Income Distribution, Growth and Basic Needs in India

R. Sinha, Peter Pearson, Gopal Kadekodi, Mary Gregory

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351801027
• Edition: 1
• Topic: History
• Subtopic: World History
• Index: History

This book, first published in 1979, explores the sources and patterns of the distribution of personal incomes in India, between rural and urban areas and among socio-economic classes, differentiating particularly those groups falling below the poverty line.

1
A Perspective on Income Distribution and Basic Needs

The basic needs strategy, in its current broad formulation, is conceived as an attack on deprivation in its two major facets: physical deprivation due to inadequate means of subsistence, and the associated deprivation of basic human rights. The essential concepts involved are defined by the International Labour Office (ILO):¹

First, they include certain minimum requirements of a family for private consumption: adequate food, shelter and clothing are obviously included, as would be certain household equipment and furniture.

Second, they include essential services provided by and for the community at large, such as safe drinking water, sanitation, public transport, and health and educational facilities.

And more fundamentally:

A basic-needs oriented policy implies the participation of the people in making the decisions which affect them. Participation interacts with the two main elements of a basic-needs strategy. For example, education and good health will facilitate participation, and participation in turn will strengthen the claim for the material basic needs.

The satisfaction of an absolute level of basic needs as so defined should be placed within a broader framework — namely the fulfilment of basic human rights, which are not only ends in themselves but also contribute to the attainment of other goals. (ILO, 1976, p. 32)

While this mode of formulation and the international context are contemporary developments, the political and intellectual leaders of modem India have, from the earliest days, held clearly articulated views and beliefs about the guaranteeing of both physical needs and human rights.

As Bronfenbrenner (1971, p. 3) points out at the beginning of his seminal study of the theory of income distribution, ‘The classical-economist and classical-Socialist concern with distribution and redistribution has become especially marked in India.’ As early as 1937 the National Planning Committee appointed by the All-India Congress Committee (AICC) had stressed that:

The ideal of the Congress is the establishment of a free and democratic State in India. Such a full democratic State involves an egalitarian society, in which equal opportunities are provided for every member for self-expression and self-fulfilment, and an adequate minimum of a civilised standard of life [our italics] is assured to each member so as to make the attainment of this equal opportunity a reality. (Quoted in Madan, 1966, p. 302)

Again, in its election manifesto of 1945 the AICC gave a pledge much on the same lines:

Industry and agriculture, the social services and public utilities must be encouraged, modernised and rapidly extended in order to add to the wealth of the country and give it the capacity for self-growth without dependence on others. But all this must be done with the primary object of benefitting the masses of our people and raising their economic, cultural and spiritual levels, removing unemployment and adding to the dignity of the individual, (p. 304)

Thus the objective and main elements of the ‘basic needs’ strategy, in conjunction with self-sustained growth of the economy, had already been fully recognised and adopted as the principal aims of economic planning in India even before Independence.

The commitment to them on Independence was clearly affirmed in the Constituent Assembly in the course of the constitutional debate. In the words of Nehru, one of the chief architects of modem India and the main inspiration behind Indian planning, ‘The first task of this Assembly… is to free India through a new constitution, to feed the starving people, and to clothe the naked masses, and to give every Indian the fullest opportunity to develop himself according to his capacity.’²

The Indian leadership always viewed its task in terms of three revolutions: political, social and economic. The political revolution ended with Independence. Social revolution meant the elimination of medievalism based on birth, religion, custom and community, and the reconstruction of the social structure on modern foundations of law, individual merit, and secular education. The economic revolution was to consist of the ‘transition from primitive rural economy to scientific and planned agriculture and industry’.³ As Radhakrishnan, the well-known philosopher, among many others, underlined, a ‘socio-economic revolution’ in India has not only to attain ‘the real satisfaction of the fundamental needs of the common man’ but also to go much deeper and bring about a fundamental restructuring of Indian society (Austin, 1966, p. 27). And the Indian leaders were also conscious that time was limited ‘because the Indian masses cannot and will not wait for a long time to obtain the satisfaction of their minimum needs’ (p. 27).

While there was widespread agreement among Indian leaders on these social and economic objectives, views differed on how they were to be achieved. Nehru’s commitment to modernisation and centralised planning is well known.⁴ Under the influence of Mahatma Gandhi (henceforth, Mahatma) the Congress Party and the Constituent Assembly pressed for the recognition of self-sufficient, self-governing villages as the primary units of social reorganisation. Mahatma had always preached

the growth of cities to be an evil thing, unfortunate for mankind and the world… and certainly unfortunate for India… The British have exploited India through its cities. The latter have exploited the villages. The blood of the villages is the cement with which the edifice of the cities is built. I want the blood that is today inflating the arteries of the cities to run once again in the blood vessels of the villages.⁵

Although the idea of a highly decentralised Gandhian model was given up under the influence of the ‘modernisers’ and the ‘unifiers’ of Nehru’s persuasion, a number of essential features of Gandhian ideology were nevertheless incorporated in the Constitution under the provisions concerning fundamental rights and the Directive Principles of State Policy.⁶

With a view to giving equality real meaning it was provided that the state should not discriminate against any citizen on the grounds of religion, race, caste or sex. This provision was expressly extended to cover access to shops, hotels, restaurants, etc., and to the use of wells, tanks and roads maintained out of public funds (Panikkar, 1963, p. 158). Equality of opportunity in matters of public employment was guaranteed to women also. Untouchability was formally abolished and its practice made an offence (p. 159). Special provisions were made in terms of reservations of seats in the legislatures, jobs and educational institutions, for the Scheduled Castes (untouchables or harijans) and Scheduled Tribes.

The Directive Principles of State, though not justiciable, but to be considered ‘fundamental in the governance of the country’, emphatically laid down that the ‘State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of national life’ (Austin, p. 52). The state was exhorted:

to ensure that citizens have an adequate means of livelihood, that the operation of the economic system and the ownership and control of the material resources of the country subserve the common good, that the health of the workers, including children, is not abused and that special consideration is given to pregnant women, (p. 52)

Moreover, the Principles stress the importance of providing for nutrition, education and leisure, as well as the contribution to be made by improving the techniques of production.

Thus it is clear that the fundamental elements now making up the basic needs strategy, in its domestic aspects, have not only been current in Indian political thought for more than a generation but are formally embedded in the Indian Constitution. Acceptance of the objectives, clearly posited, has never been a major problem. Nor, except perhaps in the very earliest years, has the leadership underestimated the immensity of the task involved.⁷ In spite of this, however, a problem of enormous magnitude remains.

The Poverty Line

The two themes of the basic needs strategy, the...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Original Title
• Original Copyright
• CONTENTS
• TABLES
• Acknowledgements
• Abbreviations
• Introduction
• 1. A Perspective on Income Distribution and Basic Needs
• 2. A Macro-economic Model of Income Distribution
• 3. The Distribution of Value Added among Income Classes
• 4. Alternative Strategies of Income Redistribution
• 5. The Employment Implications of Income Distribution
• 6. Economic Growth and the Distribution of Income
• 7. The Project Results and Some Policy Issues
• Appendix 1: Sector Classification
• Bibliography
• Index