Liberalization Merged

Unit 1: Basic Concepts
LIBERALIZATION
Outline
• The concept of Liberalization
• Liberalization in India
– Background
– Some important sectors of Reforms/ Liberalization
– Some major aspects/objectives of Liberalization
– Impact of Liberalization
• What is Liberalization?
• Relaxation (of laws and rules)

• Removal of restrictions
• The loosening of (govt.) controls
• Liberalization is most often used as an economic term.
• Liberalization means elimination of state control over
economic activities.
• It implies greater autonomy to the business enterprises
in decision-making and removal of government
interference.
• It refers to reductions in restrictions on international
trade and capital.
• It is often treated as synonymous with deregulation —
the removal of state restrictions on business.
• Liberalization (and deregulation) played a vital
role in stimulating the massive rise
in international trade.
Liberalization in India
• Background
• The concepts of liberalization, globalization
and privatization (LPG) are closely related to
one another.
• This LPG phenomenon was first initiated in
the Indian Economy in 1991 when the Indian
Economy experienced a severe crisis.
• Expenditure vs. revenue
• There was decline in the country’s export
earnings, national income and industrial
output.
• The government had to seek aid/loan from
WB and IMF to manage the crisis.
• Then the government had to introduce the
New Economic Policy (NEP) in 1991 to start
liberalizing the Indian economy.
Some important sectors of Liberalization/
Reforms
• Deregulation of the Industrial Sector

• Financial Sector Reforms
• Tax Reforms
• Trade and Investment Policy Reforms
Some major aspects/objectives of Liberalization
• Abolition of Licensing
• Liberalization of Foreign Investment/
Technology imports
• Relaxation of Locational Restrictions
• Public Sector Reforms
• Objectives:
• To promote foreign trade
• Encourage the private sector to take an active
part in the economic development
• Improve technology and foreign capital
• Develop a global market
• Reduce the debt burden of a country
• Impact of Liberalization
• Positive Impact
• Negative Impact
introduction
Liberalization’s Children—Nation,
Generation, and Globalization
It was a warm and humid day as Priya and I strolled through the long,
empty corridors of the college where I was conducting ethnographic
research. Located in a small town in the South Indian state of Kerala, the
college was closed, yet again, by student strikes protesting the economic
reform policies of the Indian government that were intended to open up
the Indian economy to larger global forces. Earlier that day, striking male
students had marched through the same corridors, shouting ‘‘Inquilab
Zindabad!’’ (Long Live the Revolution!), as they participated in a wider
campaign with other left-a≈liated political parties to protest what they
called ‘‘the sale’’ of India to global capitalist forces and ‘‘the spread of
consumerism.’’ Later, as part of the same campaign, one of these student
groups would stage another protest, attempting to disrupt a fashion
show that was part of a youth festival in a nearby college, claiming that
such shows were ‘‘an a√ront to the cultural ethos of Kerala.’’ Priya was
someone who opposed the presence of this type of student politics in her
college, going so far as to express her support for legal cases that sought
to ban this politics from college campuses, arguing it was an impedi-
Introduction
ment to the proper and adequate education that she felt she needed for
the lucrative career in Information Technology (it) she desired.
As Priya and I approached the edge of the campus on the way back to
our hostel, we came upon a garden some students had planted for a
university-wide student competition. We surveyed what was left of it—
trampled grass, uprooted plants, shredded bushes. The center of the
garden, an expanse of grass in the shape of territorial India, had been
ripped up, clumps of grass and soil strewn among the tall bushes and
wild plants. It seemed clear this was also the work of the striking male
students. Tired and fed up—it was the second time this had happened
over the past year—Priya, who had been very involved in planting the
garden, threw up her hands, turned to me, and said, ‘‘Here, there is no
modernization.’’
Priya’s investment in the garden in the shape of territorial India, and
the male students’ destruction of it, are apt metaphors for intense de-
bates over the meaning of India under globalization. The nation as well-
tended garden speaks to the optimistic narrative of work, growth, and
progress that underlies the nationalist modernization paradigm, an im-
portant component of colonial modernity, postcolonial nationalism, and
international development. For Priya, the garden represented an orderly
and well-functioning college—a site for familiar understandings of na-
tional development—and the attack on it felt like evidence that the state
of Kerala had not, after all, developed as far as she had hoped. Yet the
belief that there is ‘‘no modernization’’ in Kerala is somewhat puzzling,
for is this not the most progressive, developed state in India, where
female students like Priya are well educated?
In fact, the idea of Kerala as laboring to modernize belongs to an
almost outdated narrative of Indian nationalism. Priya also responded to
a more contemporary and shifting set of conceptions about India’s place
in a globalizing world, particularly to images and discourses, increas-
ingly popular since the early 1990s, that proclaim India to be an emerg-
ing global power.∞ This is ‘‘India Rising,’’ as an essay in Newsweek put it
(Zakaria 2006). Reform policies that opened up the Indian economy to
global market forces, colloquially known as ‘‘liberalization,’’ have signif-
icantly transformed the political, economic, and cultural landscape of
India.≤ Media representations of third world poverty, an uneducated,
rural, and traditional society, and an ine≈cient and corrupt bureaucratic
≤
Introduction
state—all backward or underdeveloped in comparison to the ‘‘modern’’

