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Second Industrialisation in India: Land and the State

Industry today faces an acute shortage of land to set up factories and it has to draw upon farm land. Because the very news of a proposed industrial project site breeds speculation of a boom in land prices, no one wants to sell. While there is no better agency than the government to acquire land for industry, protest is inevitable due to the logic of the situation. This is a classic case of the irresistible (industrialisation) dashing against the immovable (millions of peasants and artisans confined to their station). The knot can be broken by opening a window for the latter. This note shows how.


Second Industrialisation in India: Land and the State

Industry today faces an acute shortage of land to set up factories and it has to draw upon farm land. Because the very news of a proposed industrial project site breeds speculation of a boom in land prices, no one wants to sell. While there is no better agency than the government to acquire land for industry, protest is inevitable due to the logic of the situation. This is a classic case of the irresistible (industrialisation) dashing against the immovable (millions of peasants and artisans confined to their station). The knot can be broken by opening a window for

the latter. This note shows how.


Any given culture (as an ideological form) is a reflection of the politics and economics of a given society, and the former in turn has a tremendous influence and effect upon the latter; economics is the base and politics the concentrated expression of economics

–Mao Zedong, On New Democracy (1940).

he first drive for industrialisation in India took place during 1956-65; four decades later the second one has just begun. Unlike the previous occasion, this time industry faces an acute shortage of land for its sites. It has to draw upon farm land and that raises a host of issues. This note considers in particular the situation where the government acquires land from farmers to transfer it to industrial capitalists.

From a list of seven alternative sites for a small car project offered by the government of West Bengal, a renowned Indian company in the private sector selected one in the village of Singur, 40 km from Kolkata. The government acquired the land of 1,000 acres owned by over 12,000 plot-holders. According to the official status report, at the end of 2006, written consent of the owners has been received for 96 per cent of the project site. Of the compensation payable, 70 per cent has been disbursed. Of the number of plotholders, 80 per cent has been paid.

A political party with a minuscule representation in the state assembly organised protests against land acquisition, alleging the use of force. Its leader went on a fast unto death. After requests by the highest authorities of the country, including the president and the prime minister, the governor and the chief minister of the state, a former prime minister and a former chief minister of the state, the fast was withdrawn on the 25th day. In the aftermath, several villages of East Medinipur district witnessed protest and violence. Uncertain of their economic and social future, those directly dependent on agriculture are in a panic across the state.

Farmers and landless labourers belong to the lower stratum of society. They have been tilling land for over 2,000 years. All of a sudden they now find the earth under their feet crumbling; they are bewildered. And the rural gentry, proud monarchs of all they survey, are taken aback at the ambush by all those urban allies on whom they have leaned for so long. The government, although in power over a length of time and breaking world records on several counts, could not foresee such disarray. Presumably it was lulled by its overwhelming grip over the electorate as demonstrated by its consecutive wins at the polls. And perhaps its theoretical conception is inept, relative to the complex exercise of industrialisation. If the Singur quagmire has any message it would resonate across the country.

A given society is better viewed as a system of two interacting spheres, namely, its economy and culture; polity is a domain at the crossing of these two spheres. The pages of history are littered with complacent games of myopic politics. The power of politics has often been overestimated. Most glossed over is the social base which is the prime site of human existence. This is the paradigm within which the present note ventures an analysis of the situation – the nature of the resistance movement, its historical roots, its logical inevitability, and possible solutions. What is amply clear is that farm land acquisition in India is not a mere political or economic affair; it touches social chords too.

Three Facts

To simplify, suppose agriculture requires two inputs – land and labour. There are two types of farmers – rich and poor, both owning land. A rich farmer has a relatively large holding on which he works with hired labour; a poor peasant uses family labour.

Suppose a crop per acre is worth Rs 150. A rich farmer spends Rs 100 on hired labour. So his income is Rs 50 per acre. In contrast, the entire crop accrues to a poor peasant. So his income is Rs 150. The per acre income (in monetary terms) is therefore higher for a poor peasant than for a rich farmer.

What is the value of an acre of land to a rich farmer? The answer is: Rs 500, the prevailing interest rate in the market at 10 per cent.1 What about the poor peasant? The value of one acre to him is Rs 1,500.2 This finding of disparate land valuation across types of farmers can be summarised as follows: Fact 1: The value of a unit of land is higher to a poor peasant than to a rich farmer.

