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CIRD ASSIGNMENT SUBMITTED BY: ATUL

CHHABRA
MA
DEVELOPMENT STUDIES

Question: Many observers have characterized changes in the Indian political economy in the last
two decades through the discourse of neoliberalism, foregrounding things like contraction of the
state from the social sector, marginalization of those sectors and spaces considered less
economically ‘productive‘ and a predatory appropriation of natural resources. Does the evidence
from the various lectures and readings for CIRD back this perspective or challenge it?

Answer: Neoliberalism is one word which breathes life into thousands of activities which
surround our world today. Its effect is felt everywhere around us and its hegemony is so profound
that it has become an integral part of our thought process. I will be very soon defining it as it has
been defined over the years but it should be understood that its meaning does not confine to the
definition alone and goes a long way to make the world and our country the way it is today-
economically motivated, insensitive to the needs of a majority of helpless people and
environmentally destructive. Indeed the neoliberal reign has brought about some of the most
amazing results in the name of economic growth and development but if looked closely, this growth
is woefully a skewed one. Many countries exemplify this pretext who at one time had cherished
neoliberalism and later went into a phase of underdevelopment. Chile, Mexico, Argentina are to
name just a few who witnessed their share of slump and other challenges in the human development
front at a later on stage by following the straight line path to ‘success’.

According to Harvey (2006), “neoliberalism is in the first instance a theory of political economic
practices which proposes that human wellbeing can best be advanced by the maximization of
entrepreneurial freedoms within an institutional framework characterized by private property rights,
individual liberty, free markets and free trade”. The state intervention in the market affairs is
minimal since it is believed that markets if left alone will best determine the prices through a state
of market equilibrium. Emphasis is laid on increasing the efficiency of private enterprises,
liberalization of trade practices and opening up of markets to the world economy. The role of the
private sector is intensified, so as to determine the political and economic priorities of the state.
Even the social sector including education, healthcare, environmental pollution or social security,
which are generally in the hands of the government are gradually released and allowed for private
administration. Success is only defined in economic terms and profit becomes the unit for the
measurement of development of the country. Nature and its resources are treated as powerhouses to
achieve higher economic gains and become mere tools to suffice the insatiable appetite of
industrialization. A country may experience economic gains in the short run but the costs which are
born in the form of malignant inequality, segregation of labor, degradation of intellectual property,
commodification of labor power and rising discontentment in the masses, becomes the reason for its
downfall in the long run.

In order to get a more clear picture of how neoliberalism has been playing a key role in dismantling
the stability of our country, I will bring-forth certain issues which expose the gory side of
neoliberalism.
It is not a hidden fact that India currently has the largest absolute number of illeterates compared to
any other country and that every third illiterate in the world is an Indian. The gender gaps in terms
of educational access and attainment continue to be one of the widest in the world. The backward
social and occupational groups are still by far deprived of the basic amenities to lead a normal life.
Despite all these facts it is surprising to find out that government expenditure on education has
continued to be consistently below the recommended figures. Center’s expenditure on education in
proportion to its total expenditure has been a mere 12.87% for the year 2005-06. This widrawl of
government support from the secondary and higher education sector can be seen in the light of its
expectation to see the private sector coming forward and taking charge of this awful situation. Also,
one of the major characteristics of the neoliberal economic reforms is the reduction of fiscal deficit,
which goes in for aggressive tax cuts to induce investments thus hampering the ability of the state to
mobilize more revenue. The brunt of this is faced by the welfare programs run by the government
which continue to have an insufficient backing of funds. On ground, the government schools in
rural areas continue to maintain a miserable condition with poor infrastructure and obsolete
teaching methods thus affecting the learning outcomes of the children negatively. This deplorable
condition of public education system gives an incentive to the ill- equipped private schools who
target the low income groups who are desperate to see their children in ‘English’ medium private
schools as they believe that it is the only way to take their impoverished life out of the curse of
poverty. Thus we see how neoliberalism is impacting the rural masses who are being deprived of
their natural right to receive necessary help from the state in getting a quality education for their
children.

