helsinki, Finland Amiya Bagchi, Institute of Development Studies Kolkata, Kolkata, India Amrita Chhachhi, Institute of Social Studies (ISS), Erasmus University Rotterdam, Rotterdam, The Netherlands Akira Goto, National Graduate Institute for Policy Studies (GRIPS), Tokyo, Japan Barbara Harriss-White, Oxford University, Oxford, UK Keun Lee, Department of Economics, Seoul National University, Seoul, Korea (Republic of) R. Nagaraj, Indira Gandhi Institute of Development Research, Mumbai, India Rene E. Ofreneo, Center for Labor Justice, University of Philippines, Quezon, Philippines Rajah Rasiah, University of Malaya, Kuala Lumpur, Malaysia Ma Rong, Peking University, Beijing, China Ashwani Saith, Institute of Social Studies (ISS), Erasmus University Rotterdam, Rotterdam, The Netherlands Gita Sen, Indian Institute of Management, Bangalore, India Andrew Walter, University of Melbourne, Melbourne, Australia Christine Wong, University of Melbourne, Melbourne, Australia

The series situates contemporary development processes and outcomes in Asia in a global context. State intervention as well as neoliberal policies have created unusual economic and social development opportunities. There are also serious setbacks for marginalized communities, workers, the environment, and social justice. The rise of China, India, and new dynamism of South Korea, Indonesia, and Vietnam in East and South East Asia have given a new meaning to Asian development dynamics. Japan’s energetic ties with India and Vietnam, Korea joining the OECD’s Development Assistance Committee, and China and India’s investments and foreign aid in Africa and Latin America are some of the new processes of development whose impact transcends the vast Asian region. Globalization compounds uneven development, affecting macroeconomic stability, internal and international migration, class and caste dynamics, gender relations, regional parity, education and health, agriculture and rural employment, informal sector, innovation possibilities, and equity. Thus the series views development studies as an unfinished agenda of economic, social, political, cultural interactions, and possible transformations in a fluid policy and global contexts. The editor, with the assistance of a distinguished group of development scholars from Asia and elsewhere specializing in a variety of disciplinary and thematic areas, welcomes proposals that critically assess the above-mentioned wide-ranging developing issues facing Asian societies. With Asia’s contemporary transformation, the series promotes the understanding of Asia’s influence on the prospects of development elsewhere. The editor encourages interdisciplinary, heterodox approaches within the social sciences, and comparative work with solid theoretically informed empirical research. Critical development policy debates in Asia and regional governance issues that have a bearing on development outcomes are also sought.

More information about this series at http://www.springer.com/series/13342

Anthony P. D’Costa Achin Chakraborty •

Editors

Changing Contexts and Shifting Roles of the Indian State New Perspectives on Development Dynamics

123

Editors Anthony P. D’Costa College of Business The University of Alabama Huntsville, AL, USA

Achin Chakraborty Director and Professor of Economics Institute of Development Studies Kolkata Kolkata, India

ISSN 2198-9923 ISSN 2198-9931 (electronic) Dynamics of Asian Development ISBN 978-981-13-6890-5 ISBN 978-981-13-6891-2 (eBook) https://doi.org/10.1007/978-981-13-6891-2 Library of Congress Control Number: 2019932823 © Springer Nature Singapore Pte Ltd. 2019 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Preface and Acknowledgements

This volume is based on a conference organized in Kolkata by the Australia India Institute, University of Melbourne, and the Institute of Development Studies Kolkata in December 2015. The title of the conference was Instruments of Intervention: Capitalist Development and the Remolding of the Indian State. The aim was to tackle three broad threads, without foreclosing others. They are the changing nature of the relationship between state and capital, the mediating role of society in influencing developmental outcomes, to analyze the seemingly contradictory roles of the state in undertaking major state-sponsored social programs, and opening up greater spaces for the market, and to examine the dynamic relationship between the state and the form of democracy under changing political regimes. These three threads are present in this volume. Of the sixteen papers presented in the conference, we have selected ten and added an elaborate introduction to set the terms of the debate. The chapters while theoretically informed are empirically grounded, thereby providing considerable evidence that abstract theorizing of the state often departs from their actual workings. This is inevitable when the state is disaggregated into various levels at which it operates, the multiple societal pressures to which it must respond, especially in a democratic context when political regimes change, the inability of the state to completely ignore the weakest members of the society, driven lately by the rights-based movements, and the capacity of the state in a highly heterogeneous society such as India’s and its fractious dominant classes. The volume is a novel precisely because it takes off from the rich theorizing of the state based on the effectiveness of the East Asian experiences to demonstrate that the workings of the Indian state rest on the parameters that are not found in the smaller East Asian states, partly due to the lack of embeddedness as theorized, but mostly due to a different vector of social and political variables. Consequently, readers of the volume will intellectually benefit from the new perspectives on the role of the state offered by this recasting of the Indian state in terms of the actual forms of intervention today. We elaborate on how the Indian state offers new perspectives as its role shifts and the contexts in which it operates change. This material with further elaborations and revisions has been included in a lengthy introduction to the volume. Without v

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Preface and Acknowledgements

giving away the story, we do want to emphasize that the Indian state is many things at same time. A neat and clean understanding of the Indian state, especially with respect to the conventional domains of “development,” is not possible since there are new areas such as digital technologies and securitization and financialization of development that have been also embraced by the state. Hence, even an instrumentalist view of the state is suspect because it is not clear exactly where the state is going to or what drives many of the development policies even if the wider context of development has within limits become a neoliberal one. In fact, some of the chapters on the workings of the state demonstrate that the Indian state is really not neoliberal. But this is not the place to debate this. Readers are expected to arrive at their own conclusions through this volume. This is the second volume on contemporary India that Anthony D’Costa initiated at the University of Melbourne. The first volume, also based on a conference in 2014, sponsored by the Faculty of Arts, the Australia India Institute at the University of Melbourne; the Institute of Development Studies Kolkata; and the Indian Institute of Management Calcutta, was co-edited by two editors and published in 2017 by Oxford University Press as The Land Question in India: State, Dispossession, and Capitalist Transition. As with any collaborative project, we are indebted to a number of institutions and individuals. First, we would like to acknowledge the financial support received from the Australia India Institute, University of Melbourne, and the Institute of Development Studies Kolkata (IDSK). Second, there were several individuals who helped out with the logistics of the conference. In Melbourne, the staff of the Australia India Institute did a marvelous job in organizing the travel of conference participants from both India and abroad to Kolkata. We thank the staff of IDSK, especially Sanchari Guha Samanta who managed a number of organizational aspects of the conference. Third, we would also like to thank not only our contributors but also those who presented their papers but could not be included for one reason or another. They are Aditya Nigam, Sushil Khanna, Tannen Neil Lincoln, and Niloshree Bhattacharya. Finally, we would like to thank Samir Kumar Das, Manabi Majumdar, Prasanta Ray, Ratan Khasnabis, Subhanil Chowdhury, and Rajesh Bhattacharya for chairing various sessions and the many attendees and discussants who participated in the conference, indicating that Kolkata still remains an intellectual hub of ideas that govern our everyday lives. Bandel, Hooghly, India Kolkata, India May 2018

Anthony P. D’Costa Achin Chakraborty

Contents

1

Changing Contexts, Shifting Roles, and the Recasting of the Role of the Indian State: An Introduction . . . . . . . . . . . . . . . . . . . . . . . . Anthony P. D’Costa and Achin Chakraborty

Part I 2

3

4

Theorizing the State’s Changing Role in a Changing Context

From Passive Beneficiary to ‘Rights Claimant’: What Difference Does It Make? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Achin Chakraborty

25

Emerging Regimes of Market Citizenship: The Politics of Social Policy in Contemporary India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Priya Chacko

39

An Examination of Indian State in the Post-planning Period . . . . . Anjan Chakrabarti and Soumik Sarkar

Part II 5

1

57

Shifting Roles of the State

Including the Excluded: Inclusive Economic Growth in India After 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Matthew McCartney

83

6

Social Protection and the State in India: The Challenge of Extracting Accountability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 Salim Lakha

7

Compressed Capitalism and a Critical Reading of the State’s Employment Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 Anthony P. D’Costa

8

Distinctively Dysfunctional: ‘State Capitalism 2.0’ and the Indian Power Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 Elizabeth Chatterjee

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Contents

Part III 9

State and Contested Forms of Governance

Re-reading the ‘Auto-revolution’ in India with a Labour Lens: Shifting Roles and Positions of State, Industry and Workers . . . . . 175 Babu P. Remesh

10 Engaging Rural Indian Interventions: Constructing Local Governance Through Resource Access and Authority . . . . . . . . . . 191 Siddharth Sareen 11 Penetrative or Embracive? Exploring State, Surveillance and Democracy in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 P. Arun Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231

Editors and Contributors

About the Editors Anthony P. D’Costa is Eminent Scholar in Global Studies and Professor of Economics at the University of Alabama in Huntsville. Previously he was the Chair and Professor of Contemporary Indian Studies and the Development Studies Program at the School of Social and Political Sciences at the University of Melbourne. He was also affiliated with the University’s Australia India Institute for three years. During 2008–13, he was the Research Director and A. P. Moller-Maersk Professor of Indian Studies, Asia Research Centre at the Copenhagen Business School, Denmark. He was also with the University of Washington for 18 years. He has written extensively on the political economy of steel, auto, and IT industries covering themes of capitalism and globalization, economic and social development, business dynamics and innovations, and industrial restructuring. Currently his work focuses on employment challenges in late industrializing India and is working on a new framework called “compressed capitalism”. His recent books are After-Development Dynamics: South Korea’s Contemporary Engagement with Asia (edited, OUP, 2015), International Mobility, Global Capitalism, and Changing Structures of Accumulation: Transforming the Japan-India IT Relationship (Routledge, 2016), and The Land Question in India: State, Dispossession, and Capitalist Transition (coedited, OUP, 2017). He has published in World Development, Journal of Development Studies, Journal of International Development, Review of International Political Economy, Economic and Political Weekly, Asian Business and Management, Industrial and Corporate Change, Cambridge Journal of Regions, Economy and Society, and Critical Asian Studies, among others. He has been a fellow of the American Institute of Indian Studies, Fulbright-Hays, Korea Foundation, Social Science Research Council, UN World Institute of Development Economics Research, Helsinki; Abe (Japan Foundation), and the East West Center in Honolulu.

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Editors and Contributors

Achin Chakraborty is Professor of Economics and Director of the Institute of Development Studies in Kolkata, India. He obtained his PhD from the University of California at Riverside, USA, in 1995. His areas of research interest include welfare economics, microeconomic issues in development economics, human development, health economics, environmental economics, and methodology of economics. He was earlier a faculty with the Centre for Development Studies in Kerala. He has published widely in journals such as Economic Theory, Social Indicators Research, Journal of Quantitative Economics, Environment and Development Economics, Economic and Political Weekly, and others. He has co-edited with Anthony D’Costa the recently published book The Land Question in India: State, Dispossession and Capitalist Transition (OUP, 2017).

Contributors P. Arun is Research Scholar in Department of Political Science, University of Hyderabad. His primary areas of research interest are privacy and surveillance. His research examines politics over personal data and how technology-led surveillance strategies are used as a response for prevention of corruption, crime and terrorism, and assesses the implications of law, privacy, and social control. Priya Chacko is Senior Lecturer of International Politics in the Department of Politics and International Studies at the University of Adelaide. She is the author of Indian Foreign Policy: The politics of postcolonial identity from 1947 to 2004 (Routledge, 2012) and the editor of New Regional Geopolitics in the Indo-Pacific (Routledge, 2016). She has also published numerous articles in journals such as Modern Asian Studies, European Journal of International Relations, Review of International Studies and Journal of Contemporary Asia. Her current research projects focus on the economics-security nexus in India, the United States and China and the intersection of populism, neoliberalism and nationalism in India. Anjan Chakrabarti is Professor of Economics, University of Calcutta. His research interest spans the areas of Marxian Economics, Development Economics, Indian Economics and Political Philosophy. He has published and edited 8 books and has over 50 articles in academic journals and edited books. His latest book is The Indian Economy in Transition: Globalization, Capitalism and Development (with Anup Dhar and Byasdeb Dasgupta) from Cambridge University Press. Elizabeth Chatterjee is Postdoctoral Scholar in the Department of Political Science at the University of Chicago. She was previously a Fellow of All Souls College, Oxford. Her work has appeared in World Development, Contemporary South Asia, and the Journal of the Royal Asiatic Society, among other venues. Her research interests include the transformations of the contemporary state, environmental and energy governance, and the politics of climate targets.

Editors and Contributors

xi

Salim Lakha is Honorary Senior Fellow in the School of Social and Political Sciences at the University of Melbourne. He was formerly the Coordinator of Development Studies Program at Melbourne University, and in 2011 a Visiting Senior Research Fellow at the Asia Research Institute, National University of Singapore. His work focuses on India covering social protection, decentralization, governance and development, international migration, and transnational identities. He is currently engaged in a collaborative research project that examines the role of social audit as an accountability tool under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). Dr. Lakha has published several jointly authored papers on social accountability and the implementation of MGNREGS. Matthew McCartney is Director of the South Asia Programme in the Department of Area Studies, and an Associate Professor in the Political Economy and Human Development of India at Oxford University. From 2003 to 2011, he lectured in Economic Development of South Asia at the SOAS University of London. Matthew spent two years (1998–2000) in Zambia working in the Ministry of Finance under an ODI Fellowship (Overseas Development Institute, London) and has taught in South Korea, India, Pakistan, Denmark, and Japan, and worked with UNDP, USAid, World Bank and the EU in Zambia, Botswana, Bangladesh, Georgia, Egypt and Bosnia. His research looks at the political economy of macroeconomics in India, Sri Lanka and Pakistan, in particular economic growth, investment and the role of the state. Babu P. Remesh is Professor at the School of Development Studies, Ambedkar University in Delhi. His research interests include: informal sector and livelihood issues; industrial structure and labour in the automotive sector; social security; labour in plantations; labour in BPOs/call centres, work/workers in media; rural/industrial labour relations; new patterns of internal migration and social exclusion of migrants. He has also been actively working on various research methodologies—qualitative, quantitative and interdisciplinary. Siddharth Sareen is a postdoctoral research fellow at the Centre for Climate and Energy Transformation and the Department of Geography at the University of Bergen. He holds a double PhD in Development Studies and Forest and Nature Management. He has published actively on themes of resource politics and energy governance, in journals such as Energy Research and Social Science, The Journal of Development Studies, Forum for Development Studies, South Asia Multidisciplinary Academic Journal, and co-edited a special section in South Asia: Journal of South Asian Studies. Besides extensive work on resource conflict in Central-Eastern India, he has undertaken research on the political economy of electricity distribution in Western India and currently leads a project on energy transitions and the governance of solar energy uptake in Portugal.

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Editors and Contributors

Soumik Sarkar is pursuing a PhD in Economics from the University of Calcutta and working as an Economist for the Indian Chamber of Commerce (ICC) Kolkata. His research interests include political economy and Indian economics. He has also worked as a research assistant in two Indian Council of Social Science Research sponsored projects and was one of the translators of First Boyder Desh by Amartya Sen.

Acronyms

AAY ACMA ADB AFC APL ASI BJP BPL BSP CII CMP CMS CNG CPSE CyAT DFI DIPP DPEP FCI FDI FICCI FRA FYP GDP GFC GOI GPs HDI HLC HRM

Antyodaya Anna Yojana Automotive Component Manufacturers Association Asian Development Bank Asian Financial Crisis Above the poverty line Annual Survey of Industries Bharatiya Janata Party Below the poverty line Bahujan Samaj Party Confederation of Indian Industry Common minimum program Central Monitoring System Compressed natural gas Central Public Sector Enterprise Cyber Appellate Tribunal Development finance institution Department of Industrial Policy and Promotion District Primary Education Programme Food Cooperation of India Foreign direct investment Federation of Indian Chambers of Commerce and Industry Forest Rights Act Five-Year Plan Gross domestic product Global financial crisis Government of India Gram panchayats Human Development Index High-Level Committee Human resource management

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ICDS ICT IFIs IPP IRDP ISI ISP IT ITA ITR JV LARR MDMs MGNREGS MII MKSS MNC MNREGA MUDRA MUL NAC NASSCOM NATGRID NCEUS NCMP NCPRI NCR NDA NeGP NETRA NFSA NGO NIAI NMAC NPM NREGA NRHM NSS NTP NTPC OBCs OECD OEM PAN

Acronyms

Integrated Child Development Services Information and communications technology International financial institutions Independent power producer Integrated Rural Development Program Import substitution industrialisation Internet service provider Information technology Information Technology Act, 2000/2008 Indian Telegraph Rules, 1951 Joint Venture Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act Mid-day meals Mahatma Gandhi National Rural Employment Guarantee Scheme Make in India Mazdoor Kisan Shakti Sangathan Multinational corporation Mahatma Gandhi National Rural Employment Guarantee Act Micro Units Development and Refinance Agency Maruti Udyog Limited National Advisory Council National Association of Software and Services Companies National Intelligence Grid National Commission for Enterprises in the Unorganised Sector National Common Minimum Programme National Campaign for People’s Right to Information National Capital Region National Democratic Alliance National e-Governance Plan Network Traffic Analysis National Food Security Act Non-Governmental Organisation National Identification Authority of India Bill National Media Analytics Centre New Public Management National Rural Employment Guarantee Act National Rural Health Mission National Sample Survey National Telecom Policy National Thermal Power Corporation Other Backward Classes Organisation for Economic Co-operation and Development Original equipment manufacturer Permanent Account Number

Acronyms

PCP PDS PSD PESA PIL PMO PMP POTA PUCL PUP QR RSS RTE RTI SC SEB SEZ SIAM SME SPI ST TA TR TSP UAPA UID UIDAI UNDP UP UPA US PL 480 USD UUP VEC VMCs WTO

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Petty Commodity Producer sector Public distribution system Public service delivery Panchayat (Extension to Scheduled Areas) Act Public interest litigation Prime Minister’s Office Phased Manufacturing Programme Prevention of Terrorism Act People’s Union for Civil Liberties Paschimanchal Unnayan Parshad Quantitative restriction Rashtriya Swayamsevak Sangh Right of Children to Free and Compulsory Education Act Right to Information Scheduled Caste State Electricity Board Special economic zone Society of Indian Automobile Manufacturers Small and medium enterprises Social Protection Index Scheduled Tribe Telegraph Act, 1886 Telegraph Rules, 1956 Telecommunications service provider Unlawful Activities (Prevention) Act Unique identification Unique Identification Authority of India United Nations Development Programme Uttar Pradesh United Progressive Alliance US Public Law 480 United States dollar Uttarbanga Unnayan Parshad Village Education Committee Vigilance and Monitoring Committees World Trade Organization

Chapter 1

Changing Contexts, Shifting Roles, and the Recasting of the Role of the Indian State: An Introduction Anthony P. D’Costa and Achin Chakraborty

Abstract The objective of this introductory chapter is to theoretically and empirically tackle four interrelated themes that examine the various facets of the contemporary Indian state. Rather than simply assessing the deviations of the Indian state from the generalized abstractions of a developmental state, this chapter shows the actual functioning of the state at multiple levels, often in a disaggregated way. These themes are to identify some of the reasons for the changing role of the state, including first, the shifting contexts such as the reconfigured state–business relationship; second, the mediating role of society in distributive politics, especially in terms of rights-based movements or pressures from below; third, the seemingly contradictory role of the state in undertaking major public social programmes and simultaneously opening up of greater spaces for the market; and fourth, the dynamic relationship between the state and the form of democratic governance under changing political regimes. The chapter discusses some of the reasons for the changing role of the state in favour of markets as well as the introduction of certain social welfare programmes. In practice, the maturing of civil society facilitates the swing towards human capabilities and away from fetishized economic growth. At the same time, the growing power of the capitalist classes in liberalizing India suggests state cutbacks and intensified contestations over resources and thus limits to how much the state can actually redistribute. The chapter shows in various ways and at multiple levels what the contemporary Indian state has been doing and identifies some of the reasons for that mode of intervention, including responding to rights-based movements. Section four discusses how the Indian state can be recast, while the final section introduces the chapters in this volume. Keywords Developmental state · India · Distributive politics · Democratic governance · Rights-based movements A. P. D’Costa (B) University of Alabama, Huntsville, USA e-mail: [email protected] A. Chakraborty Director and Professor of Economics, Institute of Development Studies Kolkata (IDSK), Kolkata, India © Springer Nature Singapore Pte Ltd. 2019 A. P. D’Costa and A. Chakraborty (eds.), Changing Contexts and Shifting Roles of the Indian State, Dynamics of Asian Development, https://doi.org/10.1007/978-981-13-6891-2_1

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A. P. D’Costa and A. Chakraborty

1.1 Introduction Over the past few decades, the role of the state in the process of development has undergone perceptible changes. With the successful development of East Asian countries, especially South Korea, the positive interventionist role of states rather than unbridled market forces is attributed to their social and economic transformation (Amsden 1989; Wade 1990; Evans 1995). This observation, on which most scholars by and large agree, gave rise to the general characterization of such states as “developmental states”. Consequently, most scholars have attempted to theorize developmental states as a concept and thus its generalizability rather than assess the workings of the state in terms of experiences and the mobilization of a certain set of state apparatuses during a specific historical conjuncture. Paradoxically, in the meantime, the concept of development and its relationship to society has undergone significant changes, thereby rendering the role of the developmental state quite ambiguous in contemporary times. Not only has the developmental state abdicated its traditional pursuit of industrialization as an economic and social transformation strategy, it has also moved in parallel to expand human capabilities (a la Amartya Sen). It is clear that the normative ground has shifted from economic development through state directed industrialization to human capability building relying on economic development as an instrument rather than a goal in itself. In the last couple of decades, there has been recognition of certain positive rights by the Indian state with the ostensible aim of ensuring access to welfare benefits and basic public services. India of course is no exception. In Latin America, there has been a “rights turn” whereby the state has become more engaged with socio-economic rights that effectively has “recast the citizenship-state relationship” (Grugel and Riggirozzi 2018: 537). We do not go this far to make a similar claim for India, given other developments in the state–business relationship but we do acknowledge that there is greater engagement in social matters even as the state is no longer playing a developmental role. It should come as no surprise that the ruling Bharatiya Janata Party (BJP) in the 2004 general elections could not impress the voting public with its “shining India” (a reference to high growth rates) since so many were untouched (D’Costa 2005), prompting the incoming Congress-led coalition government to enact several rights-based legislations that had already accumulated political mileage. The introduction of pro-market and pro-business reforms, on the one hand, and an explicit recognition of the rights of citizens to certain public services, on the other, could be seen as a “double movement” for social protection—a la Polany—against the liberalizing capitalist state. Alternatively, the structural interpretation of this double movement suggests that to legitimize postcolonial capitalism, the state is attempting to reverse the effects of primitive accumulation such as large-scale dispossession, displacement, and destitution and softening an already charged social crisis of economic exclusion in India (Sanyal 2007; Chatterjee 2008). Theoretically informed, the objective of this volume is to broadly and empirically tackle four interrelated themes that examine the various facets of the contemporary Indian state. We follow this line of investigation as it allows us to capture the actual

1 Changing Contexts, Shifting Roles, and the Recasting …

3

functioning of the state at multiple levels, often in a disaggregated way, rather than simply assessing the deviations of the Indian state from the generalized abstractions of a developmental state. These themes are to identify some of the reasons for the changing role of the state, including first, the shifting contexts such as the reconfigured state–business relationship; second, the mediating role of society in distributive politics, especially in terms of rights-based movements or pressures from below; third, the seemingly contradictory role of the state in undertaking major public social programmes and simultaneously opening up of greater spaces for the market; and fourth, the dynamic relationship between the state and the form of democratic governance under changing political regimes. The chapter is divided into three main sections. In section two, we discuss some of the reasons for the changing role of the state in favour of markets as well as the introduction of certain social welfare programmes. In this discussion, the maturing of civil society is viewed as an important developmental outcome that facilitates the swing towards human capabilities and away from fetishized economic growth. This is as much as a tacit admission of the inability of economic growth to lift all boats as it is a reflection of the sorry material condition of India’s excluded. At the same time, the growing power of the capitalist classes in liberalizing India suggests state cutbacks and intensified contestations over resources and thus limits to how much the state can actually redistribute. Given the varying performance of the state at different levels in a complex political terrain, we shy away from characterizing the Indian state with a singular attribute. Instead, in section three, we show in various ways and at multiple levels what the contemporary Indian state has been doing and identify some of the reasons for that mode of intervention, including responding to rights-based movements. Section four discusses how the Indian state can be recast, while the final section introduces the chapters in this volume.

1.2 Growth, Welfare, and the Shifting Role of the State In addition to the double movement of the state to protect those losing out from economic liberalization or the attempt to reverse the effects of primitive accumulation to stem a political crisis, the state for more mundane reasons has been compelled to reinvent itself. For example, at a basic level, the “exhaustion” of import substitution industrialization, the growing significance of sound macroeconomic policies in open and integrated economies, and the ideological shift in preferences for market-driven economic governance (with the collapse of the former Soviet Union and Eastern European economies) are some of the well-known reasons. To that, one must also add the growing maturity of the capitalist classes in many of these state-led economies such as India, Brazil, and South Korea (D’Costa 2000, 2014),1 the search by global 1 This is one outcome, which is not recognized well by scholars of the state. The maturity of capitalist

classes under state tutelage suggests that state intervention has not been a dismal failure as is often painted to be.

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business for neoliberal policy environments for realizing their returns on capital, thereby reinforcing the reduction in the scope of the state’s economic and social role (Lange 2015: 11), and a deliberate pro-business tilt of the Indian state (Kohli 2009). Reinvention of the state in favour of markets logically implies a reduced role of the state in the economy and in the social sphere. Yet, we also find that the Indian state has consciously moved in the direction of social welfare, albeit not radically since it has not abandoned the big investment-heavy economic growth programme or launched any major redistributive programmes. Instead, the expectation is that growth with “inclusive” development, a euphemism for trickle-down economics with a few large targeted programmes for the poor will be politically expedient in the current climate of a receding state and heightened mobility of capital. Curiously, despite the state’s efforts since the economic reforms of the 1990s in enacting and implementing several welfare types of schemes for low income and marginalized populations, the state has been also admonished for allegedly retreating from its welfare-oriented interventions. In fact, this is not surprising since the prognosis for sharing growth in India is unfavourable due to the weak capacity of the state to redistribute (Kohli 2012: 195–196). This contradictory role of the state between pursuing economic growth and welfare goals is evidenced by the heated debates between Jagdish Bhagwati and Amartya Sen (summarized in Bhattacharya 2013). They suggest that certain basic conditions of life must be provided to the people, either indirectly through growth or directly through targeted programmes, irrespective of the abstract issues of efficiency, and Pareto optimality. In practice, the political class can neither ignore the dispossessed nor have democratic politics not deliver the basic minimum for survival, even if the dominant policy discourse among the elites in India revolves around the importance of economic growth. In this vein, albeit in the context of “political society”, Chatterjee (2008) argues that in an enlightened democratic India the state cannot abandon those who fall through the cracks of capitalism, and therefore, some welfare measures must be provided to those who are excluded from development. As alluded to earlier, structurally speaking this is also a minimal response to avoid social and political catastrophe arising from massive exclusionary outcomes. Irrespective of the reasons for the shift in the role of the state from economic growth to human capabilities (through asset creation and choice of work engendered by social welfare measures), the intellectual puzzle remains since the state has also distanced itself from the conventional forms of engagement with the economy such as production by the public sector and an active industrial policy. By deregulating the economy, the Indian state has de facto made more room to allow for freer play of market forces. Analytically, there are really two shifts: one from state-led development to more market-based outcomes, and the other, within market-based development a shift towards welfare, tempering some of the fallout from marketbased outcomes. Given such movements, how is one to assess the role of the state in development? Has “globalization” fundamentally changed the character of states in the Global South that were earlier seen as pursuing “statist” development strategies with less than spectacular results? Consequently, does it mean the irrelevance of the “developmental state”, a concept that emerged from the experiences of East Asian

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states? How should we frame contemporary states such as India’s if we are to analyse and assess their changing role that no longer reflects the past? It is of course debatable if the Indian state has really introduced pro-market reforms, given that piecemeal and ad hoc reforms achieved thus far favour selective businesses rather than creating a level playing field for all business (Kohli 2009: 144–163). The Indian market reforms have transformed the state–business relationship from one of hostility to one not of partnership for the common good but one of business freedom and cronyism. Thus, businesses such as those in the IT industry have risen from their technological and commercial acumen and serendipitous articulation with the world economy in a liberalizing economy, while others in the power and minerals sector have benefited from favours obtained from the state (Venu 2016). This is of course not a developmental state as rightly argued by Kohli (2009: 175–176). However, cosying up to big business to generate economic growth, even if successful, does not make it developmental as Kohli unwittingly imputes (2009: 147). After all, the very success of the quintessential South Korean developmental state has dialectically led to big business dominance, which has created a highly divisive society (Nam and D’Costa 2015). For our purposes, the concept of the classic developmental state is no longer applicable due to both open economies and democratic politics. Therefore, it is necessary to move away from the developmental state (enjoying substantial relative autonomy)—economic growth frame of reference and instead focus on why and how the Indian state is engaged in promoting individual well-being and capabilities in the context of a liberal economic environment.

1.3 Changing Contexts, Rights, and New Roles Explaining why the role of the Indian state has moved towards markets has been addressed generally as well as specifically for India. For example, Biersteker (1992) attributes the “triumph” of neoclassical economics and global convergence in policy thinking in bringing about a transformation in state–market relations. Others point to stagflation and rising government deficits (or “fiscal crisis” of the state, O’Connor (1973)) in the USA as a turning point for and culminating in the Reagan–Thatcher ideological swing of a reduced role of the state (Marchak 1993). For the Indian case, the shifting role has been due to the sheer exhaustion of state-led import substitution industrialization effort (Nayyar 1994), slow growth due to declining public investments (Bardhan 1999), microeconomic inefficiencies due to unnecessary regulations (Bhagwati 1992), changes in middle class expectations due to demonstration effects arising from rapid East Asian economic transformation (D’Costa 2005), maturity of Indian capitalists and the rise of new entrepreneurs, who are now capable of competing in the world economy (Mazumdar 2012; D’Costa 2000, 2013), and the acceptance and conviction of the necessity of market reforms by leading bureaucrats (Mukherjee 2013). Evans (1995) had provided a nomenclature of states based on their instrumentalist roles, namely custodian, midwife, husbandry, and demiurge. These roles varied

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from regulating, birthing new enterprises, nurturing entrepreneurship, and engaging in production, respectively. None of these multifaceted roles of the state was specifically designed for welfare. However, a custodian and a demiurge role of the Indian state presupposed indirectly social welfare by regulating and controlling investment and production. The Indian state lacked substantive capacity to intervene generally due to a fractured society (see D’Costa in this volume). With economic reforms, the state’s distributive capacity, ceteris paribus, has been even more limited due to state–business alliance for growth and thus pro-business policies (Kohli 2012: 195). Nevertheless, the gradual mobilization of a “civil” society due to creeping empowerment through internalization and assimilation of “democracy” among the masses, the growing awareness of rights, and the institutionalization of rights through legislations has also created “pressures from below”. Motivated by democratic expectations, the implication of such political development on any state would be to compel some distributive measures such as those necessitated by “political society”. But the epistemological impact on the developmental state as conventionally understood would be drastic since by definition it would no longer be singularly focused on growth and industrialization of the catch-up variety and instead be subject to the compulsions of societal demands. In a more recent piece, Evans and Heller (2015) explore the “more recent transformations of the developmental state” (2015: 2). They take the notion of the developmental state further to suggest that economic growth and changes in the material basis of the society lead to a different kind of politics of the state, including the possibility of deepening of democratic politics. Buried in this transformation of the state is a reorientation of goals from growth to welfare (such as promoting human capabilities) of an erstwhile developmental state. There are several questions that emerge from this reconfiguration of the state. Are welfare programmes an automatic result of a successful developmental state?2 What kind of a state does it become when it takes on a distributive role as opposed to the growth-oriented role? Assuming state capacity to be no longer the same, presumed less under the influence of capital, what might be the politics of distribution? The fact that the Indian state has introduced a number of welfare-like measures such as employment programme, the land act, right to education, right to information, and others suggest that there is more to them than just state benevolence. These are the fruits of politics pushed from below by the civil society (see Evans and Heller 2015). Of course, politics from below can arise from dissimilar contexts. For example, in Latin America there have been “politics of welfare” following on the heels of a leftward turn in a neoliberal context (Grugel and Riggirozzi 2018). Another example is the successful accumulation by South Korea that led to a shift in the power structure, away from the state to big business. At the same time, democratization, since the late 1980s by removing the raw authoritarianism, has empowered civil soci2A

Kuznets type of argument would imply that once the basic material standards have been met non-economic aspects of well-being, such as inequality, could be addressed by the state. But these are mechanistic postulations and ignore the realm of politics. It would be imprudent to expect the state to share growth when capital has been freed to accumulate even more, unless of course capital itself fears its own success because its expanded reproduction is under severe strain.

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ety to demand greater social welfare services that commensurate with Korea’s high income (D’Costa 2018). The Indian situation is different from that of Latin America and South Korea. Comparatively, an impoverished society no doubt but unlike Korea India already enjoyed specific democratic rights and aspirations, while unlike Latin America India’s ruling parties have been mostly centrist with occasional interventions in social programmes due to electoral compulsions. Democratic aspirations implied some welfare engagement of the Indian state. This meant that even if the state was hamstrung to mobilize resources for redistribution it was still subject to the continuous pressures from below by an increasingly politicized and maturing civil society, especially when recent economic growth has been largely exclusionary. There are two issues regarding the transformation of the developmental state towards greater welfare role. The first is that there is nothing inevitable with civil society in a maturing, post-developmental state. Civil society could remain weak even if the blatant authoritarian forms of economic governance disappear and a more democratic abertura is introduced. India of course has had neither a developmental nor an authoritarian state. It has always been a political democracy, caveats of state capture and patronage politics notwithstanding. Yet, it too introduced various forms of deregulation akin to developmental states, which reduced the role of the state in economic affairs. The second issue is that while a developmental state works with domestic business to pursue the national goal of escaping from economic backwardness, in effect over time and predictably so, it strengthens the power of domestic capitalists. Witness the successful accumulation experienced by Korean chaebols (conglomerates), which are today dominant players in a politically open Korean society. The juxtaposition of successful accumulation under authoritarianism and democratic opening leading to a captured state by chaebols is not surprising. The financial clout of big business and the increasing financial dependence of political parties and their leaders on campaign funds suggests the growing political influence of big business on ruling parties, a feature of most liberal democracies that do not have strong election campaign spending limits or even if they do they are circumvented. India is no different. Hence, any redistributive measures under such political constraints can come about if the industrial/working classes are able to play a vanguard role and/or there is substantial political pressure from below from a wide coalition of highly mobilized civil society actors. Today in India big business is in cahoots with the state under a deregulated environment. Yet, it is in this environment that the Indian state has been also pursuing specific forms of social welfare measures, partly a top-down approach but also as a response to deeper civil society activism. The demand for and the acceptance of certain rights by the civil society and the state, respectively, have accommodated a plethora of social demands. These pressures from below (Nagaraj 2012: 11) over time have allowed the Indian civil society, the judiciary, and political movements to extract greater accountability of the state in discharging its constitutional obligations. The state has been more forcefully engaged through both legal channels and political demonstrations. Thus, the state’s more enlightened acceptance of the importance of translating India’s constitutional freedoms into tangible rights has contributed posi-

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tively to social welfare. These include but are not limited to the right to information, the right to free and compulsory education, and the right to food. Rights of course do not necessarily translate to human capabilities, an area in which the Indian state has abysmally failed (Evans and Heller 2015) due to the state’s incapacity to redistribute (Kohli 2012). Yet the state is intervening in social spheres through the dialectics of rights-based movements by politically compelling the meeting of constitutional obligations of the state to society. Thus, the state’s decentralized and transparent rural employment programme has given many rural residents added freedom to expand their human capabilities (Dasgupta 2012). The rural welfare programme through asset creation, extra income generation, reduction in personal debt, and not having to migrate to the cities in lean times has contributed to individual well-being and capabilities. Similarly, the 2013 Land Act represents state intervention in the process of land acquisition for facilitating economic development without completely abandoning land owners who are subject to dispossession and loss of livelihoods (D’Costa and Chakraborty 2017). We of course do not see these acts as a means to wholesale sharing of benefits of economic growth. On the contrary, we see them as ongoing contestations between the state, society, and dominant economic interests in a deregulated environment. The Indian state for its own legitimacy is caught between growth and welfare, providing a modicum of redistributive measures without abandoning the former. In an interesting twist to the changing role of the state towards welfare, we also find that the state in its quest for security and development is relying heavily on emerging information and communication technologies. On the one hand, there is surveillance by the state to monitor, surveil and control large areas of society, and on the other, the state relies on these technologies to deliver public services and entitlements to the people. The most visible link of the “surveillance” state with development and welfare lies in the extensive use of personal data by the state for delivery of welfare services and entitlements to the people. At present, social security has become the most dominant discourse, which these days are often equated to national security and terrorism. Consequently, people are directed to interlace themselves with state biometric registration so as to avail of their rights, otherwise, they risk facing exclusion, denial of subsidies, and so on. The Unique Identification (UID) number associated with Aadhaar contains both biometric and demographic data and allows bona fide holders of the card to access services, both private and public that requires proof of identity. Setting aside the surveillance role of the state for the moment, it is apparent that the Indian state is committed to delivering public services transparently and without leakages. At the same time, the temptation to misuse such technologies for data mining by resorting to an elastic definition of security behind new layers of opaque institutional agencies and legal procedures is also an emergent role of the state. These contradictory roles of the state in its myriad forms whether cosying up to big business and launching rights-based legislations or using technologies to monitor and deliver public welfare services, it is difficult to assign it a specific function let alone call it “developmental”. Simply stated, the state does multiple things at different times and whose set of actions is, as one scholar puts it, a “profoundly

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contradictory phenomenon,” (Pedersen 1992: 631). The different parts of the state, at different levels, motivated by contradictory objectives and controlled by and subject to varied societal influences, including state capture and pressures from below defy any particular nomenclature. Since the emergence of “new institutional economics” in the 1980s, points of emphasis notwithstanding, there is a common understanding of the role of the state. The state in this view is expected to provide a framework of law and order, institutions for enforcement of contracts, and other such institutions that are considered necessary prerequisites for market transactions and provide incentives for private investment and enterprise. Following this perspective, Acemoglu and Robinson (2012) make a distinction between “inclusive” and “exclusive” economic institutions. They argue that long-term economic growth is only feasible in the context of “inclusive economic institutions”, by which they mean a set of institutional arrangements that support the enforcement of property rights, guarantee law and order, support contract enforcement, allow new businesses and activities to enter and existing activities to be destroyed, and support the functioning of markets for goods, labour, and capital. Accordingly, “extractive economic institutions” are associated with rent creation and extraction, and hence, the logical normative implication would be for the state to get rid of all extractive economic institutions and to put in place more and more inclusive institutions. The problem with this reasoning is that it can be shown that rents are often necessary for a balance of political power or preservation of a political equilibrium. If that is indeed the case, insistence on first-best rules to eliminate rents may have unintended political consequences which could be counterproductive for development and distributive justice. Thus, a further reading of the state catering to Chatterjee’s (2008) “political society” by way of welfare measures could be viewed as both rents acting as a payoff to maintain political order and ensure state legitimacy, and a redistributive mechanism, albeit nominal, at the same time. Therefore, removal of welfare schemes on grounds of fiscal discipline and economic efficiency is not an option that the Indian state can easily exercise. Instead, it must accommodate redistributive programmes even as it adopts business-friendly policies for accumulation and growth.

1.4 Recasting the Indian State Today In this volume, we, therefore, do not attempt to characterize the Indian state in one way or another or identify a singular view of the state. Instead, the chapters collectively focus on what the contemporary Indian state does and does not do, the different ways it intervenes and responds to societal pressures, the different levels at which it operates, and identify some of the reasons for that mode of intervention. A major theme that runs across all the chapters is the shifting contexts and changing role of the state, which at the minimum suggest ongoing reconfigurations of public and private spaces and consequently the changing direction, depth, and effectiveness

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of state intervention in the economy and society. While we do not theorize why the role of the state has changed (but see Chakrabarti and Sarkar, in this volume), it is evident that structural changes in the Indian economy (D’Costa 2005), ideological shifts (Mukherjee 2013), and social differentiation (D’Costa 2012) are some of the macro-political economy contextual reasons for this change. However, the shift in the role of the state is not just a matter of moving from statism to market reforms or business-friendly policies, which is now a familiar story, it is also a move, if not away from economic development in parallel fashion, towards social welfare. Here, a different set of factors is likely to be at play. Intuitively, the abdication of the state from the economy suggests a reduced welfare role, but the Indian evidence shows that there are in practice several forms of state intervention in favour of the disadvantaged. The reasons for this shift are many, but the centrality of Indian redistributive politics is key to understanding this change, which has been driven by substantial decentralization of the state, greater information availability, and the rise of the underrepresented social groups and regional parties (Jaffrelot 2003). Since the 1970s, the social fatigue with lacklustre growth and the persistence of poverty has contributed to a pronounced political demand for redistributive justice, which in the scheme of electoral politics has led to not only populist policies for sharing economic growth but also to a genuine deepening of democracy through rights-based legislations brought about by pressures from below. Legislations of course are no guarantee of effectiveness of policy. The ability to implement policies, projects, and programmes are dependent on the capacity of the state, which in turn is dependent on the internal organization of the state, the ideological glue that ties the different arms and levels of the state, and the degree of accountability for the performance of the state. The “overdeveloped” state (Alavi 1972) relative to the economy is no guarantor of effectiveness of intervention. Given the scale of the Indian state and the federated system of which it is a part of, it is inevitable that the performance of the state will be uneven by regions and by programs. Hence, this volume is not about the “failures and successes” of the Indian state in attaining developmental goals, even though an evaluative concern cannot be entirely avoided by the contributors while undertaking a political economy enquiry (Lakha, McCartney, D’Costa, Remesh, in this volume). Instead what we present are the multiple roles of the state and the contradictions therein (Arun, Chakrabarti and Sarkar, in this volume), with some disaggregation of the state at the local provincial levels (Sareen, in this volume). In some instances, specific economic sectors such as grid electricity the contradictions reveal themselves as “dysfunctionality” of the state (Chatterjee, in this volume). Her analysis offers a complex layering of both liberalization and statism in the power sector, thereby blurring the boundaries of the state and the private sector. Some of the contributors point to the relative success of the state in the provisioning of employment to rural households, an intervention far removed from the traditional growth concerns of the state, while others indicate a failure of the state as witnessed in the power sector or local level community development. As the Indian state finds itself in the vortex of global and national capitalisms, its ability to maintain employment security is weakened (Remesh, in this volume), while its capacity to

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intervene effectively in critical areas such as employment creation is also highly constrained (D’Costa, in this volume). These limitations are as much due to the state’s innate incapacity to intervene as they are due to the shift in the balance of power between state and business and global forces beyond its control. The sheer scale of the social transformation problem is overwhelming, given that over a million new workers enter the Indian labour force every month, a magnitude that would challenge any state anywhere. While there are excellent scholarly books on India’s development experience written primarily with an evaluative concern (Drèze and Sen 2013), relatively few have been written with an analytical political economy orientation that views the role of the state as iterative, interactive, dialectically in motion, accommodating, and subject to capture and autonomy, all rolled into one. In the latter perspective, the important questions are not whether the state (read government) or the market is the best institution to deliver the “good’” of development but around the deep factors that jointly shape the nature of the changing economy and the state. For example, how does one explain the state pursuing both economic reforms and social rights at the same time or the shift from a regulatory state to one that reconstructs market citizenship through neoliberal reforms (Chako, in this volume)? Chako argues that what is emerging is “market citizenship” within a regulatory state, which unlike the social citizenship of the post-war welfare and developmentoriented states, seeks to enable participation and inclusion within rather than against the capitalist market economy. This is similar to “market governance”, which is a form of social discipline to adjust to market realities (Grugel and Riggirozzi 2018: 529). However, the welfare turn in Latin America has been seen as a genuine form of inclusion. The distinction between the two regimes in India lies, according to Chako, in what she calls “social democratic market citizenship” of the United Progressive Alliance (UPA) and “virtual market citizenship” that characterizes National Democratic Alliance (NDA) II. UPA after coming to power for the second time in 2004, alluded to earlier, attempted to legislate claims for social citizenship, while the second NDA government formed in 2014 continues to grapple with social policies related to food security, employment guarantee and land rights, even as it projects an economically muscular India. In a parallel fashion, Chakraborty (in this volume) observes alternating movements between a normative discourse that takes rights as something to be legislated by the state to render the delivery of public services more effective (focused on “targets” and “beneficiaries”) and the political process that eventually leads to the state accommodating the rights language in its policy discourse. Starting from a brief account of the series of events that culminated in such legislations as the Right to Information Act (2005), MNREGA (2005), Right of Children to Free and Compulsory Education Act (2009), and much contested Food Security Act (2013), he argues that the subsequent emaciation of the rights language in policy discourse with the change of regime in India vindicates the view that, in modern Indian politics, democratic struggle for positive rights does not turn out to be the dominant mode. The perception of disadvantage continues to be expressed in terms of identity-based collectivities rather than interest-based ones.

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The influencing factors for the changing role of the state principally lie in the realm of politics, where the political contestation and the underlying social contracts between the state, business, and various social groups are played out (Chakrabarti and Sarkar, in this volume). For example, rights-based campaigns mobilizing accountability and political participation in an era of deregulation pushing the state towards social and welfare policies are clearly a matter of politics. “Inclusive” development results from the struggle over “class” and “need” processes. Need fulfilment, in their formulation, cannot be seen in isolation from the class processes embedded in production and appropriation of surplus value. What gets defined as social needs, how much of the social surplus must be released for these social needs-related programmes, who gets what portion for the projected social needs, and how these distributional issues affect the “fundamental” and “subsumed” class processes—are all questions that need to be answered by analysing the class processes and struggles and possible conflicts that go with them. Politics notwithstanding, McCartney (this volume) argues on the basis of evidence of the changes in development indicators that the growth process has been more inclusive in the more recent period. He identifies MNREGA (employment) programme and its relatively better implementation, compared to various poverty alleviation programmes of earlier days, as one of the key instruments for change. While acknowledging the role of civil society activism and the dissemination of information through an active social media, McCartney delves into the changing nature of national politics in India. He identifies it as a kind of “two-party system” where each of the two coalitions of parties gradually converges to a more stable form. This gradual stabilization of two coalitions, according to him, could be characterized as a shift from “roving” to “settled” bandits, a la Olson (1993). He argues that a leader with a reasonable expectation of surviving in office will have an incentive to pursue long-term goals. The success of social programmes is as much as an outcome of political stability as it is accountability of public services programmes, which could also result from pressures from below. For example, the success of MNREGA, the largest public works programme with over 58 million beneficiaries, is circumscribed by accountability (Dasgupta 2012). Where there has been elite domination of the institutions of local governance in some states, the process of social audit has been subverted, thus leading to the uneven implementation of the programme. Lakha (in this volume) compares his observations from a field survey conducted in Andhra Pradesh with the findings from various studies on MNREGA implementation in Karnataka. He argues that in Andhra Pradesh the pressure to conduct social audit came from the top but through collaboration with civil society groups the village-level auditors were trained to conduct social audits. In this instance, the state government freed the programme from elite capture, leading to its relative success compared to the Karnataka state experience. The indifferent state administration in Karnataka driven by middle class/caste concerns failed to make a mark in implementation of MNREGA. In other words, the so-called capacity of the state to ensure social protection is also contingent on the political control and containment of the interests of the elite, something that most successful developmental states shared. Here of course, we have a

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federated structure in which the local state empowered the village-level officials to ensure successful implementation of the centrally funded employment programme. The transformation of the Indian state as manifested in a market-based citizenship has been brought about partly by the top-down approach to welfare schemes and partly by pressures from below. The extent of the success of such schemes has been subject to varying capacity of the state, albeit at local levels, to carry out public projects and deliver public services. However, as D’Costa (in this volume) shows that despite the massive rural employment programme alluded to above, at the macrolevel, the Indian state is hamstrung in its ability to generate meaningful jobs for its workforce. For all the market reforms undertaken to encourage and attract domestic and foreign investments, including the most recent “Make in India” scheme, India’s employment deficit each year remains massive let alone the backlog of workers seeking jobs. The state unable to foster an employment-generating economy with pressures from below has been compelled to advocate rural employment programmes, given that much of the rural workforce has not been included in India’s recent high-growth process. The ongoing process of primitive accumulation (Chatterjee 2017) and jobless growth under compressed capitalism (D’Costa 2017, 2016), which subjects the Indian economy to the same global competitive and technological forces generates a daunting employment challenge. With increased mobility and the heightened power of capital, workers are on the defensive as the number of secure and decent jobs is diluted with increased hiring of temporary, part-time, and contract workers (see Barnes 2018 for the Indian auto industry). The contemporary employment challenge of course cannot be decoupled from India’s structural legacies inherited from the past nor can it be seen as independent of the contemporary forms of high-skill, albeit low-volume labour demand as in the export-oriented IT services and automobile production. Consequently, the Indian state can partially accommodate the fallout of primitive accumulation by encouraging rural residents to seek employment in the countryside, while pushing for urban employment growth through investment efforts. Neither response is adequate to create plentiful decent paying jobs. The unanticipated intervention in social welfare measures suggests as if the Indian state has offset pressures to pursue a pro-business stance. On the contrary, and this is part of the puzzle, the Indian state has adopted pro-business policies even as it has intervened in specific social areas. The evidence for this is not difficult to obtain. Using the automobile industry as a specific instance, Babu (Chap. 9) shows how the role of the state has changed from interventionist to hands-off pro-business policy under an expanding auto industry. Liberalization and market reforms since the 1980s and 1990s provided the impetus for growth of the industry. However, with complete liberalization of the auto industry, several multinational auto companies entered India, mostly through joint ventures with Indian firms. While the sector enjoys the benefits of generous tax concessions and healthy growth, there has been frequent industrial unrest in the automotive sector, which has been compounded by the state’s hands-off policy, as opposed to a mediating role, in industrial disputes. Auto manufacturers have aggressively sought to weaken workers through their anti-unionization posture and creating a highly segmented workforce. They have mobilized more and

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more contract and part-time workers in the midst of a small core of well-paid permanent employees, while suppliers have been pushed to impose exploitative production conditions on their workers. As a result, higher productivity gains by suppliers are passed onto the manufacturers (Kerswell and Pratap 2015), while large-scale automation has also disturbed the overall industrial relations climate. Most analysis on the role of state has focused on the central institutions on the assumption that these state institutions have a national reach. However, large states such as India are also a federated system whose governance system has devolved to lower reaches of society. Chatterjee (in this volume) disaggregates state efficacy and argues that instead of focusing exclusively on either the macro-level state autonomy or the micro-level quality of bureaucracy, it would be more useful to focus on the meso-level institutional layering to understand policy coherence and effectiveness of the changing modes of state intervention in India. She specifically focuses on the Indian power sector as it has evolved into a public–private system, combining elements of liberalization and dirigisme and presents a pessimistic vision of the operations of a kind of hybrid state capitalism in practice. The experience of the power sector shows a lack of cohesion of the state in which distribution of power and responsibilities across the agencies of the state is rather ambiguous and irrational, which in turn undermines the efficacy of the state. It helps to explain the apparently contradictory nature of the contemporary Indian state—business-friendly, populist, and often underperforming—all at the same time. State capitalism and liberalization seem to have been combined through an ad hoc and often painful process of institutional change. The success or failure of state interventions in economic and industrial transformation and in the delivery of services can be located at all three levels of central (apex institutional arrangements), local state, and meso-levels (what Chatterjee in this volume labels “institutional layering”) that result from leftover legacies of previous systems and new add-ons from new institutional arrangement. Translating policy reform into actual improvements on the ground is a matter of creating the right set of incentives and systems of checks and balances but also entails a bottom-up process. Sareen, for example (in this volume) attempts to understand the engagement of the marginalized, forest-dwelling villagers in improving state functions since governmental interventions failed to live up to their objectives. His chapter demonstrates through three case studies from the Indian state of Jharkhand how positive outcomes regarding inclusive local governance could be achieved with enabling interventions, which are sensitive to the transformational potential of the state-community-people relations. His case studies conducted in the villages of West Singbhum in the state of Jharkhand show that with increasing local awareness it may be possible to motivate marginalized populations to engage constructively with government interventions by holding public institutions accountable and thus securing services more effectively that were already earmarked. However, what is not clear is how the interaction between the state, capital, and society plays out since there are contradictory roles, with contrasting rationales, for the state. For example, the mobilization of new technologies by the state to deliver government services to the public and avoid leakages signals a democratic, clean, and

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pro-social development sentiment. However, the simultaneous use of such technologies for surveillance to check and thwart any challenges to the state’s legitimacy may have little bearing on development. According to Arun (Chap. 11) advancements in modern digital technologies have influenced the nature and functions of the modern state. With data collection treated as storable material, the Indian state is retreaded in the twenty-first century. A “retreaded state” refers to the introduction by the state of new layers of institutional agencies, legal procedures, and technological mechanisms to monitor and control larger areas of society. In this sense, the role of the state has clearly changed, whereby not only does the state regard surveillance as integral to technological entity but also use the technology as a grand development narrative, which promises to reduce fear, insecurity, corruption, poor governance and access to speedy public service delivery and welfare. This volume presents a total of ten chapters in three parts, excluding the introductory analytical framework. The first part theorizes the state’s changing context and discusses the simultaneous pursuit of economic and social goals. There are both structural and ideological factors at work that contribute to a shifting context, but the centrality of redistributive politics and the contradictions therein explain a great deal of what the state does and cannot do. In part two, we look at the workings of the Indian state both in terms of what it aspires to do but structurally is unable to accomplish either because of the scale of the problem or the dysfunctionality that sets in with continuous reforms and internally incoherent state apparatus. It also addresses, following from part one, why the state pursues welfare policies in an era when state cutbacks are the norm and not an exception. In the third part, we provide additional evidence on the role of the state and the contested forms of governance arising from changing contexts and shifting roles of the state. More specifically, the Indian state is disaggregated at different levels and sectors to capture the interaction between distributive politics and governance at the village, state, and industry levels. At the same time, the interplay between state, labour, and society mediated by capital and new digital technologies suggests that the role of the state in fostering development and welfare is double-edged and not predefined, preordained as legitimate, or completely benign as it is often claimed to be. In the section below, we describe each chapter in the volume.

1.5 Chapter Descriptions In Chap. 2, Achin Chakraborty interprets the role of the Indian state in the apparent shift in the state’s approach to welfarist interventions—from the earlier approach focusing on “targets” and “beneficiaries” to the so-called right-based one. Several acts were passed during the past decade and a half, ostensibly to allow citizens to make moral claims on the behaviour of the State and individuals, as well as on social arrangements in general. To bring these dynamics to the forefront, he develops an analytical perspective on the state to interpret this shift. Starting from a brief account of the series of events that culminated in such important legislations as the Right to

16

A. P. D’Costa and A. Chakraborty

Information Act (RTI), 2005; Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), 2005; Right of Children to Free and Compulsory Education Act (RTE), 2009; and the much contested National Food Security Act, 2013. He argues that while the normative discourse on rights and capabilities highlights the importance of the “discursive practice” in shaping public policies, it throws very little light on how it influences and is influenced by “political practice”. According to Chakraborty, the differential trajectories of human development that emanated from these acts in later years support his view that the interactions between the changing normative concerns in development discourse on the one hand, and the myriad political mobilizations and competitive electoral politics (identity-based collectivities) on the other, ultimately shape the future of human development in India. Priya Chacko in Chap. 3, analyses contestations over citizenship in contemporary India with a focus on how these struggles manifest in debates over social policy. She argues that in recent years, civil society campaigns have sought to appropriate and reconfigure neoliberal concepts of accountability, localization, and participation to further a regime of social citizenship in India. Successive governments, headed by two different political parties, however, have re-appropriated these ideas to push varied regimes of “market citizenship” which seek to reconcile social policy with market reform. The chapter makes these arguments by drawing on a relational conception of the state as the outcome of the balance of power between different social forces which act through the state’s institutional ensemble and by analysing policy documents and debates on social policy. The chapter contributes to the literature on citizenship in India, civil society, and the regulatory state, and welfare policy in a time of market reform. In examining the Indian state in the post-planning period, Anjan Chakrabarti and Soumik Sarkar in Chap. 4 seek to analyse the changing rationale and character of the Indian state in the backdrop of the post-planning Indian economic transition. They posit that the Indian economy has transited into the triad of neoliberalism, global capitalism, and inclusive development. They further argue that the Indian state is both a creator of this triad and also the site of the combined effects of these nodes that pull and push it into contradictory directions. Chakrabarti and Sarkar show that in enacting these multiple roles, the Indian state is characterized by both benevolent and violent sides of its existence in one turn. Its violent side is captured in terms of primitive accumulation and state of exception while its benevolent character as seen through the social programmes for the needy and nation building efforts by creating human capital for capitalist induced growth. The changing character and roles of the Indian state in turn suggest a foundational displacement in the rationale of its existence, a shift they argue should be identified not merely in terms of what it says but in what it actually practices. In this context, the Indian state governs for the good of society and not for itself is identified as one of the major changes in its rationale. Chapter 5 begins by presenting a well-founded popular perception—that India has long been experiencing growth without development. Whether economic growth was slow (until c1980) or among the world’s fastest (after 2003) it never had the expected impact on improving human welfare. The concerns regarding this process reached from the moral doubts about inequality being unfair to the more practical

1 Changing Contexts, Shifting Roles, and the Recasting …

17

that inequality could both lower growth rates and make growth unsustainable. Something happened after the mid-2000s. There is accumulating evidence that growth in India now seems more tightly linked to improvements in human well-being. Mathew McCartney in this chapter explores several complementary hypotheses to explain this shift. The revolt of the activists and improvements in information provides at best only partial explanations. The change in the nature of national politics in India to something more predictable and durable seems the most promising explanation for the tighter link between growth and welfare. In Chap. 6, Salim Kassa Lakha takes off from the false observation that the aftermath of the Asian Financial Crisis (AFC) in 1997 was the demise of the developmental state. In this chapter, he suggests that this view has been recently challenged by scholars who argue that rather than the demise of the developmental state, the role of the state has been reconfigured in the post-AFC period to meet new economic challenges and social demands. One aspect of this reconfiguration is the provision of more inclusive social protection by the state. This chapter examines the role of the state in social protection in India with reference to the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), which was introduced through an Act of Parliament in 2005. There are two distinguishing features of MGNREGS: first, it guarantees employment as a legal right and, second, through the provision for mandatory social audits by the beneficiaries of the scheme, it promises accountability from below. However, as Lakha shows it is arguable whether the state has demonstrated a capacity to deliver effectively on its rights-based programme. The chapter raises the central question: What does the implementation of MGNREGS reveal about the capacity of the state to provide social protection and accountability in contemporary India? In addressing the question, Lakha cautions us against viewing the state as a homogenous entity and instead points to decentralized and disaggregated states, something that is also demonstrated by Siddharth Sareen in Chap. 10. As sovereign nations, states have intervened variously across the developing the world. Those more ambitious and nationalist such as India have sought to create self-reliant economies, mostly through state-led industrialization. Today the concern for employment (and other welfare-enhancing schemes), (see Chakraborty, Chacko, McCartney, Kassim-Lakha) has received concrete policy focus with “inclusive” development as their latest mantra. In this Chap. 7, Anthony D’Costa using the framework of compressed capitalism argues that even if new opportunities accompany pro-market reforms, generating employment in an era of open economies and technological change is difficult due to both structural and institutional constraints. This chapter critically assesses whether the Indian state, despite many ambitious pronouncements can make a dent in India’s growing employment deficit, both on the quantitative and qualitative dimensions. Using a political economy framework and reviewing key recent government statements and policies regarding employment, D’Costa shows why good jobs are hard to come by despite high rates of economic growth. The chapter concludes with a brief preview of how the Indian state might have to recast itself if it is to accomplish some of the employment goals it has set out for itself.

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A. P. D’Costa and A. Chakraborty

The difficulty of the Indian state to pursue economic and social goals is further investigated in Chap. 8 by Elizabeth Chatterjee. She shows that state intervention in India has persisted but has proved far from immune to critiques of traditional dirigisme. By examining the power sector, she shows that waves of reforms since 1991 have together created a hybrid and regionally differentiated state-market system. Blurring the public–private boundary, this reinvented “state capitalism 2.0”, according to her, displays both refurbished modes of intervention and new governance arrangements with private players. Nonetheless, as the power sector’s continually dismal condition suggests, this state-capitalist hybrid has not (yet) provided a coherent alternative to older dirigisme or the Anglo-American mode of “deregulatory” liberalization. Instead, between 1991 and 2014 its ad hoc, layered emergence generated distinctive forms of dysfunction. Coupled with competitive politics, the state’s ever-increasing institutional complexity rendered it internally incoherent and vulnerable to rent seeking on multiple fronts. The evidence from the power sector suggests that state intervention in India has remained simultaneously indispensable and dogged by persistent administrative and financial difficulties. This helps to explain the apparently contradictory nature of the contemporary Indian state at once business-friendly, populist, and often underperforming. Chapter 9 by Babu Remesh critically examines how the various industrial and sector-specific policies of the state have shaped industrial relations in India’s automotive sector. Remesh begins with an overview of the supportive policy environment that facilitated the “automotive revolution” in India. Subsequently, he briefly maps the transformations in the production organization, value chain governance, and subcontracting practices and establishes the crucial role of SMEs and tiny units in the sector. Relying on available secondary data, policy documents, and empirical research, he shows that there has been a visible deterioration in the quality of employment in the sector. The decline in labour standards is attributed to multiple factors, including emergence of new subcontracting practices and flexible labour regimes; introduction of intensive austerity measures; structural changes in the workforce composition in a period of contractualization and casualization of employment; and the weakening of collective bargaining in the sector. Alongside these, Remesh explains that there has been a temporal shift of power relations in favour of capital vis-à-vis labour. A major factor that facilitated this shift is the changing role of state. Over time, a visible industry–government nexus has emerged and the state has become a facilitator of investment and a supporter of capitalists’ interests. The “dual-support” from the state for the capitalist class is visible both in terms of the promotional measures (and harmonious business climate) offered to the industry and in terms of the laxity of the state’s machinery in the effective enforcement of labour laws. Based on this premise, the chapter provides a detailed discussion of the emerging employment insecurities in the sector (focusing on casualization, contractualization and the recent trend in growing industrial unrest). It eventually concludes that the “auto revolution” in India has been booming at the cost of labour standards in the automotive industry. In Chap. 10, Siddharth Sareen disaggregates the workings of the state at the village level. He interprets how a macro-level context of capitalist development in India is shaping rural forestland by contextualizing multiple instruments of interven-

1 Changing Contexts, Shifting Roles, and the Recasting …

19

tion within Jharkhand’s village life. Deconstructing three instances of access to and authority over resources, he posits that despite poorly functioning local government, aspirations at the grassroots level drive engagement with government interventions. These included attempts to acquire title deeds over traditionally claimed land by villagers; a traditional village-cluster or pir’s internal conflict concerning regulation of access to wood by a village-level institution; and extortion by a Maoist insurgent group from a corrupt local contractor under an anti-insurgency scheme. Informed by fieldwork with Ho communities of West Singhbhum district, Sareen theorizes the state through the interplay of local governance, democracy and resource access, showing how marginalized groups’ local engagement with the state constitutes a frustrating relationship. Calling for enabling interventions’ positive outcomes for such populations, this chapter makes sense of the conundrum of villagers’ involvement with a largely dysfunctional state at the local level. Digital technology has a significant impact on the nature and functions of the modern nation state. It has conceptually changed the interrelationships between state, surveillance, and democracy in India. In this context, P. Arun in Chap. 11 explores the nature of the Indian state in the twenty-first century and examines its Janus-faced role of surveillance. The state’s data collection efforts are not merely to enhance governance to improve developmental policies; rather, they are also used for masked surveillance by the state. Such efforts make it difficult to understand the purpose for which mass surveillance is deployed. The author explores the politics of surveillance and the extent to which its use is legal and desirable. Further there is a discussion on the counter effects of deploying sovereign power on governance and, simultaneously, for unlawful intervention in the day-to-day lives of people. The former involves mass biometric identification system in India. The author analyses the latter part of unlawful intervention by inspecting cases of Indian state’s critical reactions, wherein travel by three civil society activists, Priya Pillai, Gladson Dungdung and Christine Mehta, was restricted by the state.

References Acemoglu, D., & Robinson, J. R. (2012). Why nations fail: The origins of power, prosperity, and poverty. New York: Crown Publishing. Alavi, H. (1972). The state in post-colonial societies: Pakistan and Bangladesh. New Left Review, I(74), 59–81. Amsden, A. H. (1989). Asia’s Next Giant: South Korea and Late Industrialization. New York: Oxford University Press. Bardhan, P. (1999). The political economy of development in India. New Delhi: Oxford University Press. Barnes, T. (2018). Making cars in the new India: Industry. Precarity and Informality, Cambridge: Cambridge University Press. Bhagwati, J. (1992). India in transition: Freeing the economy. Oxford: Clerendon Press. Bhattacharya, P. (2013). Everything you wanted to know about the Sen—Bhagwati, DebateLive Mint, July 20, 2013, http://www.livemint.com/Politics/zvxkjvP9KNfarGagLd5wmK/ Everything-you-wanted-to-know-about-SenBhagwati-debate.html. Accessed April 21, 2017.