Land knows no depreciation, has no maintenance cost, its price never falls. A poor peasant who lives mainly on a meagre strip of farm land receives something invaluable from it in addition to the annual crop, namely, a sense of security for the entire family. For him this phenomenon imparts an extra value to his land. Fact 2: All the sense of security of a peasant family emanates from its holding of a small plot of farmland.

Setting up a major industrial project spawns multiple ancillary shops in the area culminating in a new township. The land price in the region is expected to go up. The prospect of a substantial windfall would entice a farmer to withhold his plot of land from acquisition. This propensity of a farmer will be referred to as the “Individuality Syndrome”. Fact 3: Due to the speculative motive, a farmer is reluctant to let his land to be acquired by the government.

From these three facts, three propositions will be derived keeping in view certain classic historical evidence especially of the industrial revolution in Britain. In many respects the British history is so unique, not a model for economic development in other countries. Yet, the British chapter on industrialisation and its human results seem to be of relevance for the comparable concern in India today.

Pauperisation and Rights

The industrial revolution in Britain had two phases: the first (1780-1840) was based on textiles, the second (1840-95) on the capital goods industries, on coal, iron and steel. The aristocracy and the gentry were affected very little by industrialisation except for the better. In the next layer of society a distinct “middle class” coalesced. The successful middle class and those who aspired to emulate them were satisfied. Not so the labouring class, i e, the majority of the population, whose traditional world and way of life the industrial revolution was destroyed without being automatically substituted by anything else – remember Charles Dickens. It is this disruption which is at the heart of the question about the social effects of industrialisation.3

The enclosures occupied a prominent place in the development of capitalism in England. The word itself has a variety of meanings describing quite different things. During the 16th century the most significant were encroachments made by lords of manors or their farmers upon the land over which the manorial population had common rights or which lay in open arable fields. Attracted by the prospects of profits to be made either by selling wool or by leasing their lands to those who did and thereby increasing their rents, the lords of the manors found a variety of legal and semi-legal methods to deprive the peasants of their rights to use the commons as pasture for their cattle, the collection of wood for fuel, and the like.

In the 18th and 19th centuries the yeomen, whose class boundaries shaded off into the smaller gentry at the top and the less prosperous peasants at the bottom, were the chief force behind peasant enclosures. Directed towards land for tilling, these enclosures were quite different from those of the lordly sheep farmers. They were mainly a form of nibbling away at wastes, commons and very frequently at the fields of neighbours, including landlords who did not keep a sharp look out to defend their rights. At other times, peasant enclosures were mutual agreements to consolidate plots and abandon the system of strips in the open field.

In the 18th century, England settled down to government by parliament. And it was parliament that ultimately controlled the process of enclosure. Formally, the procedures by which a landlord put through an enclosure by an act of parliament were public and democratic. Actually, the big property owners dominated the proceedings from start to finish. Thus the consent of “three-fourths or four-fifths” was required on the spot before parliament would approve a proposal to enclose. Suffrages were not counted, but weighed. One large proprietor could swamp an entire community of smaller proprietors and cottagers [Moore 1966].

The industrial revolution inevitably imposed very fundamental changes on the land. The case for enclosure was that it enabled uncultivated land to be brought into use and made the commercially minded “improving” farmer independent of his custom-bound and old-fashioned neighbours. This was undoubtedly so. But the fact remains that it threw peasants off their holdings and labourers out of work. One class was definitely a heavy loser by enclosure: the marginal cottagers and smallholders, eking out the produce of their little plots and with the various petty – but to them crucial – advantages of common rights: pasture for animals and poultry, firewood, building material, timber to repair implements, fences and gates, and so on. Enclosure might well reduce them to simple wage-labour. More than this, it would transform them into labourers dependent on the rich. It was not an insignificant change.

By the 1790s, the consequent decay of the village poor had reached catastrophic proportions. It fell to the Poor Law to deal with it. The Poor Law of 1601 had decreed that the able-bodied poor should be put to work so as to earn their keep, which the parish – a tiny local unit – was to supply; the burden of relief was squarely put on the parish which was empowered to raise the necessary sums by local taxes to be levied upon all households and tenants according to the rental of the land or houses they occupied.

The dispossessed peasantry swelled the market of labour supply; wages fell far below the level of subsistence – a crisis that went beyond the capacity of the Poor Law to address. Landlessness and pauperisation of the village poor could not be ascribed entirely with the enclosures; but there is no doubt that the deepening misery of the village poor went along with the first industrial revolution in the world [Hobsbawm 1968; Polanyi 1944].

