Nos. 44-46, April 2008

Nos. 44 - 46
(April 2008):


India’s Runaway ‘Growth’: Distortion, Disarticulation, and Exclusion
IV. (4) The Condition of the People

Market reproduces and reinforces skewed pattern of distribution
The structure of India’s economy permits ‘growth’ to proceed even as the condition of the vast majority declines. As we have seen in earlier chapters, market forces do not lead to the automatic spread of development across wider social sections. Rather, they can operate to reproduce, and even strengthen, the existing exclusion of the vast masses from the market: (i) The present pattern of development creates a distorted pattern of employment, with the bulk of the workforce crowded into low-income sectors, and a small section in high-income sectors. (ii) This in turn gives rise to a skewed distribution of income, concentrated at the top. (iii) The different income groups constitute distinct markets. Workers, peasants, and other working people rely to a large extent on the unorganised sector for their needs. By contrast, the high-income groups rely more on the organised sector (including, now, organised retail); they identify with an international elite, and their tastes are shaped, indeed their very wants are generated, by the sales effort of international firms. (iv) The organised sector (that is, in the main, the private corporate sector) creates less jobs per unit of investment, of which a higher proportion are high-income jobs. On the other hand the weak purchasing power of the working people depresses demand for the production of the unorganised sector, which is a relatively employment-intensive sector. In this way the skewed distribution of income gets reinforced. That is, the pattern of distribution is inextricably linked to the pattern of production and employment.

The dominant school of thought today ignores the consequences of the pattern of production on distribution. This fracturing of the economy is embodied in the media’s use of the term ‘consumer’. We are told from time to time that x or y policy may hurt one or the other section of working people, but is good for ‘consumers’. The section hurt is presented as a vested interest, trying to defend its turf against the interests of the whole people. But the overwhelming majority of consumers are those who must earn by their labour in order to consume; they are workers, peasants, fishers, petty retailers, employees, and so on. Their employment determines their consumption; hence they are fundamentally characterised by their employment – and not as abstract, homogenous ‘consumers’. Of course, for the ruling class media, these low-income working sections are not ‘consumers’ at all, since their consumption is low and is dominated by items or services produced in agriculture, the small scale sector (such as textiles), or the public sector (public transport, public education). By contrast, the consumption of the high-income sections consists largely of products and services produced in the private corporate sector.

Depression of consumption of the vast majority: undernutrition
The sharp growth of inequality, and the depression of the living standards of the vast majority, are most clearly evidenced in the depression of food consumption. Calorie consumption per head per day has fallen between 1993-94 and 2004-5 by 106 calories, or nearly 5 per cent, in the rural areas; by 51 calories, or 2.5 per cent, in the urban areas.

Table 1: Changes in Per Capita Intake of Calories, 1993-2005
Source: NSS Report no. 513.

The original basis of the poverty line was a basket of goods which contained at least 2400 calories per capita per day in the rural areas, and 2100 per capita per day in the urban areas. This basis yields very high levels of poverty: Utsa Patnaik calculates that 87 per cent of the rural population was unable to obtain 2400 calories per day in 2004-05.1

But even if we accept the norms and calculations NSS itself has adopted, two-thirds of the country’s population in 2004-5 had a calorie intake below the nutritional norm. Around half the population is  more than 10 per cent below the norm. (Again, going by the NSS’s own calculations, there has been a clear deterioration between 1993-94 and 2004-05; see Table 2.) The NSS results also show that it is not the idle rich, but the labouring poor, whose consumption is below the norm: Calorie consumption rises with income level, with the highest expenditure class consuming double that of the lowest in both rural and urban areas.

Table 2: Percentage of Population More than 10 Per Cent Below
NSS ‘Norm’ of Calorie Intake2
Source: NSS Reports no.s 405 and 513.

So distorted is the Government’s method of calculating poverty, that from the same National Sample Survey data which depict such widespread under-nutrition, the Government has concluded that only 27.5 per cent of the population is below the poverty line in 2004-05 – down from 36 per cent in 1993-94. This would mean that in 2004-05 another 39 per cent were not officially defined as ‘poor’ but were nevertheless undernourished. The percentage below the official poverty line is declining even as calorie consumption is declining. Indeed the official poverty line, even as a calorie-based measure, has become meaningless.

The army of neo-liberal economists has laboured to produce arguments to explain away the decline in calorie consumption, but the simple fact is that in the developed world average calorie intake is much higher than in India: in 1994, the world average was 2718; the developed world average was 3206; and even the developing country average was 2573.3

Table 3: Changes in Per Capita Protein Intake, 1993-2005
Source: NSS Report no. 513.

The neo-liberal economists also claim that the decline in cereals consumption is not worrying, as people are diversifying their diet, and eating more ‘high-quality’ foods like milk, meat, fish, eggs, and so on. It is true that a larger percentage of total consumption is composed of such foods. However, as can be seen from Table 3, not only has calorie consumption declined, but so has protein consumption, falling 5 per cent in rural areas during 1993-94 to 2004-5 while remaining at the same level in urban areas. Indeed, even more than the fall in calorie consumption levels, it is the fall in protein consumption levels that conclusively proves the involuntary nature of the deterioration in nutrition. Of course, both calorie and protein measures arise from a single reality, namely, that the consumption of cereals, the main source of both calories and proteins for the vast majority, is declining.