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Biersteker, T. J. (1992). The “triumph” of neoclassical economics in the developing World: Policy convergence and bases of governance in the international economic order. In J. N. Rosenau & E.-O. Czempiel (Eds.), Governance without government: Order and change in World politics (pp. 102–131). Cambridge: Cambridge University Press. Chatterjee, P. (2008). Democracy and economic transformation in India. Economic and Political Weekly, 43(16), 53–62. Chatterjee, P. (2017). Prelude: Land the political management of primitive accumulation. In A. P. D’Costa & A. Chakraborty (Eds.), The land question in India: State, dispossession, and capitalist transition (pp. 1–15). Oxford: Oxford University Press. D’Costa, A. P. (2005). The long March to capitalism: Embourgeoisment. In Internationalization and industrial transformation in India, Basingstoke: Palgrave Macmillan. D’Costa, A. P. (2000). Capitalist maturity and corporate responses to liberalization: The steel, auto, and software sectors in India, special issue on corporate capitalism. Contemporary South Asia, 9(2), 141–163. D’Costa, A. P. (Ed.). (2012). Globalization and economic nationalism in Asia. Oxford: Oxford University Press. D’Costa, A. P. (2014). Compressed capitalism and development: Primitive accumulation, petty commodity production, and capitalist maturity in India and China. Critical Asian Studies, 6(2), 317–344. D’Costa, A. P. (2013). Globalization, the middle class and the transformation of the Indian State in the new economy. In S. Bhattacharya (Ed.), Two decades of market reform in India: Some dissenting views (pp. 125–141). London: Anthem Press. D’Costa, A. P. (2016). Compressed capitalism, globalisation and the fate of Indian development. In S. Venkateswar, & S. Bandyopadhaya, (Eds.), Globalisation and the challenges of development in contemporary India (pp. 19–39). Springer. D’Costa, A. P. (2017). A point of no return? changing structures and jobless growth in India. As part of the economic and social research council (UK). Global poverty and inequality dynamics research network. https://www.gpidnetwork.org/research/. D’Costa, A. P. (2018). Capitalist maturity and South Korea’s development conundrum. Asia and the Pacific Policy Studies, forthcoming. D’Costa, A. P., & Chakraborty, A. (Eds.). (2017). The land question in India: State, dispossessionand capitalist transition. Oxford: Oxford University Press. Dasgupta, P. (2012). Employment generation schemes and long-term development: A case study of the NREGA in India, in Employment Guarantee Schemes. In M. Murray, & M. Forstater (Eds.), Job creation and policy in developing countries and emerging markets. London: Palgrave Macmillan. Dreze, J., & Sen, A. (2013). An uncertain glory: India and its contradictions. Princeton: Princeton University Press. Evans, P. B. (1995). Embedded autonomy: States and industrial transformation. Princeton: Princeton University Press. Evans, P., & Heller, P. (2015). Human development, state transformation, and the politics of the developmental state. In S. Leibfried, et al. (Eds.), The Oxford handbook of transformations of the state, Oxford handbooks online (pp. 1–29). https://doi.org/10.1093/oxfordhb/9780199691586. 013.36. Grugel, J., & Riggirozzi, P. (2018). New directions in welfare: Rights-based social policies in post-Neoliberal Latin America. Third World Quarterly, 39(3), 527–543. Jaffrelot, C. (2003). India’s silent revolution: the rise of the lower castes in North India. London: C. Hurst & Co. Kerswell, T., & Pratap, S. (2015). Informality in automobile value chains in India, WorkingUSA: The Journal of Labor and Society, 18(4): 533–553. Kohli, A. (2009). Democracy and development in India: From socialism to pro-business. New Delhi: Oxford University Press. Kohli, A. (2012). Poverty amid plenty in the new India. Cambridge: Cambridge University Press.

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Lange, M. (2015). States in the global South: Transformations, trends, and diversity, In S. Leibfried, et al. (Eds.), The Oxford handbook of transformations of the state, Oxford Handbooks Online (pp. 1–20). https://doi.org/10.1093/oxfordhb/9780199691586.013.36. Marchak, M. P. (1993). The integrated circus: The new right and the restructuring of the global markets. Montreal: McGill-Queen’s University Press. Mazumdar, S. (2012). Big business and economic nationalism in India. In A. P. D’Costa (Ed.), Globalization and economic nationalism in Asia (pp. 59–83). Oxford: Oxford University Press. Mukherjee, R. (2013). Ideas, interests and the tipping point: Explaining economic change in India”. Review of International Political Economy, 20(2), 363–389. Nagaraj, R. (2012). Introduction. In R. Nagaraj (Ed.), Growth, inequality and social development in India: Is inclusive growth possible? (pp. 1–24). Basingstoke: Palgrave Macmillan. Nam, S.-W., & D’Costa, A. P. (2015). What’s next after development? Some policy directions for Korea. In A. P. D’Costa (Ed.), After-development dynamics: South Korea’s contemporary engagement with Asia (pp. 263–275). Oxford: Oxford University Press. Nayyar, D. (Ed.). (1994). Industrial growth and stagnation: The debate in India. New Delhi: Oxford University Press. O’Connor, J. (1973). The fiscal crisis of the State. New: St. Martin’s Press. Olson, M. (1993). Dictatorship, democracy, and development. The American Political Science Review, 87(3), 567–576. Pedersen, J. D. (1992). State, bureaucracy and change in India. Journal of Development Studies, 28(4), 616–639. Sanyal, K. (2007). Rethinking capitalist development: Primitive accumulation, governmentality and post-colonial capitalism. New Delhi, India: Routledge. Venu, M. K. (2016). Saving crony capitalists from Raghuram Rajan. The Wire. https://thewire.in/ 44003/saving-crony-capitalists-from-raghuram-rajan/. 26/06/2016. Accessed April 7, 2017. Wade, R. (1990). Governing the market: Economic theory and the role of the government in East Asian industrialization. Princeton: Princeton University Press.

Part I

Theorizing the State’s Changing Role in a Changing Context

Chapter 2

From Passive Beneficiary to ‘Rights Claimant’: What Difference Does It Make? Achin Chakraborty

Abstract There has been an apparent shift in the Indian state’s approach to welfarist interventions—from the earlier approach focusing on ‘targets’ and ‘beneficiaries’ to the so-called right-based one. Several acts were passed during this time, ostensibly to allow citizens to make moral claims on the behaviour of the state and individuals, as well as on social arrangements in general. In this chapter, an analytical perspective has been developed to interpret this shift, starting from a brief account of the series of events that culminated in such important legislations as the Right to Information Act, 2005, Mahatma Gandhi National Rural Employment Guarantee Act, 2005, Right of Children to Free and Compulsory Education Act, 2009, and the much contested National Food Security Act 2013. While the normative discourse on rights and capabilities highlights the importance of the ‘discursive practice’ in shaping public policies, it throws very little light on how it influences and is influenced by the ‘political practice’. The differential trajectories of human development emanated from these acts in later years support the view that the interactions between the changing normative concerns in development discourse on the one hand and the myriad of political mobilisations and competitive electoral politics on the other ultimately shape the future of human development in India. Keywords Welfare · Interventions · Rights-based legislations · Development discourse · Democratic struggles · Identity-based collectivities

2.1 Introduction There was an apparent shift in the first decade of this millennium in the way the Indian state used to deal with the problem of a large section of its citizens not being able to fulfil their basic needs. Several acts were passed during this time, ostensibly to allow A. Chakraborty (B) Director and Professor of Economics, Institute of Development Studies Kolkata (IDSK), Kolkata, India e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2019 A. P. D’Costa and A. Chakraborty (eds.), Changing Contexts and Shifting Roles of the Indian State, Dynamics of Asian Development, https://doi.org/10.1007/978-981-13-6891-2_2

25

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A. Chakraborty

citizens to make justiciable claims on the behaviour of the state and individuals, as well as on social arrangements in general. The acts specify the ‘duty-bearers’ and fix duties and responsibilities for delivering certain basic public services. The language of rights enshrined in these recent enactments gives all citizens—not just a certain group of them who are identified as ‘poor’—the right to make claims on the behaviour of the state and individuals.1 This appears as a clear shift from the earlier official discourse around ‘targets’ and ‘beneficiaries’, a shift from a paternalistic, top-down approach to an apparently more devolved and demand-driven one. This so-called paradigm shift in welfare policy thinking in India seems to have followed the global discourse on human development and human rights on the one hand and emergence of a new kind of civil society activism in the political arena in India, on the other. I make an attempt here to develop an analytical perspective on this shift which is expected to throw some light on the nature of responses of the Indian state to the intensifying demand for ameliorating multiple deprivations that a large number of Indians still experience. The perspective would help us relate the recent progress in terms of legislations and the moral philosophic conceptual development in the area of human rights and human development. There have been numerous studies to understand why the government schemes and programmes, which have so far been the Indian state’s answer to widespread deprivation in the country, have had so very limited success in terms of reaching the people they aimed at.2 The normative force of a rights-based approach in this context has long been realised. However, it is well recognised that invocation of a moral argument behind a particular right is not enough to guarantee its realisation. The recent trajectory of events that has culminated in such important legislations as the Right to Information Act, 2005, Mahatma Gandhi National Rural Employment Guarantee Act, 2005, Right of Children to Free and Compulsory Education Act, 2009, and the National Food Security Act, 2013, provides an important backdrop against which attempts can be made to understand the complex interplay of the normative and the political. In what follows, we first elaborate on the approaches that had ostensibly informed the policymakers in India as far as the policies towards poverty alleviation and human development were concerned (Sect. 2.2). We then track the trajectory of the apparent shift from a passive beneficiary-oriented approach to a right-based one (Sect. 2.3). This shift has been viewed as a result of the politics of accommodation by the state on the one hand and the shift in development discourse towards a powerful articulation of the normative arguments for human development. This has been discussed in Sect. 2.4. We finally wrap up with an understanding of the state based on the analytical insights thrown up by the empirical observations (Sect. 2.5).

1 Rights

are not necessarily claims on the State. For example, the Right to Education Act specifies duties of school management, teachers, parents and local government. 2 Amartya Sen and Jean Dreze have been critically exploring this issue in a series of books jointly authored by them. For a more recent comprehensive account of the Indian state failing to deliver the basic welfare needs of the people see Dreze and Sen (2013).

2 From Passive Beneficiary to ‘Rights Claimant’: What Difference …

27

2.2 Approaches to Poverty Alleviation and Human Development The standard economic policy recommendations for poverty reduction are basically of two kinds one, recommendations for macroeconomic adjustments that are supposed to promote economic growth, the benefits of which are supposed to trickle down to the poor and the deprived, and two, certain specific interventions based on the microeconomic logic of market failure or interventions based on some notion of distributive justice. In India, both kinds of policies have so far been considered important, even though doubts have often been raised about the poverty-reducing effects of the kind of rather impressive growth that the country has been experiencing in the recent period. Doubts have also been raised about the effectiveness of certain poverty alleviation programmes, as the design and implementation of certain schemes and programmes do not seem to have been founded on sound economic logic.3 Notwithstanding the limitations of the anti-poverty programmes that the Indian state has so far implemented throughout the country, different sub-national units have achieved varying levels of success. Given the very large differences among the states in India in terms of achievements in poverty reduction and human development (see Table 2.1 for a comparative picture across select states of India), it is important to re-examine the analytical premise that underlies the social policies towards human development in general and poverty alleviation programmes in particular.4 From the proactive role that the state governments in India have been taking recently to bring investment in their respective states, it seems that the policymakers believe in a kind of ‘separability’ of the issues of growth and poverty—the view that is still dominant in certain circles of development economists and policymakers.5 The conventional policy thinking suggests that there are policies to enhance growth, such as good infrastructure, security of property rights and ‘investment-friendliness’ and to alleviate poverty specific programmes need to be designed basically to redistribute the fruits of growth. In other words, poverty alleviation programmes, it is conventionally believed, have no positive role to play as far as growth and economic planning are concerned. The recent theoretical and empirical research, however, questions this conventional wisdom. The argument that many anti-poverty policies 3 One

of the most ambitious poverty alleviation programmes in India was Integrated Rural Development Programme (IRDP) introduced during the Sixth Five-year Plan (1980–85), which aimed at creating productive assets for the poor. But the potential of the poor to make use of the assets productively was grossly overestimated and the programme failed to bring about the desired results. To say that, it was due to the ‘problems at the implementation stage’ would be wrong. It was rather due to the design itself which ignored the micro-motives of people who were targeted. See Rath (1985) for a comprehensive assessment of the programme that brought out the flaws in the economic logic of the programme. 4 As Dreze and Sen (1996) observed, ‘In the general picture of political apathy towards elementary education that is characteristic of much of India, Kerala is a big exception, and the results vindicate the attention that has been paid to this’ (p. 16). 5 This point was made in Chakraborty and Mukherjee (2009).

67.8

63.3

72.0

66.6

66.3

70.9

66.2

66.9

72.0

62.5

Chhattisgarh

Delhi

Gujarat

Haryana

Jammu & Kashmir

Jharkhand

Karnataka

Kerala

Madhya Pradesh

66.3

Assam

Bihar

69.6a

66.0

77.8

70.8

66.9

74.9

71.3

71.0

74.7

66.3

68.4

70.8

Female

Male

66.4a

Life expectancy at birth (2010–14)

Andhra Pradesh

State

64.2

74.9

68.8

66.6

72.6

68.6

68.7

73.2

64.8

68.1

68.5

67.9a

Total

50.0

12.0

28.0

32.0

26.0

36.0

33.0

18.0

41.0

42.0

47.0

37.0

IMR (2015)

Table 2.1 Indian states compared in terms of development indicators

31.7

7.1

20.9

37.0

10.4

11.2

16.6

9.9

39.9

33.7

32.0

9.2

Poverty rate (2011–12) (Tendulkar method)

42.0

19.7

36.2

45.3

27.4

34.0

38.5

31.9

37.6

48.3

36.4

31.4

Stunting

42.8

16.1

35.2

47.8

16.6

29.4

39.3

27.0

37.7

43.9

29.8

31.9

Underweight

25.8

15.7

26.1

29.0

12.1

21.2

26.4

15.9

23.1

20.8

17.0

17.2

Wasting

Nutritional status of children < 5 years of age (2015–16)

52.5

34.2

44.8

65.2

40.6

62.7

54.9

54.3

47.0

60.3

46.0

60.0

(continued)

Anaemia among women (15–49) (2015–16)

28 A. Chakraborty

64.7

69.7

65.5

68.6

–

62.9

69.1

68.9

66.4

Odisha

Punjab

Rajasthan

Tamil Nadu

Telengana

Uttar Pradesh

Uttarakhand

West Bengal

India

69.6

71.6

74.5

65.4

–

72.7

70.2

73.8

67.1

73.6

67.9

70.2

71.7

64.1

–

70.6

67.7

71.6

65.8

71.6

25.0

26.0

34.0

46.0

34.0

19.0

43.0

23.0

46.0

21.0

21.9

20.0

11.3

29.4

–

11.3

14.7

8.3

32.6

17.4

38.4

32.5

33.5

46.2

28.0

27.1

39.1

25.7

34.1

34.4

35.7

31.5

26.6

39.5

28.3

23.8

36.7

21.6

34.4

36.0

21.0

20.3

19.5

17.9

18.0

19.7

23.0

15.6

20.4

25.6

53.0

62.5

45.2

52.4

56.6

55.0

46.8

53.5

51.0

48.0

Telengana Source Life Expectancy at Birth: SRS-Based Abridged Life Tables, http://www.censusindia.gov.in/Vital_Statistics/SRS_Life_Table/2.Analysis_2010-14.pdf IMR: SRS Bulletin (December 2016), Vol. 50, No. 2 Nutritional Status of Children and Anaemia among Women: NFHS 4 Report for India (IIPS and ORC Macro 2017)

a Includes

69.9

Maharashtra

Table 2.1 (continued)

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A. Chakraborty

can potentially—and do in fact—contribute to economic growth is, for good reason, now gaining ground. Instead of viewing poverty alleviation as a residual aspect of growth-oriented economic planning, many scholars now argue that the current state of knowledge forces us to view it as an essential aspect of any growth-oriented strategy in the developing world and the interconnections between different dimensions of deprivation and inequality on the one hand and their connections with growth on the other must be fully explored.6 Strategies to improve infant and child health, for example, cannot be seen in isolation from mass literacy programmes. We often see a lack of match between standard poverty alleviation programmes that aim at income generation and the so-called social sector programmes that seek to intervene in the areas of public health or elementary education. The complementarities between the income-generating programmes and the programmes to improve health and human capital of the poor were often ignored. Even the policies and programmes within the social sector itself suffer from isolation in both designs and its implementation. Social sector planning (as opposed to economic planning), which aims at education, health or poverty alleviation, generally suffers from inadequate allocations, wrong prioritization, bad targeting, unimaginative design, or insensitive delivery mechanism. The challenge for policymakers is to use the available resources to provide the greatest possible assistance to those who need it most. In the absence of reliable information on personal income, the first-best solution of identifying the poor and directing all benefits only to them is not feasible. This makes targeting by means of indirect indicators the only feasible alternative. The relative ease of identifying the pockets of ‘backwardness’ makes the place of residence a possible criterion for determining eligibility for poverty reduction programmes. Special allocation for identified backward areas within a state is a commonly used strategy in India, which is used in conjunction with additional targeting criteria such as identification of Below Poverty Line (BPL) households. However, geographical targeting in India has so far been attempted to ‘develop’ the ‘backward’ regions by allocating more resources to build economic infrastructure in these areas. Activities of Paschimanchal Unnayan Parshad 7 (PUP) or Uttarbanga Unnayan Parshad 8 (UUP) in West Bengal are examples of this kind. In the area of social sector, however, geographical targeting has been less emphasised, even though a few attempts have been made in this direction. The District Primary Education Programme (DPEP) was planned to be implemented in phases—starting from the most backward districts. We have discussed elsewhere how the district level focus may hide a high intra-district variation and in the absence of specific strategies to target geographically smaller units, the desired outcome may not be achieved (Chakraborty and Mukherjee 2009). 6 As

Dreze and Sen (1996: 6) noted ‘the lessons of economic and social progress across the world over the last few decades have forcefully drawn attention to the instrumental importance of education, health, and other features of the quality of human life in generating fast and shared economic growth’. More recently, Hanushek and Woessmann (2008) have empirically established the connection between expansion of human capability (in terms of cognitive skills) and economic growth. 7 Translated as ‘Western Regional Development Board’. 8 Translated as ‘North Bengal Development Board.

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Within smaller geographic areas, particularly rural areas, income disparities tend to be much smaller. This is because typically smaller areas have more homogeneous socio-economic characteristics, and the population is subject to the same agroclimatic and geographic conditions. Targeting smaller administrative areas—blocks, Gram Panchayats or even individual villages—can reduce leakage significantly. The attempt made by the Panchayats and Rural Development Department, Government of West Bengal, to identify more than four thousand villages as ‘backward’ is an important step in this direction. However, this identification exercise has not been followed up by implementation of poverty alleviation programmes targeted specifically to these villages. If a poverty alleviation programme is targeted to villages, a closer correspondence between need and provisioning can be achieved. Some villages, for example, may need badly a local source of drinking water while some others need a workfare programme like MGNREGS more than anything else. While charting out strategies to achieve universal health coverage or universalization of elementary education in India, the standard policy view tends to focus on the shortfall in physical and financial resources from certain normative standards and ends up recommending enhancement of allocation of public resources to the sector in question. The proponents of this view, who might be called the supplywallahs (Banerjee and Duflo 2011), seem to believe that it is the inadequate spending that is behind the poor education and health outcomes in India. A diametrically opposite view is commonly held by the financial press in India, which sees any government expenditure on the social services with suspicion and dubs such expenditures ‘populist’. The supply wallah position can hardly be dismissed as there is plenty of evidence from the history of Europe, America and Japan which brings out most forcefully the role of the government in promoting mass education which in turn led to sustained economic and social development. Those experiences later inspired Japan to achieve universalisation of school education by the first decade of the twentieth century, largely driven by state initiatives. Later, South Korea, Taiwan, Singapore, Hong Kong and China followed more or less similar routes (Dreze and Sen 2013).

2.3 From State Provisioning to Rights Realisation as a Normative Goal All these ways of thinking about public policy for human development or poverty alleviation that we briefly reviewed in the last section have had some commonalities. They are all normatively conceptualised top-down approaches—mostly relying on the hierarchical structure of the bureaucracy of the ‘line departments’ for implementation. The programmes and schemes were all designed from what economists call the ‘supply side’. A certain allocation of resources to a certain programme was believed to reach the beneficiary, targeted in terms of intended benefit, without much

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attention to the ‘demand side’. Even when the demand side was taken into account, the issue of implementation was seen as one of bureaucratic-managerial kind. Evaluation of these programmes and schemes largely focuses on the input or resource side—whether adequate funds have been allocated or whether the allocated fund has been utilised or not. A comprehensive evaluation, needless to say, should ideally focus on the outcome as well. Amartya Sen refines the concept of outcome by including in the evaluation the entire process through which the outcome is arrived at. And the outcome should be evaluated, according to Sen, in the space of capabilities and functionings. Following Amartya Sen’s moral philosophic foundation of the ‘capability approach’, UNDP conceptualised human development in terms of expansion of valuable human capabilities which constitute what a person can actually do or be. In this conceptual framework, the absence or deprivation of certain capabilities or real opportunities as well as the denial of political and civil liberties are relevant to the characterisation of freedoms and rights. However, there is a fundamental difference between Sen’s conceptualisation of rights and the libertarian conceptualisation of rights that views an individual’s rights as deontological constraints on the behaviour of others. While the deontological view emphasises what is called ‘negative liberty’ (such as the right to free speech), Sen takes into account both ‘negative’ and ‘positive’ aspects of freedom that characterise an individual’s capability set. Examples of positive freedom include freedom to have a long and disease-free life, freedom to have a life with dignity, and so on. By introducing this comprehensive approach, Sen effectively makes the bridge between the human rights literature that focuses largely on political and civil liberties and the human development approach that underscores the socio-economic concerns.9 One might conceptualise human development without giving a large place to civil and political rights that have historically been the dominant feature of the international human rights movement. The so-called Asian Value argument comes close to this view. In this view, the Asian societies have a value system which is essentially different from the Western value system, and therefore, the Western style human rights are irrelevant in the Asian context. One has good reason to be critical about this position. However, this does not mean we should embrace the extreme libertarian concept of right that forbids any action that would intervene, for example, in the freedom of market exchange. Sen’s suggestion is to take a consequence-sensitive evaluation system. If freedom of exchange has undesirable consequences, then the right to free exchange cannot be a universal right. On the other hand, if market-based allocation mechanism in certain contexts can bring about good consequences in terms of human capability, there is no reason why it should not be promoted.10 The extensive literature that has developed around these issues is overwhelmingly normative in which moral philosophic arguments play a significant role. While the normative discourse on rights and capabilities enhances our understanding of the interconnections between the two and in the process highlights the importance of 9 For

Sen’s view on human rights, see Sen (2004). an interpretation of Sen’s conceptualisation of human rights and the connection between human development and human rights; see Chakraborty (2000). 10 For

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what is called ‘discursive practice’, it throws very little light on how one can draw on the ‘political practice’; i.e., the actual political dynamics in a specific country context that opens up the possibilities of rights realisation. It is well known that mere legislation of a right does not guarantee its realisation. Studying the process leading to legislation as well as the post-legislation process of realisation in a concrete context would help us understand the positive-analytic side of it, as opposed to the normative.

2.4 From Normative to Political Dreze and Sen (2002) discussed failure of public policy in education, health and food security. Their case studies highlight the fact that persistent inefficiency of the public sector can be linked to a lack of public sector accountability. There are governmentrun health centres and schools, there is public distribution system that distributes food grains at subsidised prices, but it appears that there is no way to ensure effective delivery of the services expected of them. Dreze and Sen suggest that accountability could be improved by strengthening ‘countervailing power structure’ in a situation of asymmetric power between groups of stakeholders. They highlight the need for public participation and scrutiny, audits, fair electoral procedures, legal action, and so on. In all this, the media can play a positive role, they believe. Invoking human rights, in their perspective, can increase ‘voice’ and provide a source of ‘countervailing power’. In April 2001, the rights organisation People’s Union for Civil Liberties (PUCL) filed a writ petition in the Supreme Court with the demand that it is the state’s responsibility to eradicate hunger and starvation. It highlighted the striking paradox that while the food stocks in the warehouses of the Food Corporation of India were mounting, a large number of people could hardly secure two square meals a day. The petition demanded that the food stocks be used to prevent hunger and starvation. In subsequent hearings, the Supreme Court issued interim orders in which the government was asked to take specific steps in this direction. From these initial steps, the Right to Food Campaign took off. Through sustained activities of the civil society organisations and activists that include mobilisation of public opinion, media advocacy, research, dissemination, and action on the ground, the Right to Food Campaign has been able to influence the events that have culminated in the National Food Security Act 2013.11 MNREGA, passed in 2005, has culminated in the largest right-based employment guarantee scheme anywhere in the world. Introduced during the first United Progressive Alliance (UPA-I) regime, the scheme has since been continuing through UPA-II and subsequently through the National Democratic Alliance (NDA) regime led by Bharatiya Janata Party (BJP). The act guarantees 100 days of unskilled work per family in a year in rural India. Nowhere else in the world has the state imposed on itself a statutory duty to provide citizens temporary employment of this kind. 11 For

more on the Campaign, visit its website www.righttofoodindia.org.

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MNREGA has been hailed as an important step towards a meaningful social safety net, in spite of its various shortcomings. After the change of regime in 2014, there was an uncertainty regarding the continuation of the programme as Prime Minister Narendra Modi and his colleagues had earlier criticised the programme as the epitome of colossus waste. Mr Modi said in the Lok Sabha that he would keep MNREGA alive ‘as a living monument of’ the failures of the Congress for ‘making people dig holes after 60 years of Independence’.12 However, after the initial two years of neglect in terms of financial allocation and delayed disbursement of funds to states, curiously, MNREGA was again given its pride of place on its tenth anniversary when the union government declared it as a programme of ‘national pride and celebration’ and the allocation for 2016–17 was significantly raised. It would be too simplistic, rather incorrect, to say that the UPA government was more serious about implementation of MNREGA than the NDA-II government, even though one might observe some difference of significance between the two regimes’ respective approaches to the programme. In the last two years of UPA-II regime, enthusiasm about direct cash benefit transfer somewhat displaced MNREGA from its pride of place as the allocation and number of person-days created—both dropped in 2011–12. In 2012–13, they moved up a little bit but remained below the 2010–11 levels. It seems that faced with the dwindling popularity due to alleged inaction and corruption UPA-II leaders became unsure about the ability of MNREGA to generate further political dividend and found the necessary ingredients in the idea of direct cash transfer to tide over the crisis. What the ups and downs in the fate of MNREGA suggest is that competitive politics of populism on the one hand and the normative approaches built upon ethical concerns on the other may or may not coincide all the time. When they do, programmes and policies are likely to survive change of regimes. The role of Mazdoor Kisan Shakti Sanghatan (MKSS) in Rajasthan, the power of ‘public hearing’ they conducted, the role of the Right to Food Campaign spearheaded by a group of activists (Jean Dreze and others) as the main force behind the proposed Food Security Act—all these need to be brought into the ambit of analysis. What the Indian experience shows, we argue, is that an exclusively normative approach to elimination of basic capability deprivation, in particular the right-based normative framework, cannot take us far unless we appreciate the political dynamics underlying the evolution of the processes leading to rights realisation. The normative viewpoint usually subsumes the importance of politics and political act. Those legislations came into existence in India not because ‘people’ had achieved a wide ethical consensus on the normative implications of these forms of intervention, but because various groups came up forcefully with their demands, and political considerations forced the state to realise the need for accommodation. Even though the need for learning from the socalled best practices is frequently emphasised, discussions on the question of design invariably follow a normative route, centring on ‘the ought question’ rather than ‘the how question’. For example, the Right of Children to Free and Compulsory Education Act, 2009, guarantees free elementary level education for all children. However, 12 The

Hindu, 21 February 2015, as cited in Pankaj (2017). Also see Jenkins and Manor (2016).

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realisation of this right is contingent on deployment of adequate resources as well as a well-designed public schooling delivery system, which in turn presupposes favourable political institutions which are expected to shape mutually reinforcing relations between governments and groups of engaged citizens. These relations can take a variety of forms depending on what sociologists call ‘embeddedness’, that is, the ties that connect citizens and public officials across the public–private divide. Evans and Heller (2015) observe that ‘a lack of broad-based embeddedness can undermine the capacity of a state to translate growth into capabilities, albeit under democratic conditions’.

2.5 Towards an Understanding of the State and Welfare in India The debates and discussions on the ‘developmental state’ that emerged in the 1980s were mainly triggered by the remarkable economic progress in the East Asian countries in the previous couple of decades. The concept ostensibly emerged to counter the tendency to attribute economic success of these countries to the so-called marketoriented strategies. The promoters of the concept of the developmental state argued that the East Asian success was due to strategies that could best be called statedirected or state-mediated in which unfettered expansion of markets was never pursued as an overwhelming goal.13 Instead of looking at their experiences descriptively in terms of their use of a particular set of state apparatuses during a particular historical conjuncture, the scholars attempted to develop developmental state as a theoretical concept infusing generalisability. Given the diversity of experiences of different countries and the trajectory of development within specific countries, one could raise doubts about the possibility of such a grand characterisation as the one implicit in the concept of ‘developmental state’. Since the 1990s, the concept of development itself has undergone changes and the focus has been on the question what outcomes would constitute development. Such an evaluative concern required explicit value judgement. Amartya Sen’s capability approach provided the foundational arguments for a plural basis of assessing development and that helped such international development agencies as UNDP to articulate a multidimensional conceptualisation of development, which they have popularised as ‘human development’. Economic development through state-directed industrialisation can hardly be taken as an exclusive goal of development today, as the normative ground has shifted in favour of human capability as the outcome of development, in which economic development is seen as having only instrumental worth. The Indian state has often been criticised for its alleged retreat from its welfaristic interventions in the post-reform India. As a matter of fact, there is a growing sense now that certain basic conditions of life must be provided to people, which the political class can 13 See

Amsden (1989) for a thorough examination of the role of the state and industrialisation in South Korea and Wade (1990) for Taiwan.

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hardly ignore, even though the dominant policy discourse among the elite groups revolves around the importance of economic growth. Priya Chacko (Chap. 3 in this volume) also makes observations along similar lines. From the Indian state’s attempt to enable participation and inclusion within rather than against the capitalist market economy, she argues that citizenship in India is being reconstructed as ‘market citizenship’ within a regulatory state, which is different from the social citizenship of the post-war welfare and developmental states. Thus, once development is reconceptualised as expansion of human capabilities, the political economy of the developmental state becomes more complex than it used to be when the state’s agenda was to push development through industrialisation and capital accumulation with certain legitimacy of mild and not-so-mild forms of authoritarianism. Certain ideas on the role of the state have come to dominate the development literature ever since ‘new institutional economics’ emerged in the 1980s. Generally, as it was mentioned in Chap. 1, the state ‘is expected to provide a framework of law and order, institutions for enforcement of contracts, and such other institutions as are considered necessary prerequisites for market transactions and incentives for private investment and enterprise’. Accordingly, long-term economic growth is only feasible in the context of ‘inclusive economic institutions’. The ‘extractive economic institutions’ supposedly entail rent creation and extraction (Acemoglu and Robinson, 2012). Given this logic, getting rid of all extractive economic institutions would be a consistent conclusion. However, it can be shown that rents are often necessary to maintain a balance of political power or preserve a political equilibrium. Thus, the insistence on first-best rules to eliminate rents could actually have unintended and serious political consequences that would not serve overall public interests well. In India, the relative weakness of state capacity has been observed by many commentators, which is usually seen as a symptom of the underlying political difficulty of organising collective action to achieve long-term developmental goals. India’s large and heterogeneous population and high social and economic inequality are believed to have made it hard to agree on long-term common goals and their pursuit.14 India has had a fairly well-functioning democratic political system. It also has a tradition of diverse kinds of political mobilisation, including those based on caste and community identities. But this kind of activism could not produce the outcome that we are discussing (i.e. enhancement of capabilities) unless the political tradition had been harnessed to a more universalistic set of identities. In modern Indian politics, democratic struggle for positive rights does not turn out to be the dominant mode. Mobilisation against perceived discrimination and mobilisation against denial of basic capabilities—these two can yield quite different political trajectories. In other words, our main point is that a moral consensus on such an approach as right-based or capability is not something metaphysically prior to or above politics; it is the activity of politics itself, which is usually missing from the normative discourse on rights Chakraborty (2006). 14 See Bardhan (2016).

multi-class’.

In a similar vein, Kohli (2004) characterises the Indian state as ‘fragmented

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2.6 Conclusion In this chapter, I have focussed on the instruments of intervention deployed by the Indian state in the domain of human development and poverty alleviation. The fact that the trajectories of human development in different Indian states substantially differ from each other makes it important to study the interactions between the changing normative concerns in development discourse on the one hand and the myriad of political mobilisations and competitive electoral politics on the other. The apparent shift from a top-down beneficiary-oriented approach to a rights-based one seems to have been due to this interaction, which in turn would shape the future trajectory of human development in Indian states. The contrast between the experiences of the Right to Education Act and MNREGA is a case in point. While the rights language has not made a spectacular difference in the way Indian children are able to access quality education at the elementary level, the revival of interest in MNREGA by the present political dispensation after the initial phase of antipathy towards the programme shows the political compulsion that underlies the changing stance of the present regime. Therefore, invocation of ethics and normative concerns about the ‘welfare-rights’ of the citizens could only explain the overall changes in the rhetoric of development, the turn of events on the ground is deeply shaped by interests and politics.

References Acemoglu, D., & Robinson, J. A. (2012). Why nations fail: The origins of power, prosperity, and poverty. New York: Random House, Crown Business. Amsden, A. (1989). Asia’s next giant: South Korea and late industrialization. Oxford: Oxford University Press. Banerjee, A. V., & Duflo, E. (2011). Poor economics. London: Random House. Bardhan, P. (2016). State and development: The need for a reappraisal of the current literature. Journal of Economic Literature, 54(3), 862–892. Chakraborty, A. (2000). Human rights and human development. Economic and Political Weekly, September 23. Chakraborty, A. (2006). The primacy of politics. Seminar, December. Chakraborty, A., & Mukherjee, S. (2009). MDG-based poverty reduction strategy for West Bengal, (a study report sponsored by UNDP and Planning Commission, India). India: Institute of Development Studies Kolkata. Dreze, J., & Sen, A. (eds) (1996). Indian development: Selected regional perspectives. Oxford: Oxford University Press. Dreze, J., & Sen, A. (2002). India: Development and participation. New Delhi: Oxford University Press. Dreze, J., & Sen, A. (2013). An uncertain glory: India and its contradictions. London: Allen Lane. Evans, P., & Heller, P. (2015). Human development, state transformation, and the politics of the developmental State, Chapter 37. In S. Leibfried, F. Nullmeier, E. Huber, M. Lange, J. Levy, & J. D. Stephens (Eds.), The oxford handbook of transformations of the state. Oxford: Oxford University Press.

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Hanushek, E. A., & Woessmann, L. (2008). The role of cognitive skills in economic development. Journal of Economic Literature, 46(3), 607–668. IIPS and ORC Macro (2017) National Family Health Survey (NFHS-4). Mumbai: International Institute for Population Sciences. Jenkins, R., & Manor, J. (2016). Politics and the right to work: India’s national rural employment guarantee act. Hyderabad: Orient BlackSwan. Kohli, A. (2004). State-directed development: Political power and industrialization in the global periphery. Cambridge: Cambridge University Press. Pankaj, A. (2017, August 19). Shift in MGNREGA from UPA to NDA. Economic and Political Weekly, Vol LII #33. Rath, N. (1985, February 9). Garibi Hatao: Can IRDP Do It? Economic and Political Weekly. Sen, A. (2004). Elements of a theory of human rights. Philosophy & Public Affairs, 32(4), 315–356. Wade, R. (1990). Governing the market: Economic theory and the role of government in Taiwan’s industrialization. Princeton: Princeton University Press.

Chapter 3

Emerging Regimes of Market Citizenship: The Politics of Social Policy in Contemporary India Priya Chacko

Abstract This chapter analyses contestations over citizenship in contemporary India with a focus on how these struggles manifest in debates over social policy. It argues that in recent years, civil society campaigns have sought to appropriate and reconfigure neoliberal concepts of accountability, localisation and participation to further a regime of social citizenship in India. Successive governments, headed by two different political parties, however, have reappropriated these ideas to push varied regimes of ‘market citizenship’ which seek to reconcile social policy with market reform. The chapter makes these arguments by drawing on a relational conception of the state as the outcome of the balance of power between different social forces which act through the state’s institutional ensemble and by analysing policy documents and debates on social policy. The chapter contributes to literature on citizenship in India, civil society and the regulatory state, and welfare policy in a time of market reform. Keywords Social policy · Bharatiya Janata Party · Indian National Congress · Market citizenship · Social and economic rights

3.1 Introduction Contrary to dominant narratives of marketisation and neoliberalism, the past few years have seen the expansion of welfare programmes in a number of different parts of the world that have embarked on market reform (Ferguson 2015: 1–2). In India, for example, the 1990s saw the introduction of policies of pro-market and pro-business reform as well as a surge of civil society and judicial activism in relation to social and economic rights and accountability. After its election in 2004, the Congress Party-led United Progressive Alliance (UPA) government attempted to respond at a national level through legislation and policy reform to these claims for social citizenship. The major opposition party at the time, the Hindu nationalist Bharatiya Janata Party (BJP) P. Chacko (B) Department of Politics and International Studies, University of Adelaide, Adelaide, Australia e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2019 A. P. D’Costa and A. Chakraborty (eds.), Changing Contexts and Shifting Roles of the Indian State, Dynamics of Asian Development, https://doi.org/10.1007/978-981-13-6891-2_3

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acquiesced in the passing of rights-based legislation and the new National Democratic Alliance (NDA II) government that it now heads under the Prime Ministership of Narendra Modi continues to grapple with social policies related to food welfare, job guarantees and land rights. This paper seeks to compare the approach to social policy of the Congress-led UPA and the BJP-led NDA II governments to evaluate the meaning of the seemingly paradoxical ascendance of social and economic rights and the expansion of social programmes in a time of neoliberal reform. In the case of India, the new ‘rights agenda’ has been seen as a Polanyian double movement for social protection against the marketising state, which suggests the possibility of a revitalisation of social citizenship (Agarwala 2013: 196–197; Ruparelia 2013: 572; Sahoo 2010: 489). Alternatively, it has been viewed as a bid by the state to reverse the effects of primitive accumulation to legitimise postcolonial capitalism, which does not extend social citizenship but rather creates ‘governed populations’ (Chatterjee 2008: 62; Sanyal 2007). Contrary to these readings, however, I argue that what is emerging is a reconstruction of citizenship as ‘market citizenship’ within a regulatory state, which unlike the social citizenship of the post-war welfare and developmental states, seeks to enable participation and inclusion within rather than against the capitalist market economy. This can be seen in the UPA and NDA II’s negotiation of rights claims and policies. The social policy legislation eventually adopted by the UPA included various concessions to market reform within a broader project of inclusion, as reflected in the Congress Party’s (2004) election manifesto, which promised ‘economic growth for all, particularly the poor, the vulnerable and the backward’. In effect, then, in response to the political mobilisation of rights campaigns, the UPA promoted a regime of social democratic market citizenship through a political project that attempted to reconcile market reforms with social democratic objectives of broad-based social and economic inclusion. In contrast to the UPA’s social democratic market citizenship, the paper argues that the NDA II government’s approach to social policy indicates notion of ‘virtuous’ market citizenship focussed on the ‘neo-middle classes’, in particular (Jaffrelot 2015). The NDA II’s first budget, in particular, cut funding for many social programmes, furthered the marketisation and privatisation of social programmes, and shifted responsibility for social provisioning to state governments and communityled initiatives. While the latter was justified by the provision of a greater share of the divisible pool of taxes to state governments, this increase in budgetary allocation has been offset by the higher decrease in the central government’s overall financial assistance to states and lower expenditure on central government-run welfare schemes (Das et al. 2016: 162). The BJP-led coalition government has also attempted to suppress civil society dissent while promoting social policies underpinned by the notion of individual self-improvement within a culturally circumscribed framework based on Hindu nationalism that produces a regime of ‘virtuous’ market citizenship. Both the UPA’s social democratic market citizenship and the NDA’s virtuous market citizenship are the products of what Peck and Tickall (2002: 389) call, ‘roll-out’ neoliberalism, which entails new forms of governmental intervention within neoliberal projects. As Peck and Tickall (2002: 390) note, however, roll-out neoliberalism ‘represents both the frailty of the neoliberal project and its deepening’. In this case,

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roll-out neoliberalism appropriates critiques of the welfare or developmental state in relation to their lack of accountability and over-centralisation to produce concepts of accountability and participation that are used to further market forms of governance. These concepts can be reappropriated, however, by social forces seeking to challenge neoliberalisation. Hence, this chapter seeks to show that processes of neoliberalisation produce new forms of contentious politics around the terms of inclusion and exclusion in society and that these ongoing struggles are reflected in contending citizenship regimes. I outline the notion of market citizenship in the first part of the paper. Following this, I examine the emergence of rights campaigns and social movements, arguing that they took advantage of the shift from an interventionist to a regulatory state—and the judicial activism, new political opportunities and the emphasis on accountability that this entailed—to agitate for social policy reform. In the last two parts of the paper, I contrast the ways in which the Congress-led UPA government and the BJP-led NDA II government have sought to negotiate these claims for social citizenship through the development of different regimes of market citizenship that seek to reconcile social policy with market reform.

3.2 Variegated Market Citizenship Marshall (1950: 11) famously delineated a threefold sequential conception of citizenship: a civil aspect which entailed the provision of rights that are needed for individual freedom, a political aspect which guarantees the right to political participation and a social aspect encompassing ‘the right to a modicum of economic welfare and security to the right to share to the full in the social heritage and to live the life of a civilised being according to the standards prevailing in the society’. As Schoettli (2013) has shown, India’s first Prime Minister, Jawaharlal Nehru, who was a close contemporary of Marshall and shared with him an intellectual affinity for British liberalism and Fabian socialism, came to a similar understanding of the role of socio-economic rights in overcoming social divisions of class, caste, religion and ethnicity in ensuring national integration. For both Marshall and Nehru then, the basis and aim of social rights was membership of a political community. However, the turn towards markets and against the welfare state for its alleged inefficiencies and failures in producing social solidarity increasingly delegitimised the notion of social citizenship in Europe and North America from the 1980s and prompted the emergence of a new form of ‘market citizenship’ which shifts the responsibility for social provisioning to private civil society organisations and local authorities (Jayasuriya 2006: 97; Root 2007: 132). These forms of privatised or localised governance envisage active participation by citizens. However, this is a form of participation that is focussed on problem-solving and the technocratic management of policy for economic inclusion, choice and efficiency rather than contestational representative political practice or the establishment of a legitimate political and constitutional consensus (Jayasuriya 2006: 97; Root 2007: 131). ‘Localisation’ facilitates this form of

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depoliticised participation by distancing the implementation of social programmes from the centres of decision-making and substituting ‘discussions about the allocation of spatially based resources, for politics, the collective definition and setting of values’ (Root 2007: 133; Jayasuriya 2006: 92). Notions of participation, accountability and localisation, however, cannot be reduced to neoliberal economics. Indeed, in the Indian context, participation, accountability and localisation have long been championed by critics of the postcolonial state who took issue with its ‘passive revolution’ of accommodative politics and the bureaucratisation of redistributive programmes which stunted the development of social citizenship (Bardhan 1984; Frankel 2005; Kaviraj 1988). The failure of successive Indian governments to fashion a developmental or welfare state at a national level, contrary to their stated rhetorical commitments, has been attributed to the broad-based but elite-driven character of the Congress Party, which led India to independence and dominated its politics until 1990. Industrialisation and redistribution were the new government’s priorities; however, the pressure of retaining the Congress Party’s status as a ‘catch-all’ party and the weakness of organised labour meant that the redistributive agenda soon fell to the wayside. Regional Congress leaders and a conservative judiciary resisted land reforms,1 organised labour settled for class accommodation and access to state resources and the political elite prioritised social stability rather than social change. These factors meant that rural power-holders retained their dominant positions in the social order and that responsibility for social reform was passed to the bureaucracy (Chibber 2005; Kaviraj 1988). By the mid-1960s, a range of social movements, including the civil liberties movement, the women’s movement and Jayaprakash Narayanan’s Movement for Total Revolution, had emerged to contest various aspects of the postcolonial state (Ray and Katzenstein 2005: 17). The social movements and campaigns that emerged in the 1990s had their origins in these liberal-left and radical critiques of the postcolonial state. That they gained traction in this decade as India transitioned to policies of market reform was, however, no coincidence. The notions of accountability, participation and localisation that accompanied neoliberalisation have become key battlegrounds on which contestations over the terms of inclusion and exclusion are played out. This is reflected in the emergence of contending regimes of citizenship that link capitalist transformation and democratic politics in different ways. In contrast to the abstract notion of universal citizenship that informs liberal democratic understandings of the state, the notion of ‘citizenship regimes’ suggests a relational conception of the state, whose form at any given time is the outcome of the balance of power between different social forces which act through the state’s institutional ensemble (Jessop 2003). Hence, citizenship regimes, indicate who is a citizen and what the terms of inclusion and exclusion are; the nature of the identification of citizenship with nationality or cultural identity; what the recognised unit of citizenship is—individuals or groups—especially for the articulation of effective citizenship claims; the substance of citizenship rights, including and especially the rights of social citi1 An

exception was the state of Kerala, which carried out land reforms through a peasant-workertenant alliance mobilised by the Communist Party (Heller 2005).

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zenship; the role of the state and its policy strategies in stabilizing or undermining a particular citizenship regime; and how state and societal discourses and policies—of recognition or redistribution—shape citizenship. (Jayal 2014: 19–20)

While rights campaigns have sought to reinvigorate a regime of social citizenship by mobilising around the issues of accountability, localisation and participation, India’s two major national political parties, as I show later in the paper, promote different understandings of these concepts and different variations of market citizenship which reflect their distinctive political and ideological commitments as well as pre-existing institutional and political landscapes. The scholarly literature on market citizenship has pointed to its variegated nature, but the empirical focus of this work has been on Europe, North America, Australia and East Asia and on differing national conceptions of market citizenship (Jayasuriya 2006, 2015; Root 2007; Somers 2008). It is clear from the Indian case, however, that conceptions of market citizenship are variegated within as well as between national states.

3.3 Contesting Social Policy: The Turn to Rights Since the mid-2000s, there have been significant legislative changes and policymaking innovations in India which appear to be contrary to the pro-market, probusiness thrust of its economic policies. Many of these changes have been driven by civil society campaigns made up of activists, non-governmental organisations and advocacy groups. These groups have used public interest litigation (PIL) in the Supreme Court by establishing a link between the justiciable political and civil rights and non-justiciable economic and social rights in the Indian Constitution, as well as negotiations with the government in new policy spaces to achieve their aims. In 2013, for instance, the government passed the rights-based National Food Security Act (NFSA), which expanded the coverage of its subsidised food grain scheme to two thirds of the population. In 2005, the notion of livelihood rights was strengthened with the passing of the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) which guarantees 100 days of wage work, at above the market rate for every household in rural areas. The Right to Information Act which ensured access to government expenditure documents was also passed in 2005, and in 2009, the government passed the Right of Children to Free and Compulsory Education Act which makes education a fundamental right of children from the age of six to fourteen. Livelihood rights have been recognised under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, which came into force in 2014, and the Forest Rights Act, which was passed in 2007, recognises the rights of forest-dwelling communities to land and resources. In 2008, the rights of informal workers were recognised by the Unorganised Sector Workers’ Social Security Act which is designed to set up a Social Security Board to facilitate social protection schemes like old-age pensions and disability insurance to India’s 40 million workers in the informal sector.

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The literature on the ‘rights agenda’ in India tends to attribute its emergence to the efforts by the judiciary, civil society campaigns and grass-roots social movements to reconfigure state–society relations in the face of inequitable economic growth (Chopra 2014; Hertel 2015; Jenkins 2013). Ruparelia (2013), for instance, argues that the emergence of the ‘rights agenda’ in India is the result of the three interlinked ‘slow-burning’ processes of heightened judicial activism to make social and economic rights justiciable, rapid and uneven development and the expanding popular foundations of parliamentary democracy. What is missing in these accounts, however, is an explanation for why judicial and civil society activism became increasingly politically salient and effective in the 1990s and 2000s. To answer this question, it is necessary to examine the enabling context provided by deep-seated structural changes at both the domestic and international levels which has empowered actors like the Supreme Court and civil society and brought notions of accountability, participation and localisation to the fore, making them available for appropriation by rights campaigns. Specifically, at a domestic level, the twin processes of political fragmentation, whereby power was dispersed away from the centralised control of the Congress Party toward a range of new social forces like regional and caste-based political parties, together with the initiation of economic reforms in the late 1980s, created the context for a shift from an interventionist state to a regulatory state that empowered the Supreme Court, brought the notion of accountability to the forefront and created new political spaces for civil society mobilisation (Rudolph and Rudolph 2001: 129). With regard to the Supreme Court, the fractured political context together with the introduction of pro-market and pro-business economic reforms enabled it to significantly assert its autonomy and authority to intervene in the making of public policy as the political executive and legislatures lost legitimacy (Mehta 2007: 75; Sathe 2002: 272–277; Thiruvengadam and Joshi 2012: 331–334). Internationally, by 1990, notions of accountability, localisation and participation had become key themes of transnational governance for the purposes of promoting market reform (Cammack 2004; Cornwall 2007). These themes, however, were also available for appropriation by civil society campaigns which have attempted to use them to hold the state and the market accountable to society. For instance, one of the first rights campaigns to come to prominence was the National Campaign for the People’s Right to Information (NCPRI). The emergence of the Right to Information Act in India is generally attributed to the grass-roots mobilisation of civil society members of the NCPRI, such as the Mazdoor Kisan Shakti Sangathan (MKSS) a group that sought to address issues of corruption and unaccountability by gaining access to government expenditure records (Sharma 2015a, b: 165–8). As Sharma (2015a, b: 194–199) has argued, however, the willingness of state and national governments to accede to the demands of the NCPRI was substantially influenced by the conditionalities related to transparency placed on lending by international financial institutions, namely the Asian Development Bank and the World Bank, and by the foundational principles of the World Trade Organization, which promote a transparent trading system. In addition, it reflected a broader shift within the bureaucracy and political class in the

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1990s towards ‘new public management’ agendas of remaking the state such that it facilitates the open flow of information needed for market liberalization. Rights campaigners and social movements took advantage of the context of political and economic flux and the rise to prominence of discourses on accountability, in particular, to reassert older developmentalist discourses derived from the ‘Nehruvian master frame’ (Ray and Katzenstein 2005) of democratic socialism to politicise issues of welfare provisioning. Take, for instance, the strategies of the Right to Food Campaign which drove the agitation for the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) and the National Food Security Act (NFSA). Concerted agitation to reform the PDS and rural employment programmes emerged in the early 1990s, particularly in the state of Rajasthan, where these schemes have not been well-implemented, and was initially linked to the Right to Information campaign. Uncovering the causes for the non-payment of wages in famine-relief public works sites and for the diverting of food grain away from government holdings and ration shops to the open market was a major aim of the civil society group, the MKSS (Jenkins and Goetz 1999; Roy et al., no year; Roy 1996). During this period, as the central government began to make various policy changes to the PDS that were in line with the broader programme of economic reforms, the right to food and the right to work became issues of mobilisation in their own right by the RTFC. Most significantly, in 1997, a system of targeting was introduced to the previously universal PDS whereby access to low-cost grain was limited to those classified as below the poverty line (BPL), while prices were raised for those classified as being above the poverty line (APL). These reforms aimed to increase the efficacy of the PDS while reducing its cost, which was in line with the broader project of neoliberalisation with its focus on marketization and reduced public spending. The cost of the PDS had risen in the 1990s because successive minority and coalition governments had increased the minimum support price paid to farmers in an attempt to win and retain support from regional party partners with strong farmer constituencies. The outcome of this policy shift towards quasi-marketization was decreased demand for food grain and high levels of stock which increased the cost of storage and heightened levels of food insecurity, particularly as problems with the classification of BPL and APL households resulted in unwarranted exclusions. The RTFC emerged out of the decision in 2001 by the civil society group, the People’s Union for Civil Liberties (PUCL), to launch public interest litigation against the Indian government to enforce the Famine Code of 1962, which mandates the provision of employment and food relief during food shortages, in the state of Rajasthan which was facing ongoing drought and famine conditions. Specifically, the PUCL raised concerns about ‘starvation deaths’ and unemployment in Rajasthan and Maharashtra and linked these to the flaws of the public distribution system (PDS). ‘Starvation deaths’ as Amrith (2008: 1011) has argued has long been a deeply sensitive political issue in India with the postcolonial state priding itself on preventing major famines, in marked contrast to the colonial state. In response to the PUCL’s writ petition, the Court ordered the release of food grain, ruled that state governments had to introduce cooked midday meals in all government-aided primary schools within six months and ordered the revamping of an existing employment scheme,

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the Sampoorna Grameen Rozgar Yojana (Universal Rural Employment Programme) with social audits and more central government funding to state governments for this purpose. In addition, the Court appointed Commissioners to report back on state and national governments’ compliance with its orders (Supreme Court of India 2002, 2003). The Commission was also to work independently to negotiate with state and national governments as they made changes to laws, policies and programmes to ensure improved implementation and avoid exclusionary outcomes. The RTFC continued to file detailed interlocutory applications to modify government policies and hold officials to account while providing field reports, data and information to the commissioners based on grass-roots social audits to inform people of their entitlements and air grievances about the schemes and their implementation by officials (Birchfield and Corsi 2010: 720–721). Hence, the Commission effectively became a public interest regulatory authority for food welfare and employment schemes while the RTFC facilitated mechanisms of transparency and accountability to ensure that the Commission was able to properly carry out its regulatory duties. The RTFC’s emphasis on, and ability to develop, such mechanisms was the result of its links with the NCPRI and the passing of the Right to Information Act (RTI) in 2005 which enabled it to legally obtain information for the Commission to undertake its regulatory functions. Public hearings and social audits were key innovations of the MKSS, which was a member of both the RTFC and the NCPRI, in its grass-roots campaigning (Roy 1996).

3.4 Social Democratic Market Citizenship The Congress Party, which was then in opposition, proved particularly responsive to the RTFC’s lobbying for national-level welfare reforms in the mid-2000s. The RTFC lobbied the Congress-led Rajasthan government in 2003 for stronger employment guarantees shortly before it was set to contest the state election. The Rajasthan Chief Minister then raised the issue with the national leadership and organised a meeting between members of the Campaign and Congress parliamentarians. The Campaign succeeded in having the Congress include the issue in its 2004 election manifesto, which also made a commitment to the Midday Meals Scheme (Congress 2004). The Congress won the highest number of seats in the election and entered into an alliance with left parties, which demanded a ‘common minimum programme’ (CMP) aimed at social policy reform in the areas of employment, land and forest access rights, education and food. A National Advisory Council (NAC) was subsequently set up by the UPA government to deliver advice on operationalising the CMP and consisted of members of government departments and organisations such as the Planning Commission; non-governmental organisations, including the RTFC; and the Supreme Court commissioners (Srinivasan and Narayanan 2009; Chacko 2018b). Legislation like the NFSA, the MNREGA, and the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (LARR) were outcomes of NAC deliberations.

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The UPA’s responsiveness to demands for the expansion of welfare programmes, despite its commitment to neoliberal reforms, has been characterised by some scholars as indicating a new Polanyian double movement for protection against a marketising state (Agarwala 2013: 196–197; Sahoo 2010: 504). These accounts (cautiously) suggest the possibility that new democratic mobilisations have made possible the reclaiming of social citizenship in the neoliberal era. As we shall see below, however, the nature of the welfare programmes and the ease with which they have been undermined and recast by the NDA II government suggest that these hopes were too optimistic. In a slightly different vein, Sanyal (2007) and Chatterjee (2008) have argued that the UPA’s social legislation was an attempt to reverse the effects of primitive accumulation. However, this is not an expansion of democracy or social citizenship, but the advance of governmental technologies to manage ‘populations’ (Chatterjee 2008: 61–62). Sanyal (2007: Chap. 2) argues that postcolonial capitalism has revealed the limits of the understanding of primitive accumulation as a process that absorbs pre-capitalist producers into capitalist modes of production. Rather, he argues that primitive accumulation needs to be rethought as a process that produces both capitalist and non-capitalist spaces with a redundant ‘surplus population’. Contrary to Marx’s conceptualisation of surplus labour as the product of capitalist accumulation and as a category that supplements the working class, in Sanyal’s (2007: 1183) understanding, the process of primitive accumulation produces a surplus population that is of no use to capital. While in early industrialising countries, this surplus population was dealt with through mass immigration, famine, disease and war, in postcolonial states they must be managed with governmental interventions, in particular because the ‘discourses of democracy and human rights have emerged and consolidated themselves to form an inescapable and integral part of the political and social order…within which capital has to reproduce itself’ (Chatterjee 2008: 61–62; Sanyal 2007: 1267). For Sanyal, these governmental interventions have changed. The basic needs approach of the 1970s aimed to create capabilities through direct consumption within the framework of the welfare state. With the acknowledged entrenchment of the informal economy today, ‘development now means the provision of credit, inputs, and technology for the informal sector, for those outside the domain of capital’ and within a ‘need economy’ which is subordinate to, rather than autonomous of, the accumulation economy (Sanyal 2007: 4207). Drawing on Foucault, Sanyal (2007: 3360) and Chatterjee (2008: 57) reject the category of ‘citizen with rights who participates in the sovereignty of the state’ (Sanyal 2007: 3360) to describe the inhabitants of this need economy, referring to them instead as ‘population groups’ that are the objects of governance. As critics of Chatterjee’s distinction between a ‘civil society’ of citizens and a ‘political society’ of population groups have noted, however, such binaries misunderstand the nature of society, the state and the relationship between them (Nilsen 2015; Whitehead 2015). A number of studies have shown that movements that emerge from ‘political society’ in India often use the language of citizenship in their struggles (e.g. Agarwala 2013; Sundar 2011). This inability to adequately theorise state–society relations is the product of both Chatterjee and Sanyal’s understanding of the state as

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the unchanging entity of liberal democratic theory (Whitehead 2015: 1). Chatterjee and Sanyal (2007: 668) both draw on early Marx to support their understanding of civil society as equivalent to bourgeois society, but as Whitehead (2015: 8) argues, it becomes clear in Marx’s later writings that he came to understand the state as a social relation, with civil society and its divisions as the ‘ground from which particular forms of the state emerged’. By treating the state as a social relation, it can be argued that societal groups do not simply participate in state sovereignty or become objects of governmentality, but help to constitute the state form and the citizenship regime that underpins it. Thus, while Sanyal and Chatterjee are right in arguing that the social legislation introduced by the UPA are governmental interventions aimed at managing a ‘surplus’ population, the nature of these governmental interventions should be seen as contested terrain through which different citizenship regimes can be fashioned. Hence, while rights campaigners appropriated the language of participation, accountability and localisation that came with market reform in order to assert a new regime of social citizenship, various sections of the state apparatus, such as the Planning Commission and members of the Congress leadership, attempted to advance a regime of market citizenship through the fashioning of new social policies that sought to include the ‘surplus population’ as consumers and entrepreneurs. Take for instance, the NFSA. Among the significant differences to emerge in the negotiations for the NFSA—between the Prime Minister Manmohan Singh, the head of the Planning Commission, Montek Singh Ahluwalia, the Parliamentary Standing Committee on Food, Consumer Affairs and Public Distribution and the RTFC and its representatives on the NAC, like the economist Jean Dreze, and the activists Aruna Roy and Binayak Sen—were the legitimacy of targeting the PDS to certain groups, the scope of distribution, the role of cash transfers and the amount of grain procurement (Mukherjee 2010). These splits in the NAC reflect different visions of citizenship. Singh, Ahluwalia and the Standing Committee focussed on corruption and inefficiency as the major problems of the PDS. This meant that a greater reliance on the market and market citizenship, albeit in a social democratic guise with the state retaining a curtailed welfarist role, was the solution. The RTFC drew attention to the shortcomings of the market and the role of social citizenship in ensuring fair access. To do so, they pointed to research that showed, for instance, that a universally accessible PDS was less prone to ‘leakages’ and inadvertent exclusions and that cash transfers were likely to lead to lower household expenditure on food, thereby worsening malnutrition rates (Khera 2013; Mohan 2011; Right to Food Campaign 2013). Ultimately, however, the new forms of politics and policy-making which were produced by rights campaigns and Supreme Court activism had limitations. By adopting forms of ‘contained contention’ (McAdam et al. 2001), involving lobbying and working through government institutions, rights campaigns effectively helped to facilitate the appropriation of the ‘rights agenda’ by the UPA government, which used it to further a regime of social democratic market citizenship that promoted incremental shifts towards the market in social provisioning. The National Food Security Bill that eventuated was criticised by the Right to Food campaign for, amongst other

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things, the continued use of targeting, allowing for the ‘back door entry of cash transfers by allowing for a food security allowance when food is not available’, failing to have any ‘agriculture and production-related entitlements for farmers’ and a severely inadequate per capita entitlement to grain (Right to Food Campaign 2013).

3.5 Virtuous Market Citizenship The BJP, while in opposition, supported the passing of the UPA’s social policy legislation through parliament and even criticised the UPA for not introducing a more extensive PDS through its Food Security Bill (Patnaik 2015). After winning the 2014 national election, however, it emerged that the BJP was in fact opposed to the expansion of the PDS and only supported the Food Security Act to avoid being labelled ‘anti-poor’ in the lead-up to the election (Times 2015). Since the election, the NDA II government has made significant cuts to social spending, has attempted to change the UPA’s legislation in ways that alter their social democratic objectives and has introduced social policies that target the ‘neo-middle classes’. This suggests the limits of Sanyal (2007: 1267) and Chatterjee’s (2008: 62) assumptions about democracy and human rights being ‘integral and inescapable’ parts of the contemporary Indian social and political order, and that the fear of producing ‘dangerous classes’ out of the ‘surplus’ population will ensure that governmental policies will be devised to reverse the effects of primitive accumulation. These assumptions, like the division between political and civil society, are implicitly based on a liberal democratic understanding of the state as an unchanging entity with a naturalised universal conception of citizenship. The NDA II’s approach to social policy indicates an attempt to recreate the social and political order such that sections of the ‘dangerous classes’ are reproduced as virtuous market citizens who are reliant on the market, the private sector and individual self-improvement for well-being. This regime of ‘virtuous market citizenship’ is the product of a particular variant of Hindu nationalist ideology which seeks to fuse Hindu nationalism with markets and capitalism. This represents a change in the balance of power in the Hindu nationalist movement, which has long been divided on issues of anti-capitalism, state paternalism and liberalisation. The regime of virtuous market citizenship valorises an entrepreneurial individualised subject whose behaviour is regulated by a Hindu nationalist social framework. This makes virtuous market citizenship distinct from notions of market citizenship in Western countries that celebrate a self-regulating autonomous individual (Chacko 2018a). Virtuous market citizenship is directed toward the economic inclusion of the ‘neomiddle classes’, which has formed a significant component of the support base of the BJP’s new leader Narendra Modi, within the neoliberal capitalist order (Jaffrelot 2013, 2015; Chacko 2018b). The ‘neo-middle class’ has been defined by the BJP in their 2014 election manifesto as ‘Those who have risen from the category of poor and are yet to stabilize in the middle class’. This neo-middle class, the manifesto noted, ‘needs proactive handholding’ (Bharatiya Janata Party 2014: 17). While this definition remains somewhat vague, Jaffrelot (2015: 26) has suggested that this cat-

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egory refers to members of, what is known in India as, the Other Backward Classes (OBCs), who are undergoing urbanisation and are engaged in informal and insecure forms of employment (see also Alam 2008). While migration to urban areas has undermined caste identity amongst these groups, it has also led to greater Hindu religiosity as a means of attaining higher social status (Jaffrelot 2015: 26). While caste and class have both traditionally been downplayed in Hindu nationalist politics because of their divisiveness, Modi emphasised both his OBC and neo-middle class origins during the 2014 election. Jaffrelot (2015: 26) argues that, in emphasising the need for the ‘proactive handholding’ of this class, the BJP manifesto departs from ‘its neoliberal overtone replaces it by a strong emphasis on the need for state intervention’. As I have argued in this paper, however, neoliberalism, in its ‘roll-out’ form, is not incompatible with state intervention—rather it entails particular forms of state intervention to produce market citizens. An overview of the NDA II’s social policies shows an effort to break with the UPA’s, and the previous BJP-led government’s (NDA I’s), schemes for social and economic inclusion for the very poor and marginalised in favour of programmes that cater to the neo-middle classes. With regard to the NFSA for instance, the NDA II government has cut the budgets of several programmes related to the Act including the Integrated Child Development Services (ICDS) scheme, which provides supplementary nutrition, health care, and preschool education for children under the age of six, and the Midday Meals Scheme, which ensured that primary school children received a cooked meal on every school day and on vacations during droughts. The government also froze the numbers of those that can access the PDS to a 10-year census figure rather than revising the figure on a year-to-year basis, as has been the practice, and a citizenship and residency requirement have been added for access to the PDS in each state, which will affect migrant workers, in particular (Patnaik 2015). In addition, the NDA government pledged to phase out the Antyodaya Anna Yojana (AAY) (Food Program for the Last Person) scheme which introduced another layer of targeting in the PDS by identifying a percentage of BPL households that required grain to be further subsidised. The AAY scheme was introduced by the former BJP Prime Minister, Atal Bihari Vajpayee, and was named using the concept of antyodaya (upliftment of the lowest) (Sharma 2015a, b). This concept was first promoted by Mahatma Gandhi and the social activist Jayaprakash Narayan but is now linked by the BJP to the Hindu nationalist ideologue Deen Dayal Upadyaya. The phasing out of this scheme highlights the NDA II government’s attempt under the influence and leadership of Modi, to move the BJP away from any residual state welfarist tendencies (Chacko 2018a). Shortly after coming to power, the government formed a High-Level Committee (HLC) led by a senior BJP leader, Shanta Kumar, which was tasked with making recommendations in relation to the reform of the Food Cooperation of India (FCI) which buys and stores food commodities for the PDS. On the basis of greater efficiency, accountability, ‘consumer empowerment’ and financial sustainability, the HCL recommended curtailing the scope of the NFSA by lowering its coverage from 67% of the population to 40%, handing authority for food procurement to state governments, involving the private sector in food storage

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and eventually replacing the PDS with a system of cash transfers (Government of India 2015: iv–x). Aside from seeking to dilute the UPA’s social policies and make them more market-based and business-friendly, the NDA II has launched a range of social policies that exemplify the notion of virtuous market citizenship. For instance, the Pradhan Mantri (Prime Minister) Micro Units Development and Refinance Agency (MUDRA) is designed to restructure farm loans while the MUDRA Bank issues loans to cultivate entrepreneurship amongst educated youth and women, in particular. Such modes of financialisation are intended to improve individual well-being, generate employment and further economic growth (Hindu 2015). The BJP-led government’s approach to social policy thus prioritises a particular entrepreneurial individual apparently found in the middle and ‘neo-middle’ classes, in particular. As mentioned above, however, this entrepreneurial individual is not the self-regulating autonomous individual found in accounts of Western forms of neoliberalism, but operates within a Hindu nationalist cultural register (Chacko 2018a, b). This can be seen clearly in the promotion of the Swachh Bharat Abhiyan (Clean India Mission) and yoga as a public health initiative. The Swachh Bharat Abhiyan replaced the UPA’s Nirmal Bharat Abihyan or Total Sanitation Programme. The aim of these two programmes is similar in they each focus on the construction of toilets and aim to alter community attitudes towards open defecation. Both programmes neglected broader issues such as the need for sanitation infrastructure like water pipes and drainage (Rajalakshmi 2014). Yet, this neglect has become more acute under the NDA II, for while it allocated slightly more funding for Swachh Bharat in its first budget, it halved the budget for the Ministry of Water and Sanitation and shifted responsibility for sanitation infrastructure to state governments. Swachh Bharat also places greater stress on engaging the private sector via corporate social responsibility. In addition, it highlights individual and community responsibility for the provision of public goods and treats cleanliness as a nationalist virtue with Gandhi upheld as a role model. Gandhi’s emphasis on cleanliness was a part of his radical critiques of Hinduism and modernity (Alter 1996). In the Swachh Bharat campaigns, however, he is appropriated as a Hindu nationalist market citizen driven to serve statist development and ‘Mother India’ (Modi quoted in IBN Live 2014; Chacko 2018a). The NDA II government’s promotion of yoga as a public health initiative has led to the establishment of a World Yoga day, the naming of a Minister for Yoga and the provision of compulsory yoga class for public sector workers. Modi’s (2015) speeches on yoga highlight the role of yoga as a form of self-discipline which will lead to ‘[e]normous reduction in the cost of healthcare and social support…Increased collaboration and effective teamwork in businesses and communities…Increased power of innovation, technology and knowledge’. In these ways, yoga has been upheld as a ‘nationalist therapy’ (Alter 1997: 314) to counter the stresses of modernity but also a way to discipline individuals into the mould of market citizens. The use of yoga as a health therapy and the mass-drill-type yoga session led by Modi on World Yoga Day are practices that have long been promoted by the Bharatiya Yog Sansthari (Indian Yoga Society), an organisation which is affiliated with the Hindu nationalist

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organisation, the Rashtriya Swayamsevak Sangh (RSS) (Alter 2004: 148). Although the government made an attempt to separate yoga from Hinduism, the choice of 21 June for World Yoga Day undermined these efforts since it has religious significance as the date Lord Shiva became the first yogi (Chacko 2018a).

