Democracy and Growing Inequalities in India

Pluralism and Inclusiveness

India is famous for its democracy. Its governments are elected by its citizens at regular intervals. It consolidated a democratic system despite the absence of the preconditions often associated with democracy in the 1950s, when India first became a democratic, secular republic. Democracy has not only survived, but has thriven and been institutionalised. The democratic process has deepened, drawing historically disadvantaged groups into the political system. The key to the survival and success of India’s democracy lies in its inclusiveness (Ganguly, Diamond, & Plattner, 2008).

It is one of the few countries in the post-colonial world that took up the chalenge of building an inclusive democracy in a diverse, multilingual and multireligious society. The establishment of democracy and universal adult suffrage in a hierarchical society characterised by unprecedented social inequality, deprivation, and oppression was undoubtedly a revolutionary principle, a bold experiment in political affairs, perhaps the most significant in any country. What is particularly remarkable about India’s experience is that it was one of the ew societies where a political revolution preceded a social one. The freedom struggle prepared some of the ground for social equality, in the sense that it delegitimised the most egregious forms of oppression that characterised Hindu society.

The Constitution laid the foundations for the protection of fundamental and civil rights of all Indians. It protects pluralism and human rights more comprehensively than do most countries. Equality before the law is a principle that seeks to promote inclusiveness and Articles 14 and 15 explicitly state this. Thus, Article 14 holds that the state shall not deny to any person equality before the law or the equal protection of the law. Article 15 prohibits state discrimination on the grounds of only religion, race, caste, sex, place of birth, or any of them. These rights are enforceable in court, and Article 32 gives the right to seek redress from the Supreme Court in the event of any violation of fundamental rights.

The founding idea of India is intrinsically plural and egalitarian in conception. This vision was a coming together of what constitutional historian Granville Austin (1999) has called the ‘national’ and ‘social revolutions’, respectively. The national revolution focused on democracy and liberty, whereas the social revolution focused on emancipation, equality and justice. At the same time, the idea was to create a society whose citizens shared a strong sense of national identity alongside the recognition of cultural diversity, and to provide protection to historically disadvantaged and vulnerable groups (Bhargava, 2010). Primacy was given to equality and social justice as a cardinal principle of contemporary political life.

The effort to pursue equality has been made at two levels. At one level was the constitutional effort to change the very structure of social relations. Practicing caste and untouchability was made illegal. Allowing religious considerations to influence state activities was not permitted. At the second level was the effort to bring about economic equality. But then, in this endeavour, the right to property and class inequality was not seriously curbed. Moreover, the placement of the demands for economic equality into the Directive Principles of State Policy indicated clearly that the political elite did not conceive of serious intervention to check economic inequality. Nevertheless, a discourse of economic upliftment was part of the process of development and legitimisation of the postcolonial state. Successive central and state governments introduced a wide range of social welfare measures. But then, this discourse did not translate into a consensus on active state intervention to bring about greater equality, except the abolition of intermediary rights in the rural sector. In the legal and the political arenas, most of the constitutional and state efforts were directed against social inequality, and not against poverty.

There are several policies which facilitated this. Over the past sixty odd years, India has developed an affirmative action programme which, by any standards, is unprecedented in both its scope and extent (Hasan, 2009). These programmes permit departure from formal equality for the purpose of eliminating social discrimination (Galanter, 1984). The constitutional understanding of equality is explicitly aimed at securing substantive equality for historically subordinated groups, and is designed to discourage merely formal understandings of equality that have often been used to oppose affirmative action. Thus, Article 15 states, Nothing in this article…shall prevent the state from making any special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes (SCs) and the Scheduled Tribes (STs). In short, the framers understood the goal of equality in terms of an end to systematic hierarchy and discrimination based on caste.

The approach has been quite different in relation to religious minorities. In contrast to the political will and commitment to ensure affirmative action for backward and lower castes, the legislature and executive appear disinclined to take on board the socio-economic rights of minorities. The emphasis with regard to religious minorities is on formal equality which obscures the substantive issues of under-representation and lack of access to economic opportunities for them.