Appalling nutritional outcomes
This is in line with the appalling nutritional outcomes, as brought out by the National Family Health Survey of 2005-6:

Almost half of children under five years of age (48 per cent) are stunted, that is too short for their age, an indicator of chronic malnutrition, and 43 per cent are underweight. The proportion of children who are severely undernourished is also notable – 24 per cent are severely stunted and 16 per cent are severely underweight.

Wasting, defined as an abnormally low weight for the child’s height, is also a serious problem in India, affecting 20 per cent of children under five years of age.

Since NFHS-2 (1998-99), there has been only a slight improvement in the percentage of young children who are stunted and underweight, and the percentage who are wasted has actually increased slightly.

Moreover, the incidence of anemia among children under three years has actually risen from 74 to 79 per cent. The incidence of anaemia among women (ever-married women aged 15-49) has risen from 52 to 56 per cent between 1999 and 2006. Among pregnant women (aged 15-49) the incidence of anaemia has risen from 49.7 to 57.9.

The decline of calorie and protein consumption is a telling indicator of the actual state of consumption of the vast majority of people. It underlines the fact that the surge in luxury consumption is not an indicator of a general rise in incomes and living standards, but is possible because of extreme inequality.

Given the large extent of semi-starvation, a certain number of hunger-related deaths is inevitable; yet such a phenomenon is rarely reported. Does it exist? It would be difficult to gauge this from official statistics, since the authorities have a strong interest in underplaying the extent of this phenomenon. The authorities lay the cause of death at the door of one or the other disease, or merely fail to record the death at all. The former is quite simple, since a man, woman or child weakened by hunger usually succumbs to one or the other illness. Nor is the latter difficult, since such deaths are concentrated in regions which are backward and hidden from the gaze of the mass media. The Child Death Measurement Committee (CDMC, better known as the Bang Committee) set up by the Maharashtra Government, in its report of August 2004, noted the yawning gaps between different estimates of under-five mortality in the state: According to the state government, under-five mortality in the state was 25,000-40,000 per year; according to the Central Government’s Sample Registration System, 120,000; according to a large-sample two-year study carried out by the Child Death Study and Action Group (an NGO group), 175,000 per year.

According to the CDMC, the overwhelming majority of under-five deaths are the result of the combined effect of under-nutrition and bacterial infections. It points out that between 1988 and 2002 there was virtually no improvement in the rate of acute malnutrition (Grade III and IV) among children in the state. The rate of Grade III and IV malnutrition among tribal children is an alarming 15 per cent – double the rate for rural Maharashtra as a whole.4 Nor does sporadic press attention have any lasting effect. Melghat in Amravati district came to prominence in 1993 when it suffered hundreds of child malnutrition deaths; according to a writ petition filed by two doctors of Melghat in September 2007, 640 children from the region had died of malnutrition since the start of the year.5 A proper tabulation of all such hunger-related deaths in India would probably yield a startling figure, a telling comment on the Indian political system.

Rural-urban divide
In colonial times, port cities created by British rule, such as Bombay, Madras, and Calcutta, grew with colonial trade, with hardly any spread of industry from these nodes into the interior. While the number and size of cities has grown since then, the contrast between the major cities and the surrounding regions remains glaring even today. The huge investments being made in the urban areas, particularly in the metropolises, stand in stark contrast to the condition of the rural areas in the most basic facilities, such as education, health care, sanitation, drinking water, electrification, rural roads, and communications.

To take a particularly striking example, according to official figures, in April 2005, 42 per cent of habitations more than 100 in population did not have access to potable drinking water within 1.6 km. The Bharat Nirman scheme, announced with much fanfare in 2005, aims at clearing only 72 per cent of this shortfall by 2009; the Eleventh Plan document released in December 2007 admits that there has been a huge shortfall in the implementation of even this scheme. The targets, even if achieved, are no guarantee of continued supply of drinking water: Over 360,000 habitations reported in 1999 to have been “covered” were reported by 2005 to have “slipped back”, and no longer had drinking water. Given the State’s failure to guarantee such an elementary requirement of life, the gaps in other facilities6 are hardly surprising:

— Nearly half of rural households did not have electricity in 2002.
— With regard to three elementary facilities – drinking water, electricity for lighting, and a latrine – only one in nine rural homes enjoyed all three within the premises.
— Nearly two-thirds of rural homes were made partly or wholly of katcha materials (i.e., unstable construction materials such as mud, grass, reeds, bamboo, etc.).
— More than half the villages were more than 5 km away from the nearest Primary Health Centre (PHC), and more than one-fourth were more than 10 km away from it; and so on. (Nor is the existence of a PHC any guarantee of medical care: for example, other surveys have shown that only 38 per cent of PHCs have all the critical staff and medicines; only 20 per cent have a telephone; and 31 per cent do not have even a single bed7)

Dualism in education
Neo-liberal economic policy reinforces the urban-rural divide. The World Bank-funded ‘District Primary Education Programme’ in the 1990s relied on the use of ‘para teachers’ (contract teachers of varying qualifications, hours of work and service conditions), rather than regular teachers, in the rural areas. By 2002 their number had risen to 280,000, and by 2005, 400,000.