3.6 Conclusion Projects of neoliberalisation require new modes of state intervention, even in the areas of social and welfare policy, which are typically seen as the first casualties of market reform and economic liberalisation. This is not only due to the negative effects of neoliberal ‘roll-back’ policies but because the notions of accountability, localisation and participation that often accompany neoliberal projects can be, and have been, mobilised for alternative political projects and distributive claims. Hence, in India, these themes were appropriated by civil society campaigns to agitate for the reform of welfare programmes that were badly implemented or had been scaled down by post-reform national governments. The establishment of the National Advisory Council by the previous UPA government enabled civil society participation in policy-making while Supreme Court orders and local level social audits and public hearings were mechanisms through which local, state and national governments were held to account for the inadequacies of welfare programmes. The ways in which these campaigns sought change, however—through lobbying and negotiation within government institutions—were also a weakness because it left the ‘rights agenda’ vulnerable to reappropriation by factions of the UPA government to further a regime of social democratic market citizenship which sought incremental shifts towards the market in social provisioning. This social democratic market citizenship reflected electoral imperatives, the lingering influence of democratic socialism on the Congress Party as well as its commitment to pro-market and pro-business economic reform. The successor NDA II government embarked on fashioning its own regime of market of citizenship, which I have called ‘virtuous’ market citizenship, that is shaped by a commitment to market reform, the need to consolidate the BJP’s support amongst the ‘neo-middle classes’ and the desire to inculcate a Hindu majoritarian cultural frame within these classes and society more generally. However, this nascent regime of virtuous market citizenship faces many challenges to its consolidation from within the BJP, the state apparatus, the political opposition and society in general. The Hindu nationalist movement still has elements within it that are resistant to aspect of market reform and the privileging of corporate and noncorporate capital in urban India. This can be seen in the rejection of Hindu nationalist groups like the Swadeshi Jagran Manch and the Bharatiya Kisan Sangh of the BJP’s proposed reforms to the Land Acquisition Act to make it more business-friendly. These proposed reforms were abandoned following coordinated protests by farmers’ groups and opposition parties. The government’s proposed changes to the NFSA are also counter to Supreme Court Orders and have resulted in the initiation of court action. In the ongoing context of roll-out neoliberalism, citizenship and notions of

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accountability, localisation and participation will continue to be sites of struggle and contestation in contemporary India.

References Agarwala, R. (2013). Informal labor, formal politics, and dignified discontent in India. Cambridge: Cambridge University Press. Alam, J. (2008). Emerging class formation among the oppressed castes and its political implications. Social Scientist, 36(11/12), 5–19. Alter, J. S. (1996). Gandhi’s body, Gandhi’s truth: Nonviolence and the biomoral imperative of public health. The Journal of Asian Studies, 55(02), 301–322. Alter, J. S. (1997). A therapy to live by: Public health, the self and nationalism in the practice of a North Indian yoga society. Medical Anthropology, 17(4), 309–335. Alter, J. S. (2004). Yoga in modern India: The body between science and philosophy. Princeton: Princeton University Press. Amrith, S. (2008). Food and welfare in India, c. 1900–1950. Comparative Studies in Society and History, 50(4), 1010–1035. Bardhan, P. K. (1984). The political economy of development in India. B. Blackwell: Oxford and New York, NY. Bharatiya Janata Party. (2014). Election manifesto 2014. Bharatiya Janata Party. Available from: http://bjpelectionmanifesto.com/pdf/manifesto2014.pdf. Accessed July 2, 2014. Birchfield, L., & Corsi, J. (2010). Between starvation and globalization: Realizing the right to food in India. Michigan Journal of International Law, 31(691), 692–762. Cammack, P. (2004). What the World Bank means by poverty reduction, and why it matters. New Political Economy, 9(2), 189–211. Chacko, P. (2018a). Marketising Hindutva: The state, society and markets in Hindu nationalism. Modern Asian Studies, in press. Chacko, P. (2018b). The right turn in India: Authoritarianism, populism and neoliberalisation. Journal of Contemporary Asia, 48(4), 541–565. https://doi.org/10.1080/00472336.2018.1446546. Chatterjee, P. (2008). Democracy and economic transformation in India. Economic & Political Weekly, 43(16). Chibber, V. (2005). From class compromise to class accomodation: Labour’s incorporation into the Indian political economy. In R. Ray & M. F. Katzenstein (Eds.), Social movements in India: Poverty, power, and politics (pp. 32–61). Lanham, MD: Rowman and Littlefield. Chopra, D. (2014). The Mahatma Gandhi National Rural Employment Guarantee Act, India: Examining pathways towards establishing rights-based social contracts. European Journal of Development Research, 26(3), 355–369. Cornwall, A. (2007). Buzzwords and fuzzwords: Deconstructing development discourse. Development in Practice, 17(4–5), 471–484, 2007/08/01. Das, S., Chanchal, A., & Khan, J. A. (2016). Recent changes in India’s fiscal architecture: Implications for public provisioning in social sectors. In India exclusion report 2016 (pp. 161–204). New Delhi: Yoda Press. Economic Times. (2015). Food Security Act: BJP wanted to oppose but feared backlash. Economic Times. Available from: http://articles.economictimes.indiatimes.com/2015-01-22/news/ 58344145_1_food-law-vote-security-food-subsidy. Accessed June 29, 2015. Ferguson, J. (2015). Give a man a fish: Reflections on the new politics of distribution. Durham and London: Duke University Press. Frankel, F. R. (2005). India’s political economy: 1947–2004 (2nd ed.). New Delhi: Oxford University Press.

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Peck, J., & Tickell, A. (2002). Neoliberalizing space. Antipode, 34(3), 380–404. Rajalakshmi, T. (2014). Beneath the hype. Frontline. Available from: http://www.frontline.in/thenation/beneath-the-hype/article6491715.ece, Accessed July 3, 2015. Ray, R., & Katzenstein, M. F. (2005). Introduction: In the beginning, there was the Nehruvian state. In R. Ray & M. F. Katzenstein (Eds.), Social movements in India: Poverty, power, and politics. Lanham, MD: Rowman and Littlefield. Right to Food Campaign. (2013). Press release: Right to food campaign urges the UPA to bring the bill through after debate and discussion in parliament. RTF Secretariat. Available from: http://www.righttofoodindia.org/data/right_to_food_act_data/Campaign_press_note_ June_2013.pdf. Accessed June 27, 2015. Root, A. (2007). Market citizenship: Experiments in democray and globalization. London: Sage. Roy, A., Dey, N., & Singh, S. (no year). Living with dignity and social justice—Rural workers rights to creative development: A non-party peoples’ organisation towards a just and equal society. Mazdoor Kisan Shakti Sangathan Available from: http://www.mkssindia.org/wp-content/ uploads/2010/08/Living-with-dignity-and-social-justice1.pdf. Accessed September 30, 2014. Roy, B. (1996). Right to information: Profile of a grass roots struggle. Economic and Political Weekly, 31(19), 1120–1121. Rudolph, L., & Rudolph, S. (2001). Redoing the constitutional design: From an interventionist to a regulatory state. In A. Kohli (Ed.), The success of India’s democracy (pp. 127–162). Cambridge: Cambridge University Press. Ruparelia, S. (2013). India’s new rights agenda: Genesis, promises, risks. Pacific Affairs, 86(3), 569–590. Sahoo, S. (2010). Political mobilisation, the poor and democratisation in neo-liberal India. Journal of Contemporary Asia, 40(3), 487–508. Sanyal, K. (2007). Rethinking capitalist development: Primitive accumulation, governmentality and post-colonial capitalism. New Delhi: Routledge. Sathe, S. P. (2002). Judicial activism in India: Transgressing borders and enforcing limits. New Delhi: Oxford University Press. Schoettli, J. (2013). From T. H. Marshall to Jawaharlal Nehru: Citizenship as vision and strategy. In S. K. Mitra (Ed.), Citizenship as cultural flow: Structure, agency and power (pp. 25–44). Heidelberg: Springer. Sharma, P. (2015a). Democracy and transparency in the Indian state: The making of the Right to Information act. New York and London: Routledge. Sharma, S. (2015b). Antyodaya Anna Yojana Scroll. Available from: http://scroll.in/article/735000/ modi-government-is-killing-vajpayees-food-security-scheme. Accessed May 15, 2016. Somers, M. R. (2008). Genealogies of citizenship: Markets, statelessness, and the right to have rights. Cambridge: Cambridge University Press. Srinivasan, V., & Narayanan, S. (2009). Case studies in food policy for developing countries. In P. Pinstrup-Andersen & F. Cheng (Eds.), Food policy for developing countries: The role of government in the global food system (Vol. 1). Ithaca, NY: Cornell University Press. Sundar, N. (2011). The rule of law and the rule of property: Law-struggles and the neo-liberal state in India. In A. Gupta & K. Sivaramakrishnan (Eds.), The state in India after liberalization: Interdisciplinary perspectives (pp. 175–193). London: Routledge. Supreme Court of India. (2002). Interim order of 8 May 2002. Right to Food Campaign. Available from: http://www.righttofoodindia.org/data/supreme_court_orders/tpds/nrega_aay_mdms_ tpds_3_may_2003.pdf. Accessed September 30, 2014. Supreme Court of India. (2003). Interim order of 3 May 2003. Right to Food Campaign. Available from: http://www.righttofoodindia.org/data/supreme_court_orders/tpds/nrega_aay_mdms_ tpds_3_may_2003.pdf. Accessed September 30, 2014. Thiruvengadam, A. K., & Joshi, P. (2012). Judiciaries as crucial actors in Southern regulatory systems: A case study of Indian telecom regulation. Regulation & Governance, 6(3), 327–343. Whitehead, J. (2015). Au Retour a Gramsci: Reflections on Civil Society, Political Society and the State in South Asia. Journal of Contemporary Asia, 1–17 (ahead-of-print).

Chapter 4

An Examination of Indian State in the Post-planning Period Anjan Chakrabarti and Soumik Sarkar

Abstract We seek to analyze the changing rationale and character of Indian state in the backdrop of the post-planning Indian economic transition. It is held that the Indian economy has transited into the triad of neoliberalism, global capitalism and inclusive development. It is argued that the India state was both a creator of this triad and also the site of the combined effects of these nodes that pull and push it into contradictory directions. In enacting these multiple roles, the Indian state is characterized by both benevolent and violent side of its existence in one turn. Its violent side is captured in terms of primitive accumulation and state of exception while the benevolent character through the social programs for the needy and in facilitating the process of nation building by way of creating human capital for capitalist-induced growth. The changing character and roles of Indian state in turn suggest a foundational displacement in the rationale of its existence, a shift that is to be identified not merely in terms of what it says but in what it actually practices. In this context, that the Indian state governs for the good of society and not for itself is identified as one of the major changes in its rationale. Keywords Neoliberalism · Capitalism · Class · Violence · Social needs and food security We seek to inquire into the changing rationale and character of Indian state in the context of Indian economic transition during the post-planning period of 1991–2015. It will be misplaced to infer that every change concerning the Indian state that has since transpired is new. In fact, many aspects (such as state enterprises, use of sovereign power and strategy of development through growth) are a continuation of the planning period, albeit transpiring in altered form and trajectory. It will be equally unwise to begin from the premise that the Indian state has not undergone fundamental changes in the post-planning period. In this paper, we want to focus on the break points signaling the fundamental changes in order to focus upon the changing rationale of Indian state as also in its role and modes of functioning. It is our endeavor to incorporate A. Chakrabarti (B) · S. Sarkar University of Calcutta, Kolkata, India e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2019 A. P. D’Costa and A. Chakraborty (eds.), Changing Contexts and Shifting Roles of the Indian State, Dynamics of Asian Development, https://doi.org/10.1007/978-981-13-6891-2_4

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as far as possible the moments of continuation (with all their displaced and mutating forms) within the process of unpacking what is new in the rationale and character of the Indian state. Before proceeding to discuss the content of our arguments, we shed some light on the approach we take. Our analysis is not an attempt to read the character of Indian state in terms of known theories of state: Liberal, Libertarian, Welfarist, Marxian, Post-Structuralist, and so on. Rather, our approach strives to explore the Indian state in its connection with a concrete set of relations and practices that arise in the context of the new order of things (to be explained) which it has explicitly sought to create and within which it is now embedded (Chakrabarti and Dhar 2013). Rather than analyzing the Indian state and its transformation as a mirror of theory, we take this route in order to showcase the rationale and character of the post-reform Indian state as a product of a unique historical conjuncture of overdetermined and contradictory practices and their effects from where one begins to get a glimpse of a theory of the state specific to Indian characteristics. The set of rationale explaining the existence and role of Indian state that emerges through our analysis point to one overarching conclusion: The Indian state governs not for itself but for the ‘good’ of society. The crux of the argument we present is the following. What is new about the postreform Indian state is traced to the Indian economic transition.1 Broadly, the transition can be characterized in terms of the movement from self-reliant and self-sufficient economy based on centralized planned economy to neoliberal globalization, transition in capitalism from national capitalism to global capitalism and of development moving from an emphasis on economic growth to that of inclusive development with a focus on combining economic growth and social needs (Chakrabarti et al. 2015; Chakrabarti 2016). The three movements form a historically specific triad—the new order of things—that the Indian state helped create and within which it has been relocated. We intend to begin our intervention uncovering the changing rationale of the post-reform Indian state with respect to the mentioned nodes of the triad—neoliberalism, global capitalism and inclusive development. This engagement will be delineated into three separate sections. There after, there are two further aspects that we pay special attention to. Following Agamben’s insights on ‘state of exception’ and ‘homo sacer’, we intend to underscore the necessity of coercion/repression/violence—the logic of permanent force and the repressive state apparatuses—as a necessary constituent of the Indian state in the age of democracy and rights that help keep the abovementioned triad secured and operational. It reveals that, along with the institutionalized and micro-level disciplinary and governmental power, the Indian political economy is constituted by the sovereign power of Indian state. In the final part, we uncover a novel reinterpretation of public policy and inclusive development by opening analytical space in which class distribution and development distribution emerge in a relation of mutual constitution. We use the debate on Indian Food Security Act to exemplify the instance of how a fierce struggle over class 1 Much

of the details of this paper along with some important added arguments that we do not discuss here are presented in Chakrabarti et al. (2015).

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distribution and development distribution permeates public policy. It also shows how and why class matters for public policy. One clarification is required before proceeding further. For convenience sake, the mentioned triad in totality is referred to as ‘Development.’ Development is distinguished from inclusive development, which is a particular axis of the triad. One reason for distinguishing Development and inclusive development is because, as we understand, the former term at times is used with potent rhetorical effects in the practical registrar of policy and politics, especially with the intent to subdue the opposition to the ongoing march of India’s economic transition. With this clarification, we begin our discussion with the first axis of the triad—neoliberalism.

4.1 Neoliberal Globalization and the Political Economy of Reform In the Indian context, neoliberal globalization is captured by the movement toward a global competitive market economy that is supposed to be driven by a recasted mass of homo economicus or what following Foucault (2008) we can refer to as rational ability machines.2 For our purpose, it suffices to note that neoliberal globalization must begin with a transformation of the idea, logic and justification of the state itself which can only transpire within a reshaped relation between state, economy and subjects. ‘Not to be equated with a regime of laissez faire in which the state lets ‘the’ economy ‘be,’ neoliberalism adopts the market as the organizing and regulating principle of the state itself, such that the ‘state is under the supervision of the market rather than the market being supervised by the state.’ (Foucault 2008, 116) On top of an inversion of the classical state–economy formulation along with a disturbance of classical formulations of sovereignty, neoliberalism signifies a ‘completely new way of figuring ‘the economic,’ which brings with it a new set of values and ends, and a new conception of the subject along economic lines’ (Callison 2017, 179). But it is not just any relation of market to society that neoliberalism seeks to propagate. Rather, ‘the society regulated by reference to the market that the neoliberals are thinking about is a society in which the regulatory principle should not be so much the exchange of commodities as the mechanism of competition… This means that what is sought is not a society subject to the commodity-effect, but a society subject to the dynamic of competition’ (Foucault 2008, 147). Neoliberalism entails that the state governs for the competitive market economy and in whose image society is to be reshaped through the recasting of subjects who would be responsive to and 2 The

homo economicus or ‘economic man’ (projected as an embodiment of post-enlightenment rationality) has been the conventional representation of subject under liberalism. However, ‘neoliberalism is not Adam Smith; neoliberalism is not market society’ (Foucault 2008: 131). Rather, under neoliberalism, as a personification of rational conduct with entrepreneurial human capital (Becker 1976), ‘the homo economicus sought after is not the man of exchange or man the consumer; he is the man of enterprise and production’ (Foucault 2008, 147).

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indeed active producer of such an economic structure. Therefore, by governing for the competitive market economy, the state governs for the society. Rather than abandoned, laissez-faire is now integrated in a displaced form and resultantly deepened through a reorganization of the relation between the state, economy and subjects. The meaning and structure of globalization have been filled up by this reorganization and which requires that respective nation-states that seek integration within the new found globalized order must take policies along the neoliberal lines. Such a set of policy has been popularized as ‘reform.’ We contend that the tendency of India’s political economy of reform has been neoliberal (Chakrabarti et al. 2015, Chaps. 4 and 6). At the cusp of India’s transition from centralized planning to such an economic structure (global competitive market economy) and economic subject formation (neoliberal homo economicus), the Indian state faced the following paradox. ‘Though the eventual and ideal objective of liberalization is to reduce the state’s role in economic life, ironically, it is only the state which can reduce the functions of the state’ (Kaviraj 2010: 237). To this end, the self-transformation of the state demands both active and passive components. Its policy regime needs to be directed to (i) create, secure and facilitate the competitive market economy even as it allows that functional economy, through the free interaction of actors, to self-regulate itself, and (ii) provide ‘space’ for homo economicus to nurture themselves and, consequently, exercise/conduct their freedom in an unbounded market economy that crisscrosses ‘economic’ and ‘non-economic’ domains (since anything can be potentially priced, directly or through imputation); even non-producible components of life such as emotion and anxiety have been opened up for sale (Rose 1999; Rabinow and Rose 2006; Callison 2017). The state does not directly govern the subjects, but rather by creating, protecting and modifying the competitive market economy, its model of governance takes the form of conducting the conduct of the otherwise independent freely choosing subjects. Taking the mass of homo economicus as accepting and responding systematically to modifications in the environment through which they can now be governed, neoliberalism entails that ‘power is exercised only over free subjects, and only in so far as they are free’ (Foucault 1983: 221).3 It is claimed that this potentially unbounded competitive market economy ruled by the ‘free’ conduct of mass of homo economicus will on one hand generate optimum economic outcome (resulting in maximum economic growth) and on the other ensure a self-regulation of the economic structure, thereby ruling out external intervention such as by the state in the daily functioning of the competitive market economy. By governing for the competitive market economy, the state thus governs for the good of society and not for its own good. While much has been talked about the structural adjustment side of Indian reform, the deficit in analyzing the concomitant aspect of subjectification is surprising. The 3 Within

the competitive market economy operated by homo economicus, the aspect of power (disciplinary and governmental) shifts to institutions and subjects. There is a huge literature by now that addresses this issue. Since our focus in this paper is on state, we take the aspect of power in private institutions and their relations to subjects as somewhat muted.

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point is that the neoliberal subject cannot be taken as given. Instead, the subject’s mental landscape and consciousness have to be reshaped to secure and procreate the altered economic structure and the mode of governance being put in place by reforms (Chakrabarti 2016). At one level, the creation and deepening of competitive market economy assist the cultivation of the neoliberal practice of economic subjects (since, within this setup, the subjects are incentivized and persuaded to respond to the call of cost-benefit calculation and for human capital generation in various socioeconomic matters). But the mere presence of this economic structure cannot suffice for producing the functional subject of/in the global competitive market economy. Subjective transformation toward rational ability machines is additionally formed by a process of cultural transformation from childhood itself. Cultural institutions, apparatuses and meanings pertaining to education, pleasure, human body, etc., must undergo fundamental alteration enabling, among other things, the accumulation of neoliberal brains and abilities to accompany the accumulation of surplus and capital (Foucault 1976; Rabinow and Rose 2006; ŠpoljarVržina 2012). In a society subjected to the dynamics of market competition, the individual must be schooled and directed to the spirit of competition long before they arrive at the market. Their assessment of performance, their mode of choosing and acting and the manner of organizing life has to be, to a considerable extent, regulated by the need and desire to be competitive rational ability machine. This is what enables the global competitive market economy to be lubricated by a mass of entrepreneurial homo economicus. Despite the reform process being gradual (Ahluwalia 2002) and despite its specificity concerning Indian characteristics (federalism, coalition politics, etc.), there is no doubt that India’s ‘political economy of reform’ has taken the color and character of neoliberal globalization. At the beginning of 1990s, India possessed neither an extensive market economy nor the depth of competition that was anything comparable to the West. Globalization was nonexistent. Finally, the kind of neoliberal homo economicus described above was farthest from realization. To be successful, India’s reform had to enact a change in the Indian economy and society in these directions. To a considerable extent, this objective has been achieved (see Chakrabarti et al. 2015, Chap. 6 for details). One of the important facets of neoliberalism is to make the state accountable to the performance parameters of the principles (such as cost-benefit) modeled on competitive market principle. That is, the neoliberal state does not merely do something to the economy and subjects, but is also one who imbibes the competitive market principle and traits of governance to its own functioning (as far as possible) and seeks to generate condition that will allow the subjects to hold the state accountable on economic markers such as efficiency, productivity and profitability. Reducing fiscal deficit (backed by Fiscal Responsibility and Budget Management Act), disinvestment and privatization, merger of administrative departments, shedding off activities completely (like management of pension funds or hotel business), outsourcing state activities to private agencies and individuals (such as through public-private partnership), etc., are examples of the principle of economizing which have been activated. Governmental activities concerning the welfare of society such as production and distribution of public utilities such as water, health, education and infrastruc-

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ture (which though are also increasingly being privatized and/or made marketable), poverty management and public distribution system are increasingly being subjected to efficiency criterion, individualization and monetization (including the proposal for cash system instead of direct subsidies). Rather than subjecting others to its rules and objectives, the state relocates its own existence and operation within the domain of critical assessment and that too exposed to those modes of assessment and rules which it mandates or desires others to follow. Overall, for the sake of clarity, we can divide the phase of reform as first freeing, creating and organizing principles/rules of market and competition and then allowing markets to operate freely in an increasingly competitive environment (however murky and uneven it may be). We have also witnessed the creation of new markets in areas which till now had been dealt with in non-market ways (spanning a vast canvas, covering information and communication, pension, water, care-affective labor, rivers, mountains, etc.). Rules and regulations regarding trade and competition (accepted under international agreements, such as the WTO or set up domestically in alignment with the global economy) were created and authorized by the Indian state. We can say that the first phase of creating and organizing market and competition is at a fairly advanced stage and is now giving way to the second phase of a deeper competitive market economy in which commodification of ‘everything’ and ‘anything’ including the components of biological and mental life is becoming normal (Rose 1999; Chakrabarti et al. 2015; Callison 2017). India’s integration to global competitive market economy remains in the last stage of completion with reformed public utilities, agriculture, health, labor, education, retail, banking and infrastructure being now further unbolted for total integration. As the described features of neoliberal globalization were getting concretized, a new set of conditions gradually appeared (regarding governance, state’s existence and function, commodification and competition, free trade, rational ability machines, the rule of law and protection of private property, etc.) that facilitate the existence and function of global capitalist enterprise (itself deemed as a form and product of neoliberal homoeconomicus). Global capitalist-induced growth strategy is rationalized as virtuous and the state rules to promote and shape this form of capitalism. Ruling for global capitalism is thus for the good of society as well.

4.2 Global Capitalism and the New Indian Economic Map The post-planning period saw a change in the character of Indian capitalism. Demonstrating this requires familiarity with some theoretical tools. Following the classfocused Marxian approach (Resnick and Wolff 1987, 2006), the economy is conceptually decomposed into a diverse assortment of class processes of performance, appropriation, distribution and receipt of surplus labor (capitalist, feudal, slave, communist, communitic and independent) that can, in concrete scenarios, appear in a constitutive relation with multilayered non-class conditions of existence. In this context, we define capitalist class process as an exploitative organization of surplus

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labor/value appearing in a scenario where the means of production, labor power and final produce are in commodity/value form. Capitalist class process could take state or private form depending upon additional features such as whether the mode of appropriation of surplus value is connected to the state (appropriators connected to bureaucracy and ministry) or not (appropriators being private). Capitalist economy or capitalism is the cluster of capitalist class process (state or private) and non-class processes; alongside capitalist economy, we have independent, feudal, communist economies, and so on. Capitalism is thus one component of the economy; it is not the economy per se. The decentered and disaggregated economy when seen through the singular lens of capitalism is referred to as capitalo-centrism, and such a representation of the economy privileges the power of capital both at the epistemological and ontological levels (Gibson-Graham 1996). It is in this context that the role of Indian state became decisive. The Indian planning era can be segregated by the privileged status accorded to state capitalism from within an otherwise decentered and disaggregated (mixed) economy; the development policy therein can be perceived as a concerted attempt made to reconstruct the Indian economy and society through its lens. In post-planning era pioneered by neoliberal globalization, the privileged place accorded by the Indian state changed; it was private and not state capitalism that became the lens through which the trajectory of the economy came to be dissected and navigated. With this change in the form of capitalo-centrism, the character of capitalism in India as also its role and span of influence underwent a transition. With the flow of value and class processes fragmented across regions and nations (facilitated by information technology, transportation, telecommunication revolutions and now artificial intelligence), global capitalist enterprise (industrial, trading and financial that takes M-C-M/ or M-M/ form through global chain; henceforth, global capital) was taken in the post-planning era as the primary unit and that too within a global competitive market economy.4 Because global capital was seen as 4 In Marxian theory, capitalist commodity (W) = C (constant capital or value of means of production + V (variable capital or value of labor power) + SV (surplus value or value of surplus labor). The extra value SV is created in production process by performance of surplus labor which when expressed in money form is (productive) capital. Capitalist production can thus be expressed as money/value begetting more money/value or M-C-M/ or SV when designated as value form of surplus labor. In capitalist production, the ones who are the direct performers of surplus labor creating surplus value are known as productive laborers and a different set of persons who appropriate that surplus value are known as productive capitalists. Therefore, capitalist class process represents a generalized commodity system (could be material or immaterial produce) through which the surplus value created by the productive workers is appropriated by the non-performing productive capitalists. Other than appearing through the process of production of commodity, the phenomenon of money capital or SV can also be generated through the process of circulation, i.e., as M-M/ (trading/merchant capital, finance capital, etc.). The ones who appropriate such forms of surplus value or money capital are known as unproductive capitalists (bank capitalists, merchant capitalists and shareholding capitalists—all generating more money by advancing certain amount of money in circulation) and the workers performing under and for them are defined as unproductive laborers. Additionally, there are other kinds of unproductive laborers who might be working under the capitalist class enterprise by providing various conditions of existence to the performance and appropriation of surplus value. Following Marx, Resnick and Wolff showcases an economic

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the primary value creating sector, the post-planning policy paradigm privileged and provided a central place (epistemologically and ontologically) for global capital and then allowed the socioeconomic space to be re-signified and restructured by the functioning of global capital within a global competitive market regime which in turn institutes a reverse impact on state and its policy. This locking in of state-global capital-neoliberal complex represents one of the core aspects of Indian economic transition. Once this privileged position and role of global capital is accepted, the new Indian economic map that emerges can be construed in terms of the circuits-camp of global capital and its outside—world of the third (to be explained). At one level, exchange relations are forged between the global capitalist enterprises and other local enterprises within a nation’s border (the local market) and with enterprises beyond the nation’s border (the global market). Via the continuum of local and global markets or local-global market structure, global capital gets linked to the ancillary local enterprises (big and small scale, local capitalist and non-capitalist) and other institutions (banking enterprise, trading enterprise, transport enterprise, etc.) producing in turn what we name as the circuits of global capital. Following an extension of the circuits of global capital (inclusive mainly of manufacturing, services and now in agriculture relate products), rapid growth of the Indian economy is inducing rapid development of urbanization and migration (rural–urban, urban–urban). Spurred by neoliberalism (as already explained), it is being complemented by a new culture of individualization and consumerism, by competitive market-oriented ideas of success, entrepreneurship, market-oriented human capital, by neoliberal ways of judging performance and conduct by subjects, private institutions and state alike, etc. Resultantly, a social cluster of practices, activities and relationships transpires that we refer to as the ‘camp of global capital.’ A new nationalist culture is appearing around this camp, especially its hub, and is becoming the breeding ground of shaping competitive self that emphasizes utilitarianism, possession and accumulation as part of nation-building project. With global capital as the privileged center we refer to circuits-camp of global capital as global capitalism.5 In contrast, world of the third constitutes the overdetermined space of capitalist and non-capitalist enterprises (much of what when expressed in non-class terminology would come under the so-called informal sector) that procreate outside the localglobal markets and hence outside the circuits of global capital; it spans across rural and urban space. Likewise, the camp of world of the third comprises of a social cluster of practices, activities and relationships connected to the language-knowledgeexperience-logic-ethos of this space (Chakrabarti and Dhar 2013; Chakrabarti et al. 2015). However, what stands as circuits-camp of world of the third is for the hegemonic discourses (like colonialism, development, political economy, and so on) third world. Third world supposedly epitomizes mass poverty, arising in no small part due system—capitalism—in which these various kinds of capital, capitalists and workers are embedded in a system of overdetermination and contradiction. 5 See Chakrabarti et al. (2012) for a full-fledged discussion on circuits-camp of global capital and world of the third.

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to inefficient and non-competitive practices and activities; third world as nurturing excess labor; as harboring a large reserve army of the unemployed/underemployed. In short, it is re-presented as a figure of lacking and devalued other of circuits-camp of global capital. The truth of outside to the circuits of global capital remains unaccounted; through the foreclosure of its language-knowledge-experience-ethos-logic, one loses access to the world of the third. Instead, what awaits us is a devalued space, a lacking underside—third world—that needs to be transgressed–transformed–mutilated–assimilated. It is the foreclosure of world of the third via the foregrounding of third world (or, by substitute signifiers such as social capital and community) that helps to fortify the hegemony of (global) capital over world of the third. India’s economic map changed as a result of the primacy accorded to capitalist performance, appropriation and distribution of surplus value which, with increasing rate of capital accumulation, induced the growth of the circuits-camp of global capital. The ideology and implementation of neoliberal reforms no doubt helped fuel this expansionary logic. What followed was high economic growth and material prosperity, especially surrounding the hub of global capital (the rise of the so-called middle class). This sustained income growth is certainly one of the success stories of Indian capitalism even as it has in the process grafted modern abuse onto ancient injustice, new forms of class-caste-ethnic-gender divisions and modes of inequalities onto their older structures. However, expansionary logic of economic growth came to be associated with a rapid process of state-sponsored expropriation of land, forest, rivers, etc., which in turn was justified by the progressive uplifting of third world from its so-called decrepitude existence. The explicit use of force and violence against world of the third came to be seen as indispensable for initiating the long-run process of liberation of the embedded subjects from their own backward structures that supposedly holds them down. This element of force and violence has involved land alienation, dislocations, forced evictions and displacements that in Marxian analysis have been analyzed as instance of primitive accumulation (Basu 2007; Sanyal 2007; Chakrabarti and Dhar 2009); along with income and social exclusion, exclusion is also structurally produced, i.e., exclusion from the primary value creating domain of the circuitscamp of global capital (Chakrabarti and Dhar 2013). What appears as progressive from the perspective of global capital (or third world) may appear as unjust violence and plunder from the perspective of world of the third, which in turn can and did produce countrywide resistance. Once it was realized that mere repression is not sufficient, the Indian state initiated changes in laws of land acquisition, forest rights and environment although the same nation-state has since been trying to undercut and undermine those laws (D’Costa and Chakraborty 2017). The last twenty-five years of India’s celebration of reforms have also seen a parallel rise in such resistances and the effort of state-capital nexus to manage and navigate the transition process. The response of the Indian state to possible fissures, antagonisms and outright resistances with reference to the historical conjuncture of neoliberalism and global capitalism and particularly in response to the expansion of the circuits-camp of global capital has been novel enough to produce an added rationale in the very existence of

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the state. This novel response can be explained by way of enacting what we call the political state of exception.

4.3 State of Exception and Legal Right of Violence Force is the midwife of every old society pregnant with a new one. It is itself an economic power Marx (1990, 916).

Only a blind person will not acknowledge the connection of capitalist development with violence that following Marx, has been referred to as primitive accumulation. However, primitive accumulation by itself does not reveal the general relation of state with violence; i.e., it does not explain how in the age of democracy and rights, the state can acquire a legitimate right to use force and violence in favor of certain groups and process, here, capitalists and capitalism. State-sponsored primitive accumulation can only appear as one instance of the state’s universal right to deploy sovereign power. In short, the rationale of sovereign power of Indian state (when it does no longer rules for itself but for the ‘good’ of society) needs to be explained. The problem is that post-Foucault the element of state-sponsored sovereign power seems to have fallen out of favor as an analytical tool for understanding the mechanism of power in democratic society. The attention has instead turned to more micro-level biopolitical instances of power (disciplinary, governmentality) as the appropriate way of analyzing the rationale, mechanisms and technologies of subjectification and subjection (Foucault 1976; Rose 1999; Rabinow and Rose 2006). This has also been used to characterize much of development policies in India as an instance of neoliberal mode of governance that we have already described. The somewhat jarring demotion of sovereign power in favor of micro-level instances of power and subjectification in shaping the neoliberal subject does not seem appropriate in light of the palpable reassertion of the sovereign power of Indian state (as we have explained earlier), in ways that are more lethal and wide ranging than hitherto known and achieved. The demotion of sovereign power reveals a glaring deficit in analyzing post-reform Indian transition and the specific location and role of state in it. The inalienable connection of state, violence and development is sufficient to flag the question: What allows the state, committed to democracy and individual rights, to accept sovereign power as a legitimate tool in its endeavor to govern for the good of society? We can get to this question by expanding on Giorgio Agamben’s insightful intervention (Agamben 1998, 2005; de la Durantaye 2009). The argument we make is not that disciplinary and governmentality types institutionalized and micro-processes of power are insignificant (far from it; our earlier sections have explained their role). From our vantage point, what it does highlight is the importance of the rationale that allows sovereign power to emerge as a constitutive component of post-reform Indian society.

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Let us begin with an observation of the previous Prime Minister of India on the connection between Indian Adivasis and Maoists. There has been a systematic failure in giving the tribals a stake in the modern economic processes that inexorably intrude into their living spaces. The alienation built over decades is now taking a dangerous turn in some parts of our country. (Manmohan Singh, Chief Ministers’ Conference on Implementation of the Forest Rights Act, November 2, 2009)

This is an acknowledgment of both structural exclusion and state-capital intrusion that we referred to earlier; the dangerous turn refers to the support base of Maoists among the tribals. The response of the Indian state’s strategy to this dangerous turn has since been to combine security (to combat Maoism) and development politics (to eradicate Adivasi poverty through social programs as also to bring them in the ambit of modern market economy and in the process de-link them from Maoists). There are two points that can be generalized from this example. First, the aspect of using social programs is not restricted to Adivasis but has become a general principle of the so-called inclusive development. This will be discussed later. Second, the aspect of security problem too is not conceptualized by the Indian state as specific to Maoism. Rather, it is an extension of a novel idea of political state of exception that allows the Indian state to lay down the ground to impose its absolute political authority on behalf of global capital. This does not reduce the state to machinations of global capital, but rather highlights one axis where the connection between the two emerges. And, as we shall see now, this connection is cemented through sovereign power. In the context of ‘Development,’ the political state of exception entails a phenomenon of securitization where entire regions and people therein could be classified as ‘problem.’ The source of the ‘problem’ can be located at the point of opposition to global capital’s entry or functioning, to its claimed legitimacy as a progressive force or simply to the diktat and rule of state that centralizes its authority. The biopolitics of population by way of classifying people into designated groups is designed for a special treatment of these areas-subjects by first declaring them as a state of exception; state of exception in the sense that state enjoys the sovereign power to declare illegal the normal rights of these people that are otherwise accorded to ordinary citizens (Agamben 1998, 2005).6 While it may have persisted in fragmented forms in the past conducts of Indian state, the post-reform Indian state has systemized (morally, judicially, technologically) the political state of exception into its rationale for existence; backing itself on grounds of defense of democracy and nation building, it has saturated itself with laws and immunities, whose scope, reach and effect have now expanded manifolds through the ever-expanding and penetrating technologies of power. 6 Agamben develops the insight of sovereign and state of exception by taking off from Carl Schmitt.

Schmitt defines the sovereign as ‘he who can decide on the state of exception’ and hence has the power to suspend the rule of law of which is a participant of. This logic of sovereignty embodied by modern state allows for the juridical use of the sovereign to declare something/somebody illegal, i.e., outside the rule of the law and the set of rights and privileges that are otherwise enjoyed by normal citizens as part of their biopolitical existence. This process of subtraction/suspension from biopolitics is legal and comes to be seen by Agamben as the state of exception.

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The right to declare ‘exception’ is not accidental or temporary, but rather it has the status of permanent privilege regarding what its existence means and ought to be perceived as. But a question may arise at this point. Who is to be excluded? How is ‘who is to be excluded’ determined? The question has to be answered because everyone is a potential citizen with certain rights and duties that are drawn from the constitution and democratic edifice of Indian society and which the state pledges to protect. What is then the status of one who is to personify the state of exception? Here, Agamben takes recourse to the figure of Homo Sacer. Homo sacer stands for ‘sacred man.’ It is a juridical term derived from ancient Roman law that stands for a figure who is an outcast from the community and can be killed by anyone with impunity. The ‘sacred’ is not sacred in the religious sense implying that he cannot be used in a sacrificial ritual that requires taking of a life seen as valuable. Why not? Because he has been dubbed as impure, his rights usurped and his place in society suspended. He cannot be sacrificed because he is no longer part of the community and therefore has no value. The life that homo sacer embodies is what Agamben called bare life. Homo sacer is then the symbolic figure of bare life. Evacuated from the social space and activity, the only law that applies to homo sacer is the one that legally has cast him permanently out of social life and made him an exception for the political community at large. In this context, the content of sovereign power that the Indian state in the age of democracy and rights has come to possess is very special. It embodies an almost imperial authority to, at any time, name and segregate any region/group/person to be outside the scope of law and thus cast out the targeted subjects (the homo sacer) from the communal life that everybody else is entitled to. The state of exception is with reference to bare life, a political figure personifying impurity and illegality reduced to mere biological life that the state and global power reserves the right to rule/contain/destroy through the technologies of power at its disposal (using networks of laws, indefinite detention, encounters, etc.). Moreover, it does not matter whether the ‘bad’ subjects operate outside law (they may or may not). What is crucial is that the state, by this kind of naming, relocates itself outside the law reserved for citizens. Its right to be outside the rule of law is henceforth rendered legal (that is what the systematic array of security-related laws that the state has armed itself with captures). It allows the political state of exception to emerge and by extension explains the privilege of sovereign power of the Indian state. This model constitutes one of the new axes of India’s emerging political economy without which any explanation of India’s development paradigm is incomplete at best and prejudicial at worse. Faced with resistance in/from world of the third or from within the circuitscamp of global capital, we are witness to a process whereby the dissent/opposition gets displaced into a particular political terrain, not for engagement or debate (as Amartya Sen would like it to be) but always in danger of being positioned as homo sacer, and hence declared the enemy of the nation and ‘Development.’ Thus, the scope of defining, branding and punishing the ‘terrorists and secessionists’ is being gradually broadened to encompass the development dissenters, thereby creating a chain of equivalence. State’s sponsor of and participation in primitive accumulation

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and other kinds of developmental violence finds legitimacy and potency by relating the specific event and its opposing force to this chain of equivalence; it showcases state’s role in primitive accumulation as furthering the overall good of society as against the other side that gets projected as the antagonistic force representing evil or dystopia, hence requiring to be isolated and cast away from society. At the point of encounter of the state with respect to bare life, sanctioned politics in the political body thrives not on expanding the scope and scale of democratization and dialogue, but on its growing truncation through the suppression of dissent to the so-called nationalist consensus of ‘Development.’ The response to antagonistic fissures in the political economic order is to exclude one of the sources of antagonism by way of the figure of bare life (which could be anything and anybody). The figure of bare life, illegal and illegitimate, is here the personification of the unresolvable antagonisms that challenge global capitalism and by default constitutes one of the objectives of state’s rule. The continual attempts to displace the political event of antagonism into dystopia (e.g., association of any questioning of and opposition to the new order seen as an automatic instance of Naxalism [a catch call for far left ideology projected by the ruling disposition as dystopia] which in turn is made coterminous with terrorism, anarchy and anti-nationalism) are potent because it disallows the possibility of dialogue with dissenting and opposition voices/positions and for force and violence to emerge as a legitimate and necessary constituent of nation building. It also enables in the process the state to exercise control over the terms and content of discussion and deliberation over matters concerning the triad of Development. The Damocles Sword of force and violence hanging over society is thus necessary to streamline, legitimize and clear the path of Development. This explains why, potentially, we are all homo sacers and this existence is purportedly required to protect and defend society. It is what makes the sovereign character of the Indian state special in the age of democracy and rights. Development is the policy of conquest of world of the third at the behest of global capital where the source of the conquest—a political source—lies not in what is included but what must get fundamentally excluded (bare life) and declared an exception, a state of exclusion-exception that can only be defined and secured by force and violence. It is this exclusion-exception that helps draw the (b)order of the inside (body politic) and enables capital to come ‘dripping from head to foot, from every pore, with blood and dirt’ (Marx 1990, 926). However, the sovereign rationale of force and violence that can be deployed through a network of repressive apparatuses against the world of the third is not the only characterization of the Indian state. It appears in conjunction with another kind of engagement with world of the third, an engagement that is productive and curative. It is to this benevolently situated rationale and role of the Indian state that we now move to.

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4.4 Class, Social Needs and Development Indian policy paradigm has remained squeezed between two kinds of mainstream development model. The classical approach takes as its fundamental indicator of standard of living (measured as GDP per capita or GDP per worker) to be economic growth; growth serves as the means that help fulfill the primary development objective of poverty reduction. In contrast, in addition to GDP per capita, the revisionist approach considers standard of living to be comprising of many social components like life expectancy, literacy, etc. By accommodating the benevolent distributional role of Indian state, NGOs and international agencies such as World Bank, this developmental approach has given rise to the discourse of inclusive development through social programs directed toward the fulfillment of variety of social needs within world of the third in the name of uplifting the third world. The debate between the classical and revisionist positions has been fierce in India, pertaining to whether growth is primary (position of present BJP-led NDA government) or whether it needs to be supplemented by projects of inclusion (erstwhile Congress-led UPA government position).7 Rather than delving into this debate, we focus on a reinterpretation of the revisionist position from a class-focused perspective and in that context interrogate the making and unmaking of inclusive development by the Indian state. This reinterpretation is needed because the revisionist position (not to speak of the classical path) is devoid of any class content which delinks any analysis of inclusive development from its relation with class and capitalism. By bringing class process into the picture, we shall show that this relation is central to the consideration of public policy of the Indian state and the debates that transpire in that space. But, before that, a theoretical problem needs to be addressed. Are class processes related to need processes, and more broadly from there, is India’s capitalist-induced growth related to the development space of social needs?8 Once we theorize this relation and distil its intricacies, we shall exemplify through the debate on the food security our claim of how an inalienable relation between class and need process, and between class struggle and need struggle shapes Indian public policy as a site of intense contestation and conflict. Following Resnick and Wolff (1987, 2006), the organization of surplus labor in a labor process is divided into two components: fundamental class process (FCP) 7 The recent argument between Jagdish Bhagwati and Amartya Sen represented broadly the classical

and revisionist positions, respectively. The former tried to formulate a defense of the BJP led National Democratic Alliance position that seems to be veering toward emphasizing the growth logic by foregrounding the importance of rapid expansion of circuits of global capital through labor intensive industrialization as the quickest and efficient way of reducing poverty. The demotion of social programs in favor of economic growth is integral to its imagined path of development. In contrast, the erstwhile Congress-led United Progressive Alliance clearly emphasised the necessity of combining social programs and economic growth to reduce poverty, something Sen defends. The debate is not on the utility of capitalist development (on whose benefit both sides agree), but on the desirable strategy and trajectory of capitalist development. 8 For the technical presentation of this theory see Chakrabarti et al. (2008) and for a non-technical presentation see Chakrabarti (2013). Our theory here follows the insights of these papers.

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encompassing the performance and appropriation of surplus labor and subsumed class process (SCP) as the distribution and receipt of surplus labor. FCP and SCP are each other’s conditions of existence, and their specific relation in any concrete scenario helps form the organization of surplus. Since the primary value creating sector is presumed to be capitalist in Indian policy context, let us focus on the specific form of capitalist commodity and money equivalent of surplus labor qua capital (see Footnote 6). Take capitalist enterprise. To ensure the continuous existence of capitalist FCP, the appropriated surplus is distributed by productive capitalists as subsumed class payments to the entities who are delivering non-class conditions of existence to secure FCP; these include, among others, unproductive capitalists (such as financial and merchant capitalists for ensuring the process of lending money and transforming the produced use value into commodity by selling the product) and to an array of individual and social actors—shareholders, managers, landlords, state, etc., who provide various non-class economic conditions (with respect to ownership, strategizing, land, subsidy, security etc.); the supervisors, state administrators, politicians, trade unions, etc., who offer political conditions; the educational institutions, media, religious institutions, advertisement enterprises, etc., who provide cultural conditions of existence. Subsumed class payments, SCPs, required to meet the conditions of existence of FCPs constitute Production Surplus (PS). Call this distribution of surplus to the point of production as class distribution. In contrast, the distribution of surplus, in excess of PS, directed toward the socially determined needs of the people as mentioned earlier constitutes Social Surplus (SS). Rather than being exhausted to the point of production, i.e., FCPs, surplus distribution qua SS takes account of those agents who may not provide any conditions of existence against which they will receive a portion of subsumed class payments. Expanding on Marx (1977), we can consider in this regard the social existence of the poor, the elderly, the unemployed, mentally ill, the children, and so on. This implies that the full extent of surplus distribution cannot be accounted for by subsumed payments since the latter, on their own, cannot capture the totality of distribution of ‘unpaid labor which maintains all the non-working members of society’ (Engels 1974, p. 5). Social needs and its related channel of possession, distribution and receipt of social surplus determine the development space. Flows of social surplus for various socially defined needs are defined as development distribution. Consistent with these two forms of distribution, the total produced surplus value (TVS)—the domain of FCPs—is divided between production surplus (PS) and social surplus (SS). Evidently, what accrues to social surplus (SS) will depend upon TVS and PS; these three are then in an overdetermined and contradictory relation. Change in any one will propel a change in another. Associated with class process and class distribution and with socially determined needs and development distribution are class struggle and development struggle, respectively. The struggle over FCPs (performance and appropriation of surplus) and over class distribution is class struggle, while struggle for or against various social needs and over development distribution is need-related development struggle. Like class and social needs processes, class distribution/struggle and development distribution/struggle too are in an overdetermined and contradictory relation. We

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know of no other theoretical frame capable of generating and exploiting such an integrated relation.

4.5 Social Needs, Public Policy and the Indian State Rather than referring to need as a naturalized predefined objective ends, we see it as the combined effects of processes (economic, political, cultural and natural) that constitute it across time and space. By virtue of those constituting social and natural effects that shape it, need gets manifested in specific forms. This socially determined need remains open to interpretation and change, that is, to sociopolitical articulations. Needs space is thereby a contested terrain, and any appearance, mutation and disappearance of what qualifies as social need must be construed in terms of struggles that shape it. For example, in the 1960s, spurred by social upheavals and economic distress in rural India, rural employment for the poor started to emerge as social needs; it culminated in the public works program initiative in the fifth five-year plan. As social movements in rural India gathered force over time, this need form kept on changing. This ultimately takes us to the non-party political formation of Mazdoor Kisan Shakti Sangathan (MKSS) in Rajasthan whose relentless pursuit of rural employment as a right opened a debate that eventually paved the way for the MNREGA program, one of the flagship inclusion program adopted by the Indian state in the twenty-first century. In the need space, international organizations such as the World Bank, central governments, local governments, NGOs and social organizations like the Rashtriya Swayamsevak Sangh, social movements, class enterprises (such as state class enterprises and private class enterprises including corporations, and so on), the political parties, think tanks, and so on are some of the entities bringing into play their specific and often contradictory ideas of social needs and modes of struggle over the appropriation, distribution and receipt of social surplus. The conflict over social needs could be fierce, as it usually is. By foregrounding the need space within the overdetermined and contradictory relations of FCP, SCP and SS, our frame unlocks a unique rendition of public policy. Public policy is by default pulled and pushed into contradictory directions by various kinds of class and need effects and influences, some over which the policy makers may not have role or even know of. For the sake of argument, one can split these effects and influences between hegemonic needs and radical needs. Hegemonic social needs pertain to the construction of those needs which facilitate and secure the privileged position of global capital and that of capitalists and their cohorts. That is, the point is to situate social needs, if required at all, in ways such that they do not impede the march of the circuits-camp of global capital. In contrast, radical needs may come from other directions and sources, not least following social movements from below that may challenge the given order of things. The example of MKSS’s influence on the formation of MNREGA highlights this point. Rather than being top-sided and one-sided, public policy formation takes place in a contested development space, thereby underscoring its contingent nature and non-teleological

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trajectory. This theory of public policy appears due to the conceptual relocation of public policy within the class-need overdetermined and contradictory plane and the ensuing complexity of diverse and contesting positions with respect to social needs, class distribution and development distribution. It is the depth of political democracy that will determine whether such a dense space and assortment of struggles would arise or how far they can be accommodated within a political principle of participation. Public policy works through a tense relation between the objective of economic growth and the constitutional provision of political democracy. It is not surprising that those in favor of relentless growth strategy find themselves at odds with public participation/influence in policy matter. Resultantly, the dislike of neoliberal hawks toward social needs betrays at the same their distaste for direct public participation in public policy. The two are connected since vibrant political democracy will only unlock the door to a complex participatory space in which social movements, activism and voices of the poor, workers and dissidents would have to be internalized in public policy. This tends to challenge and dilute the presence/role of hegemonic needs. Finally, one must not ignore non-class processes (related to gender, race, caste, nature, etc.) which, through their distinctive effects, impart significant influence on the presence, quantity, composition and purpose of production surplus and social surplus. Taking all the discussed aspects into account, the amount of surplus available for distribution toward various social needs such as that for poverty related need is thereby an outcome of class struggle (i.e., struggle over fundamental and subsumed class processes), need struggle (i.e., struggle over processes related to social surplus) and other non-class struggle (i.e., struggle over processes that determine the meanings of social needs as also production and social surplus). Given our theoretical frame derived from TVS, PS and SS, we recast inclusive development as an unending conflict over class and need processes regarding what gets defined as social needs, the amount to be channelized as social surplus for these socially determined needs-related programs, the appropriate/targeted subjects to receive a portion of SS and how much, and over the impact of social surplus distribution on FCP and SCP and vice versa. Such a relation and struggle are unavoidable, as the present NDA-II government, despite its emphasis on growth, is finding out. Finally, we draw attention to the connection of capitalist-induced growth and inclusion, since the amount of SS to be available for inclusive-based social programs is contingent upon the surplus value created in capitalist FCPs tied to the circuits of global capital and how much accrues to the agents of subsumed class positions especially those occupying the hub of the circuits of global capital. This leads to the conclusion that changes within and across TSV, PS/SCP and SS render their relation intricate, volatile and in a state of flux. Resultantly, our framework highlights the point that class counts for social needs-related development space and vice versa.

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4.6 Food Security Debate: A Class-Need Reinterpretation Poverty is a site of intense contestation and struggle, not least because the distributional angle of poverty alleviation is connected to other contending claimants of social needs as also claimants connected to FCP and SCP, especially those occupying the hub of circuits-camp of global capital. There seems to be a systemic tendency in capitalism to lock up the fruits of income growth within the hub (concentrated among Indian capitalists and their supporting cohorts), which sets it in opposition to other claimants, especially at the margins of the circuits-camp of global capital and beyond that to those in the world of the third. In this context, it is naïve to think that the struggle to end poverty through distribution of social surplus would be socially neutral or benign. Rather, we showcase the debate on Food Security Act to underscore our point that public policy on poverty is constituted by intense class-need struggle spanning the interconnected class and development domains. It is well known that the Food Security Act passed by parliament in 2013 was considered as a flagship program of inclusive development. It was through decades of social movements before and since independence that the demand for food security as a right qua radical need gained prominence in India. Resulting from the ideas derived from these social movements, those who have theorized food security of India as a human right problem championed the ‘Right to Food’ campaign. This camp developed the idea of food security as a radical need for combating and terminating poverty by demanding universal coverage as encapsulated in its proposed ‘Food Entitlements Act.’ Not surprisingly, the amount of social surplus required for its coverage would be the highest among all possible versions. As we shall see now, the remaining positions including those in the discussed debate on the issue in India take this position as their reference and departure point. The immediate location of the present debate on food security can be traced back to the Supreme Court case filed by People’s Union for Civil Liberties (PUCL) against the Union of India. Since then, the Supreme Court has intervened a number of times in favor of the issues proposed by the ‘Right to Food’ campaign. That includes directives to complete the implementation of targeted public distribution systems (PDS) by January 2002, identification of Below Poverty Line (BPL) families with distribution of 25 kg of grain per family per month; directive to implement the Antyodaya Anna Yojana (AAY) scheme whereby the poorest of the poor get grain at Rs. 2 per kg; directive with regard to other schemes, such as the midday meal in all government and government-assisted schools, Annapoorna Scheme, the Integrated Child Development Services, National Maternity Benefit Scheme, and so on (Human Rights Law Network 2009). In its campaign, the ‘Right to Food’ camp integrated the plight of children and women, considered the most vulnerable in so far as undernourishment is concerned. Fall in per capita consumption of cereals from 1983–1984 to 2000–2001 in both urban and rural areas and sharp decline in total calories per head in rural areas from 2211 in 1983 to 2149 by 1999–2000, as compiled by the National Sample Survey data is argued to be pointing to a situation of hidden hunger (Human Rights Law Network 2009; Dreze and Khera 2010). To further highlight the problem, ‘according

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to the National Family Health Survey 2005–2006, 40.4% of children under the age of three are underweight, 33% of women in the age group of 15–49 have a body mass index below normal and 78.9% of children in the age group of 6–35 months are anaemic’ (Report of the Expert Committee on National Food Security Bill 2011, 1). In other words, the problem of hunger was seen as particularly acute for children and women. Taking off from these figures and arguments, a position evolved that the income-centric understanding of the poverty line is incapable of capturing the extent and depth of the problem of undernourishment. Spurred by the intervention of the Supreme Court, the ‘Right to Food’ camp has proposed the ‘Food Entitlements Act’ with the objective for an overarching obligation to protect everyone from hunger. Among other recommendations, it sought a universal public distribution system. It thus relocated the issue of food security as a case of ‘exclusion’ by problematizing its denial as a violation of the fundamental human rights of individuals to access food for livelihood. Food was turned into a matter of development struggle and food security a meaningful and just social need that must be mandatorily funded by social surplus distribution. The element of food security as a struggle over the question of development justice forced its way into the policy paradigm of the Indian state, which the successive UPA governments (2004–2014) sought to internalize within the trope of inclusive development. It is well known that the Congress-led UPA-I government formed the National Advisory Council (NAC) led by Congress President Sonia Gandhi and which included some academicians, social activists and members of NGOs as well. It is also well known that NAC-I pioneered the public policy of MNREGA (the job scheme that guarantees unskilled manual work for at least 100 days for every household in rural India). Designed to address income inequality, MNREGA was supposed to bolster rural income, build public infrastructure, stabilize agricultural production and stem migration to urban areas. It was initially launched in a few districts of the country and then subsequently extended. Encouraged by its success, UPA government in its second term initiated the process of introducing a ‘National Food Security Act’ for which NAC-II was asked to deliver its recommendations. Regarding the scope of the Bill, it was proposed, along the lines of MNREGA, to initially bring the poorest districts under the Food Security Act and then extend the Right to Food by 2014. Submitting its report in December 2010, the first series of recommendations of NAC-II paved the way for what could arguably be seen as one of the most important policy debates in recent Indian history. The expert committee of NAC ultimately recommended coverage of 90% of the population in rural India and 50% in urban Indian; this covers 75% of the Indian population; the coverage for this population was to transpire in two phases. The households were to be divided between priority households (46% in rural areas and 28% in urban areas) and general households (39% rural and 12% urban in phase 1 and 44% rural and 22% urban in final phase). Each household in the former group was entitled monthly to 35 kg (equivalent to 7 kg per person) at a subsidized price of Rs. 1 per kg for millets, Rs. 2 per kg for wheat and Rs. 3 per kg for rice, while each household in the latter group was entitled monthly to 20 kg (equivalent to 4 kg per person) at a price not exceeding 50% of the current

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minimum support price for millets, wheat and rice. Legal entitlements for child and maternal nutrition, destitute and other vulnerable groups were also provisioned. It is very interesting that the same UPA government asked the erstwhile Planning Commission to delve into the matter independently and deliver its findings. Under its aegis, the Rangarajan Committee Report (expert committee appointed by the then Prime Minister of India) played the contradictory role of diluting the provisions of National Advisory Council (NAC). Its recommendation restricted the distribution to 46% of rural and 28% of urban population considered as priority group (arrived at by taking the percentage of population below the official poverty line + 10% of the BPL population) at the prices of Rs 2 per kg for wheat and Rs 3 per kg for rice which are to be indexed to the consumer price index; millet is excluded. More tellingly, it left out in the process those falling in the APL (above poverty line) category; in case of the latter, if available, food grain can be distributed at the minimum support price. Regarding its rejection of the NAC report, the Rangarajan Committee pointed to the constraint of non-availability of food grains to the extent demanded by the NAC, possibility of higher price in open market due to the additional procurement of food grains (which is argued to be detrimental to the priority group as well) and finally burden of subsidies much larger than foreseen by the NAC. The debate seems to come down to the extent of coverage to be guaranteed under the Food Security Act Bill, and the content of it (e.g., should it be universal or not; if not universal, who should receive the benefit; should it be nutrition based or simply target-based distribution of certain quantum of food grains such as rice and wheat). Ultimately, after many rounds of suggestions and recommendations, a compromise between the two was reached, and the Indian parliament passed the ‘The National Food Security Bill’ in December 2013. Without going into the details of the exact nature of the bill, we can still infer that, in its final watered down recommendations, while the Bill did retain the spirit of food security as a social need, it clearly diverged from the ideal of universal coverage by accepting the constraints of food production and procurement as also that of subsidy bill. By default, it internalized to an extent the possible negative effects of increased demand for social surplus on other social needs considerations, and indeed on the FCP and SCP. As a part of its compromise, it sought to allocate for each month 5 kg of food grains per person to priority households and 35 kg per household to Antyodaya households; food grains included rice, millet and wheat. It was claimed that 75% of the rural population and up to 50% of the urban population’ would be covered by Priority and Antyodaya households (called ‘eligible households’). The conflict within the state over the public policy over food security was not just restricted to social movements, activists, NGOs and government organs, but involved the active intervention of capitalists and their cohorts (including business bodies, media, think tanks, credit rating agencies, etc.). In this regard, we want to draw attention to the more ferocious attack launched by the pro-capitalist, neoliberal lobby

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(inclusive of business organizations and thinks tanks such as FICCI9 and Moody’s10 ) even when the social surplus demanded by the final NAC recommendation of food security was lesser than that claimed for by the ‘Right to Food’ campaign or what has been initially proposed by NAC. Spurred by the Rangarajan Committee Report, this critique had no sympathy or consideration for the idea of food security as radical need. Rather, it stressed on the negative impact on budgetary prudence, distortions on food grain supply and prices, further bureaucratization and wastage, impact of negative signals to the investors, etc., as reasons for rejecting the proposed policy of Food Security Act. By dismissing any suggestion of giving any further ‘doles’ some even called into question the very idea of food security as social need, that is, whether it qualifies at all as social needs.11 From our vantage point, these array of criticisms serve to exemplify the instance of institutions and individuals coalescing in favor of a position that reassert the primacy of capitalist class process and of capitalist’s (productive and unproductive) right to retain as much of the surplus for class distribution as possible. From our vantage point, the concern being expressed by defenders and beneficiaries of the circuits of global capital pertains to what affects them as a result of this policy: a greater social surplus for food security would put pressure on PS which in turn may impact the FCPs, thereby further problematizing the growth story of India. It can be seen as an expression of disquiet on the role of public participation in public policy and an attempt to dilute the general relevance of inclusion-based social programs. We see this as part of an intense struggle to carve out and retain the influence of capitalists and their cohorts in public policy and statecraft, including matters that pertain to world of the third. The fierceness of this concerted attack serves to remind us of the political nature of public policy and its fragility. With the return of second NDA government in 2014 with its pro-growth agenda and strong business lobby support, there have been question marks regarding its seriousness in implementation of Food Security Act. But that is another story. We tried to show that the debate over food security represents an intense struggle over the meaning of social needs, as also the distribution of social surplus including its procedure and scope, and over class processes. While the key word ‘class’ is understandably tabooed in this debate (by virtue of its epistemological foreclosure), it is evident that the class-focused approach helps to defamiliarize the terms 9 Ficci President Naina Lal Kidwai said ‘Ficci does not support Food Security Bill… In addition to the

cost put forward by the government, the cost of administering it and the whole gamut of things that comes along will put burden on the exchequer. It is a very troublesome act in terms of number,’ (Food Security Bill ‘a troublesome act’: Ficci, https://economictimes.indiatimes.com/news/economy/ policy/food-security-bill-a-troublesome-act-ficci/articleshow/21251014.cms; Jul 22, 2013, 09.34 PM IST). 10 On Moody’s position see, ‘Food Bill credit negative for India: Moody’s,’ http://www.rediff.com/ business/report/food-bill-credit-negative-for-india-moodys/20130829.htm, August 29, 2013 15:20 IST (see Footnote 10). For a general sample of this position, see Sabina Alkire, http://www.thehindu. com/opinion/op-ed/this-bill-wont-eat-your-money/article4963938.ece, July 29, 2013 00:56 IST. 11 “The Economic Times referred to the National Food Security Bill as a ‘money guzzling measure’ and according to CNBC-TV18, Rahul Bajaj, chair of Bajaj Auto, said that ‘all such give-aways are populist measures’ (quoted from Sabina Alkire, http://www.thehindu.com/opinion/op-ed/this-billwont-eat-your-money/article4963938.ece, July 29, 2013 00:56 IST).

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of this debate, and produce a unique interpretation by unpacking the public policy formation over food security to be a struggle over social needs, class distribution and developmental distribution.

4.7 Conclusion We have tried to showcase a theory of the Indian state—composed of its rationale, strategies and practices—on the basis of a set of concrete relations that we argue comprise a new historical conjuncture in the post-planning Indian scenario. Resulting from the combined effects of three broad components (neoliberalism, global capitalism and inclusive development) of this new order of things, we have shown that the emerging Indian state is both a producer of this triad as also the object of diverse effects from these. Resultantly, the Indian state gets pulled and pushed into contradictory directions and the deployed set of rationale for its existence expresses the seemingly opposite positions. However, notwithstanding the diverse sites and causes of appearances, the set of rationale converge to fulfill one central objective of state: governance for the good of society and not for itself. Specifically, we have shown that, even as it navigates itself within the triad which it actively helped set up, the Indian state is characterized by an attempt through various means—sovereign and productive—to control and subjugate the world of the third (procreating outside the circuits-camp of global capital). It does so to create, secure and facilitate the march of capitalism through its growth inducing and inclusive social programoriented strategies.

References Agamben, A. (1998). Homo sacer trans. Daniel Heller-Roazen: Stanford University Press. Agamben, A. (2005). State of exception. London: Chicago University Press. Ahluwalia, M. S. (2002). Economic reforms in India since 1991: Has gradualism worked? The Journal of Economic Perspectives, 16(3). Basu, P. K. (2007). Political economy of land grab. Economic and political weekly (Vol. XLII No. 14). Becker, G. S. (1976). The economic approach to human behaviour. Chicago and London: University of Chicago Press. Callison, W. (2017). Subjectivity. In I. Szeman, S. Blacker, & J. Sully (Ed.), A companion to critical and cultural theory. Wiley-Blackwell. Chakrabarti, A. (2013 November, 5). Class and need: Social surplus and Marxian theorization of development. Philosophers for Change. https://philosophersforchange.org/2013/11/05/classand-need-social-surplus-and-marxian-theorization-of-development. Chakrabarti, A. (2016). Indian economy in transition. The new order of things. Economic & Political Weekly, 51(29). Chakrabarti, A., & Dhar, A. (2009). Rethinking dislocation and development: From third world to world of the third. London and New York: Routledge.

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Chakrabarti, A., & Dhar, A. (2013). Rethinking and theorizing the Indian state in the context of new economic map. In S. Banerjee & A. Chakrabarti (Eds.), Development and sustainability. New Delhi: Springer India. Chakrabarti, A., Cullenberg, S., & Dhar, A. (2008). Rethinking poverty beyond non-surplus theories: Class and ethical dimensions of poverty eradication. Rethinking Marxism, 20(4), 673–687. Chakrabarti, A., Dhar, A., & Cullenberg, S. (2012). World of the third and global capitalism. New Delhi: World View Press. Chakrabarti, A., Dhar, A., & Dasgupta, B. (2015). The Indian economy in transition: Globalisation. Capitalism and Development: Cambridge University Press. D’Costa, A. P., & Chakraborty, A. (2017). The land question in India: State, dispossession, and capitalist transition. New Delhi: Oxford University Press. de la Durantaye, L. (2009). Giorgio Agamben: A critical introduction. Stanford University Press. Dreze, J., & Khera, R. (2010). The BPL census and possible alternatives. Economic and Political Weekly, XLV, 09, 54–63. Engels. (1974). Engels on Capital (2nd ed.). New York: International Publishers. Foucault. (1976). The History of Sexuality (Vol. 1). London: Allen Lane. Foucault, M. (1983). Afterword: The subject and power. In H. L. Dreyfus & P. Rainbow (Eds.), Michael Foucault: Beyond structuralism and hermeneutics. Chicago: University of Chicago. Foucault, M. (2008). The birth of biopolitics: Lectures at the College de France 1978–79 (G. Burchell, Trans.). London: Palgrave Macmillan. Gibson-Graham, J. K. (1996). The end of capitalism (as we knew it): A feminist critique of political economy. Oxford: Blackwell Publishers Ltd. Human Rights Law Network. (Fourth edition). (2009). Right to food. New Delhi: Human Rights Law Network. Kaviraj, S. (2010). The trajectories of the Indian State. Ranikhet: Permanent Black. Marx, K. (1977). The critique of the Gotha programme. In D. McLennan (Ed.), Marx: Selected writings. New York: Oxford University Press. Marx, K. (1990). Capital (Vol. 1) (B. Fowkes, Trans.). London: Penguin Books. Rabinow, P., & Rose, N. (2006). Biopower Today. BioSocieties, 1, 195–217. Rose, N. (1999). (2nd ed.). Governing the soul: The shaping of the private self. Free Association Books. Resnick, S., & Wolff, R. (1987). Knowledge and class: A Marxian critique of political economy. Chicago: University of Chicago Press. Resnick, S. A., & Wolff, R. D. (2006). New departures in Marxist theory. London and New York: Routledge. Sanyal, K. (2007). Rethinking capitalist development: Primitive accumulation. Governmentality and Post-colonial Capitalism, Routledge: New Delhi. ŠpoljarVržina, S. (2012). Brainstorming for which brains are prohibited: Analyzing our bioneoliberal realities. Collegium Antropologicum, 36(4), 1109–1118.

