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The demand side of inclusive growth

Why is Tamil Nadu, with a large lower caste population, among the toppers in the growth rankings, and Uttar Pradesh, with its strong Dalit mobilisation movement, at the bottom?

Samuel Paul & Kala S Sridhar 

Samuel Paul & Kala S Sridhar

According to the latest Economic Survey, (UP) is among the states with the slowest growth rates. When Indian states are ranked based on the population below the poverty line for 2009-10, UP ranks second from the bottom - at 39.4 per cent rural poverty and 31.7 per cent urban poverty. (TN) is among the top four states - at 21.2 per cent rural poverty and 12.8 per cent urban poverty.

While faster growth in TN has contributed to its poverty reduction, there is strong evidence to show that social mobilisation that energises the demand side has led to more inclusive growth in the state. Here, we focus on the demand factor arising out of social mobilisation and how that can aid inclusive growth. In TN, we found several characteristics of social mobilisation that brought about growth more inclusively:

  1. A large proportion of TN's population (nearly 73 per cent according to the National Family and Health Survey or NFHS) was from the lower castes (other backward classes or OBCs), and it is their participation that led to inclusive growth in the state;
  2. The timing of the social movement in TN occurred much earlier in history than it occurred in UP; in TN, the participation in growth and employment opportunities of the lower castes was aided by social movements;
  3. Successive governments that came to power in TN were mostly led by people from the lower castes, and they worked for the betterment of the majority to which they belonged;
  4. The lower castes reinforced mutual support for their own betterment. Social mobilisation also enabled them to demand reform and make use of the rights, entitlements and services offered by the government. Demand, thus, elicited positive responses from the government that benefited them.

In UP, the upper castes formed a bigger proportion of the population, nearly 46 per cent according to NFHS, as of 1999. Given its caste composition, naturally, successive state governments in UP focused on the western part of the state (which also happens to be fertile) with a large proportion of the upper castes, such as the Jats and the Brahmins. (POOR ECONOMICS)

Given their relative caste composition, an explanation of what happened in TN, which promoted growth inclusively, but did not happen in UP is in order. In the last century, TN experienced a mobilisation of the Dalits and the backward classes. The social movements that dominated TN politics and the public discourse in the early part of the 20th century created a much greater awareness among the lower castes that constituted the majority of the population about their rights and the need for collective action to claim their entitlements. While there were movements that protested caste abuses and brahminical dominance in both the northern and southern regions of the country, the distinguishing feature of TN's social movements was their focus on gaining access to education and economic opportunities, such as government jobs. Reports show that TN set aside 69 per cent of government jobs and seats in higher education for downtrodden castes, which helped them rapidly move into the mainstream. Because education was widely embraced, the lower castes in the south were also better able to take advantage of these opportunities. Similar movements occurred in Kerala.

In UP, the Bania and Vaishya groups had a stranglehold over trade, industry and money-lending, and the lower castes were unable to overcome the entry barriers erected by these higher castes. The first wave of backward class horizontal mobilisation took place in the north Indian countryside against upper-caste socio-economic and political domination. This was seen in the formation of a backward-led government in 1967 in which, for the first time, a number of backward caste ministers were appointed. But it proved to be short-lived because its leaders were divided over the party's ideology and strategy, with the result that the Dalits, attracted by Indira Gandhi's Garibi Hatao and the Twenty-Point Programme, supported the Congress. Thus, UP experienced no lower-caste movement early on.

It is true now that for nearly two decades, UP has had a movement to mobilise the Dalits and the other backward castes of the state, and the northern region as a whole did put in place affirmative action policies. But the poor literacy rate worked against the state (70 per cent in 2011 against 80 per cent in TN, but only 42 per cent against 64 per cent in TN in 1991 at the time of the Dalit mobilisation in the state). The lower castes in UP and other northern states were unable to take advantage of such reservation because they could not qualify for those jobs. The result was that many such positions were vacant for long periods, and the progress of the Dalits did not occur in the same way as in TN. Clearly, this signals a failure of the demand side in UP.

The neglect of the lower castes in UP, thus, led to their revolt in the 1990s. This final revolt of the subalterns led to a worsening of the law-and-order situation, which became a negative factor for attracting private investment into the state. The Congress was driven out of power, following which regional parties such as the Bahujan Samaj Party and the Samajwadi Party came to power. Social movements that merely symbolically display caste pride and identity, however, are unlikely to achieve the full benefits of demand-side growth.

It is reasonable to conclude from the foregoing discussion that the social movements that occurred in TN strengthened the demand side of governance, which was one factor that led to better governance and caused inclusive growth there. Such a push from the demand side was quite weak in UP a few decades ago. We expect that the revolt of the subalterns in UP that occurred recently will strengthen the ability and willingness of the lower castes in the country's largest state to demand better governance, influence the state's ability to govern more effectively and bring about inclusive growth there.

The authors are with Public Affairs Centre. They gratefully acknowledge inputs from various officials whom they met in Lucknow and Delhi. These views are personal

First Published: Tue, March 05 2013. 21:42 IST