Recruitment procedures and service conditions of these teachers, variously known as ‘Shiksha Karmi’, ‘Guruji’, ‘Vidya Sahayak’, ‘Shikhan Sevaks’, ‘Vidya Volunteers’, ‘Sahyoginis’, ‘community teacher’, ‘voluntary teachers’, etc. vary considerably across the states.... [In Madhya Pradesh], the regular teacher cadre is being done away with. Gradually, the exception appears to become the ‘norm’ all over the country. Often such a move is justified in financial terms as for one regular teacher’s salary, 3 to 5 para teachers can be appointed, and government liability does not extend beyond salary.8

Given that the qualifications for such teachers are lower than for regular teachers, and indeed are arbitrarily decided, this shift is part of a general pattern of informalisation of services for the poor – in which  the school system with a network of para-schools. Thus dualism in education has been strengthened in the name of extending education.

The Government’s claims regarding literacy and education have more to do with fulfilling well-publicised targets than actually delivering education. The Census figure for literacy  is 65.4 per cent of the population aged seven and above. However, this figure merely reflects the replies given by households to the question “How many persons in the household are literate?” It does not reflect whether they actually are able to read. A study by the Indian Institute of Management, Ahmedabad, carried out in four Hindi-speaking states (Rajasthan, U.P., M.P., and Bihar) compared the responses to queries using the Census approach with the results of a reading test. By the Census approach literacy of the 20,000 sample was 68.7 per cent; but by the reading test, only 26 per cent could read properly. Another 27 per cent could read only parts of it, or took recourse to sounding syllables before putting together words. The remaining 47 per cent could not read at all. Thus the gap between the Census approach and a proper definition of literacy was 42.7 per cent; even using a much looser definition of literacy, the gap was 15.7 per cent.9

Adult literacy in the sense of the regular practice of reading is perhaps better reflected in the readership of newspapers and magazines. The total readership of newspapers and magazines in India is about 212 million,10 or about 19 per cent of the population.

The National Common Minimum Programme (NCMP) of May 2004, which is the basis of the United Progressive Alliance government and of the support extended by the CPI and CPI(M), states that “The UPA Government pledges to raise public spending in education to at least 6 per cent of the GDP.... This will be done in a phased manner.” However, as can be seen from Table 4, there has been only a slight increase in spending on education as a percentage of GDP by the Centre and state governments over the tenure of the UPA government; the percentage is indeed lower than in 2001-02. The 2008-09 Budget shows that the Centre’s expenditure will rise by only an additional 0.1 per cent of GDP.

Table 4: Expenditure on Education (by Centre and State Governments Combined) as a Percentage of GDP11
Source: Economic Survey, 2006-07 and 2007-08, Union Budget, 2008-09 and RBI Bulletin, February 2008. State governments’ budgeted expenditure and has been taken for 2007-08.

During the same period there has been a sharp rise in private final consumption expenditure on education as a percentage of GDP (see Table 5).

Table 5: Expenditure on Education (by Centre and State Governments Combined) as a Percentage of GDP
Source:Economic Survey, 2007-08

Much of this rising share of private expenditure on education is involuntary. There is a general perception that lack of education is a disadvantage in the scramble for the meagre jobs available. Given this, and given the shortcomings of the public education system (the result of inadequate public expenditure), the lower income groups are virtually forced to pay for private schools, private colleges, and private tuition (the latter, an expression of the extreme distortions in India’s educational system, has become a significant service industry).

The situation of health expenditure is similar. Here the NCMP pledged that “The UPA Government will rise public spending on health to at least 2-3 per cent of GDP over the next five years”. In fact the combined spending of the Centre and the states has remained at 0.9 to 1 per cent of GDP in these years.12 Health expenditure in the 2008-09 Central Budget is just 0.34 per cent of GDP, more or less the same as the previous year. As a result, the common people will continue to be forced to turn to the rapacious private sector for their health care needs.13

Within the urban areas 
The rural-urban divide is only part of the story: within the urban areas, particularly within the metropolises, slum life is sub-human. With regard to drinking water, electricity for lighting and latrine, only 15 per cent of urban slum homes have all three facilities within the premises. One-third of urban homes are made of katcha materials. The huge investments in the urban areas are directed to the better-off.

In the country’s financial capital, Mumbai, more than 60 per cent of the population lives in slums. Here living conditions are sub-human, and health statistics resemble those of the rural areas. The National Family Health Survey 2005-06 revealed that 40 per cent of Mumbai’s children are underweight; a similar percentage are stunted; and as many as 14 per cent are classified as ‘wasted’, with abnormally low weight for height. During 2006 and 2007 a number of private surveys by social work organisations discovered alarming levels of malnutrition in slums of Bhandup, Mankhurd, Govandi, and Aarey. A number of children were admitted into hospitals with Grade IV malnutrition. 14

To the ordinary citizens of Mumbai, the cost of Mumbai becoming an IFC is massive, brutal displacements; closure of productive firms; huge land grabs. All these are imperative for attracting massive foreign speculative capital to the city. Both the World Bank and the Central Government demanded the scrapping of the Urban Land Ceiling Act, an Act which, at least on paper, required the public acquisition of thousands of acres of vacant urban land hoarded by a few families. Indeed, the World Bank made future lending to the state government contingent on it, and the Centre made it a condition of provision of funds for urban renewal. Among the other elements of the transformation of the city are the privatisation/closure of public health institutions and the privatisation of utilities such as water. The link between the entry of foreign capital and the ruin and exclusion of the people is starkly apparent. Similar processes are under way for other cities.