Part II

Shifting Roles of the State

Chapter 5

Including the Excluded: Inclusive Economic Growth in India After 2004 Matthew McCartney

Abstract This chapter begins by presenting a well-founded popular perception—that India has long been experiencing growth without development. Whether economic growth was slow (until c1980) or among the world’s fastest (after 2003) that it never had the expected impact on improving human welfare. The concerns regarding this process reached from the moral doubts about inequality being unfair to the more practical that inequality could both lower growth rates and make growth unsustainable. Something happened after the mid-2000s. There is accumulating evidence that growth in India now seems more tightly linked to improvements in human well-being. This chapter explores several complementary hypotheses to explain this shift. The revolt of the activists and improvements in information provide at best only partial explanations. The change in the nature of national politics in India to something more predictable and durable seems the most promising explanation for the tighter link between growth and welfare. Keywords Poverty · Economic growth · Inclusive development · Inequality · Public policy · Public services

5.1 Introduction Since the early 1980s and especially since 2003, India has created enormous extra wealth. Popular opinion holds that this boon has provided few benefits for the poorest. There is ample evidence of the abundance of both poverty and wealth. The official poverty rate in India implies that about 300 million people are unable to afford enough nutrients, shelter, and clothing to survive as dignified human beings. The both celebrated and condemned parallel process of popular perception has been a growing middle class that is increasingly detached from the rest of India, living in gated communities, drinking bottled water, and attending private schools. Floating M. McCartney (B) University of Oxford, Oxford, UK e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2019 A. P. D’Costa and A. Chakraborty (eds.), Changing Contexts and Shifting Roles of the Indian State, Dynamics of Asian Development, https://doi.org/10.1007/978-981-13-6891-2_5

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well above the privileged “middle” are the super wealthy. Since the 1990s, India has seen a sharp rise in the wealth of billionaires. Gandhi and Walton (2012) argue that as a result India is now an outlier in the size of billionaire wealth relative to the size of her overall economy. One implication of this popular perception is to worry for India’s future because inequality may be bad for economic growth and social cohesion. In a polarised society, poor people with talent, ability, and drive will be consigned to sub-standard education and unproductive employment (Weisskopf 2011). As the middle and upper classes opt out of majority India, their voices and political influence are lost to the task of pressurising the government to improve public services. The task of raising the living standards of 75% of the population living on less than $2 a day will become even harder. An inegalitarian society may turn its attention to inefficient redistribution rather than wealth creation (Alesina and Rodrik 1994). During the election campaign of 2014, the then opposition BJP created much political capital from this perception and also argued that policy efforts to mitigate poverty had been little more than political populism and had wasted resources giving handouts to existing or potential supporters (Ghatak et al. 2014). This paper examines the underlying assumptions of this popular perception that the mass of the population in India are being excluded from the growth process and that the policy response during the 2000s was a failure. Section 5.2 introduces the empirical evidence. Section 5.3 provides various explanations for this phenomenon. Section 5.4 suggests that growth seemed more tightly linked to wider development after the mid-2000s, and Sect. 5.5 discusses a number of preliminary hypotheses to explain this shift. Section 5.6 concludes.

5.2 Growth Without Development: The Numbers This section reviews some of the evidence that supports (and less often contradicts) the widely held view that three decades of rapid economic growth in India has not translated into equivalent welfare gains for all parts of the population. There are dissenters. Panagariya (2008) and Bhagwati and Panagariya (2013) highlight that while national poverty levels stagnated between the 1950s and 1970s, there has been steady, even rapid decline ever since, and that “there is now irrefutable evidence that sustained growth alongside liberalising reforms has reduced poverty not just among the better off castes but across all broadly defined groups” (Bhagwati and Panagariya 2013: 37). Even though the gap in average incomes of the richest and poorest states has increased over the last three decades, they note that even the poorest states (such as Bihar and Orissa) are now growing much faster than before. Panagariya (2008) argues that social and human development indicators have improved consistently for the poorest, including those related to child labour, infant mortality, and primary school (especially girl) enrolment. Evidence does support the contention that the poor have shared, to some extent in economic growth since the 1980s. Official estimates of poverty show a decline from 39.4% of the population in 1987/1988 to 26.8% in 1999/2000 (Deaton and Dreze 2002: 149). Adjustments to

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take account of different methods of capturing consumption or different measures (such as the poverty-gap index) all agree on the decline even if they disagree on its extent. But argue Dreze and Sen, “the growth process is so biased, making the country look more and more like islands of California in a sea of Sub-Saharan Africa” (2013: ix). There is indeed evidence of rising inequality. The most spectacular gains occurred at the top end of the corporate sector. The corporate profit share in GDP doubled between the late 1980s and 2009 and wealthy owners reaped the benefits. By the early 2010s, Indian billionaire wealth as a share of GDP had risen to levels above Mexico, Brazil, Colombia, and the US and was similar to those in Russia and Saudi Arabia (Walton 2011). The income share of the top 1% of income earners declined from roughly 13% in the late 1950s to about 5% in the early 1990s and then rose to over 10% by the late 1990s. The rising share of the top 0.1% of income earners was even more dramatic (Banerjee and Piketty 2005). The “sea of Sub-Saharan Africa” becomes even more evident when looking at wider measures of human development. The rising literacy rate after 1980 hides enduring concerns with the quality of mass education in India. Evidence from an internationally comparable measure of educational outcomes shows that around half of enrolled children in Rajasthan and Orissa failed to meet a basic low standard of mathematical achievement. By comparison, the top 5% of performers show a good performance even by comparison with high-income European countries. This distribution of test scores is the second most unequal in the sample of countries after South Africa. The results would be even more striking had the test scores included the large number of poorly educated children not enrolled in school (Das and Zajonc 2010). Despite repeated governmental aspirations to raise health spending to 3% of GDP, spending has languished at 1% of GDP for more than two decades, lower than all but 10 countries in the world. In India, 70% of total health care expenditure is financed through out-of-pocket health expenditure rather than pre-paid health insurance. Such expenditure forces the poorest households to reduce spending on clothing, footwear, and education (Pal 2013) and causes around 30 million people every year fall into absolute poverty (Krishna 2010). Even around this low average there exist substantial inequities in access to health care. About 75% of the resources and infrastructure of the public health system are concentrated in urban India (Husain 2011). The all-India average for full immunisation coverage in 2005/2006 was 44%; the rural population 39%, and the urban 58%; by state full coverage ranged from 75% in Kerala to 23% in Uttar Pradesh; by income 71% among the highest 20% of income earners and 24% among the bottom 20%; and by caste 31% among scheduled tribes and 54% among others (Baru et al. 2010). The measured proportion of underweight children in India by the mid-2000s (43%) was higher than in sub-Saharan Africa (20%) or the least developed countries as a whole (25%) and much higher than China (4%) (Dreze and Sen 2013: 160). Almost half of women between 15 and 49 in India suffered from malnutrition in some form in 2005/2006 (Jose and Navaneetham 2008).

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5.3 How to Explain Growth Without Development This section introduces four explanations for the phenomenon of growth without development; the pattern of economic growth, an elite revolt, discrimination, and the state and liberalisation.

5.3.1 The Pattern of Economic Growth The first explanation is that economic growth has not created employment for the poorest. In the 1990s, output growth in agriculture was associated with declining employment, and employment creation in other sectors was not sufficient to compensate (Goldar 2009). Employment in the entire organised sector increased from 26.7 million in 1991 to 27 million in 2003 (Singh 2006). During the 2000s, output growth in the service sector reached nearly 10% p.a. much of which came from business services, communications and trade which created a few well-paid jobs but not mass employment (Singh 2006: 83; Mukherjee 2013: 3). Even those few well-paid jobs that were created were geographically very concentrated. Between 2004/2005 and 2009/2010 Maharashtra, Karnataka, Delhi, Gujarat, Kerala, and Andhra Pradesh accounted for 91% of the 2.3 million new jobs generated in India in finance and business services (including software services) (Thomas 2012, also D’Costa in this volume). The absence of good jobs is particularly striking for women. In 2004/2005, only 12.9% of women in urban areas who had completed higher secondary schooling were participating in the labour force (less than half the rate for illiterate women). Labour force participation among university-educated women was higher but even here more than 70% of women who were “graduates and above” were not employed (Unni and Raveendran 2007: 198).

5.3.2 An Elite Revolt At the time of independence, Varma argues that the middle class shared “an attitude towards the nation and the society, a sense of idealism and high minded purpose transcending purely individual concerns” (1998: 27). By the 1990s economic liberalisation, Varma argues had been supported by and contributed to “the acceptance of a certain kind of lifestyle: insular, aggressive, selfish, obsessed with material gain, and socially callous” (1998: 132). This was labelled as an “elite revolt” by Corbridge and Harriss (2000). Evidence for this “revolt” is manifest in the privatisation of welfare in the form of private schools, gated communities, and bore-wells or bottled water, all supported by a middle-class content to avoid paying taxes and seeing no moral compulsion to do so.

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Kohli argues that the power and influence of Indian business have grown enormously in recent decades; reflected in their dominant share of total investment, increasing control over the media and financing of elections. Indian business is well organised through various chambers of commerce, such as the Confederation of Indian Industry (CII). Further, Kohli argues that “a close alliance between the state and big business is responsible both for releasing dynamism and for limiting the spread of the resulting gains” (2012: 3). Together these factors argue Kohli have created a “pro-business political economy” and economic policy that is less concerned with creating open markets, vigorous competition, and the free entry of new firms and more about promoting the profits of politically influential incumbents. Evidence includes official sanction of the flouting of labour laws and casualisation of the labour force and the striking shift in distribution from wages to profits at the all-India level that started in the late 1980s and then increased after the 1990s (Walton 2011: 42). A specific manifestation of this alliance are the nearly 600 Special Economic Zones (SEZs) created by the government of India between 2005 and 2010. These involved the use of eminent domain authority by the state to seize the property of (mainly) small farmers and hand it over to private companies. The process argues many allowed corporate developers to capture windfall profits from the artificially cheap land acquired by the state. Small farmers lost land cheaply to brokers who benefited from insider knowledge about forthcoming SEZs. Jobs in SEZs for local people were confined to poorly paid and insecure positions as gardeners, drivers, guards, or cleaners (Levien 2011).

5.3.3 Discrimination Caste-based and other forms of inequalities remain widely prevalent in contemporary India. In the (Uttar Pradesh) press club, university faculty, bar association, top ranks of the police and trade unions, NGOs, media, and other public institutions, the share of upper castes is around 75% compared to their 20% share in the population. In Delhi, there is no evidence of any significant presence of Dalits in any of these same institutions with the partial exception of quota-based positions in the university system. A survey of 315 editors and other leading members of the print and electronic media in Delhi found that not one of them was from the scheduled tribes (ST) or scheduled castes (SC) (Dreze and Sen 2013: 220–1). Similar patterns exist by gender. Women face abnormally high levels of mortality, access less health care, are less likely to participate in the labour force, to inherit, to have freedom of movement and to remain free of domestic and other forms of violence (Dreze and Sen 2013). There is little evidence for the social mobility that could progressively dissolve these inequalities. The occupational background of successive generations shows that there is “great deal of class continuity in India” (Kumar et al. 2002: 2985). While 71% of men born into business families themselves become businessmen, 68% of men born into unskilled manual families have remained unskilled manual workers and only 5% of lower agriculturalists experience any form of upward mobility. The limited

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upward mobility indicated here is almost exclusively driven by the contraction of the agricultural sector that has forced people into other low-paid occupations. Once this change has been accounted for there is no statistical evidence of any weakening of the links between fathers and sons class positions and jobs at the top remain relatively closed (Kumar et al. 2002). Inequality and discrimination are not the same things. Lower castes could be poorer, for example, because they remain in rural areas or choose to acquire less education for their children and not because of the active constraints of discrimination. There is evidence for a “discrimination effect.” Lower caste people earn lower wages for any given level of education (Barooah 2005). Experimental evidence has shown that low caste or Muslim job applicants were less likely to be called to job interviews than identically qualified higher caste or Hindu applicants (Thorat and Attewell 2007), and in urban call-centres lower caste are less likely to be called for interviews than higher caste applicants (Banerjee et al. 2009).

5.3.4 The State and Liberalisation Many scholars have doubts about the capacity of the state to implement any form of effective welfare. Herring argued that India’s state was “too democratic, soft and embedded, to govern the market” (1999: 1). There is even good evidence that the capacity of the state in India is declining. The Global Competitiveness Reports published by the World Economic Forum compile indices, ranging from 1 to 7 (7 being the best) to measure various aspects of governance. Table 5.1 compares the reports from 2006/2007 and 2014/2015, and these show a decline in state capacity according to the measures of the quality of institutions, judicial independence, favouritism in government decision making, wasteful in government spending, and an improving if low measure of the reliability of the police. Key to the weak state is the decline of the civil service of which Appu says, the “once superb administrative structure lies in ruins, reduced to a shambles” (2005: 826). The civil service has long been subordinate to the short-term demands of politicians. Civil servants face the destructive uncertainty of rapid and often arbitrary

Table 5.1 Declining state capacity in India

Measure of Governance

2006/07

2014/15

Quality of Institutions

4.5

3.8

Judicial Independence

5.9

4.2

Favouritism shown in decisions of government officials

3.6

3.4

Wastefulness of Government Spending

3.6

3.5

Reliability of Police

2.9

3.6

World Economic Forum (2006, 2014)

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transfers. During the 1980s, over 60% of IAS officers in Haryana, Andhra Pradesh and Rajasthan served in their post for less than one year. The power to transfer is a tool used by politicians to ensure civil servants allocate resources to the benefit of supporters of the ruling party (Banik 2001). Reinforcing declining state capacity is economic liberalisation which has undermined the fiscal props for government intervention. Trade liberalisation is likely to reduce government tax revenue. The few ports, borders, and airports of India are bottlenecks in which to identify and tax imports and exports. The vast hinterland of the largely informal economy of production, trade, and consumption is by contrast much harder to coral into the tax net. There is widespread evidence across developing countries that trade liberalisation has consistently reduced government tax revenue (Khattry and Rao 2002). Tanzi (2001) focused on what he called “fiscal termites” that compounded this policy change through the twin forces of technological change and globalisation. The growth in online commerce across international jurisdictions and related growth of transactions within multi-national corporations (MNCs) are difficult for national tax authorities to monitor and tax. There is also a politics of globalisation. Investors and skilled workers can threaten to exercise an exit option and take their physical and human capital elsewhere if taxes are raised (or not reduced). The consequent race to the bottom may force host governments to reduce taxation (and with it social provisioning) in their competition to attract and retain investment (Swank 2003).

5.4 Something Changed in the Mid-2000s… This section reviews the evidence that growth in India became more inclusive after the mid-2000s. A change which has been missed in much of the reviewed literature which tends to focus on the decades since liberalisation in the early 1990s. Employment in manufacturing declined by 5 million between 2005 and 2010, but this was more than offset by 18 million new jobs in construction and 14 million in services. The number of those in regular/salaried employment increased from 58 million in 1999/2000 to 71.7 million in 2009/2010. Some of this was directly linked to better public (and private) services such as the 3 million extra teachers finding employment in the 2000s (Mehrotra et al. 2013). A random survey of 200 villages in 1996 and 2006 in seven large northern states showed that the school enrolment ratio for 6–12-year-old children increased from 80 to 95%. The share of schools with at least two all-weather rooms increased from 26 to 73%, those providing free school uniforms from 10 to 50% ,and free textbooks from less than 50% to nearly 100% (Dreze and Sen 2013). The overall gaps between SC/ST and non-SC/STs in education were declining from the mid-2000s (Hnatkovska and Lahiri 2013). Across India, there was a sharp acceleration in the rate of poverty decline. Total poverty dropped from 45.3% of the population in 1993/1994 to 37.2% in 2004/2005, an average annual decline of 0.74%. Between 2004/2005 and 2011/2012, the poverty rate fell sharply to 21.9% representing an annual rate of decline almost three times

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faster, at 2.18%. The absolute number of poor had increased from 403.7 to 407.1 million in the earlier period and dropped sharply to 269.3 million in the latter period. The decline encompassed both rural and urban areas. In the latter period, more than 100 million people exited rural poverty (Ghatak et al. 2014: 40). This poverty decline was not just a consequence of rapid economic growth but there were clear signs of greater inclusivity. At the all-India level between 2004/2005 and 2009/2010, poverty among STs and SCs fell by more than the national average in both rural and urban areas. In urban areas poverty among casual labourers and in rural areas poverty among wage labourers (the most disadvantaged occupational classes) fell more rapidly than other occupational groups (Thorat and Dubey 2012). In Uttar Pradesh between 2004/2005 and 2011/2012 poverty reduction was faster in rural areas (12.31%) than in urban areas (7.89% points). This led to the gap between urban and rural poverty declining from 8.65 to 4.23 percentage points. The rate of poverty decline among SCs (−2.04% p.a.) was more rapid than among upper castes (1.67% p.a.), and the most impoverished southern part of Uttar Pradesh experienced the fastest rate of poverty decline by region (Arora and Singh 2015).1 Jodhka (2010) examines the emerging phenomenon of Dalit entrepreneurs as a group breaking away from their traditional subservient reliance on casual wage labour. He undertook a survey of 321 Dalit entrepreneurs in 2008 in Haryana and western UP. This rise is notably influenced by positive state action. These Dalit entrepreneurs come from disadvantaged backgrounds, for example, 90% of their mothers and 68% of their fathers were illiterate; but they have benefited from the expansion of education. Among the Balmiki Dalits, 30% had college (BA and above) and 31% had school education up to class 10–12. While two-thirds relied mainly on help with start-up capital from immediate and extended family almost one-fifth of the sample reported receiving a loan from a formal institution like a bank and half of the sample were aware of special government schemes to help Dalits.

5.5 Explaining the Change This section identifies three hypotheses and makes a preliminary discussion of their evidential base to explain the shift to growth with (more) development after c2005. The hypotheses are improved information, a revolt of the activists and changing politics in the 2000s.

1 The story becomes more complicated if we look more closely within these broad aggregate groups

(STs, SCs, etc.). Economic growth alone should have reduced poverty among STs by 12% between 2004/2005 and 2009/2010 but more than half of this was offset by worsening income distribution among ST households (Thorat and Dubey 2012).

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5.5.1 Improved Information Voters will be less likely to elect a politician unless the latter can take credible credit for public policy such as welfare provision. The more nebulous, complex, and invisible outcomes like the quality of teaching in the classroom or the health status of the population are hard for anyone to claim ownership of. Politicians like opening hospitals. Teachers often get jobs or a favourable transfer by paying a bribe and so they will be fully aware of their ultimate political patron. There is a big building that can be named, a ribbon to cut at a press conference to advertise the association with the politician (Keefer and Khemani 2004). This is not just a problem of the poor being uninformed. In elite areas of Delhi, only just over half of medical practitioners held the necessary qualifications. Less than a third of qualified public-sector doctors were able to ask the proper questions to understand the medical condition of a patient (Das and Hammer 2007).2 The ability of a community to demand good-quality public services and so the resulting incentives of public servants to supply them is the contingent on better information. An improvement in information available to voters and activists is part of the answer to the puzzle in this paper. Literacy makes for a better functioning democracy argued Amartya Sen, a more literate population can read newspapers, debate, and discuss the quality of public services. Literacy among the adult population increased from 48% in 1991 to 74% in 2011 (World Development Indicators 2014). From a solitary state provided television channel in the pre-liberalisation 1980s, there were over 800, mostly private channels by 2012, and more than 400 of these were broadcasting regular news. By 2012, there was a daily circulation of more than 370 million newspapers spread over almost 90,000 titles. With 3 million readers by 2008, the Times of India was the most read daily in the world. One study found that governments were indeed more responsive to floods between 1952 and 1992 in areas with a greater density of newspaper circulation (Besley and Burgess 2000). The Right to Information Act of 2005 has improved transparency and the accessibility of information and so made governmental affairs more open. The Act guarantees unrestricted access to virtually any government document or to information more generally which have to be given to any citizen who applies for it. There are fines for civil servants failing to comply within thirty days. There are around 1 million applications for information annually through the act. Better information has been shown to be linked to better school performance (Pandey et al. 2008). In a sample of households across three states, better information (proxied for by attendance at village meetings) had a clear link with participation in employment programmes by low-caste households. The ability to exchange information across mobile phones was found to reduce discrimination by linking politicians and grassroots activists with the poorest in Uttar Pradesh (Jeffrey and Doron 2012). Better information is only part of the explanation. There is more media but less diversity in ownership. Media in India is owned by and tends to reflect the interests 2 It

is power rather than information which is asymmetric in this example—thanks to Anthony D’Costa for making me think about this interesting point.

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of the corporate sector. The Indian media is also driven by advertising so is reluctant to investigate corporate malfeasance for fear of losing advertising revenue. This bias is reinforced by the fact that media professionals as noted earlier tend to come disproportionately from a privileged background in terms of caste and class (Dreze and Sen 2013). Rural issues get around 2% of the total news coverage in national dailies though the interests of the minority middle classes (fashion, gastronomy) are well covered. The National Food Security Bill tabled by the government in the Indian Parliament in December 2011 was immediately attacked through the media as being fiscally irresponsible, though it was only projected to cost 0.3% GDP annually, and this only amounted to half of the revenue lost from the exemption of diamond and gold imports from customs duties. In February 2012, the Finance Minister proposed introducing a small excise duty on gold and precious metals used for jewellery. This immediately triggered a massive response from jewellers and other influential people that was widely covered in the media (Dreze and Sen 2013). All too often fieldwork has shown that there is often only a weak link between better information and better public services. A village-level survey in Uttar Pradesh found that a large fraction of children (6–14 years) could not read simple texts or do basic writing and arithmetic and that parents, teachers, and village education committee (VEC) members were not aware of the problem (Banerjee et al. 2007). Banerjee et al. (2010) followed this up with a study of efforts to improve information. Three sustained efforts to improve awareness among parents failed to significantly increase involvement in public schools by teachers , parents or VEC members. Better information failed to improve the attendance of children or of teachers and failed to increase community participation in schools. Ban et al. (2010) found that although people were well informed about the responsibility of local governments to keep villages clean across four South Indian states this information does not result in cleaner villages. Better information may have no effect if households have given up with the public sector. Between 1993 and 2002, 95.7% in urban and 24.4% of the increase in total primary school enrolment occurred in private schools (Kingdon 2007: 186). In this case, why would a household invest any time or effort to lobby or mobilise in support of better public services? Among Delhi elite’s investment in private wells, cisterns, and storage tanks on roof have enabled middle-class households to get 24-h water and reduced their concerns with poor-quality public water supply (Pritchett 2009). The NGO Seva Mandir used time-clocks to generate information about the attendance of nurses at rural health clinics in Rajasthan. This information was linked to incentives, whereby fines were introduced for absence and dismissal for repeated absence. There was a dramatic improvement in attendance for the first six months after which the politically influential nurses succeeded in lobbying the local government to allow them more exempt days. A year later absence rates at 60% were as high as they had been before the intervention. The results show that information combined with incentives can work but that politics is important. The more influential service providers were able to distort the system to their advantage, and there was no countervailing pressure from service providers to forces nurses back to work (Banerjee et al. 2008). Without meaningful accountability, even when combined with incentives, information will have little impact. This would require a huge

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shift in India where teachers, nurses, and other public sector workers are recruited through a highly centralised system and where subsequent salaries and promotion are determined by qualifications and seniority without reference to performance on the job. In one survey only 18 from 3,000 disciplinary cases for repeated absence was a teacher transferred to another job, teachers and doctors are almost never fired (Chaudhury et al. 2006).

5.5.2 Revolt of the Activists It is not enough to provide better information if elites then capture the benefits from public services. The 2000s witnessed passionate social-activism that has challenged the elite capture of public service delivery. Hnatkovska and Lahiri (2013: 248) argue that the declining overall caste gaps in education in Uttar Pradesh after 1993 are related to the low-caste Bahujan Samaj Party (BSP) becoming part of the state governing coalition in that same year. Jodhka (2010) found that the rise of Dalit entrepreneurs was strongly linked to democratic activism. Democracy and reserved seat quotas had helped Dalits into politics, and there was a perception that success in politics helped secure their business endeavour in an insecure social environment. Among the sample of Dalit entrepreneurs, 94% of them identified with the Dalit movement and had been associated with it in some specific way, and 63% were involved with local Dalit NGOs or Dalit religious organisations. Employment guarantee was mentioned in the 2004 Congress election manifesto. There had been some minimal earlier pressure from civil society activists through the Mazdoor Kisan Shakti Sangathan (MKSS) in Rajasthan to try and persuade Congress to accept the idea in the limited case of drought-affected areas. The creation of the National Advisory Council (NAC) chaired by Sonia Gandhi to advise the Prime Minister on the implementation of the National Common Minimum Programme (NCMP)3 was significant. Congress did not mobilise support for NREGA, and this was left to the NAC and civil society activists. The initial draft of the NREGA bill brought before parliament by the Ministry for Rural Development was subject to fierce criticism from activists expressed through the NAC. This motivated the formation of the “Peoples Action for Employment Guarantee.” The bill went back for re-drafting. Unusually, the welfare aspects of the bill were strengthened over time rather than being compromised. NREGA was strengthened through the extension of employment guarantee to anyone requesting work (not just the below poverty line households), through the greater role accorded to village government (panchayats) in its implementation and through the extended central government financing of the scheme (Hasan 2012). Similarly, the impetus for educational reform came from the National Alliance for Fundamental Right to Education which eventually came to encompass more than 2,000 voluntary organisations. In 2010, the Right to Education 3 The policy programme agreed to by the incoming UPA alliance in 2004

among the Left political parties.

and its outside supporters

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Act came into force which provided for free education for all children up to the age of 14 (Corbridge et al. 2013).4 Civil society activism does not offer a sufficient explanation for the arguments of this chapter.5 There is a long history in India of social activists bringing the pressure of mobilisation to bear on policymakers. Examples include language movements in the 1950s, union-led strike activity in the late 1960s, farmer movements in the 1980s, and caste mobilisation in the 1990s. The governments tended to respond but did so not through the provision of broadly based welfare schemes but instead through targeted subsidies. Farmers, for example, were given loan write-offs, cheap electricity and higher procurement prices. Why then does activism after 2004 seem to be associated with a different sort of government response—one that leads to broadly based and inclusive economic growth? The Supreme Court has also been influential, for example, in compelling state governments to universalise the midday meals programme in schools. Again this is not enough to answer our question. The law has always proved a flexible enough entity for states to flexibly subvert. Land reform laws, for example, were left with enough loopholes that they never seriously challenged the ownership prerogatives of politically influential landlords. Much of this activism and mobilisation for work, education and food has been led by the relatively privileged or what Corbridge et al. call “middle class activism” (2013: 117). This leaves us with another puzzle. The middle classes have long sought cuts in income taxes or urban land-zoning laws that permit good schools and retail facilities but exclude hawkers and low-income housing. Why then did this particular fraction of the middle class, the pro-poor activists suddenly seem to have such influence on policy after 2004?

5.5.3 Politics in the 2000s The final argument in this paper is that there was a change in the nature of the political system in the 1990s, and especially so after 2004. Welfare based on rules is a crucial means of promoting inclusive economic growth. Rules-based welfare means that objective criteria such as illiteracy or poverty are 4 Other

initiatives failed to influence actual policy. The Sachar Committee Report reflected on the deprivation of Muslims. The recommendations were opposed by the BJP and also by other groups fearing any re-allocation of resources from their own (also deprived) constituents, such as Congress Dalit MPs. Implementation of the committee’s recommendations was passed on to the newly created Ministry for Minority Affairs (MMA) and no assessment or monitoring system was set up. The MMA was allocation only 0.32% of the Eleventh Plan outlay to run 12 separate and small schemes. The MMA, in general, operated as an ineffectual post office, lacking policy implementation capacity of its own it relied mainly on forwarding requests to other ministries. Even its own minister, Salman Kurshid called it “powerless and redundant” (Hasan 2012: 171). Another example is the failure to act upon the recommendations of the National Commission for Enterprises in the Unorganised Sector (NCEUS) which sought to spread entitlements to unorganised sector workers. 5 Chacko (this volume) discusses this in more detail and has a more strongly positive opinion about the role of civil society welfare campaigns.

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used as the hooks on which to allocate welfare benefits. The more common variety in India has been client or patronage welfare, whereby voters trade individualised benefits such as cheap electricity for farmers in return for their political support. The eligibility for such welfare is typically decided at the discretion of a bureaucrat or politician—so the benefits can be carefully directed in return for votes. Public services have long been used to provide benefits to political clients in India. The Public Distribution System (PDS), for example, is supposed to provide subsidised food grains to the poorest via a network of fair-price shops. In Bihar, licenses to run a fair-price shop were allocated to supporters of whichever government was in power. The dealer would then divert the subsidised rice, wheat, and other supplies onto the market—welfare for the client (Mooij 2001). The prevalence of absenteeism among public service providers—one-third of medical personnel from medical clinics in Rajasthan (Banerjee et al. 2004) and one-quarter of government primary school teachers (Chaudhury et al. 2006)—the failure to institute any disciplinary action and connivance in staff using their “free time” to earn private incomes through diverting public resources such as medicines to the private market or taking private tuitions shows public sector employment to have also been a form of patronage-based welfare. Similarly forcing teachers into classrooms to teach the poorest students and ensuring free medicines are available for poor patients in government clinics are examples of rules-based welfare. There is good evidence that the provision of welfare and some public services shifted from being patronage or clientelistic-based to rule-based provision after 2004 and that this is key to explaining why growth became more inclusive. The National Rural Employment Guarantee Act (NREGA) that came into national force in 2008 is an example of the shift in social policy to greater reliance on rules. NREGA provides rural households with a minimum of 100 days’ work at minimum wages. Compared to the previous employment programmes like the Sampoorna Grameen Rozgar Yojana (SGRY) and National Food for Work Programme (NFFWP), NREGA is very large. These two earlier incarnations together generated 856 million person-days of work in 2003–2004. In 2012/2013, NREGA generated 2.3 billion person-days of employment for 80 million people. In 2010/2011, the scheme cost the central government 0.5% of GDP (around $7 billion). This was actually a significant chunk of the 10% of GDP which the central government managed to raise in tax revenue and was large compared to the miserly spending of 4% of GDP on health and education combined. The NREGA preserved many of the long-standing inefficiencies and corruption of Indian welfare. Wage payments supposedly going to poor labourers often disappeared into the hands of government officials, state bank employers, or labour contractors (Adhikari 2010; Government of India 2013). But NREGA is a remarkable improvement on what has gone before, it has clearly demonstrated positive impacts on poverty, and these impacts seem to have been growing over time and the NREGA is increasingly looking like a large-scale programme of rules-based welfare.6

6 This

section largely draws from McCartney and Roy (2016).

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NREGA requires that participants do manual labour in rural areas for a low wage rate, the scheme is self-targeting and unlike cash payments or subsidised food offers no evident benefit for the richer to participate. Participation rates are striking among the entire bottom half of the consumption distribution (Dutta et al. 2012; Liu and Barrett 2013). This is not poor targeting but evidence of the success of the programme in reaching the needy poor. The official poverty line in India is a “destitution line” (Dreze and Sen 2013: 189) that allows for income enough to purchase a barely adequate quantity of cheap calories and, for example, Rs. 10 per month for footwear and Rs. 40 for medical care. Those likely to benefit from working on NREGA is the $2 a day poverty line which in India encompassed 76% of the population in 2005 and 69% in 2010 (World Development Indicators 2014). That this group would benefit from NREGA can be seen by a comparison of NREGA wages which are the near equivalent daily wage earned by casual labourers in the rural economy (Dutta et al. 2012: 61). NREGA has benefited women in particular. In random visits to worksites across six northern states in 2008, the proportion of women workers on the scheme was 32% (Khera and Nayak 2009). Though lower than it could be this share is much higher than the shares of women otherwise working in casual wage labour in rural areas (Dutta et al. 2012). The typical story in the past has for subsidy or welfare schemes to be established and then progressively undermined and their benefits leak out to the non-poor and various middlemen. For NREGA, there is some evidence that the opposite has occurred. In the late 2000s, a shift was made from cash payments made in public to direct transfers to bank accounts; this was both popular among beneficiaries (Adhikari and Bhatia 2010) and seems to have reduced corruption in NREGA (Vanaik and Siddhartha 2008). The state government of Andhra Pradesh undertook s number of novel experiments to integrate bank accounts with recording the work of labourers which enhanced the transparency of the scheme (Vanaik and Siddhartha 2008). Another example is the Public Distribution System (PDS). In Chhattisgarh, after 2004, the government increased the coverage of the PDS by nearly two million individuals. The transparency of the scheme was improved through SMS alerts to report grain movements to citizens, using electronic weighing machines for rations and publicly displaying lists of ration card holders in fair-price shops. These reforms led to a big and widespread increase in consumption of rationed rice (Krishnamurthy et al. 2014). Even the dysfunctional PDS in Bihar has been the subject of attempted reform. Since 2007, Bihar has used coupons to administer the PDS. These coupons specify their entitlements to wheat, rice, and kerosene and the price they have to pay for each commodity. Based on fieldwork across 350 households in ten villages, Choithani and Pritchard (2015) found that there was a marginal improvement in the delivery of food grains and striking improvement in the delivery of kerosene. Important for the sake of the argument in this paper, kerosene was not being used as a targeted public good but was rather available to all households. A nine-state village-level survey of the PDS in 2011 shows a broad-based trend of improvement. Reforms have helped a general tendency towards widening coverage, while Tamil Nadu and Himachal Pradesh have long been universal, Andhra Pradesh and Chhattisgarh have moved to 80% coverage, and Rajasthan, Bihar, and Jharkhand have significantly expanded coverage. Reforms

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have included making higher payments to fair-price shop license holders to increase their viability, handing over management to gram panchayats or self-help groups, computerising records, functioning grievance redressal procedures, and SMS information about stock of food grains in any outlet (Khera 2011a). These reforms started to plug one of the key patronage-based benefits of the scheme, the ability of those running fair-price shops to sell subsidised grain onto the black market. Between 1999/2000 and 2004/2005, the overall proportion of PDS grain diverted to the black market had increased, from 24 to 54%, after which there was a reversal of the trend, to 44% in 2007/08. Those states seeing big improvements included Chhattisgarh, Madhya Pradesh, Orissa, and UP which were all dysfunctional at the beginning of this period (Khera 2011b). This decline continued up to 2011–12 to 30% with again the decline being more pronounced in states that had undertaken serious reform of the PDS (Khera and Dreze 2015). The scheme has shifted from being one based on targeted patronage to one of rules-based welfare, “Since 2004–05, an expansion in the coverage of the PDS across all states is visible. It is encouraging to find that the expansion has covered those who are most vulnerable and live at the margins, such as SCs and STs. Also, a greater number of households in the lower income classes now not only have greater access to the PDS, but are also consuming larger quantities from the PDS” (Rahman 2014: 68). Increasing subsidies (often with borrowed money) and allowing public services to be corrupted into providing clientelistic benefits have long been characteristic features of public service delivery in India. There are signs this changed in the early 2000s. The public finances were better managed, with total debt of the central government, first rising from 50 to 61% between 1999 and 2004, then falling to 48% by 2011. Some of this was due to the transformation of various parts of the state. While the state-owned railway system had been near bankruptcy in 2001, they operated with a US$6 billion cash surplus in 2008. This was due to gains in operational efficiency including labour and asset productivity gains, greater market share, better quality of service, fare hikes in under-priced freight segment, and rapid growth of passenger and freight volumes (Kumar and Mehrotra 2009). Public policy became more oriented to the long term in the 2000s. The share of infrastructure spending in GDP increasing from 5 to 8% and much of this went into long-gestation projects such as power supply. Electricity consumption in KwH per capita grew by 2.5% between 1999 and 2004 and 6.4% p.a. between 2004 and 2011. There have long existed private markets in stolen electricity in India, often organised by mafia-like groups, the tolerance or connivance of the state in this process represented clientelistic-based “welfare”. Figure 5.1 demonstrates that there are clear indications such theft declined from the early 2000s. The deeper explanation for this change in public policy (from targeted and clientelistic to broadly targeted and rules-based) is that politics changed, especially after 2004 in a way to give politicians more incentive to build bigger coalitions and to think more long-term. In a first-past-the-post parliamentary system, the winning percentage is closely linked to the number of candidates standing for election. If there are two candidates, the winner will need more than 50%, in a closely run three-way contest; the winning

98 Fig. 5.1 India electric power transmission and distribution losses (% of output). World Bank (2017)

M. McCartney 30 25 20 15 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

vote could decline to as low as more than 33%. So, the less fragmented is the political system the wider the cross-section of the community a successful political party will need to appeal to. There is clear evidence of this in the Indian context. In national elections in India between 1957 and 1991, a winning party needed 55 and 38% of the vote in seats where there were two and three+ effective parties standing. The vote share is also clearly linked to policy outcomes. Multiple party Indian states show (between 1967 and 1997) more spending on wages and salaries (an example of targeted benefits) and spend less on general development (which is more likely to provide general benefits) (Chhibber and Nooruddin 2004). A solution to the paradox in this chapter is that Indian politics changed in the 1990s. The political fragmentation that had begun in the 1960s began to shift to something more like a relatively stable two-party alliance system. This would imply that politicians and political parties would need to appeal to a broader electorate in order to win elections. Congress did, as is widely documented decline in the 1990s. The number of seats won by Congress fell from 415 in 1984 to 232 in 1991 and to 114 in 1999. In can be forgotten that the rise of the BJP was a virtual mirror image of this decline. The number of seats won by the BJP showed a near equivalent increase, from 120 in 1991 to 182 in 1999. Congress revived in the 2000s to mirror the decline of the BJP. The combined share of votes won by the two main parties remained at around 50% throughout the 1990s and 2000s. The salience of the two-party alliance system for 2014 was evident. Across India and regardless of local circumstances, the choice was seen as one between Rahul Gandhi and Narendra Modi and Rahul Gandhi. The overall result, despite the headlines generated by the BJP victory, saw a small increase in their combined vote share and a negligible increase in their combined seat share. The growth of a two-party alliance system in India gave politicians more incentive to target bigger electoral coalitions so shift from narrowly targeted to more broad and rules-based welfare provision. When three-quarters of the population live on less than $2 a day, electoral success in a two-party alliance system comes from broadly targeting anti-poverty programmes in a rules-based system (Table 5.2). Hospitals can be built quickly to provide patronage benefits for contractors and states can rapidly expand the employment of teachers—Bihar built an extra 100,000 classrooms and employed an extra 300,0000 teachers in the second half of the 2000s.

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Table 5.2 Seats won and voting share in Lok Sabha elections, 1991–2015 1991

1996

1998

1999

2004

2009

2014

Seats Won by the Indian National Congress

232

140

141

114

145

206

44

Share of Vote to Congress (%)

36.5

28.8

25.9

28.3

26.53

28.55

19.3

Seats Won by the BJP

120

161

179

182

138

116

282

Share of Vote to BJP (%)

20.1

20.3

25.5

23.8

22.16

18.80

31.0

Share of Votes Won by Congress and BJP (%)

56.6

49.1

51.4

52.1

48.69

47.35

50.3

Share of Seats Won by Congress and BJP (%)

64.8

55.4

58.9

54.5

52.12

59.3

60.03

Source Authors own calculations

Efforts to improve service delivery are more painstaking to achieve and do not provide any quick political dividend. From the late 1990s, Indian politics underwent a further change which gave ruling parties and their leaders more incentive to think to the longer term and contemplate undertaking those difficult changes. In contrast to the rapid rise and fall of central governments in the 1990s, governments after the late 1990s always filled their five-year term in office and as elections neared tended to believe their rule would last. In 2004, the BJP thought it would win the election. The Congress was rightly convinced it would win a second term in 2009. Governing parties after the late 1990s also headed stable coalitions that were largely constructed before the elections. Again, a contrast to the 1990s when the election result would motivate a chaotic scramble among disparate parties to cobble together a parliamentary majority which was then faced with the threat of collapse, usually promoted by a hungry opposition party attempting to peel away allies and bring down the government. This stabilisation and orientation towards the long term can be framed in terms of the distinction between “roving” and “settled” bandits (Olson 1993). When a politician is facing losing the next election in the near future (“roving bandits”), the rationale thing to do is to engage in predation, plunder state resources as quickly as possible—raise the revenue to fund the next election campaign. These incentives exist regardless whether the political system is democratic or authoritarian. When a leader has a monopoly of power, expects to stay in office and even win the next election (“stationary bandit”), they will face an incentive to promote economic growth. Such a stationary bandit can still steal and enrich themselves and their supporters but the best way to do it is to protect property rights, promote innovation, provide public goods such as rules-based welfare and so economic growth and siphon off some of the gains through stable taxes or predictable bribes without undermining the incentive of producers to produce. an incentive to generate incomes (Olson 1993). The leadership of the Congress after 2004 (Sonia Gandhi) had an added dynastic incentive to think of the long term by investing in the pro-poor reputation of the party to ensure the political longevity of Rahul Gandhi.

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5.6 Conclusion This chapter began by presenting a well-founded popular perception—that India had long been experiencing growth without development. Whether economic growth was slow (until c1980) or among the world’s fastest (after 2003) that it never had the expected impact on improving human welfare. The concerns regarding this process reached from the moral doubts about inequality being unfair to the more practical that inequality could both lower growth rates and make growth unsustainable. Something happened after the mid-2000s. Scholarly and journalistic discourse focused on India becoming one of the fastest growing economies in the world and after c2008 on the growth impact of the global financial crisis. Much less noticed was that the mechanism of growth itself seems to have changed. There is accumulating evidence that growth in India now seems more tightly linked to improvements in human well-being. This paper explored several complementary hypotheses to explain this shift. The revolt of the activists and improvements in information provide at best only partial explanations. The change in the nature of national politics in India to something more predictable and durable seems the most promising. One striking failure of its decade in office was the absence of any organisational reform in the Congress. In remained in 2014 as it had entered government in 2004 with a weak and ineffective organisation, was plagued by factionalism at all levels and all office holders continued to be nominees of higher level leaders rather than being elected. The leaders of Congress are not engaged in political mobilisation, agitation, constituency development and have not generally emerged from grassroots politics or movements. The party failed to undertake the party reforms necessary to rebuild the party base and instead relied through the 2000s on policy initiatives and formal administrative structures of the government to make these work. Whether the inclusive public policy interventions necessary to sustain the growth model of 2004–2014 into any future election victory is itself sustainable without reforms to the party organisation is an important question (Hasan 2012). Trying to judge the implications of these findings is impossible without more detailed consideration of the result of the 2014 election. Will Modi adopt the business first model many praised and blamed him for doing in Gujarat? Will Modi be compelled by the emerging constraints of better information, mobilised activists and incentives of more stable politics to maintain the tighter link between growth and human development to lock in his rule for the next decade?7 There are also interesting wider questions. Why did economic growth after 2004 seem more tightly linked to poverty reduction and employment creation for the poorest but not example to nutrition. Detailed surveys on family health between 1992/1993 and 2005/2006 show that these high rates barely changed during these years of rapid economic growth and the negative relation between economic growth and improved nutritional status is far stronger in other developing countries (Walton 2009: 17). While the government managed to look more to the long term in the case of 7 Chacko (this volume) discusses the evolution of social policy under the Modi government in more

detail.

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infrastructure provision including electricity generation credit to the corporate sector was locked into the short term. Over the 1990s and 2000s, the reform of the longterm oriented Development Finance Institutions (DFIs) left 80% of bank liabilities as short term and firms constrained in their access to long-term lending (Bhattacharjee and Chakrabarti 2013; Ray 2015). For reasons of space, this chapter presented its case and did not engage with those scholars who evidently disagree with its findings. Far from the more stable and durable politics and policy-making over the 2000s, Sen and Kar (2014) argue that political deal-making became more closed and disordered and factionalised at the national level which led to a “shortening of the time horizons of political elites (2014: 2).”

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Chapter 6

Social Protection and the State in India: The Challenge of Extracting Accountability Salim Lakha

Abstract In the aftermath of the Asian Financial Crisis (AFC) in 1997, some observers pronounced the demise of the developmental state. This view has recently been challenged by scholars who argue that rather than the demise of the developmental state, the role of the state has been reconfigured in the post-AFC period to meet new economic challenges and social demands. The provision of more inclusive social protection by the state is now a significant consideration. This paper will examine the role of the state in social protection in India with reference to the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) which was introduced through an Act of Parliament in 2005. There are two distinguishing features of MGNREGS: it guarantees employment as a legal right, and through the provision for mandatory social audits by the beneficiaries of the scheme, it promises accountability from below. However, it is arguable whether the state has demonstrated a capacity to deliver effectively on its rights-based programme. This chapter raises the central question: What does the implementation of MGNREGS reveal about the capacity of the state to provide social protection and accountability in contemporary India? The discussion cautions against viewing the state as a homogenous entity. Keywords MGNREGS · Karnataka · Developmental state · State capacity · Social protection · Rights-based development

6.1 Introduction 1

The State in India has a long history of involvement in the provision of employment and poverty alleviation programmes, but successive studies have shown that the results have been mixed. While in recent years the State’s intervention in poverty alleviation and development has been driven to some extent by a rights-based discourse, it is arguable whether the State has demonstrated a capacity to deliver effectively 1 In

this paper where there is reference to the state at the centre it is spelt with capital ‘S’.

S. Lakha (B) University of Melbourne, Melbourne, Australia e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2019 A. P. D’Costa and A. Chakraborty (eds.), Changing Contexts and Shifting Roles of the Indian State, Dynamics of Asian Development, https://doi.org/10.1007/978-981-13-6891-2_6

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on its rights-based programmes. This chapter will consider the role of the State in social protection with reference to the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) of 2005 which was introduced by the previous United Progressive Alliance (UPA) government (2004–2014). Under this Act, 100 days of guaranteed employment for an adult member of a rural household is offered as a right to those seeking employment and willing to undertake manual work on local projects connected mainly with road construction, afforestation, irrigation and water harvesting. This flagship employment scheme (henceforth MGNREGS2 ), which is implemented largely through gram panchayats (GPs) or village councils, has attracted widespread attention from scholars interested in both social development and the political economy of rural India (see Khera 2011; Jenkins and Manor 2017). The intense interest in the scheme is justified since it represents, in terms of scale, the largest public works programme with over 57.8 million beneficiaries in 2014 (World Bank 2015: 13 and 108). Further, according to the Asian Development Bank (ADB 2013: 34; see also Rawat 2012: 32–34), in 2009 the scheme consumed as much as 38% of the total social protection expenditure in India.3 A distinguishing feature of MGNREGS is the inbuilt requirement for accountability. The scheme has provision for mandatory social audits by its beneficiaries, thus promising accountability from below. While this commitment is laudable, the outcomes have fallen short of the desired objective. This paper raises three questions: (i) What does the implementation of MGNREGS reveal about the provision of social protection in India? (ii) Is MGNREGS ensuring accountability? (iii) What does the implementation of MGNREGS demonstrate about the capacity of the State? It is argued here that the uneven implementation of MGNREGS and the partial character of social audits are explained by elite domination of the institutions of local governance in some states. This domination detracts from the capacity of the State to ensure accountability and deliver effectively the benefits of the scheme. Although the State has in the past played a major role in regulating the economy through ownership of banks and productive assets, it has not delivered effectively on its promises of economic development as measured by higher living standards for mass of the population. In the last decade, poverty has declined by some estimates (see Matthew, Chap. 5, in this volume) as a result of high economic growth, but millions still suffer from absolute poverty as defined by the World Bank standard of per capita income of US$ 1.25 per day4 (Kohli 2012: 130–143). In comparison with 2 MGNREGS

refers to the Mahatma Gandhi National Rural Employment Scheme as distinct from MNREGA which is a reference to the Act (of Parliament). 3 However, in 2012–2013 the scheme’s budget accounted for just 0.28% of GDP (Fultz and Francis 2013: 11) which represented a drop from the financial year 2010–2011 when the expenditure on the scheme was 0.51% of GDP (World Bank 2012: 271). 4 One estimate claims the ‘poorest Indians’ comprise roughly one-third of the country’s total population, that is, about 400 million people (Dreze and Sen 2013: 87). Estimates of poverty in India, however, are highly contested, and a recent World Bank report that uses a different methodology

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the developmental states of East Asia which also exercised a major control over the economy, the outcome in India is lacklustre, especially where social development is concerned. It, therefore, begs the question why the State in India has not been effective in improving living conditions through schemes like MGNREGS? There is now a vast amount of literature analysing various aspects of MGNREGS, but insufficient attention is paid to theorizing the role of the State in its implementation. This study is a modest attempt at such theorization. The discussion is divided into three main sections. Section two begins with an examination of the concept of the developmental state and the continuing significance of the state in the aftermath of the Asian Financial Crisis (AFC) in 1997. Section three involves a brief consideration of the two major analytical approaches to social protection for the underprivileged and the significance of the rights-based discourse in India. Finally, section four examines whether mandatory social auditing is effective in extracting accountability from the implementers of MGNREGS. This paper is based upon a qualitative analysis of the existing literature on MGNREGS, and it is also informed by some of the findings of two rounds of joint fieldwork conducted in 2011 and 2012.5 Further, a brief follow-up field visit was undertaken at the end of 2015. The first field trip involved a preliminary investigation which included meetings with villagers and members of five GPs or village councils in Hiriyur taluk of Chitradurga District, Karnataka. It also included a review of GP documents relating to works implemented under MGNREGS and visits to inspect selected works.6 During our subsequent fieldwork in 2012, we conducted two surveys: one included a sample of households who had worked in MGNREGS and the second comprised members of Vigilance and Monitoring Committees (VMCs) in the five GPs that we visited in 2011. In Karnataka, it is the responsibility of VMCs at the village level to conduct social audits under MGNREGS and ensure accountability from the implementers of the scheme.7 Interviews were also conducted with key informants from different districts, including Chitradurga and the city of Bangalore.

6.2 A Continuing Role for the Developmental State The notion of the developmental state has been vigorously debated by scholars from different disciplinary backgrounds and ideological leanings. For those who are critical of state intervention in industrial policy and economic development, such intervention is a source of price and market distortions, rent-seeking behaviour, and crony shows that the incidence of poverty in India has been overestimated (Misra 2015). Notwithstanding what methodology is applied, millions in India still live in poverty. 5 The fieldwork was conducted jointly with Professor D. Rajasekhar and R. Manjula who are both based at the Institute for Social and Economic Change in Bangalore. 6 Refer to Rajasekhar et al. (2013) for detailed results of this fieldwork. 7 By contrast in some states, it is the gram sabhas or village assemblies (of which all adults are members) that are responsible for undertaking social audits.

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capitalism (Kang 2002). Thus, AFC was viewed by some as a consequence of indiscriminate provision of credit and subsidies to inefficient producers and political allies in the business sector (Sharma 2003). The alleged unholy nexus between business, bureaucrats and politicians was widely blamed for the myriad economic woes confronting many of the states in East and Southeast Asia in the wake of AFC. Notwithstanding the various doubts and criticisms levelled against the developmental state, many scholars with more circumspect and nuanced views on market efficiency and efficacy have strongly emphasized the critical role played by the state in promoting industrial development, especially in Japan, South Korea and Taiwan. The state facilitated, for example, the introduction of new technologies through substantial ‘productive investment’ (Wade 1990: 26). It achieved this by directing investment to priority industries and ensuring local industries were subjected to international competition. The economic transformation of East Asia is attributed to the state’s role in guiding markets to ensure stability in exchange rate, prices, interest rate, and subordinating the interests of financial capital to those of industrial capital (Wade 1990: 27). Control over lending by the state was also of considerable importance as the experience of South Korea and Taiwan illustrated albeit in different forms (Bello and Rosenfeld 1992: 51, 67; Weiss 2003: 248). From the perspective of guided or ‘governed markets’, industrialization and economic growth in East Asia were the result of effective capital accumulation. This approach, it is claimed, generated investment that was different in scale and ‘composition’ to what would be possible under free market conditions (Wade 1990: 29). It is evident that not all states in the so-called developing world have managed to effectively transform their economies and generate living standards comparable to those of the East Asian states mentioned above or Singapore in Southeast Asia. The developmental state, however, is distinguished by its distinctive character. Evans has defined developmental states as being characterized by ‘embedded autonomy’ 1995: 50–60). He argues that the developmental state is autonomous because it is run by a bureaucratic order that is professional and also distanced from the interests of particular power blocs. At the same time, the state is embedded in society to the extent that it is bound to society through social ties that connect it to ‘particular social groups’ (Evans 1995: 59), especially those sections of business committed to national industrial development. The state shares with these social groups a common goal of transforming the economy. The cohesiveness of the state is an important feature of developmental states according to various scholars including Evans (1995) and Pingle (1999). Without cohesiveness, the state lacks the capacity to effect change and maintain a degree of autonomy that allows it to negotiate effectively with the private corporate sector and labour unions. A precondition for state cohesiveness is the existence of a strong bureaucratic order guided by impersonal and consistent application of rules to ensure that this order is not subverted by personal interests (Chibber 2002: 956). Importantly, state cohesion is only realized where there is ‘disciplinary coordination’ between various state agencies in charge of policy making. It requires a ‘nodal agency’ that is able to exercise power over other agencies to ensure that the developmental goals

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set by the state are achieved and not overwhelmed by rivalries between different agencies (Chibber 2002: 956, 959; Weiss 2003: 249). Market guidance in favour of national development, therefore, requires a strong state that is able to exercise its authority over many contending interest groups or classes. At a broader level, the discussion on the nature of the state and political system underlines the significance of state–society relations in developmental outcomes (see Nesadurai 2000). Singapore exemplifies the tendency where the state continues to actively direct and intervene in the economy in order to facilitate the transition to a post-industrial society (Pereira 2008: 1194–97). A significant reason for the state’s continued dominant role, it is argued, is the class character of Singapore where the local capitalists have remained weak in relation to the state which has sought investments from transnational corporations to fuel economic growth and development (Pereira 2008: 1191). At the same time, the state has managed to control labour through various means, including a wide range of social benefits. With reference to India, Atul Kohli in an earlier study distinguished it from other developmental states like South Korea and Taiwan by classifying India as a fragmented multiclass State8 where policy making within the democratic system is more politicized resulting in the dilution of its effectiveness (2004). Further, the relationship between the State and private sector is complex since it is both conflictual and cooperative. These conditions result in multiple goals and limited political capacity which detract from the State’s effectiveness in promoting development that is comparable to the classic cases of developmental states mentioned above (Kohli 2004: 286, 406–407). Herring also assesses the developmental capacity of the Indian State with reference to state–society relations and argues these relations mitigate the ‘application of universalistic rules’ (1999: 322). He characterizes these relations in terms of ‘embedded particularism’ arising from the ‘vertical and horizontal incoherence’ of the bureaucracy which is partly an outcome of the country’s federal system of governance (Herring 1999: 322). The federal system in India displays many regional variations where economic and social development is concerned. These differences caution against viewing ‘the state as a unified actor’ since at the regional level states demonstrate varying levels of industrialization and investment (Sinha 2003: 460). A comparison of three states including Gujarat, Tamil Nadu and West Bengal revealed adoption of different strategies by these states towards the central government’s industrial and investment policies before economic liberalization which resulted in divergent outcomes (Sinha 2003). This divergence, according to Sinha (2003: 460, 466), calls for an appreciation of ‘the multilevel character of states’ taking into account institutional differences between the states. Similarly, Harriss examines how different regimes at the state level in India influence poverty alleviation because of caste and class differences which are pertinent to this discussion (2005: 204). 8 In

his later study, Kohli (2012: 3, 42–43) argues that since the 1980s, the relationship between the State and business (particularly the large business houses) has become much closer whereby the latter enjoys a dominant status in the economy which has, on the one hand, promoted economic growth but, on the other hand, also restricted redistribution of the benefits of growth (see Matthew Chap. 5 in this volume).

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It is evident from the discussion below on the implementation of MGNREGS that there are significant variations between the different states of India. This applies particularly to extracting accountability through social audits which is a mandatory requirement under the scheme. This paper does not attempt a comprehensive evaluation of the debate on the developmental state as this is beyond its scope. However, it is noteworthy that despite the criticisms of the developmental state in the post-AFC period, support for the concept has not dissipated. Evans (2012) in a sequel to his earlier work on the developmental state (referred to above) argues there is a continuing role for the state in promoting development. He asserts that in the twenty-first century the state will have to assume responsibility for enhancing the delivery of services like education and health through public institutions in order to raise the capabilities of its population, so that people can participate more productively in the economy whose growth and development will be propelled increasingly by ‘intangible assets’, that is, ‘ideas and information’ (2012: 33–38). The significance of capabilities in the development process is underscored further where Evans and Heller (2014: 692) argue that what characterizes the developmental state9 is its capacity to expand human capabilities as defined by Amartya Sen. Capability expansion will require greater (not lesser) state involvement through ‘competent, coherent’ bureaucracies capable of providing ‘collective goods’ (Evans and Heller 2014: 696). Though the developmental trajectory of East and Southeast Asian states in the post-AFC period is quite varied (Beeson 2009), it is notable that state direction and intervention continue to exercise substantial influence (Beeson 2007: 179–182). Some writers refer to a continuing developmental role for the state, albeit in an altered or reconfigured form to meet new economic challenges. These challenges include, for example, rising inequality in South Korea following the AFC and greater social demands resulting from progressive democratization (Wong 2004; Kwon and Holliday 2007: 244–245). Of the various interventions, the provision of more inclusive social protection by the state in East Asian countries has received significant attention by certain scholars10 (Kwon 2005, 2009). Even in India social inclusion and delivery of welfare are important considerations in State intervention in the economy (Williams et al. 2011: 8; see also Matthew, Chap. 5, in this volume). However, it is important to make a qualitative distinction between social protection measures followed by East Asian countries compared to those pursued by other nations like India. Rudra (2008: 86–87) identifies two separate paradigms: the productive welfare state and the protective welfare state. Productive welfare states like South Korea which are export-oriented do not incorporate public employment programmes in their social protection policies but place greater emphasis upon enhanc9 Whereas

previously Evans (1995) emphasized the importance of capital accumulation and links between the state and industrial capital in defining the developmental state, subsequently there was a shift in emphasis whereby the capacity of the state in promoting human development became a more relevant consideration (Evans and Heller 2014). 10 Kwon argues that Asian countries have followed different social policies confronted by AFC. Hong Kong and Singapore took a more conservative approach by offering selective welfare, whereas South Korea and Taiwan have adopted a ‘more inclusive welfare state model’ (2009: S15).

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ing their human capital through education and training (Rudra 2008: 147–149). Under the productive welfare paradigm ‘social policy is strictly subordinate to the overriding policy objective of economic growth’ (Kwon and Holliday 2007: 243). By contrast, protective welfare states like India are identified with protected markets, import substitution and a ‘protective’ labour market combined with the expansion of public sector employment (Rudra 2008: 86, 111). While this situation has altered somewhat since economic liberalization, it is evident from the discussion below that MGNREGS is conceived under the protective welfare state paradigm. Though the achievements of East Asian developmental states have sometimes been articulated exclusively in terms of economic growth and economic policy, it is claimed that social policy also influenced the development of nations like South Korea and Taiwan (Kwon 2005: 478; Evans and Heller 2014: 700–701), even though the social benefits were initially enjoyed largely by workers employed in the formal sector (Wong 2004: 351; Kwon 2005: 478–79). With the progress of democratic reforms during 1980s, more significant change followed in both the countries (Ramesh 2003: 93–95). By 1988–89, the whole population of South Korea was included under the National Health Insurance scheme, and by 1995, Taiwan also had its National Health Insurance in place (Kwon 2005: 479). Importantly, from 1986 to 1996/1997, the government’s share of ‘health and income maintenance’ as a proportion of gross domestic product (GDP) rose both in South Korea and Taiwan (Ramesh 2003: 87).11 Further policy changes in welfare followed the hardships caused by AFC in South Korea and the shift in economic strategy from production based upon wage competitiveness to that geared to higher productivity (Kwon 2005: 483). The upshot of these developments was the introduction of more wide-ranging and inclusive social welfare and social protection (Wong 2004: 355; Kwon 2005: 493). Kwon and Holliday (2007: 246–247), however, are somewhat cautious in their assessment of these reforms arguing that the coverage of the population and the benefits offered under these changes were very limited and did not spell the end of the ‘productivist’ model. Notwithstanding their assessment, it is significant that the share of public expenditure on social development expanded from 9.8% in 1993 to 13.1% in 2003 and more people were included under the national pension scheme and unemployment insurance (Kwon and Holliday 2007: 247). Importantly, social protection in South Korea under the productive welfare state model was aimed not only at providing unemployment benefits but also the provision of training to workers to promote ‘job capability’ instead of merely ‘job security’ (Kwon 2005: 493). The emphasis upon ‘job capability’ is in stark contrast to some countries like India where ‘job security’ has dominated the State’s agenda of economic and industrial restructuring. Beyond the provision of extended social welfare, Wong (2004: 358) notes that the developmental states in East Asia have institutionalized ‘new’ forms of accountability and governance since the AFC, though in the case of China it may prove a more significant development in the longer term (Beeson 2009: 27). In the context of

11 In South Korea, it rose from 2.15 to 5.28% from 1986 to 1996 and in Taiwan from 2.92% in 1986

to 5.84% in 1997 (Ramesh 2003: 87).

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this discussion, the emphasis upon accountability and appropriate governance are pertinent to the implementation of MGNREGS as discussed below. The analyses of the developmental state above are important for at least three reasons. First, as Wong (2004: 357) emphasizes, the state has not shirked from the task of ‘national development’ in the face of globalization and its attendant changes but readapted to meet new social and economic demands (see also Beeson and Pham 2012: 553). Second, the construction of more inclusive social protection compatible with the shift to high productivity economy is noteworthy. Finally, increasing democratization demanded more inclusive social policy underlining the importance of state–society relations in the provision of social welfare.

6.3 Social Protection and the Rights-Based Discourse Social protection includes a variety of measures to overcome poverty and deprivation. These include, for example, cash transfers, social pensions, provision of nutritious meals for school children and different kinds of employment generation schemes to supplement the incomes of poor households (Marcus 2007: 3). While in 2007 the Organisation for Economic Co-operation and Development (OECD) countries allocated on average nearly 20 per cent of their GDP on public social expenditure, emerging economies like China and India spent ‘three to four times less’ compared to the average for OECD, even though inequalities had increased over the previous 20 years in both the countries (OECD 2011: 49, 59). Subsequently, there was a rise in social expenditure in India from 13.4% of the budget in 2007 to 18.5% in 2011–2012 (Mehta 2012: 3). Despite this rise, India’s performance under the social protection index (SPI)12 is unimpressive compared to some other Asian countries (see Table 6.1). The overall SPI for India in 2009 was only 0.051 compared to, for example, 0.200 for South Korea and 0.139 for China (ADB 2013: 13–14). Revealingly, India’s SPI ranked below that for some other South Asian nations like Sri Lanka (0.121) and Nepal (0.068). Taking social protection as percentage of GDP, India’s expenditure on social protection was only 1.7% compared to 7.9% for South Korea, 5.4% for China, 3.2% for Sri Lanka and 2.1% for Nepal. The comparatively low ranking of India on both measures indicates that social expenditure is not commensurate with the urgent needs of the underprivileged. The low level of social development in India is underlined by its low ranking under the United Nations Development Programme’s (UNDP) Human Development Index (HDI) where it ranked 130 in 2014 which was well below, for example, China, Japan, South Korea and Sri Lanka (2015: 212–214). Millions of people in India still suffer from poverty and inequality increased both in 12 Explained simply, social protection index is represented by ‘the ratio of total social protection expenditures to total intended beneficiaries’ (ADB 2013: 6). Social protection expenditures comprise expenditures on social insurance, social assistance and labour market programmes. For crossnational comparison, poverty line expenditures are also taken into account (ADB 2013: 7). A higher index figure indicates better performance.