Three Propositions

Consider Facts 1 and 2. Since their respective valuations of land are significantly different, a rich farmer and a poor peasant will not agree to a uniform sum of monetary compensation unless it is sufficiently large. This negative statement underlines the impossibility of procuring farm land for industry through the market. It leads to the following. Proposition A: In addition to the standard market price-indexed amount of money by way of compensation, an extra-market incentive scheme would be necessary to induce a poor peasant to acquiesce to government acquisition of his land.

Consider Fact 3. It is rational on economic ground for an individual farmer – poor or rich – to eschew acquisition of his land, while in the same breath wish other farmers to comply with the acquisition. Since everyone feels this way, no one will voluntarily part with his land. As a result of what we have called the Individuality Syndrome the proposed

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industrial project would come to naught. Only third party intervention can save the day.

Should the government pick up the mantle of the third party to intervene, political parties in the opposition will not miss this opportunity to side with the farmers at least to harass the government. That is to say, political resistance is a logical corollary of the compulsion of industrialisation in a land-short environment.

The government has statutory authority to acquire land on behalf of the state for public purpose. It is the only organisation that can deal with so many farmers simultaneously. In the case of Singur, for example, there are 12 plot-holders per acre of land on average. Proposition B: Acquisition of land with appropriate compensation by the government for the sake of industrial projects in the private sector is a legitimate, efficient and necessary instrument.

Some persons have asked why the government should procure land for private enterprises and why not the companies themselves directly purchase land from farmers. An answer to this query can be found in Fact 3 and Proposition B.

Industrialisation in Britain uprooted peasants, artisans and other village poor who then flocked to the labour market of industry. As a result wages fell. India has a labour surplus to begin with. Now appropriation of farm land to industry would accentuate the condition depressing wages further. Under the circumstances, providing a job in industry to one person per family of poor peasants may not be adequate to remedy its hardship in comparison with what they were previously receiving from their land. Proposition C: A poor peasant has to be compensated for his three losses: the land, the family security, and the rights to commons.

On the eve of the first industrialisation the nation had set before itself the mission of building a “socialistic pattern of society” which envisaged comprehensive development of all, with special attention to the poor. The country has retreated from that path over the last half a century moving in the opposite direction toward a creed-caste-capitalist society. At the onset of the second phase of industrialisation it seems to be all the more compelling that the nation makes special effort for those who are being asked to sacrifice whatever little they are left with.

Socialistic Pattern of Society

There is a fair degree of consensus nowadays that development of a country essentially means “human development”. People are the real wealth of nations. “The basic goal of development is to create an environment that enables people to enjoy a long, healthy, creative life”. Human development can simply be defined as a process of enlarging choice.4

Every day human beings make a series of choices – some economic, some social, some political, some cultural. If people are the proper focus of development efforts, then these efforts should be geared to enhancing the range of choices in all areas of human endeavour for every human being. Human development is both a process and an outcome. It is concerned with the process through which choices are enlarged, but it also focuses on the outcomes of enhanced choices.

Human development thus defined represents a simple notion, but with far-reaching implications. Human choices will be enlarged when people obtain more capabilities and enjoy more opportunities to use their capabilities. It thus entails an equation: the left-hand side reflects human capabilities; the right-hand side includes economic, political and social opportunities to use these capabilities.

Enshrined in the Constitution of India, the people have resolved to constitute a “sovereign socialist secular democratic republic”. By its nature, human development is a necessary condition for realising this constitutional objective. The rank of India is 127 by the index of human development prepared by the UNDP (2006) among all 177 countries. The country needs substantial improvement of its economy, society and polity to reach a respectable level of human development.

Agriculture has gone through one successful green revolution beginning in the late 1960s and is awaiting another. The second green revolution would demand a great deal of resources, technology, social determination and political will. Industry will bear a sizeable responsibility to supply inputs to it. Agriculture needs industry.

As for society, Nehru had this to say:

The Indian social structure had given

amazing stability to Indian civilisation. It had given strength and cohesion to the group, but this came in the way of expansion and a larger cohesion. It developed crafts and skill and trade and commerce, but always within each group separately. Thus, particular types of activity became hereditary and there was a tendency to avoid new types of work and activity and toconfine oneself to the old groove, to restrict initiative and the spirit of innovation. It gave a measure of freedom within a certain limited sphere, but at the expense of the growth of a larger freedom and at the heavy price of keeping large numbers of peoplepermanently at the bottom of the social ladder, deprived of the opportunities of growth.