Another extremely important aspect of inclusiveness was the reorganisation of states on the basis of language. The state showed an abiding sensitivity towards language-based agitations after a spate of protests in the 1950s that posed the greatest threat to India’s survival. It led to a reorganisation of the state’s provinces into linguistically more homogeneous units in 1956.

Democratisation has been further helped by the revival of the 74th Constitutional Amendment of the Panchayati Raj system. Within a short time frame, India now has 250,000 elected panchayats, with 3.2 million elected representatives including over 1.2 million elected women. The revitalisation of the Panchayati Raj in India has had a strong impact on federalisation. Overall, a delicate balance has been struck between individual and collective rights, the forces of centralisation and decentralisation and the accommodation of diversity and universalism in society. Except for the brief interlude of the Emergency from 1975 to 1977, democratic institutions have remained intact. Sixteen parliamentary elections and many more assembly elections have been conducted. In the past half century, no trend has been more powerful and transformative than the growth and expansion of democracy. The social base of the polity has widened considerably through the expansion of democracy and participatory upsurge that has marked Indian politics since the early 1990s. Thanks to the democratic upsurge, previously marginalised groups are entering the political arena in large numbers, contributing to a change in the pattern of representation and a shift in the balance of political power in governments and legislatures. No doubt, these trends have been helping to make democracy more inclusive by steadily chipping away at hierarchies and moving downwards. The ‘transfer of power’ from the upper castes to the lower castes has had major consequences for the restructuring of political power. The significant changes in the social composition of India’s ruling elite since independence, both in politics and in the bureaucracy, are largely due to parties opening their doors to new recruits from marginalised groups, which ultimately make their way into the government.

However, democracy is not just about elections, but also the electoral process. The accountability of institutions and the work culture of elected representatives leave a lot to be desired. Even some of the procedural practices have been falling apart most notably in the working of the legislatures which spend very little time on legislative business. Far too many of India’s democratic institutions are weak, and even those holding constitutional positions can often be coerced into subservience. Political parties are far too leader-centric, promote family rule, lack internal democracy and are unwilling to increase political decentralisation.

Rising Inequality

India’s economy has been on a high growth path for the past more than two decades. Even as many Indians have benefitted from the rapid economic growth of the past quarter century, the process of growth has bypassed the vast majority of the population. The main beneficiaries of economic boom are the comparatively affluent in urban areas. High growth has benefited the top 20 per cent of the population to the virtual exclusion of the majority of the people.

The most conspicuous development is the remarkable increase in wealth in-equality that has occurred after the 1990s, that is, from the commencement of the economic liberalisation. According to the Credit Suisse which brings out a Global Wealth Report every year, as of 2014, ‘very high inequality’ characterised the advanced economies. Between 2000 and 2014, ‘rapid rise’ in inequality also characterised a dozen emerging market economies namely Argentina, Brazil, Egypt, India, Indonesia, Malaysia, Peru, Philippines, Russia and South Africa (Patnaik, 2014). Even among the countries witnessing a ‘rapid rise’ in wealth inequality, India’s inequality stands out. The richest 10 per cent have been getting steadily richer since 2000, and, as of 2014, they held nearly three-quarters of total wealth (Credit Suisse’s Global Wealth Databook, 2014 cited in Rukmini, 2014). More remarkable is the fact that the share of the top 1 per cent in the total wealth of households increased from 36.80 per cent in 2000 to close to half the country’s total wealth (Credit Suisse’s Global Wealth Databook, 2014 cited in Rukmini, 2014). This is a higher figure than for the world as a whole, and what is more is that the share of the top 1 per cent has been rising much faster than in the world as a whole (Credit Suisse’s Global Wealth Databook, 2014 cited in Rukmini, 2014). This increase in inequality is phenomenal by any standards. An OECD report cited in ‘India’s income inequality has doubled in 20 years’, 2011, pointed out:

Inequality in earnings has doubled in India over the last two decades, making it the worst performer on this count of all emerging economies. The top 10 per cent of India’s wage earners now make 12 times more than the bottom 10 per cent, up from a ratio of six in the early 1990s.

This raises questions about the effectiveness of policies and governance systems that can produce dollar billionaires but cannot effectively address extreme inequalities and human deprivation. This pattern of economic growth is disequalising, and it results in the concentration of wealth amid impoverishment marked by discontent and violent clashes from time to time.