Since the second half of the 1980s, and more aggressively since the 1990s, big employers and the State have dismantled the earlier environment of organised labour. Units with sizeable workforces have been broken up as far as possible; within units the workforce has been broken up as far as possible, placed under various contractors and diverse statuses. Historic industrial centres such as Mumbai, Kolkata, Ahmedabad, and Kanpur, with their specific histories of working class movement, have been dismantled. Their industrial workforces have been dispersed into unorganised employment or unemployment, and industrial land converted into real estate. The labour force is more fragmented and insecure than ever before; even the unorganised workers are affected, as the scope for their entering the organised sector, a key demand of earlier struggles, is virtually shut off. This fragmented, insecure existence strengthens their ties to the village, which offers a fallback in times of distress. The greater use of contract labour, frequently hired through the use of village or caste ties, reinforces these ties. In these complex conditions, the traditional type of trade union movement has disintegrated. Only a very different type of working class movement can expect to survive and extend its influence over the rest of society: in particular, its links with the peasantry would be crucial.

Where and how the vast majority labours
The life of the people is shaped principally by their employment, and thus a brief description of the state of employment is in order. (We have touched upon this subject earlier in this essay from the angle of describing the structure of the economy; here we do so from the angle of portraying the life of the people.)

First, most employment is isolated, and its relation with the whole economy is obscure to the workers; secondly, the incomes of workers in the bulk of such employment are apallingly low. 

Were we to confine ourselves to the impressions conveyed by the mass media, we would doubtless believe that there is a labour shortage in India; that employers are scrambling to offer jobs to those entering the job market; and that wages are soaring. The truth is otherwise. The overwhelming majority toil in informal/unorganised employment, where earnings are miserable, security non-existent and conditions of work appalling. The following facts and figures from the recent report of the National Commission on Enterprises in the Unorganised Sector (NCEUS)15 provide a portrait of the labour of the overwhelming majority.

The NCEUS puts total employment in 2004-05 at 458 million; of this, 394 million were unorganised/informal (i.e. unprotected) workers in the unorganised sector, and 29 million were unorganised/informal workers in the organised sector.16 Thus total informal employment was 423 million, or 92 per cent of total employment.17 Of these workers, 256 million (61 per cent) were in agriculture, and 167 million (39 per cent) in non-agriculture.

Wage workers: There were 77 million wage workers in the unorganised sector outside agriculture. These workers are concentrated in manufacturing, construction, trading, transport, and (in the case of women) domestic services. The NCEUS report provides some details regarding the wretched conditions of work in these occupations: the poor ventilation, temperature, humidity, lighting; the lack of safety and commonness of occupational diseases; the non-availability of facilities such as drinking water, washing facilities, rest rooms, creches, canteens, sanitation, and housing; the extended hours of work and absence of paid holidays. The manner in which this workforce is recruited – frequently through a network of family/caste/community, or through labour contractors who operate through similar channels – deters labour’s self-organisation.

The concept of a ‘minimum wage’ hardly exists in India except on paper, and even there it is obscure. What defines the ‘minimum’? Several states have statutory minimum wages well below even the official poverty line; those who determine these levels do not take into account the minimum requirements of a family of three consumption units. State governments fail to notify minimum wages for a large share of the workforce: one study found that in Ahmedabad only 30 per cent of the workers in the unorganised sector were covered by the schedules notified; and even those for whom wages were notified did not receive the stipulated minimum.

Significantly, the wages of both regular and casual wage workers in the urban areas declined in real terms (i.e., after discounting for price rise) in the period 1999-2000 to 2004-05, as shown by Table 6.

Table 6: Growth in Urban Average Real Daily Wage Rates, 2000-2005
Source:Jeemol Unni, G. Raveendran, “Growth of Employment (1993-94 to 2004-05): Illusion of Inclusiveness?”, EPW, 20/1/07. Figures here are for non-agricultural wage employment in urban areas.

Apart from those officially classified as wage workers, of those classified as ‘self-employed’, about 12 per cent18 are ‘homeworkers’, or home-based workers; they receive raw materials from contractors and receive payment (usually on a piece-rate basis) for the finished goods. In effect they are disguised wage workers. Unlike other wage workers, however, they have to bear various costs of production – they purchase, repair and maintain their own tools/machines; the costs of some inputs (eg thread), transportation to and from the contractor/firm, and infrastructure (space, lighting, water, etc); and the costs of current capital (frequently falling into a debt trap). A higher proportion of homeworkers are women; the subjugated social status of women, along with homeworkers’ isolation from other similarly placed workers, makes it more difficult for them to organise; thus they are a particularly exploited section. As the NCEUS puts it, homeworking “can be clearly identified as a system of production within a global or domestic value chain”, one which contains a number of intermediaries between the homeworker/producer and the final consumer: the greater the number of intermediaries, the lower the bargaining strength of the homeworker and the lower the share she receives of the final consumer price. Contractors use their dominant position to depress the real price paid to the homeworker by making arbitrary deductions in the name of deficient quality  and delaying payment. It should be noted that ‘homeworking’ is merely another name for the ‘putting-out’ system, a form of mercantile capital that preceded industrial capital in the countries of original capitalist development. The mercantile capitalist does not transform the production process, but merely takes advantage of his access to markets and finance to exploit labour working in the old way. The persistence of this mercantile form on a significant scale in India today, and its coexistence with advanced industry, underlines the stunted and distorted character of development here.