Poor peasants and landless labourers have been confined for thousands of years “at the bottom of the social ladder, deprived of opportunities of growth”. Industrialisation can offer an opening for them.

Pride and Prejudice

“The inherent properties of things are produced by the mode or manner in which they arise”, wrote Vico (1744, p 81). “Such properties therefore allow us to verify an institution’s exact nature and nascence”. If so, a glimpse at the origin and evolution of the peasantry and village gentry would help us understand better the rural reaction to industrialisation at the expense of farm land.

In the fourth century BC, the territory was still thinly settled over long distances in difficult country. There was plenty of space for retreat of the tribes – people as well as for expansion of plough cultivation, in contrast to the limited useful terrain, for example, in Greece and Italy. There was neither any marketed commodity production nor enough supply of produce for extensive slavery to be profitable. Force, with one dominant group which reduced all the rest to slavery, could not eventually secure labour supply. In order to tie up labour to till the soil the Maurya dynasty (320-200 BC) would resort to application of force; but five centuries later the Gupta dynasty (AD 320-500) would necessarily turn to inventing and invoking religious obligations allegedly specific to castes. Each village was to be so manned by hereditary personnel as to make it self-contained and barter-based, thereby transforming the village into an exclusive, stagnant, timeless unit.

In the early fourth century BC, as Chandragupta Maurya ascended the throne, virtually self-sufficient village sprouted here and there for the first time as the basic unit of production; it would spread over and characterise the whole of India. The first major village settlement was constructed directly under Maurya state control, which fought a deadly battle with private enterprise, especially the trader. As a result, we shall see in a moment, development of capitalism was delayed and became fuzzy.

Unlike in the realm of the Maurya emperor, village settlements in the Gupta empire could not be held by force because of the vast distance, plentiful supply of uncleared land, and the difficulty of clearing off food-gathering savages from their habitat. So now the royal strategy was to mix the opium of religion with the elixir of private initiative. An acute monetary crisis was looming large: coins of precious metals had been drained away to meet external trade deficits owing to excessive imports of luxuries by the nouveau riche. The available supply of coins in circulation was too little to support market transaction of commodities on a scale consistent with the growing volume of agricultural produce. The scarcity of currency was circumvented by an ingenious strategy: assigning artisans to each village so balanced that barter exchange within the village would do.

Each village came to have its required blacksmith, carpenter, potter, barber and other artisans adding up to a total number of precisely 12. Each artisan received a plot of land to till in his spare time or with family labour. In addition, each was entitled to a certain portion of harvest from every peasant cultivator family. The village became self-sufficient, cash-free. In the process, inevitably, the caste order got permanently implanted into the fabric of rural society.

The Gupta state had encouraged private settlement on condition of paying tax in kind – remember the coin shortage. This unique way of Gupta prosperity contained the seeds of its own destruction. The tax having been paid in kind had to be collected as well as consumed mostly by local officers. Therefore, the imperial coffers in the capital shrank; the central army thinned. Rise of local princelings of new tribes, ambitious feudatories, or daring officials followed. Hence the decline and fall of the Gupta empire. Only rarely had a currency shortage led to embracing the caste system and eventually bringing down a mighty empire of the genre of Gupta’s.

The insularity of the village was unshakable hereafter. The peasant would witness the ruin of empires with equanimity while concentrating upon his increasingly miserable piece of land. Salt and metals, brought in by poor caravaneers on barter, never constituted enough exchange with the outside world to raise the level of village culture. Only the occasional fair or pilgrimage relieved isolation to a trifling extent. The average village brahman rarely went out to learn anything [Kosambi 1970, 1975].

Feudal Developments

Some feudal developments were inevitable with the growth of small kingdoms over plough-using villages. Feudalism came to India in two stages, the one from above, the other from below. Feudalism from above means a state where an emperor or powerful king levies tribute from subordinates who still rule in their own right and do what they like within their own territories as long as they pay the paramount ruler. By feudalism from below is meant the next stage where a class of landowners develops within the village, between the state and the peasantry, gradually to wield armed power over the local population. The basic difference between these two stages derives from the great increase in the number of village communities and the need to create a class who could concentrate enough of the surplus in their hands to assure the trader of steady customers and supplies.

