The Indian Growth Story – Achievements and Future Challenges

Ashish Kothari is a founder-member of the environmental group Kalvapriksh. He has taught at the Indian Institute of Public Administration and coordinated India’s National Biodiversity Strategy and Action Plan process. He has been active with various people’s movements and has authored and edited over thirty books. He is the co-author of the book “Churning the Earth: The Making of Global India” (published by Penguin Books India in 2012), which is a critique of India’s development strategy and argues for a radical ecological democracy based on the principles of environmental sustainability, social equity and livelihood security.

The ‘Indian growth story’ has received a lot of international attention. How would you describe the developments of the last decades?

In the last five decades, but especially in the last 20 years, economic growth has been the predominant way of looking at development in India and a deep preoccupation for the political decision-makers. Every day in the papers you read about India’s growth rate dropping or climbing up by half a percent. It appears that growth, which was meant to be a means to an end, has become an end in itself. Nobody speaks about the effect of these 5% or 10% growth in GDP. We have come to a point that a growth rate of 5% is perceived as a problem in itself. What we have seen in the last few decades is that growth per se has not necessarily benefited people, in particular the poor – elsewise, why would the government put a law into place that provides food aid to 75% of the population? Clearly, this is not just an issue of redistribution: it is often argued that the fastest growth possible should be achieved, which then could be fairly distributed through things like the Rural Employment Guarantee Scheme[1]. Yet, it is a structural phenomenon that this kind of growth, especially if it is lead by the private sector, is inevitably leading to greater inequalities. But the second, and for us even more important aspect, is that there are very clear signs of its lack of sustainability. If you admit the existence of ecological limits the concept of “sustainable infinite growth” is a contradiction in terms. However efficient your technology, it will always have an ecological impact. In India, while the government says that sustainable development is the primary focus of its plans – actually, there is nothing that tempers the growth logic.

To our international readers, could you explain what happened in 1991, given that you describe this in your book as a turning point to the people and the environment in India?

Prior to 1991, or rather the late 1980s where some of the neoliberal economic policies were initiated, the predominant economic model was to a large extent a socialist model. A lot of the production, research and development happened within the public sector. This is especially true for crucial sectors like agriculture. Additionally, the domestic economy was given a much greater emphasis than the external economy and there were efforts being made to be self-sufficient. As we were still largely dependent on gas and petrol imports there had to be some balancing exports. Besides this it was a very inward-looking economy. This changed substantially in 1991 with an opening up of the economy, making it much more led by foreign trade - exports and imports - and therefore outward-looking. A lot of sectors including agriculture were opened up – to both the Indian and the international corporate sector and invitations and attractions were given to foreign direct investment. Constitutional and legal regulations created in the 70s and 80s, for instance on indigenous people's territories and the environment, were diluted and state control declined.

Do these structural changes from 1991 also offer an explanation to the current economic crisis in India?

Yes. When the economic collapse happened in 2008 the Indian economy was much less hit than others. Up to that point the Indian government claimed how beneficial it was to open up India to the international economy. Then they argued that our economy was less hit because of the remaining protections and its supposedly inward-looking character. But that was a brief phase. In August the prime minister almost clearly admitted that we have no control. For the rupee to slip virtually 10-15 rupees against the US Dollar in a few months has never happened before. And it is clear that the government is either not in control or doesn't want to be in control.

India is about to elect a new government in 2014. The discourse of economic development and growth is very predominant in the current election campaigns. Where do you see space for the issue of environmentally sustainable development in the elections?

Discussions and debates in the elections are highly simplistic and consequentially, it is difficult to get into the issue of sustainability. But for instance land has become a major political issue. The more we can actually get a sense across to people that the current model of development needs huge amounts of land acquisition and its infinite continuation is simply not possible or not desirable because it displaces unprivileged people. The Indian newspapers demonstrate daily examples of communities protesting against displacement and evictions and it is crucial to show alternatives to the current model. The passing of the Land Acquisition Bill[2] shows that this issue receives significant attention. Addressing health is another way sustainability can enter the election campaigns. More and more parents are concerned about pesticides and air pollution and the effect on their children. We must connect these concerns to the current development model. Recently, the World Bank published that environment related damage, especially damage to human health, knocks out 5% of GDP in India. This effectively means a net growth of 0%. Such messages must be integrated into the elections – if not now, then certainly in the next one.

In its accounts on the Indian growth story the Western media strongly focuses on the supposedly growing and rising middle class. To what extend is that an appropriate representation and how big is this 'middle' class actually?

First of all, the term middle class comprises enormous diversity, in terms of economic but also other sorts of situations. It is clear that there is a section of maybe 50 to 100 million that has significantly benefitted in the last 15-20 year from an income point of view. Looking at the upper middle class – those able to go to a shopping mall and buy foreign products – the Indian growth story appears to be a big success. But if one considers the real purchasing power of what is said to be the wider middle class of maybe 200 million people one quickly notices that they face serious economic problems. Plenty of middle class families are not able to afford pulses and lentils, for instance, or the values have changed such that they would prefer to buy consumer goods. This middle class is in a sense aspiring to be the upper class and in so doing it has actually deliberately, or subconsciously, or unconsciously separated itself from the billion people that haven't made it yet. So the issue of poverty is something that this middle class is either not willing to look at or not capable of looking at.