Despite relatively accelerated growth, poverty has come down slowly even as economic inequality has widened (Kohli, 2013). The magnitude of poverty is also indicative of who has really benefitted from changes in economic policies and the glaring shortcomings in ensuring effective implementation of public welfare and development programmes targeting the poor. The socially marginalised groups such as the Scheduled Castes, Scheduled Tribes and Muslims face multiple deprivations and difficult challenges posed by the everyday discrimination and exclusion and, to a considerable extent, a great systemic bias in the case of all the three groups (Kannan & Raveendran, 2011). The deprivation and disparities are more glaring in the poorer states namely Bihar, Jharkhand, Madhya Pradesh, Odisha, Rajasthan, Uttar Pradesh, Chhattisgarh and West Bengal which account for 55 per cent of the Scheduled Caste and Scheduled Tribe population and 55 per cent of the Muslim population.

Elite Capture and Economic Concentration

Two powerful forces associated with the rapid rise in inequalities are ‘market fundamentalism and the capture of politics by elites’ (OXFAM, 2014b). The most influential force driving wealth inequalities are socio-economic policies that have dominated India’s development agenda since the economic liberalisation. This is responsible for the widening gap between the rich and the poor in India.

The details of the economic policies that came to be adopted in India since 1991 are well known and need not be repeated here. Suffice it to note that Indian policy-thinking has been dominated by a market fundamentalist approach which insists that sustained economic growth only comes from reducing government interventions and leaving markets to their own devices, although there is growing evidence that the current top-down, trickle-down development strategy that rides on an extraordinary growth momentum is not sustainable. India’s employment problem is in fact related to the growth model. Large-scale employment was the key to poverty alleviation but this did not happen. The last decade is widely recognised as a decade of jobless growth, thereby further exacerbating the problem. The economic reform process had unleashed opportunities that could be taken advantage of by a limited few. Broadly speaking, public policy, which would deliver basic benefits to the entire population, was not made a priority. These policies would include: agrarian reform, food procurement, education, public health, employment creation, changes in governance through decentralisation and devolution of resources.

The second powerful force driving the ‘rapid rise’ in inequalities is the elite capture of politics, which has worsened economic inequality, and undermined rules and regulations that give the poorest, the most marginalised citizens a fair chance. The concentration of economic and political power goes hand in hand, as the state—prone to capture by special interests—pulls its weight behind the corporate–capitalist elite, which further intensifies disparities. The last twenty years have seen a massive growth of corporate power which has gained a position of unparalleled significance, displacing the legitimacy previously enjoyed by the developmental state (OXFAM, 2014a). Over a period of time, an alliance has developed between government and big business, both at the centre and the states, characterised by policy capture by India’s corporate sector, and a nexus has developed between India’s industrial class and the government on vital economic issues. The disproportionate political power of the privileged minority reinforces the elitist biases of public policy and democratic politics (OXFAM, 2014a). The massive lobbying power of corporations to bend the rules in their favour has increased the concentration of power and money in the hands of the few. Businessmen have become increasingly cynical in manipulating the state to corner scarce resources and earn rent and super profits. The state remains the sole policy-making agency and main allocator of scarce resources—land, water, minerals, airwaves, spectrum, oil and gas. The key to success in business in India lies often less in real entrepreneurship than in influencing these major functions of the state.

Elite capture was palpable in the sweetheart deals between political and economic elites in mining, land acquisition and telecommunications (Mohanty, 2012). If the debate during the 2014 election is any indication, the intrinsic relationship between crony capitalism and corruption practiced by the Congress-led United Progressive Alliance (UPA) government was a major concern for the public in India, and this concern impacted the election outcome. However, this model did quite not change after the election. In fact, the Land Acquisition Ordinance (2014–15) pushed by the BJP-led National Democratic Alliance (NDA) government, after it came to power in May 2014, is a blatant example of the politics– business nexus.

