It’s time to
acknowledge that the Indian elite’s plan to replicate European sequence of
modernization is a pipe dream….
Indian
leaders often warn that they need to shift the majority of their country’s
population—almost 70%—from rural to urban areas. Our salvation, Prime Minister Manmohan
Singh claims, lies in moving people out of agriculture. Finance
minister P. Chidambaram confirms, “My vision is to get 85% of India
into cities.”
These
dedicated urbanizers claim to have history on their side: the shift from
agriculture to urban industry and manufacturing is how Europe, the US and, more
recently, China enhanced their productivity and created capital for broader
investments to modernize their economies.
Can India
adopt this recipe for prosperity today? For one, Indian cities do not have the
infrastructure to accommodate more rural migrants than they already have: a
fact reflected in their pollution levels, power cuts, unsanitary conditions,
social unrest and crime rates. Infrastructural constraints and political
ineptitude and corruption make it unlikely that India can emulate China’s
planned urbanization, building entirely new cities to house migrants.
Abandoning
a crisis-ridden farming sector, millions of Indians already move from one
temporary job to another; their destination can often be other villages. Living
part-time in a village in Himachal Pradesh, I have been intrigued by the
presence there of migrants from the poorest parts of rural India.
Temporary lives
Over the
last 10 years, they have set up temporary lives near building sites across the
valley, participating in India’s construction boom, which, even in this largely
agrarian, unindustrialized part of the Himalayas, has sprayed residential
complexes, private universities, dams and tunnels across green hills.
The
labourers arrive bearing all the marks of a destitution depressingly
commonplace in the plains, where small, unproductive land holdings and lack of
irrigation radically shrink one’s opportunities: They are barefooted, scantily
clothed, with rust-haired young children already showing the signs of chronic
malnutrition that has made their parents small and painfully thin.
Over the
years, I’ve seen their material conditions improve. Wages, suppressed at
exploitative levels by their rich employers, began to rise after the government
introduced its guaranteed employment programme in 2006. The immigrants managed
to send their children to local state-run schools, which are better in Himachal
than in most other states in India. Their health seems to have visibly
improved.
But the
construction boom is nearing its physical limits. In my own village, there is
very little scope for developers left. Other potential sites suffer from lack
of access to water and power. The recent devastating floods that reportedly
killed tens of thousands of pilgrims in the region have highlighted the folly
of unchecked construction in the Himalayas. Even the most venal among the
politicians who struck lucrative contracts with real estate speculators will
balk at approving more large-scale projects.
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So the
question now is: Where will the migrant labourers go next? Any attempt at an
answer must quickly acknowledge that India’s economic trajectory is not following
the European or Chinese map of development.
China,
for instance, had a flourishing manufacturing sector that could absorb the tens
of millions of people—the biggest such move in history—leaving an agrarian
economy. And even China is having trouble creating enough jobs for the hundreds
of millions its leaders wish to move to urban areas. India’s growth has been
led by services, which account for almost 50% of the national GDP. At 28% of
GDP, industrial output has barely budged since 1989, when it was 25%. Despite
high GDP growth in recent years, employment has actually shrunk in the
manufacturing sector, with fewer jobs available for the more than 12 million
Indians entering the work force each year.
Stunted model
A recent
article in India’s premier intellectual periodical, the Economic and Political Weekly, by Hans P.
Binswanger-Mkhize points to the peculiarly stunted nature of India’s economic
model: surplus labour in the agricultural sector, a manufacturing sector
incapable of generating fresh jobs for workers from rural areas, and a tiny
formal sector determined to engage only informal or contract labor.
Jobs are
mostly being created in India’s already vast informal sector, where more than
90% of India’s workforce is employed in labour that ranges narrowly between
scavenging and sweatshops. They contribute to the country’s GDP, but the
degrading working conditions of most workers in the informal sector make their
transition from rural to urban areas much less of a sustainable and desirable
shift than it seems.
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I have
seen many young men in my village return from such jobs in cities, convinced
that they are better off at home, farming the little land they have, and doing
small jobs on the side. Lingering statistically near rather than way above the
poverty line, they at least have the luxuries of cleaner air and water, and
easier access to their families and friends.
It may be
time to acknowledge that the Indian elite’s plan to replicate the European
sequence of modernization—rural to urban, agriculture to manufacturing and
services—is a pipe dream. No one apart from a few flat-earthers seriously
believes that the growth of services will ever be enough to turn 1.2 billion
people into well-off urban consumers; and, though India’s Planning Commission is
determined to make manufacturing the engine of India’s economic growth, the
country may have already lost the chance of creating labour-intensive
industries that could absorb its large workforce and boost productivity.
It isn’t
just mobile and promiscuous capital in the age of globalization that is to
blame. Decades ago, the distinguished American economist Daniel Thorner pointed
out that late-modernizing countries with large populations like India face the
great disadvantage of industrializing at a time when technology is rapidly
boosting output per worker. Greatly accelerated technological innovation now
takes away jobs in developed economies as well.
Temporary solution
Theoretically
at least, the construction boom in India could be kept going with greater
investments. But China is presently weaning itself off this model of growth,
revealing its built-in limits. Jobs in the informal non-farm sector are at best
a temporary solution for people uprooted from rural areas. And the government’s
job guarantee programmes and subsidies to (mostly rich) farmers are basically
attempts to avoid a full reckoning with the India’s atypical dilemmas.
It
increasingly makes sense for Indian leaders to acknowledge—rather than deny—the
fact that they live in a land of small farmers, and start to tackle its
fundamental problems of hunger and malnutrition through more productive and
diversified agriculture. For this bottom-up approach to work, the government
would have to increase its investments in irrigation and efficient water use.
More
important, urbanizers will have to radically overhaul their broad vision of
India, which is based on outdated and impractical economic models. Such
reconsiderations are never easy. Perhaps, the hundreds of millions of uprooted
men and women scrambling for poorly paid work on the margins of cities will
help focus the strangely isolated minds at work on India’s future.
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