West—jostle with images of a world-class information technology indus-
try, a robust economy, and a media-saturated, highly educated, urban,
a√luent, and globally oriented consumer middle class. The political as-
sertiveness of India as a nuclear power, its economic strength and power,
and a newfound global prominence in film, literature, music, art, and
fashion have created a sense both globally and within the country that
India is fast approaching its moment of arrival on the world stage.
Priya’s investment in the garden and her frustrations with its destruc-
tion must be understood in light of such discourses that proclaim India
to no longer be struggling at the bottom of the modernization ladder:
when she frames the destruction as the absence of modernization in her
college, she is anxiously wondering if she will be left behind in this
new India.
The male students who destroyed the garden question and reject the
promise of opportunities in a newly globalized India. One way of under-
standing their explicit politics of antiglobalization is through the frame-
work of inclusion and exclusion. Some popular discourses hold that
liberalization has produced two Indias: an urban, metropolitan middle
class disengaged and disconnected from the problems and contestations
of a wider Indian society through its new global orientation and consum-
erism and, as Priya feels so keenly, a rural, semirural and small-town
India that is outside the boundaries of liberalized India. According to
such formulations, those who protest globalization do so because they
are being excluded from its opportunities and promises.
Based on my fieldwork on youth social and cultural life in a low-caste
college in a small town in the Indian state of Kerala, this book argues
that straightforward notions of inclusion and exclusion are far too sim-
ple by analyzing the workings of globalization among young people who
are on the margins of its dominant articulations yet fully formed by
its structures of aspiration and opportunity. Kerala sits at the cross-
roads of development and globalization; held up as an exemplary and
relatively egalitarian model of successful modernization, it has now been
transformed through an extensive and largely nonelite migration circuit
of labor, money, and commodities, to the Persian Gulf and elsewhere.
Mass-mediation and an expanding commodity culture have di√erentially
incorporated young people across the boundaries of gender, caste, and
≥
Introduction
class at the intersection of nation and region into the structures and
aspirational logics of globalization. In turn, this has generated a wide-
ranging politics of globalization in the everyday spaces of education and
youth; a politics that reveals the everyday cultural mediations of global-
ization. It is within this cultural politics that I locate the explicit politics
between Priya, who supports neoliberal economic reform, and her politi-
cized male classmates, who oppose them.
Student political protests against ‘‘the spread of consumerism’’ and
fashion shows in colleges, as part of a wider campaign against liberaliza-
tion, demonstrate that new forms of consumerism in Kerala are con-
nected and engaged with contestations about citizenship, politics, and
democracy in globalizing India. Indeed, practices of consumption and
their perceived impact are highly salient and contested sites for debates
over the meanings and impact of globalization. In this way, globalization
is a framework for understanding these young people’s lives, contextual-
izing their social and cultural practices, their hopes, frustrations, and
aspirations. Young people—men and women, pro- and anti-liberalization
—are caught up both by powerful market forces that fashion them as
consumers and by state-centric discourses and institutions such as edu-
cation and politics that fashion them as citizens. How do students, as
both citizens and consumers, navigate the increasingly mass-mediated
cultural and social worlds of youth in globalizing India? To answer these
questions, let us further define how globalization marks these students
as distinctive: in their generational and geographical positioning, their
identities as consumer citizens, and as gendered youth.
The Zippies of ‘‘India Rising’’

