THE INDIAN GROWTH MIRACLE

The impressive economic growth of India is not equally divided amongst all Indians. Social struggle and an ambitious employment law could improve the situation.
It is eight o’clock in the morning in the bustling city of Mumbai, a megapolis of seventeen million inhabitants - increasing every day. The sun is already blazing when we visit the naka workers in the city part of Bandra and Khar. The same as every other day, thousands of people are waiting in the streets – naka in Hindi - in the hope that someone provides them with a job for a day or more. Some carry a paint brush, others a sander. The ones who bring a tool, can earn more.

Here, as in the western world, politicians try to win the elections by demonising these migrants. Raj Thackeray of the Shiv Shena party, which has ruled Mumbai for years now, campaigns against migrants from Northern India, who are often under attack. ‘His uncle Bal Thackeray preceded him in this, although then the focus was on migrants from the Southern states’, says Belgian sister Jeanne Devos
India grows (apart)
Indian businessmen benefited greatly from the extended liberty they got after 1991. Before, the Indian socialism ensured that the state had the commanding heights of the economy in its hands. Entrepreneurs needed licenses to make a new product, to set up a new department, to get a loan, etc. In 1969 the state even decided that every group owning more than two hundred million rupees in the capital was a monopoly and was not allowed to expand.
This so called License Raj (“leader by license”) kept the private sector in check. In 1991 a lot of those restrictions were lifted and taxes were decreased. The Indian economy consequently saw her growth rate get a boost from five percent to eight percent a year. The growth however was not divided equally. Especially the upper class benefited. The one percent of highest salaries increased with seventy percent in the nineties. The income of the super rich even tripled. The consumption of the poorest only increased eight percent.
When we ask the naka worker whether their life is better now that India is growing quicker, the recurrent answer is a forceful “No”. It’s different for Miss Tejaswita. As a bank clerk she saw her salary increase eightfold in five years. ‘I started at five thousand rupees a month. My second job gave me twenty thousand rupees and in my new job, I earn twice as much again.’ Together with the income of her husband it is sufficient to lead a comfortable life. ‘I feel for the naka workers. I sometimes work five hours a day in an air conditioned room, while they toil under a blazing sun for a salary a lot less than mine.’
In an IMF paper, Petia Topalova concluded that poverty during the years of rapid growth didn’t decrease more quickly than before. The explanation lies in the fact that seven hundred million Indians have to live off an agricultural economy that doesn’t even take up a fifth of the GNP and has an annual growth of only two percent. The remaining four hundred million Indians make a living in services and industry. Those sectors represent eighty percent of the economy and grow every year by ten percent.
Within the urban industry mainly the people with money and education were able to increase their income. Nevertheless, no matter how modest the existence of the low educated, like the naka workers, may be in the city, they still earn more than what they would make in the countryside.
In the little village of Nani in the growing state of Gujaret, the families with children who work in the city can flourish, while those who have to live off the land complain. In the countryside the agricultural production is slowing down and the caste system maintains the social status quo. In the city people manage to organize themselves better and hence gain a better income.
Trade union work is slowly shifting towards the informal sector as well, where nine out of ten Indians work. The Domestic Workers Organization of Jeanne Devos is a renowned example of this. Devos: ‘State after state we succeed in getting to vote for a minimum wage for the sector of home workers and through strong organizations we make it enforceable. If someone doesn’t pay that minimum, he just wouldn’t find any more workers.’
The government falls short according to many. Author Gurchuran Das hails the liberalization but regrets the fact that good education is only available for the rich, while education is exactly the way towards a better income. ‘The law is made in favor of companies and the rich’, believes Nirmal Ahuja, a partner in the real estate company Ahuja Realty in Mumbai that sells luxurious residences. ‘Only two percent of Indians pay taxes. It’s easy not to pay taxes, but also shortsighted, because we need a lot more public services. The traffic and pollution here are terrible. In fact, even the rich would benefit from a better public transport system funded by their income tax. But for the moment they prefer to go to Switzerland for a month to purify their lungs then to take care of the chaos here. The pressure isn’t yet high enough.’

The day the sun stopped shining

It wasn’t such a surprise that so many Indians didn’t follow when the government was showing off with their growth figures last year and went to the elections with the slogan Shining India. There were simply too many people who felt little or nothing of the sheen, so the center right government could wrap up and leave. A center left government came to power, supported from the opposition by communist parties. The civil society used the key role of the leftist parties to try to push through some of their objectives. ‘The number one priority for us was the introduction of the right to work’, says Annie Raja, secretary general of the National Federation of Indian Women. ‘Number two was the introduction of the right to information. And it has to be said, it was mainly congress chairwoman, Sonia Gandhi, who pushed the proposition through.’