Employers use the social institution of gender as a method of depressing wages. They construct a hierarchy of jobs, in which particular jobs are classified as women’s work. The latter jobs are described as low-skilled even if, as in hand-embroidery in the garment industry, they involve considerable skill acquired over a long period of informal training. The beneficiaries of this division of labour are not the male workers – the savings on women’s labour are not transferred to them; rather, it is the employers who benefit. This is evident in the low earnings of both men and women: In 1999-2000 the gross earnings of homeworkers came to Rs 870/month for men, and Rs 462/month for women.

Self-employment: However, the bulk of unorganised employment outside agriculture is self-employment. According to the NCEUS, there are 92 million self-employed workers outside agriculture. Similarly, in agriculture, 64 per cent of the workforce are cultivators (i.e., self-employed), and the remainder agricultural labourers. Thus the Indian economy is dominated by self-employment.

Outside agriculture, self-employment is largely ‘own account’ (i.e. purely self-employed) workers and their unpaid family members. ‘Own account’ enterprises (OAEs), i.e., with no hired labour, account for 87 per cent of the informal sector enterprises and 73 per cent of the labour of such enterprises. The condition of the OAEs is dismal. In 2000, the average value of their fixed assets was just Rs 39,000 per enterprise; their earnings per worker were just Rs 2175 per month in the urban areas and Rs 1167 per month in the rural areas. Assuming a family size of five, this would put them below even the official poverty line of that year.

The above provides a glimpse of the complex web of employment outside agriculture in India. The character of the employment is precarious, and earnings from it may not even meet bare subsistence needs. Most of it is isolated, and it is difficult if not impossible to organise against the employer, if any. That very isolation also makes it difficult for the workers to unite to make demands of the State. Underlying this rickety edifice of isolated, ground-down employments are agrarian conditions, to which we will turn in the next chapter. In turn, this pattern of subsistence employment offers no escape from agricultural stagnation and bondage, but becomes merely an urban mirror-image of it; thus it perpetuates the overcrowded misery of agriculture as well.

Retrogressive social divisions and the pattern of employment
This pattern of employment also provides the basis for the perpetuation of retrogressive hierarchies and divisions among the people. As under British rule, so also after their departure, economic processes lent support to the stratification of the people of the same broad economic classes into different castes and communities. The deindustrialisation carried out under British rule, and the paucity of industrial employment thereafter, combined with the absence of serious land reforms, condemned various castes and communities to remain in traditional occupations. While the pattern of employment provides fertile soil for social divisions, these divisions in turn help maintain economic partitions and discrimination.

The post-1991 neo-liberal economic policies further strengthened these partitions. It has been widely pointed out that the decline of public sector employment and the consequently greater share of private sector employment, where there are no caste-based reservations, have further whittled down the meagre opportunities for members of the oppressed castes. However, such opportunities, while helpful in improving the social position and voice of the oppressed sections, were never very significant in relation to the labour force. More sweeping have been the effects of liberalisation policies on the unorganised sector, in which the vast majority of oppressed castes, scheduled tribes, and Muslims are employed – agriculture (including the forests), handicrafts, small and micro industry, and petty retail. The social sections facing discrimination or oppression are concentrated in the stagnant or retrogressing sectors of the economy. 

On the other hand, the relatively advantaged social sections, which make up the minority of the population, were better positioned to take advantage of the opportunities created by the current pattern of ‘growth’. Such boom sectors as engineering, the financial sector, medicine, and so on are overwhelmingly dominated by those from upper caste, non-Muslim households. These strongholds of seeming modernity are actually strongholds of caste consciousness, expressed in the deceptive form of upholding ‘merit’ and ‘equality’ (ignoring the tremendous inequalities on the basis of which the ‘successful’ have advanced). When medical, engineering or business school students pretend to sweep streets or shine shoes as protest against caste-based reservations, they reveal their attitude toward manual labour and the castes whose fate this is. Such offensive gestures receive wide appreciation from the media, and, more subtly, from the corporate sector, which can brook no restraints on profitability or freedom to hire and fire. Large corporate firms have been protesting a Government proposal to extend the system of caste-based reservations to the private sector. “A large quota system”, says the human resources director of Infosys, “inevitably hurts merit.”19

The Sachar Committee20 has recently documented the condition of the Muslim community. Muslims are more concentrated in the unorganised sector than any other socio-religious community; in particular they are concentrated in self-employment (53-61 per cent of Muslim men of different castes, and 72 per cent of Muslim women). They are also more urbanised than other communities, and in the urban areas they can be found in activities such as street vending, petty trades (as plumbers, electricians, carpenters, etc) and small manufacture. Among workers outside agriculture, Muslims were the least likely of all communities, including scheduled castes and scheduled tribes, to get jobs in the organised sector. Further, as mentioned earlier, there is a distinction between employment in the organised sector, which includes casual/contract workers employed by organised sector firms, and organised/formal employment, which enjoys legal protections. The percentage of Muslim non-agricultural workers who got organised employment was half or less the percentage for all socio-religious groups. Thus the social interface between Muslims and other communities is restricted by the pattern of employment, a pattern that is perpetuated by discrimination and in turn perpetuates it.