While Priya and her classmates vigorously debate liberalization, the dis-
course of ‘‘India Rising’’ celebrates the role of their generation as a
key instantiation of globalized India. Media discussions of liberalization
often highlight statistics showing that 54 percent of Indians are below
the age of twenty-five, making India one of the youngest nations in the
world.≥ In Kerala, people between the ages of fifteen and twenty-five are
said to make up 45 percent of the total population.∂ These youth form a
potent new market for fashioning India’s newly globalized middle class.
One major publication has labeled them ‘‘zippies’’:
∂
Introduction
. . . a young city or suburban resident, between 15 and 25 years of age, with a

zip in the stride. Belongs to Generation Z. Can be male or female, studying or
working. Oozes attitude, ambition and aspiration. Cool, confident and cre-
ative. Seeks challenges, loves risks and shuns fear. Succeeds Generation X
and Generation Y, but carries the social, political, economic, cultural or ideo-
logical baggage of neither. Personal and professional life marked by vim,
vigour and vitality (origin: Indian).∑
This definition does not name specific commodities but draws attention
to an embodied demeanor, an attitude, and a set of values. Its reference
to the ‘‘baggage’’ of previous generations names a shift in generational
sensibilities, attitudes, and values, in which ‘‘zippies’’ are an almost
evolutionary alternative to their more backward predecessors.
The media has drawn an even sharper contrast between generational
sensibilities in characterizing ‘‘zippies’’ as ‘‘liberalization’s children.’’
Again embodying India’s newly found confidence and ambition on the
global stage, they are urban, hip, and cool.∏ The term is a play on ‘‘mid-
night’s children’’—the generation named after the Salman Rushdie novel
which focused on those born during the first hour of the year 1947, when
India gained its independence from British colonial rule.π The term inter-
twines the lives of those born in the immediate aftermath of indepen-
dence with the life of the nation, a nation shaped by the socialist-inspired
understanding of national development represented by Jawaharlal Nehru,
India’s first prime minister. In contrast to liberalization’s children, mid-
night’s children seem mired in the ideological baggage of Nehruvian
nationalist development, with its focus on the rural poor and service to
the nation; as lacking in ambition; and being risk averse, ‘‘uncool,’’ and
fearful.
This narrative directly links the values and attitudes of this new gener-
ation to the economic liberalization of the economy and the cultural
impact of globalization. It juxtaposes midnight’s and liberalization’s
children in order to dramatize the idea that the liberalization of the
Indian economy and its cultural and political e√ects through the spread
of consumerism were a primary cause for the eclipsing of the Nehruvian
vision of the Indian nation. In a special section on India’s newly global-
ized youth in the magazine Business Week, a table titled ‘‘How India’s New
Generation is Di√erent’’ elaborates a set of generational contrasts.∫ The
∑
Introduction
‘‘older generation’’ has idealized ‘‘Gandhian poverty’’ and socialism,

