With a little effort, one can find a strategic significance in each of these sectors. Petroleum and natural gas minister Ram Naik raised the spectre of national defeat and humiliation in a war should the privatised oil companies refuse to sell us oil. The argument can be turned around in different ways to suit the sector in question. Suppose the airports were privatised, what would happen if the privatised airports refused to allow our Air Forces aircraft to use them Suppose telecommunications were privatised, would that not pose a grave danger to the vital and secret communications of the country in times of war We can multiply the examples.
The catch-all argument is security. By that argument, even farmland should be brought under collective, state-owned enterprises, lest the private-sector farmers of India refuse to grow food during a war. The best place to consign these arguments is the dust bin.
After drawing blood in the disinvestment battle, the anti-reform lobby is gearing up to take the battle to another front: the investment front. The soft target is foreign direct investment. The next target will be domestic investment in the industry and services sectors.
There is nothing innocuous about the RSS call for policies that support small-scale and rural industries, labour intensive development, self-sufficiency, protection against imports and entrenched trade union laws. These arguments are as old as the hills. Sometimes they are dressed up as socialism; sometimes they come in the garb of swadeshi. They always invoke the name of Mahatma Gandhi. Most recently, the RSS chief took the name of Gandhiji to proclaim that India lives in her villages. In his LK Jha Memorial Lecture, Deputy chairman of the Planning Commission KC Pant, recalled the same words of Gandhiji.
There is no quarrel with the proposition that most Indians, and hence India, live in villages. But how do they live They live without protected water or sanitation. They live without proper roads or lighting. The children attend schools without a library or a laboratory. The women deliver their babies at home and many of them die at childbirth. As our village folk grow older, many of them regress into illiteracy and tradition.
There is more. As Babasaheb Ambedkar pointed out, most villages are deeply divided on caste and religious lines. Every ambitious young man or woman aspires to escape from the confines of a village, not live in a village. The average Indian village is a place with little capital, low technology and limited market access, and hence opportunities for growth are scarce. You will find that every successful person who claims to have come from a village has achieved success after he or she left the village.
That is not to say that our economic policies must ignore the village. On the contrary. So long as 70 per cent of our people live in rural areas and so long as 70 per cent of our work force is dependent on agriculture, our economic policies must be directed towards their welfare. But even as we do so, we must remember that no country has achieved growth and prosperity through a village-based model of development. No country has clung to the plough and yoke, or the handloom, or tiny industries, or the bicycle and bullock cart, or to single-teacher village schools, and yet has been able to abolish poverty. China, which in many ways resembles India, abandoned the village-based model of development long ago.
Indias biggest problems are poverty and unemployment. A frontal attack on the twin problems will require large amounts of capital, the best technology, global scales of production and access to world markets. It is the rapid growth of the industry and services sectors that will throw up more jobs and make a dent on poverty.
In 1991 we turned our back on the dirigiste model that we had followed for 40 years. As a consequence, the nineties registered the highest decadal growth rate in the history of India. That decade also registered the sharpest reduction in the level of poverty. There is so much more to be done. There can be no greater disaster than a return to socialism or swadeshi.
If we are genuinely concerned about our villages, there is a great deal that can be done. I am indebted to Pant for highlighting some of these actions. For example, 60 million hectares of wasteland and degraded land can be brought under cultivation or forest cover. The area under assured irrigation (40%) can be expanded by quickening the pace of implementation of all major and medium irrigation projects (Remember, there is an Accelerated Irrigation Benefit Programme). The funding for the rural roads programme can be enlarged. The Minimum Needs Programme can be provided more funds. Agricultural research and development, especially on biotechnology, can be strengthened. The incentive structure for farmers can be revised to encourage them to diversify to non-foodgrain products. I sincerely hope that Pant will succeed in incorporating these strategies in the Tenth Plan.
Those who claim to be pro-poor are really pro-poverty. Their political instincts tell them that their survival depends upon a large number of people remaining poor and unemployed. When labour minister Sahib Singh Verma says that he wants more protection for industrial workers, not less, he is pandering to a constituency of 30 million and does not care a damn about the many hundred million who are unemployed. When Mr Naik says that he will not allow speculators in the stock market to influence the disinvestment policy, I am certain that he does not know or care that these so-called speculators are also investors and the source of new capital.
We have committed enormous crimes in the name of the poor. I am afraid some more are being plotted by the swadeshi lobby.
(The author is former Union finance minister)