Globally as well as within India the consuming class hardly carries the ecological costs of their consumption. Those who pay the externalities of this consumption are economically, geographically and socially separated from the consumption class. How do you think the gap can be bridged between those?

First of all, communities from whom resources are being taken away need to be empowered to say “No”. We refer to this in our book as “direct democracy”: that every community can determine what happens to its water, its land, its resources and so on. As a consequence, what the urban rich people are used to in terms of long-distance access to resources won't be there anymore. Examples of empowered and protesting communities across India are plenty. Secondly, I think the urban rich consumer has to become much more aware of the impact of her or his consumption. Their awareness is very poor. The best audience for this might be the children and education should reach across to those. But there are also other possibilities. I have been arguing for the need of a “sane consumption line” or a “sustainable consumption line”. As we have a below poverty line and people are supposed to be above it, we also need a measure of an upper limit which includes water consumption, electricity, petrol etc. Obviously, this is not to work according to “you pay more thus you get more” principle because we simply cannot afford it – ecologically.

In your book you mention the concept of environmental imperialism. You also mention the view of India being a microcosm of the world - accordingly, how does environmental imperialism play out within India?

Environmental Imperialism is a narrow environmentalist viewpoint, which I certainly don’t subscribe to. It attempts to try to protect the environment by looking at people as enemies and then pointing at the least privilege.  For instance, for years we have been working on the marginalization of people in wildlife habitats, for the conservation policies are such that they alienate the people or keep them out of the habitat. Another phenomenon observable amongst some urban environmentalists is that they don’t want to see slums or dirt or garbage. They will ask for or will not say anything against the displacement of people in poor slum areas. But of course, very large sections of the environmental groups do understand these issues.

In your book you suggest a “radical ecological democracy” (RED) as an alternative. In this model a lot of importance is given to the local level. What would be role of the federal state in such a scenario, in particular in respect to sustainable development?

National policies are currently disincentives to localization and ecological democracy, for instance on agriculture. One example of heavy centralization would be the public distribution system of cheap subsidized food to the poor. It is not only centralized in its decision but based on the central decision that only rice and wheat is considered, the grains come from a few regions in the country with high levels of production. Based on our experiences on the ground we have been recommending to localize the food distribution system by incentivizing local farmers to produce locally and organically. A policy shift of this kind could greatly contribute to sustainable food production. We think that those sorts of federal policy decision are essential to a transformation into a radical ecological democracy. Despite the importance of decentralization in RED, the central government will have to maintain a crucial role in at least three areas: besides the maintenance of large-scale activities like the railway or the postal system, the federal state has to offer social services to counter the high rates of poverty and promote social justice through social protection schemes. From our experience, localization itself is not sufficient to counter deeply enshrined social divisions along the lines of class and gender.

Given that many environmental issues transcend borders what role do you give to the global level? What potential do you see for collaboration, in particular within Asia, on a pathway to a sustainable pathway?

One level of collaboration is at the level of governance, whether it is the Association of South East Asian Nations (ASEAN), the South Asian Association for Regional Cooperation (SAARC), Asia as whole or the Group of 77 at the United Nations. I am glad that some government like Bolivia and Ecuador are raising the issue of sustainability and countering the growth paradigm within their region but also globally. In particular the governments of India and China need to pay far more attention to this. But I do think that collaboration will happen more on the level of people across national boundaries. The more we will be able to build solidarity across people's movements across South Asia, for instance uniting the sustainable farming groups, the more we will be able to push the region as a whole towards sustainability and equity. There isn't nearly enough transboundary collaboration happening.

Drawing together what would your message be to readers within Europe, or Germany even? What role could people in Europe take in the strengthening of this transboundary collaboration?

The simplest task would be to financially facilitate this collaboration - even for things like exchange visit, people working across countries etc. Unfortunately, independent of how much we talk about emerging economies the financial resources are still elsewhere. Significantly more complex would be the exploration of pathways of sustainability by establishing connections between, for instance, the de-growth movement in Europe and pathways of sustainability in India. The third and certainly most difficult task is for Germans and Europeans to understand the impact of their consumption. Given the limited ecological space on earth Europe’s occupation of a disproportionate chunk needs to change. This is the only way in which we can credibly talk about overcoming growth as a primary objective in India. Otherwise, people will understandably argue that we need to increase the size of the pie for the majority of Indian society to escape poverty.

 

[1] Mahatma Gandhi National Rural Employment Guarantee Scheme is a job guarantee scheme for rural Indians, which was enacted by legislation on 25 August 2005. The scheme provides a legal guarantee for at least 100 days of paid employment in every financial year to adult members of any household willing to do unskilled manual work related to public work at the statutory minimum wage of 120 (US$1.80) per day.

[2] Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2013 is a Bill that was passed on 29 August 2013 in the Lok Sabha (lower house of the Indian parliament) and on 4 September 2013 in the Rajya Sabha (upper house of the Indian parliament). The Bill has provisions to provide fair compensation to those whose land is taken away, brings transparency to the process of acquisition of land to set up factories or buildings, infrastructural projects and assures rehabilitation of those affected.

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