6 Social Protection and the State in India: The Challenge … Table 6.1 Social protection index and social protection expenditure as percentage of gross domestic product (GDP) for selected Asian countries (2009)

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Country

Social protection index (SPI)

Social protection as percentage of GDP

Japan

0.416

19.2

South Korea

0.200

7.9

China

0.139

5.4

Sri Lanka

0.121

3.2

Nepal

0.068

2.1

India

0.051

1.7

Source Countries selected by the author from ADB 2013, pp. 13–14

rural and urban areas from 2004–05 to 2009–10 according to the National Sample Survey data (Kapoor 2013; see Matthew, Chap. 5, in this volume). The low ranking of India under HDI is unsurprising considering the State’s low level of investment in a key human development sector like health. India’s public expenditure on health as a percentage of GDP in 2014 was just 1.4% compared to 2.0% for Sri Lanka, 3.1% for China and 4.0% for South Korea (World Bank n.d. a). It was well below the world average of 6.0%, and even below that for sub-Saharan Africa which was 2.5%! The health status of a vast majority of Indians is precarious according to a survey undertaken in the first half of 2014 which revealed that 86% of the rural population and 82% of the urban dwellers did not have any health cover (Singh 2016). The persistence of poverty in India is compounded by the fact that the agricultural sector is characterized by slow rate of growth and a high concentration of population comprising many marginal farmers and agricultural labourers (Mukherji 2009: 97). Under these conditions, some measure of social protection for the poor and marginalized in especially rural India is necessary. Further, the internal and external liberalization of Indian economy influenced by the neoliberal ideology has led to greater intrusion of market forces into different sectors of the economy. The impact of intensified market forces is felt differentially across regions and social groups generating inequalities. Udayagiri and Walton (2003: 310) compare the contemporary phase of neoliberal economics with Karl Polanyi’s ‘great transformation’ of the nineteenth and early twentieth centuries. They claim that the two phases are comparable since both involve the reorganization of international capitalism and the extension of market forces to ‘new’ sectors of social–economic life that result in tensions which require social protection. The introduction of MGNREGS by the UPA government was an attempt by the State to contain social tensions and manage inequalities. Thus, Bhargava argues that recognition by the State of the right to work only materialized after ‘pressure from below’, including the disaffection expressed during 2004 elections by those who were deprived and bypassed by the economic reforms (2006: 448–449). While India’s social expenditure rose as a proportion of the budget from 2007 to 2011–12, it appears the benefits are not reaching those for whom they are meant

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because of corruption (Mehta 2012: 3). As Evans and Heller (2014: 705) claim, India has not been able to take advantage of its economic growth to provide wider social benefits because the provision of social goods is based upon a ‘top-down’ approach dominated by a coalition of bureaucrats and politicians which has resulted in significant misappropriation of funds. It is clear from the discussion in section four below that in some states of India the capacity of the states to deliver the social benefits is severely compromised for a variety of factors, including elite domination of the institutions of local governance. Though social protection is recognized in the development sector as a necessary means to tackle poverty, there is little consensus over what approaches provide effective longer-term solutions to the eradication of poverty. It is evident that social protection measures and policies are influenced as much by a commitment to eliminating poverty as they are by ideological predilections. Questions related to efficiency, equity, inclusion, needs, risk management, empowerment and various types of rights are vigorously debated by the proponents and critics of social protection. The debate over social protection falls broadly into two major divisions: on the one hand there are those who adopt an ‘instrumentalist’ approach which requires the adoption of ‘risks management’ strategies in the absence of ‘insurance markets’ (Devreux and Sabates-Wheeler 2007: 1). On the other hand, the ‘activist’ approach views poverty and vulnerability as a ‘symptom of social injustice’ and structural factors and promotes social protection as a citizenship right as in the case of MGNREGS (Devreux and Sabates-Wheeler 2007: 1). In the face of a new phase of crisis, namely the global financial crisis (GFC), even international financial institutions (IFIs) called for state intervention to provide social protection to the economically vulnerable sections of the population. Thus, the ADB (2009: 16) urged governments to aid those who are ‘vulnerable’ to economic crises through ‘community-based interventions’ that include various measures such as micro-insurance, public works schemes and conditional cash transfers among others. It was, however, careful to add that income support should be treated only as a temporary measure in order to avoid ‘unsustainable fiscal burdens’ (2009: 16). For the ADB (as cited in Baulch et al. 2008: 7), social protection involves: the set of policies and programs designed to reduce poverty and vulnerability by promoting efficient labor markets, diminishing people’s exposure to risks, and enhancing their capacity to protect themselves against hazards and the interruption/loss of income. (italics in original)

Similarly, the World Bank, which is generally reputed for its fiscal prudence or conservatism, also argues in favour of social protection but in combination with ‘labour programmes’ to reduce poverty and promote ‘sustainable, inclusive growth’ (n.d. b, p. 1). While the World Bank calls for reduction in poverty and inequality, at the same time it emphasizes the role of social protection and labour strategies in promoting ‘opportunity, productivity and growth’ (italics in original) through enhancing human capital (n.d. b, p. 1). Even though the need for social protection is strongly articulated by IFIs, it is coupled with promoting efficiency, growth and productivity.

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The so-called risk and efficiency or instrumentalist approach promoted by IFIs is in contrast to other approaches that argue that social protection should be promoted as a right. The rights-based approach to social protection offers greater potential for social and political transformation because it holds a different ‘vision of society’ (Kabeer 2007: 52). The risk management approach of IFIs is conceived within a framework of protecting and equipping individual households to better manage risk within a competitive market environment (Kabeer 2007: 52). It offers safety nets to households to ensure they do not slide into economic distress under crises situations but does not aim to redistribute assets in favour of the poor and vulnerable, so they can attain ‘sustainable livelihoods’ (Sabates-Wheeler and Devereux 2008: 69). The rights framework by contrast is collectivist and transformative because it aims to create greater awareness among the deprived and vulnerable of their entitlements as citizens (Kabeer 2007: 52). Transformative social protection, therefore, involves ‘supporting citizens to claim social protection from the state as a basic right’ (Devereux and Sabates-Wheeler 2007: 3). Further, transformative social protection incorporates into its framework a belief that vulnerability occurs within a certain social and political context which is linked to a structure of society that is marked by an unequal distribution of resources (Devereux & Sabates-Wheeler 2007: 3). Therefore, investing citizens with rights to certain entitlements like employment, health, education and social insurance empowers them to claim more resources in their favour. With reference to India, several writers support popular demands for rights and a rights-based approach to development because they believe it is integral to the idea of citizenship and democratization. Jayal (2009: 365, 371–372), for example, believes recognition of the concept of citizenship is more empowering and specific than the somewhat ambiguous notion of inclusion because demands for social citizenship require the state to provide basic needs and social security which serve to enhance human development. Both Jayal (2009: 371) and Bhargava (2006: 446) regard the enactment of MGNREGS as a major step forward in the attainment of social citizenship. Bhargava argues enthusiastically that through the introduction of MGNREGS parliament has recognized that the right to work is ‘constitutive of the very idea of citizenship’ (2006: 446). Adopting a sober and radical view, Patnaik (2010: 35) questions the concept of rights enunciated by the Indian government in recent years because he argues, these rights are not universal nor are they justiciable. While supporting the introduction of MGNREGS, Patnaik argues that in practice it does not offer a right because it is unable to satisfy one of its key provisions, that is, offering employment when it is demanded. Evidence from various parts of India indicates that officials at the local level who are in charge of implementing the scheme ignore demands for work from those in need of employment. One may add here that the scheme falters in other respects too such as the mandatory requirement for social audits to ensure transparency and accountability. Some argue that without accountability and some change in power relations, rights-based development and transformative social protection has little meaning (Cornwall and Nyamu-Musembi 2004: 1432; Sabates-Wheeler and Devereux 2008: 69).

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6.4 Accountability Under MGNREGS This section examines the conduct of social audits which is mandatory under MGNREGS and a necessary tool for fostering accountability to ensure effective implementation of the scheme. The discussion below reveals that the effectiveness of MGNREGS is hindered by irregularities and opposition from vested interests to accountability mechanisms that are integral to the scheme. As stated in a Government of India (GoI n.d.: 20) budget report, MGNREGS was implemented in 200 districts during its first phase from 2006 to 07 but extended to a further 130 districts in the second phase from 2007 to 08, and finally from April 2008 it was rolled across the remaining districts of the nation (see Matthew, Chap. 5, in this volume). The scheme is self-targeting and employment is to be provided within 15 days of demanding work or else the job seeker is to be paid an unemployment allowance. The request for work is lodged with the GP which is responsible for implementing the scheme at the local village level13 (Das 2013: 114). The person seeking work is provided with a job card which displays the identity of the worker and records the details of the work undertaken and wages paid to ensure there are no irregularities. During its initial phase from 2006 to 07, MGNREGS benefitted 21 million households who obtained on average 43 person-days of work (World Bank 2012: 271). Significantly within about five years, that is, by the financial year (FY) 2012–13, the number of households that received employment under MGNREGS had more than doubled to 49.9 million or 4.99 crore14 (GoI 2015a, b). This upward trend has not been maintained, and by the FY 2014–15, both the total number of households receiving employment and the average days of employment provided per household had declined to 4.14 crores (41.4 million) and 40.17, respectively (GoI 2015a). The provision of employment has also varied considerably between different states in India. For example, in FY 2014–15, the average days worked per household was the highest in the north-eastern state of Tripura at 87.9 days (GoI 2015b.). In the south, Tamil Nadu and Andhra Pradesh with 47.3 and 47.1 days of employment per household, respectively, performed better than Kerala and Karnataka which provided 42.6 days and 39.6 days, respectively. In the west, Maharashtra performed comparatively better providing 52.9 days of employment per household but the populous states of Uttar Pradesh and Bihar generated only 33.5 days and 34 days of employment, respectively. Wide variations between the states in the number of days of total employment provided per household are a significant feature of the scheme. According to Jean Dreze, these differences are explained by the varying political commitment of different state governments to the scheme (2010: 516). Thus, in Tamil Nadu where the scheme has been comparatively successful, strong state government support combined with close monitoring of the scheme by different chief ministers has played an important part in its effective implementation (Carswell and 13 GPs are the lowest tier of local government in rural India with the zilla parishad

occupying the top tier and the taluk representing the intermediate level. 14 One crore equals ten million.

or district council

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De Neve 2014: 581). Similarly, in Andhra Pradesh where MGNREGS has performed relatively well it was support from the chief minister of the state, Y. S. Rajasekhara Reddy and his government that ensured its effective functioning (Maiorano 2014; Das 2013: 145). The chief minister, who belonged to a prominent political family and enjoyed strong support from the central organization of the Congress Party, promoted welfare programmes to enhance his political support in the state which he managed successfully. Maiorano (2014: 96) argues the support of the chief minister was crucial to the effective implementation of MGNREGS. He quarantined the scheme from misappropriation of funds by warning his political supporters that the scheme was not to be treated as a source of accumulation for personal enrichment or political patronage. Further, the chief minister staffed the Rural Development Ministry with officials who were competent and committed to promoting ‘transparency and accountability’ (Maiorano 2014: 96–97; Das 2013: 145). Thus, both in Tamil Nadu and Andhra Pradesh, commitment from top politicians and competent officials played an important role in boosting the capacity of these states to ensure accountability and deliver the benefits of MGNREGS. By contrast, opposition to social audits and subversion of the accountability process by vested interests are common in some other states of India. The resistance to social audits detracts from delivering the benefits of the scheme to those who are economically vulnerable, reduces the transformative impact of social protection and undermines the deepening of democracy in rural areas. The purpose of social audits is to ensure transparency (openness) and accountability (answerability) of officials to the beneficiaries of the scheme through a joint monitoring and evaluation of the scheme. It involves participation by both government officials and the people or beneficiaries in this case (Swain and Sen 2009: 97). Impartial audits are not welcome by dominant forces at the local level as, for example, in Rajasthan where there has been vigorous opposition from GP officials because impartial audits restrict their control over how the funds are utilized. This is despite the fact that the state represents a case of accountability from the ‘bottom-up’ because of the involvement of civil society actors in disseminating information on rights to rural dwellers and aiding them to obtain their entitlements under MGNREGS (Afridi 2008: 37–38). There is a strong tradition in Rajasthan of demanding government accountability that predates MGNREGS, with pressure emanating from civil society groups like The Mazdoor Kisan Shakti Sangathan (MKSS) which is an organization of workers and farmers (Jenkins and Goetz 1999). Groups associated with MKSS have in the past mobilized villagers to participate in conducting social audits in the face of sometimes violent opposition from sarpanches (Heads of GPs) and other powerful forces in the rural areas. Though in some districts of Rajasthan social audits have been carried out by civil society groups without opposition, subversion of the social audit process under MGNREGS and opposition to it continues (see Shankar 2010) even after many years of activism by MKSS.

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Our fieldwork15 in Karnataka in 2011 also revealed the limitations of the social audit process, which is dominated and subverted by village elites. Though social audits are conducted on a regular basis, their objectives are not realized because of little ‘popular interest’ (Pani and Iyer 2011: 85). This is partly explained by the fact that the promotion of awareness about MGNREGS is not a significant priority for local government officials who complain they already suffer from an onerous workload and do not have sufficient time for additional demands. The situation at the local level is in stark contrast to the official view espoused by the central government’s Ministry of Rural Development (MoRD 2011: 5) according to which a ‘much greater emphasis is needed on spreading awareness among MNREGA workers about their legal entitlements and procedures of the Act’. Considering the prevailing situation, it is not surprising that a household survey of MGNREGS beneficiaries by Kumar and Maruthi (2011) discovered that an overwhelming majority had no knowledge of how to make a complaint and of those that did submit complaints only a very small proportion found their complaints had been addressed. One reason behind the weakness of social audits in Karnataka is that the gram sabhas (village assemblies) are not particularly active, as demonstrated by either irregular conduct of gram sabha meetings, or poor attendance at the meetings. (Pani and Iyer 2011: 4). Different studies on local governance in Karnataka confirm the weak and variable functioning of gram sabhas even though they are regarded as the ‘lynchpin’ of local governance (Besley et al. 2008: 253). According to Vijaylakshmi (2008: 169), even though the gram sabhas were meant to raise the level of ‘transparency, accountability and …people’s participation’ they have failed to achieve this goal. Gram sabhas are not active because they are controlled by powerful interests in the villages.16 Though gram sabha meetings are supposed to be held quarterly, ordinary villagers are not informed in advance. Instead they are given very short notice making it difficult for the villagers to attend. A high-ranking district official17 in Karnataka disclosed that gram sabhas are not active because nobody wants them to have power. GPs are opposed to gram sabhas having a voice, since that would challenge their authority. Our survey18 of VMCs conducted in 2012 in Chitradurga district revealed that social audit reports were presented only at a few gram sabha meetings, whereas under MGNREGS the presentation of reports to gram sabhas is a necessary requirement. We found that the village elites dominated MGNREGS. These elites included well-off farmers, contractors, influential GP members and local traders who some-

15 The

discussion here is based upon information from the fieldwork (except where indicated otherwise) conducted in 2011 and 2012 with Professor D. Rajasekhar and R. Manjula, and from other published sources related to Karnataka. 16 Information provided by an academic acquaintance working at ISEC whose home is in Bangalore Rural District. The discussion was held in Bangalore in November 2012. 17 Interview held in Bangalore in November 2012. 18 For detailed results of the survey, refer to Lakha et al. (2015).

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times combine the different roles. In most GPs, the VMCs19 had members who were either co-opted by the powerful village elites, or the latter had acquired membership of VMCs. In some cases, those appointed to VMCs as members by GP officials were not even aware of their membership and consequently did not fulfil their auditing duties. There were also instances where contractors, who are banned from implementing works under the scheme, were involved in implementing the works. Further, a few contractors even engaged in auditing the works because they happened to be relatives of female VMC members who were not familiar with auditing procedures. Many VMC members also sanctioned works on their private lands, which, though not prohibited under MGNREGS, is restricted to land belonging to socially and economically disadvantaged groups. Another way of rewarding VMC members was to provide them job cards and pay wages for almost 100 days irrespective of whether they had worked or not. It was revealing to note at GP meetings we attended that almost all the members of GPs and VMCs present stated that they had worked for close to 100 days, although the proportion of the households completing 100 days of employment was only 2.7% in Karnataka during the financial year 2011–12 (GoI n.d.: 64). Needless to state, the social audits were not conducted in an impartial manner which seriously compromised the whole process of extracting accountability from the implementers of the scheme.

6.5 Conclusion It is evident from the above discussion that a rights-based approach to social protection as constituted under MGNREGS has had mixed results in terms of employment creation and extracting accountability. The outcomes for awareness and participation are also mixed. On the one hand, there is opposition from vested interests like the sarpanches in Rajasthan to demands for more accountability, and lukewarm attempts by local officials in Karnataka to publicize the scheme, both of which have prevented greater participation in the scheme. On the other hand, it is having some transformative impact through creating awareness in certain instances. For example, even in Haryana, which has a relatively high per capita income, there is considerable demand for employment under MGNREGS and increased assertiveness on the part of agricultural labourers seeking work (Rajalakshmi 2013). When a female labourer in one village demanded work under the scheme, the sarpanch refused to issue a job card, but when those demanding work threatened a ‘sit-in protest’, the sarpanch acceded to their demand. According to this labourer (as cited in Rajalakshmi 2013): Earlier, if a zamindar called a worker to his fields, the latter could never refuse. Today, if the same zamindar tells us to come for picking cotton and stop doing MGNREGS work, the workers demand better rates for picking cotton. 19 VMC has nine members, five of whom have to be labourers, and it should also have some women members though the exact number is not specified. The members are selected from the ward sabha which is the village-level electoral constituency.

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As a result of rising awareness and increasing demands for better pay rates, it is not surprising that in Haryana and elsewhere like Karnataka (as revealed during our fieldwork) there is little enthusiasm for the scheme among the employers of labour. As far as awareness and entitlements are concerned, it is still a work in progress and the outcomes are far short of any wide-ranging transformation across the nation. The varied performance of the scheme across the country underlines that the State is not a unitary entity. Within the multistate federal system that prevails in India, there are significant cultural, institutional, and political differences between the regional states which define the capacity of the State at the centre to implement its welfare programmes. For example, within each state there are local level governance institutions like GPs that influence the ability of both the State at the centre and the state at the regional level to exercise authority. Thus, State capacity is complicated by a governance structure that is complex and shaped by different levels of administration. In the case of MGNREGS, it is evident that its implementation is mediated at different levels by the prevailing social and political structures extending from the State at the Centre down to the GPs and the beneficiaries of the scheme at the local or village level. Along this hierarchical grid, the capacity of the State to implement its developmental programmes is reliant upon the commitment and interests of intervening social and political forces. It is instructive to contrast the performance of social audits in two southern states, namely Andhra Pradesh and Karnataka whose diverse experiences call for more nuanced understandings of state capacity in order to appreciate its mediated character. In Andhra Pradesh (as stated above), the pressure to conduct audits has emanated from the top, that is, from the chief minister and the state government which has promoted training of village-level auditors in collaboration with civil society groups producing 60,000 volunteer social auditors across the state (Das 2013: 145). Training of village volunteers combined with sending these volunteers to villages other than where they reside to conduct audits has resulted in impartial audits (Aiyar and Samji 2009). This approach insures against interference from GPs (and vested interests therein) who are the designated implementers under MGNREGS but have been ‘excluded’ from implementing the scheme in Andhra Pradesh (Maiorano 2014: 102). Through a vigorous promotion of social audits by the state government, audits have uncovered fraudulent practices and also led to substantial recovery of funds (Aiyar and Samji 2009). The state in Andhra Pradesh has demonstrated its capacity by creating an appropriate institutional structure that has bypassed vested interests and facilitated effective conduct of social audits (Das 2013: 144–145). In Karnataka, the performance of MGNREGS, including social audits, has been unimpressive as reported in 2010: ‘A lax and insensitive administration has virtually stalled the pro-poor MGNREGS across Karnataka’ (cited in Das 2013: 140–141). Much of the blame has been laid on the state government. Karnataka is classified as having a regime that is marked by ‘middle-caste/class domination where there is a low level of ‘success’ in alleviating poverty (Harriss 2005: 211, 213). This is explained by the domination of middle castes and classes in politics which has remained largely unchallenged (Harriss 2005: 219) and extensive, since the Lingayats and Vokkaligas,

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who are the dominant castes, constitute approximately 30% of the total population (Harriss 2005: 217). The capacity for more effective implementation of the scheme is compromised by the power relations prevailing at the local level. Local elites have managed to dominate governance institutions like GPs, gram sabhas and VMCs, and appropriated many of the benefits of MGNREGS as stated above. Vijaylakshmi’s study (2008: 185) of local governance in three districts of Karnataka found local elites belonging to dominant castes exercised substantial influence over the working of panchayats at different levels regardless of whether they were members of the panchayats or not. This dominance entails a social and economic cost since there is a strong nexus ‘between elite dominance, lack of accountability and rent-seeking in the panchayats’ (Vijaylakshmi 2008: 185). Local elites who dominate or exercise influence over the working of panchayats are also politically involved having links with members of parliament at the state and central levels. Further, according to our informants, bureaucrats at the district level connected with the monitoring and evaluation of MGNREGS ignore various breaches of the scheme. Thus, the embedded autonomy of the developmental state, identified by Evans (1995), where the bureaucratic order is distanced from particular power blocs is evidently lacking in many of the regional states in India. Overall, the State in India is less cohesive compared to the developmental states of East Asia. Also, the level of human development in India and the resources devoted to key social development sectors like health are not comparable to the developmental states of East Asia. Evans and Heller (2014: 692) state that what characterizes the developmental state is the expansion of human capabilities. Despite the investment in a large-scale social protection scheme such as MGNREGS, judging by India’s ranking under the HDI and SPI, it cannot be claimed that there is evidence of substantial expansion in human capabilities that is comparable to the developmental states of East Asia. The mediated character of the State in India is in contrast to totalizing understandings of state capacity articulated by some scholars. Referring to public sector capacity, Polidano claims it is generally understood as ‘the ability of an organization to act effectively on a sustained basis in pursuit of its objectives’ (2000: 808). He argues that one aspect of public sector capacity is its ‘implementation authority’, which is ‘the ability to carry out decisions and enforce rules within the public sector itself and the wider society’ (2000: 810). Similarly, in assessing state capacity Mann’s definition of ‘infrastructural’ power refers ‘to the capacity of the state to actually penetrate civil society, and to implement logistically political decisions throughout the realm’ (Mann 1984: 189). According to Mann (1984: 206), this power is most advanced in industrial societies where with the onset of the Industrial Revolution ‘territorially federal societies’ were dismantled and superseded by nation states in which ‘unitary control and surveillance structures’ managed to permeate or ‘penetrate’ society. By contrast, Migdal (1988: 33) does not take state capacity for granted but argues the ‘capacity’ or ‘incapacity’ of states to pursue their policies and objectives is linked to the ‘structure of society’. The comparison between Andhra Pradesh and Karnataka underscores the importance of institutional differences and social structures in explaining differential outcomes in the provision of social protection and the

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different reach of state capacity. Without proper accountability and changes in power relations, transformative social protection is unlikely to materialize. While the State in India has made a bold move to provide social protection to the low income groups through MGNREGS, its capacity to implement the scheme is at present unevenly distributed nationally and not commensurate with its ambitious objectives.

References Afridi, F. (2008). Can community monitoring improve the accountability of public officials? Economic and Political Weekly, 42(43), 35–40. Aiyar, Y., & Samji, S. (2009). Transparency and accountability in NREGA: A case study of Andhra Pradesh. AI Working Paper no. 1 (pp. 1–28). New Delhi: Accountability Initiative, Centre for Policy Research New Delhi. Asian Development Bank. (2009). The global economic crisis. Challenges for developing Asia and ADB’s response, (April), ADB, viewed 28 March 2014. http://www.adb.org/sites/default/files/ pub/2009/global-economic-crisis-adb-response.pdf. Asian Development Bank. (2013). The social protection index. Assessing results for Asia and the Pacific, Manila: Asian Development Bank, viewed 3 April 2014. http://www.adb.org/sites/default/ files/pub/2013/social-protection-index.pdf. Baulch, B., Weber, A., & Wood, J. (2008). Social protection index for committed poverty reduction, Volume 2: Asia. Manila: Asian Development Bank, viewed 28 March 2014. http://www.unicef. org/socialpolicy/files/ADB_Social-Protection_Index.pdf. Beeson, M. (2007). Regionalism and globalization in East Asia. Politics, security and economic development. Basingstoke: Palgrave Macmillan. Beeson, M. (2009). Developmental states in East Asia: A comparison of the Japanese and Chinese experiences. Asian Perspective, 33(2), 5–39. Beeson, M., & Pham, H. H. (2012). Developmentalism with Vietnamese characteristics: The persistence of state-led Development in East Asia’. Journal of Contemporary Asia, 42(4), 539–559. Bello, W., & Rosenfeld, S. (1992). Dragons in distress. Asia’s miracle economies in crisis. London: Penguin Books. Besley, T., Pande, R., & Rao, V. (2008). The political economy of gram panchayats in South India. In K. K. Gopal, R. Kanbur, & V. Rao (Eds.), Development in Karnataka. Challenges of governance, equity and empowerment (pp. 243–261). New Delhi: Academic Foundation. Bhargava, R. (2006). Indian democracy and well-being: Employment as a right. Public Culture, 18(3), 445–451. Carswell, G., & De Neve, G. (2014). MGNREGA in Tamil Nadu: A story of success and transformation? Journal of Agrarian Change, 14(4), 564–585. Chibber, V. (2002). Bureaucratic rationality and the developmental state. American Journal of Sociology, 107(4), 951–989. Cornwall, A., & Nyamu-Musembi, C. (2004). Putting the ‘Rights-based approach’ to development into perspective. Third World Quarterly, 25(8), 1415–1437. Das, S. K. (2013). India’s rights revolution: Has it worked for the poor?. New Delhi: Oxford University Press. Devereux, S., & Sabates-Wheeler, R. (2007). Editorial introduction: Debating social protection. IDS Bulletin, 38(3), 1–7. Dreze, J., & Sen, A. (2013). An uncertain glory. India and its contradictions. London: Allen Lane. Dreze, J. (2010). Employment guarantee and the right to work. In N. G. Jayal & P. B. Mehta (Eds.), The Oxford companion to politics in India (pp. 510–518). New Delhi: Oxford University Press. Evans, P. B. (1995). Embedded autonomy. States and industrial transformation. Princeton, New Jersey: Princeton University Press.

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Chapter 7

Compressed Capitalism and a Critical Reading of the State’s Employment Challenges Anthony P. D’Costa

Abstract In this chapter D’Costa critically examines both the quantitative and qualitative dimensions of India’s employment challenges to assess whether the Indian state is in a position to make a dent in India’s growing employment deficit. This is in spite of the efforts made in creating the world’s largest employment program in the countryside. Using a political economy framework, he offers an institutional perspective as to why plentiful good jobs are hard to come by in India despite the recent high rates of economic growth. He argues that the deeply dualistic employment structure with a relatively small share of highly paid tradeable services jobs and a vast pool of insecure informal sector jobs are a result of “compressed capitalism” that contributes to India’s uneven development. Compression arises from a stalled agrarian transition, state-sponsored leapfrogging of select sectors within the broader truncated industrialization process and a persistent petty commodity producer (PCP) sector. Both institutional and structural legacies in the context of contemporary capitalist dynamics constrain an agrarian transition and instead encourage capital and technology bias in industry, thereby sustaining an expansive PCP sector. The chapter shows that notwithstanding the government’s employment goals they remain unrealistically lofty not just because of state incapacity but also due to the structural imperatives of global capitalism that substantially limits the policy space in a deregulated and liberal economic environment. At the minimum, to accomplish the employment goals, the state needs to be recast differently, which is more in line with rebalancing the state–business relationship in favor of employment-driven policies. Keywords Employment challenges · Compressed capitalism · Petty commodity sector · Agrarian transition · ISI · Jobless growth in manufacturing

A. P. D’Costa (B) University of Alabama, Huntsville, USA e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2019 A. P. D’Costa and A. Chakraborty (eds.), Changing Contexts and Shifting Roles of the Indian State, Dynamics of Asian Development, https://doi.org/10.1007/978-981-13-6891-2_7

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7.1 Introduction Development, and more narrowly economic development, is a preoccupation that few post-colonial or late-industrializing countries have escaped. As sovereign nations, states have intervened variously across the developing world. Those more ambitious and nationalist, such as India, have sought to create autonomous or self-reliant economies, mostly through state-led industrialization through domestic production, exports, or some combination of the two. Agriculture, a significant sector both in terms of economic contribution and employment, has often taken a backseat. When targeted, it has been to ensure livelihoods in the countryside, not as a source of dynamic capital accumulation. In India, employment as a development goal was rarely mentioned with as much force as self-reliance then or economic growth now. In either case, it was/is presumed that employment would follow from economic growth and structural transformation. Paradoxically, today the concern for employment (and other welfare-enhancing schemes) (see Chakraborty, McCartney, Kassim-Lakha, Chacko, in this volume) has become the policy focus of the Indian government and multilateral organizations (see World Bank 2012) with “inclusive” development as their latest mantra. The irony is that such well-meaning interventions have accompanied growth, yielding greater space to private capital by the Indian state. This could be seen as an acknowledgment of the difficulty of generating employment in an era of open economies and technological change even if new opportunities open up with pro-market reforms. The Indian state has both withdrawn from much of the economy and reinserted itself into specific social spheres by recognizing certain rights and aiming to create employment. The objective of this chapter is to critically assess whether the Indian state is in a position to make a dent in India’s growing employment deficit, on both quantitative and qualitative dimensions. Rough estimates suggest that one million new members are added to the workforce every month. Using a political economy framework, I offer an institutional perspective as to why good jobs are hard to come by in India despite high rates of economic growth. Instead, India has experienced a deeply dualistic employment structure, with a relatively small share of highly paid tradeable services jobs and a vast pool of insecure informal sector jobs. I argue that compressed capitalism contributes to India’s uneven development. Compression arises from a stalled agrarian transition, state-sponsored leapfrogging of select sectors within the broader truncated industrialization process, and a persistent petty commodity producer (PCP) sector. Both institutional and structural legacies in the context of contemporary capitalist dynamics constrain agrarian transition, encourage capital and technology bias in industry, and sustain an expansive PCP sector. Thus, supply-side arguments for employment creation are inadequate and the government’s employment goals remain unrealistically lofty. Nevertheless, addressing the supply side still calls for a remaking of the Indian state in terms of effective capacity to negotiate the imperatives of global capitalism to ensure a more shared national economic development.

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The chapter is divided into five main sections. In section two, I offer a framework to highlight why late industrialization, despite advantages of leapfrogging, can be a drag on employment. The next section traces India’s employment challenges in an evolutionary manner. In section four, I offer a brief review of recent key government statements and policies regarding employment. In section five, the pronounced gap between policy intent and employment outcomes is used to point out the difficulties in generating large-scale employment. The chapter concludes with a brief preview of how the Indian state would have to recast itself to accomplish the employment goals it has set out for itself.

7.2 Compressed Capitalism and the Framing of Employment Challenges One way of linking contemporary employment challenges to capitalist dynamics is to hypothesize that capitalist development does not follow the classical European or OECD trajectories due to “lateness” of entry to industrialization and consequently more intense forms of state intervention. Lateness is shorthand for imputing varying institutional legacies that place economies differently in their capitalist trajectories.1 Capitalism in India can be said to be “compressed” (D’Costa 2014a). It is a particular interlocking form of uneven development that results from an incomplete or stalled agrarian transition, a truncated form of industrialization (or premature deindustrialization) characterized by some leapfrogging but mostly lagging sectors, and a vast, persistent petty commodity (or informal) sector. An incomplete agrarian transition means that the agricultural sector is not dynamic enough to experience rapid productivity growth, thus binding large numbers of people to the land. In this scenario, the role of agriculture to drive capitalist development by generating economic surplus for diversified non-agricultural activities in both urban and rural areas is weak. The anticipated reduction of the agricultural workforce is also slow to materialize, thereby leaving the employment pattern biased toward low-productivity agriculture. The other implication of compressed capitalism is that industrial growth is not rapid enough to “pull in” surplus rural workers to a dynamic manufacturing sector. If the industry is not dynamic and agricultural incomes are low, the alternative form of labor absorption could be inferred to be in the heterogeneous, low-wage services sector. Labor abundance in a hierarchical society suggests the availability of a wide range of low-value, non-tradable services, mostly in the informal sector. Thus, India’s current visibility in high-value information technology (IT) and other business services, incongruent with lagging agriculture and 1 Aside from the degrees of lateness, which in itself is suggestive of different institutional legacies, the

particular forms of state intervention and the global economic milieu in which they are practiced substantially determine industrial trajectories. Hence, lateness by itself is not meant to reduce multiple development experiences to a singular narrative and some “lateness” has been spectacularly successful, as in South Korea.

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industry, is quite consistent with late industrialization and compressed capitalism (D’Costa 2016a). What is sobering is that the IT and other new-economy tradable service sectors that rely on tertiary technical education and professional training are not major job generators. In the historical transition to capitalism, an informal sector was inevitable; but with economic growth and diversification, the sector has largely dissipated in the OECD as formal, secure, and better-paying jobs expanded.2 However, for countries such as India, still in the throes of structural transformation, the persistence of an unorganized sector suggests a different kind of capitalism from that of the classical transition. The experience does not neatly fall under the “varieties of capitalism” perspective (Hall and Soskice 2001), since the workings of advanced national capitalist markets are explained by institutional coordination. However, India is not advanced economically, is late to the process of capitalist development and subject to global forces. Hence, the persistent informal sector must be seen not as a transitory phenomenon waiting to be wiped out by economic growth and development, but a permanent one. This sector reproduces itself by accommodating the vast pool of “floating” workers in a wide range of precarious forms of employment. The incomplete agrarian transition is one of the root causes of an expansive informal sector. A handful of late industrializers such as Japan, South Korea, and Taiwan completed this transition at a time when the world economy was quite different. China is close to experiencing the exhaustion of surplus rural workers by leveraging its abundant unskilled labor for exports of manufactures to the USA. What is common to all these countries is agrarian reforms (land reforms, for example) undertaken to make agriculture more productive. Where agricultural productivity is not remarkable, as in China, the slack has been picked up by massive labor-intensive, export-oriented industrialization, thus closing the transition loop. A successful (agrarian) capitalist transition for India would mean, at the minimum, rising agricultural productivity on a continuous basis to support dynamic accumulation in agriculture and subsequently in non-agricultural, non-rural economic activities such as industry. However, low agricultural productivity remains an Achilles heel for India, limiting job creation in the non-agricultural economy through inter-sectoral linkages. If the agrarian transition is incomplete, stalled, or has simply reached a steady state that not too much can be structurally expected from it, then widespread employment has to be generated in the non-agricultural sector. Today, recessionary global conditions and China’s competitiveness make laborintensive, export-oriented industrialization difficult. The intensification of international integration has exacerbated cutthroat competition among low-wage economies, imposed narrow specialization based on specific niches within global value chains, introduced innovation-based competition to meet high-quality requirements and rapidly changing tastes, and compelled flexible adjustments to technolog2 However,

today with deregulated labor markets combined with disruptive technologies and new labor arrangements such as “on demand” economy, “gig economy” that are essentially new forms of precarious employment are a growing trend in the OECD (Jopson, Financial Times, August 23, 2016).

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ical change and automation. These features impose high investment costs, require large markets due to scale economies, and constrain widespread labor absorption. They have also introduced the Luddite specter of automation and thus substitutability or increasing redundancy of labor and the destabilization of labor markets everywhere as subcontracting and offshoring transcend national boundaries. Based on this stylized account of the evolution of global capitalism, we can now synthesize a particular kind of capitalism, namely a compressed form in lateindustrializing India that has not undergone an agrarian transition, that is experiencing enclave economic dynamism tied to the world economy and is witnessing a persistent informal sector. Compression refers to the combined presence of a mutative form of agrarian transition, truncated industrialization, and a persistent petty commodity sector, which has significant implications for employment. Thus, primitive accumulation entailing the separation of peasants from their land as a precondition for capitalist economic (industrial) development that has been historically necessary to advance capitalism is an incomplete and ongoing process in India. A large rural population reliant on low agricultural productivity means that the demand for urban-industrial goods and services is weak, while economic impoverishment in the countryside suggests growing pressure to migrate. Additionally, capitalist development initially nurtured by state-sponsored, capital-intensive industrialization (Griffin 1989: 100–131) and subsequently fostered by deregulation and liberalization has contributed to recent spurts in economic growth and urban development. Land acquisition for nonagricultural purposes (large-scale factories, real estate, infrastructure) has intensified. Bitter contestations over land resulting in the dispossession of cultivators by market forces, distress sale by desperate farmers, and political coercion due to state’s exercise of eminent domain contribute to the vast and persistent informal sector. The growth of the informal sector is thus a visible reminder of a different trajectory of contemporary capitalism, one in which the agrarian transition is stalled or bypassed and where industrial growth is stymied, the result of a complex mix of factors, not all of which can be disentangled. The employment effect is obvious. Today, barring a few labor-intensive modern sectors, most production of goods and services is either in the low-value informal sector or selectively in a few globally-tied capital, skill, and technology-intensive activities in the formal sector. The two sectors are not disconnected. Global value chains pull in informal workers just as domestic firms in their cost-cutting strategies outsource work to lower-cost, smaller firms, and the informal sector. Paradoxically, under such a strategy, economic growth, when narrowly derived, results not in the disappearance of the petty commodity sector but in its continued reproduction and expansion. Much of the new employment, unsurprisingly takes place in the informal sector. Hence, a few high-growth sectors in goods and services in a milieu of a slow-growing rural economy accompanied by dispossession, and a persistent petty commodity sector, cumulatively and collectively comprise compressed capitalism or a particular form of uneven and combined development.

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7.3 Late Capitalism and the Employment Question In a world of sovereign nations, industrial catch-up has been intrinsic to most ambitious late-industrializing states. India has been no different. However, catchup implies a form of industrialization in which both the simple labor-intensive and the complex capital-intensive industries are targeted. It also means leapfrogging in some sectors. The employment impact can be inferred to be limited under this kind of industrialization, especially when an incomplete agrarian transition locks in a large agrarian population. The reasons for a lagging agricultural sector are many but the institutional legacies of the past, both colonial and non-colonial, a large rural population, and the political inability of the state to alter the structure of land ownership can be viewed as central to the problem. The weak employment-pull effect of industry on rural workers and the lack of agricultural dynamism have contributed to the overall stasis of the Indian economy. A key result of both has been the growth and persistence of the petty commodity (informal) sector. It employs the largest number of people in rural and urban areas, mostly unskilled and self-employed. In this section, I sketch the employment impact and implications of industrialization, agriculture, and the informal sector (D’Costa and Chakraborty 2017).

7.3.1 The Limits of Industrialization Strategy India’s strategy to “escape from economic backwardness” has been import substitution industrialization (ISI). Planning was a central instrument of state intervention for large-scale industrialization and catch-up. The motivation was political, namely to create a “self-reliant” economy as a response to India’s economic regression under colonial rule and to prop up capitalist development. Employment generation through industrial investments was assumed, not explicitly stated as an objective. Politically, it translated into privileged public-sector employment for a few, as in the steel industry (D’Costa 1999). The state’s “big push” program, with large investments in key heavy industries such as steel, mining, machinery, fertilizers, and infrastructure, was intended to provide the critical inputs for other sectors, mostly owned and managed by the private sector. The private sector, assured of inputs, would make profitable investments in most consumer industries, which were protected by high tariffs. Employment was ramped up by public and private investments as backward and forward linkages through the multiplier effect were established. Nevertheless, jobs were scarce as evidenced by featherbedding and “sons of the soil” employment practices in a number of public-sector projects (D’Costa 1999:104). The impact on employment of the state-led industrialization program under the ISI strategy was limited. Not only was ISI intrinsically biased against employment due to the capital-intensive nature of investments, India’s particular form of ISI and the environment in which it was promoted worked against rapid economic expansion and the absorption of labor.

7 Compressed Capitalism and a Critical Reading of the State’s … Fig. 7.1 Employment growth in the formal public and private sectors

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Planning for industrialization rationalized the complementarity of public and private investments. Under the 1944 Bombay Plan, the nascent capitalist class and would-be political leaders of an independent India agreed to such a division of labor. However, planning for development and thus employment creation has largely failed (Fig. 7.1). Reasons for the failure include the fragmented nature of the Indian state (Bagchi 1991; Kohli 2009), the lack of entrepreneurs (Kalecki’s intermediate regime), and by extension the absence of a dominant capitalist class to spearhead economic progress (Byres 1994). Furthermore, the grip of non-capitalist classes in the countryside thwarted land reforms (Bagchi 2010; Bhaduri 1983) and the conflicts between the rich peasantry and urban upper classes worked against a dynamic agrarian economy. Additionally, the Gramscian mobilization of consent of dominated groups and the conflict between state-sponsored accumulation and legitimation (Chatterjee 1994) undermined the possibility of a more determined, purposeful, and progressive development. Planning for self-reliance succeeded (Kelkar 1980) but the micro-level inefficiencies induced by unproductive government regulations on economic activity (Bhagwati 1993) and the macro-structural political context of declining public investments (Bardhan 1984) pushed back the earlier gains made through heavy industrialization. In this context, employment, despite the initial momentum of investments, failed to correspond to the growing demand for jobs.3 3 The

shortcomings of the ISI strategy across the developing world have been well documented (Cypher 2014). The issue is not that ISI is faulty to begin with, as some multilateral institutions such as the World Bank have maintained, on the grounds that it might violate a country’s comparative advantage. The South Korean state has demonstrated that the carefully calibrated ISI strategy that led to its highly successful export-oriented industrialization strategy was not an “either/or” option but rather a judicious combination and sequencing of policies. The effectiveness of ISI has to do

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The other reasons for lackluster employment performance are factors specific to ISI (see Griffin 1989). For example, the bias against agricultural infrastructure investments and subsidies and tariff protection for industries that encouraged capitalintensive production undermined job creation on a large scale. The bias against laborintensive production, where employment elasticity with respect to output tends to be greater in small firms compared to large firms, all else constant, has dampened overall employment. The effect of reservation policy of specific products for the small-scale sector to generate employment had the perverse effect of uneconomic size of operations and thus limited expansion. The demand for tertiary education, especially technical education for industrial catch-up, also undercut support for universal education for the masses. Aside from creating inequality, the strategy also ignored skill development for unskilled and semi-skilled workers with little formal education. Industrial leapfrogging in a few sectors was possible through state intervention but employment lagged behind substantially.

7.3.2 Agrarian Transition and Employment The agricultural sector, which received sporadic state attention, was recognized as a significant source of livelihoods but as a whole, despite some important gains through the green revolution, has largely failed when it comes to economic dynamism. The agrarian transition so necessary for economic transformation (Byres 1994) has been wanting. A dynamic agricultural sector, and thus rural prosperity, has been in theory and practice a source of capital and labor and a market for industrial products (Bhattacharyya et al. 2013). That this link did not widen and deepen is part of the story of slow economic growth, poor quality of employment in the countryside, and limited employment opportunities in India as a whole. The paradox is not the absence of capitalism that explains such features of Indian agriculture but rather the particular form that has evolved over time through institutional legacies, colonial and post-colonial state policies toward agriculture, and more recent developments under selective intervention and globalization. Historically, the transition question was mostly resolved through primitive accumulation, where the wresting of land away from peasants became a hallmark for jumpstarting agrarian capitalism and thus a source for capital in general. Mercantile trade through unequal exchange and colonial plunder also contributed to the early foundations of global capitalism. For post-colonial societies such as India, the experience of agrarian transition has been largely incomplete since agriculture under colonial domination was fundamentally reorganized to serve imperial interests. British pursuit in maximizing revenues from land fundamentally altered the class with the type of industry (easy and complex) promoted and the length and depth of protection extended. The latter is clearly a political economic matter since protection is influenced by intracapitalist class conflict, capital–labor relationships, state–business partnerships, and the degree of state autonomy and state capture.

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structure in the countryside, creating not only zamindars, a new class of landowners, but also reinforced the grip of feudal relations in the countryside and reoriented agriculture toward exports of cash crops to serve British needs. In addition, the “home charges” for maintaining the British government in India drained substantial economic surplus from the country, truncating the potential links between agriculture and industry. What is noteworthy is that the economic importance of agriculture in India, consistent with capitalist development, has declined substantially (Fig. 7.1) presenting an unusual dilemma with millions of rural residents eking out a living due to low productivity of agriculture. Under the aegis of the industrialization drive for self-reliance, the quality of employment issue in agriculture has largely taken a back seat. Similar to industry, the concern for self-sufficiency in food has driven agricultural policy. Famine in the 1960s and the heavy reliance on US PL 480 funds for grain imports pushed a technological fix for Indian agriculture. New industrial agricultural practices such as the use of chemical fertilizers, pesticides, and high-yielding seed varieties associated with the success of the green revolution in India have largely solved the self-sufficiency challenge. The state has been crucially involved in this agrarian change through the production and distribution of chemical fertilizers, agricultural training programs, and rural infrastructural projects such as irrigation schemes. However, neither the state nor the green revolution has resolved the agrarian question. On the contrary, the issue has been structurally bypassed.4 In the absence of land reforms, demographic pressure, and monetization of the rural economy, again consistent with capitalist development, there has been class differentiation in the countryside (see Bharadwaj 1985; Bardhan 1989). However, in the absence of a robust accumulation dynamic, a growing class of landless wage workers (or a process of depeasantization) has been on the rise, while the grip of large landowners has been reinforced by the state’s concern for food security and the resulting subsidies cornered by the rural dominant groups. Alternative employment opportunities for those eking out a living from small parcels of land and for the landless have been limited, especially under limited urban-industrial employment. One effect of limited opportunity for mobility is the reluctance of small farmers to abandon cultivation even when such economic activity is not remunerative. The desperate attachment to land by small owner-cultivators is due to the real risks associated with the lack of alternative livelihoods. Those on the margin are able to hold onto their land because of remittance incomes earned from non-agricultural sectors, either in rural areas or from urban work (Bharadwaj 1985: 16). Such behavior has been documented recently in villages in the state of Andhra Pradesh (Vijay 2017; Ramana Murthy 2017), where unprofitable cultivation for small owners is not an incentive to dispose of their land because the alternatives are dismal (Bardhan 1989). The implication of this is that agrarian transition is further stalled and the quality 4 The

recent fall in the absolute size of the agricultural workforce from 343 million in 2004–05 to 337 million in 2009–10 (Thomas 2012: 39, 41) might suggest a belated agrarian transition. However, the absolute size remains large with nearly 340 million workers, and given the structural conditions in rural areas, largely impoverished. Hence it is not a transition but a state of being, what Bharadwaj (1985: 23) in a related context terms “muted” or “truncated” capitalist relations in the countryside.

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of employment remains low because self-employment in cultivation and wage work in agricultural and non-agricultural activities in the countryside remain the primary outlets. This development has a debilitating effect as it slows rural differentiation by tying people to the land and limits technological adoption by small-scale cultivators. It is evident that there is considerable rural distress in India’s agriculture as smallholders of land become laborers and add to the growing rural–urban migration flows. This development is effectively the ongoing historical process of dispossession but curiously, in the absence of dynamic industrial expansion, without proletarianization. Today rural indebtedness is rife (Shetty 2011; Rao 2011) and can be explained by the exercise of structural power in the countryside, such as “labor-tying” that acts to control workers and constrains “allocative efficiency” (Bardhan 1989: A-22, Bharadwaj 1985: 11). By incurring debts, the cultivator is often at the mercy of the creditor (landlord) to plant specific crops or is prevented from finding alternative higher wage work, thus restricting the development of markets. It is no surprise that pre-capitalist labor controls persist in many parts of India despite capitalist growth and diversification in the countryside. Due to the precariousness of many cultivators who own land, because of smallholdings, indebtedness, or other sources of financial hardship, they hire themselves out to other cultivators thereby being both self-employed and casual workers. While the employment circumstances in the agricultural sector have waxed and waned, the trend in agricultural employment is quite clear (see Table 7.1). It remains a large source of low-quality rural employment even as non-agricultural employment in the countryside has gradually expanded (Unni 1998: A37). In fact, the rural nonfarm sector absorbs surplus agricultural labor, which is largely “distress-induced” (Vaidyanathan 1986). However, it is the weak link between agriculture and industry that makes the urban economy less of a driver of the agricultural economy and vice versa. Barring a small group of large landowners and owner-cultivators, earning a livelihood from agriculture is precarious at best and a cause for destitution at worst. Non-agricultural employment (such as construction), while a promising avenue, has been much too slow and of low quality to absorb those leaving the agricultural sector (Unni 1998). The commodification of land has made it an alienable and pledgeable asset (for mortgages) mainly because of rural distress and not because agriculture has become more efficient. This process may be likened to primitive accumulation in a limited way since dispossession of peasants (alienation) through coercion or market exchange is not necessarily leading to widespread agriculture-based accumulation. Rather, as many studies indicate, dispossession is a result of a severe agrarian crisis plaguing the Indian countryside (Reddy and Mishra 2011; Ramakumar 2010; Patnaik 2007). The role of the state in overcoming structural bottlenecks in rural areas has been thus quite constrained. On the one hand, the rural structures of power continue to wield considerable clout over the state. Weaning away large landlords from state subsidies is a political-electoral challenge. On the other hand, introducing any form of redistribution is politically and practically challenging since the nexus between politicians and large landowners is tight and the fragmentation of land through coparcener practice has reached acute proportions. It would be difficult to identify and con-

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Table 7.1 Changing distribution of the workforce across sectors in India Sectors

Number of workers (in millions and %) 1993–94

1999–2000

2004–05

2009–10

2011–12

Agriculture

241.5

246.6

268.6

244.9

231.9

% of total

64.6

61.7

58.5

53.2

48.9

Manufacturing

38.9

42.8

53.9

50.7

59.8

% of total

10.4

10.7

11.7

11.0

12.6

Other industries

15.8

20.4

29.4

48.3

55.3

Services

77.7

89.8

107.3

116.3

127.3

% of total Total

20.8

22.5

23.4

25.3

26.8

374.0

399.5

459.1

460.2

474.2

Source From National Sample Survey (NSS) rounds 1993–94 to 2011–12 Notes Until 2004–05, the absolute number of workers in agriculture in the country as a whole steadily increased, even though agriculture’s share in total workers declined throughout the period from 1993–94 to 2011–12

solidate “surplus” land contiguously, above a set limit for redistribution to landless peasants and smallholders. Under the current climate of land rights and regulation, the price of land and the conditions of sale and purchase are prohibitive and cumbersome enough to warrant considerable conflict between landowners, business, and the government (often representing business and real estate speculators). With the fiscal burden on the government much too high to adequately compensate sellers of land for the loss of their livelihoods and the absence of alternative sources of income many land transactions remain contested or are in limbo, in effect locking small producers to precarious agriculture.

7.3.3 Informality as Employment of Last Resort The third feature of compressed capitalism, and integrated with late industrialization and lagging agriculture, is the persistent petty commodity or informal sector where most Indians are employed. Historically, primitive accumulation separating peasants from their land has contributed to rural–urban migration and the rise of the informal sector in both rural and urban areas. However, under capitalist development, the informal (unorganized) sector has been seen as a transitory phase and is expected to dissolve with economic growth. Yet, for post-colonial societies such as India, the informal sector is not only a permanent feature but has become the most important employment source. The sector is characterized by small and tiny operations entailing precarious, insecure jobs with low wages, productivity, and skill requirements, and is beyond the formal reach of the state’s labor and corporate regulations. The sector’s flexibility allows for substantial self-employment in urban areas as well as rural areas (Unni and Raveendran 2007: 197–198). Aside from the sheer scale of employment

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Table 7.2 Persistence of the informal sector (% Employment) Organized

Unorganized 2011–12

Total

2011–12

2004–05

2004–05

2011–12

Formal

45.4

52.0

0.4

0.3

2004–05

8.1

7.3

Informal

54.6

48.0

99.6

99.7

91.9

92.7

Total

17.3

13.0

82.7

87.0

100.0

100.0

Source Ministry of Finance (2015). Economic Survey 2014–15, Government of India, Volume I and II, https://www.thehinducentre.com/multimedia/archive/02324/Economic_Survey_Vo_2324734a. pdf. Accessed June, 2016, p. 136

in this sector (approximately 92% of all employment), its growth and high share of distress-driven self-employment suggest a labor market that is here to stay. The persistence of the informal sector is presented in Table 7.2. The informal sector has been variously interpreted. The petty commodity sector is not independent of the formal capitalist sector. Rather, petty commodity producers (PCP) act as a structural buffer (a reserve army of labor) to keep wages low in the formal sector (Chakrabarti and Dasgupta 2007: 1961, 1964). Whether the PCP sector keeps wages low is an empirical matter to be investigated in specific labor markets but intuitively, if the informal sector adds to the total supply of labor, assuming some substitutability of informal workers for formal workers, we can expect wages in some formal jobs to be under threat. This is especially the case in rural areas where the wage rate is often the “going rate,” meaning below the legal minimum wage, under the structural domination of large hirers of rural labor. In some regions, mechanization has added to the glut of rural workers thereby keeping wages “competitive”. However, jobs in the formal sector, which are increasingly capital- and technologyintensive, are unlikely to be good substitutes of labor-intensive activities that tend to employ many informal workers. Due to global circuits of capital, the PCP sector also provides numerous enterprises in the formal sector the opportunity to subcontract cheap labor. Witness the Indian automotive industry where temporary, contract labor work beside permanent employees for far less wages than regular workers (Barnes 2018). There are other types of informal work that could be in the formal sector, such as assorted low-level service jobs (janitorial, security, and the like) in formal enterprises, including in high-value software service companies. Although some of these service jobs may require literacy and some education, the informal sector can provide such workers. Additionally, as many urban economies in the developing world indicate, the vast informal sector is a major producer of many wage goods and provides a wide range of low-value services for the informal and formal sectors, which have the combined effect of keeping the costs of goods and services low. While this is not tantamount to the effect of a reserve army of labor, which is really an exercise of structural power of capital against labor, by keeping costs low the informal sector “subsidizes” the

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expanded reproduction of the formal sector.5 The reduction of wage costs is further introduced through informalization of the formal sector itself through the hiring of contract, part-time, and temporary workers (see Unni and Raveendran 2007: 196). This growing informalization of the formal sector is a result of the intensification of contemporary capitalist competition and the loosening of state regulations governing both capital and labor. Growing landlessness and the inability of the industrial sector to create large-scale, labor-intensive manufacturing industries have contributed to a sub-stratum within the informal sector, which is argued to be outside of capitalist relations (pre-capital à la Sanyal (2007), Samaddar (2008), Chatterjee (2008)). Members of this sub-segment are considered a “floating” population including itinerant vendors and recent arrivals to cities from the countryside. Their entry to the informal sector is possible due to low entry barriers but is not assured as there are limits to the absorptive capacity of the informal sector as well.

7.4 State Thinking on and a Critical Reading of Employment Creation So what can the Indian state do to create employment, given the harsh economic environment for job creation? Not surprisingly, the Indian state, like its counterparts elsewhere, believes that economic growth is the answer to India’s employment woes even if the growth obsession has been tempered by welfare-type interventions, including employment creation. For example, the 11th Five Year Plan (FYP) (2007–12) (Volume I, Planning Commission 2008: 79) emphasized the importance of both the quantitative and qualitative increases in employment and indicated a focus on regular jobs as opposed to self-employment, which was already close to 60% of all employment in 2004–05 (Computed from Planning Commission 2008: 83). In the 12th FYP (2012–17), the growth target is 9% by the end of the plan period (Planning Commission 2013a: 1). The state is also expected to be more involved with “employment programmes” for inclusive development (Planning Commission 2013a: 7–8). This employment concern comes on the heels of admission that India’s growth has been largely “jobless” (Planning Commission 2008: 64). The reality is quite sobering: Agriculture has faltered, with a 3.7% growth rate in the 10th FYP (2002–07) and a modest desired rate of 4% in the 12th FYP (Planning Commission 2013a: 31). Industrial stagnation, reflected in the decline of manufacturing employment from 12.2% to 11.0% over the 2004–05 to 2009–10 period (Planning Commission 2013b: 127), adds to the challenge. A rough estimate suggests that one million new workers enter the workforce every month, while four million are added in agriculture every year. Yet the growth obsession continues even as specific employment and welfareenhancing programs such as the Mahatma Gandhi National Rural Employment Guar5 Interestingly,

the “excluded” labor force may not be necessary for growth but could have a depressing effect on informal wages as well (Corbridge et al. 2013: 85).

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antee Act (MNREGA), Mid-Day Meals (MDMs), Integrated Child Development Services (ICDS), and National Rural Health Mission (NRHM) have been instituted. But these programs, argued to lead to inclusive development, are expected to be financed by growth itself. It is apparent that the Indian state is trying to kill two birds with one stone, encouraging growth by working with the market (the neoliberal direction) rather than against it and by inducing inclusive development as a result of that growth. Here inclusiveness is understood to be shared growth, where the distribution of the social surplus is more equitable, crossing class, caste, gender, ethnic, and regional boundaries (see Chakraborty, in this volume). This reinvention of the state by promoting capital accumulation and protecting labor has become necessary in capitalist, democratic India. Creating employment is one way of ensuring some shared growth and state legitimacy. There is no doubt that India’s recent economic growth has translated into some growth in jobs, especially in the construction sector (26.6 million over the decade 1999–2000 to 2009–10), while services (mostly trade) contributed nearly a quarter of total employment (Planning Commission 2013b: 128–129). As mentioned above, through specific programs such as MNREGA, the state has targeted employment in rural areas. There are two rather disquieting features of this seemingly positive development and favorable state intervention. One is the rather low road to employment such as construction and trade-related activities. The other is that the state-directed programs such as MNREGA are limited in their transformative effects because of the type of jobs they create. They are neither skill- nor education-based and are meant to assist poor farmers and landless wage laborers to cope with their dire economic circumstances by augmenting their main sources of income.6 Recently, the state has moved more aggressively with its growth strategy by trying to create a favorable investment climate, especially for manufacturing. For example, the Modi government is pursuing the “Make in India” campaign, wooing domestic and foreign investors (see Ministry of Finance 2015: 32). On closer inspection, this approach represents a form of the industrial policies of the past except that today the national border is more porous. It is also an extension of the longstanding proposal to tackle the growth problem from the supply side. The government’s position is that since there are barriers to (manufacturing) investment including lack of skills, infrastructure bottlenecks, rigid labor laws, inadequate electricity supplies, regulatory confusion, and so on, fixing these ought to produce the desired results (Amjad et al. 2015: 37–38). There is no doubt that fixing some of these problems will enhance investment and thus promote economic growth, but what is the guarantee that employment will surge, and what will be the quality of such employment? India’s recent record is not encouraging (see Table 7.3). Employment elasticity in all sectors except construction has been unimpressive, while the projected growth rates of these sectors in the 12th FYP appear optimistic; betting heavily on the manufacturing sector as 6 This

position may be challenged by those who see the one hundred days of guaranteed rural employment through MNREGA as better than no employment. From a rights-based perspective such employment is welfare enhancing. However, the larger question is whether MNREGA, along with other rural development programs, will lead to an agrarian transition.

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the key driver to employment is probably misplaced. Also, solving the supply-side issues for manufacturing is tantamount to uncritically accepting Say’s law that supply creates its own demand. Yet excess capacity, lags in supply adjustments, and a large impoverished population with low purchasing power, which is consistent with a persistent PCP sector, can be argued to undermine an easy supply-side solution. Employment elasticity for the economy as a whole has been very low even in times of high economic growth, thus indicating the difficulties of creating jobs.7 In manufacturing, employment elasticity has been equally low. The overall economic growth rate in the 11th FYP was twice the growth rate of the primary sector as a whole. However, the projected growth rate of the economy in the 12th FYP of nearly 11% is considerably higher than the 6.8% of the 11th FYP. If this target is maintained and assuming employment elasticity does not change drastically, the additional employment growth in manufacturing is likely to be small. Yet the Planning Commission’s manufacturing employment projections estimate an addition of 12.5 million jobs in five years, which is no small number but far short of the 60 million new workers that will have entered the workforce in five years. How will this growth in manufacturing be fostered now if it has not taken place thus far? The sector that has done well, especially in high-value exports, is services. From development trajectories experienced historically and more recently this is anomalous but quite consistent with compressed capitalism, where there is leapfrogging of industries catching up and skipping of sub-sectors due to radical shifts in technologies. As a late industrializer at a particular juncture of global capitalism, and having the missed the manufacturing bus, the temptation to ride the services bandwagon is strong. India already boasts a share of nearly 60% of services relative to GDP, whereas per capita income remains only a fraction of the OECD average. Of course the services sector is a residual category, which makes an aggregate analysis of the sector less meaningful. However, it is obvious that labor-abundant India is likely to generate large employment in a variety of low-paying, insecure, non-tradable informal services. The construction services sector, as mentioned earlier, is one such example (Ministry of Finance 2015: 105). Counterintuitively, India has also specialized in well-paying, globally-driven, IT-related information, software, and business services. This results from early education policies favoring the tertiary system for industrial development and a middle-class penchant for elitist higher education in a deeply entrenched hierarchical social system (see D’Costa 2016b: 106–114). Software and tradable business services demand tertiary education and specific skills that are increasingly in short supply relative to global demand. However, because of the skill and education bias, such tradable services generate relatively few jobs in India: Between two-and-a-half to three million jobs through direct employment and four times as many indirect (mostly low-wage, informal) jobs have been created by India’s information technology sector 7 Employment

elasticities estimated by various Indian surveys are: 1991–2001 (0.44, Census); 2001–2011 (0.24, Census); 1993–94 to 1999–2000 (0.16, NSS); 1999–00 to 2011–12 (0.19, NSS); 2011–12 to 2013–14 (0.22, Labour Bureau); 1990–1998 (0.35, Economic Census); 1998 to 2014 (0.41, Economic Census); 1990–91 to 1998–99 (0.12, ASI); 2003–04 to 2012–13 (0.54, ASI) (Ministry of Finance 2015: 11).

3.3

4.0

51.74

44.99

Sectoral growth rates (%), based on 11th FYP

Sectoral growth rates (%), 12th FYP expectations

Projected share of employment (%) (2011–12)

Projected share of employment (%) (2016–17)

0.61

0.60

3.2

3.2

0.52

Mining and quarrying

12.65

10.88

11.0

6.8

0.09

0.28

0.29

6.0

6.0

0.04

Manufacturing Utilities

15.09

10.90

7.3

7.3

1.13

Construction

15.57

15.20

10.0

10.0

0.19

Trade, transport, hotels, etc.

3.06

2.33

10.7

10.7

0.66

Finance, banking, real estate, etc.

7.77

8.06

8.3

8.3

0.08

Community, personal and social services

100.00

100.00

9.0

7.9

0.19

Total

Source Planning Commission, Government of India, 2013. Twelfth Five Year Plan (2012–2017), Social Sectors, Volume III, New Delhi: Sage Publications, pp. 136–138

0.04

Employment elasticity from past data

Agriculture

Table 7.3 Employment elasticity and projected sectoral growth rates

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(NASSCOM-Deloitte 2008), which represents a very small share of jobs needed. Overall, the employment possibility picture is rather grim despite several pockets of excellence in the Indian economy. Low-productivity agriculture combined with low employment elasticities for manufacturing ensure the persistence of a large, lowquality informal sector. Under globalization, the corporate strategy to reduce formal workers by informalizing them further adds to the growing precarious workforce.

7.5 Compressed Capitalism and the Remaking of the State India’s late development trajectory or compressed capitalism poses substantial challenges to employment. The challenges result from the historical-structural legacies of India’s pre-independence colonial past but also from particular state actions undertaken during India’s immediate post-independence period. The inability to experience a dynamic agrarian transition was reinforced by the narrow but critical industrialization. Surplus workers were not expelled from the countryside and the industrial sector could not expand fast enough to draw people from rural areas.8 Nested within this larger agriculture–industry relationship is India’s specific problems afflicting industrialization (manufacturing) and thus the lack of widespread employment. Employment challenges to contemporary industrialization also arise from global capitalism in which India is embedded. Notwithstanding leapfrogging and employment opportunities in the global economy, India is subject to massive competitive pressure from China and other Asian economies and the anti-labor bias inherent in technological change and automation. The Indian state has several options that have both direct and indirect bearing on employment but questions remain whether they are strong enough to undo the entrenched structures over the long haul and whether they can cope with the new employment challenges that come with compressed capitalism. Here I consider four options. The first is the state’s relentless focus on growth. Second, resolving the dilemma of whether such growth would be spearheaded by manufacturing or services. Third, tackling the growing and persistent informal sector. Finally, direct employment programs such as MNREGA, which paradoxically postpone the fundamental process of primitive accumulation that is necessary for capitalist expansion.

7.5.1 The Indian State and Economic Growth The state’s recent pronouncements focusing on economic growth can be anticipated to create some jobs directly in some sectors and indirectly in others through trickle8 The green revolution supported by the state raised Indian agricultural productivity but only region-

ally. The ensuing migration was not matched by urban jobs growth. Emigration from the region has been a major response to labor being made redundant by productivity increases.

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down effects. A strategy to create a business-friendly environment is expected to lead to investments on a large-scale. This has been already observed since India’s economic reforms of the early 1990s, when the state became more business friendly. However, being business friendly rather than just market-friendly has its downside. It implies on the one hand that the policies cannot be labor friendly, at least directly, and on the other, it suggests the possibility of crony capitalism. Such a nefarious statecapital nexus has already been witnessed in the state of Gujarat and at the central government level in India when a variety of reforms were in motion (Jaffrelot 2015). Concessions to capital across the board to make investment worthwhile could translate into slowing wage growth, increased control of labor unions, or introduction of new hiring practices such as temporary and contract workers. These effects are already felt by default, given the acute shortage of employment opportunities. For example, the Indian automotive industry, the poster child of high-value manufacturing, illustrates how poorly-paid, low road to employment contributes to the high growth in the industry (Barnes et al. 2015; Kerswell and Pratap 2015). Business friendliness may also entail underwriting profits or guaranteeing a pre-determined rate of return by the state if projects with long gestation periods (such as infrastructure) are undertaken by private capital. What is clear is that being business friendly is no easy matter since many of the existing institutions governing investment must be redesigned to allow for greater flexibility. Furthermore, being growth-friendly is not the same as being business friendly since the latter could involve forming a particularistic relationship between the state and businesses and thereby continue to regenerate India’s fractious political economy and longstanding private vested economic interests that often go against long-term public interests. One can safely assume that India will grow at a faster pace than the proverbial Hindu rate of growth. However, given India’s recent history of jobless growth (Corbridge et al. 2013: 94–97; Krishna 2014), the question is what will drive it and whether such growth will create good jobs in the future. Employment growth from 1983 to 1993–94 was 2.03%. From 1993–94 to 2004–05, the rate was 1.05%. Thus far only a few manufacturing sectors and the tradeable services sector have created good jobs but only in small numbers. At the same time, successful business development has been also associated with rising inequality. Under the high rate of growth scenario, the return to owners of capital has been higher than wage growth. This is just not a result of a formulaic mechanism of different rates of growth (Piketty 2014) but a direct result of uneven development made possible by state action and inaction such as favoring capital through a better business climate and going against workers by relaxing labor regulations and withdrawing critical services. A late-industrializing state’s obsession with growth in an open economy, even when justified as development and on grounds of efficiency, is likely to widen economic and social inequality, as we will see below.

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7.5.2 Manufacturing or Services for Employment? Given the structural legacies and the contemporary challenges of generating jobs on a large scale, it is not clear whether the government strategy ought to focus on the manufacturing sector that is behind the development success of many of the East Asian economies or continue to emphasize the IT services sector. As noted earlier, compressed capitalism facilitates selective leapfrogging in the catch-up process. The ISI strategy that incubated a mature capitalist industrial sector has run its course due to global competition. Premature “non-industrialization” (which is different from labor-absorbing industrialization) suggests the difficulties associated with manufacturing to create jobs. Supply-side deficits, such as inadequate investment for roads, communications, power, lack of credit, and exchange rate fluctuations are argued to hurt the Indian manufacturing sector (Thomas 2013: 684–690). Labor market rigidities are also cited as an obstacle, a view that has been theoretically and empirically challenged (Nagaraj 2007; Chakraborty 2015; Thomas 2013 for Coimbatore labor market). Kapoor (2014) makes the point that since 90% of employment is in the unorganized sector with a small share of total output, it makes little sense to talk about deregulating labor markets to increase output since only 10% of workers are formally regulated. Firms get around labor market rigidity through capital flight to other states, subcontracting, and adoption of capital-intensive technologies (Kapoor 2014: 17).9 Indian infrastructure and logistics industries are of poor quality compared to international standards. However, it is less clear if solving supply-side bottlenecks alone will necessarily attract investment, and specifically labor-absorbing investments. In this instance, the Bangladesh garment export story is noteworthy: despite rapid expansion and the global competitiveness of the Bangladeshi sector, the resulting jobs are of poor quality (Amjad et al. 2015: 37). The structural power of textile factory owners has prevented sharing runaway success with the workers of the sector. According to Thomas (2013), the lackluster performance in manufacturing employment in India has been the primary force in inducing “jobless” growth. Why is the organized factory sector in India not expanding? While the absence of some critical inputs contributes to the lethargy of the Indian manufacturing sector, there are also intrinsic processes that limit manufacturing employment today. For example, open markets mean international competitiveness of firms. Competitiveness requires staying abreast of changing technologies and scale economies, which today implies labor displacing production methods, even if theoretically technological change could increase employment through spillover effects. Hence, even Indian firms in a milieu of abundant labor are compelled to adopt recent technologies and large-scale production. The automotive and steel industries are cases in point with the adoption of robots, automation, and the continuous streamlining of steel production through 9 The

calls by capital to reform labor markets is premised on the expectation that deregulated labor markets will encourage more investment and thus create more jobs. Yet the hiring practices of businesses already indicate increasing contract labor (Nagaraj 2007), suggesting that India’s labor regime remains flexible despite the absence of reforms because Indian businesses have found ways to hire casual and contract workers Chakraborty (2015).

