Economic Highlights

New Delhi, 27 July 2012

Mukherjee, New Santa Claus

ABANDON TRICKLE DOWN THEORY

By Shivaji Sarkar

It is official now. Even President Pranab Mukherjee has told his Government to abandon the theory of “trickle down”, enunciated in 1991. This is based on the fallacious premise that crumbs thrown by the rich would remove poverty. Remember, Mukherjee as a Union Minister had ‘hands on’ close look at everything. As Finance Minister he has seen how economic theories are propounded and how they do not work. As First Citizen he empathises with the plight of the aam aadmi.

Importantly, in his scheme of things, economic equity has to be the basis of governance. Also by his selection of blunt words he made plain to his Government and the country that equity does not come by throwing crumbs to the poor. Thereby, implying that such assumptions hurt the dignity of the poor people.

After four decades in Government in various capacities, President Mukherjee was candid. “Trickle down theories do not address the legitimate aspirations of the poor. We must lift those at the bottom so that poverty is erased from the dictionary of modern India”. Having seen the poor very closely in his own constituency Jangipur in West Bengal, his words of wisdom need to be heard.

Notably, one may question him as to why he remained silent for so long? But answers can be found in multiple interviews he has given before being formally elected President. Indicating, that as part of the Government he had to abide by enforced discipline.

This raises another question. Are Ministers not free to express their views even in internal meetings which hurt the sentiment of a common citizen? Perhaps, if he had been able to express himself freely, possibly the pattern of governance could have been changed earlier.
Given the fact that his Government is not obligated to follow its President’s advice, it is not necessary that Mukherjee’s words would be taken seriously.

Does that mean the 1991 theories propounded by the rich would continue to dominate? In all likelihood, if we go by the recent swell of the number billionaires which have increased exponentially in the country. Whereby, there are many Indians who boast salaries of over half a million rupees every month.

This is not all. Company reserves too have increased by hundreds of billions of rupees. Despite an economic slowdown, profits also remain in the range of 15 to 40 per cent.

On the other hand, workers, forming the multitude of poor, continue to have stagnated wages and are deprived of statutory dues. Thus, as disparity increases unrest spreads. The Maruti Suzuki incident at Haryana's Manesar plant is indicative of a larger malaise which is afflicting the nation. Namely, of workers being mistreated.

Undoubtedly, this calls for an end to the globalised theory of labour reforms. The policy of hire and fire, wherein the rich want legal powers to deprive the under-privileged. If President Mukherjee is to be heard, the nation would need stricter implementation of the labour laws enacted in early 1950s. Recall, these laws were enacted to ensure equity by the egalitarian Jawaharlal Nehru Government

Significantly, the violent protests against land acquisition dotting India’s landscape, be it West Bengal’s Nandigram, Orissa's Posco, UP's Noida and elsewhere speaks of the poor’s fear of losing their livelihood. Whereby, under the new dispensation, concentration of wealth in the hands of a few individuals or corporates is becoming the rule. Making it easier for investors and others with deep pockets to claim that the country belongs to them.

Alas, not only is this increasing deprivation but also leading to discrimination. Borne out by the rising incidents of violence in Assam's Kokrajhar, the jungles of Jharkhand, West Bengal, Orissa, Andhra Pradesh and Maharashtra which stand testimony of the anguish.

Ironically, it is a negation of this theory that at a compounded 30 per cent inflation during the last three years, those earning Rs 32 per day are in the category of the rich, as per Planning Commission Chairman Montek Ahluwalia’s definition.

Coupled with this, while newspapers give wide coverage to concerns raised by CRISIL rating agency, that capital expenditure by the corporate India would dip by 14 per cent in 2012-13, it has not spared a thought to the plight of the people who despite earnings of over Rs 10,000 a month are finding it difficult to feed their families.

Moreover, even as tears are shed over Indian airports becoming expensive (it should not be), there are no words of consolation for the large number of poor and now even the middle class who cannot admit their children in universities and colleges for want of money.

Pertinently, with education becoming excruciatingly expensive children of the poor are forced to drop out. Shockingly, an artificial shortage of seats is created, so that school and college managements can sell the poor’s quota to the highest bidder. This is not the exception but rule everywhere, including colleges and institution affiliated to State Universities of the Delhi Government. Raising a moot point: Is education becoming the preserve of the rich?

Consequently, it is the rich and privileged Government servants, particularly in public dealing departments, who are perpetrating corruption. In his Presidential speech Mukherjee lamented this obliquely.  “Corruption is an evil that can depress the mood of the nation,” he asserted. Scathingly adding, “We cannot allow our progress to be hijacked by the greed of a few”.

Further, his choice of word --- progress --- is careful. Markedly different from development which might not encompass all. While, progress is for all.

True, nothing trickles down. Had it been the case, after 20 years of “liberalisation” there would have been plenty of jobs today. Instead, jobs are shrinking; wages are stagnating and more and more are succumbing to penury.

The recent Government’s Labour Bureau survey confirms that only lower category jobs; called ABCD – orderly, bearer, chaprasi and driver; are available. Sadly, higher the education one remains unemployed. Clearly, this is not progress as Mukherjee wants to see.

All in all, President Mukherjee has given dollops of food for thought to the entire political class, in Government and Opposition. The nation now keenly watches our polity’s moves. Unmistakeably, the people need freedom from exploitation. India’s First Citizen hopes this can happen! ---- INFA

(Copyright, India News and Feature Alliance)