Socialist Worker

India - the great democracy gap

Sixty years after independence India is being ravaged by neoliberalism and increasingly divided between rich and poor, writes activist Meena Menon

Issue No. 2064

Poor children eke a living in the streets of Mumbai  (Pic: Jess Hurd/» )

Poor children eke a living in the streets of Mumbai (Pic: Jess Hurd/ »

Sixty years ago on 15 August 1947, India was handed over by its British rulers to be governed by the political medley called the Congress Party – ending over 170 years of colonial rule.

Since then, a fledgling nation with hardly any claim to the conventional concept of nationhood has belied the scepticism of many schools of political thought and emerged as a distinct entity with political and economic ambitions of its own.

India is seeing rapid changes in terms of its priorities and economic policy. It is becoming more ambitious and aggressive – regionally and globally. Indian democracy has its own distinctive political flavour – bewilderingly diverse, chaotic, often anarchic.

The country also has abject poverty living cheek by jowl with immense wealth. Three quarters of the population at the bottom have been hidden under an enormous invisibility cloak in the “great Indian success story”.

At the same time, the “great Indian middle class” – which once played a progressive role during the independence movement – has settled down to enjoy the fruits of an economic boom, with more money to spend and buy.

A strange mix of Jawaharlal Nehru inspired socialism and Mahatma Gandhi style morality guided Indian policy priorities during the first few years after independence.

People were at the centre of policy, at least in theory – even if this was not always evident in practice.

These policies resulted in a strong public sector, an attempt to provide government-run social services, and regulation of the private sector and investment. But all this changed in 1991 when a new phase began – one of liberalisation and “opening up” the economy.


The earlier “socialistic” model gave way to market-led economic reforms and growth orientated policies. The result has been the creation of immense wealth at one pole of society – but marginalisation, impoverishment and unemployment at the other.

The public sector, except for a few profit-making sections, is rapidly being disinvested and sold off. India now markets itself as the “world’s fastest growing free market democracy”. It has had 8.5 percent average GDP growth over the past three years, 9 percent in 2005-6, and an estimated 9.2 percent for 2006-7.

There has been 100 percent growth in Foreign Direct Investment (FDI) and over 340 percent growth in private equity investment in 2006. The stock market is soaring.

It has the world’s fastest growing telecom market, with over 115 million customers by February of this year and adding six million new customers every month.

While this is the top story, the one beneath is appallingly sordid. Agriculture was once the backbone of the Indian economy, and more than half of the country still depends on it for a living. But it is in deep crisis.

The “reformed” neoliberal agriculture policy focuses on production and markets rather than on land reform, rural credit, social support for farmers or access to food.

In various parts of the country, suicides by middle and small farmers have become so common that they rate just a small mention in the newspapers and hardly any coverage on television news.

Reasons for farmers’ suicides are complex. They include mono-cropping, the small and unviable size of land holdings, lack of credit and fair support prices, debt and high interest rates, the high cost of new seeds, fertiliser and pesticides, lack of access to the market, and the vagaries of the global market with which Indian agriculture is now linked.

India’s National Sample Survey Organisation released a report in December last year on the level and pattern of consumer expenditure in 2004-5.

It revealed that about one third of India’s rural population – over 200 million people – survive on less than 12 rupees (15 pence) per day.

Migration to the cities was an option for starving peasants in earlier days – but no longer. According to a recent estimate, India will have 34 cities with populations of 1.5 million or more by 2015.

These cities will increase in size at an average annual rate of 2.8 percent. Four of them will have crossed the ten million mark – with the city of Mumbai having the largest population with over more than 27 million people living there.


The last census of India was held in 2001. It estimates that 28 percent of the population in India is urban. There is no infrastructure, physical or social, that is even barely adequate to service this growth.

The basic urban needs are a livelihood, affordable housing, education, health, public transport and clean environment. On all these counts, Indian cities are sadly wanting.

Unemployment for “lower expenditure classes” is high in urban India, with current daily status unemployment rates as high as 9.5 percent. Factories have been closing down, giving way to smaller units that provide insecure and low paid employment.

