Pranab Kumar Bardhan
, Professor of Economics at the University of California,
Berkeley, is known for busting many myths about India and China.
According to him, many popular beliefs on these emerging superpowers are
oversimplifications.
As regards
Indian politics, his contrarian views don't please his friends in high
places. While he is supportive of the Sonia Gandhiheaded National
Advisory Council (NAC), he opposes its policy of "preserving of" old
ways in the public distribution system.
Bardhan, who is working on a sequel to the 'Political Economy of
Development in India', was in Delhi to attend a conference. He tells
Ullekh NP on the sidelines of the conference that blaming NREGS for
inflation is an exaggeration. Edited excerpts:
How badly has authoritarianism distorted China's growth and how acute are accountability failures in India?
In my book, 'Awakening Giants: Feet of Clay', I have said that
many things people say about China and India are oversimplifications.
One of the biggest problems in China is that at the local level that
country used to be better in terms of social services delivery.
This is because much of the social services
delivery is in the hands of the local governments that don't have the
money, but have the function of delivering such services. It is a
problem in India as well, but it is much more a problem in China.
In India, even though it is a democracy,
in some sense there are serious accountability failures. For example,
there is a problem of corporate oligarchy capturing the political
process... through various means, through various connections with the
politicians, especially connections that come from funding elections.
This is because the election process is not as accountable as it should
be.
And that is at the higher
level. At the lower level, even though we have panchayats, most
elections are fought on state-level issues. However, efforts could be
made in that direction...
Let me
give you an example of how you can make it happen: it is common in India
that teachers don't come to take classes and doctors or nurses don't
come to the primary health centres. In Nagaland they linked a small part
of the teachers' salary to be given by the panchayats. Soon, teachers
started turning up at schools.
That
is the lesson--- that if you make the whole process a little more
accountable to the local panchayats, people working at that level toe
the line. Again, none of the Indian political parties have inner-party
democracy. That is also a major problem.
In the case of the Congress party, it is the High Command or the
state leadership that has to take the final call, and so candidates
don't raise local issues. Similar is the case with most political
parties. Your chances of success in politics depend on how close you are
to 10 Janpath or the state leaders. It is no surprise then that you end
up not representing common man's issues.
Globalisation
has resulted in a lot of inequalities in income. What are the policies
that India and China should put in place to check this?
I am particularly worried about inequality of opportunities.
It depends on three major factors: the amount of land you inherit, the
opportunity to education and the third is social identity. You have much
less equality of opportunity as a Dalit or as an adivasi.
One thing very few people notice is inequality in terms of
education and the situation in India is much worse than most Latin
American countries such as Chile, Argentina, etc.
In India, inequality in terms of years of schooling is
pathetic ... you may not have land, you may not belong to a high caste,
but you still could climb out of the way through education.
Recent NSSO ( National Sample Survey Office
)) data on unemployment and an increase in differences in
consumption between rural and urban India point to increases in
inequality. What do you think are the drivers of this trend?
The NSSO data actually underestimate inequality because, as we
all know, it is not about income, but about consumption. Consumption
does not include savings. Rich people save, and the poor largely don't,
and that is not represented in the data ... there is underrepresentation
of the rich in NSSO's data and this phenomenon has been increasing over
time.
Now, the drivers of this
trend are many and that includes lack of basic infrastructure and
education. Some people complain about labour laws, but from my studies I
have found out that in most labourintensive industries, labour laws
don't apply, because these laws kick in only when you have a firm of
more than 100 employees.
In India,
92% of the garment firms employ less than eight employees per firm... we
have not succeeded in labour-intensive industries. Why have we not
succeeded in creating enough jobs for poor people? That is the question.
Most of the Indian business media talk about labour laws, but they are
not the only problem. What you need to do is upgrading of businesses and
skills and for that you need more power, equipment and other resources.
Do
you think the national rural employment guarantee scheme (NREGS) is
fuelling inflation, especially food inflation and in turn spilling over
in other areas?
That is an
exaggeration. NREGS gives jobs to very poor people and when they get
more income, they cannot still afford high-value food items ... they may
eat more rice or they may shift from low quality rice to high quality
... but that can't buy eggs, and most vegetables.
The food prices that are going up are those of relatively high-quality foods. So it is an exaggeration.
How do you view India's food security scenario and how effective could be the proposed Food Security Bill?
Food security is a major issue because a very large number of
people do not have enough food. When it comes to food for women and
children, India is one of the worst countries in the world....
I agree with Jean Dreze that PDS based on
BPL list is flawed. I agree with the NAC in that there should be
universal food distribution. A lot of poor people do not have the BPL
card while many rich people have. Give food through PDS to everybody,
and give food of the coarser variety because the rich are not going to
buy this. I agree with the NAC on universal food distribution.
But where I do not agree with the NAC and also the
Food Security Bill is that they want to preserve the PDS. A
very large part of PDS sees massive leakage and wastage. And
FCI is very inefficient at storage. Strangely, all this wastage
and theft happens to be more in places where you have more poor
people-especially in India's eastern states. My suggestion is instead of
pushing more PDS, try some alternatives such as food stamps. It
shouldn't really replace the PDS, but should supplement it.
What are you currently working on? Besides theoretical work, I
am working on a project on decentralisation--the impact of
decentralisation in some 90 villages of West Bengal.
You are not the most liked economist in India's corridors of power. Why?
I have friends in the corridors of power starting from
Prime Minister Singh. But I am an academic, and I am not a
politician or a social activist ... my job is to criticise, but they are
all friends.