A tale of two rallies

The two mammoth rallies at Delhi's Ramlila Maidan look different, but both reveal the need of better economic management

Delhi’s Ramlila Maidan has, over the past fortnight, seen two massive rallies — demonstrations that reveal exactly what the forces are which are lining up to contest the next general election. The first, a fortnight ago, featured tens of thousands of farmers marching under the red flags of various Left-leaning organisations to demand that rural distress be addressed. The second, this Sunday, was an exhibition by the Vishwa Hindu Parishad and allied organisations of their power, and saw tens of thousands of young men in saffron descend on Delhi to demand the building of a Ram temple in Ayodhya. And while the tone, appearance and demands at either of these rallies could not have been more different, they both reveal at their heart the fundamental failure of the Narendra Modi-led National Democratic Alliance to manage India’s economy properly. 

It is now widely understood that rural distress is pervasive across large parts of India, particularly those where agriculture continues to be rain-fed or where irrigation mechanisms are largely unreliable. This is due to a combination of factors, some that are policy-driven and others that are not. For one, it is clear that the monsoons are becoming less and less predictable, and more and more variable. Extreme weather events are more common. This has long been predicted as a side effect of climate change, and we are seeing the effects in real-time. India has always been the country most at threat from climate change, and its subsistence farmers were always going to be the first to suffer. 

Illustration: Ajay Mohanty

Other, more administrative failures also abound. Government insurance schemes, in spite of being re-jigged constantly including under the current government, continue to be badly designed — paying farmers late or not at all, and mysteriously ensuring that insurance companies make money even when they should be paying out. Attempts to extend government procurement to crops other than wheat and rice have not taken off properly, and in any case the procurement machinery is not widespread enough in places where farmers are most vulnerable. Other forms of transfers to rural Indians have been tried, but the government’s decision to transform Aadhaar from an instrument of inclusion into a mechanism for exclusion to be wielded by petty bureaucrats has meant that transfers cannot be relied on, either. As a result, the long-standing tendency to forgive agricultural loans has become entrenched in the Indian polity, and was one of the major demands from farmers at the Ramlila Maidan rally. In the absence of other income support, farmers will expect that nationalised banks will give them money whenever required, and repayment becomes optional. 

Meanwhile, the angry gathering of young men demanding the construction of a Ram temple is a reminder of the social costs of under-employment. Precarious employment need not lead inevitably to social regressiveness, but the two are often linked, given that other and more ascriptive forms of identity become dominant in the absence of identity linked to occupation. In the West, the growth of precarious employment and the opening up of employment markets to greater competition for previously advantaged groups have led to an upsurge of anti-migrant and xenophobic emotion that was always present but previously subterranean. Similar tendencies are visible here. It does not mean that the primary motive force for such a movement is not religious fundamentalism; it merely means that religious fundamentalism plays a greater role in many individuals’ political life than might otherwise have been the case.

This was not the India expected in the 2000s, when many confidently declared that 1990s-style revivalist movements had lost political salience. Even L K Advani, the politician most associated with the Ayodhya movement, minimised its importance during his prime ministerial campaign. It appeared unlikely even in the first months after the election of Narendra Modi, who — in spite of his hardline image — once called for “ten years” of wealth creation without internal struggles over identity. Even as recently as 2014 the creation of millions of jobs appeared possible. But as time passed, those jobs failed to materialise. The vast error that was demonetisation may well have taken many jobs away. And today, as 2018 turns into 2019, the creation of jobs on such a scale looks increasingly improbable. The government instead relies on data pointing to the formalisation of existing jobs — by which they mean the expansion of the Employees’ Provident Fund — and to lending to micro, small and medium enterprises, which they believe serves as a proxy for entrepreneurship. This does not end precariousness. It merely enhances it. Even the forcible expansion of the EPFO will also increase the payroll costs to employers in the future, reducing the impetus to create more high-quality jobs. 

These two failures — the failure to create returns for agricultural producers, and the failure to create less precarious forms of employment in semi-urban areas — are inextricably linked. People continue to be tied to the farm because there are no other places to go. This, in turn, reduces the average product (Indian agriculture is organised around average product and not marginal product, as economists pointed out long ago). Today, if you just rely on farming income, you are unlikely to be able to escape poverty. If you look for other work, you will find only precarious employment, which causes you to seek fulfilment and pride in identity-based political mobilisation.

India’s window to create a safe, stable and prosperous society is closing. It was closing when Mr Modi took office; but his government has shown little urgency when it comes to reform of either agriculture or industry. We should not be surprised. After all, if the Congress and like-minded parties were criticised prior to 2014 because their policies “kept people dependent” on the state and thus voting for mai-baap parties, Mr Modi’s party can certainly rely on re-election from those who organise around majoritarian identity. There is little political incentive for them to create an economy where farmers and under-employed young people do not march on Ramlila Maidan. India still awaits a political force that will choose to implement genuinely transformative economic policy of the sort that changes Indians’ lives and prospects.
m.s.sharma@gmail.com

Twitter: @mihirssharma