The rise of local princelings, ambitious feudatories or daring officials in the Gupta realm contributed to the consummation of the feudalism from above. By the sixth century this feudalism attained its full form. Soon the decline would begin.

As the extensive propagation of Hinduism increasingly incorporated tribes and assigned them the lowest rank of social hierarchy the main labour supply, that of cultivators was assured. But the very organisation of the latest cultivators into caste groups prevented the mastery of finer technique of production. Very few could, because of caste, could skin cattle, tan the hides, or work in leather, all low occupations. Some tribals might become basket makers, but without being permitted to learn how to weave cloth or spin yarn. On the other hand, not every village could support a whole guild of blacksmiths, leather workers or basket weavers. The problem of indispensable technique was critical, and unless solved, meant either the collapse of the village or a change to commodity production for markets. In the event, while the total volume of production of goods went up, the commodityproduction, i e, production of output to be bought and sold in market, per head of population declined. It was not so in the feudalism of Europe. In India, falling commodity production per capita would have far-reaching consequences of blocking the path of capitalism. At the root of this phenomenon was the rigidity of the social order.

Marx (1894, p 334) had envisaged two historical paths of transition from feudalism to capitalism – the one revolutionary, the other ambivalent. In the first, “the producer becomes merchant and capitalist. This is the really revolutionary path”. In the second, “..., the merchant establishes direct sway over production. It cannot by itself contribute to the overthrow of the old mode of production, but tends to retain its precondition.” Sudras were cultivators or artisans, i e, the direct producers. But they were barred by cultural code from accumulating capital.5 There goes the first path of transition from feudalism to capitalism in India.

The second path was open but constrained. Traders and merchants had no space in the scheme of Kautilya, the architect of Maurya politics and economics. The Gupta empire did not formally oppose them, but villages being barter-based, self-sufficient, traders and merchants got little business. In the end feudalism from above failed to pave the way for capitalism. This is the main difference between the experiences of India and of Europe.

By the 8th century, trade on international scale had become profitable. Muslim merchants took the trade to the east from Arabia mostly to India and Indonesia. Indian shipping was peculiarly inefficient. And the self-sufficient villages anyway had little to offer for maritime trade. The technical deficiency had a serious administrative concomitant: Arab sailors were often made governors of the ports thereby giving away a pivot of trade to them. The existence of local port

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traders implied widespread breaking in upon the closed economy of villages to put together a hinterland as supply chain. New money sailed in to be concentrated at the hands of indigenous port traders. This nouveau riche would form the barons of feudalism from below, to be in course of time the nucleus of rural gentry, characteristically contemptuous of manual activities and most aloof from the plebeians.

The early industrial revolution in 18th century England was technically rather primitive. The technological tasks were fairly simple. They required no class of men with specialised scientific qualifications, but merely a sufficiency of men with ordinary literacy, familiarity with simple mechanical devices and the working of metals, practical experience and initiative. Industrial development was within the capacities of a multiplicity of small entrepreneurs and skilled traditional artisans. The novelty lay not in innovations, but in the readiness of practical men to put their mind using science and technology which has long been available and within reach. It lay not in the flowering of individual genius, but in the practical situation which turned men’s thought to the solution of problems.

Industrial development had long been within the range of possibility in India in terms of the available efficiency and technical competence of its artisans. But the social order had stopped them at their door before they could venture into new territory.6 Now the irresistible force of industrialisation is dashing at the immovable – the millions of peasants and artisans so long confined in their station for millennia by the compulsion of the prevailing cultural code. They know not how to become free.

Nehru appropriately wrote in the course of his voyage to the Discovery of India: “A creative minority is always small in numbers but, if it is in tune with the majority, and is always trying to pull the latter up and make it advance, so that the gap between the two is lessened, a stable and progressive culture results”. However, that was not to happen in India. Looking at the reality, he lamented: “But it may also decay if the bond between a creative minority and the majority is broken and there is a loss of social unity in society as a whole, and ultimately that minority itself loses its creativeness and becomes barren and sterile; or else it gives place to another creative or vital force which society throws up.”

Challenge and Response

Economics deals with two basic problems, namely, production and distribution. Translated into the present context it essentially involves allocation of land between agriculture and industry. Given the paradigm of society viewed as an interdependent system of economics and culture, the mode of production has to subsume the question of distribution.