The brutal rate at which farmer suicides are taking place in our country especially in the state of
Maharastra, Andhra Pradeshand and Madhya Pradesh is an issue of great concern. These farmers
are facing an agrarian crisis like never before. Though water stress is a common feature of all these
farmers but it doesn’t end here. The quality of land has also been worsening over time which has
resulted in a lower productivity of the farm produce. Cultivation costs have also shot up since there
is a steep increase in the prices of inputs (by several hundred percent) as there has been no
intervention by the government to regulate these prices. With the US-EU subsidies to their growers,
the condition of the Indian farmers has exacerbated all the more as prices for their produce have
become incompetent to the global prices. Recently while subsidies to farmers are rising in the West,
in India they are being cut out. The veil of neoliberalism that is covering the eyes of our
government is making it insensitive to the needs and conditions of the Indian farmers. Sadly, the
government is still continuing to cut back upon its investment in the agricultural sector.

Mr. Sainath in one of his articles, has very well brought forward the paradox between the rising
incomes of the billionaires of India on one hand and the millions of rural poor who are starving to
death on the other. On one side there are 311 billionaires who are alone pulling in a sum of Rs 3.64
trillion (as per 05-06) while on the other side are a millions of poor in the rural India who have been
only spending a total sum of Rs. 503 on their monthly expenditure and are the ones who constitute
the BPL households. There is a clear cut showcasing of inequality on an all time rise in our country.
Maharastra which is the third richest state in our country, interestingly- is struggling in terms of its
agricultural revenue; the bank credit to the farmers is declining; and the farmers are forced to turn
over to money lenders. The question then arises that what is the worth of this wealth when it is not
coming to the rescue of the poor but instead is just getting accumulated in the hands of a few elite
businessmen. Four-fifths of the suicides which took place in Andhra Pradesh, were a result of the

1 Source: Annual Financial Statement and Expenditure Budget Vol. I


debt crisis being suffered by the farmers. The same state is also host to one of the world’s most top
rated MNC’s and becoming the next silicon valley- ‘Hyderabad’. The government’s favoritism with
respect to neoliberalism is so evident through these cases.

Finally, the recent incident of talks to grant Vedanta, a London based company permission to begin
mining in the forests of Niyamgiri- the sacred mountain of the Dongaria Kondh tribe is one of the
most practical examples where neoliberalization has made the home of the wretched tribe a living
hell. Vedanta group is already running a refinery in Rengopally, which is one of the 13 villages in
the vicinity of the refinery. The company created a giant pond (size of several football grounds) just
a few meters away from the village. This red mud pond is used for dumping alkaline slurry from the
plant. The construction of this waste disposal unit has led to the contamination of the groundwater
of Rengopally and other surrounding villages causing some serious skin problems to the villagers
who do not even have an access to any proper healthcare facilities in the village. There have been
instances of leakage of caustic soda into the Vamsadhara river which is used by the villagers for
numerous works. The air has been polluted with dust particles and has caused breathing diseases
among the villagers with tuberculosis claiming the lives of around 14 people in the last two years.
All these claims by the villagers with the help of some genuinely working NGO’s like Amnesty, and
Action aid have been voiced out in the public and the case has also been taken to the Supreme Court
but; to no use. The villagers sick of these grave problems faced by them and tired of the noise of
trucks carrying material day and night have requested to the government for their resettlement but
the government has its eyes and ears closed. The people have also lost faith in the government as
they know it is on the side of the rich industrialists who are doing the needful to keep the
government happy.
Though this refinery problem continues to haunt the villagers even today, there emerges some ray of
hope through the mining issue that had a happy ending on 24th August 2010 when the Supreme
Court denied Vedanta the permission to perform its mining activities.

Hence, the issues that were discussed in this answer very clearly demonstrate the gruesome ground
reality which is operating as a result of our adhering to the much ‘result oriented‘ approach of
neoliberalism. I hope the government acts more responsibly in the future by taking decisions
keeping in mind the implications they bear on the masses and not just go ahead with achieving short
term benefits which ultimately go on to contribute to the very structural problems later faced by the
country.

Question: Available evidence suggests that rural development programs such as NREGA and
NRHM have been unevenly successful in India, with clear inter and intra-state disparities. Using
one of these recent programs, discuss the factors that have shaped its relative success or failure in
particular areas.

