Thursday, May 7, 2015

Hindu Rate of Growth! BJP’s Social Ideology a drag on Economic Development?

India’s efforts to race in the league of the economically developed and politically matured countries of the world look somewhat premature. There is a lot of hype mostly emerging from relatively higher levels of growth rates during the last decade and half; as this happened due to low absolute levels to begin with. It is the large population count, a basic multiplier that leads to grand GDP estimates, real opulence that could generate sustained demand, promote economic activity and spiral up further growth is limited. At best the consumer-heroes of India are the middle and lower middle class who must engage the market to meet their basic needs such as food, energy, transportation, education, health and technological essentials. While affordability and appropriate technology is still the issue, the relatively higher inflation is leading unexpected race to achieve affordable living.

A considerable social and ideological baggage has sprung-up since the BJP assumed power which potentially can pull down and derail the economic growth and social development prospects of India. Note that India has come a long way overcoming the drag of the socialistic ideology, since about 1985 the GDP grew to increasingly higher levels continuing until now. Although the recent global downturn has only marginally depressed India’s GDP growth, it will be the only large economy in the globe expected to register a relatively high growth of around 6-7 percent during 2016 and 2017. Such a higher rate of growth if sustained for a decade and more, can then enable India register a place in the ‘new league of nations’ that will propel global economic development during the best part of 21st century.                                                                                                                                                                                                                                                                                                                         Now let us ponder over the conditions that are necessary for India to register a sustained higher growth rate during the immediate to medium term. Firstly, India’s natural advantage of harvesting and exploiting vast natural resources will yield higher growth only when it has access to investible funds and appropriate (green) technology. Both these inputs are available to India from abroad through the process of foreign direct (FDI) and foreign institutional (FII) investments. Secondly, the relative advantage of having a youthful population which will continue for at least another two to three decades can sustain only when they are educated and skilled appropriately; which in tandem with increasing investments get worthwhile rates of return through enhanced productivity in essential sectors of the economy such as manufacturing, services and agriculture.  Lastly but not the least, India must exhibit social cohesion and societal peace in the manner that it becomes the preferred destination for foreign investors and technological flows assisting the economy to progress through improved financial efficiency and reduced cost of production.  The structure of modern labour supply in India is uniquely lopsided favouring the high castes who are socially and economically better-off, keeping away large proportions of Scheduled Castes and Tribes, the Muslims and selected ‘other backward classes’  from the modern labour market. This scenario needs to be calibrated towards socially inclusive labor market, which amounts to no less than a paradigm shift.

Recent interferences by the ultra right-wing groups who fantasise India to be a Hindu state often identify themselves as a form of social-civil society have thrown off-gear the policy frameworks, legal and civic institutions regulating economic and social domains of millions of citizens. They are able to effect policy reversals in selected states and even at the centre, such as withdrawal of quota-reservations to Muslims (a case in Maharashtra), banning the culling and consumption of livestock and so on. Even many compelling legal cases with respect to police excesses and motivated political threats are being withdrawn. There are changes and revisions being made in school curriculums promoting right wing Hindutva ideology. The scientific temper among the students and the population at large is being challenged in a manner that unsubstantiated beliefs are used as citations and theories to the dismay of modern thinkers, practitioners of reason and science.

Establishing links between religion and levels of GDP across the nation is taboo. It is instructive, however, to learn that, unlike the Christians, the Muslims and the Buddhists who constitute much of the population of the globe and spread around a large number of countries across the continents; the Hindu religion is confined within shores of India from three sides and the imposing Himalayas in its north.  Note also that over 95% of the Hindus live in India and only small numbers in Nepal, Bangladesh and Pakistan; all these countries have registered low levels of per capita GDP of less-than USD 1500, India being on the top.

Over 61 per cent of the Buddhists on the other hand domicile in countries which have high levels of GDP including Japan, South Korea and China.  Incidentally it is a matter of historical fact that Buddhism emerged in the Indian sub-continent yet it did not survive on these lands to the extent that only about two percent of India’s population is Buddhists. Similarly, practically all Christians with the exception of Congo and Ethiopia (about 124 million out of 1.5 billion) live in countries with very high levels of GDP, such as the USA, most of European nations, Brazil, Mexico and Russia.  Even over 55% of the Muslims live in countries which have relatively higher per capita GDP although the most numerous of the Muslims live in India, Pakistan and Bangladesh with meagre GDP. This simple association between religion and GDP summarizes the broad parameters of religiosity and culture and its influence on the economy and Hindu-radical groups need be better informed about this association.

On another plain, it took a President of another country - the USA to preach lessons on diversity, tolerance and creation of equal opportunity during his visit to New Delhi in January 2015. Mr. Obama even invoked Mahatma Gandhi, the icon of religious tolerance during the ‘63nd annual national prayer breakfast’ speech in Washington D. C, to point out that ‘looking at what is happening in India even Gandhi would have ashamed’.  Politically though, at the moment in India, the presence of minorities especially the Muslims are of no significance excepting as a historical fact. They often are of entertainment value for the general masses and not welcome co-patriots.  However, the Muslims constitute the backbone for a number of traditional manufacturing; the structure and growth of modern industry especially in the areas of textiles, construction, leather, garments, gems and jewellery and iron and steel and have been based on the artisanal skills they carry to this day. A recent estimate undertaken by this author suggests the Muslim labour force contributes relatively higher value added compared to all other socio-religious categories at all levels of education excepting the topmost which is affected by labour market and employment distortions caused by quota system.

The state governments in India wield a substantial independent power in many areas of governance especially those affecting the basic needs and human development. The public police are implemented mostly through state bureaucracy the solutions for the social and also many economic issues have to be found at the local level. It is in this context that India and its states need to establish institutional arrangements to ‘equal opportunity a cherish goal and institutional mechanism to be found and executed. Prudent economic and social policies both at the national and state levels can yield higher economic growth lets India falls again in the trap of the so called ‘Hindu (Low) Rate of Growth’.


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