Given the amount of total available land in the country, the pure economic consideration warrants that the optimal point of land allocation be reached when the marginal productivities of agriculture and of industry are equalised.7

The productivity of agriculture in India still remains at the mercy of monsoon;8 and indeed the country is immersed in an acute water crisis. “India had not managed its farm sector properly – water was already a precious commodity in large parts of the country where the water table was falling. [In this respect] India is living on borrowed time.”9 In a word, farm land is not being used efficiently. It follows that effective utilisation of agricultural resources could enable the country to release part of the farm land to industry without affecting the current level of food security. At any rate a second green revolution is essential – it is a putative decision; we argue that the second industrial revolution is an equally essential complement. By no means in India, at the moment, are agriculture and industry mutually exclusive. They are instead structurally complementary. Without industry, agriculture will starve.

Recall the famous discourse on the Mahalanobis strategy that the nation embraced in full measure in the mid-1950s with stellar success. Agricultural development needed fertiliser which had to be imported. If we import machines to produce fertiliser in the country rather than importing fertiliser as such instantly, it transpired, the country would gain in a few years, provided we are prepared to bear some inconvenience for the moment. Again, if alternatively we import the machine which produces the machine of making fertiliser, the gain would be still larger; and so on. It was called the “mother machine” theory. Accordingly, the country resolved to go for “heavy industry”, whose fruits it began to enjoy later. The Mahalanobis strategy raises the rate of growth; albeit starting at a lower base, it more than repays later the cost of bearing with immediate impatience. Besides, such is the world around us now that unless India builds up a sufficient number of strong industries which can stand up to global competition within 10 or 15 years, this part of the subcontinent will be reduced to a place of only poor peasants or landless labourers.

The mode of production includes the forces of production (land, labour, capital, technology) as well as the social relations among the people. The latter refers to the second sphere of society, economy being the first sphere. In the past, the gentry’s disdain of manual labour had degraded the dignity of millions who wear the cross of low social status. The core Vedic scripture first mentioned the four varnas, but by no means did it give even a hint of human discrimination.10 Subsequent sacred texts, however, misrepresented the original formulation in order to subdue the working class.11 Kosambi sought to explain the surprising persistence of pernicious taboos thus: “Ideas (including superstition) become a force, once they have gripped the masses; they supply the form in which men become conscious of their conflicts and fight them out.” Superstition is misleading. In the absence of a countervailing force the prejudice would prevail. The second industrialisation is going to shake up the society as never before. This moment of fluidity must be seized in order to modulate the social transformation in the direction of universal human dignity.

Human Development Initiative

The three facts and three observations cited above make it abundantly clear that contiguous plots to prepare a site for an industrial project cannot be purchased at the market. The individuality syndrome by itself would motivate some farmers not to sell land now. The prospect of a land price boom expected after the project gets operational is the bait they would bite. The project would not see the light of day unless the government ensures the land for industry.

Parliament in 18th century England insisted the consent of “three-fourths to four-fifths” for approval of an enclosure proposal. But this legal provision was abused. Since the suffrage was not counted but weighed, one large landholder could swing the outcome, and many did. In India the process can be made transparent and democratic by requiring the consent of 80 per cent of the number of plot-holders, not necessarily of the owners of 80 per cent of the land.

The history of over a 1,000 years discloses that social relations had been among the formidable barriers to economic growth. As Nehru perceives it, Indian civilisation had attained the “golden age” during the Gupta period, only to lose the momentum thereafter. A trend of decline set in. It was “probably the inevitable result of the growing rigidity and exclusiveness of Indian social structure”. “The spirit of exclusiveness sapped the creative faculty and developed a narrow, small group and parochial outlook. Life became cut up into set frames, where each man’s job was fixed and permanent and he had little concern with others.” The gap between the ruling minority and the majority of masses widened and hardened; “social unity in the society as a whole” splintered. This description of India of so long ago well resembles the present.12 Human development is able to redeem the deficiency. The compensation scheme for farm land can be so designed as to initiate a social transformation.

Rural society may be seen as consisting of two broad groups, namely, the gentry and the peasantry (including landless labourers). The gentry opposes land acquisition not so much because of the loss of an economic asset like land as because of the depletion of power over the established social hierarchy, which is another, perhaps more lucrative source of economic gain. By contrast, as for a poor peasant a strip of land is all he has.