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continuous processes. High-technology manufacturing sectors such as telecommunications and high-value services such as finance are also unable to absorb many unskilled workers (Ministry of Finance 2015: 32). Even labor-intensive electronics assembly is vulnerable to automation.10 The rise of the gig economy in services in the OECD markets is also a result of such new technologies. While technologies create employment (as in Uber), they also give rise to precarious workers (as in Uber in the rich countries) and displacement of workers in competing sectors. For Indian manufacturing, China is a daunting factor. China has honed its production processes to lean systems, subjecting production to scale economies and constantly evolving technologies. Assuming that the Chinese wage advantage will erode relative to India’s (the Lewisian turn, see Amjad et al. 2015: 37), it is still an open question how quickly India can translate the opportunity into actual competitiveness. China remains India’s largest trade partner but India’s bilateral trade deficit continues to worsen. In 2014–15, the deficit was $48.48 billion with India exporting merely $7.56 billion (Economic Times March 2, 2016). Immediate issues for Indian manufacturing include whether China will lose its grip on global manufacturing, which segment of global value chains Indian manufacturers can competitively enter, how large-scale production will be handled, and whether Indian manufacturers will be able to meet international quality standards. Even with India’s labor cost advantage, strategic automation by China could extend its grip on global manufacturing. Relatedly, will the world economy, currently under duress be able to absorb the scale of exports of an equivalent China, coming from India? No doubt new low-cost producers have been accommodated in the world economy through industrial restructuring and upgrading, China being the most recent example. However, the field of manufacturing exporters is very crowded, putting India and others on the defensive. If manufacturing is so daunting, should India move into services, since by default India is already structurally similar to OECD countries with the most output being produced by the services sector? Non-tradable services that are labor-intensive also correspond to low-quality employment lacking job security, decent wages, and benefits. Recent efforts by the government to promote domestic production by multinationals in India have produced few projects; but more importantly, they are unlikely to have high employment-creating effects as several of these projects have been in the defense sector. The entry into tradable IT and business services has provided another lucrative alternative for Indian business that has facilitated the bypassing of the manufacturing sector without destabilizing accumulation in the formal sector. However, these tradable services sector jobs require tertiary technical education and hence are beyond the reach of most (D’Costa 2003, 2011, 2014b). For 2010, government data show that financing, real estate, and business services employed a total of 10 million, representing a tiny fraction of the workforce of nearly half a billion people, suggesting that only a small fraction of high-value services were in the IT sector since it is included in business services (Thomas 2012: 45). Most of the additional jobs that are likely to be created are anticipated 10 For example, Foxconn of Taiwan, which produces the Apple I-phone by relying on the massive reservoir of Chinese labor, has begun introducing robots on the assembly line.

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to be low-wage, informal jobs in the formal IT sector. In sum, the Ministry of Finance deemed the growth in services not as “expansion (but) pre-mature non-industrialization” (Ministry of Finance 2015: 107–110). This refers not to a progressive process of structural differentiation and diversification but rather a form of relative deindustrialization with services as an employment “sink” by default.

7.5.3 Reservoir of Informal Workers Jobless growth in India has not meant that workers are unemployed. Far from it: They have been engaged by the hundreds of millions in the informal or petty commodity producer (PCP) sector. The PCP has myriad labor arrangements, both market and non-market based, but it is not a source of capital accumulation (Harriss-White 2014: 984, 982, 990). In fact, much of India’s employment growth has been in the unorganized sector, most of it is PCP, where the presence of self-employment rather than wage employment is high, making the PCP less of a capitalist sector, a “dark space” according to Sanyal (2007) or pre-capital (Chatterjee 2008). While it is entirely possible that the PCP mostly operates on non-market lines and wage labor is significantly weak, it does not mean that the PCP sector is independent of capitalism (see Damodaran 2015: 1221). It may not generate capital but by and large it is linked to the circuits of capital (Harriss-White 2014: 990; D’Costa 2014a: 332). What this suggests is that Indian capitalism works in a way that also reproduces PCP undergrowth but is not by itself a source of capital nor is it characterized by complete wage labor. It also suggests that the PCP cheapens wage goods production, thereby reproducing low-cost labor, and thus supporting capitalist profits in the formal sector. The characteristic of PCP employment is poor-quality jobs that are mostly insecure, low paid, and comprise self-employment (Harriss-White 2014: 990). PCP employment is more distress-driven than voluntary (Chandrasekhar 2007). The state is interested in converting the informal sector to a formal one by making the sector more dynamic through various supply-side inputs (see NCEUS 2007: 67–73) (see also above). Since the Indian unorganized sector is characterized by small firms (“tiny” sector), the general inference is that access to capital, skill development, electricity, and other supply-side inputs will enable small firms to become dynamic and by extension larger and market-competitive (see Chakraborty 2015: 55; Thomas 2013).11 This would presumably also raise wages or create the conditions to turn insecure informal jobs into formal ones. However, aside from the inexhaustible supply of unskilled labor in India, transforming the informal sector to a formal one runs up against the growing informalization of formal jobs (Kannan 2014), a development also witnessed in the OECD with public sector cutbacks and corporate cost 11 A

libertarian argument would posit that it is precisely the failure of the state that individuals through their own initiative find ways to earn a livelihood. Hence it would be prudent for the state to recognize the informal sector for its dynamism and provide the means, such as titling to land and property, for them to act as (petty) capitalists (de Soto 1989).

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reduction strategies. Setting up new institutions that govern PCP labor and recognize labor rights would help but this strategy may not necessarily increase employment. Instead, such a strategy could decrease it if formalization with teeth in a cutthroat environment leads to higher costs and thus labor-reducing strategies that capitalists everywhere already deploy. At best, for the foreseeable future the informal sector will remain large, acting as the default reservoir of workers, and at worst it will remain a permanent feature of contemporary capitalism.

7.5.4 Revisiting Agrarian Transition With the agrarian transition incomplete or stalled, employment growth in the countryside is intrinsically limited, except perhaps in the rural non-agricultural sector. With some differentiation in the countryside, meaning the emergence of capitalist farmers and wage labor, allowing the former to accumulate some capital could lead to greater diversification of their portfolio and generate corresponding employment. But this cannot be stretched too far since accumulation on an expanding scale in the rural non-agricultural sector is unlikely to spill over into the urban sphere, while rural incomes must be high enough to support viable and growing off-farm employment. Some output from off-farm activities such as handicrafts and artisanal work could be supported if their links to urban and global markets were strong. As land reforms are no longer on the state’s agenda, it is hard to imagine how Indian agriculture will be a source of dynamic capital accumulation for the wider economy and thus employment. Aside from the political difficulties of carrying out land reforms today, there is the practical problem of consolidation and redistribution of land due to considerable fragmentation of land holdings. Investments in agriculture and the rural sector could enhance productivity and thus the possibility of deeper rural diversification and social differentiation, including the formation of wage seeking labor for the urban-industrial sector. Rising wage costs in rural areas could push rural capitalists to invest in labor-substituting, productivity-enhancing capital equipment, and the urban and rural non-agricultural sectors would absorb the excess workers. But as we have noted, India’s manufacturing and services sectors are in no position at this time to offer large-scale, good-quality jobs. The state’s direct employment programs in rural areas such as MNREGA are laudable for targeting the rural poor. MNREGA offers one hundred days of guaranteed employment annually to any member from a rural household willing to do manual work. Not surprisingly, the program has had mixed results with some states doing better than others (see Kassim-Lakha, in this volume). This employment program is not aimed at creating agro-entrepreneurs and capitalists but rather provides a stopgap measure ensuring a minimum income for rural residents and avoiding more drastic consequences of poverty and malnutrition. One of the unintended consequences of this program, should it be sustained successfully, could be emerging labor shortages, which would raise rural wages and spur a productivity-enhancing mechanism in agriculture. Basic education and access to nutrition and healthcare could be other

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spinoffs. However, improving the quality of life on the margins for rural workers may very well keep poor landowners and landless workers tied to the land in a precarious form. Furthermore, with a definite pro-business shift on the part of the state with mounting fiscal deficits, there is also no guarantee that the program will be continued. One development consistent with compressed capitalism is the incomplete or ongoing primitive accumulation. Related to agriculture, the state has positioned itself to facilitate land transactions for non-agricultural purposes thereby contributing to primitive accumulation insofar as the separation of peasants from their land is concerned.12 The newly passed land reform legislation in 2013 is not for redistribution of land but ostensibly designed for capitalist development through large-scale investments in industry and non-agricultural uses of land such as real estate, smart cities, manufacturing, and special economic zones (D’Costa and Chakraborty 2017). Thus, it is envisaged (contrary to what I have presented) that urban activities would both pull and push people off the land and presumably put the economy on a more dynamic capitalist footing by rendering land and thus cultivation a less attractive economic activity. There is no doubt that the dispossession and displacement implicit in this kind of land reform will continue to add to landlessness and to an expanding petty commodity sector in urban areas. This dynamic reverses the classical transition where wage labor in the countryside is the immediate outcome of land grabs or primitive accumulation and the emergence and subsequent disappearance of the petty commodity producer sector. Instead, the larger transformation currently in process is the reproduction of small-scale and unprofitable agriculture and the persistence of the PCP sector, creating poor-quality jobs rather than the kind of employment that the state has targeted and the people wish for.

7.6 Conclusion In this chapter, I analyzed India’s employment challenges and demonstrated that the relationship between late industrialization and job creation is increasingly tense because of the particular form of contemporary capitalism unfolding in India. By approaching the relationship through a critical reading of India’s employment experience and the state’s recent attempts to address the shortcomings, I showed that late industrialization with India’s attendant structural legacies and institutions contributed to compressed capitalism, which deviates substantially from the classical capitalist development trajectory. State intervention in industry and technology under the catch-up mode has created a different configuration of capitalist development and employment possibilities. The stalled agrarian transition and the expansive petty commodity sector contributing mostly to precarious forms of low-quality employment have undercut a more transformative impact of economic development. Thus the over-developed tertiary sector with capitalist maturity in the organized sector 12 For

an alternative interpretation, see Levien (2017).

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sits uncomfortably with a truncated form of industrialization and an underdeveloped agriculture sector. Broad areas of state intervention include but are not limited to labor-intensive manufacturing exports. Other areas include resolution of contested land transactions without massive loss of livelihoods and displacement, the expansion of nonagricultural activities in the countryside, and input provision for the informal sector such as electricity, education and skill development, and credit access. Given India’s diversified export base innovation will be critical to move to new products (Amjad et al. 2015: 38) and services. However, such a reallocation of resources and shift in priorities compel a realignment of the state–capital relationship in favor of workers in a political economy where the power of capital has become singularly dominant. Expecting businesses to be innovative, when evidence shows weak capabilities (Mani 2012; D’Costa 2009), is a tall order. Whether intervention in favor of industry and services can pull them up along with the agricultural sector is debatable, since the formal high-value segments create few jobs while agriculture and petty commodity production in the informal sector by and large create insecure work. The advantages of late industrialization through leapfrogging and capitalist maturity are thus outweighed by the growing duality and inegalitarian labor markets in India. Deregulation, labor flexibility, trade, and investment liberalization while necessary for growth, cannot be sufficient for employment. Ensuring the viability of Indian agriculture by introducing genuine land reforms that would go beyond the mere transfer of land from one desperate class to a class of speculators to one that established tight linkages between agriculture and rural off-farm work and urban industry would be a major step to tackle India’s unemployment problem. Furthermore, the state’s provisioning of social services and continuing employment programs such as MNREGA, while significant, are not sufficient to ensure a job-based rural capitalist dynamic. Wages paid under MNREGA meet government norms but the program itself acts to barely ameliorate precarious livelihoods. Encouraging the formation of large firms, while antithetical to immediate employment, could pull in other smaller firms as suppliers, including some from the informal sector that are equipped with skilled labor and offered the same kind of protection that their regular counterparts receive. Daunting as the employment task may be, the state must remake itself to revisit the radical versus the reformist approaches and choose those strategically to generate employment. Otherwise, the specter of jobless growth will haunt India for a long time and the legitimacy of the state will continue to face severe challenges.

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Chapter 8

Distinctively Dysfunctional: ‘State Capitalism 2.0’ and the Indian Power Sector Elizabeth Chatterjee

Abstract State intervention in India has persisted but has proved far from immune to critiques of traditional dirigisme. An examination of the power sector shows that waves of reforms since 1991 have together created a hybrid and regionally differentiated state–market system. Blurring the public–private boundary, this reinvented ‘state capitalism 2.0’ displays both refurbished modes of intervention and new governance arrangements with private players. Nonetheless, as the power sector’s continually dismal condition suggests, this state–capitalist hybrid has not (yet) provided a coherent alternative to older dirigisme or the Anglo-American mode of ‘deregulatory’ liberalization. Instead, between 1991 and 2014 its ad hoc, layered emergence generated distinctive forms of dysfunction. Coupled with competitive politics, its ever-increasing institutional complexity rendered it internally incoherent and vulnerable to rent-seeking on multiple fronts. Power sector evidence suggests that state intervention in India has remained simultaneously indispensable and dogged by persistent administrative and financial difficulties. This helps to explain the apparently contradictory nature of the contemporary Indian state: at once business-friendly, populist and often underperforming. Keywords Energy · Infrastructure · Institutional change · State capitalism · New developmental state

8.1 Reinventing State Intervention In recent years, state intervention has enjoyed a renewal of academic interest. Scholars wrote of the ‘flexible’ or ‘hidden’ developmental states of pre-recession Ireland and the United States (Ó Riain 2000; Block 2008), the rise of a more ‘regulatory’ form of state activism in China (Yang 2004; Hsueh 2011) and the ‘new’, ‘liberal’ or ‘renewed’ developmentalism of Brazil, then still growing strongly (Ban 2013; Trubek E. Chatterjee (B) Department of Political Science, University of Chicago, Chicago, USA e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2019 A. P. D’Costa and A. Chakraborty (eds.), Changing Contexts and Shifting Roles of the Indian State, Dynamics of Asian Development, https://doi.org/10.1007/978-981-13-6891-2_8

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2013; Hochstetler and Montero 2013). This nascent literature suggested that the state activism of the twenty-first century was far from a return to the old centrally planned dirigisme of the twentieth: the state’s forms and activities had been transformed in the face of changing economic and political contexts. According to this interpretation, the second generation of state intervention has two interrelated ‘vocations’ (Levy 2006: 368). It is corrective, seeking to repair ineffectual elements in older national models—often in line with Washington Consensusstyle critiques. But it is also constructive, oriented towards creating, supporting and adjusting rather than dominating markets. As such it is characterized by new forms of public–private governance arrangements and the increasing exposure of state agencies to the discipline of market competition, however asymmetric in practice (Trubek 2013; Musacchio and Lazzarini 2014). This fusion of dirigisme and liberalization has many labels, but perhaps the most catchy and evocative is ‘state capitalism 2.0’.1 For a brief moment in the aftermath of the 2008 global financial crisis, state capitalism 2.0 captured attention as a possible alternative to the Anglo-American deregulatory model. India often featured as a marginal example in these discussions; and perhaps the most influential strand of recent political economy research on the subcontinent has corroborated the notion of a revised and increasingly private-sectororiented state interventionism.2 How, then, does India’s variant of state capitalism 2.0—the combination of state activism and elements of the Washington Consensus—actually work? Does it really amounts to anything like a coherent alternative to outright liberalization? The present chapter explores these questions using a case study of a crucial sector, the electricity supply industry, from 1991 to 2014. Electricity lies at the heart of India’s distributive politics and the drive for economic growth. Existing examinations of the Indian state have often focused on capital, land and labour, but energy—and especially electricity—is the other key input for contemporary capital accumulation. As such, it deserves a central role in accounts of state transformation. The power sector is also a bellwether of institutional change. While the international post-war consensus saw electricity as a natural monopoly best left to the public sector, power generation was the first sector in India opened to private investors in 1991. This began a quarter-century of reform and re-regulation, significantly inflected by regional variations as the crucial distribution segment remained in the hands of subnational (state) 1 The

term ‘state capitalism 2.0’ owes its inspiration to the work of Aldo Musacchio in particular, especially in his interventions in the business press. See also Nölke (2014), who prefers ‘state capitalism 3.0’ for this same phenomenon. While a plethora of terms have attached themselves to the phenomenon, ‘state capitalism’ neatly emphasizes continuities in state involvement and the close links between state and capital. 2 Atul Kohli has argued that ‘[w]hile some liberalization is real, Indian state remains activist’ but increasingly ‘pro-business’ (2007: 108). This ‘pro-business interpretation’ has been widely endorsed by Indian political economy scholars (if not their neoclassical counterparts): a 2013 workshop—including Pranab Bardhan, Vijay Joshi, Mushtaq Khan, James Manor, R. Nagaraj, Pallavi Roy, Kunal Sen, Alpa Shah, Aseema Sinha, Louise Tillin and Michael Walton—upheld Kohli’s core distinction between the ‘pro-market’ (open competitive) policies characteristic of textbook liberalization and the ‘pro-business’ (activist pro-incumbent) policies associated with India’s ‘pro-business tilt’ since the 1980s (Tillin 2013: 21).

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governments. The power sector is therefore an important—and often overlooked—case through which to study the distinctive trajectory of institutional change that India’s haphazard and partial liberalization has brought. At the same time, the sector’s fate provides salutary lessons about the contradictions and dysfunction that plague India’s reinvented interventionist state. In many states, tariffs for industrial and commercial consumers are extremely high and supply remains inadequate, characterized by power cuts and voltage fluctuations. In contrast, populist subsidies persist: huge proportions of electricity generated is systematically stolen or given cheaply to farmers and residential consumers, although these groups also suffer from the poor quality of supply—a ‘low-level equilibrium’ trap (Dubash 2007). Around 200 million Indians remain without access to electricity altogether. This crucial sector thus demonstrates the same contradictions noted more widely in India: between pro-business and populist politics, rapid economic growth and policy incoherence. This chapter examines the power sector since 1991 in order to shed light on state capacity in India during the economic reform era. It first outlines the key changes to the state’s form and functions in the sector between 1991 and 2014, during which time the state continued to play myriad roles, new and old (Sect. 8.2). Dirigisme and liberalization are not neatly ‘fused’ to create state capitalism 2.0. Instead, reinventing state intervention through the incorporation of liberalized elements is a haphazard process that differently inflects various institutions. Constrained by political interests, power reforms proceeded not through displacement of older statist organizations but through a process of ad hoc institutional layering, or organizational creation without much destruction. Rather than supplanting the older system, liberalized and unreformed segments continued to exist in parallel, even intertwined. The result is a public–private system in which different groups can exercise influence via different state agencies and tiers. This state–market hybrid has exacerbated the sector’s existing predicament, and even generated new sources of financial and administrative dysfunction (Sects. 8.3 and 8.4). Contributing to the nascent body of research on liberalized ‘new developmental states’, this paper therefore suggests that, at least until 2014 and in the power sector, state intervention in India remained simultaneously indispensable and dogged by persistent policy failings. India’s is a ‘weak-strong state’, remaining both more interventionist than is often acknowledged and yet also less coherent.3 Understanding its apparently paradoxical dynamics—going beyond the unhelpful truism that it is ‘Janus-faced’—requires unpacking the state’s institutional structures themselves.

3 Rudolph

and Rudolph (1987) originally used the paradoxical idea of a ‘weak-strong state’ to capture the robustness of India’s public institutions on one hand, and the state’s failure to penetrate society, especially in rural areas, on the other. The present chapter is somewhat less sanguine about the country’s institutional capacity at the centre, but similarly contends that the crucial role of the state in India’s political economy has continued into the twenty-first century.

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8.2 The State’s Changing Form and Function: Liberalization as Layering In the first decade after India’s independence, the state secured control over the power sector.4 Responsibility was constitutionally shared between the centre and provincial states: while the centre provides broad policy direction, it is the states that control the crucial ‘last mile’ of distribution. Throughout the 1950s, the states tightened their grip. The key institutions were the state electricity boards (SEBs), vertically integrated monopolies under the politicized control of state governments, which controlled almost three-quarters of generation and virtually all distribution by 1991. The most important outcome of this institutional settlement was the emergence at the subnational level of an incoherent and financially ruinous politics of populist electricity subsidies and widespread power theft. In the early years after independence, tariff structure generally favoured industrialists, but gradually this balance altered to favour wealthier agriculturalists instead. This shift was especially pronounced in states with powerful agricultural lobbies—Tamil Nadu, Andhra Pradesh, Punjab, Haryana and Maharashtra, for example—which were in turn reinforced by the subsidies, rendering these regional political economies of power path-dependent (Kale 2014a). Cost recovery was only around 79% by 1991 and power subsidies were some states’ largest budgetary burden, creating a vicious circle of underpayment, underinvestment and deteriorating performance.

8.2.1 Grafting on Private Participation By the 1980s, it was widely agreed that the sector required overhauling. Outright dismantling of the flawed statist system was both ideologically and politically difficult to imagine, however. While a surprising number of politicians agreed that some degree of private participation was desirable, if not inevitable, none were inclined to moot full-scale privatization.5 More importantly, powerful interest groups—such as farmer lobbies and the politicians who courted them with power subsidies—had become more entrenched over time within the existing system. Even when chief ministers became convinced of the case for power reform as the 1990s progressed, sustained implementation would prove slow and painful, as shown by the faltering of reform in early movers such as Uttar Pradesh, Haryana and Andhra Pradesh. These constraints helped to shape a distinctive trajectory of reform. The power sector has not simply witnessed an undifferentiated process of ‘liberalization’, but a more complex process of institutional layering. Layering refers to a dynamic of gradual institutional change whereby new or renegotiated organizational elements 4 While

the 1956 Industrial Policy Resolution reserved generation and distribution for the public sector, the small number of existing private units (primarily in cities) continued to be tolerated. 5 The opinions of many senior politicians, from a range of states and political parties, can be found in Department of Power (1989).

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do not supplant or eliminate pre-existing structures, but are superimposed or grafted onto them (van der Heijden 2011). It is the product of political strategy as well as inertia: because ‘[e]stablished institutions create constituencies for their preservation’, it is ‘typically easier to add new institutions than to dismantle pre-existing ones’ (Schickler 2001: 252). The results of liberalization-as-layering are also distinctive. Rather than a steady process of deregulation towards an ideal–typical liberal–market economy, it produces a form of improvised ‘patchwork’. Old, new and reinvented organizations come to coexist, although cumulative change may be substantial. Of course, no process of reform ever completely erases older structures.6 Rather than this very generic consequence, I suggest, the distinctive institutional product of layering is a messy system of segmentation, in which a liberalized zone emerges in parallel (or rather entangled) with existing statist organs.7 With radical institutional dismantling politically unfeasible, reform in the power sector took the form of the ad hoc accretion of new agencies. The entry of the private sector into the state-dominated power system proceeded through a series of incremental policy changes which began to create a dual system, incorporating private participation in parallel with the pre-existing public system rather than displacing it. First came the opening of a ‘back door’ to private participation through loosened regulations on captive generation for large consumers, creating a readymade constituency for greater private participation.8 1991 brought more explicit reform: as in much of Asia, independent power producers (IPPs) were invited to establish projects, encouraged with a variety of generous incentives and central guarantees—as Enron’s Dabhol project in Maharashtra would make notorious. With the amendment of the 1948 Electricity (Supply) Act, the IPP policy focused narrowly on increasing generation capacity and mobilizing scarce capital, thereby ‘promising to support rather than dismantle the existing [politicaleconomic] matrix’ (Kale 2014a: 99). The emphasis was not on privatization, but the introduction of new greenfield projects in parallel with the public system. This logic would continue through the mooted mega projects of the later 1990s and accelerated with the ultra-mega power projects of the twenty-first century, partnerships which combined private participation with renewed state activism. As has often been pointed out, the early focus on generation left the system’s major problems—primarily the politicization of the distribution segment—virtually untouched. The second phase of reform saw subnational experiments with distribution reforms. The third phase, the comprehensive legislation passed as the Electric6 The

classic example is Pierson (1994) on the limits of welfare state retrenchment even under Reagan and Thatcher. 7 This has some similarities with the concept of ‘dualization’, most often applied to labour markets, in which a core of favoured insiders coexists with an increasingly large set of informal workers. In the case of the power sector, this latter term risks overemphasizing the neat, binary quality of the segmentation. 8 Similarly, in 1994, the government permitted firms invested in power generation, cement and steel projects to establish ‘captive’ coal mines, laying the groundwork for the later ‘Coalgate’ scandal (Jenkins 1999: 190).

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ity Act of 2003, attempted to mandate competition in the distribution segment, by enabling large consumers to purchase power directly from the market (‘open access’) instead of relying on local power utilities. On paper, it marked a striking attempt to displace existing institutions with an alternative operating logic, an ambitious attempt to go beyond patchwork solutions. Yet even after distribution was recognized as a gaping hole in the reform process, politicians and technocrats have struggled to reform the segment. Of all the states, only Odisha and Delhi have privatized distribution, the former with major financial difficulties—by 2015, all its distribution utilities had returned to government control—and the latter prompting a major populist backlash in the form of the Aam Admi Party. In practice, many states remained reluctant to cede control over their most lucrative customers, resorting to high charges to discourage exit and thereby stymying open access from above. Private investors, too, have generally been wary of becoming enmeshed in this most politicized and financially troubled of segments. As this suggests, there have so far been striking limits to outright liberalization in the sector.

8.2.2 The Resilience of State Intervention Throughout this process, the state has continued to play a crucial role, both through inertia and necessity. The notion that reform could mean reconfigured rather than reduced state intervention both predated and survived 1991. The centre in particular repeatedly attempted to bolster its hand against the states through direct intervention in the sector. While distribution remained the purview of intransigent state governments, generation, transmission and infrastructure financing have consistently provided greater opportunities for the centre to exert leverage. Central public sector enterprises (CPSEs) in thermal and hydroelectric power generation were accordingly established in the mid-1970s, followed by the central transmission utility Powergrid in 1989. Explicitly introduced to provide an exemplar of public sector best practice, the National Thermal Power Corporation (NTPC) remains one of Asia’s largest power generation companies. These CPSEs continue to be used (with modest success) to strong-arm state utilities into more responsible fiscal behaviour; NTPC even took over Odisha’s Talcher plant in 1997 for non-payment. At the same time, these are not the same CPSEs as those of the 1970s: they have subsequently been corporatized and granted varying degrees of autonomy, as part of a parallel (if unarticulated) drive for institutional reform (Chatterjee 2017b). The centre also created major financial corporations, most notably the Rural Electrification Corporation (in 1969) and the Power Finance Corporation (1986), to guide policy development along its favoured lines through loan conditionalities; this approach continued into the era of centrally sponsored schemes and new, state-backed infrastructure investment funds in the 2000s. Both of these trends were bolstered by the desire to encourage further resource exploration, including overseas, and the development of renewable energy investments. By adding another layer of agencies

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under the line ministries, though, the central apex would inadvertently increase the sector’s institutional complexity, exacerbate interministerial conflicts, and reinforce its own infrastructure agencies’ abilities to act in their interests rather than those of a single coherent policy, as we shall see. This project of state reinvention was reinforced from another direction. The perceived excesses of the sector’s ad hoc opening and the courtship of private capital provoked an awkward oscillation between deregulation and re-regulation, testifying to the tensions between state and market inherent in India’s evolving form of state capitalism. In view of the egregious corruption that became attached to the IPP policy in the 1990s, for example, the centre moved to develop model concession agreements, and to emphasize competitive auctions over discretionary selections. Electricity regulatory commissions were also introduced at both the state and central levels, and made mandatory in 1998. An alternative history could be written of electricity re-regulation coterminous with deregulation: as in the Global North, policymakers are beginning to recognize that market regulation, environmental concerns and ‘turning and keeping the lights on’ may all require ‘more (and improved), not less, state capacity’ (Dubash 2011: 71). Yet this regulatory transformation of the state ought not be overstated; changes in form sometimes ran ahead of function. India’s power reforms did not occur in a vacuum, but at least in the first decade after 1998 echoed an international template then endorsed by the World Bank. The result was something of an ‘add-and-stir’ approach to regulators, which were imported at the state level with little domestic discussion; Navroz Dubash reports that the unlikely pioneer, Odisha, included them as ‘a somewhat formulaic appendage to a larger sector-reform process’ in order to appease private investors and international donors (2013: 102). In several states, they have been integrated only half-heartedly, and instead appear as a supplemental layer of institutions with an ambivalent relationship to the state governments, state utilities, private investors and consumers. The Electricity Act, passed in 2003, continued in this mode, assuming that ‘an apolitical regulatory sphere’ could be successfully sutured onto the politicized power system ‘simply by legislating one’ (Dubash 2013: 103). India’s reinvented state capitalism may now demonstrate some of the morphological features of the European-style ‘regulatory state’, but it has certainly not been entirely colonized by technocrats.

8.2.3 The Segmented Public–Private System As Dubash has argued, ‘it would be more accurate to describe the market as grafted on to rather than replacing the state sector, and with decidedly mixed results’ (2011: 69). The result of these piecemeal, layered reforms—private collaboration on one hand, and resilient or reconfigured modes of state intervention on the other—was not the fully liberalized market system in line with the so-called World Bank template for power reforms. Instead, it produced a ‘dual’ or ‘hybrid’ structure which ‘combin[ed] attributes of the state- and market-based systems’ (Victor and Heller 2007: 30).

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This hybridity proved highly uneven across the segments of the electricity supply industry. The last decade saw a very rapid expansion of private generation, so that in late 2014 private producers outweighed state-level producers for the first time: today around 44% of on-grid generation capacity lies in private hands, compared to 31% for the states and 25% for the centre, although the central generation enterprise NTPC has also continued to flourish.9 However, transmission is still overwhelmingly dominated by public sector companies. Outside Odisha and a handful of cities, the crucial distribution segment remains in the hands of state administrations. State agencies thereby retained crucial roles as producers, financiers and regulators. Even where public sector agencies continued to dominate, their activism nonetheless took new forms. Morphologically, by 2014, the power system included a variety of institutions whose characteristics and activities blurred the crude dichotomy of public and private ownership. New or reworked organizational forms—such as imported regulatory agencies, corporatized CPSEs, and public–private partnerships—had been grafted onto the older statist system. Given the sector’s ‘rent-thick’ character, even the private players who especially captured the benefits of the sector’s opening were inextricably linked to and dependent on state resources in ways which conditioned their structures and practices, developing into large, vertically integrated conglomerates with extremely close ties to policymakers.10 The state thereby remained at the heart of the sector, even as private enterprises sought to leverage benefits from their asymmetric influence over this control. Yet this reinvented state capitalism has not so far amounted to a coherent alternative model either to the old state-dominated power system or to the ‘World Bank template’ for deregulation. Instead it has allowed underperformance to persist, and undermined efforts to develop a coherent energy policy that integrated upstream and downstream concerns. The following sections concentrate on two dimensions of this failure: its financial dimension (the coexistence of resilient ‘populist’ subsidies with apparent ‘crony capitalism’) and its administrative dimension (the fragmentation of administrative control, leading to increasing policy paralysis). The two are interlinked: institutional proliferation has facilitated the proliferation of rent-seeking and rents—competing interest groups are differentially able to penetrate institutions—even as institutional fragmentation has weakened the central apex’s ability to bolster the state apparatus against societal penetration.

8.3 Dysfunction (1): Segmentation and Proliferating Rents Section 8.2 introduced the idea that power sector reforms in India have often proceeded through a process of institutional layering, through which new elements are grafted onto an older system rather than displacing it. Superficially, this trajectory 9 Central

Electricity Authority figures, dated 31 July 2017.

10 Since around 2011, such firms have faltered, hit by overleveraging, insecure fuel supplies, and an

overall glut of private power investments.

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resembles one of the most influential interpretations of this gradual liberalization, Rob Jenkins’ ‘reform by stealth’ (Jenkins 1999). Jenkins argued that this type of gradualist institutional layering, rather than outright institutional displacement, facilitated reform; it was a political strategy to ensure that resistance could not coalesce around dramatic reforms (and, he added, it was accompanied by strategic rent-sharing to buy unexpected sources of support). Yet this compartmentalization works both ways. ‘Reform by stealth’ produces cumulatively important liberalizing changes. But it also leaves unreformed zones outside its heartlands, and yet which are not in practice isolated from the reformed zones of the economy—that is, it produces segmentation. Such segmentation fragments the spread of reforms, just as Jenkins predicted it would fragment resistance. It provides multiple points of entry both for ‘new’ private rent-seekers to influence the policy process, and veto points at which ‘old’ rent-seekers can protect their own subsidies. This is true both of the segmentation of the policy process (multiple agencies at the federal and state level which can be lobbied) and the technical segmentation of the power cycle (into fuel supply, generation, transmission and distribution). Competing interests can dominate in different domains of the power sector. The result is that the proliferation of institutions—with only a weak hierarchical authority—has facilitated a proliferation of rents and rent-seeking.11 In the medium term, institutional segmentation blocked the sweeping displacement of older rents, but it also facilitated the expansion of new rents. In many states, the older populist subsidies, alongside tolerance of widespread theft (an informal subsidy), did not disappear with liberalization. In 2011, all-India agricultural users continued to use 23% of power but pay for only 8% (up from 4% a decade earlier) (Pargal and Banerjee 2014). These populist subsidies were supplemented by subsidies for politically connected producers in the form of preferential loans, cheap access to land and fuels, and access to policymakers auctioning projects.12 These two sets of rent-seekers, ‘old’ and ‘new’, operate through quite different modes of influence on the state: it is the state’s incoherence which they can both exploit and has thus far allowed them to coexist. To caricature a rich vein of political activity, the ‘old’ rents for wealthy farmers and residential consumers are often secured through electoral politics and popular agitations at the subnational level, through everyday political interference with tariff setting or street-level tolerance of theft. In contrast, the ‘new’ rents for politically connected private producers are secured more through lobbying at the higher levels of government at the centre and states where policy is formulated, supplemented with attempts to secure improved implementation terms on a case-by-case basis after the fact (Kochanek 1996).13 This masks considerable complexity, of course: as noted below, for example, the power

11 This link between institutional complexity and proliferating rents has been made by neoclassical scholars; see especially Shleifer and Vishny (1993). 12 For further details on this dualistic system of rents, see Chatterjee (2017a). 13 Attempted tariff renegotiations are endemic in the energy sector, with companies making surprisingly low bids to secure projects and then seeking to renegotiate terms upwards.

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and fertilizer ministries have often taken up the banner of the aam admi (common man) versus the upstream ministries. This segmentation of influence continues into the power sector itself. These new private players are concentrated in the more lucrative generation segment. Meanwhile, outside the purview of the profitable CPSEs, the statist residual, notably in the distribution segment, remains financially viable only through underpayments, bailouts and systematic supply rationing (scheduled load-shedding). More recent policy initiatives resemble attempts to institutionalize a segmented, dualistic system more explicitly. Increasing attention to urban distribution franchises, the rise of short-term market power purchases alongside long-term contracts, and special economic zones with dedicated power plants again attempt to create parallel systems. Without decent regulation, such a solution risks ceding ‘all the family silver (big cities, industrial areas and SEZs [special economic zones])’ to private players (Kumar and Chatterjee 2012: xiii). Lower-revenue consumer categories, such as poorer consumers in rural areas, will be left to increasingly decrepit public utilities. In practice, these ‘dual tracks’ are intertwined. A market has been grafted on to an insolvent state system, and indeed ensures that the state system remains insolvent: these proliferating rents are funded in large part through short-term exploitation of natural resources, milking central state-owned enterprises and government control of the financial system,14 and suppressing demand (Chatterjee 2017a, b). In this way, ‘financially viable units (generally privately owned) and insolvent systems (generally state-owned) can co-exist’ in ‘a system in which parts of power generation and delivery are profitable even as other parts are plagued by non-payment, inadequate investment and economically inefficient operation’ (Victor and Heller 2007: 289, 30). Jenkins’ ‘reform by stealth’ thesis was accompanied by a bold analysis of the state elite’s room for manoeuvre: following Rudolph and Rudolph (1987), he suggested that the competition between India’s rival elites might open up greater room for independent state action (Jenkins 1999: 38). Yet in reality, the Indian state is far from monolithic, and the state apparatus itself was not cohesive enough to resist the parallel pulls of pro- and anti-reform constituencies. Reform by stealth thus did not merely fragment societal interest groups, but exacerbated the fragmentation of the state.

8.4 Dysfunction (2): The Underlying Crisis of Control In the Indian power sector, the central government’s authority was weakened virtually from the outset. In the Emergency’s aftermath, it became common to imagine that India’s constitution was an unusually unitary one, but early observers were more likely to critique the centre’s weakness. A Ford Foundation report, much discussed within the Nehru administration, concluded that ‘the Centre is without any real

14 On

government exploitation of public sector banks and institutions such as the Life Insurance Corporation, see Vaidyanathan and Musacchio (2012).

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powers in almost the entire field of development’ and ‘fundamentally lacking in administrative authority’ (Appleby 1957: 45, 10; see also Sinha 2005: 72–3). This was particularly pronounced in the power sector. The colonial prehistory of Indian electricity was regionally variegated (Kale 2014b). The constitutional division of responsibility only exacerbated this divergence. As noted above, this federal asymmetry of power and information helped to create regional political economies of populist power subsidies and theft, settlements which have proved extraordinarily difficult to alter subsequently in many states (Kale 2014a).15 Regional variance is only one side of the story; the other is state incoherence at the central apex itself. The centre’s organs of coordination remained feeble: by the mid-1960s the Planning Commission was already being marginalized by powerful and often quarrelsome ministries, while the Central Electricity Authority, virtually moribund into the mid1970s, was considered by the SEBs and other state agencies merely ‘a hurdle to be negotiated’ (Department of Power 1980: 110). It is with vertical control problems—the difficulties of federalism—that the power sector is particularly associated, and despite occasional calls to change it, this constitutional settlement looks very unlikely to change in the era of political regionalization. But even within these limits, the centre’s authority was decisively weakened. Horizontal coordination and control proved an underrated problem. It is often overlooked that liberalization and the regionalization of Indian politics coincided with a proliferation of state agencies and programmes. The rise of coalition governments from 1989 led to a proliferation of ministries. In July 1992, the single energy ministry created under Indira Gandhi was trifurcated to create separate ministries of coal, power and new and renewable energy. ‘Perhaps the performance of no other infrastructure sector depends so heavily on the cooperation of other Ministries’, one power secretary reflected in his memoirs (Abraham 2009: 307); yet the fragmentation of the old Ministry of Energy left power policy divorced from its essential relations with the upstream industries. Through the rise of private lobbying and centrally sponsored schemes, power increasingly spread to these large, cash-rich infrastructure ministries. Infrastructure ministries thus gained in power and frequently pursued their own corporate interests, while the hierarchical authority that nominally coordinated them declined. Until 2014, then, India’s energy bureaucracy became increasingly ‘byzantine and fragmented’ (Dubash 2011: 68). The result was internecine infighting and the absence of a coherent energy strategy. Individual projects and reforms were frequently delayed. As Modi’s then-new minister of an overarching energy portfolio, Piyush Goyal, put it: ‘One Ministry would propose, and another would dispose. Ministers and Ministries would be consistently at loggerheads with each other, and stories on interministerial turf-wars were a matter of bureaucratic legend’ (2014: 6–8). The power ministry repeatedly blocked attempts by the upstream ministries to raise fuel prices to market levels, while one newspaper found that in 2012 a ‘typical infrastructure project’ required 56 permissions from 19 different ministries. Such 15 Change is not impossible: Gujarat is the most celebrated example of a state with powerful farmer lobbies that has nonetheless managed a turnaround.

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disputes were mirrored by the enterprises that fell under these ministries: the thermal major NTPC, Coal India’s largest client, attacked the coal major for providing subpar coal, with the feud at one point threatening to cut power to a swathe of eastern and northern India. Outside the ministries, the problem of state fragmentation was heightened in line with new international notions about power sector governance. The new public management (NPM)-style governance reforms pioneered in the Anglo-American world and mooted by international finance institutions often encouraged state fragmentation through ‘agencification’, the creation of specialist and nominally autonomous bodies to take on particular tasks. Further agencies proliferated, including a layer of regulatory bodies and the Appellate Tribunal for Electricity, as noted above; a set of power trading specialists; an entirely new infrastructure for dealing with climate change; and new infrastructure financing and promotion corporations. If positive coordination (purposive attempts to increase coherence) was lacking thanks to the weakness at the central apex, negative coordination through alignment of these organizations’ missions also frequently broke down. Agencies have frequently challenged the ambiguous descriptions of their divisions of labour or sought to colonize new instruments, as in the case of the central and state electricity regulatory commissions, or the turf war between the central regulator and the Forward Markets Commission over regulation of power trading, a dispute that reached the Supreme Court. Inside the new administrative layer of nominally independent regulation, then, the organizational fragmentation and rivalries of the old system were replicated. While such turf wars were hardly new, ministerial fragmentation, the regionalization of politics and the rise of new agencies all conspired to create an ever more ‘diffused, fragmented and siloe’d [sic] approach to energy policy’ (Mehta 2013: 14). In the Global North, it was quickly realised that NPM created problems of coordination, especially over ‘wicked’ cross-cutting problems such as energy and climate change. India has lagged behind in the ‘joined-up governance’ attempts that have sought to counter state fragmentation as a result of new public management elsewhere in the world; its weak central apex until 2014 developed no coherent response to the challenge. Hierarchical management proved difficult in the fragmentary state. Although it attempted to draft an intersectoral energy policy, the Planning Commission was ‘often hard-pressed to herd together large and powerful energy ministries’ (Dubash 2011: 68) and increasing had to content itself with ‘working within the interstices of the dense structure of the sectoral ministries to influence policy’, as one former member recalled (Desai 2014). At times the Prime Minister’s Office (PMO) stepped in, with some prime ministers holding the power portfolio themselves at key moments,16 but this mechanism remains vulnerable to the idiosyncrasies of the premier’s personality, as under the previous prime minister. For the United Progressive 16 Prime Minister Atal Bihari Vajpayee retained the power portfolio during the 13-day BJP minority government of 1996, which extended the controversial central counter-guarantee given to Enron’s Dabhol plant. The next premiers, H. D. Deve Gowda and I. K. Gujral (United Front), also retained de facto control under ministers of state; in 1996, Deve Gowda convened a key conference of State chief ministers specifically to discuss the power sector, which agreed a wide-ranging reform programme.

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Alliance regime (2004–2014), ‘government by committee’—a form of horizontal management—became the favoured alternative via an endless series of (Empowered) Groups of Ministers, but this became perceived as merely a means for the PMO to shelve or distance itself from difficult issues. Within the national administration, layering was both a symptom and a further source of declining central coordination. The centre created new institutions to provide it with new tools—whether to create more malleable agencies, to accommodate coalition allies, or to keep ‘politics’ more at arm’s length—but this in turn made the coordination of energy policy, within which power is embedded, more difficult. Central policymakers struggled to discipline not only large private firms, but also the centre’s own large, powerful agencies. This lack of cohesion is not new (Chibber 2002); in fact, it illustrates the path dependence in the balance of power within the state. The process of institutional layering offered no solution to the pre-existing frailty of the central coordinating mechanism, however, but instead often exacerbated it. This institutional complexity also facilitates the evasion of responsibility when policy (somewhat inevitably) goes wrong. As in the case of the 2012 blackouts, and less dramatically in explaining away the everyday failures to meet targets and improve supplies, different agencies seek to shift blame upwards, downwards and horizontally to their rivals (Chatterjee 2012). This helped policymakers to dodge responsibility in the short and medium terms. Such tactics proved to have limits, however: in the closing years before 2014, the absence of hierarchical authority and monitoring of the system’s persistent failures and pro-business scandals prompted a backlash from both the public and regulators. Institutional proliferation and government by committee were popularly re-evaluated as symptoms of ‘policy paralysis’. The system of governance was therefore in a form of administrative crisis by 2014, laying the groundwork for the surprisingly decisive election verdict that summer and providing the new regime with its raison d’être and raison d’état. In this context, Narendra Modi’s new government has prioritized administrative change as much as economic reforms, remodelling the central energy bureaucracy. The regime has both sought to make micro-political changes—altering bureaucratic behaviour through increased surveillance—as well as reshaping state organizations, most famously killing off the long-beleaguered Planning Commission and breaking Coal India’s monopoly. In the energy sector, the key manifestation of this impulse was the move to ‘organic ministries’, as Modi labelled them. Power, new and renewable energy, and coal were all allocated to a single energy ‘superminister’, tellingly a young minister of state (independent charge) with much administrative talent but no real power base of his own. This combined two modes of hierarchical coordination: a unitary energy authority, but one that could not seriously rival the Prime Minister’s Office, which retained the capacity to take key decisions. In 2017, a further reshuffle once again detached ministerial oversight of power from coal, instead bracketing the latter with the similarly overlapping issue of the railways. This mode of operations has already produced some notable successes, especially in alleviating coal shortages and raising the environmental coal cess (typically blocked by the coal ministry). Yet the current government’s programme to restructure the debt of state distribution companies to incentivize reform at present looks little

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more successful than the ineffectual bailouts of 2002 and 2012. The path-dependent constraints that channelled the power sector’s pre-2014 reform trajectory will not easily be dismissed, though the current majority government has an unparalleled opportunity to rewrite the sector’s governance. It remains to be seen if its centralizing, technocratic mode of control will mark the end of the ‘patchwork politics’ of the half-liberalized system, or will amount to a workaround rather than a recalibration of the state’s institutional foundations.

8.5 Conclusion This chapter has used a quarter-century of electricity reforms to illuminate the changing nature of the Indian state. Since 1991, the state’s morphology and activities have altered substantially in response to the perceived failures of the older state-dominated system. Over this time, the Indian power sector evolved into a hybrid public–private system, marked by a series of organizational innovations that combine elements of liberalization and dirigisme. Today, private firms control the plurality of India’s generation capacity, and on paper the sector’s governing rules have taken a radical turn to emphasize market solutions and the discipline imposed by competition. At the same time, through organs like corporatized state-owned enterprises and new, nominally independent regulatory agencies, state activism has been both renewed and reinvented. In contradistinction to the deregulatory liberalization of the Anglo-American model, this chapter has labelled such a hybrid state–market combination state capitalism 2.0, emphasizing both the continued use of older forms of state activism across the purported ‘divide’ of liberalization in 1991, their upgrading for the more liberalized economy, and the persistently close links between state and capital. At the same time, the half-reformed power sector remains dysfunctional, suggesting that state capitalism and liberalization cannot simply be fused. Instead, they have been combined through an extended, ad hoc and often painful process of institutional change, which has layered new and reinvented institutions atop the sediment of the pre-existing statist system. At least between 1991 and 2014, the resulting layered hybrid often tended to exacerbate rather than solve the power sector’s predicament. The result has been a protracted internal crisis of control, characterized by both organizational proliferation—new agencies have emerged ad hoc while existing ones are rarely destroyed—and a corresponding proliferation of rents as different interest groups influenced different state agencies, tiers and aspects of the power system. This internal incoherence helps to explain both the absence of a broad energy strategy before 2014, the sector’s persistent financial and supply crisis, and finally the ‘policy paralysis’ of the last years of the UPA administration regime—a low-grade crisis of legitimacy for the nascent system of state capitalism 2.0. This trajectory suggests that state capitalism 2.0 offers no simple alternative either to the old developmentalism or to the deregulatory mode of liberalization. As other large countries in the Global South attempt to combine market discipline and administrative reform with renewed state activism, the difficulty of fusing these different logics is likely to

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become increasingly obvious in practice, even while such hybrids and their problems will take locally distinct forms. Through such an analytic, this chapter also hopes to rejuvenate the study of public institutions in South Asia. While existing literature on state capacity concentrates on macro-level state autonomy from societal forces or micro-level bureaucratic quality, the analysis here suggests that the meso-level of state forms is also crucial. In India, a lack of state cohesion, or ‘an appropriate apportionment of power among state policy agencies’ (Chibber 2002: 952, emphasis in original), has repeatedly undermined policy coherence. More than this, state-society relations are mediated through the structure of the state. Against analyses that attempt to distinguish state capacity (‘the chain of command’) from India’s problematic relationship with society (‘the chain of sovereignty’; Evans and Heller 2015), this chapter has shown that the state’s organizational problem and its political problems are inextricably entwined. Paying careful attention to the layered dynamics of institutional change can help to explain the apparently contradictory or ‘Janus-faced’ nature of the contemporary Indian state: at once business-friendly, populist and often underperforming.

References Abraham, P. (2009). From powerless village to Union power secretary: Memoirs of an IAS officer. New Delhi: Concept Publishing Company. Appleby, P. H. (1957). Public administration in India: Report of a survey. New Delhi: Govt. of India, Cabinet Secretariat, Organisation & Methods Division. Ban, C. (2013). Brazil’s liberal neo-developmentalism: New paradigm or edited orthodoxy? Review of International Political Economy, 20(2), 298–331. Block, F. (2008). Swimming against the current: The rise of a hidden developmental state in the United States. Politics & Society, 36(2), 169–206. Chatterjee, E. (2012). Dissipated energy: Indian electric power and the politics of blame. Contemporary South Asia, 20(1), 91–103. Chatterjee, E. (2017a). The limits of liberalization: The power sector. In R. Nagaraj & S. Motiram (Eds.), India’s political economy (pp. 52–74). Delhi: Cambridge University Press. Chatterjee, E. (2017b). State capitalism in India: A view from the energy sector. Contemporary South Asia, 25(1), 85–100. Chibber, V. (2002). Bureaucratic rationality and the developmental state. American Journal of Sociology, 107(4), 951–989. Department of Power. (1989). Conference of power ministers of states, January 23–24, Vigyan Bhawan, New Delhi. New Delhi: Ministry of Energy, Government of India. Desai, N. (2014). RIP Planning Commission. Business Standard, 20 August. Dubash, N. K. (2007). The electricity-groundwater conundrum: Case for a political solution to a political problem. Economic and Political Weekly, 42(52), 45–55. Dubash, N. K. (2011). From norm taker to norm maker? Indian energy governance in global context. Global Policy, 2(2), 66–79. Dubash, N. K. (2013). Regulating through the back door: Understanding the implications of institutional transfer. In N. K. Dubash & Bronwen Morgan (Eds.), The rise of the regulatory state of the South: Infrastructure and development in emerging economies (pp. 98–114). Oxford: Oxford University Press.

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Evans, P., & Heller, P. (2015). Human development, state transformation, and the politics of the developmental state. In S. Leibfried, E. Huber, M. Lange, J. D. Levy, & J. D. Stephens (Eds.), The Oxford handbook of transformations of the state (pp. 691–713). Oxford: Oxford University Press. Goyal, P. (2014). Achievements of Ministries of Power, Coal and New & Renewable Energy in the first 100 days. Accessed December 1, 2014 at http://www.piyushgoyal.in/uploadedfiles/views/ ministry_english_booklet.pdf. Hochstetler, K., & Montero, A. P. (2013). The renewed developmental state: The National Development Bank and the Brazil model. Journal of Development Studies, 49(11), 1484–1499. Hsueh, R. (2011). China’s regulatory state: A new strategy for globalization. Ithaca, NY: Cornell University Press. Jenkins, R. (1999). Democratic politics and economic reform in India. Cambridge: Cambridge University Press. Kale, S. S. (2014a). Electrifying India: Regional political economies of development. Stanford University Press. Kale, S. S. (2014b). Structures of power: Electrification in colonial India. Comparative Studies of South Asia, Africa and the Middle East, 34(3), 454–475. Kochanek, S. A. (1996). Liberalisation and business lobbying in India. Journal of Commonwealth & Comparative Politics, 34(3), 155–173. Kohli, A. (2007). State, business, and economic growth in India. Studies in Comparative International Development, 42, 87–114. Kumar, A., and Chatterjee, S.K. (2012). Electricity sector in India: Policy and regulation. New Delhi; Oxford: Oxford University Press. Levy, J.D. (Ed.). (2006). The state after statism: New state activities in the age of liberalization. Cambridge, MA; London: Harvard University Press. Mehta, V. S. (2013). Energy policy: Redesign the decision making architecture. Working paper, King’s India Institute, King’s College, London. Ministry of Energy. (1980). Report of the committee on power. Delhi: Government of India. Musacchio, A., & Lazzarini, S. G. (2014). Reinventing state capitalism: Leviathan in business, Brazil and beyond. Cambridge, MA: Harvard University Press. Nölke, A. (Ed.). (2014). Multinational corporations from emerging markets: State capitalism 3.0. Basingstoke: Palgrave Macmillan. Ó Riain, S. (2000). The flexible developmental state: Globalization, information technology and the “Celtic tiger”. Politics & Society, 28(2), 157–193. Pargal, S., & Banerjee, S. G. (2014). More power to India: The challenge of electricity distribution. Washington, DC: World Bank. Pierson, P. (1994). Dismantling the welfare state? Reagan, Thatcher, and the politics of retrenchment. Cambridge: Cambridge University Press. Rudolph, L. I. and Rudolph, S. H. (1987). In pursuit of Lakshmi: The political economy of the Indian state. Chicago; London: University of Chicago Press. Schickler, E. (2001). Disjointed pluralism: Institutional innovation and the development of the U.S. Congress. Princeton, NJ; Oxford: Princeton University Press. Shleifer, A. and Vishny, R.W. (1993). Corruption. Quarterly Journal of Economics, 108(3), 599–617. Sinha, A. (2005). The regional roots of developmental politics in India: A divided Leviathan. Bloomington, IN: Indiana University Press. Tillin, L. (2013) Varieties of state-capital relations in India. Economic and Political Weekly, 48(39), 19–22. Trubek, D. M. (2013). Law, state, and the new developmentalism: An introduction. In D. M. Trubek, H. A. García, D. R. Coutinho, & A. Santos (Eds.), Law and the new developmental state: The Brazilian experience in Latin American context (pp. 3–27). Cambridge: Cambridge University Press.

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Vaidyanathan, S., Musacchio, A. (2012). State capitalism in India and its implications for investors. Unpublished manuscript, on file with author. van der Heijden, J. (2011). Institutional layering: A review of the use of the concept. Politics, 31(1), 9–18. Victor, D. G., & Heller, T. C. (Eds.). (2007). The political economy of power sector reform: The experiences of five major developing countries. Cambridge: Cambridge University Press. Yang, D. L. (2004). Remaking the Chinese leviathan: Market transition and the politics of governance in China. Palo Alto: Stanford University Press.

Part III

State and Contested Forms of Governance

Chapter 9

Re-reading the ‘Auto-revolution’ in India with a Labour Lens: Shifting Roles and Positions of State, Industry and Workers Babu P. Remesh Abstract This chapter critically examines the evolution of automotive industry in India and explains as to how the various industrial and sector-specific policies have shaped the current state of labour affairs in the sector. The author explains the ‘tierization’ process in the automotive sector, traces the temporal transformations in the value chains and discusses the implications of these changes on labour. It is shown that with the expansion and evolution of buyer-driven supply chains, the quality of employment in the industry has been on the decline. The author argues that over time, the power relations between capital and labour have considerably tilted in favour of the former. One of the major determinants of this change is the visible shift in the role of state in favour of industry, which is evident from the pro-industry policies of recent times and the laxity of governments in effectively implementing the extant pro-labour legislations. Eventually, it is concluded that ‘auto-revolution’ in India has been booming at the cost of labour, with growing worker insecurities and deteriorating labour standards. Keywords Automotive industry · Labour relations · Employment insecurities · Labour standards

B. P. Remesh (B) School of Development Studies, Ambedkar University, Delhi, India e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2019 A. P. D’Costa and A. Chakraborty (eds.), Changing Contexts and Shifting Roles of the Indian State, Dynamics of Asian Development, https://doi.org/10.1007/978-981-13-6891-2_9

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9.1 Introduction Since the 1980s,1 India’s automotive sector is in a steady path of expansion.2 Currently, the Indian auto-industry is one of the largest in the world. The industry accounts for 7.1% of the country’s gross domestic product (GDP). Globally, India is the fourth largest automotive market by volume. India is the largest manufacturer of motorcycles, the second largest manufacturer of passenger cars and the fifth largest commercial vehicle manufacturer. The spectacular growth of automotive sector in India during the past three decades (the ‘auto-revolution’) owes to a number of factors3 of which the foremost is the supportive state policies during the period that facilitated economic restructuring of the industry, through participation of foreign capital via joint ventures between Indian firms and global original equipment manufacturers (OEMs). The definite revival of the automotive industry commenced in the early 1980s picked up further momentum in the 1990s in an overall environment of economic liberalization, with specific policies in place that further supported the growth and expansion of automotive sector.4 The sector has been attracting huge amounts of foreign direct investment (FDI), and currently, it is the sixth prominent sector in the economy with about 8% of the total FDI inflow. As per data provided by the Department of Industrial Policy and Promotion (DIPP), the cumulative FDI flows into Indian automobile industry during January 2000–March 2015 were USD 12,539 million (5.23% of total). While the growth of automotive sector in the initial years was mainly domestic market-driven (Mukherjee and Sastry 1996), in the past few years, along with increasing exports of auto-components and automobiles, the Indian firms have been steadily expanding their base into international market.5 Over time, the auto-component sector has matured and has also gained its credentials in terms of supplying high-quality and cost-effective components to both domestic and international OEMs. Thus, from 1 Advent

of Maruti Udyog Limited (MUL) in 1983 as a major player in passenger car market is a major landmark in the history of automotive industry of India. From this point onwards, the automotive sector in India got a supportive environment to expand. The situation became more conducive from the 1990s onwards with the commencement of economic reforms and liberalization policies, which helped a steady flow of foreign direct investment (FDI) to the automotive industry. Maruti Udyog (later on, Maruti Suzuki) became and still continues as the market leader in the passenger car segment ever since its Model 800 became a success in the 1980s. 2 The automotive industry, comprising automobiles and auto-component sectors, is one of the vibrant segments of the otherwise stagnating manufacturing sector of India. 3 The key determinants include: (a) supportive state policies; (b) availability of skilled and unskilled workforce (‘cheap labour’); (c) abundant availability of steel at competitive prices; (d) overall steady growth of Indian economy and booming production sector; (e) growing middle class with sufficient purchasing power; and (f) favourable demographic scene—with a higher share of working population and increasing volume of internal migration. For a detailed account on the drivers of auto-revolution in India, refer to Remesh (2015a). 4 The details of supportive policies of the state in the auto-sector will be discussed in detail in the next section of this paper. 5 Tata’s taking over of Daewoo Trucks in Korea and the acquisition of Jaguar and Land Rover (from Ford) are some examples for this.

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an initially domestic market-driven growth, the automotive sector is moving to a new phase, where the growth is also propelled by exports to the global markets. Notwithstanding this continuing story of growth, expansion and ‘economic upgradation’ of the automotive sector, of late, a growing body of the literature and empirical evidences suggest that the industry is characterized by blatant decent work deficits and worsening labour standards. Against this backdrop, the present paper attempts to discuss the labour issues in the automotive sector in India. Such an attempt assumes importance, as the sector continues to be viewed as a potential engine for attracting further investment and promoting manufacturing employment as evident from its inclusion as one among the twenty-five identified sectors in the Make in India (MII) programme. The discussion in the paper is mostly based on secondary data and available empirical evidence from some of the research in this area, including the author’s own fieldwork in the National Capital Region (NCR). The rest of the paper is divided into five sections. To contextualize the autorevolution and to understand the centrality of government policy in the promotion of the sector, the second section of the paper provides an overview of the supportive policy environment. The next section discusses the production organization and supply chain networks in the automotive sector. The importance of cluster-based production in the industry and the crucial role of Small and Medium Enterprises (SMEs) and tiny units in the unorganized sector are explained in this sector. Attention is also given to briefly map the transformations in the production organization, value chain governance and subcontracting practices. While doing so, the temporal trend of weakening of relative bargaining strength of the firms in the lower rungs of the supply chain and its implications to labour is explained. The fourth section focuses on the quality of employment and emerging labour relations in the sector. The prevailing working conditions and employment insecurities are discussed, with a special focus on the alarming proportions of casual and contractual workers in the industry (both in its unorganized and in its organized segments). The growing incidence of industrial unrest in the automotive units is yet another aspect elaborated in this section. The fifth section provides an exclusive discussion on the changing role of state and establishes its link to the ‘low-road labour relations’ in the automotive sector. Subsequently, the sixth and final sections conclude the paper.

9.2 Supportive Policies of the State As mentioned above, a central factor that facilitated the auto-boom in India in the past three decades is the supportive policy environment, which is characterized by a marked shift in the state policy from a ‘highly regulated’ to a ‘liberalized’ regime. During the first few decades of post-independent India, the automotive sector was totally under a restricted regime. Automobiles, especially passenger cars, were viewed as luxury items and thus subjected to severe restrictions and heavy taxes. Banning of import of completely built vehicles in 1949, refusal of permission to domestic manufacturers to assemble imported vehicles without increasing local con-

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tent (since the early 1950s6 ), etc., was the first step in this phase of ‘curtailment’ (D’Costa 2009). The Phased Manufacturing Programme (PMP) of the 1970s and its revamped version launched in the 1980s intensified the pressure on assembly firms for indigenizing production base,7 eventually forcing many to quit the scene. This situation led to a further reduction in the number of assemblers. Consequently, by the end of the 1980s, there were only five assemblers in India. During this period, widely known as the ‘License Raj’, every activity related to expansion and development—be it imports, collaborations, equity ventures, technology transfers, capacity expansion—required licences as well as thorough scrutiny of and approval from the government. With strict quantitative restriction (QR) and heavy tariff structures, the market was a strictly protected and closed one with strong disincentives for the producers to expand. This highly restrictive regime began to change in the 1980s, especially with the advent of Maruti Udyog Limited (MUL) in 1983 as a joint venture (JV) between Government of India and Suzuki Motor Company of Japan. Maruti was the first multinational company (MNC) to enter into the automotive market with government’s collaboration.8 And, naturally, it got a supportive environment to expand.9 This was the starting point of a new liberalized era in the Indian car market, particularly, and in the automotive sector as a whole. In the next few years since Maruti’s advent, the two-wheeler and light commercial segments also witnessed the entry of a few Japanese manufacturers, beginning with Hero Honda starting its activities in 1984. The 1980s also saw a visible awakening in the auto-component sector. The joint ventures (JVs) between the assemblers provided a lot of spillover gains to the component industry. Right from Maruti Udyog (where government itself was a partner), all the JVs had to follow certain local content rules and technology transfer requirements, which inter alia supported the growth of domestic production in the auto-component segment. Policies of liberalization and market reforms since 1991 provided the required impetus for the industry to flourish further. During the neoliberal era, there have been definite changes in the approach of the state towards automotive sector. The New Industrial Policy of July 1991 abolished the licensing requirement for many segments of automobiles, though the system of licensing continued in the case of passenger 6 In

1953, the Government of India introduced a restriction which prevented the operations of assemblers without any local manufacturing programme. Accordingly, assemblers solely involved in assembling of CKD units were asked to stop operations in three years. Krishnaveni and Vidya (2015) notes that only seven firms—namely Hindustan Motors Limited, Automobile Products of India Limited, Ashok Leyland Limited, Standard Motors Products of India Limited, Premier Automobiles Limited, Mahindra & Mahindra and Telco—survived these regulatory norms. 7 For instance, the new PMP of the 1980s stipulated a local content ratio of 90% (D’Costa 2009). 8 When MUL was formed, in the early 1980s, the government owned 80% of the equities. Over time, the share of government was reduced. In 2007, when the government sold out the remaining 18% of shares to financial institutions, the participation of Government of India in Maruti almost ceased to exist. 9 An overall supportive environment was visible in the two-wheeler segment also. In 1982, government allowed foreign collaboration for manufacture of 100 cc two-wheelers, with a 40% cap on foreign equity.

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cars. Sooner, the passenger car segment was de-licensed10 as part of New Automobile Policy in 1993, which further facilitated the easy entry of global assemblers. By 1995, the auto-industry was completely deregulated, and in 1997, automatic FDI approval with 51% was allowed in the passenger car segment. Consequently, in another few years, the country witnessed a massive entry of multinational companies (MNCs) in the auto-industry,11 mostly through joint ventures with Indian firms (Mukherjee and Sastry 1996). In 2000, the Government of India removed quota restrictions in the automotive sector due to external pressures.12 Subsequently, as part of the Auto Policy, 2002, 100% FDI was permitted in the automobile and component sectors under the automatic route. All these changes helped the industry to grow, with active participation of international players. Eventually, these developments also added to the competencies of Indian firms, not only in the domestic market but also in the export of automobiles and auto-components. Thus, the journey of auto-industries, during the initial decades since liberalization, has been one from ‘curtailment to internationalization’ (D’Costa 2009). An overall supportive tax regime also helped the sector to grow, open up and become competitive. The excise duty was brought down from 66% in 1991 to 40% in 1993 and to 16% in 2006.13 Similarly, the import duties on auto-components were also considerably lowered during the post-liberalization period.14 The other governmental supports to the industry include ‘direct15 ’ and ‘indirect16 ’ interventions, special

10 However,

the quota restrictions on imports continued in the sector. major multinationals entered the Indian market in the initial years of liberalization are: Daewoo, Peugeot, General Motors, Mercedes-Benz, Honda, Hyundai, Toyota, Mitsubishi, Suzuki, Volvo, Ford and Fiat (Krishnaveni and Vidya 2015). 12 This was subsequent to India losing a case at WTO regarding quota restrictions on several items/sectors. 13 This approach is maintained till date. For instance, to strengthen the recently launched ‘Make in India’ (MII) programme, the government has reduced the excise duty on small cars, scooters, motorcycles and commercial vehicles to 8% in 2015 (from 12% in February 2014). 14 The import duties on auto-components were reduced from 60% in the 1980s to 10% in 2014 (Jha and Chakraborty 2014). 15 Auto Policy, 2000, and Automotive Mission Plan 2006–16 are instances of specific and direct action of the Government of India to strengthen the automobile and auto-components sector. 16 For instance, the liberal vehicle financing policies followed by the Indian banks since the 1990s enabled a large chunk of consumers to own two-wheelers and cars, thereby stimulating production in the automotive industry. Similarly, the National Highway Policy announced in 1997 is believed to have helped the growth of automobile industry. The environment and safety norms restricted by Indian courts also indirectly helped the auto-industry. For example, the 1999 order of Supreme Court of India directing all car manufacturers to comply with Euro I emission norms, within a stipulated time frame, in the National Capital Region (NCR), led to a quick increase in demand for cars (which comply with Euro norms). In the same way, the recent initiatives of the government (as well as interventions of courts) to promote eco-friendly vehicles—CNG, electric and hybrid—are believed to have brought more vibrancy in the automotive production and sales in India. 11 The

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concessions provided in the budgets17 and rebates/exemptions in taxes.18 Over the years, with the active presence of strong collectives of industrialists and automotive producers [e.g. Federation of Indian Chambers of Commerce and Industry (FICCI), Confederation of Indian Industry (CII), Society of Indian Automobile Manufactures (SIAM), Automotive Component Manufacturers Association (ACMA)], the concessions through announcements in budgets and rebates in taxes have been viewed as prominent way of availing governmental support, which is evident from each industry group coming with detailed wish lists, prior to the union budget every year.19 Apart from the above supportive policies of the central government, the automotive sector also hugely benefitted from additional incentives and pro-investment policies of various state governments. These include: assurance of green channel approval systems, provision of land and infrastructural facilities at subsidized rates, relaxation in stamp duties, tax incentives/holidays, power tariff incentives, concessional interest rates on loans, provision of backward area subsidies and special incentives for mega projects. Thus, it is evident that the overall supportive policy environment in the past three decades has been a key determinant of the ‘auto-revolution’ in India.

