Manmohan Singh is one of the best prime ministers in India’s history

Say what you want about India’s economy, but the prime minister has forever changed the economics of development.
Say what you want about India’s economy, but the prime minister has forever changed the economics of development.
Image: Reuters/Danish Siddiqui
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Of late, it has been fashionable to blame Manmohan Singh for everything going wrong in India. And it’s true that all is not well. His studied silence hardly helped matters either. But there’s no denying the fact that he will go down in history as the prime minister who has most changed the rhetoric around development in India. Nor is he paralleled by another prime minister in making good on election promises. Not even severe detractors can deny what he has done for the country by putting the aam aadmi, the proverbial common man of India, at the center of the political economy of development. One could invoke the record of late prime minister Indira Gandhi, and her introduction of government into the development discourse in India. And in his book Lineages of Political Society, Partha Chattopadhyay discusses these policies during the Emergency and their impact on development. But her approach, while effective, was based on benevolence—a distinct difference from the rights-based approach that Singh has taken. This is a paradigm shift.

Amid the prevalent media onslaught aimed at Singh, these words may sound strange, even absurd. Perspective is necessary. When Singh’s first coalition government, the United Progressive Alliance government (UPA I) came to power in 2004, it was a symbol of the electorate’s upfront rejection of the Bharatiya Janata Party’s “India Shining” campaign. The claim that the BJP-led government lost because of the campaign is hotly debated, and a perfectly feasible alternate argument is that the government’s failure to deliver actually cost the election. Nevertheless, the general perception was that the unashamed celebration of an opulence enjoyed by only a handful didn’t go down well with the masses. In contrast, Singh’s Congress party crafted its position as the champion of inclusive growth. At that point in time, this was defined to mean that the government would ensure the fruits of growth would reach more people. This promise—and acknowledgment of the India that was indeed not shining—helped Singh stand apart.

His government chose a rights-based approach to development over the well-trodden welfare approach. Here’s how that plays out: the latter is somewhat dependent on the charitable intentions of the ruling class—and a belief, overt or covert, in the so-called trickle down theory. But Singh’s focus on human rights bound rulers into legally delivering the means of development. As champions of this approach have repeatedly point out, such obligations do significantly contribute to development, especially in a functioning democracy like India.

All major development policies adopted by the ruling party over its nine-year run thus far have been directed by such rights. The Mahatma Gandhi National Rural Employment Guarantee Act (NREGA) of 2006 provides a legal guarantee of at least 100 days of paid work every year to adult members as long as they are willing to perform unskilled manual work for the government. They are paid minimum wage of 120 rupees per day (in 2009 prices). Meanwhile, the Right of Children to Free and Compulsory Education Act of 2010 makes education a fundamental right of every child between the ages of 6 and 14. The latest in the suite is the Right to Food bill, recently passed in the parliament. The bill puts the legal onus of providing food to two-thirds of the entire Indian population on the government.

To be sure, Singh is hardly the first prime minister to make strides toward empowering the poor. Further the concept of rights-based development is fairly new so it wouldn’t be fair to accuse erstwhile leaders of deliberately shunning it. The demand for rights came from society. A judiciary aided the process. The UPA did respond to that. Also in Singh’s favor: no former prime minister enjoyed a sustained annual GDP growth rate of 8% over a period of eight years. But given the opposition toward the social programs, Singh’s fastidiousness is remarkable—and commendable.

India has come a long way in terms of human development since its independence in 1947. Life expectancy today is around 66 years, more than twice what it was in 1951 (32 years). The infant mortality rate is about one-fourth of what it was in 1951 (44 per thousand live births today, as opposed to 180 or so in 1951). The literacy rate has increased many folds. But given how India’s GDP growth rate soared in recent years, human development didn’t keep pace. In their latest book, An Uncertain Glory: India and Its Contradictions, Jean Dreze and Amartya Sen show that India, compared to other South Asian economies, has performed dismally in terms of many human development indicators, even as it has achieved the third highest per capita income. To compound matters, India has been one of the worst performers in terms of many human development indices among the 16 poorest countries outside Sub-Saharan Africa. Dreze and Sen ruefully note: “what is disturbing… is not India’s comparatively low position in terms of income per head among the countries in the world outside Sub-Saharan Africa, but how badly India does in terms of non-income features of living standards even within the group of poorest non-African countries…”

Indeed, this is a state failing its citizenry. Economic reform hasn’t particularly helped. It undoubtedly proved beneficial to an already upwardly mobile middle class in many ways, but the poor didn’t reap much. “In sharp contrast to China, where the post-reform economic boom happened first in agriculture and then in manufacturing, India’s rapid economic growth during the last twenty years or so has been driven mainly by ‘services.’ This is a very heterogeneous category, but there is growing evidence that a good deal of the growth in services has been heavily concentrated in skill-intensive sectors (such as software development, financial services and other specialized work), rather than more traditional labour-intensive industries,” Dreze and Sen noted. Thus, the so-called trickle-down effect proved to be virtually non-existent as income inequality rose. The gap between the development of a handful of privileged and the vast majority also widened. So, 21st century India had a growing case for redistributive policies and the UPA’s policies should be examined in this context.

