With the growth rate in the final quarter of the last financial year being just 4.8 per cent, it is virtually certain that the UPA government will ride into the 2014 election on a weak economy. The Congress leadership can no longer hope to use the resources generated through high growth to provide the voters largesse at election time, as it did with the MGNREGS in 2009. But what could make its task even more formidable is that a group of seven contiguous States, from the north to the east of the country are showing signs of a massive rural crisis, which does not find its way into the discourse on economic policy.
A report recently released by the Census of India points to a significant shift in the composition of the workforce in rural areas from cultivators to agricultural labour, particularly among men. The proportion of male workers in rural areas — main workers and marginal workers taken together — who are cultivators has declined from 42 per cent in 2001 to 35.2 per cent in 2011. Such a decline would not be worrying in itself, if it represented a movement away from agriculture as in the case of States such as Kerala. It could then be treated as a predictable sign of development.
Ominous trends
But in large parts of the country the shift is within agriculture. The decline in the proportion of male cultivators has been matched by an increase in the proportion of male agricultural labour in rural areas from 27.5 per cent to 34.4 per cent.
The magnitude of this shift is made more significant by the fact that it is concentrated in a set of contiguous States: Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Bihar, Jharkhand, Odisha and West Bengal. These States, which account for 237 Lok Sabha seats, show a shift that is greater than the national average.
And far from being a part of a larger shift from agriculture, the proportion of the male workforce in agriculture has, in fact, increased in Uttar Pradesh, Bihar, Jharkhand and Odisha. In the seven contiguous States, a significant proportion of male workers is moving down the land-based hierarchy.
What makes this transformation more ominous is that agriculture does not seem to be in a position to absorb all the labour this workforce is able to offer. There are signs of an increasing part of the workforce becoming marginal workers. The proportion of rural male main workers to total rural male workers in India as a whole has declined from 85 per cent in 2001 to 78.5 per cent in 2011.
And in each of the seven contiguous States, the decline has been faster than the national average, with Bihar showing a massive drop from 85 per cent in 2001 to 66.8 per cent in 2011.
If we see the striking increase in the proportion of rural male marginal workers to total rural male workers as a sign of rural distress, the ruling party would have to contend with a disgruntled electorate in a region that accounts for over 40 per cent of the seats in the Lok Sabha. It will no doubt try to blame the local governments for the crisis.
But even if it succeeds, there are other parties that could benefit from dissatisfaction with the local government, ranging from the BSP to the RJD to the Left. The government could try to overcome the resource crunch by converting existing subsidies into cash transfers to voters.
But even ignoring the economic and social issues involved in such a conversion, this approach reflects an accountant’s view of politics.
It assumes that voters will not mind paying a higher price on the understanding that the difference will be credited to them. But it is quite conceivable that voters treat the payments into their bank accounts and price of essentials as two different issues.
They could treat the payments as their right, something which the Congress slogan encourages them to do. They could at the same time complain about the rising prices of essentials. And if the conversion to cash transfers generates further inflationary pressures, as it well might, the government could face a large number of disguisedly unemployed voters in the midst of inflationary pressures.
Election largesse
It could prove to be much more rewarding for the ruling party to focus instead on improving the efficiency of its rural schemes.
The MGNREGS was originally supposed to not just guarantee employment but to also create assets that could revive agriculture. But even its most ardent supporter will admit that it has fallen way behind in the task of creating productive assets.
There are several reasons for this failure, ranging from the choice of assets to the way they were created. But one reason why they have not received adequate attention is that the MGNREGS was seen as primarily a means to provide a benefit directly to voters.
It was an essential part of a strategy where high growth could be used to provide largesse at election time.
With the growth rate no longer sufficient to provide the resources for this strategy, there would appear to be no option but to finally address the rural crisis. But there are few signs across the political spectrum of this crisis even being acknowledged, let alone addressed.
(The author is Professor, School of Social Science, National Institute of Advanced Studies, Bangalore.)