The social question, who cares?

(From: The Hindu, June 09, 2010)

Built into the economic dogma of growth first is the ingrained notion held by large segments of the nation’s elite that the fabric of inequality is meant to remain unimpaired.

“The Challenge of Employment in India; An Informal Economy Perspective†sums up the findings of a National Commission set up in September 2004 to review the status of the unorganised/ínformal sector in India (Volume I Main Report and volume II Annexures. Report of the National Commission for Enterprises in the Unorganized Sector, Government of India, Academic Foundation, New Delhi 2009. This report as well as the preceding ones are also accessible on website: www.nceus.gov.in.)

While the Shining India operation in the preceding years had increased the wellbeing of the already better-off, the United Progressive Alliance committed itself to ensure ‘the welfare and well-being of all workers, particularly those in the unorganised sector, who constitute more than 93% of our workforce.’ The Commission — chaired by Arjun Sengupta and with only two members (K.P. Kannan and R.S. Srivastava) and two part-time members (B.N. Yugandhar and T.S. Papola) — managed to produce altogether nine reports. The last one elaborates on what the Commission considers to be the overarching problem, which is lack of adequate and decent employment at a fair wage for the large segments of the workforce hovering around the bottom of the informal sector economy. The urgency of such a plan of action is underscored by the finding that 77 per cent of the population in 2004-05 had to make do with, on average, no more than Rs.20 per day per capita. The Commission’s classification of these people as poor and vulnerable stems from the observation that the official poverty line of Rs.12 per day consumption is fixed at an inordinarily low level and needs to be doubled in order to meet with international standards.

The NCEUS panel completed its tenure in April 2009. What happened next? Nothing at all. Receipt of the conclusive report was not even acknowledged, let alone taken up for further action. The stony silence has much to do with the evidence produced, which is that a very large chunk of India’s informal sector workforce is mired in poverty and that its deprivation has not become much less between 1993-94 and 2004-05. In the decade when the neo-liberal reforms of the early 1990s started to take off — the rate of employment growth declined significantly and whatever increase took place was nearly exclusively within the informal economy. There has been a similar fall in the growth of real wage rates. As worrisome as the drop in the quantitative growth of employment was that no improvement has occurred in the quality of employment. More and more formal sector workers could hold on to their job only by accepting informalisation of their formerly secure and respectable labour standards. Sliding down from what in the doctrine of the free market is looked upon as unduly privileged and protected terms of service, these people have come to share the plight of the informal sector workforce summed up by the Commission as absence of job security, income security and social security.

Poverty and lack of resources are closely interrelated. It is quite clear that all those who have to rely solely on their low- or un-skilled labour power for making a living, did not benefit from the changing economic scenario in the decade on which the Commission concentrated its analysis. The years of high growth have made the middle and upper classes — barely a quarter of India’s population — much better off than they were before, an equal portion may have managed to marginally enhance their condition, while the majority of the informal sector workforce made only negligible progress or none whatsoever. The note that productivity has increased at the same time that employment has stagnated leads me to conclude that labour is being squeezed even more than before. Of crucial importance in the intensification of the workload is wage payment not based on time rate but on piece rate. This modality goes together with what is recorded as self-employment but which actually is a disguised wage labour contract. What passes for self-employment easily boils over in self-exploitation because these workers are willing to exert themselves until the point of exhaustion for the sake of raising their all too meagre incomes. Apart from lengthening the workday and night, these workers also cannot afford to set children and the aged members of their household free from participation in the labour process.

The Commission’s fact finding report ends with a list of recommendations. The most important ones can be clubbed together: to expand employment for the people in the lower echelons of the informal economy and while realising that prime objective see to it that the work provided will not be compromised by less than decent employment standards. Fully aware that the proposed agenda is bound to encounter strong opposition from vested interests, the rapporteurs suggest a first beginning by adapting a rights-based programme of action promoted by a more organised working class and a vigilant civil society. Their strategy is to establish a social floor. It actually means a return to the basic needs approach pushed by the ILO during the 1970s, although for a couple of years only. The NCEUS argues that an unconditional reliance on the free interplay of market forces in order to maximise economic growth is adhering to a road map which produces more deprivation for the segments down below and more wealth for those higher up.

These divergent dynamics are interconnected in the sense that the ongoing squeeze at the bottom is directly related to the accumulation of surplus at the top. It is basically a strategy of betting on the rich and forgetting about the poor, not to acknowledge the latter multitude as citizens but to reject them. To halt the drift to further polarisation, a turnaround in the economic policy from exclusive to inclusive growth is forthwith required. On the basis of my own experience, I share the Commission’s opinion that participation in the process of economic growth is the yardstick of being included or not. I myself happen to be the product of the welfare state in Western Europe, the foundation of which emerged during the first half of the 20th century. The new trajectory meant that welfare was not spread around but got generated by expansion of decent and dignified employment in the public and private sector on the basis of state intervention and the political execution of socio-economic policies resulting in an egalitarian climate all around bent on dividing up the steady rise of national product in a spirit of equity, proportional representation in a democratic framework and social justice.

Symptomatic for the state of denial that characterises the current body of policymakers is their unwillingness to tackle the social question. They insist that the ongoing transformation from a rural-agrarian economy to an urban-industrial one is best served by freeing the forces of production from all market interventions and from all public meddling. In view of the massive poverty or even outright pauperisation it is remarkable that the powers that be are not bothered that the anguish and anger building up might spill over in outbursts of violence. While the Prime Minister has declared the Maoist threat in the remote forest hinterland to be the main security risk the nation faces, it seems that no thought is given to the simmering unrest in the urban and rural slums of the heartland. Built into the economic dogma of growth first is the ingrained notion held by large segments of the nation’s elite that the fabric of inequality is meant to remain unimpaired. The social question does not even arise in a milieu favouring the better-off and shutting up the voices of the poor. For that reason, explosions of unrest are bound to come as a rude shock.

In my opinion, the Commission’s work should be regarded as a landmark. But the exceptional contribution the Commission made is not only in terms of fact finding and analysis of what goes on in the echelons of the economy which are beyond the reach of the state. In addition, there is the set of do-able recommendations — financially and institutionally — on how to strengthen labour rights which are now missing for the men, women and children in the informal economy. The next step is to engage in action. Building up the political pressure in the public domain is a challenge facing all of us. Let us make a start.

(Jan Breman is emeritus professor at the University of Amsterdam and has carried out anthropological research for the last half century in India as well as elsewhere in Asia. His fieldwork has always focused on the labouring poor, the people at the bottom of the rural and urban economy. His latest book is Outcast Labour in Asia published by Oxford University Press in June 2010)