9.3 Industrial Clusters, SMEs and Supply Chains The automotive production in India has grown in clusters of interconnected firms, linked by commonalities and complementarities (GOI 2006). An active participation of Small and Medium Enterprises (SMEs)20 is a unique aspect of this networked and cluster-based production systems. Currently, there are three major auto-clusters in India, viz. the Southern Cluster comprising Chennai, Coimbatore,

17 The announcement of credit up to Rs. 85,000 to farmers in the Union Budget 2015–16 is expected to boost the production and sales in the tractor segment. 18 Special concessions/rebates for automotive firms under Income Tax Act since 2012 are an example for this. 19 Over the years, the industry–government nexus became strong. The entrepreneurs in the industry have been successful in establishing institutionalized interaction between the industry and the government. For instance, FICCI, CII and ACMA regularly organize periodic events bringing together the manufacturers and government officials. Such efforts help the industry to mobilize corporate opinion for desired policy changes. Thus, over the years, the role of industry has been elevated to that of influencing policy—thus, ‘instead of state regulating capitalism, markets led state to deregulate, reform and privatize the economy’ (D’Costa 2004). 20 Given the strong backward and forward linkages, promoting SMEs in auto-sector was central to industrial policies of various governments, especially in the past few decades. Accordingly, the SMEs have been viewed by policy-makers and multilateral agencies as the growth engines and potential sources of employment provision (Vijayabaskar 2008).

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Hosur and Bangalore; the Western Cluster spread across in Pune, Mumbai, Nashik and Aurangabad; and the Northern Cluster including Delhi, Noida, Greater Noida, Ghaziabad, Faridabad, Gurgaon and Manesar.21 On the whole, the production organization in the industry is characterized by a strong presence of buyer-driven supply chains. It depicts a vertically integrated pyramid structure, where the OEMs or large assemblers are positioned at the top; Tier 1, Tier 2 SME firms in the middle; small and tiny firms in the unorganized sector22 in the lower rungs of the chain (Uchikawa 2011). Firms in the chain are connected through subcontracting practices,23 involving purchase–supply relationships.24 There have been visible temporal changes in the value chain governance in the past few decades. While initially the assemblers got into subcontracting relations with Tier 1 and Tier 2 firms, where the latter acted as a captive production unit for the former, taking advantage of the opening up of new opportunities in the post-reforms period, many of the SMEs in Tier 1 and 2 started supplying parts to multiple assemblers.25 By 2000, many of the SMEs that started operations prior to the 1980s have grown to medium and large companies. In the meanwhile, the OEMs also devised new strategies to retain their lead in the supply chain. The performance of the subcontractors was evaluated regularly in terms of timely supply, quality of product and cost efficiency. Further to this, in order to avoid risks and to ensure competition between suppliers, the assemblers also started procuring the same products simultaneously from two or more firms. The ongoing boom in the domestic and global markets has been beneficial for Tier 1 firms to upgrade more than those in lower rungs of the value chain. But, such upgradations have often happened with greater pressure on the Tier 2 firms and the attached tiny units of the latter (informal sector units) to attain greater cost reductions. Under such circumstances, the tiny and small firms are found resorting to extreme

21 Apart from the above three auto-industrial belts, the other important localities in the automotive map of India include Jamshedpur–Kolkata cluster (Eastern Cluster) and an upcoming cluster around Sanand, in Gujarat. In a scenario where many state governments are in the process of inviting corporate investment in the automotive sector, a few more clusters may emerge in the coming years. 22 While the firms in organized sector cater mostly to the OEMs and lead firms (and the production involves that of high-value precision instruments), the units in the unorganized sector mainly cater to the local after-sales market and deal mostly with low value-added products. 23 SMEs act as the subcontractors delivering product or service to the large firms, as per the production requirements and specifications of the latter. The SMEs also try to regularly upgrade their technologies through vertical and horizontal integration networks with major assemblers (Kumar 2007). Such an arrangement provides the assemblers in auto-component sector greater degrees of flexibility to adjust their production, according to the fluctuating market trends. 24 The integration of auto-firms through supply chains and subcontracting arrangements (or the ‘tierization’) commenced with the entry of Maruti Udyog Limited in the early 1980s. Prior to this, the prominent method followed by the assemblers was to produce parts and components in-house (Uchikawa 2011). 25 Uchikawa (2011) explains this transformation as a two-stage process. An initial shift of value chain ‘from integrated firms to collaborative ones with captive units’, which eventually graduated to a ‘shifting of captive value chains to relational value chains’.

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cost-cutting measures,26 eventually leading to deteriorating labour standards (Suresh 2010) and to the rise of ‘flexible regimes’ (D’Costa 200427 ). Thus, the emerging scenario is one of ‘race to the bottom’,28 where the economic upgrading of the industry is not matched by commensurate ‘social upgrading’.29

9.4 Employment Insecurities and Deteriorating Labour Standards30 Along with the overall supportive policy environment, abundance of skilled and semi-skilled workforce at internationally competitive wage rates (‘cheap labour’) has been one of the major drivers that made India’s auto-sector attractive for global investors. As expected, with the growth of manufacturing activities in automobile and auto-component sectors, the past few decades saw an increased number of skilled, semi-skilled and unskilled youth working in the sector. It is estimated that 19–20 million workers are directly or indirectly relying on the automotive industry for their livelihood. This number is expected to grow faster in the coming years. Notwithstanding this quantitative attainment in terms of employment provision, there are growing anxieties about the quality of employment being provided in the sector. A growing body of empirical research suggests that a large chunk of employment in the sector is characterized by decent work deficits. Despite the impressive volume of the employment generated (that too with a major share in organized segment), the jobs in the sector are characterized by strong employment insecurities. The use of temporary and contract workers is rampant31 in the sector, as the firms keep only a smaller proportion of skilled workers as permanent workers. Based on secondary data, pertaining to three industrial clusters (Delhi-NCR, Chennai and Pune), Uchikawa (2011) explains that with the growth in production in the automotive sector, there had been an increase in the number of employees in 26 Each renewal of contract implies further reduction in the share to small and tiny firms, putting more and more pressure on these firms to follow cost-cutting measures. 27 A growing body of literature suggests that the industry is characterized by various post-Fordist production regimes and work organization/management systems (e.g. just-in-time production, 6-sigma, Kaizen). 28 Due to weaker bargaining power within the supply chains and owing to constraints posed by poor resource base, the tiny units in the unorganized sector are usually operating with deplorably lower working conditions. These include low wages, non-provision of safety measures, extended hours of work and so on. This segment of the industry engages mostly unskilled labour, working as casual (and sometimes, contractual) workers. 29 Strategies for cost minimization (such as just-in time production) force the firms to push down the wages and to enhance the workloads—to stay competitive in the value chains—‘low-road’ path in terms of labour standards (Vijayabaskar 2008). 30 A more specific and detailed discussion on the labour and employment issues in the automotive sector was attempted in Remesh (2015b). 31 Contractualization and casualization were found even in lead firms (Vijayabaskar 2008).

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the organized sector. However, these employees were denied of stable jobs, as use of contract workers on the production lines was rampant, which is essentially a strategy of the management to avoid labour conflicts.32 A number of studies suggest that considerable proportion of the workforce in the auto-component manufacturing firms are contract workers and casual workers (Rani 2005; Vijayabaskar 2008; Remesh 2014). Such a situation leads to the rise of flexible labour regimes—where the employers enjoy greater degrees of freedom to adjust the workforce as per market fluctuations. In most of the firms, a good proportion of contract workers are terminated after the tenure of the contract. In addition to this, many workers quit (or change their jobs) as the wages, terms and conditions are not good enough to retain them for long. Given this situation, the employment security is visibly absent in the sector. Contractualization and casualization often adversely affect the organized strength of employees. Compared to permanent workers, contract and casual workers are found with more ‘voice insecurities’. Collectivization of workers is severely constrained, and in many cases, right to association of workers is overtly denied. Generally, a good proportion of contract and casual workers is constituted by migrant workers, who are by design kept out of the reach of organized trade union movement (Remesh 2014). Firms are also found engaging trainee recruits and apprentices in large proportions. These workers, contrary to their misleading designations, are often deployed to carry out all production-related works (including core operations), after a brief period of in-house training. Nevertheless, they are paid only a pittance as wages—which are often termed as ‘stipends’! Suresh (2010) observes that although such employment is restricted to a maximum of three years, in most of the companies, especially in foreign firms, such trainees/apprentices are engaged for five to seven years. Some of the recent steps of the governments are also found facilitating the engagement of more apprentices in the industry.33 Existence of multiple categories of workers—permanent/regular, temporary, casual, trainee recruits and apprentices—also results in fractionalization of collective interests of workers. The clash between permanent workers and casual labourers in the factory of Pricol Ltd. (a leading auto-component firm) in Coimbatore in July 2007 is an example of this. Quite often, workers with similar skill levels are recruited for a wide range of employment categories—regular employee, temporary workers, trainee workers, apprentices and contract workers, with varying levels of wages and employment conditions. On the shop floor, they will perform more or less the same tasks! (Ibid). Since the 1990s, in order to increase productivity and reduce production costs and supply risks, restructuring was resorted heavily in the industry by altering 32 It

is explained that in 2010, the shares of contract workers in the total workforce were 58% in manufacture of bodies and 36.8% in manufacture of parts and accessories (for motor vehicles and their engines). (Uchikawa 2011). 33 The recent developments related to Apprentice Act and MEPP in Maharashtra are to be seen in this perspective.

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processes (business process reengineering),34 adoption of new governance structures, and by introducing flexible practices on the shop floor.35 Labour productivity has been enhanced through retooling, shop floor innovations and multi-skilling of workers. D’Costa (2004) provides a detailed account of how intensity of work got enhanced through ‘cellularization’, a novel practice of work organization, citing the case of Sona Steering, an auto-component supplier in the supply chain of MUL. It is explained that Sona’s production doubled even as the number of shifts was reduced from three to two. The number of operators per shift was also reduced from two to one, which allowed the firm to redeploy ‘excess workers’ to more productive uses. Cellularization was introduced at MUL’s request. The results of cellularization in Sona Steering have been remarkable. From an early practice of roughly one worker for every two machines, cellularization increased the ratio to 11 machines per worker. Thus from 1994, Sona’s output of column and rack and pinion steering assembly increased sharply, whereas labour remained virtually the same (from 415 to 418). This is more than simple automation. The resultant ‘surplus labour’ was deployed in maintenance support for the machine operators, while others were put into new production lines. D’Costa (2004)36

Large-scale automation37 and substitution of labour with labour-replacing machinery (including use of robots) are also happening in a big way (Jha and Chakraborty 2014).38 This trend is especially disquieting in a context where the labour intensity of the organized manufacturing sector, as a whole, is on a continuous decline in the post-reform period (Sen and Das 2015). The engagement of robots is resorted in a range of functions from welding to foundry operations to 34 By the early 2000s itself, significant restructuring transformed the small and technologically backward industry to a relatively high-growth, dynamic one (D’Costa 2004). 35 Japanese-style flexible arrangements and lean production methods were extensively used in the industry, as the success of firms largely depended on the use of flexible practices. Along with arm-length arrangements, where principal suppliers are located nearby, the OEMs also encouraged trust-based cooperative subcontracting arrangements. Along with this, technological upgradation and introduction of flexible production practices were introduced at the shop floor to rationalize workforce and enhance productivity. Many of these changes resulted in enhancement of work efforts per worker, besides multitasking. 36 D’Costa (2004) also explains how in the early 1990s MUL expanded its annual capacity from 130,000 units to 180,000 without significant outlays on new capital equipment, as follows: “the number of strokes per minute of the press shop was increased…lunch breaks were staggered, the equipment maintenance was shifted to non-production time. Other cost-reducing, output-enhancing changes included reductions in welding and transfer time, lengthening the conveyor line, and adding another work station. Models with low demand were easily replaced with high demand items, making a new line available for high demand units. Even the paint shop (an expensive bottleneck) was reconfigured to accommodate production of additional units. These measures also released labour time for additional production”. 37 Automation in the initial years was with greater use of numerically controlled machines (D’Costa 2004), but got intensified with the introduction of highly sophisticated machineries (including robots). 38 As per media reports, over 400 robots work in Hyundai’s Sriperumbudur factory. Ford’s Sanand Plant in Gujarat has 437 robots. Tata’s plant in Sanand has close to 200 robots. Maruti Suzuki has more than 1000 robots in its plants at Gurgaon and Manesar. Volkswagen India has 123 robots at its Pune plant.

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laser applications. On the one hand, the presence of these sophisticated machines replaces many jobs, and it intensifies work efforts of the remaining workers on the other, besides increasing occupational hazards and the rate of industrial accidents. While discussing the increased work intensity and deskilling of workers in Maruti’s Manesar Plant, in times of intensive automation, Jha and Chakraborty (2014) view this as a case of ‘capital pushing maximum workload to the least organized segment of workforce’. Till the early 2000s, the automotive sector was more or less free from industrial tensions. During the initial years, the firms were successful in retaining the workers ‘productively docile’ by forging trust-based relations and by creating conducive environments for greater work participation in the production process. For this, new HRM practices were resorted to, along with experimenting new types of industrial relations and cooperative industrial practices.39 Some sense of equality in the workplace and of worker participation in management was created through the promotion of egalitarian treatment of workers and their active participation (D’Costa 2004), albeit in a minimal and paternalistic way. All these helped to maintain industrial peace for a while.40 The industry witnessed a series of labour unrest since the mid-2000s. Of late, the automotive production units in India have been epicentres of sporadic but prominent industrial unrests. Quite often, the reasons for these unrests were blatant negation of basic labour standards.41 Remesh (2014) explains that a major reason for the recent episode of worker unrest in Maruti’s Manesar Plant was the resistance of the management to recognize a new organization of workers.42 A positive aspect, which is oft-cited, is the skill factor. Unni and Rani (2008) found that the workers could attain skills through their participation in auto-component and machine tool companies. Through their participation in the auto-component sector, many of the workers got ample opportunities to learn new skills. Further to this, some of them also got opportunities to upgrade their skills and graduate to higher levels of job hierarchy, along with their firm’s economic upgradation. Thus, employment in the sector often came to workers as an opportunity for acquiring new skills, attaining experience and ensuring a reasonable level of earnings—at least for some time (Suresh 2010; Rani 2005). But quite often the employees are not in a position to make the best out of these acquired skills due to many factors including higher levels of attrition, obsolescence of skills in the event of technological upgradation, the absence of certification of skilling and so on.

39 For a detailed account of new industrial relations and cooperative industrial practices in the automotive sector in the 1990s, refer to D’Costa (1998). 40 D’Costa (2004) provides examples from MUL and Toyota Kirloskar, where the management could avoid or quickly settle strike, by resorting to non-confrontational modes. 41 For instance, non-recognition of workers’ collectives was an issue that eventually led to labour protests in Tamil Nadu (Suresh 2010). 42 In general, the automotive firms are found promoting ‘company unions’ (internal enterprise unions) and opposing the workers joining in political party-affiliated unions.

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9.5 Changed Role of State: A Crucial Determinant of Deteriorating Labour Standards By now, it has been acknowledged that, over time, the Indian automotive industry has brought in ‘low-road’ labour relations, characterized by informalization of workforce, prevalence of subminimum wages for majority of the workers, decline of collective bargaining/trade unionism and widening wage inequalities (Barnes 2017). A closer examination of the available empirical evidences suggests that a major determinant for the downswing in labour relations in the sector is the discernible change in the role of the state in matters relating to automotive industry and the workers in this sector. The shift in the state’s attitude to the affairs concerning the automotive sector can be seen as a ‘dual-support’ model, where incentives to industrial growth are supplemented with a visible laxity in terms of inspection and enforcement of labour laws, which are crucial for safeguarding labour standards in the sector. The ‘two-pronged support’ from the state can be explained as follows. On the one hand, there have been several pro-industry policies and promotive measures offered to the industry that helped the automotive sector to grow. For instance, during the past two decades, government of India has gradually liberalized the regulations and rules apropos foreign direct investment (FDI) in this sector. Alongside this, there has been a visible emergence of a strong industry–government nexus, which helped the industry to get a number of supportive measures including tax exemptions, subsidies and other incentives. As mentioned earlier, over time, industry–associations and pressure groups have become very influential in the formulation of state policies apropos automotive sector. Accordingly, holding of consultations on industry’s expectations on the desired changes in the policy frameworks in the automotive sector has now become a regular activity, prior to the announcement of annual budget of governments or industrial policies in India. It is not surprising to see that some of the recommendations included in the ‘wish lists’ provided by industrial association are duly and promptly addressed in the policy document issued by the government. Alongside the above explained ‘promotive measures’, in recent times the state is also found providing some indirect supportive measures to the industry, mainly by not effectively enforcing the available protective regulatory framework and labour laws. In an era of neoliberal policies, provision of a supportive environment has become an expected role of the state, to invite business and investment. Thus, by not acting promptly on implementation of labour laws, the state has been implicitly assuring a peaceful and harmonious climate for industry to operate (Suresh 2010; Remesh 2014). Of late, in their rat race to attract and retain corporate capital, state governments within India often compete with each other. Accordingly, flagging ‘prevalence of harmonious industrial relations’ as a key point of attraction, to invite and retain huge investments, has become a regular feature of state-specific industrial policy documents. Barnes (2017) explains that, in the recent past, the implementation of crucial acts such as Contract Labour Act and Interstate Migrant Workers’ Act has not been efficient. Sehgal (2012) explains about the emergence of a ‘collusive state’ (Sehgal

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2012), where the state government with supplementary support from local communities/civil society effectively safeguards interest of global capital. For instance, empirical evidences related to Maruti workers’ struggles in Haryana suggest that violations of worker rights often happened with an ‘implicit cooperation’ and backing provided by the state. The net result of all these is a rise of flexible labour regimes, where the employers enjoy greater degrees of freedom to adjust the workforce as per market fluctuations. Over time, provision of lower wages, insecure employment options (contract and casual workers) and suppression of labour rights have become a norm than exception in the automotive sector. A corollary of this situation is the deplorable living standards of the workers. It is an irony that the workforce catering to world’s most sophisticated automotive production plants is living in slum-like situations, without adequate supply of basic necessities such as water, electricity, cooking gas and so on. In a visit conducted to the worker’s colony near Maruti’s Manesar Plant in Gurgaon (as part of fieldwork for Remesh 2014), it was noticed that workers were living in small huts, which were more akin to cattle sheds! The above evidences suggest that in a scenario of changed role of state, contrary to the expectations of high-quality jobs, the technologically superior workplaces of auto-firms are widely characterized by ‘low-road job employment conditions’ (Barnes 2017).

9.6 Conclusion From the foregoing discussion, it is evident that ‘auto-revolution’ in India has been blooming at the cost of labour, with growing job insecurities and deteriorating labour standards. Over the years, the quality of employment in the sector has been deteriorating due to multiple factors. Firstly, the production organization in the sector witnessed sea changes, with the advent of new subcontracting practices, flexible labour regimes and introduction of intensive austerity measures in the firms (especially in the lower rungs of the buyer-driven supply chains). Acute cost-cutting measures and struggles for survival pushed most of the tiny firms in the industry to a situation of ‘race to bottom’, where the question of labour standards is often neglected. The temporal rise in the proportion of contractual and casual labour in the total workforce also resulted in a visible decline of collective strength of the automotive workers. The available empirical evidences suggest that alongside the growth of automotive sector and expansion of markets, there has been an overall weakening of labour’s position. On the one hand, fractionalization of workforce into multiple categories (e.g. permanent, regular, temporary, contractual, apprentices and so on) has weakened the bargaining power of the working class, thereby tilting the power relations in favour of capital vis-à-vis labour.

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References Annavajhula, J. C. B., & Pratap, S. (2012, August 25 & 2012, August 18). Worker voices in an auto production chain, notes from the pits of a low road—I & II. Economic and Political Weekly, XLVII No. 34, & XLVII No. 33). Awasthi, D., Pal, S., & Yagnik, J. (2010). Small producers and labour conditions in auto-parts and components industry in North India. In A. Posthuma & D. Nathan (Eds.), Labour in global production networks in India. New Delhi: Oxford University Press. Barnes, T. (2017). Why has the Indian Automotive Industry reproduced “low road” labour relations. In E. Noronha & P. D’ Cruz (Eds.), Critical perspectives on work and employment in globalising India. Berlin: Springer. D’Costa, A. P. (1998). An alternative model of industrial development? Cooperation and industrial practices in India. Journal of International Development, 10. D’Costa, A. P. (2004). Flexible Practices for mass production goals: Economic governance in the Indian automobile industry. Industrial and Corporate Change, 13(2). D’Costa, A. P. (2009). Economic nationalism in motion: Steel, auto, and software industries in India. Review of International Political Economy, 16(4). GoI. (2006). Automotive Mission Plan, 2006–2016, Ministry of Heavy Industries & Public Enterprises, Government of India, New Delhi. http://www.siamindia.com/uploads/filemanager/ 20AMP-2006-16.pdf. Accessed on October 15, 2015. Jha, P., & Chakraborty, A. (2014). Post-fordism, global production networks and implications for labour: Some case studies from national capital region, India. Working Paper 172, Institute for Study of Industrial Development, New Delhi. Krishnaveni, M., & Vidya, R. (2015). Growth of Indian automobile industry. International Journal of Current Research and Academic Review, 3(2). Kumar, R. S. (2007). Global TNCs and local SMEs: Does subcontracting facilitate Indian SME competitiveness? Paper presented at the DRUID-DIME Academy Winter 2007 PhD Conference on Geography, Innovation and Industrial Dynamics, Aalborg, Denmark, January 25–27, 2007. http://www2.druid.dk/conferences/viewpaper.php?id=1012&cf=10. Accessed on July 20, 2015. Mukherjee, A., & Sastry, T. (1996). Automotive industry in emerging economies: A comparison of South Korea, Brazil, China and India. Economic and Political Weekly, November 30, 1996. Rani, U. (2005). Growth of small firms and diffusion of skills in these firms: Case of auto component industry. Paper presented at the IDPAD-funded Workshop on Globalisation and Informalisation: Consequences for Skill Formation, Security and Gender, held at India International Centre, New Delhi, October 17. Remesh, B. P. (2014). Fundamental rights of workers at stake: Dissecting the Maruti workers’ struggles. In Sekar & Dhanya (Eds.), Worker’s right and practices in the contemporary scenario: An overview. V.V.Giri National Labour Institute, NOIDA. Remesh, B. P. (2015a) Situating the ‘Automotive Revolution’ in Neo-liberal India: Evolution, industrial structure, trends and prospects. Input Paper (India-I), presented at the International Workshop on “Development of Automotive Sector in Emerging Countries”, Sao Paulo, Brazil, during 4–6 November 2015. Remesh, B. P. (2015b). Expanding markets and worsening labour standards? The case of automotive sector in India. Paper presented in the International Conference on ‘Labour Questions in the Global South’, 18–20, November 2015, Jawaharlal Nehru University, New Delhi. Sehgal, R. (2005, August 27). Gurgaon, July 25, police brutality not an aberration. Economic and Political Weekly, 40(35). Sehgal, R. (2012). Maruti workers are the villains: Truth or prejudice? Economic and Political Weekly, XIVII(31). Sen, K., & Das, D. K. (2015, June 06). Where have all the workers gone? Puzzle of declining labour intensity in organised Indian manufacturing. Economic and Political Weekly, L(23).

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Sinha, P. (2015). Trade unions and industrial relations in the car industry in India. Input Paper (India-II), presented at the International Workshop on “Development of Automotive Sector in Emerging Countries”, Sao Paulo, Brazil, 4–6 November 2015. Suresh, T. G. (2010). Cost cutting pressures and labour relations in Tamil Nadu’s automobile components supply chain. In A. Posthuma & D. Nathan (Eds.), Labour in global production networks in India. New Delhi: Oxford University Press. Uchikawa, S. (2011). Small and medium enterprises in the Indian auto-component Industry. Economic and Political Weekly, 46(25). Unni, J., & Rani, U. (2008). Flexibility of labour in globalizing India: The challenge of skills of technology. New Delhi: Tulika Books. Vijayabaskar, M. (2008). Can cluster development programme ensure decent work? Evidences from Indian MSE clusters in global value chains. The Indian Journal of Labour Economics, 51(3), 2008.

Chapter 10

Engaging Rural Indian Interventions: Constructing Local Governance Through Resource Access and Authority Siddharth Sareen

Abstract In this chapter, Siddharth Sareen disaggregates the workings of the state at the village level. He interprets how a macro-level context of capitalist development is shaping the state in India’s rural forestland by contextualising multiple instruments of intervention within Jharkhand’s village life. Deconstructing three instances of access to and authority over resources, he posits that despite poorly functioning local government, aspirations at the grassroots level drive engagement with governmental interventions. These included attempts to acquire title deeds over traditionally claimed land by villagers; a traditional village-cluster or pir’s internal conflict concerning regulation of wood access by a village-level institution; and extortion by a Maoist insurgent group from a corrupt local contractor under an anti-insurgency scheme. Informed by fieldwork with West Singhbhum district’s Ho communities, Sareen theorises the state through the interplay of local governance, democracy and resource access, showing how marginalised groups’ local engagement with the state constitutes a frustrating relationship. Calling for enabling interventions’ positive outcomes for such populations, this chapter makes sense of the conundrum of villagers’ involvement with a largely dysfunctional state at the local level. Keywords Marginalised aspirations · Local governance · Engaging the state · Jharkhand · Forest interventions · Access and authority

10.1 Introduction Governments are corrupt, inefficient, unstable and ineffective—this might be said to hold true in many developing country contexts, particularly in India, and rarely more so than in the Indian state of Jharkhand (Shah 2009), which saw 13 changes of government within its first 17 years of existence. Yet there is great public interest in governmental interventions. To some extent, studies explain this as being due to the S. Sareen (B) Department of Geography, University of Bergen, Bergen, Norway e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2019 A. P. D’Costa and A. Chakraborty (eds.), Changing Contexts and Shifting Roles of the Indian State, Dynamics of Asian Development, https://doi.org/10.1007/978-981-13-6891-2_10

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vast resources available in the public sector to those who can use privileged access to these resources to their advantage through elite capture or corruption (Corbridge et al. 2003; Véron et al. 2006), oft-defined as the use of public office for private profit. But do ‘ordinary’ people in rural hinterlands also strive to engage with the government through its various interventions (Welzel and Inglehart 2008), and if so, what forms does their engagement take? Puzzlingly, despite the criticism that these interventions do not work half as well as one might hope, villagers seek involvement in state functions, as this chapter demonstrates by closely analysing three such attempts. Based on these case studies, I show how marginalised populations’ attempts to engage with the state take the form of frustrating encounters that seldom reward their efforts. Working towards meeting marginalised populations’ aspirations through enabling the positive outcomes these interventions promise can, I argue, build inclusive local governance. The most common way in which governments try to achieve these positive outcomes is through attempts at democratic decentralisation. Studies of democratic decentralisation processes have shown that these are rarely effectively in place, despite consistent efforts for several decades in most developing countries (Ribot 2004, 2011). India is no exception, and major problems include the lack of devolution of power and resources to local institutions, the absence of relations of downward accountability, and the inability or unwillingness of government institutions at higher levels to support grassroots efforts to democratise (Agrawal and Ribot 1999; Johnson 2003). This means governmental interventions are most often determined by top-down directives and implementation rather than being demand-driven and executed by bottom-up community-level decision-making through local institutions. Yet, rather than reducing the question of effectiveness and inclusiveness of governmental interventions to the false binary of ‘democratic’ or ‘undemocratic’, ‘successful’ or ‘unsuccessful’, some authors have called for more nuanced views of the ‘institutional bricolage’ that characterises their implementation at the local level (Cleaver 2002; Ingram et al. 2015). This approach varyingly differentiates between ‘formal’ and ‘informal’ institutions, ‘bureaucratic’ and ‘embedded’ ones, and emphasises the importance of capturing a more lively picture of actual action at the ground level. Research along these lines has pushed the boundaries of what comprises authority in local governance to include non-governmental institutions in addition to governmental bodies (Bierschenk and Olivier de Sardan 2011; Sikor and Lund 2009). It has pointed out that the ‘state’ is an assemblage of a variety of these institutions, to which actors turn while claiming access to various resources (Blundo 2006). In legitimising actors’ access claims, these institutions in turn gain recognition, as the actors legitimise their power as authority. So far, such arguments have primarily focussed on land, but they are readily extendable to natural resources, and material benefits from public schemes (cf. Sareen 2017). These are important aspects of governmental interventions, particularly to marginalised peoples who depend on access to land, natural resources and public schemes supporting local livelihoods and infrastructure development to meet the most basic needs of their everyday existence (Sareen and Oskarsson 2017). In this chapter, I closely examine ordinary villagers’ attempts to engage with three such governmental interventions. These cases represent how, despite various forms of social

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mobilisation, local resistance and positive governmental intent, interventions currently benefit ordinary villagers to an extremely limited extent. Besides constituting the basis for specific policy recommendations pertaining to the three cases studied, this chapter makes the general argument that rendering local governance more inclusive and participatory is crucial towards state-building efforts, marginalised populations’ experience of the state and effective democratisation (Gaventa 2004; Grindle 2007). This sort of disaggregated treatment is required for a more nuanced understanding of the developmental state than in some popular current accounts (e.g. Evans and Heller 2013). The rest of this chapter is organised in the form of a background section detailing Jharkhand’s aptness as a state-building context for this study of governmental interventions and marginalised groups, a brief section describing the qualitative methods employed in conducting empirical work, followed by three case study sections. Subsequently, a discussion section synthesises and engages with the policy relevance and theoretical significance of the cases, and a conclusion returns to and addresses the opening conundrum.

10.2 Background State-building is of particular significance in Jharkhand, a federal Indian state formed as recently as 2000, that has undergone 13 changes of government in its short, tumultuous history. Carved out of the resource-rich southern part of the chronically corrupt, ill-governed state of Bihar, Jharkhand’s formation was the culmination of a 90-year political movement in support of greater autonomy for this region (Prakash 2001; Stuligross 2008). Predominantly populated by indigenous peoples and forestdwelling groups, many recognised as Scheduled Tribes by the Indian Constitution with their access to various resources legally safeguarded (Sundar 2009), Jharkhand has India’s highest concentration of iron ore and other mineral deposits, and considerable shorea robusta or ‘sal’ and teak forests (World Bank 2007). Despite these ingredients towards a recipe for success, it is a succession of politically unstable governments that have characterised Jharkhand’s early experience of statehood. With the Bharatiya Janata Party (BJP) forming a strong national government and winning state elections in Jharkhand in quick succession in recent times, an opportunity for governmental interventions to stem the tide and usher in political stability and progress certainly seems to exist. Regional research suggests that things are not nearly this simple: many decades of the experience of ‘Bihari’ governance have perpetuated a widespread perception of the state machinery as inevitably corrupt and engendered a political class proactively seeking to further its vested interests through access to the ponderous but gargantuan public sector’s funding (Shah 2013; Tillin 2011). Studies suggest these perceptions are not without merit, and a quick glance through recent years’ mainstream media coverage of the political shenanigans associated with mining iron ore in Jharkhand readily confirms that the stakes are high and bureaucrats more

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than willing to use their positions to sanction ‘development’ that lines their pockets with free-flowing commissions from capitalising capitalists (Sareen 2016). Hence, the claim that self-serving powerful actors seek to promote and maintain ‘durable disorder’ is not unfounded in this context (Baruah 2007), with adverse implications for governmental interventions targeted at improving marginalised groups’ access to resources (Corbridge 2002). Inclusive governance might be able to address the ill effects of this political economy problem, but in order to do so it must gain sufficient traction for the objectives of governmental interventions to come to fruition. In recent decades, political will has indeed led to important legislative advances. In 1996, the Panchayats (Extension to Scheduled Areas) Act (PESA) extended the scope of the 73rd Constitutional Amendment of 1992 to Scheduled Areas, which comprise a substantial part of Jharkhand and eight other Indian states in regions with the most marginalised groups in the country (Government of India 1992, 1996). PESA accords Scheduled Tribes significant control over the governance of their resources in accordance with existing community traditions. In 2006, a parliamentary act commonly referred to as the Forest Rights Act (FRA) was passed, enabling committees at the community, sub-district and district level to accord property rights to forest-dwellers filing claims based on having established residence on a plot of land for longer than a defined period of time approximating a generation (Government of India 2007). While these progressive steps are encouraging signs of democratisation, they do not amount to ‘substantial democracy’ unless policy is translated into action (Törnquist 2000). Going by existing studies, performance in terms of implementation has been poor (Corbridge et al. 2004; Sarangi 2014). Coincident with these nation-wide efforts at devolving power and resources has been ongoing conflict between Maoist insurgent groups and governmental antiinsurgency operations. In areas like Jharkhand with its mineral wealth, impoverished rural population and forested hilly landscape, insurgents have established strongholds that the national and state governments have been battling in various ways (Sundar 2009). Alongside overt military action, governmental interventions have taken the form of providing funding through anti-insurgency schemes to win the ‘hearts and minds’ of villagers, to ensure that they support the government rather than any insurgent groups (Pasquale 2014). Along with cases where the FRA and PESA are of relevance, this chapter takes up a case that brings into play a project funded by an anti-insurgency intervention and the local politics around it. All three case studies are situated in West Singhbhum district of Jharkhand, in villages of its Sadar Chaibasa forest division. This is Jharkhand’s most resourcerich and conflict-affected district, with a history of state–community conflict and the state’s highest concentration of Scheduled Tribes (Damodaran 2006). This chapter focusses on village communities of a Scheduled Tribe known as the Ho, whose entire population of 1.1 million people is concentrated in and around West Singhbhum. The study area is included under a colonial era estate called the Kolhan Government Estate, with traditional village chiefs (mundas) and village-cluster paramount chiefs (mankis) recognised under national law as formally officiating over their territory, and provided recourse to a government official known as the Kolhan Superintendent.

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The two most active government line agencies with at least modest ground presence even in this remote rural region are the Forest Department and the District Rural Development Agency.

10.3 Data Collection Methods The data used for this study was collected over the course of six months of fieldwork carried out in four phases between January 2013 and January 2015, using an interpreter to translate between Ho and Hindi. I primarily employed qualitative methods, including 107 semi-structured interviews and a number of unstructured interviews with villagers in 20 villages in West Singhbhum, 49 key informant interviews, three small (n = 12, 30, 36) sets of highly structured interviews, six focus group discussions and detailed empirical observation over extended periods at multiple field sites (Yin 2003). This chapter draws on the in-depth understanding I gained in the process of collecting this rich data set, as well as on portions of the mentioned interviews, in particular key informant interviews with government officials in the district capital of Chaibasa, loggers, villagers trying to claim land title deeds, project contractors and regional researchers. Multiple extended visits allowed me to broach and probe topics that can be difficult to examine reliably, by putting to rest respondents’ potential concerns about putting themselves in vulnerable or compromised positions through building up relations of trust and consistently anonymising their identities.

10.4 Case Studies on Resource Access and Authority in Governmental Interventions 10.4.1 The FRA and Ahatu’s New Neighbour The first case study concerns villagers’ attempts to acquire title deeds over traditionally claimed land. It is set in a patch of Protected Forest formally under the Forest Department’s control, adjacent to a recognised village whose name is anonymised as Ahatu (‘hatu’ being the Ho word for ‘village’). This case needs to be situated within the environmental history and micro-politics of the study district. In the 1970s, West Singhbhum district was the site of a series of forest-related conflicts between the Forest Department and forest-dwelling rural communities (Jewitt 2008; Paty 2007). The Forest Department conducted commercial forestry operations by leasing out stands of trees, valued for their timber, to private contractors. It was the main provider of local livelihoods to villagers, whose labour was employed through daily wage work to maintain the forests and chop down trees. Revenue generated from the sale of timber, especially for prized wood sources such as teak, went into the Forest Department’s coffers rather than being shared with villagers. This exclusion,

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along with the displacement of communities for forestry operations and restrictions on their access to forest resources they had traditionally used to meet everyday needs, led to growing resentment. Sporadic protest and revolt eventually shaped into a movement known as the ‘jungle katai andolan’ or ‘forest felling movement’ that lasted through the 1970s and 1980s (Areeparampil 1992). Villagers and outsiders chopped down the forest and sold whatever wood they could lay their hands on at fire-sale prices to willing buyers who had the wherewithal to treat this opportunity as an investment in valuable timber. With the National Forest Policy of 1988 and the advent of Joint Forest Management in 1990, the Forest Department began to develop a less adversarial relationship with these communities. However, occasional conflicts have persisted, and Sadar Chaibasa forest division lacks the human resources to manage scientific forestry operations at the community level in the same way as in its heyday. Indeed, Divisional Forest Officers of West Singhbhum’s four forest divisions admitted in interviews that very few of their staff have actual experience with techniques such as felling series, which have not been implemented in large parts of the Forest Department’s holdings in recent decades. During this period, several families from nearby villages cleared land in the Protected Forest near Ahatu through an act known as ‘jharkhand’—literally ‘jungleclearing’—to establish households that are now two–three decades old. This act reflects a traditional Ho practice, also common among other Mundari Scheduled Tribes in central India, through which a ‘khuntkattidar’ clears forest to establish a village, becoming the clan leader by virtue of being the founder, and thereby gaining the status of ‘munda’ or customary Ho village chief (Vasan 2005). For the past decade, the FRA has afforded a legal opportunity for such villages to gain formal recognition of their village commons and individual land holdings by submitting claims for community and household land rights respectively through a defined procedure (Springate-Baginski et al. 2012). Claims must be submitted to the ‘gram sabha’ or ‘village assembly’, a democratic local institution at the community level, for validation before being forwarded for further validation to a sub-district committee comprising elected local representatives and street-level bureaucrats. Subsequently, these are put before a district-level committee headed by the District Collector or Deputy Commissioner and including a number of other district-level government functionaries and elected representatives, for approval in order to be granted a ‘khatiyaan’ or title deed officially recognising the individual or community right to the land based on the provisions of the FRA (Government of India 2007). On paper, this is a more transparent, formal system than what some villagers described from the forest felling movement days, where they paid monthly ‘membership fees’ to political party members who promised to secure land rights for them on the felled forest land but never delivered. My findings, however, revealed a lack of response by authorities to the villagers’ attempts to submit claims. Thirty-odd households, all with household plots established for two-three decades on Forest Department land, contributed sum of 500 rupees each twice, and 1000 rupees each on one occasion, towards ‘costs’ for filing their applications. Living over 20 kilometres away from the collectorate in the district

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headquarter town of Chaibasa, connected by dirt tracks and then tar roads and often speaking only Ho and no Hindi and being illiterate, most are neither equipped to access information and government officials, nor to file claims themselves. Despite the fact that forms and the filing process should be free, the villager who had collected money and paid it to government officials essentially as bribes to ensure their claims were processed said that it had been to no avail. All three times, they had received no response, and for all they knew, not a single claim from the village had been registered or processed. They had certainly not been given any reason to expect that title deeds would be granted. An interview with the District Welfare Officer revealed that approximately 2800 land claims in the entire district had been granted in the past decade, which was verified by consulting a written record as well. According to this official, this low number in a district with a population exceeding 15 million people is due to the FRA not being operational in most areas, as the Forest Department does not have any interest in backing it. In the 20 villages I interviewed in, no villager knew of a single case first-hand where a land claim had been granted, though several knew of attempts to file claims. Some interviewed villagers explained that claims had been granted in some villages elsewhere in Jharkhand not because of a bottom-up process of validation as required by the FRA but because a politician had promised to get title deeds for villagers as part of vote bank politics and had used political influence to push for their land claims to be approved. The Kolhan Superintendent, when interviewed in 2013, assigned blame to the Deputy Commissioner and other landrelated line agencies such as the department for land revenue, complaining about not being consulted despite being the official in charge of governance in Ho villages. She claimed that the district-level committee made decisions as its members saw fit without actively conducting checks on the ground. The Land Reform Deputy Collector, who took over her role and was ironically also the District Land Acquisition Officer when interviewed in 2015, explained that applications without adequate paperwork are rejected. These findings indicate several problematic aspects. The Land Reform Deputy Collector also serving in a role where he was responsible for approving mining companies’ licences for land leases alongside being in charge of Scheduled Tribes’ land rights in this Scheduled Area seems to pose a clear risk of conflict of interest. Villagers’ lack of ability to file effective claims combined with the apparent lack of downward accountability of higher-level officials allows them to be exploited while their land claims are ignored or summarily dismissed. Field observations showed that while many villagers might lack the complete paperwork necessary for a complete application, they did have actual claims to the land based on the FRA, and field inspections with due diligence would have satisfied district-level committees that sufficient ground existed to process and grant their land claims. The main problem is, in fact, that there is no incentive for district-level officials to acknowledge, process and grant villagers’ claims, and officials’ failure to do so has no adverse consequences for them. Thus, Ahatu’s neighbour continues to lack formal recognition and its villagers’ search for title deeds continues.

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10.5 PESA and Bhatu’s Wood Access Regulation The second case study addresses a traditional village-cluster’s protest against regulation of wood access by a village anonymised as Bhatu, a few kilometres from Ahatu. Bhatu and Ahatu are part of the same ‘pir’ or traditional Ho village-cluster, with a manki as its paramount chief. Bhatu was singularly active among all the villages in the study region in exercising the rights granted to Scheduled Tribes under PESA. Its munda or traditional village chief was a retired army officer, and along with other proactive villagers including a self-styled social activist, formed a functional village assembly for Bhatu’s villagers to govern themselves. Aside from some other functions, May 2012 onwards, the village assembly formulated a number of rules pertaining to the regulation of access to wood in Bhatu’s forest, preventing illicit logging by outsiders. While sale of logged wood is illegal, the Forest Department routinely turns a blind eye to it. As a Forester and Divisional Forest Officer explained to me when interviewed, this is because sale of wood is villagers’ main form of local livelihood, provides essential household income in the absence of other comparable sources and is beyond the capacity of the Forest Department to regulate without causing a revolt. A village interviewee put it eloquently: ‘one can hardly kick someone in the stomach when they are trying to feed their family’. Most logging is from land managed by the Forest Department, which does little with the stretches of Protected Forest in Sadar Chaibasa due to their relatively low commercial value after the forest felling movement combined with lack of human resources. However, villagers from non-forest and forest-fringe villages find it easier to avoid several extra kilometres’ cumbersome and arduous bicycle ride to and from deep public forests by logging in forest villages’ forestland. While most forest villages watch in dismay while their fuel wood and housing material diminish with every passing year, Bhatu mobilised its villagers to regulate outsiders’ access to its forest and the wood therein. Through its village assembly, Bhatu’s villagers democratically agreed to conduct daily forest patrols in rotating groups of households on a daily basis, and publicly announced a system of fines to ensure their sign-posted rules were not breached. Despite this, some women from Ahatu were caught logging in Bhatu’s forest, including the wife of a Forest Guard who worked in the Forest Department. They refused to pay fines as per Bhatu’s village assembly’s rules and circulated a rumour among other villages in the pir that Bhatu was attempting to fine them for having picked leaves in its forest. The pir’s villages responded by biding their time and pouncing upon 14 of Bhatu’s men with bicycles loaded with wood logged from deep public forest as they made their tortuous journey to the edge of Chaibasa to sell the wood as fuel to soap factories. Their argument was that if Bhatu would not let them access its forest, Bhatu’s inhabitants could not access the public road running through their villages to Chaibasa. I approached the 300-strong gathering of men with the 14 wood-laden bicycles confiscated from Bhatu’s men and was given an impassioned justification of their actions by the manki and other vocal members of Bhatu’s neighbouring villages.

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Bhatu’s munda and other villagers, however, refused to honour the invitation to enter this charged gathering. Instead, they arranged for the Sadar Chaibasa Divisional Forest Officer to visit Bhatu, showcased their conservation efforts and demanded a forestation project with funding for approximately 100,000 saplings to plant a nursery on their village land. Two days later, when tempers had tempered somewhat, Bhatu’s munda and other influential men met with the pir manki and other elders of neighbouring villages. They coolly clarified their position, pointed out that their actions were legally sanctioned by PESA, and relied on the tacit understanding that they had the backing of the Forest Department to enforce their regulation of access to wood in their village forest. All the confiscated bicycles were immediately returned to Bhatu’s men, loads intact. This went down as a definitive statement to all the villages nearby, and the chatter at rice beer stalls mentioned Bhatu as having a singularly successful, model village assembly. Bhatu did plant a nursery with 85,000 saplings and carried out two other roadbuilding projects sanctioned by the Forest Department. However, after a string of attacks by insurgent groups in the vicinity, I interviewed the Divisional Forest Officer in 2015, only to be informed that he had been advised to stop making field visits to Bhatu or its neighbouring villages, and that Forest Department funding for projects there had been discontinued. Bhatu’s villagers reported that they had been awaiting wage payments for their most recent labour on Forest Department projects for some months. Thus, in the face of crisis, the government removed central support to a village’s inspirational work rather than addressing the security situation.

10.5.1 Maoist Extortion from an Anti-insurgency Project The third case study handles extortion by a Maoist insurgent group from a corrupt local contractor under an anti-insurgency scheme1 in a village anonymised as Dhatu, which has harder access to Chaibasa than Ahatu and Bhatu due to worse conditions along the tracks leading to it. Villagers perceived Dhatu as being relatively more prone to visits from insurgent groups, due to a hilly, less-exposed location that ruled out swift military arrival and operations, and mentioned multiple overnight visits from insurgent groups. Corruption in government projects is considered normal in Dhatu, as it is in much of Jharkhand (Corbridge et al. 2003; Shah 2009), with a contractor boasting to me about having pocketed at least a third of the funds assigned to him on having been awarded a tender for a road-building project. An anti-insurgency scheme meant to assure the rural population in insurgency-prone districts across India that the government is interested in their development by improving their infrastructure had,

1A

total of 60 districts across India were funded 55 crore rupees (nine million dollars) each during 2010–12 under the ‘Integrated Action Plan for Selected Tribal and Backward Districts’: this antiinsurgency, pro-development intervention has since been extended to 88 districts till 2017 in the form of ‘Additional Central Assistance for Left Wing Extremism Affected Districts’.

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fittingly enough, sanctioned two bridges to be built along the dirt tracks to Dhatu, in order to improve access to it. I drove past this ongoing construction project several times a week over the span of some months and was surprised to note that work suddenly stopped when the bridges were still being built. Instead of two dozen villagers engaging in minimum wage labour work, the bridge lay unfinished for months on end. Interviews revealed this was because an insurgent group had demanded ‘rangdari’ or protection money from the contractor, being aware that he was siphoning off project funds. Accounts of the estimated amount demanded from and paid by the contractor varied dramatically and it was infeasible to get an accurate figure, just as the total project budget sanctioned under the scheme was not publicly displayed. In projects funded by the District Rural Development Agency and other line agencies, this has been a standard requirement for over a decade, but this project for the bridges displayed a board that simply thanked the local Member of Legislative Assembly for having helped commission it. It is plausible that a mutually satisfactory amount in the hundreds of thousands (lakhs) of rupees (two to three lakh rupees, or $3000–4500, would be an educated guess) was settled upon by the contractor and the insurgents, after which work recommenced and the two bridges were completed, generating some more weeks of local livelihood opportunities for villagers. Interviews revealed, however, that these villagers were forced to wait for several months before they finally received delayed payments for their work, as the contractor claimed to have used up the funds on another project and not have a sufficient amount left to hand out wages. The national employment guarantee scheme tries to guard precisely against some of these possibilities of corruption and exploitation through safeguards and transparency measures that are not built into the considerable funds being handed out through this antiinsurgency scheme in resource–conflict contexts. Ironically, in the case of Dhatu this ended up benefitting not just a corrupt project contractor, but the very insurgent groups that the scheme funds were targeted against. Villagers’ experience was one of being harassed from both ends, though they were simply trying to make the most of a local livelihood opportunity. They did, however, eventually get two bridges on a difficult stretch of dirt track, making Dhatu more accessible from Chaibasa, especially during the monsoon when navigating these stretches is hardest.

10.5.2 Interventions and Engagement: Constructing Local Governance Each of the three case studies demonstrates, in its own way, how ordinary villagers attempt to make the most of the opportunities presented by various governmental interventions to derive benefits in the form of claiming formal land rights, conserving the village forest and earning the minimum wage through labour on a local project respectively. However, each case study also documents how these villagers’ attempts are frustrated by the unresponsiveness and lack of downward accountability of higher

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levels of government, the social norms prevalent in a resource–conflict context and the absence of central support, and elite capture through corruption and extortion by privileged local actors respectively. Thus, it is not villagers’ lack of interest, but the difficulty of meaningful engagement due to both supply-side and demand-side factors, and the lack of options for redress, that keep interventions from making local governance inclusive (Gaventa 2004; Grindle 2007). The case study on Ahatu shows how, despite a progressive legislative reform like the FRA, little has changed except on paper in the lived reality of the villagers it seeks to empower, such as the ones in Jharkhand’s forests. Sub-district and district-level government institutions have no incentive for implementing FRA effectively, and the Forest Department actually has a lot of land at stake which it stands to lose if villagers’ claims to land are granted. Village assemblies are rarely strong enough to hold these higher-level institutions accountable, and few villagers have the individual wherewithal—in terms of financial and social capital as well as information—to pursue their own land claims, let alone file community ones, which have seen low numbers across India due to lack of awareness and social mobilisation. In short, if the FRA is to redress historical injustices against marginalised groups of forest-dwellers as intended, stronger downward accountability and stronger local institutions are essential (Sarangi 2014; Springate-Baginski et al. 2012). The case study on Bhatu reveals the shortcomings in implementing constitutional mandates of PESA so as to enable self-governance in Scheduled Areas like the study region. Even in the rare successful instance of this village assembly, social mobilisation at the local level in order to conserve resources and enforce community regulation of outsiders’ access to wood faced challenges. These came from local neighbouring communities, whose entrenched norms proved to be at odds with Bhatu’s forward-looking outlook. For a while, Bhatu was able to gain the backing of a government line agency—the Forest Department—which is notable given the poor record of state–community relations in West Singhbhum district’s recent history (Areeparampil 1992; Jewitt 2008; Paty 2007). However, instead of the government continuing to provide support to Bhatu at a time of adversity, the Forest Department abandoned its engagement with this emerging bottom-up success story. Advocates of democratic decentralisation have suggested that central support to local democratic institutions is essential for democratisation to take root (Ribot 2004, 2011), and in less positive cases than Bhatu a great deal of proactive devolution of power and resources and encouragement of social mobilisation also seems in order (Corbridge et al. 2003; Sundar 2009). But this case does show that it is possible for villagers to develop strong local governance and make decisions locally and democratically about their resource use given the sort of legislative basis that an act like PESA provides (see also Sareen and Nathan 2017). The case study on Dhatu casts light on the manner in which parallel and poorly conceptualised governmental interventions can do more harm than good (Blundo 2006). It examines a project very similar to those commissioned by the rural development line agency, but without the standard in-built transparency and accountability measures that accompany such projects. Precisely because the scheme in question specifically targets state-building contexts to counter ongoing insurgency, it seems

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likely that implementation will be affected by leakage and other contextual challenges that take benefits away from targeted villagers through elite capture by privileged local actors. This is precisely what has been shown as taking place, in a way that not only allows insurgent groups to appropriate public funds, but enables a private contractor to indulge in corruption at the cost of the targeted villagers. Such instances quickly become common knowledge in rural contexts, especially in India, and can undermine the authority of the government in popular perception locally (Bierschenk and Olivier de Sardan 2011; Sikor and Lund 2009). If anti-insurgency schemes are indeed deployed to serve such purposes in the future, as a minimum they need to meet the same stringent in-built safeguards as the national employment guarantee scheme, which itself does not manage to altogether prevent leakage in various forms (Sareen 2016). How parallel schemes implemented in this ad hoc manner affect democratic decentralisation processes by creating multiple funding channels aimed at developing local infrastructure also merits careful consideration: India’s constitutional framework emphasises bottom-up community-level decision-making on the nature of local development (Government of India 1996), and democratisation is hard to accomplish when top-down initiatives such as an anti-insurgency scheme create confusion and send out undemocratic signals at the local level (Johnson 2003).

10.6 Conclusion: State-Building Towards Inclusive Local Governance This chapter opened with the aim of making sense of the conundrum of marginalised, forest-dwelling villagers’ involvement in state functions despite little working at present in their state-building context. By showing how governmental interventions fail to live up to their objectives due to a variety of supply-side failures and demandside challenges and analysing how they can overcome these tendencies through three case studies, I have argued that enabling interventions’ positive outcomes for such populations can build inclusive local governance (Vasan 2005). This is not only desirable within the narrow perspective of the specific pieces of legislation and schemes examined in this chapter, but essential towards realising the broader, longerterm aim of building a democratic, stable state in Jharkhand and similarly volatile state-building contexts (Corbridge et al. 2004; Sareen and Oskarsson 2017; Sundar 2009; Tillin 2011). To some extent, translating policy reform into actual improvements on the ground is a matter of creating the right set of incentives and systems of checks and balances (Agrawal and Ribot 1999; Ribot 2011), and building local awareness to create social mobilisation and motivate marginalised populations that are beginning to engage constructively with governmental interventions to hold public institutions accountable (Gaventa 2004; Véron et al. 2006). But at the same time, gaining traction for these efforts requires enormous political will, and this is exactly what makes Jharkhand of considerable interest at the current juncture (Pasquale 2014; Shah 2013; World Bank

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2007). With a government that has come to power with a strong performance at the polls, led by a political party that has much to prove at both the national and regional level (Prakash 2001), Jharkhand has an opportunity to emerge from its initial years of political instability into a steady phase of consolidating its statehood and building on the abundant possibilities for democratisation. Implementing some of the policy recommendations emerging from this study can help this cause, as can an earnest effort to empower marginalised peoples and promote inclusive local governance (Damodaran 2006; Stuligross 2008). This study has shown that public will is not lacking; in fact, villagers are keen to participate in governance functions and engage with governmental interventions to derive the promised benefits (Welzel and Inglehart 2008). It is both a moral imperative and a wise policy choice for the government to do its utmost to facilitate such involvement and strengthen local governance. Acknowledgements The author gratefully acknowledges support from the Erasmus Mundus Joint Doctoral Programme on Forest and Nature for Society, a University of Copenhagen faculty scholarship and a University of Melbourne workshop travel grant which enabled fieldwork and writing for this chapter, as well as the inputs of the editors and workshop participants. He is also grateful for guidance from Iben Nathan and Christian Lund.

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Chapter 11

Penetrative or Embracive? Exploring State, Surveillance and Democracy in India P. Arun

Abstract This chapter conceptually reconsiders the relationship between the state, surveillance and democracy in India in the light of advancements in modern digital technologies. As data collection has begun to be treated as storable material to rejuvenate governance, democracy and development, the nature of Indian state is retreaded in the twenty-first century. A “retreaded state” connotes how the state introduced new layers of institutional agencies, legal procedures and technological mechanisms to monitor and control ever larger areas of society. The chapter regards surveillance not merely as a technological entity but also as a grand narrative, which has accreted as a cultural entity to reduce fear, insecurity, misgovernance and corruption. Paradoxically, such technologies promise access to speedy public service delivery and welfare. However, in the production of this cultural discourse, the utilisation of “surveilling” technologies for mass surveillance and for state’s ideological and developmental discourse is something outside the grand narrative. Here, the political vocabulary of such a state has been retwined under the rhetoric of security and development discourse. This chapter aims to understand the means adopted by the Indian state to achieve its ends and unravels the different procedures and mechanisms of surveillance. It also examines the counter-effects of deploying surveillance in Indian democracy. Keywords State · Surveillance · Democracy · Digital technologies · Public services and governance · Development discourse

An earlier version of the paper was presented at the international conference “Instruments of Intervention: Capitalist Development and the Remolding of the Indian State” held at the IDSK, Kolkata, in December 10–11, 2015. Part of this chapter is adapted from the “The Unravelling of Constitutional Dilemmas and Surveillance Laws in India” with permission of Alexis Foundation. I would like to thank Professor Anthony P. D’Costa and Professor Achin Chakraborty for giving me their editorial suggestions and my friend Anushri for proofreading. However, I am solely responsible for any errors and omissions. P. Arun (B) Doctoral Scholar in Department of Political Science, University of Delhi, Delhi, India e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2019 A. P. D’Costa and A. Chakraborty (eds.), Changing Contexts and Shifting Roles of the Indian State, Dynamics of Asian Development, https://doi.org/10.1007/978-981-13-6891-2_11

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11.1 Introduction In the time of crisis and transformation, the state becomes a major puzzle to understand, and it also becomes central to the political analysis. If we look into the nature of the Indian state at this juncture in the twenty-first century, it has basically “retreaded.” A “retreaded state” connotes how the state introduced new layers of institutional agencies, legal procedures and technological mechanisms to monitor and control ever larger areas of society. And it is a significant metamorphosis in its nature instead of a negligible deviation. Therefore, its nature in contemporary connotation needs to be restated and further the transformations under which it is functioning need to be explored. On the one hand, there is an unambiguous commitment for security and development; on the other hand, the ambiguous outcome due to its former commitments is to monitor, surveil and control even larger areas of society. The advancements in modern digital technologies brought changes in the nature and functions of the modern state. Particularly, data has begun to be treated as storable material in order to retread the state and to rejuvenate governance, democracy and development. Currently, surveillance needs to be regarded not merely as a technological entity but also as a grand narrative, which has accreted as a cultural entity to reduce fear, insecurity, misgovernance, corruption, access to speedy public service delivery (PDS) and welfare. However, while producing this cultural discourse, the utilisation of surveilling technologies by the state for mass surveillance and state’s ideological and developmental discourse is something outside the grand narrative. The political vocabulary of such a state at this juncture has been retwined under the rhetoric of security and development discourse. It has raised significant concerns regarding the right to privacy and freedom of speech, expression and association in a democracy. This chapter will limit itself to a conceptual examination of the retreaded Indian state and its various surveillance practices in a democracy in the twenty-first century. In this, it will not merely explore the state’s penetration, but also try to understand the means adopted to achieve the ends. Understanding the state traditionally according to Torpey (2000) merely focused on the capacity to “penetrate” deeper into society and failed to focus on its capacity to “embrace.” In this regard, he said that identifying the procedures and mechanisms is crucial. Therefore, this chapter would focus on the process of executing the rhetoric of security and development in practice by adopting several new layers of institutional agencies, legal procedures and technological mechanisms. And also follow his method to not merely understand whether the different procedures and mechanisms of surveillance measures are penetrative but also whether it is embracive. To understand the nature of the state, it is viable to explore what Mitchell (1991) says “approaching the state as an effect.” Though it is visualised as a powerful organisation, but it is the metaphysical effect of practices which make such structures appear to exist. It is important to understand the surveillance practices, which often convey the aspirations, requirements or contradictions in the society. And historically, it is shaped to suit varying interests and agendas. From time immemorial, techniques to monitor, observe and control population have been deployed. During colonial period, it was

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employed to establish, extend and even consolidate their dominance (Cohn 1996). In post-colonial period, the state embraced colonial intelligence organisations and even erected some anew during the crisis without any legal mandate and constitutionality in twentieth century. Section 11.2 will examine the significant changes occurred in legal measures and surveillance mechanisms in the twenty-first century. The legal measures contained provisions from ordinary to extraordinary situations. Whereas the quest for new surveilling space ended up in innovations in data collection by creating the state-of-the-art system to monitor and control its territory and population, the state also simultaneously introduced the efficient and effective delivery of welfare goods and services. Under this retreaded state, people need to interlace themselves with surveillance to avail entitlements and exercise democratic rights. Section 11.3 will examine the nature of digital governance and surveillance. For this purpose, it will explore the legal framework, political contexts and discursive practices surrounding Aadhaar. And it will also highlight the emerging uncertainty and insecurity due to the despotic push towards digitalisation, while such developments are Janus-faced as surveillance is not merely to distribute resources effectively but also to surveil and govern state’s territory and population. Following Sect. 11.4 would try to explore such a Janusfaced nature of governance and understand its impact on Indian democracy. And also examine the state discourse of surveillance whether it is penetrative or embracive.

11.2 Legalities and Mechanisms of Surveillance in Retreaded Indian State In modern times, development in technological realm has not only transformed human lives but also ameliorated them. Apart from altering lives, it was surveillance, which dramatically influenced ubiquitous observation and involved monitoring everybody’s movements and actions. According to Lyon (2007), surveillance may be direct, face-to-face or it may be technologically mediated, of which the latter is growing fast, and such proliferation needs a methodological understanding. This is because of its varied roles (i.e. security and risk management, terrorism, welfare and service delivery, commercial or online marketing, etc.) in different conditions which result in diverse outcomes. Undoubtedly, it is apparent that surveillance is a part of our human world and we all are deeply interlaced into it. For Lyon (2008), surveillance is a purposeful, routine, systematic and focused attention paid to personal details, for the sake of control, entitlement, management, influence or protection. And historically, it had led to major social and political transformations around the world through its expansion, penetration, intensification and integration. Though, from time immemorial, there have been various techniques to monitor, observe and control population, under the gaze of the modern state, these techniques and practices of surveillance have become predominant. For Giddens (1985), it refers to both the accumulation of coded information and direct supervision of social life,

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and it becomes a significant means of domination. In fact, it has become a key feature of the development of the nation state. Also, it is a system of surveillance and social control process, states Rule (1974), as being one of the crucial aspects of our collective human living and social life. There is a general temptation to narrow down surveillance as “cloak and dagger.” But Dandekar (2011) says “surveillance is not used in the narrow sense of “spying” on people, but more broadly to refer to the gathering information about and the supervision of subject population.” A major setback occurred when there were terrorist attacks in the opening of the twenty-first century leading to a precarious situation around the world. During this time, the Indian state introduced series of reforms in anti-terror legal regimes (Prevention of Terrorism Act 2001 and Unlawful Activities Prevention Act 2004). It empowered itself to intercept along with the ability to tap and eavesdrop telephonic and electronic communications of its population to counter terrorism (Singh 2007: 70–75, 2012: 439, 2014: 42–47). However, it did not coincide by establishing robust institutional safeguards to prevent any potential abuse. For instance, POTA contained an institutional safeguard called review committee to regulate interception. However, it was absent solely because of political will which was not activated to establish it. Later, in UAPA the provision of Review Committee or legislative review was obliterated (Singh 2007: 153–154, 2014:42–47). The state created legal measures and appropriated surveillance powers to respond in the climate of global terrorism. And former Vice-President of India Hamid Ansari agreed to the fact that “in a fast-changing world, the challenges facing intelligence practitioners are enormous” (Ansari 2010). However, he posed a serious question that does it (surveillance) provide an adequate safeguard to privacy of communications by making it unaccountable and non-transparent? In August 2017, the Mumbai Police Crime Branch busted two illegal phone exchanges in Mumbai where the Voice over Internet Protocol (VoIP) facility was misused by avoiding the international tariff. On the one hand, it causes loss of revenue to the state, and on the other hand, it raised concerns over its usage for terrorism. The police official said “Unless we have specific information, intercepting them is impossible.” For this, Department of Telecommunications is monitoring unusual cellular traffic in order to identify such rackets and forwarding information to the law enforcement agencies.1 The above-mentioned case is one of the numerous instances where there is legitimate state interest for interception for the public emergency, public safety, criminal investigation, prevention of crime and so on. Other than “extraordinary provisions” to counterterrorism, there is an array of “ordinary provisions” for normal times.2 It equips the state to intercept telephonic and electronic communication and access elec1 “Illegal phone exchanges thriving on SIM boxes.” 2017, The Hindu, November 11. Available at: www.thehindu.com/news/cities/mumbai/illegal-phone-exchanges-thriving-on-sim-boxes/ article20239988.ece, accessed November 26, 2016. 2 There are several legislations which enable the state to get access into different types of information. According to Abraham and Hickock (2012), there are almost 50 policies (including statutes, rules, regulations and executive orders) covering several other subjects which contain provisions which either implicitly or explicitly protect rights to privacy.

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tronic information held not merely by public entities but also private entities. There are relevant sections in the Code of Criminal Procedure 1973, Indian Telegraph Act (TA) 1885, Information Technology Act (ITA) 2009 and Information Technology Rules. Under the TA, the state could intercept communications only on the occurrence of any “public emergency” or “public safety.”3 Later, it got widened under ITA which permits interception to prevent or investigation of any offence.4 Now, law also contains penal provisions for non-compliance with interception and monitoring requests—as the TA contains civil liability, whereas the ITA carries criminal liability.5 Telephone tapping and snooping became a grave concern in the post-emergency era. During the tumultuous period of the 1980s and 1990s, there were major scandalous revelations about the involvement of several politicians in snooping. Political snooping even led to the resignation of Ramakrishna Hegde from Chief Ministership of Karnataka in 1988.6 Lack of an oversight institution on state surveillance remained a major concern in the second half of the twentieth century. In 1996, the Supreme Court retreated from providing “prior judicial scrutiny” in People’s Union of Civil Liberties v. Union of India judgement and declared that it is up to the central government to lay down “procedural safeguards and precautions” from unlawful surveillance. Although it directed and placed restrictions on the class of bureaucrats, who could authorise interception, and ordered the creation of a “review committee.” Only after almost ten years of the recommendations given by the court in PUCL judgement got incorporated in 2007 under 419(A) of the Indian Telegraph Rules (1951). Besides several allegations of phone tapping by politicians on their rivals, there have been several prominent incidents of telephone tapping. It all occurred in spite of the guidelines specified to regulate unlawful snooping. In 2009, Gujarat Government’s surveillance of a female architect,7 and the Radia tapes controversy of 2010, revealed a deep nexus between corporates, politicians and surveillance.8 Since then, there have been instances of phone tapping. For example, in 2013 state agencies in Himachal Pradesh9 as well as in 2015 the states of Telangana and Andhra Pradesh

3 Section 5 (1) and (2) of the Indian Telegraph Act 1885, Rule 419(A) of the Indian Telegraph Rules

1951. 4 Section

69 in ITA 2009. Section 15, ITA Section 69A (4). 6 Chawla, P. 1991. “Scandalous revelations.” India Today, February 28. Available at: http:// indiatoday.intoday.in/story/secret-report-by-cbi-contains-shocking-details-of-phone-tappingordered-by-congressi-govts/1/317946.html, accessed November 28, 2015. 7 “Fresh tapes on Gujarat government’s surveillance emerge.” 2013, The Hindu, December 15. Available at: http://www.thehindu.com/news/national/other-states/fresh-tapes-on-gujarat-governmentssurveillance-emerge/article5460462.ece, accessed November 26, 2016. 8 “Leaked tapes: CBI says it has 5851 recordings.” 2010, DNA, November 23. Available at: http:// www.dnaindia.com/india/report-leaked-tapes-cbi-says-it-has-5851-recordings-1470650, accessed November 26, 2016. 9 “HP to continue with parallel phone tapping probe.” 2013, The Pioneer, December 28. Available at: http://www.dailypioneer.com/state-editions/chandigarh/hp-to-continue-with-parallelphone-tapping-probe.html, accessed November 26, 2016. 5 TA

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were allegedly complicit in phone tapping.10 It shows the failure of the procedural framework to safeguard and prevent unlawful surveillance and corrupt uses of power. In the aftermath of 2008 Mumbai attacks, there were significant changes in laws of ITA. During that moment, the state surveillance started penetrating into virtual space.11 Now, it could monitor not only payload data (i.e. the essential or actual data such as message, text, images and voice) but also metadata (i.e. basic information about data such as source, destination and timestamp).12 Now, the state can collect and store sensitive personal data.13 But the authorisation procedures were altered to get blanket access (access without any prior authorisation) for law enforcement agencies. It basically diluted the authorisation standards with the removal of impediments such as a court or executive order. Although it would state the purpose for acquiring information, its utilisation contains broad and generic purposes (verification of identity, prevention or detection of crimes, investigation including cyber incidents, prosecution, and punishment of offences). The above-mentioned legal regime emerged under a particular period of liberalisation and globalisation. All this commenced during the erstwhile years of the late twentieth century when the P. V. Narasimha Rao-led congress government adopted the liberalised economic policy. Under the cusp of the prevailing globalised market environment, India realised the need for modern telecommunication services (Mukherji 2008; Ganguly and Mukherji 2011). The National Telecom Policy (NTP) of 2012, though a carryover of the policy of the 1990s, incorporated significant changes that were a response to a “long decade”14 of terror attacks. Major inclusion was to get communication assistance for the law enforcement agencies (LEAs) to meet the needs of national security and cyber security. For this, the Internet Service Providers/Telecommunications Service Providers (ISPs/TSPs) were required to develop and deploy the state-of-the-art system to provide assistance for legal interception and monitoring. Here, both the licence agreements contain legally grounded

10 “Phone tapping row; MHA steps in.” 2015, The Hindu, July 24. Available at: http://www.thehindu.

com/news/national/phone-tapping-row-mha-steps-in/article7461295.ece, accessed November 26, 2016. 11 The rapid growth of Internet also brought in massive expansion of virtual service providers (ISP, search engines, cyber cafes, etc.). To regulate them, Intermediary Guidelines Rules 2011 and Guidelines for Cyber Cafe Rules 2011 were introduced. In the former, the companies must preserve data for at least 90 days. In the latter, the cyber café would maintain log records (identification details and usage history). 12 ITA 2009 empowered the state to intercept, monitor, track and decrypt information. The procedures and safeguards were elaborated in two different IT rules: 1) Procedure and Safeguards for Interception, Monitoring and Decryption of Information Rules 2009, 2) Procedure and Safeguard for Monitoring and Collecting Traffic Data or Information Rules 2009. 13 Section 6 (1) IT (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011. 14 Jenkins (2014) uses the term “long decade” to portray the lingering fear of terrorism and to characterise the major terror attacks occurred in the early part of the twenty-first century, along with the lasting impact on liberal constitutionalism and individual rights.