Table 7: Percentage of Non-agricultural Workers in Organised Employment: OBC Muslims, Other Muslims, and All Socio-Religious Groups
Muslim OBCs
Other Muslims
All Socio-Religious Groups
Source:NCEUS, op. cit.

Considering their dependence on self-employment, access to credit would be particularly important to Muslims. Yet, although they constitute 13.5 per cent of the population, and 12.2 per cent of priority sector loan accounts of scheduled commercial banks, they account for only 4.6 per cent of the amount outstanding under priority sector amount outstanding.

This type of enduring partition or stratification among the mass of working people is typical of a stunted economy such as India’s. The capitalist transformation in the original capitalist countries tended to break down the barriers among various social groups and sharpen their class demarcations (though never comprehensively, for the ruling classes needed to maintain these non-class differentiations as a tool against the struggling unity of the working people). However, the isolation and backwardness of economic activity in an economy like India’s preserves the non-class barriers, and indeed preserves the uneveness between the multifarious social groups. Thus it poses an obstacle to a person of the exploited classes (whether hailing from a social group higher or lower in the hierarchy) becoming conscious of his or her class position. And in turn, as we have seen above, the differences in social status tend to perpetuate the unevenness in economic status.

Thriving caste system and medieval oppression
Far from weakening over the course of six decades since the transfer of power from British rule, the caste system thrives in India today, and is indeed strengthened by the prevailing economic processes. We describe below the condition of Dalits, but they are not the only victims of the caste system.

The condition of Dalits, or scheduled castes (SC) is one of acute poverty and social oppression. Both poverty and oppression are linked to the question of land. In the rural areas, 57 per cent of the SC households cultivate no land at all; 21 per cent cultivate under one acre (0.4 hectares); and another 13 per cent cultivate between one acre and two and a half acres (1 hectare). That is, 91 per cent of the SC households in the rural areas are either landless or operate what are termed ‘sub-marginal’ or ‘marginal’ holdings. In urban areas, 51 per cent of SC households spent less than Rs 675 per head per month; whereas only 28 per cent of all classes (including SC) spent below that level. Literacy and enrolment levels too were lower for Dalits than for ‘all classes’.21

With the post-1991 liberalisation of banking, Dalits were swiftly excluded from bank credit. (In other words, they experienced a somewhat sharper form of what the poor and middle peasantry had to undergo in this period.) The credit per capita of small borrowal accounts of Dalits fell from Rs 495 in 1993 to Rs 225 in 2004. Dalits’ share of the amount outstanding on such accounts fell from 12.4 per cent to 4.6 per cent. Thus the share of rural Dalits’ loans from informal sources (such as moneylenders) rose from 36.6 per cent in 1992 to 55.2 per cent in 2002. Unsurprisingly, debt with a high interest rate (20 per cent or more per year) soared from 27.8 per cent to 45.5 per cent of their total debt.22

The Public Distribution System (PDS) has been to a large extent dismantled over the post-1991 period. This process accelerated with the introduction of the Targeted PDS in 1997, which divided consumers into so-called Below Poverty Line (BPL) and Above Poverty Line (APL) households. Prices for the latter were raised to virtually the level of market prices, effectively driving them out of the PDS. By various methods, including the use of the fraudulent official poverty line, the majority of the poor were simply excluded from the BPL category; being the poorest sections, the Dalits and Adivasis were particularly affected. By 2004-05, less than 40 per cent of Dalit households in rural areas had either a BPL card or an Antyodaya card (a scheme for the ‘poorest of the poor’). Among landless households (which describes the majority of rural Dalit households), 51 per cent did not have a ration card at all, and another 24.5 per cent had an APL card.23

The actual social condition of rural Dalits, however, is hardly conveyed by such statistics. The Dalit settlement is situated outside the village; it is frequently without a water source, and without electricity. Dalits frequently do not even have land of their own on which to relieve themselves, but must use the fields of the dominant communities with their consent. They are still compelled to perform traditional services, including the skinning of dead animals and manual scavenging (cleaning and disposal of excreta from dry latrines). According to a recent study by a study team from the Massachusetts Institute of Technology and a Gujarat-based NGO, the number of manual scavengers in Gujarat is actually increasing, even as their social segregation remains intact.24

Crimes against Dalits are not properly captured in official statistics. Many are not reported to the police for fear of reprisal, and because the police are almost uniformly partisan with the dominant social sections. Moreover, the caste character of many of these crimes is often ignored.25 At a recent national consultation of the National Commission on Scheduled Castes in Delhi, office-bearers of the Commission admitted the State’s complete failure to bring down atrocities against Dalits despite the existence of two legislations for the purpose; even untouchability, ‘abolished’ under Article 17 of the Constitution, persists. The police let off the culprits, and those tried are not convicted; indeed the conviction rate is going down in some states.26

