Why the Economic Crisis Shouldn't Become an Opportunity for More GDP Talk

We must discard our economic growth addiction brought on by a GDP driven system for a more humane one.

The Modi government has tried very hard to persuade all TV viewers that we are not in the midst of a COVID-19 pandemic mismanagement disaster.

The Union finance minister’s delivered a five-part presentation on a plan for economic revival. But as Kiran Mazumdar Shaw said on an NDTV show, what everyone was waiting for, was a package for economic survival or relief funds.

This plan to pump up the economy through loans and privatisation at this time has met with criticism from independent thinking industrialists to economists, farmer associations to industrial trade unions, and across the opposition parties. Irrespective of different ideologies or vocations, everyone seems to agree that the economy cannot be jumpstarted when the urban and rural workers of our country have no food or cash and the families in the middle to lowest sections of the economy have lost jobs and are indebted.

But the central government appears to be in denial. 

The government has recycled many of its pre-coronavirus economic policies as its new Atmanirbhar Abhiyan (self-reliance movement) package.

Support to MSME, privatisation of the mining sector, expansion of airports, ports and highways and space exploration were the government’s key announcements in its 2020 Budget.

Now, these policies being pushed to increase the economic GDP at this time of global recession and anti-globalisation may end up costing the Indian public far more than it gives us. This government, which administered shocks to the economy with demonetization and GST, has not been known to count the cost of its policies. But our society, that is highly unequal and where different sections experience “the economy” is vastly different ways, cannot afford these risky proposals. 

It is doubtful if anyone in India still needs convincing that after two terms of the UPA and one of the NDA, the cache of achievements of neoliberal growth since 1991 has disappeared into the Cayman islands or into NPAs or into the wealth of families of the Forbes list of billionaires.

Oxfam’s report of 2020 stated that the wealth of 63 Indian billionaires was higher than the Union Budget of 2018-19. We have been in a long phase of jobless growth and our spending on public infrastructure and services has been shrinking. As stated by experts studying urban growth, this is a state of “accumulation without development”.

This has occurred along with a spike in the wilful, legitimised destruction of environmental resources. Those who say our choice is between growth and environment are wrong. Our governments have weaponised growth against the environment and its citizens. 

Persisting with such a growth model will now be harmful to humanity. Communities and movements in many parts of the world, who care about the earth and its inhabitants are demanding greener, slower and smaller economies that value social indicators over GDP, cooperation over competition, and leisure, creativity and connectedness at the centre of our social organisation. Why haven’t we seen such proposals in India?

Union finance minister Nirmala Sitharaman announcing the details of the government’s economic plan to fight the coronavirus pandemic, in New Delhi, May 13, 2020. Photo: PTI: Kamal Kishore

The short answer may be that we are still in relief mode as our governments are yet to make adequate resources available for the needy like the stranded migrants, farmers and fishers who have lost their produce and the growing number of unemployed people.

These are certainly the issues deserving all attention due to the unimaginable levels of hunger and deprivation. But the lack of bold post COVID-19 proposals may also be because we have many economists who believe that India is too poor to shun the prevailing growth models.

We also have only a few economists who are willing to see beyond the model of a welfare state that is underpinned by a highly extractive economy. It is for this reason that shaping a post-pandemic world needs the full participation of activists, scholars and community organisations who can root the economy within a just society.

As members of an interconnected society we need to dictate our terms and conditions to the economic system rather than be controlled by its default logics. 

Land and Labour

Most poor workers from cities are making their way to their native villages as they are without food, shelter or money. 

While TV channels call them all “migrants” and lump them into one mass of people, their specific identities that tell the story of systemic injustice is hidden. Many who come to the city for jobs are from the most socially and economically oppressed sections of our society.

The state is complicit in allowing the continuation of exploitative caste based work and feudal forms of discrimination of communities because it works in favour of those interested in privatising land and controlling the rural economy.

Adivasis and Dalits form a significantly large part of the small holders, wage workers and landless peasants in our rural economy. Marginalised rural workers, especially Dalit and Adivasi women rely on village commons and forest lands for their food security. These categories of lands are highly vulnerable to land grabs and the families most dependent have no say over the decisions made about these lands. 

Uneven private property making is crucial to understand how communities on land become lowly paid labour in India. For example, in Arunachal Pradesh, that is now again in the news for large dam projects, indigenous communities that are now divided by class will lose their lands because those who have de-facto control over common land resources want to capitalise it.

The government never intervened with progressive reforms to sustain and support rich traditions of upland community land management. The entire population will soon be badly off because those who give up land and those who protest against it cannot be accommodated in an economy that is getting leaner with big data, algorithms and automation.

Government backed land acquisition for large projects are opportunities for profit over investment rather than for the needs of our society. These projects promise great futures but they mostly end up as stories of displacement. Despite constitutional safeguards and national and international rights frameworks against discrimination and dispossession, land dependent communities have been uprooted mostly without their consent.