The gentry and the peasantry almost equally share two common deprivations: the one, lack of education; the other, absence of proper healthcare. Redemption of these two deficiencies is the core of human development. We suggest below a way of addressing the age-old issue.

All children and teenagers living within the distance of, say, 30 km from the perimeter of the industrial project site should be offered by government, the full facility – including provisions for food and shelter – for study and training as far as a student can go in his academic pursuit. And all peasant families of the present generation should be provided with the facility for complete healthcare for life.

Accordingly, a series of schools, colleges, vocational institutes, hostels, hospitals comparable to the best urban standard should be established by government within the distance of 30 km adjacent to and around the project site. Equipped with all amenities of a town, the facility is meant to serve those who have suffered one way or the other in course of converting farmland to the adjoining industrial site. This ring of the human development initiative is mindful of three dimensions: healing injuries of the past, mending life in the present, and preparing for the future – of those who have been called upon to make heroic sacrifices.

As a child of today’s peasant grows up and passes through the university becoming a doctor, engineer, accountant,

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physicist or poet, new industries would look forward to welcoming him. A child of a peasant would no longer necessarily become a peasant himself. The vicious circle of poverty and social humiliation will be broken once for all. This would mark a small step towards the goal of a socialistic pattern of society.




1 The market value of an asset is measured by the present value of cash flow expected during its lifetime. Let x denote the annual cash-flow constant over time, and r the discount rate. The asset lasts for ever. The market value of this asset is: x/r. So the market value of one acre of land to a rich farmer is given by 50/0.10, at the discount rate of 10 per cent; it is equal to Rs 500.

2 By the same formula, the market value of the land to a poor peasant is: 150/0.10, i e, Rs 1,500.

3 Britain today combines two apparently incompatible phenomena. Its social and political institutions and practices maintain a remarkable, if superficial, continuity with the pre-industrial past, symbolised by the queen and the House of Lords. At the same time this is in many respects the country which has broken most radically with all previous ages of modern history: the peasantry most completely eliminated, the proportion of men and women earning their living purely by wage (or salaried) labour higher than anywhere else. Class divisions are more simplified than anywhere: there are only two classes which count, namely, the “working class” and the “middle class”, and the British two-party system has reflected this duality to a considerable extent [Hobsbawm 1968].

4 Enlarging human choices is critically linked to two issues: capabilities and functioning on the one hand and opportunities on the other. The functionings of a person refer to the valuable things the person can do or be. The capability of a person stands for the different combinations of functionings the person can achieve; it reflects the freedom to achieve functionings. Enlarging choices for a person implies formation or enhancement of capabilities. However, capabilities cannot be used unless opportunities exist to use them – economic opportunities and political opportunities [UNDP 2006].

5 “A servant [sudra] should not amass wealth, even if he has the ability, for a servant [sudra] who has amassed wealth annoys priests” [Doniger 1991: 250].

6 “A ritual law which every change of occupation, every change in work technique, may result in ritual degradation is certainly not capable of giving birth to economic and technical revolutions from within itself, or even of facilitating the first germination of capitalism in its midst” [Weber 1958: 112].

7 Here is a formal statement. Output of agriculture and industry are represented by, respectively, x and y, both measured in rupees. Total land is denoted by L; those of agriculture and industry by L1 and L2; the land constraint is expressed by L = L1 + L2. Production functions of agriculture and industry are: x = f(L1) and y = g(L2); note that the latter can be rewritten as y = g(L – L1), whose first derivative with reference to L1 is negative. Maximise Q = x + y, which is the national income, subject to the land constraint. Using the Lagrange multiplier we get: f'(L1) = g'(L2), which means equality of the marginal productivities.

8 The average annual growth rate of value added in agriculture including allied sectors declined from 4.7 per cent during the Eighth Plan (1992-97) to 2.1 per cent during the Ninth Plan (1997-2002). As against the targeted average annual growth rate of 4 per cent during the Tenth Plan (2002-07), growth rate in the first year (2002-03) of the Plan was negative, precisely –7 per cent. The blame goes to the severe drought of 2002. Next year, the growth rate jumped to a splendid

9.6 per cent thanks to the kind monsoon. There can be no more vivid show of the vagary of the monsoon and the consequence of India’s agriculture. These are all official data.