Significantly, caste oppression appears to be perfectly compatible with liberalisation and runaway growth. Far from being restricted to extremely backward states such as Bihar and Orissa, it thrives even in relatively prosperous regions such as Punjab and Haryana; the latter was the site of the Jhajjar massacre (October 2002) and the burning of Dalit houses in Gohana August 2005) and Salwan (March 2007). Casteism flourishes too in the ‘boom’ states, such as Maharashtra, Tamil Nadu, and Gujarat. On the campus of India’s premier medical school, the All India Institute of Medical Sciences, Dalit students are beaten, physically tortured, humiliated, insulted, and segregated into separate hostels by upper caste students, and the top faculty encourage anti-reservation agitations.27

The social life of India – marriages, festivals, homes, secular gatherings, even cuisine, dress and language – are still dominated by caste and clan. The caste system rides roughshod over the grand parliamentary edifice, from the Lok Sabha to the village panchayats. Parliamentary politics in India is in reality conducted largely in caste and communal terms, not in bourgeois-democratic terms. True, the aspirations and churning among the oppressed castes are reflected, in a sense, in the rise of parliamentary parties claiming to represent them, as in the case of the Bahujan Samaj Party. However, there is no tangible improvement in their condition even where such parties come to power. A Dalit may become president of a Tamil Nadu constituency reserved for scheduled castes, but he/she will not run the panchayat: one panchayat president must still perform his caste duty of beating the drum to inform villagers of news, another is forced to clean the village tank, and all are treated as untouchables without any power. In the reserved constituencies doctors still refuse to touch Dalit patients, Dalits must drink from separate tumblers at tea stalls, and local temples, community halls and even main streets are out of bounds for Dalits.28

The focal point of caste oppression lies in India’s agrarian society. Where Dalits are too terrorised to resist oppression, apparent ‘peace’ reigns. Caste atrocities take place when those at the bottom of the social hierarchy begin to assert themselves. A common form of such assertion is the demand for either individual or collective temple-entry (or related demands, such as being allowed to pull the temple chariot). This is not essentially a religious demand, but a demand for social equality. Eight decades after Ambedkar’s Nashik satyagraha for temple entry, and six decades after the end of colonial rule, restrictions on Dalits praying at temples remain quite widespread. This fact forces its way into the public view when Dalits in one or the other village decide to challenge the unwritten ban, braving the wrath of the upper castes. Within the last year, such incidents have been reported at Bhivargi (Maharashtra), Keredagada (Orissa), Kandampatti (Tamil Nadu), among others, but these are just the tip of the iceberg: according to a recent survey, in just a single district of Maharashtra (Sangli) Dalits are not allowed to enter 116 temples.29 Other forms of social assertion which bring the wrath of the rural gentry on the heads of Dalits are such seemingly innocuous acts as wearing certain clothing or footwear, refusing to perform certain humiliating caste ‘duties’ (one recent instance was the refusal to wash the feet of guests during a caste Hindu marriage in Puri, Orissa; the Dalits’ wives were beaten and one was paraded naked30), riding a cycle or a two-wheeler, obtaining college education, and of course marrying members of the upper castes.

What accounts for the violence of the response of the dominant social sections to these relatively mild forms of social assertion by the oppressed? Whatever be the consciousness of those committing such acts, they would have the effect of deterring the Dalits from any broader assertion. Thus they pre-empt any challenge to the socially dominant sections’ control over land and other assets.

This becomes explicit when Dalits attempt to assert their rights to ‘common’ property resources from which they are excluded – for example, a plot of land, or a public tank, or some other water source. Such an assertion is usually met with the most comprehensive weapon of the dominant sections, the social and economic boycott. The boycott mobilises all the non-Dalit villagers (on pain of ostracisation) under the hegemony of the socially dominant. All employment in the village, all supplies of food and other mundane needs, are shut off; Dalits are even denied access to ground on which to relieve themselves. One can hardly imagine a more striking reminder of the role of non-economic coercion, including religious authority, social sway and physical force, in India’s agrarian economy.

This situation, however, is not static: there are signs of simmering discontent among the Dalits. This finds greater scope for expression in urban areas, but it is not limited to the urban areas. The sudden wave of protests by the Dalits across Maharashtra in the wake of the September 2006 Khairlanji massacre took the entire political leadership of the state by surprise, and pointed to the emergence of a new, potentially explosive social force.

All forms of stratification such as caste, clan, community or tribe complicate the formation of class consciousness of the working people – the consciousness of the place  they occupy in the system of social production. For example, it is true that scheduled tribes (STs), scheduled castes (SCs), and other backward classes (OBCs) are the most deprived, and constitute the bulk of the agricultural labourers and small/marginal/sub-marginal peasants. However, four-fifths of the non-ST/SC/OBC cultivators are also small, marginal and sub-marginal peasants, that is, they belong in class terms with the other exploited sections. Their caste identity, on the other hand, makes them susceptible to mobilisation by large landholders, and thus hinders their identification with other exploited sections. Among the socially oppressed, too, non-class identities get reinforced with the withdrawal of even meagre welfare measures by the State, since family, caste and community appear to be the only visible ‘safety net’ in the struggle for survival amid insecurity and want. Indeed, amid the growing misery and want, divisions and clashes take place among the oppressed: many of the attacks on Dalits have been carried out by members of OBCs.

Is this the fate of Indian society? Are the Indian people doomed to lead wretched, divided lives, segregated from those condemned similarly to isolated drudgery, unable to unite to become masters of their destiny? Before we attempt to answer this, we must examine the agrarian scene, where most Indians live and labour.