Let’s delve deeper into two major policies—the right to work and right to food programs. These two initiatives have been the flagship of UPA I and UPA II respectively. Both have faced severe criticism. The former recasts public employment in the framework of justiciable rights— not only the right to work on demand, but also the right to minimum wages, payment within 15 days, safety in work-site facilities, etc. Soon after it came into being, the country saw a massive expansion of rural public employment programs. According to official data, about 50 million households have been participating in NREGA every year since 2008-09 (when the act was extended to the whole country), with an average employment level of around 40 days per household per year.

Notably, the program also ushered in a series of changes in wages, particularly for intermittent labor in rural areas. For one, workers actually and finally got paid. There was also a major increase in people’s awareness of the minimum wage, and a substantial increase in agricultural wages followed. This ended the long spell of stagnation in the real wage that preceded NREGA. Since the program, the growth rate of real wages in rural India has significantly picked up. For example, the real wage for all rural male workers grew at an average of 0.01% annually from 2000-01 to 2005-06, and picked up to 1.82% during 2005-06 and 2010-11. The difference is even more striking for female workers. The real rate of growth of wage for rural unskilled female worker went from negative numbers to 4.34% during 2005-06 and 2010-11. Importantly, the improvement was not confined to people employed in NREGA; it came across the board.

The program has suffered from a poor reputation, dubbed a “money guzzler” and “costly joke.” It also has been accused of corruption and of spending more than the rural assets it purports to create. Dreze and Sen attack this head on, saying, “this myth has acquired a certain influence by sheer repetition, but it has little factual basis.” Indeed, some states credit the rural work program for the de-silting of canals, digging of ponds, land leveling, roadside plantings, soil conservation and construction of wells.

The second flagship program, the Right to Food, gives two-third of India’s population legal rights to food-grains at a drastically subsidized rate. It stipulates that 75% of the rural population and 50% of urban population will receive five kilograms of rice/wheat/coarse grain such as bajra at 3, 2 and 1 rupees respectively per kilogram. The program is estimated to directly cost 1.25 trillion rupees ($20 billion) in the initial year, around 1% of India’s GDP. It is estimated that the total cost may actually be somewhere around 2 trillion rupees in this period. This makes for rabble-rousing headlines and prompted one politician to call the program a “financial disaster.” Business papers, collectively known as the pink press for the color of the newsprint some of them use, have called it the “biggest mistake India might have made till date.” There’s growing concern that India can ill afford the ambitious program as its economy takes a nosedive.

Or so everyone says. Suddenly the whole world knows that the Indian economy is in “dismal shape.” The growth rate has plummeted to 5% and threatening to move even further south. How bad is that? Apart from China, no major economy around the world comes close to India’s growth rate right now. It is absurd to suggest that a 5% annual GDP growth rate leaves no room for redistributive measures. Far from it. It should be noted that India is the only one of the BRICs (Brazil, Russia, India, China) which is yet to start a major program to redistribute wealth. It has the second highest GDP growth rate in the league, though.

If someone claims that India lacks the financial muscle to pull off the food security program, look to its fuel subsidy for a reality check. India’s fuel subsidy in 2012-13 was a whopping 1.6 trillion rupees. The fertilizer subsidy was a whopping 0.7 trillion rupees in the FY 2012-13. These two subsidies together comprise nearly two times the amount required to implement the food security program. Other portions of the budget support this comparison; the annual “revenue forgone” (the amount of tax which could have been collected, but forgone on account of various exemptions and incentives) for the FY 2011-12 is 5.3 trillion rupees, more than 5% of India’s GDP. In this context, the amount required for food security looks paltry. It’s clearly not the case that India does not have the required financial strength; it’s just that priorities have been different for long.

This brings us to Singh’s achievement. By making work, food, education a right, he ensured that the fulfillment of the development needs of the aam aadmi does not depend on the whims of the powerful. Inclusive growth cannot be a fair weather policy. It has to be as imperative as defense spending. As no one argues that a certain defense expenditure be cut because “India cannot afford it now,” the same should be the case with development expenditures meant to satisfy the basic needs of its people.

Manmohan Singh and his party may or may not come back to power in 2014. But these policies are here to stay. True, the programs are not perfect. There are huge design and implementation issues, problems of inefficiency, corruption and general administrative failures. A few states have performed remarkably well on most of the programs. Others have not. The cases of success as well as those of failure should be instructive. The programs need to be fine-tuned, redesigned and much more effectively implemented and supervised to realize their potential.

But the shift that the UPA under Singh has ushered in is unmistakable. It’s given, for the first time in the history of independent India, the “power to people.” Rights, once extended in this manner, are difficult to be revoked. Anyone who tries would be committing political suicide. No government, irrespective of its position on the ideological spectrum, would dare to discontinue these vital programs. This reserves a special berth, likely in first class, for Manmohan Singh in the history of development in India.