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provisions of the Telegraph Act which give immense power to the state for lawful interception and monitoring facilities.15 The major innovations in the state-of-the-art technology in surveillance developed in the post-26/11 scenario to address challenges of national security and terrorism. The quest for new surveilling space ended with the development of innovative data-collection initiatives such as launching Central Monitoring System (CMS), National Intelligence Grid (NATGRID), NEtwork TRaffic Analysis (NETRA),16 Project Insight17 and NMAC (National Media Analytics Centre).18 It also includes the grand biometric identification programme known as Aadhaar or Unique Identification (UID) card. Though it was introduced to streamline governance (discussed later), it is also interlinked with the surveillance apparatus, which provides realtime access to information about individuals. The interlinking of technologies and mechanisms serves a range of desires which is not limited to governance, social control and security. By linking biometric card with Intelligence Grid and the National Population Register,19 a vast database can be created and shared with various other intelligence agencies and government departments. With this, the state is equipped with unmatched capabilities to carry out deep search surveillance. It essentially is a “dataveillance,” wherein the users’ actions or communications are tracked, monitored, intercepted and traced. Haggerty and Ericson (2000) captured multiple, overlapping governing practices, with different capabilities and purposes, as a “surveillant assemblage.” With major terrorist attacks at the beginning of the twenty-first century, the first decade for India commenced with intensifying surveillance for extraordinary circumstances, including those related to public emergency and public safety. It added 15 See

ISP Clause 34-35, UASP Clause 39-41 (Abraham and Hickok 2012: 308). In October 2013, licence terms were amended in line with the state decision to set up a CMS and to facilitate lawful interceptions. DoT 2016. Amendment to the Unified License Agreement regarding Central Monitoring System 2016. Available at: http://www.dot.gov.in/sites/default/files/DOC231013.pdf, accessed July 13, 2017. 16 For more details on surveillance techniques. See SFLC 2014. India’s Surveillance State: Communications Surveillance in India. Software Freedom Law Centre. Available at: http://sflc.in/wpcontent/uploads/2014/09/SFLC-FINAL-SURVEILLANCE-REPORT.pdf, accessed July 13, 2017.; Xynou, M., and Hickok, E. 2015. Security, Surveillance and Data Sharing Schemes and Bodies in India. Centre for Internet and Society Available at: https://cis-india.org/internet-governance/blog/ security-surveillance-and-data-sharing.pdf, accessed July 13, 2017. 17 On August 2017, “Project Insight” was introduced, to amass big data in order to unearth tax evasion through data analytics (PIB 2016). 18 In 2016, National Security Council Secretariat proposed to establish a NMAC which will track, monitor and analyse the online content (blogs, Web portals of TV channels and newspapers, and social media platforms) to counter news and comments that it decides are negative or provocative. “Now, govt cyber cell to counter ‘negative’ news.” 2016, Indian Express, February 26. Available at: http://indianexpress.com/article/india/india-news-india/now-govt-cyber-cellto-counter-negative-news, accessed July 17, 2017. 19 The pilot project UID commenced to provide universal identity and remove ghost beneficiaries; now, it is being linked with NPR data to find out ghost residents. “Government out to match Aadhaar, NPR data.” 2015, Indian Express, July 6. Available at: http://indianexpress.com/article/india/indiaothers/government-out-to-match-aadhaar-npr-data, accessed August 12, 2017.

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new layers by making itself technologically competent to control and monitor its territory and population. This legal framework and technological innovations equip the state with not merely proactive (routine and periodic disclosure) and reactive surveillance (disclosure on specific request by state), but they are also used for transforming itself with an apparatus of systematic surveillance (state’s real-time access to information) (Arun 2017b). Apart from this penetrative surveillance, the next section would explore how in the last few years a more novel and benign kind of embracive surveillance had evolved.

11.3 Unwinding Digital Governance and Surveillance in India India is in the midst of a historical transformation in terms of deployment of new practices, dynamics and technologies of surveillance under this retreaded state. According to international aid institutions, digitised public service reforms can lower the levels of corruption (Bussell 2012). Therefore, by the end of the first decade of the twenty-first century, technology was harnessed to revitalise governing practices. Now, surveillance is not merely a technological entity but a grand narrative which is accreted as a cultural entity to reduce fear and insecurity, counterterrorism, prevent crimes, undoing misgovernance and corruption, ensuring just distribution of goods and much more. To accomplish that, the state by virtue of its sovereign power directs mass surveillance. Unlike the previous section where surveillance added new layers as a response to public safety and national security, this section would highlight how new layers were added for social welfare, i.e. social security. Initial steps of adopting information and communication technology (ICT) appeared during 1970s. However, it was confined to operate for data-intensive functions of internal government (e.g. elections, census, tax administration etc.). Though slowly it was externalised as it seeped into union and state level governance initiatives. It was in 2004 when UPA’s Common Minimum Programme primarily emphasised on pushing e-governance on a massive scale. And with a renewed vision, the National e-Governance Plan was launched in 2006. The Second Administrative Reforms Commission, 2008 (II ARC) also highlighted the significance of e-governance to discharge government functions more efficiently and effectively. Along with that, it also recommended the need for a legal framework since it is a mammoth task which would significantly change the citizen–government interaction. Few crucial recommendations were—parliamentary oversight mechanism, a mechanism for coordination between government organisations at union and state levels and a framework for digital security and data protection (GOI 2008). In 2012, the National Policy on Information Technology was approved by the Cabinet which aimed to leverage ICT to address nation’s developmental challenges and also to utilise its power to transform the lives of people (NPIT 2012). But, in 2015, the UPA’s National e-Governance Plan was delinked from its central support

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by the NDA regime (PIB 2015). Though digital governance was initiated under the UPA regime, it was carried out further by the NDA regime (discussed in the forthcoming section). Despite the differences, the successive regimes emphasised that technology can enhance governance and bring about development, by realizing action and performance in delivering goods. With greater application of technology, it is believed to facilitate greater capacity, speed of access and rapid processing in order to deliver public services. Hence, effort was made by the successive regimes to rapidly expand technological means in the last two decades. Unlike the abovementioned clandestine surveillance techniques, this one (Aadhaar) is more visible and perceptible. And gradually it is being embraced and playing a major role in the mundane governing practices. ‘Mera Aadhaar, Meri Pehchan’: Exploring Ruffly Feathers of Aadhaar A tiny village Tembhali in Nandurbar district, Northern Maharashtra, came into limelight on September 29, 2010, as Aadhaar card was launched first in this village. The first recipient of Aadhaar card was Rajana Sonawane who said “I thank Soniaji for selecting me to be India’s first Aadhaar card recipient…. Aadhaar card is the Aadhaar (support) of my life.” She might not have wondered about its implications on her livelihood, because even after four years, the plight of Ranjana is still deplorable and she even locked her Aadhaar card away in a box. She says “We have no money. No jobs. Just a card. How will I eke out a living with a card?”20 At present, almost 1.16 billion people are enrolled to Aadhaar. The need for UID essentially appeared as a result of Kargil war when a group of ministers in 2001 recommended the need for a “compulsory registration of citizens and non-citizens living in India.” It stated that the former should be given a Multi-Purpose National Identity Card and the latter should be issued identity cards of a different colour and design (Mehmood 2013). “Initially it was intended to wash out the aliens and unauthorised people,” said the National Security Advisor AK Doval, but “the focus appears to be shifting. Now, it is being projected as more development oriented.”21 On March 3, 2006, the idea of UID was given administrative approval by the Department of Communications and Information Technology. Even II ARC recommended “not only for security reasons but also for delivery of services to citizens and taking the development programmes to the target population” (GOI 2008). In 2009, with the recommendations of the Committee of Secretaries and decision of the Empowered Group of Ministers, the Unique Identification Authority of India 20 “Ten

Adivasis Get UID Number as PM Launches Aadhaar.” 2010, Outlook, September 29. Available at: https://www.outlookindia.com/newswire/story/ten-adivasis-get-uid-number-as-pmlaunches-aadhaar/695162, accessed August 12, 2017; “First Aadhaar card owner struggles for a living.” Hindustan Times, April 20, 2014, Available at: http://www.hindustantimes.com/india/firstaadhaar-card-owner-struggles-for-a-living/story-4XDs3Ffu0aoG8NCPRWDj3O.html, accessed August 12, 2017. 21 Doval even said “lest it (Identity Card) ruffle any feathers. People would be unwilling to give up their right to privacy…. With this system, people can be located anywhere because all databases will be connected” Mittal, T. 2009 “Falling Between the Barcodes.” Tehelka, 6(33), Available at: http://www.tehelka.com/2009/08/falling-between-the-barcodes/, accessed August 12, 2017.

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(UIDAI) was constituted and notified by the then Planning Commission.22 This grand identification programme commenced under UPA regime not through a statutory law but with a notification in 2009, and after two years later, there was an effort to give it a statutory backing (UIDAI 2009). However, the Parliamentary Standing Committee on Finance rejected the National Identification Authority of India Bill (NIAI) 2010. The committee pointed out several issues like—absence of data protection legislation, dangers and issues like access and misuse of personal information, surveillance, profiling, linking and matching of databases and securing confidentiality of information. Later, the BJP-led NDA government, in March 2016, rashly passed the Aadhaar Act as a money bill despite severe furore in the parliament, public apprehension, and strangely against NDA’s own criticism of Aadhaar when it was in opposition during the UPA regime. As the technical deployment occurred before policy development, it raises several questions. Until March 2016, how did non-statutory body operate and function? Especially during the year in between 2009 Notification till the enactment of Aadhaar Act in 2016 or even Aadhaar Regulations, 2016. There is sheer ambiguity on this subject on operational functioning and issues arising out of enrolment, storage, authentication, etc., which existed before the act and regulations. Even after its enactment, it contains several controversial and ambiguous rules. First the Aadhaar Act, 2016 contains a controversial Section 33 (2) which allows the “disclosure of information, including identity information or authentication records, made in the interest of national security.” The biometric identification system is an interlocking of technologies and mechanisms that serve a range of desires, including those for governance, social control, security and much more (as mentioned earlier section). Secondly, the act excludes judicial intervention, as it says “no court shall take cognisance of any offence punishable under this Act,” unless a complaint is made by the authority (Section 47). As the right to move court is curbed, individuals are at the helm of the UIDAI. After seven months of enacting Aadhaar law, some new regulations were introduced in September 2016. However, regulations contain some critical issues concerned with privacy. First, addressing the grievances pertaining to Aadhaar was a major concern. Therefore, Grievance Redressal Mechanism in the form of “contact centre” was introduced which would log the queries and grievances. However, there is ambiguity regarding its nature and functioning, as the rules fail to highlight the procedural functioning and substantive provisions, which are significant to address the grievances within an appropriate time. And apparently, it will keep the individual longing to avail justice.23 Second, though there are rules to take consent from the residents, these rules do not address if someone is non-consensual and does not want to give up one’s data. These rules lack consensual neutrality of the user as they are

22 UIDAI

2017 “Background.” Available at: https://uidai.gov.in/about-uidai/about-uidai/ background.html, accessed August 12, 2017. 23 Regulation 32, Aadhaar (Enrolment and Update) Regulations, 2016.

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framed to obtain the user data (the outcome of this mandatory rule will be discussed later).24 “Aadhaar is not a secret number like your password or PIN [personal identification number], which can materially affect your life tomorrow” …” there is a danger that someone will make a 360-degree profile of you … and connect databases” Ajay Bhushan Pandey Chief Executive Officer, UIDAI25

Third, there were concerns of fears and dangers regarding individual profiling, which was also acknowledged by the CEO of UIDAI. Seemingly, it is due to this controversial regulation which introduced a rule to maintain authentication data logs which shall be maintained for two years by the requesting entity (users have the right to access the data during this period). After its expiry, it would be archived for five years or the number of years as per the law. Even after the specified period, the required data would be retained for court proceedings or pending disputes. Though the rules assure that the Personal Identity Data (demographic, biometric and OTP) will not be retained, maintaining the authentication logs of the transaction means storing metadata.26 If we exclude the legitimate purpose of data retention such as audit and dispute-resolution, there are some legitimate concerns regarding privacy violation, as it contains significant risks, such as data mining. In fact, data retention despite the accomplishment of the purpose is inadequate, irrelevant and undue, and it is contrary to data minimisation principles. Contesting Aadhaar in the Corridors of Court As mentioned above, the skeletal framework of Aadhaar originates from a notification. It was severely opposed in public sphere and civil society due to the issues pertaining to the violation of rights and freedom. It finally ended up knocking the doors of the judiciary. While responding to the petition in late 2012, the Supreme Court in Justice K.S. Puttaswamy (Retd.) v. Union of India (W.P.(C)494) issued notices against NIAI Bill, 2010 which was trashed by Parliamentary Standing Committee on Finance in December 2011. A year later, an interim order was issued on September 23, 2013, stating that “no person should suffer for not getting the Aadhaar card in spite of the fact that some authority had issued a circular making it mandatory.” The same bench reiterated the order on November 26, 2013. This position was again maintained in UIDAI v. Central Bureau of Investigation on March 24, 2014. The court continued its stern warning by maintaining its earlier position again on March 16, 2015, when it said “Aadhar is being insisted upon by various authorities. We do not want to go into specific instances. We expect the Union of India and all the States to adhere to the order dated September 23, 2013. We will take the officers concerned to task if any order comes on record 24 Regulation

5 and 6 of Aadhaar (Authentication) Regulations, 2016. man in charge of Aadhaar vouches for its safety, but there’s no stopping the leaks.” 2017, Scroll, April 27, Available at: https://scroll.in/article/835491/the-man-in-charge-of-aadhaarvouches-for-its-safety-but-theres-no-stopping-the-leaks accessed August 12, 2017. 26 Regulation 18 of Aadhaar (Authentication) Regulations, 2016. 25 “The

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making it (Aadhaar) mandatory” …. “You better advise the States, if the officials insist, it would have consequences. We will take them to task. This is absolutely not right.”27

However, on August 11, 2015, besides maintaining the earlier position the court also tried to create a balance of interest, as it allowed the state to proceed with few conditionalities (publicity of not being mandatory, voluntary usage for subsides, nonutilisation for other purposes). These orders were severely flouted by the state as they never intended to advertise that Aadhaar is not mandatory; instead, they spearheaded their Digital India programme and made it mandatory. After a month, several states and agencies approached the court to modify the August order. In which the court renewed the earlier order on October 16, 2015, by adding few more schemes (old age/widow/disability pensions and opening bank accounts) along with PDS Scheme and the LPG Distribution Scheme. The court sternly reiterated its earlier position as it said, “the Aadhaar card Scheme is purely voluntary, and it cannot be made mandatory till the matter is finally decided by this Court one way or the other” (Krishna 2017a). Meanwhile, Aadhaar Act was passed in March 2016. On June 2017, in Binoy Viswam v. Union of India (W.P.(C) 274) the court gave a partial stay on linking Aadhaar-PAN (because Puttaswamy case was still subjudice), in which it agreed to the viability of UID to prevent the growing menace of corruption and black money. At this moment, several matters related to privacy violations got attached to Puttaswamy case, and it collectively dealt with almost a batch of twenty-two petitions. Finally, on August 14, 2017, the larger constitutional bench unanimously declared the right to privacy as a constitutional right. The constitutionality of Aadhaar case was settled on September 26, 2018, when 5-judge bench delivered final verdict. The majority opinion held that Aadhaar does not violate privacy however they have struck down and read down few sections. However, a sole dissenting opinion by Justice Chandrachud, held the entire project as unconstitutional and violates fundamental rights.28 At this juncture from the cradle to the grave individual body is governed by the lordship of Aadhaar. It has become mandatory for Indian residents for the registration of birth, school admissions, midday meals, scholarships, examinations, ration schemes, employment, marriage, travelling, banking, tax returns, buying property, death certificate and many more. For governance, the state interlinked Jan Dhan, Aadhaar and Mobile (JAM Trinity), as it was proposed to deliver direct transfer of benefits through banks in an efficient, leakage-proof, well-targeted and cashless manner.29 At present, the biometric identity is interwoven with several policies, despite 27 “Don’t

insist on Aadhar, warns SC.” 2016, The Hindu, March 16. Available at: http://www. thehindu.com/news/national/aadhaar-not-mandatory-sc-reiterates/article6999924.ece, accessed August 12, 2017. 28 Few of them are: Mandating Aadhaar in social welfare schemes case Shantha Sinha & Anr. v. Union of India (W.P.(C)342/2017), Money Bill case Jairam Ramesh v. Union of India (W.P.(C)231/2016), Contempt of order case Mathew Thomas v. K.D. Tripathi (C.P(C)444/2016, Scholarship cases All Bengal Minority Students Council and Anr. v. Union of India and Anr. (W.P.(C)686/2016), Nasimuddin Educational and Charitable Trust (W.P.(C)7931/2016). 29 GOI 2017. Economic Survey 2016–17. Available at: http://indiabudget.nic.in/es2016-17/echapter. pdf, accessed April 28, 2017.

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a series of interim orders by the court. According to Software Freedom Law Centre, there had been 52 notifications which made Aadhaar mandatory until March 27, 2017.30 The state even manipulated the court judgement in Lokniti Foundation v. Union of India 2017 by regarding the biometric authentication from “not mandatory” to “compulsory” to avail any new telephone connection and to update the existing connections with Aadhaar (Krishna 2017b). In the above-mentioned cases, the state gave four major arguments on its position on Aadhaar in the court. First, it disregarded privacy as a fundamental right. Rather it held that privacy could be a legal right but cannot be given the elevated status of a fundamental right.31 Second, it repeatedly emphasised on originalism. As it stated, the founding fathers did not intend to include privacy as a fundamental right in the constitution. Third, the state pitted right to privacy against public interest, as the right to life of the poor and marginalised sections of society in the country is considered paramount. For this, the state is implementing the Aadhaar to discharge its positive duties, i.e. to remove duplication and ghost beneficiaries and essentially to provide efficient, citizen centric and paperless access to welfare schemes, and finally, to serve the immediate need of the identification system such as biometrics for tax evasion, criminal investigation, prevention of crime and terrorism. The court in the Puttaswamy judgement of 2017 rejected the first two and for the remaining two it agreed with certain conditions (discussed in the final section). Uncertainty and Insecurity in Digital India: A Despotic push towards Digitalisation On July 10, 2014, the Government of India launched a pan India programme named “Digital India” in its Union Budget 2014–2015. To address the “imminent need to further bridge the divide between digital haves and have-nots,” several policies and schemes were proposed. It was called a clarion call for E-Kranti (Electronic Revolution) in government service delivery and governance.32 It aims to “build a digitally empowered society and knowledge economy by leveraging Information Technology as a growth engine of new India.”33 Until now, it was merely a novel push by the government towards Digital India, as a means to transform India, by harnessing digital technologies (including Aadhaar) and making it accessible to people and to empower them through digital services (Arun 2017b).

30 “No Aadhaar, No Service- Notifications Making Aadhaar Mandatory.” 2017, Software Freedom Law Centre, March 28. Available at: http://sflc.in/no-aadhaar-no-service-notifications-makingaadhaar-mandatory/, accessed August 28, 2017. 31 Aftermath of judgement, Minister Ravi Shankar Prasad called the arguments of Attorney General as the “banter in the courtroom.” “Law minister says attorney general’s comments against right to privacy were just courtroom banter.” 2017, Scroll, August 24. Available at: https://scroll.in/latest/848411/law-minister-says-attorney-generals-comments-against-right-toprivacy-were-just-courtroom-banter, accessed September 12, 2017. 32 Budget 2014–2015. Budget Speech by Arun Jaitley, Minister of Finance, Available at: http:// indiabudget.nic.in/budget2014-2015/ub2014-15/bs/bs.pdf, accessed April 28, 2017. 33 ibid.

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However, a sudden deployment of the demonetisation policy by the Reserve Bank of India (RBI) on November 8, 2016, accelerated the cash-crunch Indian economy to forcibly adopt non-cash methods or cashless methods for monetary transactions.34 As the flow of cash and lower denomination notes in the circulation deteriorated, the government initiated a despotic push towards digital currency again under the campaign of Digital India. Eventually, there was a sudden surge in the consumer base and amounts of transactions in e-wallet apps as India’s central banking institution RBI did not restrict the electronic means of payments. Before demonetisation, in August 2016, the government launched its own mobile digital payment application named Unified Payments Interface (UPI). Later in December 2016, another app named BHIM (Bharat Interface for Money) was launched. In order to promote digital transactions, the government also launched promotional schemes to lure individuals to adopt digitalisation (Arun 2017b). There has been a perceptible change in the way technology is leveraged for governance. Now, data is regarded as a new oil and national asset.35 For the state, it is a tactical tool to fight against corruption, financial inclusion of the poor, financial accountability, and also to provide digital convenience and accessibility. Apart from its larger public interest, the questions regarding the uncertainty and insecurity revolving over the data are severely unaddressed and being repeatedly neglected. Along with this, there are several serious issues concerning implementation of Aadhaar. First, issues regarding disruption, denial and exclusion. On September 28, Santoshi Kumari, an 11-year-old girl in Simdega district, Jharkhand, died due to starvation because her family’s ration card was cancelled as it was not linked to their Aadhaar number.36 Similarly, several other people faced denial and exclusion as they failed to link or produce Aadhaar. While on the other hand, despite holding Aadhaar, several beneficiaries are facing immense problems due to biometric authentication failures, poor connectivity, server problems, seeding errors and many more.37 Contrary to the intended goals to eradicate corruption, an assessment study conducted

34 According to the government, demonetisation was unleashed to tackle three issues; circulating fake currency notes, black money, financing terrorism and economic security. However, its goalposts shifted towards cashless economy and promoting benefits of Digital India. Notification. Department of Economic Affairs, Ministry of Finance, 2016, Available at: http://finmin.nic.in/172521. pdf, accessed August 14, 2017. 35 See response to the RTI Application (Yadav 2017). 36 “Denied food because she did not have Aadhaar-linked ration card, Jharkhand girl dies of starvation.” 2017, Scroll.in, October 16, Available at: https://scroll.in/article/854225/denied-foodbecause-she-did-not-have-aadhaar-linked-ration-card-jharkhand-girl-dies-of-starvation, accessed November 12, 2017. 37 Several scholars and activists (Jean Dreze, Ritika Khera, Usha Ramanathan, Shanta Sinha, Bezwada Wilson etc.) and several news dailies have highlighted issues surrounding exclusion and denial to access to their entitlements due to Aadhaar. See Dreze, J. (2016, September 10). Dreze, D. 2016. “Dark clouds over the PDS.” The Hindu. September 10, Available at: http://www.thehindu. com/opinion/lead/Dark-clouds-over-the-PDS/article14631030.ece, accessed November 12, 2017; Khera, R. 2017. “Impact of Aadhaar in Welfare Programmes.” Available at: https://ssrn.com/ abstract=3045235, accessed November 12, 2017.

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on the ration shops in Delhi region found that despite putting Aadhaar-enabled point of sale (POS) machine, there had been evidences of corruption.38 Second, there are unauthorised authentication and impersonation issues. On February 2017, six people were arrested from Indore, Madhya Pradesh, for allegedly selling SIM cards through unauthorised authentication and impersonation of Aadhaar data and fingerprint scans of other customers.39 This is not an isolated case. There are numerous cases of misuse of Aadhaar data. Third, there are data leak and breach issues. During the initial months of 2017, an online media portal Medianama identified some serious instances when Aadhaar data was leaked by several union and state government departments. Also a study by Centre for Internet and Society (CIS) identified potential leaks of personally identifiable information (PII) of individuals in the public record system (especially in the benefits disbursement schemes) were publicly available on government websites.40 The Minister of State P. P. Chaudhary (Electronics and Information Technology) acknowledged data leaks while responding to a question in Lok Sabha. He said that “around 210 websites of Central and State government departments including educational institutes were displaying the list of beneficiaries along with their name, address, other details and Aadhaar numbers for information of general public.”41 Apart from government departments, the private companies are also sailing on the same boat. On July 2017, telecom giant Reliance Jio faced data breach in the customer database.42 These are some of the few cases, apart from which there are several other cases of data leaks and breach in public and private sector. Finally, issues surrounding illegality and vulnerability. The sting operations by Cobrapost and CNN-News 18 exposed the illegalities and vulnerabilities in Aad-

38 See Peoples’ Assessment of the Implementation of Transparency, Grievance Redress and Accountability Measures of the National Food Security Act in Delhi. Delhi Rozi Roti Adhikar Abhiyan & Satark Nagrik Sangathan, 2017. Accessed November 18, 2017. https://static1.squarespace.com/ static/58b545dc59cc68c59cb75b8e/t/59a9c386d482e916061cee7a/1504297932554/Delhi+Rozi+ Roti-+NFSA+Report-+full+report.pdf. 39 “Reliance Jio SIM Cards Scam: Six Held in Indore for Selling SIM Cards.” 2017, NDTV, February 20, Available at: http://gadgets.ndtv.com/telecom/news/reliance-jio-sim-cards-scam-six-heldin-indore-for-selling-sim-cards-1661424, accessed August 13, 2017. 40 See Sinha A. and Kodali. S, Information Security Practices of Aadhaar (or lack thereof): A documentation of public availability of Aadhaar Numbers with sensitive personal financial information, 2017, Centre for Internet and Society, Available at: https://cis-india.org/internetgovernance/information-security-practices-of-aadhaar-or-lack-thereof-a-documentation-ofpublic-availability-of-aadhaar-numbers-with-sensitive-personal-financial-information-1, accessed August 1, 2017. 41 Lok Sabha Debates 2017, P. P. Chaudhary (Minister of State for Electronics and Information Technology) July 19, Available at: http://164.100.47.190/loksabhaquestions/annex/12/AU574.pdf, accessed September 1, 2017. 42 “Jio Customer Database of over 120 Million Users Leaked, Could Be Biggest Data Breach in India.” 2017, Fonearena, Available at: http://www.fonearena.com/blog/224741/jio-customerdatabase-of-over-120-million-users-leaked-could-be-biggest-data-breach-in-india.html, accessed September 1, 2017.

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haar making process.43 Exposing these issues led to penal actions against the news media.44 The several RTI applications filed by independent news venture Scroll.in revealed that UIDAI received 1390 complaints about enrolment agencies during 2010–2016. In only three instances, the complaints were filed by the UIDAI. The cases involved were serious which included—corruption charges or charging bribes for enrolment, fictitious and fake enrolment (such as Lord Krishna, Goddess Saraswati, Lord Ganesha, and Jhansi ki Rani.), refusal to enrol children below 5 years of age (they were exempted to provide biometric to get Aadhaar), multiple registration of same person, using fraudulent methods to carry out enrolment (e.g. using rubber thumb) and many more. Of these, only a few cases were resolved, while most of the cases were closed or dropped (Yadav 2017). The above-mentioned issues show the degree of information security available to the sensitive personal data in India’s digital governance. The next section discusses the outcome of an unleashing of governance and surveillance measures on Indian democracy.

11.4 Emerging Contradictions in State’s Surveillance and Democracy in India The issues concerning security and development were burgeoning, for which the state adopted modern technological measures. For national security and public safety, the legal measures were formulated and surveillance apparatus was erected. For development and social security, a grand biometric identification system and massive digitalisation project were launched. Such assorted forms of surveillance practices, mostly guided within a democratic and legal framework, clearly have far-reaching effects on individual’s rights and freedom in a democracy. Conceptually, both surveillance and democracy as concepts are antithetical, complex, contextual and multifaceted. Nevertheless, their existence makes a significant impact on our lives, making it critical to understand the complexity of the relationship between surveillance and democracy. According to Haggerty and Samatas (2010), democracy involves a system of open procedures to make decisions in which all members have an equal right to speak and have their opinions counted which in turn protects individuals from the corrupting effects of power. Further, they assert that this has a direct bearing on democratic governance and surveillance as the democracies are accountable to their citizens. 43 “Cobrapost exposes how illegal immigrants easily avail Aadhaar cards.” 2014, Firstpost, March 25, Available at: http://www.firstpost.com/india/cobrapost-exposes-how-illegal-immigrantseasily-avail-aadhaar-cards-1449057.html, accessed August 13, 2017; “First FIR filed under Aadhaar Act after two found having same biometric info.” 2017, The Pioneer, March 28, Available at: http://www.dailypioneer.com/todays-newspaper/first-fir-filed-under-aadhaar-act-after-twofound-having-same-biometric-info.html, accessed August 13, 2017. 44 “FIR against man over rumours on Aadhaar.” 2017, The Asian Age, February 28, Available at: http://www.asianage.com/metros/delhi/280217/fir-against-man-over-rumours-on-aadhaar.html, accessed August 13, 2017.

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So, when we look into issues pertaining to proliferating terrorism, cybercrimes and also issues concerning social welfare and development, it appears imperative to adopt surveillance technologies. The state makes a shift from traditional policing to modern policing, from traditional facial identification to modern biometric identification and from cash-ridden economy to cashless economy. For this, new technologies of surveillance are being adopted with its governmentally relevant knowledge and adding new layers in its governing mechanisms. Additionally, it is being argued that democratic rights can be protected more effectively and efficiently through surveillance which makes it indispensable. However, does it mean to bypass or set aside the ideas and principles of democracy and the rule of law? Also, isn’t it problematic to create surveillance infrastructure within constitutional boundaries? Democracy in India is guided by the principles of liberal constitutionalism and doctrines of the rule of law. And these guiding principles are cherished by the liberal democracies around the world. However, there are four serious issues concerned with the state’s surveillance and democracy in India. First, it lacks robust legal and institutional framework. If we look into the privacy regime in India (also around the world), it is not an absolute freedom. It is limited instead, because it can be curtailed under specified conditions with procedures established by law. Even the court in Puttaswamy case outlined threefold requirement—legality, necessity and proportionality to address state’s legitimate interest and simultaneously to limit their power to safeguard fundamental right to privacy.45 But when we look into the chequered history of telephone tapping and political snooping in the hands of the state (as mentioned earlier), it does raise questions on the procedural framework to safeguard individual privacy and freedom. For instance, while responding to RTI Application about data security in Aadhaar, the UIDAI held that “[D]ata being national asset and sharing the systems in place can affect the security interest of the UIDAI and may lead to incitement of an offence” (Yadav 2017). The authority’s refusal to reveal the security-breach statistics shows the web of secrecy and confidentiality without any oversight mechanism in the grand biometric system. In the light of numerous instances mentioned in the earlier sections, it can be observed that—on the one hand—the abuse of state power to surveil and intercept is still looming large, and on the other hand, the issues of misuse, exclusion and dangers related to Aadhaar in both public and private sectors are still seeping out. Though privacy is held as a constitutional right, still it lacks appropriate legal and procedural force to curb potential abuse and also accountability and transparency over state’s surveillance. Despite the recommendations given by AP Shah Committee in 2011, the successive regimes failed to enact a privacy law. Before the court’s final verdict on privacy, B N Srikrishna Committee was constituted on July 31, 2017, to formulate a robust privacy policy for the government for which it released a white paper on November 27, 2017. Later the committee released their final report along with draft legislation on data protection on July 27, 2018. Though there had been several attempts to draft privacy or data protection laws, after some time it was passed into cold storage. Even the non-appointment of the Chairperson in Cyber Appellate Tribunal (CyAT) 45 (W.P.(C)

494/2012), pp. 254–255.

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for more than six years turned it into a dysfunctional body.46 This institution was established to adjudicate cyber-related cases and to evolve robust cyber law jurisprudence and most importantly be a harbinger to safeguard individuals’ rights in this age of information. Contrarily, it turned out as an appendage; hence, NDA regime sought to merge the CyAT with other tribunals.47 However, the vacant Chairperson’s post in CyAT reflects the precarious climate, where giving a guarantee of safety and security is merely a delusion with a headless body in a privacy-less India. In short, the expansion of state’s surveillance in the first decade of the twenty-first century did not coincide with robust principles to safeguard privacy. Second, there is a lack of proper deliberation and discussion. If we look into the growth of the so-called indispensable surveillance infrastructure, it probably lacked significant parliamentary debates, and even if there were debates in civil society, they were eschewed in the name of security or development of the state. For instance, during post 9/11 and 26/11 scenarios, interception clauses penetrated through a series of legislative reforms, and it merely received lackadaisical parliamentary debates on their merits and demerits, and they were addressed with nationalist jingoism. Similarly, the Aadhaar Bill 2016 did not receive the required amount of deliberation in Parliament and was passed hastily. In this regard, the Rajya Sabha gave few prudent recommendations to Aadhaar Bill such as substitution of the word “national security,” with “public emergency or in the interest of public safety,” because, as MP Sugata Bose observed that “[i]t would be open to abuse and misinterpretation.”48 However, Finance Minister Arun Jaitley snubbed this argument. Those recommendations were not binding, as it was a money bill. Some other recommendations were related to privacy issues, provision to opt out from Aadhaar enrolment and to offer an alternative identification. In this respect, Jaitley argued that “under Article 21, a person is entitled to his right of life and liberty which can be taken away by a procedure established by law…. So, privacy in an exceptional case by a fair, just and reasonable procedure can be taken away.” By pointing out the global practices on welfare and identification, he argued that “You cannot say that I do not want social security number and still I want the benefit.”49 46 The Parliamentary Standing Committee Report, 2015 expressed its concern over the sad state of affairs of Tribunals. Apart from raising concern over the absence of presiding officer in CyAT, it also stated that as the cases are mounting, it defeats the entire purpose for which it was created. See Seventy-Fourth Report on The Tribunals, Appellate Tribunals and Other Authorities (Conditions of Service) Bill 2014, Parliamentary Standing Committee, Available at: http://www.prsindia.org/uploads/media/Tribunal%20Authorities/SC%20Report%20Tribunals%20Bill,%202014.pdf, accessed July 17, 2017. 47 In 2017-2018 Budget Speech, Minister of Finance Arun Jaitley argued that “over the years, the number of tribunals have multiplied with overlapping functions. We propose to rationalise the number of tribunals and merge tribunals wherever appropriate.” Budget Speech 2017. Arun Jaitley (Minister of Finance), July 10, Available at: http://indiabudget.nic.in/ub2017-18/bs/bs.pdf, accessed September 17, 2017. 48 Lok Sabha Debates 2016, Seventh Session. March 16, Available at: http://164.100.47.193/ debatestext/16/VII/1603f.pdf, accessed September 1, 2017, p. 256. 49 ibid, pp. 266–269.

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Third, there is judicial evasion from the issues concerning surveillance and democracy. The role of the judiciary is quintessential in fortifying the constitutional rights and democratic principles, but on the contrary, there is an evolving phenomenon of judicial evasion.50 In February 2016, Supreme Court dismissed a public interest litigation filed by Prashant Bhushan concerning the legality and Parliament oversight over intelligence agencies. The court held that “we are not inclined to entertain this petition…. Trying to get into the domain of intelligence may create dent in national security.”51 In the much-hailed Puttaswamy judgement, the court lost an opportunity to highlight the significance of accountability and transparency in intelligence and national security. Here, the refusal to address the unchecked and unregulated surveillance in the name of national security further deepens the state’s secrets in a democracy. It is important to understand that the word “security” is quite elastic and subjective which can be moulded as per the circumstantial requirements. Above all the court’s refusal to urgently hear and address numerous petitions of coercive compulsion and exclusion had wide-ranging ramifications on individual rights and freedom. Consequentially, such a judicial evasion fait accompli legitimises the state’s discourse on surveillance. Finally, whenever surveillance is pitted against democracy, the ripple effects of security are evident on freedom. It has even turned out to be a major tussle in the twenty-first century,52 where the argument to trade-off liberty for security has gained more weight around the world, including India. After the court judgement on privacy, Kiren Rijiju (Minister of State for Home Affairs) acknowledged that privacy is very important and it is an intrinsic part of the fundamental right, as he says “No doubt about that and no question of revisiting those provisions enshrined in the constitution of India. At the same time privacy cannot be unqualified. There is something called national interest. There is something called national security. When it comes to national security, I personally feel, that national interest overrides everything.”53 Instead of placing them in a state of antagonism, where one is subverted over the other, the two need to be protected, as the Constitution guarantees individual civil and political rights (privacy) along with the aspirations for achieving socio-economic rights (social welfare). There is a dire need to create a harmonious balance between burgeoning issues of security along with the concern about threats to privacy. The exceptions sought for the public emergency, national security and social welfare need 50 For more information on the evolving doctrine on “judicial evasion,” see Bhatia, G. 2017. “‘O Brave New World’: The Supreme Court’s Evolving Doctrine of Constitutional Evasion.” Indian Constitutional Law and Philosophy, Web blog post, January 6, Available at: https://indconlawphil.wordpress.com/2017/01/06/o-brave-new-world-the-supreme-courtsevolving-doctrine-of-constitutional-evasion/, accessed November 6, 2016. 51 “SC junks PIL seeking to make intelligence agencies accountable.” 2016, India Today, February 23. Available at: http://indiatoday.intoday.in/story/sc-junks-pil-seeking-to-make-intelligenceagencies-accountable/1/602937.html, accessed November 6, 2016. 52 For more discussion on security vs liberty (Arun 2017a, c). 53 “National security overrides everything: Rijiju.” 2017, India Today, August 31. Available at: http:// indiatoday.intoday.in/story/national-security-overrides-everything-rijiju/1/1037830.html, accessed November 6, 2017.

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to be operated by “striking a thin balance between the often-corrosive surveillance measures with civil liberties” (Arun 2017c). Even the court in Puttaswamy case held that “Civil and political rights and socio-economic rights do not exist in a state of antagonism. The conditions necessary for realising or fulfilling socio-economic rights do not postulate the subversion of political freedom.”54 Therefore, they need to be equally protected, because they are “complementary and not mutually exclusive.” Also, there is an instrumental value of political rights on socio-economic rights. The court pointed out how the historical denial of civil and political rights for economic well-being has been utilised “to wreak the most egregious violations of human rights.” Because the “conditions of freedom and a vibrant assertion of civil and political rights promote a constant review of the justness of socio-economic programmes and of their effectiveness in addressing deprivation and want.”55 Apart from this, it is essential to understand the politics behind the technological changes. Here, the reforms in digital governance were hailed as a panacea for several problems. However, it needs to be understood that reforms do not occur in a political vacuum. Rather the administrative reforms are dependent on political will, which in turn is guided by the opportunities that local politicians have for financing their election campaigns and bribe money (Bussell 2012). Also, the realisation of these promises requires strategies to change the incentives for those making and implementing the policy, because it is the individuals who determine how technology is to be used. All these technological changes were embarked on to revive the economy through financial investments. It became more apparent by the aggressive commitment of the NDA regime to neoliberalism by easing up the ground for the businessfriendly opportunities to facilitate capitalism. Here, the prescribed policy of digitalisation also contains the state’s interest and agenda in adopting a model of privatisation and neoliberal economy. For this, the state is also accruing private investments (PIB 2017a), and the government roped in the New York-based consultancy firm McKinsey & Company to lay the road map to reap more investments (PIB 2017b). Under this form of surveillance practices, especially in the context of social welfare, in order to exercise their democratic rights and citizenship, the people need to interlace themselves with “surveillant assemblage.” It would be more appropriate to call it a political bargain where individuals would relinquish their freedom to acquire their entitlements. Here, the circumstances (safety, security and welfare) under which surveillance is justified pose major problem. For instance, there is a provision of disclosure of information for national security in Aadhaar Act. The fusion of national security with welfare policies makes triangulation of data possible which gives greater prospect for the state to penetrate deeper into lives of the people. The mundane ordinary lives are fused with emergency and extraordinary situations. Now, this form of surveillance is not merely penetrative but also embracive. Here, the information about the people is extracted to govern them efficiently and effectively. It is “surrounding” and “taking hold” of their people in this information age by collecting data about their people, because the “states must embrace societies in 54 See

(W.P.(C) 494/2012), p. 216. pp. 215–217.

55 ibid,

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order to penetrate them effectively” (Torpey 2000). But the means adopted by the state is problematic and inappropriate. The state’s power to embrace in a democracy thrives on the doctrine of the rule of law and constitutionalism; otherwise, it could become authoritarianism. In this case, merely envisioning Orwellian state surveillance would be sheer short-sightedness. Because it is also Kafkaesque in nature where the dehumanised bureaucratic state surveillance is coercive and despotic which led to denial and exclusion as people failed to avail their entitlements. So, the Aadhaar system contains both the rights-promoting and rights-denying aspects. In the former, it makes population “eligible” for social and economic liberties. While in the latter, as what critics are concerned about, are its repressive outcomes because consequently, it makes surveillance “legible” and puts political liberties at risk and under trade-off. Ostensibly, it may ameliorate livelihood and may be subverted for other ends too. Within the far-ranging debates regarding Aadhaar, it is quite evident that it provides “identity, not citizenship.” Nonetheless, it has gone beyond from belonging and being identified. Now such a humungous data essentially has far-reaching effects on the nature of relationship between technology and individual in a modern society. And it rests upon how the personal data is collected, stored, and processed by the state agencies and private companies in future. In this particular phenomenon retreaded state is janus-faced—one with “allocative governance” and the other with “authoritative governance.” In the former, numerous social security schemes based on digital technologies were launched. It was made possible when data collection became material, and the state embraced the population through digitalisation. The latter is a form of governance where it is purposefully monitoring and observing the counter-dissenting voices against the state. It became quite apparent by the authoritative actions, in three notable incidents—when the tribal activist Gladson Dungdung’s passport was impounded in 2016, when a Look Out Circular was issued to Greenpeace activist Priya Pillai in 2015 and prevented her from travelling abroad, and when Amnesty International’s Christine Mehta was deported in 2014 (Arun 2016).56 Here, at this juncture the path for development being carved out is under the process of churning and leading to confrontation between two different polar points. On the one side, the state is striving to create businessfriendly environment and robustly supporting foreign investors, on the other side, it is suppressing dissent.57 There is massive upsurge among people on several grounds,

56 Dungdung, G. “Ask no questions.” 2016, Indian Express, May 16, Available at: http:// indianexpress.com/article/opinion/columns/jharkand-adivasi-forest-rights-act-human-rightsenvironmentactivist-2802460/, accessed September 29, 2017; “Greenpeace campaigner Priya Pillai offloaded at airport.” 2015, The Hindu, January 11, Available at: http://www.thehindu. com/news/national/greenpeace-campaigner-priya-pillai-offloaded-atairport/article6777773.ece, accessed November 1, 2017; Mehta, C. “How I was deported from India.” 2015, The Hindu, July 2, Available at: http://www.thehindu.com/opinion/op-ed/christine-mehta-writes-on-how-she-wasdeported-from-india-for-herreport-on-afspa/article7375878.ece, accessed November 1, 2017. 57 “Guard against 5-star activists: Narendra Modi.” 2015, The Hindu, April 5, Available at: http:// www.thehindu.com/news/national/modi-chief-justices-conference-judiciary/article7070485.ece, accessed November 1, 2015.

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and the rise of a wide variety of social movements, protests and resistance in order to counter the state on political grounds.

11.5 Conclusion The development of novel technological measures for the issues concerning security (national security, public security and social security) is quintessential for effective and efficient functioning in a democratic state. For this purpose, the retreaded Indian state added new layers of institutional agencies, legal procedures and technological mechanisms to govern. However, it failed to establish and operate it democratically and constitutionally. This is because it leapfrogged constitutional safeguards, which is detrimental in particular to individual rights and freedom and to democracy in general. Additionally, the despotic push towards digitalisation has been catastrophic, and it is severely affecting numerous lives. Here, the existence of technologies of surveillance needs to be shaped and calibrated in a democratic legal framework. Also, the indispensable state powers to surveil for “security” need to be limited through the robust regime of procedural framework and operate on the underlying doctrine of the rule of law and constitutionalism. The instruments of intervention developed by the retreaded state in the twentyfirst century are Janus-faced. They are not only penetrative in the traditional sense of conceptualising the state, but also embracive where the state is grasping and covering everyone through its novel and benign surveillance measures. While conceptually neither privacy nor surveillance is a self-defining phenomenon, rather, they dwell around the deep muddy terrain of an array of interrelated social and policy issues. Historically, they were moulded to suit varying interests and agendas. At this juncture, privacy and surveillance laws are moulded to get the utmost degree of access to personal data. In the twenty-first century, the degree of access to personal data determines the amount of power to monitor, control and penetrate deeper into individuals and society. Such a massive expansion of state surveillance leads to strangulation of the democratic space, when civil liberties and constitutional rights are being traded off for security without appropriate safeguards to potential abuse. It becomes even more complicated when such instruments of intervention are legally endorsed in a democracy. It became quite apparent with the actions against the people who differed with the state policies. In a democracy, intolerance towards dissents by the state is sheer brutalisation. And these events raised significant concerns surrounding the right to freedom of speech and expression, right to form associations or unions, right to movement and right to privacy. A vibrant democracy rests upon the pillars where the civil and political rights thrive in consonance with the constant nourishment of the socio-economic rights. Acknowledgements I would like to thank Prof. Anthony P. D’Costa and Prof. Achin Chakraborty for their editorial suggestions and my friend Anushri for proofreading tirelessly. However, I am solely responsible for any errors and omissions.

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P. Arun is Doctoral Scholar in Department of Political Science, School of Social Sciences, University of Delhi. His primary areas of research interest are privacy and surveillance. His research examines politics over personal data, privacy and surveillance. As to how technology-led surveillance strategies are used as a response to prevent corruption, crime and terrorism, and assess the implications of the law and social control

Index

A Absolute poverty, 85, 106 Accountability, 7, 10, 12, 16, 17, 33, 39, 41–46, 48, 50, 52, 53, 92, 105–107, 110–112, 115–119, 121, 122, 192, 197, 200, 201, 220, 221, 223, 225 Agrarian crisis, 136 Agrarian transition, 127–132, 134, 135, 140, 143, 148, 149 Agricultural productivity, 130, 131, 143 Agriculture, 49, 62, 64, 86, 128–130, 132, 134–137, 139, 142, 143, 148–150 Andhra Pradesh, 12, 28, 86, 89, 96, 116, 117, 120, 121, 135, 158, 211 Apprentices, 183, 187 Asian Development Bank (ADB), 44, 106, 112, 114 Asian financial crisis, 17, 105, 107 Auto component sector, 176, 178, 181, 185 Automation, 14, 131, 143, 145, 146, 184, 185 Automobile policy, 179 Automotive Component Manufactures Association (ACMA), 180 Automotive sector, India, 13, 18, 176–179, 186, 187 Auto revolution, 18, 176, 177, 180, 187 B Backward and forward linkages, 132, 180 Bahujan Samaj Party (BSP), 93 Bangladesh, 145 Bargaining strength, 177 Bharatiya Janata Party (BJP), 2, 33, 39–41, 49–52, 70, 84, 98, 99, 193, 216 Bihar, 28, 84, 95, 96, 98, 116, 193

Biopolitics, 67 Black market, 97 Bombay plan, 133 Brazil, 3, 85, 155 Bureaucracy, 14, 31, 42, 44, 63, 109, 110, 165, 167 Business lobbying, 77 C Capabilities, 1–6, 8, 16, 25, 30, 32, 34–36, 47, 110, 111, 121, 150, 213 Capabilities expansion, 32, 36, 110, 121 Capital accumulation, 36, 65, 108, 110, 128, 140, 147, 148, 156 Capital-intensive industrialization, 131 Capitalism, 2, 4, 16, 40, 47, 49, 57, 58, 62–66, 69, 70, 74, 78, 113, 127–132, 134, 141, 143, 147–149, 180, 226 Capitalocentrism, 63 Casual workers, 136, 183, 187 Catch-up process, 145 Chhattisgarh, 96, 97 China, 31, 85, 111–113, 130, 143, 146, 155 Chitradurga district, 107, 118 Circuits of global capital, 64, 65, 70, 73, 77 Citizenship regime, 43, 48 Civil service, 88 Civil society, 1, 3, 6, 7, 12, 16, 19, 26, 33, 39–41, 43–45, 47–49, 52, 93, 94, 117, 120, 121, 187, 217, 224 Class process, 62, 63, 70, 71, 77 Colombia, 85 Common minimum program, 46 Compressed capitalism, 13, 17, 127–131, 137, 141, 143, 145, 149

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232 Confederation of Indian industry, 87, 180 Congress party, 39, 40, 42, 44, 46, 52, 117 Construction, 51, 72, 89, 106, 112, 136, 140–142, 200 Construction sector, 140 Consumption, 47, 74, 85, 89, 96, 97 Contractual workers, 177, 182 Contract workers, 13, 144, 145, 182, 183 Corporate, 51, 52, 85, 87, 92, 101, 108, 137, 143, 147, 165, 180, 181, 186 Cost-cutting measures, 182, 187 Crony capitalism, 108, 144, 162 D Dalit, 90, 93 Debate, 58, 68, 70, 72, 74, 76–78, 91, 110, 114 Delhi, 28, 86, 87, 91, 92, 142, 160, 181, 182, 221 Democracy, 6, 7, 10, 19, 44, 47, 49, 58, 66–69, 73, 91, 93, 117, 191, 194, 208, 209, 222, 223, 225, 227, 228 Demographic pressure, 135 Deregulation and liberalization, 131 Developmental state, 1–7, 17, 35, 36, 105, 107, 108, 110, 112, 121, 193 Development Finance Institutions (DFIs), 101 Development, human, 16, 25–27, 31, 32, 35, 37, 84, 85, 100, 110, 113, 115, 121 Discrimination, 36, 86–88, 91 Dispossession, 2, 8, 131, 136, 149 Doctor, 91, 93 Dualism, 128, 164 E East Asia, 43, 107, 108, 111, 121 Economic liberalization, 3, 109, 111, 176 Education, 6, 8, 26, 27, 30, 31, 33, 34, 37, 43, 46, 50, 61, 62, 84, 85, 88–90, 93–95, 110, 111, 115, 134, 138, 140, 141, 148, 150 Election, 7, 39, 40, 46, 49, 50, 84, 93, 97, 99, 100, 167, 226 Electricity, 10, 94, 95, 97, 101, 140, 147, 150, 156–162, 165, 166, 168, 187 Elites, 4, 93, 101, 118, 119, 121, 164 Eminent domain, 87, 131 Employment, 6, 8, 10–13, 17, 18, 33, 45, 46, 50, 51, 72, 84, 86, 89, 91, 93, 95, 98, 100, 105, 106, 110–112, 115, 116, 119, 127–150, 177, 180, 182, 183, 185, 187, 200, 202, 218 Employment elasticity, 134, 140–142 Employment insecurities, 18, 177, 182

Index Enclave economy, 131 Entrepreneurship, 6, 51, 64 Excess capacity, 141 Export-oriented industrialization, 130, 133 F Federation of Indian Chambers of Commerce and Industry (FICCI), 77, 180 Food security, 11, 16, 25, 26, 33, 34, 43, 45, 48, 49, 58, 70, 74–78, 92, 135, 221 Foreign Direct Investment (FDI), 176, 179, 186 Forest rights act, 43, 67, 194 Foxconn, 146 Fundamental class process, 70 G Gandhi, Rahul, 98, 99 Gandhi, Sonia, 75, 93, 99 Gig economy, 130, 146 Global capital, 63–65, 67–69, 72, 74, 78, 187 Global Financial Crisis (GFC), 114 Globalisation, 61, 63, 89, 212 Global value chains, 130, 131, 146 Gram Panchayats (GPs) [village council], 106 Gram sabha (village assembly), 1, 118, 121, 196 Green revolution, 134, 135, 143 Gross Domestic Product (GDP), 70, 85, 92, 95, 97, 106, 111–113, 141, 176 Growth, economic, 1, 3–10, 16, 17, 27, 30, 36, 40, 44, 51, 58, 60, 65, 70, 73, 83, 84, 86, 90, 94, 99, 100, 106, 108, 109, 111, 114, 127, 128, 130, 131, 134, 137, 139–141, 143, 156, 157 Growth, inclusive, 114 Gujarat, 28, 86, 100, 109, 144, 165, 181, 184, 211 H Haryana, 28, 89, 90, 119, 120, 158, 187 Health, 30, 31, 33, 50, 51, 61, 62, 75, 85, 87, 91, 92, 95, 100, 110, 111, 113, 115, 121, 140 Health, India, 31, 113 Health, insurance, 85, 111 Health, public, 30, 51, 85 Heavy industries, 132 Himachal Pradesh, 211 Hindu nationalism, 40, 49 Hiriyur taluk, 107 Home charges, 135 Homo economicus, 59–61 Homo sacer, 58, 68

Index Households, 10, 30, 43, 45, 48, 50, 75, 76, 85, 91–93, 95–97, 106, 107, 112, 115, 116, 118, 119, 148, 196, 198 Human capital, 16, 30, 57, 59, 61, 64, 89, 111, 114 Human development, 16, 25–27, 31, 32, 35, 37, 84, 85, 100, 115, 121 Human Development Index (HDI), 112, 113, 121 Human Resource Management (HRM), 185 I Immunisation, 85 Import Substitution Industrialization (ISI), 132–134, 145 Inclusive development, 16, 57–59, 67, 70, 73–75, 78, 139, 140 Inclusive growth, 114 Indebtedness, 136 Industrial clusters, 180, 182 Industrial policy, 4, 107, 140, 158, 176, 178, 180, 186 Industrial relations, 14, 18, 185, 186 Industrial unrests, 13, 18, 177, 185 Inequality, 6, 16, 17, 30, 36, 65, 75, 83–85, 87, 88, 100, 110, 112–114, 134, 144, 186 Informalization, 139, 147, 186 Informal sector, 43, 47, 64, 127–132, 137–139, 143, 147, 148, 150, 181 Information, 6, 8, 10, 12, 17, 30, 44–46, 62, 63, 83, 90–93, 97, 100, 110, 117, 118, 141, 165, 197, 201, 209–214, 216, 221, 222, 224–226 Information Technology (IT), 5, 6, 13, 91, 129, 130, 141, 145–147, 211, 214, 215, 219, 221 Infrastructure, 27, 30, 51, 62, 75, 85, 97, 101, 131, 132, 134, 140, 144, 145, 160, 161, 165, 166, 192, 199, 202, 223, 224 Institutional layering, 14, 157, 158, 162, 163, 167 Institutions, 9, 11, 12, 14, 19, 35, 36, 44, 48, 52, 60, 61, 64, 71, 77, 87, 88, 90, 106, 110, 114, 120, 121, 133, 144, 148, 149, 157–164, 166–169, 178, 191, 192, 196, 201, 202, 211, 214, 220, 224 Intermediate regime, 133 International Financial Institutions (IFIs), 114, 115 Investment, 4, 6, 9, 13, 18, 27, 36, 87, 89, 92, 108, 109, 113, 121, 131, 140, 144, 145, 150, 160, 164, 177, 180, 181, 186, 196

233 J Japan, 31, 108, 112, 130, 178 Jharkhand, 14, 19, 28, 96, 191, 193, 194, 196, 197, 199, 201–203, 220 Job capability, 111 Jobless growth, 13, 144, 147, 150 Job security, 111, 146 Joint Venture (JV), 178 Judiciary, independence, 42 K Karnataka, 12, 28, 86, 107, 116, 118–121, 211 Kerala, 27, 28, 42, 85, 86, 116 L Labor-intensive production, 134 Labour relations, 177, 186 Labour standards, 18, 177, 182, 185–187 Labor unions, 144 Land, 6, 8, 11, 19, 40, 43, 46, 65, 71, 87, 94, 119, 129, 131, 132, 134–137, 147–150, 156, 163, 176, 180, 191, 192, 194–201 Land acquisition, 8, 43, 46, 52, 65, 131, 197 Land grabs, 149 Landless workers, 149 Land reforms, 42, 94, 130, 133, 135, 148–150, 197 Late industrializing countries, 128 Leapfrogging, 127–129, 132, 134, 141, 143, 145, 150 Liberalisation, 13, 49, 52, 86, 88, 89, 91, 212 License Raj, 178 Literacy, 30, 70, 85, 91, 138 Loan, 90, 94, 160 Local-global market, 64 Lok Sabha, 34, 99, 221, 224 M Madhya Pradesh, 28, 97, 221 Maharashtra, 29, 45, 86, 116, 158, 159, 183, 215 Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), 16, 25, 26, 33, 34, 37, 43, 45, 46, 72, 75, 106, 118, 140, 143 Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), 17, 31, 105–107, 110–122 Make in India (MII), 13, 140, 177, 179 Manufacturing Programme (PMP), 178 Market citizenship, 11, 16, 36, 39–41, 43, 46, 48, 49, 51, 52

234 Maruti Udyog Limited (MUL), 176, 178, 181, 184 Mazdoor Kisan Shakti Sangathan (MKSS), 34, 44–46, 72, 93, 117 Media, 12, 33, 71, 76, 87, 91, 92, 184, 193, 213, 221, 222 Mexico, 85 Middle class, 5, 12, 49, 50, 65, 83, 86, 92, 94, 141, 176 Migrant worker, 50, 183, 186 Migration, 50, 64, 75, 136, 137, 143, 176 Modi government, 140 Modi, Narendra, 34, 40, 49, 98, 167, 227 Mortality, Infant, 84 Multinationals, 13, 146, 179 Muslim, 88 N National Advisory Council (NAC), 46, 48, 52, 75–77, 93 National Food for Work Programme (NFFWP), 95 National Rural Employment Guarantee Act (NREGA), 26, 93, 95, 96 Neoliberalism, 16, 39–41, 50–52, 57–59, 61, 64, 65, 78, 226 Neo-middle classes, 40, 49, 50, 52 Nepal, 112 Newspapers, 91, 165, 213 Non-Government Organisation (NGO), 92 Non-tradable services, 129, 141, 146 Nutrition, 50, 76, 100, 148 O Offshoring, 131 Organisation for Economic Co-operation and Development (OECD), 112, 129, 130, 141, 146, 147 Organized sector, 149 Original Equipment Manufacturer(OEM), 176 Orissa, 84, 85, 97 P Petty Commodity Producer (PCP) sector, 127, 128, 138, 141, 147–149 Political society, 4, 6, 9, 47 Population, 31, 36, 43, 47–50, 67, 75, 76, 84, 85, 87, 89, 91, 96, 98, 106, 110, 111, 113, 114, 121, 131, 132, 139, 141, 176, 194, 197, 199, 208–210, 213–215, 227

Index Poverty, 10, 12, 26, 27, 30, 31, 37, 45, 62, 64, 67, 70, 73–76, 83–85, 89, 90, 93–96, 98, 100, 105–107, 109, 112–114, 120, 148 Premature industrialization, 129, 145 Primitive accumulation, 2, 3, 13, 16, 40, 47, 49, 57, 65, 66, 68, 69, 131, 134, 136, 137, 143, 149 Privatization, 158, 159 Production surplus, 71, 73 Productive capitalists, 63, 71 Productive welfare state, 110, 111 Protective welfare state, 110, 111 Public Distribution System (PDS), 45, 48–51, 74, 75, 95–97, 208, 218, 220 Public policy, 16, 31, 33, 44, 58, 59, 70, 72–78, 91, 97, 100 Public sector, 4, 33, 51, 92, 93, 95, 111, 121, 132, 147, 156, 158, 160, 162, 164, 192, 193 Public services, 2, 8, 11–13, 15, 26, 84, 91–93, 95, 97, 207, 208, 214, 215 Q Quantitative Restriction (QR), 178 Quota restrictions, 179 R Race to bottom, 187 Railways, 97, 167 Rajasthan, 29, 34, 45, 46, 72, 85, 89, 92, 93, 95, 96, 117, 119 Redistribution, 7, 42, 43, 84, 109, 136, 137, 148, 149 Reform by stealth, 163, 164 Regulation, 19, 60, 137, 156, 161, 164, 166, 191, 198, 199, 201, 216, 217 Remittance income, 135 Reserve army of labor, 138 Right of Children to Free and Compulsory Education Act (RTE), 11, 16, 25, 26, 34, 43 Rights campaigns, 40, 41, 43, 44, 48 Rights-based programs, 106 Right to association, 183 Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (LARR), 46 Right to Information Act (RTI), 11, 16, 25, 26, 43, 44, 46, 91, 220, 222, 223

Index Robots, 145, 146, 184 Russia, 85 S Sampoorna Grameen Rozgar Yojana (SGRY), 95 Sarpanch [village council head), 117, 119 Saudi Arabia, 85 Scale economies, 131, 145, 146 Scheduled Caste (SC), 87, 89, 218 Scheduled Tribes (ST), 85, 87, 89, 193, 194, 196–198 School enrolment, 84, 89, 92 School, primary, 50, 84, 92, 95 Self-employment, 136–139, 147 Self-reliance, 128, 133, 135 Self-sufficiency, 135 Services, 7, 8, 13–15, 31, 33, 50, 64, 74, 86, 88, 89, 92, 93, 95, 97, 99, 110, 129–131, 137, 138, 140–148, 150, 181, 207–209, 212, 214, 215, 219, 224 Shared growth, 140 Singapore, 31, 108–110 Small and Medium Enterprises (SMEs), 18, 177, 180, 181 Smallholders, 136, 137 Smart cities, 149 Social audits, 12, 17, 46, 52, 105–107, 110, 115–120 Social citizenship, 11, 16, 36, 39–43, 47, 48, 115 Social democracy, 7, 44, 47, 49, 117 Social needs, 12, 58, 70–78 Social policy, 11, 16, 27, 39–41, 43, 46, 48–51, 95, 110–112 Social protection, 2, 12, 17, 40, 43, 105–107, 110–115, 117, 119, 121, 122 Social Protection Index (SPI), 112, 121 Social protection:instrumentalist approach, 114, 115 Social surplus, 12, 71–77, 140 Society of Indian Automobile Manufactures (SIAM), 180 Software services, 86, 138 South Africa, 85 South India, 92 South Korea, 2, 3, 6, 7, 31, 35, 108–113, 129, 130 Special Economic Zones (SEZ), 87 Spillover effects, 145 Sri Lanka, 112, 113 State, 1–19, 25–27, 30, 31, 33–37, 39–52, 57–73, 75, 76, 78, 85–88, 90, 91,

235 93–97, 99, 105–117, 119–122, 127–137, 139, 140, 143, 144, 147–150, 155–169, 176–178, 180, 181, 186, 187, 191–194, 201, 202, 207–214, 218–228 State capacity, 6, 36, 88, 89, 120–122, 157, 161, 169 State capitalism, 14, 18, 63, 156, 157, 161, 162, 168 State-led industrialization, 17, 128, 132 State legitimacy, 9, 140 State of exception, 16, 57, 58, 66–68 State-owned enterprises, 164, 168 State policies, 134, 169, 176, 177, 186, 228 Subcontracting, 18, 131, 145, 177, 181, 187 Sub-saharan Africa, 85, 113 Subsumed class process, 71 Supply chain, 177, 181 Supreme Court, 33, 43, 44, 46, 48, 52, 74, 75, 94, 166, 179, 211, 217, 225 Surplus labor, 62, 63, 71 Surplus workers, 143 Swachh Bharat Abhiyan, 51 T Taiwan, 31, 35, 108–111, 130, 146 Tamil Nadu, 29, 96, 109, 116, 117, 158, 185 Taxation, 89 Teacher, 93 Tertiary technical education, 130, 146 Third world, 64, 65, 70 Trade, 44, 62, 71, 86, 87, 89, 95, 134, 140, 142, 146, 150, 186, 225, 227 Tradeable services, 127, 128, 144 Trade deficit, 146 Trade union, 183 Transformative Social Protection (TSP), 115, 122 Transparency, 43, 44, 46, 91, 96, 115, 117, 118, 200, 201, 221, 223, 225 U Uneven development, 44, 127–129, 144 United Nations Development Programme (UNDP), 32, 35, 112 United Progressive Alliance (UPA), 11, 33, 39–41, 46–52, 70, 75, 76, 93, 106, 167, 168, 214–216 United States, 155 Unorganized sector, 130, 145, 147, 177 Unorganised Sector Workers’ Social Security Act, 43 Unproductive capitalists, 63, 71 Unskilled labor, 130, 147

236 Urban development, 131 US PL 480, 135 Uttar Pradesh (UP), 28, 85, 87, 90–93, 97, 116, 158 V Value chain, 18, 177, 181 Vigilance and Monitoring Committees (VMCs), 107, 118, 119, 121 Village Education Committee (VEC), 92 W Welfare, 1–4, 6–13, 15–17, 26, 35–37, 39–42, 45–47, 52, 61, 83, 84, 86, 88, 91,

Index 93–100, 110–112, 117, 120, 128, 139, 140, 159, 197, 208, 209, 214, 218–220, 223–226 Workers’ struggles, Maruti, 187 Working conditions, 177, 182 World Bank, 44, 70, 72, 98, 106, 113, 114, 116, 128, 133, 161, 162, 193, 203 World of the third, 64, 65, 68–70, 74, 77, 78 Z Zamindars, 119, 135