Also read: Is the Rs 20 Lakh Crore COVID-19 Package a Case of Too Much Bark, Too Little Bite?

The 2013 land acquisition law requires the consent of land owners and commits to compensating land dependent wage workers. But state level revisions have done away with the consent requirements altogether. Women headed households are targeted first in eviction drives. Mining, an extractive sector that contributes a mere 2% to India’s GDP, turns their world literally inside out. This sector is handled with kid gloves by central and state governments even though it creates fewer low paying and unskilled jobs in return for decimating entire living landscapes. 

Progressive reforms treat rural land like it were only a platform from which to take off into more “advanced” forms of economies. But shrewd capitalists, successful farmers and indigenous communities know from first-hand experience how the political economy of land works. Land laws enable some people accumulate what everyone needs. 

India’s industrial and urban economy is built on the extraction of caste work and resources from the village and the forest. And what has it created? Millions of jobs that are undervalued and that strip people of dignity. These jobs were touted as the backbone of the economy but ironically they disappeared as soon as the economy shook. The questions about work in our society are far more profound than what statistical metrics on employment can grasp.

This lockdown has shown that India’s workers are not only landless but also stateless. They were expected to realise India’s growth aspirations when there is no safety net below them. They are stranded between the urban and rural realms. This is indeed the greatest form of alienation: millions of families squeezed out of two worlds.

Labour and the Environment

Those who are not concerned with this primary separation of communities from land and only attend to the distributive aspects of the economy, demand more of what we have been doing all along in order to achieve a larger welfare state; globalised markets, industrial growth and urbanisation. But a production system cannot perpetuate beyond certain limits. We may not know these limits in all cases but we do know we are pushing at the seams when ecological feedback is negative and intense. This pandemic and the several virus attacks before it, are one kind of evidence.  

Our planet is ravaged by mass scale consumption of goods and materials. And no, recycling hardly puts materials back to the earth. Intensive agriculture, industrial and urban growth is given priority access to depleting water and forest resources even though these are precious commons.

The commons is understood as inefficiently managed and so, project activities, no matter how environmentally degrading or dangerous to life, are allowed to privatise common resources. Many economic “sectors” destroy more livelihoods than create jobs. If they do provide employment, their production systems expose workers and nearby communities to occupational diseases and environmental damage.

It is common to come across disease and ill-health in multiple generations of families living in coal mining and industrial belts. Such projects directly threaten public health. Their operations cause toxins to leach into food and water which are consumed by workers and larger communities and affect animals that are critical to the household economy. 

Projects like these are given approvals in the most cursory manner. Weakened labour and environmental laws are mute witness at worst, but mostly facilitators of these outcomes. These laws create a sense of false complacency that someone somewhere may be taking care of all of us.

Just last week a South Korean plant leaked toxic gases affecting villages within a 3 km radius atleast. Such development projects affect industrial labour, farm labour and ecological communities in many parts of India. It was for this reason that the Narmada Bachao Andolan (Movement to Save the Narmada) and Shankar Guha Niyogi’s trade unionism worked for the solidarity of the poorest Adivasi (tribal), kisan (farmer) and mazdoor (worker).

The green elephant in the economic planning room today is, of course, climate change. The sudden, uneven and unpredictable effects of climate change are little understood but widely experienced in India. Our country consistently tops the list of disaster displacement in Asia.

Ecomodernists are quick to put on the technology lens to see the converging “pathways” of economic growth and climate solutions. Reducing carbon emissions from fossil fuel use is seen as a central piece of these solutions. However, technology can only be an important partner, it cannot determine the framing of our possibilities for a different future.

The manner in which climate and energy policies have accepted the reliance on large scale, private corporation led large renewable energy projects is an example. It is known that large solar parks using materials that are non-renewable and set up at the scale of mini countries even, will prove inadequate for an inherently over-consumptive modern economy. But we continue to measure the success of climate policy through the growth of this sector.

The sector is a major attraction for global discussions on green jobs but in land- based countries like India, renewables are criticised like all other projects for taking away valuable land from communities. We must be mindful that this new economy of alternatives does not replicate the effects of the present economy. Many “climate resilient” growth models may not qualify as an improvement over the present forms of top down, extractivist economies. 

An ecological state

India’s land, labour and the environment are seriously affected by years of short-term economics and cabal politics. This government’s economic package at this crucial moment takes us further away from social and environmental justice. It is true that our urgent need is a solid and strong socio-economic welfare state.

This moment also requires us to walk that distance from the welfare state to the ecological state.

We cannot ensure the wellbeing of all if, as geographer Cindi Katz notes, the “grounds of social reproduction” are poisoned and turned hostile to life.

Ecology needs to now underpin welfarism. We must discard our economic growth addiction brought on by a GDP driven system for a more humane and regenerative system. Our task should be to create conditions for the social, economic and environmental freedoms of the unborn child. 

 The authors are with the Centre for Policy Research.