Answer: In the light of widespread hunger and starvation plaguing the country, coupled with one
after the other failure of various employment, health and other schemes in lieu of corruption, the
government of India came up with the National Rural Employment Guarantee Act in 2005 under the
reign of the UPA. One of the main tenets of this scheme was its intertwining with the Right to
Information. It began with its enforcement in 200 of the most poor districts in the country, thus
providing them 100 days of guaranteed employment. Under the provision of the Act, the state
government has to provide unskilled manual labor to the applicants within a parameter of 5 kms
from their residence. If the distance is more then the requisite allowance needs to be paid for the
same. In terms of the payments, the workers are to be paid a statutory minimum wage directly into
their bank accounts or post office accounts within a period of 7 days of the work done. The work
must be provided within fifteen days or else an employment allowance needs to be generated by the
state government which shall be paid to the applicants. Importance has been given to equal pay for
equal work whereby the women will also be paid the same wages as that of the men. The nature of
work has to be labor intensive with minimal dependence on machines so that more and more people
can be employed. Transparency and accountability has to be maintained at al levels, be it the
payment of wages, work done, materials required, etc and all the relevant information is subject to
scrutiny by the public. Regular social audits are also conducted so as to find out if all the conditions
and provisions are being well taken care of or not. Programs at a massive scale have been
conducted to inform people about their ‘right‘ towards getting themselves benefitted against the
provisions of NREGA. Training of government officials and panchayat members has taken place to
spread awareness pertaining to their roles and responsibilities. The sincerity with which these
initiatives have been taken up by the different state governments has brought about a diversity in
the way the act has been implemented across the country. According to Jean Dreze, “there are
startling differences in the levels of NREGA employment between different states.” For the purpose
of my answer I will be mainly considering the three states of Jharkhand, Andhra Pradesh and
Kerela.

Status of NREGA in Jharkhand


The condition of NREGA in Jharkhand is rather dismal. Out of twenty two of the districts of
Jharkhand, twenty have been those that were included in the list of 200 districts in where NREGA
firstly began its operations. This very well discloses the condition of unemployment and poverty in
this state. The major reason of underperformance of NREGA in Jharkhand is possibly due to the
lack of sufficient awareness about the features of NREGA. People are aware that it is a new
initiative taken up by the government to provide rural employment but this knowledge almost ends
here. They have very little idea about the benefits that they are entitled to on possessing a job card.
They do not clearly know that possessing a job card gives them a guarantee for employment
(employment on demand) and that they are qualified for an unemployment allowance incase they
do not get any employment within 15 days. Surprisingly the Hindi version of the guidelines under
NREGA were not even available with the government officials which also includes the district
magistrate. The very design of the job cards is also defective as it does not include necessary
information pertaining to the wage payments or other entitlements that the laborers are permitted.
However, the major stumbling block in the case of Jharkhand is perhaps the absence of Gram
Panchayats and Gram Sabhas. This opens up the entry for contractors who manipulate the program
to further their personal gains and result in exploitation of the poor. The government officials also
try restricting the distribution of job cards so as to avoid extra workload and responsibilities. The
muster roll which is one of the major innovations of this program is also not well maintained here
and rather a ‘kaccha‘ muster roll is prepared which paves way for fudging of the details in the
‘pakka’ muster roll. This almost makes it impossible for the authorities to later scrutinize during a
social audit and thus defeats the norms of transparency which have to be adhered to as per the act.
Thus, one cannot deny that the program is far from a smooth flow in Jharkhand but at the same time
it should not be discouraging enough since one has to understand it is only a nascent period and
NREGA has to yet evolve in such a region which is so very deprived of the most basic of the
opportunities and a program like NREGA still lights up a ray of hope where other programs have
failed.