In august 2006 the National Rural Employment Guarantee Act (NREGA) was approved by the Indian government and ensured every Indian family in the countryside the right to a hundred days of work at the minimum wage.
Anyone who demands a job has to be given one within fifteen days, if not he is entitled to an unemployment benefit. It’s in the state’s best interest to create jobs as they are the ones who have to cough up the unemployment benefits - while the salaries are paid by the national government. It’s up to the city council, in consultation with the people, to draw up the necessary public efforts around water and soil management. The NREGA should also stimulate the rural ecological reconstruction - a more pressing than ever need now that agricultural production is stagnating.
The employment law is the result of years of activism. Experiences from the past to fight corruption with demands of transparency are merged with it. The law was put into practice in August 2006 in two hundred districts of the country. In principle it guarantees a means of income for 45 million rural families. This makes it the world’s biggest ‘right to an income’ program. The central government has put aside 160 billion rupees (2,66 billion Euro) for the program.
Relocation, Indian style

In April the heat is scorching in Rajasthan. We visit a NREGA project in the district of Jalore. Standing out like a colourful spot in the middle of the dusty land, about fifty women and one old man work on a land road between the villages of Santipura and Badenwari. They dig and scrape off the ground after which they apply some hard substance as road surface. The tools are primitive, but the workers advance at a reasonable pace.
In Jalore, the collector (highest official) enthusiastically implemented the NREGA, which made it a model for other districts. Collector Rohit Kumar: ‘We went to every village to explain that based on this law, they were entitled to a heap of money to develop their village. We explained that this time, it was all in their hands: if they asked for work and the local government reacted to it, the central government is obliged to pay.’
And the result: in Jalore many families are close to the hundred working days. Kumar: ‘Recently I got a phone call from Kashmir; they asked me why this year in the dry period just before the monsoon there were no seasonal workers from Jalore. Answer: The NREGA gives them a job in their home region. As a result of the NREGA paying the day laborers a minimum salary, the landowners now also have to pay them more.’

 In brief, NREGA gives the people in these harsh circumstances a more comfortable environment and could therefore slow down the urban shift. The water of the notorious Narmada dam – five hundred kilometers further in the state Gujarat - will furthermore provide all the villages in the area with more water. The construction of the dam undoubtedly has its victims through the displacement of vulnerable people, but in the bone-dry Rajasthan they are very pleased with the Narmada water.
In places without an active collector NREGA is being promoted by civil society. Bhanwar Singh of the NGO Astha: ‘On foot we visited all the villages of the Udaipur district. We went from door to door to tell people that there was work for those who wanted it.’ As a result the NREGA works in a lot of villages.
A share of the pie

As often in India, there is a certain amount of corruption. Local politicians or contractors put money into their own pockets. But there are certain guaranties given by NREGA. Bhanwar Singh: ‘It’s no coincidence that we linked the right to information to NREGA: documents have to be made available to the public. The state of work has to be published in the village. In Banswara we camped for three days in front of the collector’s house until we had all the papers. When we discovered misuse, the local sarpanch (the mayor) was convicted and had to pay back everything.

In Rajasthan the NREGA works thanks to the strong civil society that has been active for years in the fight for employment and the right to information. In India you will always be confronted with the same reality: people have to organize themselves if they want the law to be obeyed. Social battle is a necessary condition to support and maintain the state of law.
During 2006 - 2007 the NREGA employed three million people a day. But there are huge differences between the states: in Rajasthan the NREGA provided the average rural household with 77 working days. The state of Tripura in the north east even made it to 87 working days. ‘We’re getting close to the maximum of a hundred days there, an unmatched effort in the history of social security in India’, says the Belgian Jean Drèze, professor of Economics at the University of Allahabad and one of the driving forces behind the employment law.
On the other hand, in the states Jarkhand and Uttar Pradesh, NREGA is not really known by the people and they definitely don’t realize they have the right to work nor that there is a lot of corruption.
The NREGA represents 0.3 percent of the national income. Once it really spreads to the whole country, this will be one percent of the GNP. Step by step, the possibilities of redistribution are expanding. In 2003 9.2 percent of the GNP consisted of taxes, in 2008 this will be 12.5 percent.
The National Rural Employment Guarantee Act could give a million Indians their share of the economic growth pie but there is still a good deal of work to be done.
Drèze is moderately positive about the realizations, but if the program wants to achieve its true potential, the government has to become more involved. The government behaves remarkably schizophrenic in this regard. One the one hand they want to boast about the NREGA. Prime Minister Manmohan Singh called it historical and revolutionary. But on the other hand the government does too little to achieve its full potential’.
The trade Union CFTUI (Confederation of Free Trade Unions India), supported by the Belgian NGO Wereldsolidariteit, has founded a co-operation that enables the naka workers to deposit their money in a bank account. Suresh Patil of CFTUI: ‘Migrants without an official home address can’t be served by a bank. We use the deposited money to collectively purchase tools, so the naka workers can gain a better salary. Also, our educational sessions contribute to this.’
During The day workers lead a very scanty life. They sleep with four or five in one bedroom, they mostly have a job for only half of the time and scrape together a meager monthly income of two to five thousand rupees (33 to 83 Euro).
The naka workers are part of the ten million people that live in the shanty towns of Mumbai. Living in this mega city is expensive, very expensive. ‘Here on Malabar Hill a three bedroom flat costs 15.000 Euro a month.’, according to Jean-Joel Schittecatte, the Belgian consul in Mumbai.
The people of India’s biggest city have the choice of either paying these enormous costs for housing or moving to the far north of the city and spending several hours a day in traffic trying to get to the city. Others have no problems with the high expenses of living. The entrepreneur family Ambani, owner of the Reliance group, is constructing a building of 27 floors, partly living apartments for the extended family, partly garages for their cars.
As a helper, I earn 160 rupees (2.66 Euro) a day’, says a Bihari boy. Painters or polishers could earn between 250 to 300 rupees (up to five Euro) a day. Mumbai has an estimated half a million of these naka-workers. They come from the other states: Bihar, Uttar Pradesh, Orissa.

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