9 Joseph Stiglitz, ‘India Warning on Globalisation’, BBC News in web, January 5, 2007.

10 One hymn in the Rigveda (mandala 10, sukta 90, stanza 12) describes the creation of men. They emerged from the body of ‘Purusha’, which in translation stands for Nature or Matter: brahman from the mouth; kshatriya from the arm; vaisya from the thigh; sudra from the feet. The scripture does not give their rank ordering, that implies no discrimination among human beings. Later in the post-Vedic period varna became hereditary. The change was sought to be justified by a postulate that was imported from outside the Vedic teaching. This was the postulate: the ritual status of a varna was measured by the height of its point of origin in the cosmic body. Thus brahman was at the top and sudra at the bottom of social hierarchy. But this inference is not tenable because of the following. The next two stanzas of the shloka narrate that, like the sudra, the earth too came out of the feet of the Purusha. But the earth, who is the dual of the heaven, is worshipped with highest esteem as the mother of all. To take another example, Indra was the king of gods, receiving the highest number (as many as 250) of adulatory shlokas in the Rigveda; he was born at a point in the divine body of Purusha which is below the point wherefrom the sun came out. Yet, not sun, but it was Indra who was the king. It follows that the Vedic scripture does not consider the site of one’s birth as the index of social status.

11 Manu attempted to rationalise the varna order by his criterion of so-called “purity”/“impurity”. He arbitrarily declared: “the orifices of the body above the navel are all pure, but those below are impure”. And “a man is said to be pure above the navel;…and mouth was the purest part of him.” But there is no medical or biological proof of mouth being the “purest” part of the body. The whole notion of purity or impurity of human parts makes no sense at all. Manu has no coherent definition of alleged “purity” anyway. Here are several quotes to illustrate the bizarreness of his idea. “A woman’s mouth, a girl’s breast, a child’s prayer, and the smoke of sacrifice, are always pure”. “There is nothing purer than the light of the sun, the shadow of a cow, air, water, fire, and girl’s breath”. “Only in the case of a girl is the whole body pure”. “A woman’s mouth is always unpolluted, as is a bird that knocks down a fruit; a cow is unpolluted while the milk is flowing, a dog is unpolluted when it catches a wild animal”. “Garlic, scallions, onions, and mushrooms, and the things that grown from what is impure, are not to be taken by twice-born men”. “People who eat impure things become worms”. “The Sama Veda is traditionally said to belong to the ancestors, and thus the sound of it is polluted” [Doniger 1991].

12 Nehru credited the stability of Indian civilisation to its culture. But what is the consequence of the stability of that culture? The ancient Greeks shared some of the traits of Indian culture such as the connecting of the doctrine of transmigration of souls with that of compensation for good and evil deeds in the form of a more or less honourable rebirth. Aristotle had his distinct logic; he defended slavery in terms of difference in physical fitness: “Nature would like to distinguish between the bodies of freemen and slaves, making the one strong for servile labour, the other upright, …useful for political life in the arts both of war and peace. …And if there is a difference in the body, how much more in the soul!…It is clear, then, that some men are by nature free, and others slaves, and that for these latter slavery is both expedient and right.” All this prejudice in ancient Greece was swept away in course of time. Did the arrival of Christianity with universal humanism help make the difference in Europe? It is astounding how certain ideas succeeded to create abiding impression upon the people in India which eventually robbed freedom from uncountable numbers of human beings.


Aristotle (1885): Politics, translated by Benjamin Jowet, Dover Publications, Mineola, NY.

Doniger, Wendy (1991): The Laws of Manu, Penguin, London.

Hobsbawm, E J (1968): Economic History of Britain, Vol 3, Penguin, London.

Kosambi, D D (1970): The Culture and Civilisation of Ancient India in Historical Outline, Vikas, Delhi.

– (1975): An Introduction to the Study of Indian History, Popular Prakashan, Mumbai.

Moore, Barrington (1966): Social Origins of Dictatorship and Democracy, Penguin, London.

Nehru, Jawaharlal (1946): The Discovery of India, Oxford University Press, New Delhi, 1986.

Polanyi, Karl (1944): The Great Transformation, Beacon Press, Boston, 2001.

UNDP (2006): Human Development Report 2006, United Nations Development Programme, United Nations, New York.

Vico, Giambattisa (1744): New Science, Penguin, London, 2001. Webber, Max (1958): The Religion of India, The Free Press, New York.

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