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Development with Dignity

ECONOMIC AND POLITICAL WEEKLY Development with Dignity That economic growth and distribution of income in favour of the poor can be integral to a process of development that simultaneously and systematically breaks the social barriers of discrimination based on caste, gender, religion and ethnicity is not a utopia. This is

March 11, 2006

WEEKLYECONOMIC AND POLITICAL

Development with Dignity

T
hat economic growth and distribution of income adults offering their labour services to work at the in favour of the poor can be integral to a process minimum wage will be offered employment. They should of development that simultaneously and have “a voting right in the choice of the project”, thus systematically breaks the social barriers of discrimi-increasing the likelihood that the project chosen may nation based on caste, gender, religion and ethnicity is directly benefit those employed thereon. The completed not a utopia. This is “development with dignity”, which project should be an asset of the panchayat against which can be pursued with the help of reasonable economic it can further borrow. The panchayat should have the policies that are within the realm of feasible politics. right to charge a user fee for the service/good that the This is the theme and title of a recent monograph, written project provides, except from those who were employed with unusual clarity sans professional jargon by the well on the project at the minimum wage. And, the track known macroeconomist Amit Bhaduri. What emerges record of the panchayats should count for receiving is a programme for productive full employment based funds for subsequent projects. on a strategy of “employment first, with growth as the What Development with Dignity essentially suggests outcome”. is a way of ensuring the full productive participation

Bhaduri is in favour of financing the programme of the poor with accountability at all levels. At the preferably through borrowing from the Reserve Bank heart of this approach is the implementation of Keynesian with an amendment of the “counterproductive” Fiscal macroeconomic policy that ensures that higher labour Responsibility and Budget Management Act. However, this productivity provides more goods and services for a borrowing should be on a special account, where the funds better standard of living for all, which can happen only are for the exclusive use of the gram and nagar panchayats if it is accompanied by the expansion of employment that will steer the employment guarantee projects. In at satisfactory wages. This is essentially the advocacy the spirit of the 73rd constitutional amendment, the of social democracy in a large underdeveloped surpanchayats should not be “treated simply as implement-plus labour economy and society that is India. The ing agents for the central or the state government without state’s guarantee of employment at the minimum wage authority and fiscal autonomy”. The panchayats should to all who seek it is the main agency of management have the decision-making power, but they should be of aggregate demand. Such a programme would, held accountable for their actions, while transparency however, be implemented in the spirit in which is ensured through the Right to Information Act. Bhaduri expects it to be, in proportion to the strength

The emphasis is on decentralisation, with transpar-of the labour movement and the extent to which the ency and accountability through fixing of responsibility self-help groups of working people – the unions – are at all levels – the central, state and the local. And, the widespread and effective. Sadly, this is precisely one centre or the state should not be allowed to supervise of the institutions of economic democracy that has been and hold the panchayats accountable without being severely undermined in the present free market accountable themselves. Regulation and monitoring of globalising economy. This is the very institution, along the work of the panchayats should be with the local with others like the worker cooperative that seem community, their records “kept open for public inspection more than necessary to ensure the success of a by law” and “as a pre-condition for receiving funds”. productive full employment programme. Bhaduri in The productive employment-oriented projects should fact does not seem to think it important to consider the be subject to “self-selection” and “self-supervision”. All main institutional handmaidens of the proposed

programme; presumably, the panchayats and the right to information on the statute are sufficient.

There is one major set of issues that is alluded to only tangentially in this thought-provoking monograph. This is the political process which is necessary for implementation of a full employment policy. As a review of Development with Dignity in these columns (pp 891-93) suggests, it would require a major political movement to exert pressure on the state to follow an effective people-oriented strategy. The second and related point that needs to be discussed is the nature of a state which makes such a strategy the centre of its economic policy.

All the same, despite the institutional handicaps, Bhaduri makes a strong case for a major social-economic programme of full employment in present-day India. It follows that this must therefore be demanded from the ever-reluctant and resistant capitalist power structure. Why not also then demand better and universal education and healthcare, and so on? A reasonable political economic analysis might suggest that “development with dignity” is feasible in India in the here and now; a thorough analysis of the class structure of the ruling elites, however, remains to be made in order to have our feet firmly on the ground. EPW

Economic and Political Weekly March 11, 2006

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