Singled out by the corporate sector as the main obstacle in the path of development, the Land Ordinance was the single most important business-friendly decision of the new government. The government issued three ordinances to amend the Land Acquisition Act passed in 2013 by the UPA government. It tried hard to sell the amendments as a pro-reforms measure, making it easier for the state to acquire land for infrastructure and industry. However, it failed to persuade the opposition to pass it in the Parliament. Eventually, it had to revert to the prevailing situation before the Modi government came to power, thus admitting that the Land Acquisition Ordinance was a colossal mistake. The major climb-down occurred owing to the vehement opposition inside and outside Parliament, most notably from farmers. In the end, the government allowed the Ordinance to lapse on 31 August 2015.

Inequality is also perpetuated by unequal access to health and education between the poor (whose ability to pay for better quality private services is very limited) and the rich. The actual public expenditure on education, health, agriculture and social security remains abysmal. The global average on social spending is 8.8 per cent of the GDP. AmongBrazil, Russia, India, China and South Africa (BRICS nations), India spends the lowest proportion of public expenditure on social protection at 2.5 per cent, while Brazil spends the highest at 21.2 per cent, as of 2010. China, more populous than India, spends 6.5 per cent of total expenditure on social protection schemes (OECD Report cited in ‘India’s income inequality has doubled in 20 years’, 2011).

India needs to increase its social sector spending substantially. The tax system is the most important tool at the disposal of the government to address these inequalities, because public spending and redistribution are crucial for reducing poverty along with a corresponding investment by government to reduce inequality (OXFAM, 2014c). At 15.5 per cent, India is one of the countries having the lowest tax-to-GDP ratio.

Manipulation of Political Processes

Closely related to this is the issue of political processes that allow certain politically and economically powerful groups to control and manipulate not just economic activities, but also the democratic processes. Intense political competition has witnessed politicians making lofty electoral promises. But then, delivery falls short even as elected governments are expected to provide the electorate, which has elected them, access to some degree of state resources. The first-past-the-post system or the simple plurality system of vote aggregation is also responsible, to some extent, for constraining the political behaviour of India’s political elites when it comes to the question of tackling mass deprivation and marginalisation. The rise of identity politics and the concomitant increase in the number of political parties further aggravates the problem. Political competition and ethnic heterogeneity complicates the exercise, resulting in an increase in clientelistic patterns of public service delivery. This means the limited public goods are very often targeted to benefit one’s own group. In this scenario, politicians tend to target a very narrow band of voters to win the elections, as under a simple plurality rule, the political parties are vying for only a plurality of votes at the constituency level to win a seat. There exists very little incentive for them to cast a wider net in terms of channelling limited state resources to address the issues of inequality.

Political processes in a democratic system by ensuring redistribution of resources and power can be an effective mechanism for addressing inequality. Contesting elections has become an increasingly expensive affair, and hence, electoral representation is becoming the privilege of the wealthy. This has consequences for the operation of democracy and, eventually, for people’s well-being. Elections have become so expensive that no ordinary citizen can afford to fight an election on his or her own steam. The ever-rising cost of elections has encouraged the involvement of private benefactors for whom election expenditure is just another investment which yield stupendous gain, in the form of patronage, if one’s favoured candidate gets elected. The strong, mutually beneficial relationship between business and politics, such as this, eventually leads to distorted economic priorities and developmental outcomes.

Confronting Inequality

Against the background of uneven development and high levels of inequality, three distinct processes have catalysed a social welfare agenda: (a) socio-legal activism (public interest litigation and Supreme Court orders from time to time calling upon the state governments to identify the needy within their jurisdictions and ensure that they receive adequate food), (b) the expanding ambit of civil society movements and finally, (c) the rights-based approach to development (Ruparelia, 2013).

Since 2004, India has enacted a series of national legislative acts that enshrine a number of new socio-economic entitlements through legally enforceable rights, most notably the right to information, employment and food security. The UPA government prioritised the rights-based approach and pushed the envelope on social welfare. Its ten years in power laid the seeds of a rights-based welfare state. The signature piece of legislation in this regard was the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). For all its shortcomings of implementation and leakages, it represents an important step towards a building a social safety net. Some of these policies and programmes have tried to make overall economic growth more inclusive. The institutionalisation of these rights is essential for an alternative agenda of citizenship that transcends specific identities and ensures for everyone the prerequisites for a meaningful life (Patnaik).

