Between 1997 and 2005, one Indian farmer committed suicide every thirty-two minutes in India. Since then, it’s dropped to one suicide every thirty minutes. Last year, India fell two spots to rank 128th in the UN Development Program’s Human Development Index–behind El Salvador, Guatemala, Botswana, Sri Lanka and the Occupied Palestinian Territories. Yet, even in the face of massive rural and substantial urban distress, pundits continue to praise India for being a “powerhouse economy” and a “stirring giant.”
The agrarian crisis is the most glaring–yet mostly ignored–aspect of economic policy gone wrong in India. In a country where more than two-thirds of the population is engaged in some form of agriculture, the agrarian sector has been the hardest hit. Since India’s economy was opened up in the late 1980s, successive governments have withdrawn their support to Indian farmers competing against billions of dollars of government financial aid to their counterparts in the United States, causing the worst economic and humanitarian crisis in India since independence in 1947. Many farmers are killing themselves over debts of as little as a few hundred dollars.
Prabhat Patnaik, professor of economics at Jawaharlal Nehru University in New Delhi, is one of many who blame the current crisis on the Indian government’s retreat from agriculture, adherence to WTO-imposed reductions on import duties and the thrust toward neoliberalism. He has been a vocal critic of their negative impact on the Indian economy.
The 62-year-old professor is vice-chairman of the State Planning Board in the southern Indian state of Kerala and was the chairman of the Second State Finance Commission. He is the author of several books, including Economics and Egalitarianism (1991), Whatever Happened to Imperialism and Other Essays (1995) and Accumulation and Stability under Capitalism (1997). He answered questions recently at Columbia University, where he was delivering a series of lectures.
Do the pundits have it right? Is India truly the powerhouse they claim it is?
The rate of growth means nothing to me–and in that, John Stuart Mill is my illustrious predecessor. The object, instead, is to raise the living conditions of the bulk of the population. Mahatma Gandhi said that one must wipe away the tears from every Indian’s eyes. Yes, there was a period of high growth, but there also was sharply increased inequality and absolute misery for a certain population. According to one Washington, DC, study [by the International Food Policy Research Institute], our malnutrition index is below that of Ethiopia. So in terms of nutritional poverty, there has been an impoverishment of the people. In 1993-94, 74.5 percent of rural India did not access the poverty level. In 2004-05 the figure was 87 percent. In 1993-94, 57 percent of urban India did not access it, and by 2004-05, the number went up to 64 percent.
Why are people more impoverished now?
It’s the high rates of labor productivity. High growth doesn’t alleviate poverty because it doesn’t absorb labor. In any society–especially India and China–that has been colonized and de-industrialized, there’s unemployment, underemployment and disguised unemployment. Take the shoeshine boy–that’s disguised unemployment. These people are poor. And because they exist, they pull down the wage rate of employed people to subsistence level. So the existence of this army of laborers is the root cause of poverty. Unless employment begins to rise, poverty won’t disappear.