1. “Neoliberalism and Rural Poverty in India”, EPW, 28/7/07. The official cut-off for calculating poverty today is the spending level required to buy the particular basket of commodities which in 1973 would have contained 2400 calories (for rural areas) or 2100 calories (for urban areas). However, the actual pattern of consumption has changed – not voluntarily, but because of circumstances beyond the control of the consumers (employment may be further off, hence spending on transport would rise; firewood may no longer be available from the forest, hence fuel costs may rise; and so on). As a result, persons above the official cut-off level of spending are not actually obtaining those levels of calories. The official cut-off level is therefore meaningless. (back)

2. The NSS has been using a ‘norm’ of 2700 calories per consumer unit per day, and comparing the actual intake with this norm. One ‘consumer unit’ is defined as the calorie requirement of a normal male person doing sedentary work and belonging to the age group 20-39; the calorie requirements for males and females of different ages are expressed as percentages of this norm, and the requirements for the population are worked out on the basis of the age and gender break-up of the population. The original calorie basis for defining the poverty line was not in consumer unit terms, but per capita terms, and used differentiated norms for rural and urban areas. Here we are merely reporting the NSS’s own calculations. (back)

3. Cambridge World History of Food, vol. I, ed. Kenneth F. Kiple and K.C. Ornales, p. 899. (back)

4. CDMC, 1st Report (Marathi), August 2004. (back)

5. “Malnutrition deaths: Centre, state get notices”, Times of India, 9/9/07. (back)

6. NSS Reports 487 and 488. (back)

7. Surveys by Jan Swasthya Abhiyan and Indian Institute of Population Sciences, cited in Access Denied, Infochange Agenda, April 2005. (back)

8. Praveen Jha, “Withering Commitments and Weakening Progress: State and Education in the Era of Neoliberal Reforms”, EPW, 13/8/05. (back)

9. Brij Kothari, “Literate but cannot read”, Times of India, 22/2/08. (back)

10. According to the National Readership Survey: “Daily newspapers reach over 200 million people, says NRS 2006”, Hindu, 30/8/06. (back)

11. The Ministry for Human Resources Development reports higher figures for expenditure and uses lower figures for GDP (i.e., at factor cost, rather than at current market prices); as a result it calculates public spending at 3.39 per cent of GDP in 2004-05 and 3.58 per cent in 2005-06. – Answer to Lok Sabha question, 20/11/07. (back)

12. Calculated from RBI, State Finances – A Study of Budgets of 2006-07, RBI Bulletin¸ February 2008, and Union Budget, various years. The Economic Survey 2006-07 reports higher figures for combined health expenditure and state governments, amounting to 1.4 per cent of GDP in 2006-07, but they do not tally with the figures given in the sources we have used. (back)

13. It is worth noting in passing that, apart from education and health, the third major promise of the NCMP, namely, “a legal guarantee for at least 100 days of employment, to begin with... for at least one able-bodied person in every rural, urban poor and lower-middle class household” has been comprehensively dumped in the 2008-09 Budget, the last Budget of the UPA government. (back)

14. Times of India, 10/6/06, 16/6/06, 18/6/06, 22/7/07. (back)

15. Report on Conditions of Work and Promotion of Livelihoods in the Unorganised Sector, September 1997. (back)

16. The NCEUS uses the terms ‘unorganised’ and ‘informal’ interchangeably. It defines unorganised or informal employment as “those working in the unorganised enterprises or households, excluding regular workers with social security benefits, and the workers in the formal sector without any employment/social security benefits provided by the employers.” The distinction is not related to whether or not the particular section is unionised (workers enjoying legal protection may have no union; and workers without such protection may form a union). (back)

17. That is, organised/formal employment was 35 million in 2004-05 according to the National Sample Survey (NSS) data, which is based on a sample. However, according to Labour Ministry data, based on reporting by firms, organised/formal employment in 2005 was only 26.5 million. (back)

18. In 1999-2000. (back)

19. T.V. Mohandas Pai, “Is reservation for OBCs in IITs and IIMs justified?”, Economic Times, 17/4/07. (back)

20. Social, Economic, and Educational Status of the Muslim Community in India: A Report, Prime Minister’s High Level Committee, chaired by Justice Rajinder Sachar, November 2006. (back)

21. NSS Report no. 516. (back)

22. Pallavi Chavan, “Access to Bank Credit”, EPW, 4/8/07. (back)

23. NSS Report no. 510. (back)

24. B. Rajagopal, “The caste system – India’s apartheid?”, Hindu, 18/8/07. (back)

25. For example, according to one investigation, the child victims of rape and murder in Nithari were largely Dalit or of other oppressed communities. The murderers, aware of the children’s social background, knew the police would not actively probe their disappearance. (Hindu, 20/1/07) Similarly, it was not accidental that the teachers of the Patan Teachers’ Training College in Gujarat picked a Dalit student to gang-rape repeatedly over six months. (Times of India, 5/2/08) (back)

26. Asian Age, 7/2/07. (back)

27. See the report of the Thorat Committee, May 2007. (back)

28. Hindu, 5/3/07, 16/4/07, 23/4/07, 21/9/07, 5/10/07; Frontline, 18/5/07. (back)

29. Times of India, 14/2/07. (back)

30. Times of India, 23/9/05. (back)


NEXT: IV. (5) The Agrarian Impasse and its Implications


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