But since the advent of the National Democratic Alliance (NDA) government in May 2014, it has become increasingly evident that the Indian state may no longer act as a social equaliser. Last year, Prime Minister Narendra Modi, in the course of his Independence Day address, deftly moved India’s political discourse towards individual responsibilities rather than rights and entitlements stressed by his centrist predecessors. The budget of 2014–15 slashed expenditures on health, education and welfare schemes for women and children, and the employment guarantees under NREGA were diluted by withholding wages. The government was duty-bound to provide whatever funds were needed to accede to the demands of those upon whom the right was conferred. Funding should not be arbitrarily fixed at some level determined by the central government, but the NDA government not only arbitrarily fixed a certain level of financial provision for the MGNREGA, irrespective of the demands of the beneficiaries, but also enforced a substantial cut in this provision compared to last year. This led to the violation of fundamental and statutory rights of the rural population.

Indifference to Inequality

Inequality has become a hot button issue globally. In India, even though excessive income and wealth inequality is very visible, there is no urgency in the debate in the realm of either policy or polity. The issue does not figure in the agenda of a single political party. In fact, growing economic inequality has altogether fallen off India’s economic and political discourse. This is also because of the moral indifference towards the poor within the growing middle class (Mander, 2015). The middle class lacked solidarity with the vast mass of the poor, even as it falls prey to media manipulation and media-driven debates on populism and wasteful subsidies. It also reflects the rightward political shift and underlines the neoliberal consensus that exists within the bulk of the political elites who are not particularly bothered about growing disparities (Bidwai, 2014).

The recent Indian tendency to ignore economic inequality and the politics and policies fuelling it seems to run contrary to a growing recognition among policy-makers worldwide that addressing inequalities requires some amount of state inter-vention. The consequences of skewed distribution of income and wealth are harmful for everyone. It hinders development, stifles social mobility and fuels violent conflict. It stands in the way of eliminating poverty. The life of the majority of the people can be improved by tackling the concentration of wealth in the hands of the elite. Countries that have been successful in doing this and increasing the well-being of the majority of their populations over relatively short periods of time have done so through state-directed strategies that combine economic development objectives with active social policies and forms of politics that elevate the interests of the poor in public policy (UNRISD, 2010).

Devoid of inclusiveness, democracy becomes merely procedural and formal (Bidwai, 2014). It is only when all citizens acquire an equal sense of ownership in a collective national project that a substantive democracy flourishes. What we need to do is to ensure that public debates and actions, at all levels, prioritise poverty, inequality and exclusion and issues of the underprivileged.

Shift in the Discursive Space of Indian democracy

Far from moving in an egalitarian direction, for the first time since independence, India elected a right-wing party to power with an absolute majority in May 2014. Coupled with the steep decline of centrist forces and the near obliteration of the parties on the left, which were until recently an influential presence in parliament, it signals a shift in the discursive and ideological space of Indian politics marked by a series of dramatic ruptures in its post-independence project. The most striking in this regard was the decision to abolish the Planning Commission.

Behind all the recent talks regarding a developmental regime promising rapid industrial expansion and millions of jobs for the mass of unemployed youth, on which not much has been delivered, we have seen, instead, an explosion of a cultural politics of the right, a rampant culture of violence and targeting freedom of expression, freedom of religion and intellectual freedoms (Banaji, 2015). This indicates that a majoritarian agenda has entered the centre stage of Indian politics. At the heart of this agenda are questions of national identity, the relationship between Hindus and Muslims, reworking policies with regard to education and culture and a conflation of majoritarianism with democracy. More substantively, there is an attempt to redefine Indian citizenship based on religion and culture—not civic equality that respects diversity and pluralism—and also, in the process, an attempt to transform the very meaning of words such as secularism and democracy.

To avoid the pitfalls of majoritarian democracy, a continuous struggle to create a stronger democracy and a stronger secular regime is required, which ought to make mass welfare, equality and an expanding culture of democracy the central planks of its vision for India to prevent the monopoly of political, economic or social power by those who find themselves presently in charge of the state.