Those who manage to train in spoken English can aspire to the higher calling of “cyber coolie” in the “business process outsourcing” centres that are mushrooming across Indian cities.

There are fewer jobs to be had for those who aren’t educated and English speaking, apart from those in the service sector. These tend to be informal jobs, such as domestic work, chauffeuring, gate security and so on.

The urban poor is being pushed to the periphery, having to subsist without regular jobs or legal housing – and also cut off from social security of any kind.

Housing the urban population is one of the most contentious issues in the Indian metropolis, linked as it is to the one of the most profitable of businesses today – real estate.

A new kind of class war is developing in the Indian cities, where the poor are being thrown out of the city area to live on the periphery.

Slums or shanty towns are being demolished to make way for high rises to house the rich.

In Mumbai, for instance, public housing is practically non-existent. The solution being offered by the government is based on a principle of cross-subsidy, where big builders are given slum land to build middle and upper class housing, keeping a percentage of the land for the poor – the latter to be subsidised by the former.

Mumbai is becoming the epitome of urban disparity, with glittering malls, multiplexes and luxury apartments towering over slums and dilapidated tenements.

Regarding public services, the government of India in its wisdom has launched the Jawaharlal Nehru National Urban Renewal Mission, which is theoretically meant to address the problems of urban development.

This mission essentially promotes a policy of neoliberal reforms, such as sweeping changes in the financial, governance, legislative spheres that cut away the powers of the legislature and of elected representatives.

They advocate private-public partnership in all projects. The thrust of the approach is towards the privatisation and the removal of any constraints to the operation of a free market in land.

Another even more infamous project is the Special Economic Zones (SEZs), an urbanisation plan that envisages the conversion of vast swathes of rural and agricultural land into “industrial zones” – prime real estate.

Taking a cue from the Chinese economic miracle in the form of the Shenzhen SEZ, and introduced by the Indian government as a trade export promotion effort, these projects have in reality turned into a nightmare of land acquisition and grabbing from farmers by big corporations.

The SEZ law says that half of the land in the zones has to be used for manufacturing or services and related activity – but the rest can be turned into whatever the promoter pleases.

There’s bitter resistance all over the country by peasants against what they see as a massive land grab.

Despite this the Indian government has given formal approval to 341 SEZ proposals, amounting to 443 square kilometres, and granted “in principle” approval to 171 more proposals. By its own admission, only four million jobs are expected to be created through these zones.

The state is not only increasingly opting out of any affirmative action, it acts as a facilitator for business, an activity that is left to insensitive and often corrupt bureaucrats to perform.

The policy changes in India are symptomatic of the huge transition which the country is undergoing.

Neoliberal globalisation has benefited nearly a quarter of the population, a number larger than that of any European country, and almost equal to that of the US.

Big business is more than happy with a market of this size. Indian corporations have reached out successfully for global markets, investments, collaborations and takeovers. The world is indeed their oyster.

But the vast majority of Indians, who will loyally hoist and salute the tricolour flag this Independence Day, are alienated from the prosperity they see around them and from the Indian success story they hear and read about.

Their future is uncertain at best. All they can hope for is the famous “trickle down” – and they have not seen much of that.

Although India has many active and militant popular movements, the discourse on alternatives is still relatively weak.

An alternative economic and development model for a country like India would necessarily involve an alternative agrarian programme, with land reform, sustainable agriculture, and fair wages for agricultural labour.

It would need to address the lack of access of a large majority of Indians, particularly women and dalits (castes that face discrimination), to education, health, water, sanitation and a clean environment.

In the urban sector, the questions of jobs, housing and transport need to be looked at. People, not big business, should be at the centre of policy concerns.

It is the social movements and the left that holds the hope for articulating and realising these alternatives.

Those who celebrated at midnight on 15 August 1947 have passed on. But 60 years after independence from colonialism, the goal of real independence from poverty and deprivation are still as distant as a dream. It is for this that India waits.

Meena Menon is a senior research associate for Focus on the Global South in India »

Making money in the Mumbai stock exchange (Pic: Jess Hurd/» )

Making money in the Mumbai stock exchange (Pic: Jess Hurd/ »

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Tue 14 Aug 2007, 18:05 BST
Issue No. 2064
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