NREGA in Andhra Pradesh


Andhra Pradesh has faired well if not exceptionally with regards to the implementation of NREGA.
Its exclusivity lies in two innovative initiatives taken up by the government of AP. One is the
computerizing of the entire process from job allotment to the payment. Also, “Engineering norms
have been digitized so that the discretion available to local engineers is no longer available.” (Burra,
2010, p 5) This has strengthened their position against tackling corruption by bringing in
transparency to a next level. Second is probably their well designed process of social audit made
more viable and effective through the inclusion of Civil Society Organizations (CSO’s). Volunteers,
officials and civil society activists, including the journalists have jointly taken up the task of
checking against any kind of corruption which might be taking place. This has been possible
through thorough inspection of the muster rolls, interviewing the workers on ground if they
received employment and payment of their work on time, organizing gram sabhas and discussing
the outcomes of their survey in such meetings, calling block level public meetings, etc. These social
audits have been extremely useful and successful as they have tremendously raised the level of
knowledge and information of the villagers with respect to the various features of NREGA and their
‘right’ to have access to this program. Level of corruption has also gone down and is now only
confined to lower level and amongst the staff. One of the biggest achievement of these social audits
has been the return of huge sums of money (approximately 55 lakhs) by the corrupt officers in 13 of
the NREGA districts. This is not just achievement in monetary terms but more so the realization
among people who dared to take bribery or resorted to corrupt means and exploited the innocent
village population. Thus the operation of NREGA in Andhra Pradesh has a real bright future in
assuring the livelihoods of the poverty ridden village population. The AP model has brought about a
new paradigm in terms of bringing about a successful model of Government and CSO partnership
in ensuring a better implementation of NREGA which will inspire many more states in future.

NREGA in Kerela

In terms of figures, Kerela might not show up a significant performance but it is somewhere a
reflection of the low demand for NREGA employment rather than a failure in its implementing the
program. One of the biggest attribute of KREGS (Kerela Rural Employment Guarantee Scheme)
under NREGA has to be the impressive participation of women laborers. “Women constituted above
60% of the total applicants in all panchayats. Further women constituted 90% of the total workforce
employed under NREGS” (Jacob & Varghese, 2006, p 4943). This can account to the higher wages
paid by NREGA (Rs. 125) to all the workers irrespective of their sex while the otherwise average
wage, outside NREGA has been Rs. 60-80 for the women. However this has also resulted in the
lower participation of more men as they find it difficult to accept that women are paid an equal
wage as the men. As a consequence to this occurred the falsification of the estimates of labor
requirements which were calculated keeping in mind the productivity levels of men.
Gaining impetus from the higher literacy levels in Kerela, high levels of awareness about NREGA
and also effective means of implementing the same have been found. From Gram panchayats to
NREGS officials and BPO’s to the villagers, all have been well aware of the clauses under NREGA.
The muster rolls have also been well maintained and transparency with respect to their ready
availability to all has also been observed in Kerela. Thus the existing socio-economic conditions of
the state have had a great influence on the effective implementation of NREGA. Kerela has done a
decent job in executing the act, if not in absolute terms, definitely in relative terms.

Hence the three different cases observed above help us understand the variance which exists in the
implementation of NREGA in different states across the country. The motive should not really be to
compare one state with the other as to declare one as better than others. It is very essential to
evaluate the performance of different states with respect to their backgrounds and past experiences
to adjudge how NREGA is fairing. One must be patient enough to give the requisite time for the act
to bring about the desired level of result in providing mass employment in the scenario of abysmal
unemployment and poverty that surrounds our country. This is just a sincere step forward in the
process of improving the lives of people and trying to protect them from any kind of harassment
brought about through rapid corruption embedded in the previous schemes which have failed
miserably.

References:

Harvey D. (2006). Neoliberalism as Creative Destruction. Interfacehs, p. 1-26

Jha P. (2005). Withering Commitments and Weakening Progress: state and Education in the Era of
Neoliberal Reforms. Economic and Political Weekly. p. 3677-3684

Rajshekhar M. (April 13, 2010). Vedanta’s plan mired in charges of ecological sins. Economic
Times

(March 17, 2010). Stop the Vedanta project in Orissa. Economic Times

Sainath P. (November 17/18, 2007). A Farmer is Committing Suicide Every 32 Minutes.


Counterpunch

Sainath P. (November 26/27, 2005). Net Worth of India’s Billionaires Soars. Counterpunch

Dreze J & Oldiges C. (2008). How is NREGA Doing?


Burra N. (2010). Transparency and accountability in employment programs: the case of NREGA in
Andhra Pradesh

Bhatia B & Dreze J. (2006). Employment Guarantee in Jharkhand: Ground Realities. Economic
and Political Weekly, p. 3198-3202

Jacob A & Varghese R. (2006). Reasonable Beginning in Palakkad, Kerela. Economic and
Political Weekly, p. 4943-4945

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