grew up in the midst of famine, had only one state-run television chan-
nel, was technophobic, was thrifty, grew up within a stable single-party
system led by upper castes, favored civil service careers, and had low
levels of literacy. In contrast, the ‘‘new generation’’ admires capitalism
and wants to get rich, grew up in the era of food surpluses, can watch
fifty television channels, is technology savvy, consume guiltlessly, grew
up with shaky coalition governments and assertive lower-caste political
parties, favors jobs in the private, corporate sector, and has higher liter-
acy rates. This construction of the lifestyle and generational sensibilities
of globalized Indian youth encompasses ideology (capitalism versus so-
cialism), the state of agriculture (from famine to surplus), the spread of
mass media, technology, and consumption, the breakdown of the post-
independence hegemony of the dominant nationalist political party, the
Indian National Congress, and the rising political assertion of lower-
caste political parties, shifting career choices, and rising literacy rates—
all harbingers of India as a modernized, global power rather than a
poor third-world country. The article’s mention of ‘‘more voice for lower
castes,’’ rising literacy rates, and food surpluses, amid the more con-
ventional indices of globalization such as media, technology, and con-
sumption, is noteworthy and suggests that journalists see globalization
‘‘trickling down’’ to impact the masses. In short, youth and generation
are a key site for popular cultural reconfigurations of the Indian nation in
the age of liberalization.
Yet these celebrations of globalizing India, heralding a newly con-
sumerist, globally oriented middle-class youth, belie some counterdis-
courses. First, popular culture and public discussions are also rife with
worry about the consumerism of youth, their lack of interest in the heroic
struggles of the anticolonial nationalist generation, and their apathy
toward the problems that plague contemporary India. Rather than cele-
brate the emergence of a consumerist, globally oriented youth, in such
discourses there is much anxiety about their roles as committed citizens
of the nation. Moreover, neither celebration nor anxiety acknowledges
the Kerala students I met who were deeply engaged in contesting visions
of India under globalization. Again, one way of understanding this dis-
crepancy is to point to the disparities between the nonmetropolitan,
regional, low-caste, semirural social location of these students and the
∏
Introduction
metropolitan, upper-caste elite indexed by the category ‘‘zippie.’’Ω This

book not only focuses on nonmetropolitan youth; it argues that global-
ization does more than simply exclude them from its sphere of influence
or straightforwardly include them by ‘‘trickling down’’ to benefit them.
They are liberalization’s children in their own right.
The discourse of ‘‘India Rising’’ proclaims that the nation has tran-
scended its colonial and postcolonial histories. Working against such
triumphalism, this book examines globalization in India as a complex
encounter between such legacies and their transformations under liber-
alization. It refutes the notion that globalization is either a radically new
force or simply the persistence of older forms of cultural production
generated by colonialism and nationalism. I examine globalization as
experience, as practice, and as discourse. Young people at the lower-caste
Kerala college where I conducted my research are situated as citizens and
consumers at the intersection between development and globalization in
particularly salient ways. Located between region and nation as well, they
provide a nonelite, nonmetropolitan perspective on the dominant, na-
tionalist trope of generational shift that has come to mark constructions
of globalizing India.
Consumer Citizenship
While the discourse of generational shift from midnight’s to liberaliza-
tion’s children rightly focuses on the eclipsing of the Nehruvian vision of
the nation within liberalizing India, it obscures more than it reveals
when it simply highlights the triumph of consumerism.∞≠ For members
of societies that are actively being transformed by globalization, con-
sumer practices and discourses become an increasingly important axis of
belonging for negotiating citizenship; in other words, for the politics of
social membership, for negotiations of public life, and for an under-
standing of politics within the nation. Through a careful analysis of
consumer citizenship, this book argues that the breakdown of the Nehruvian
vision connects with ongoing struggles over the meanings of public life:
lower-caste cultural-political assertion; the ascendancy of a Hindu na-
tionalism; reconfigurations of upper-caste, middle-class aspirations;
and attempts by the middle class to reconfigure understandings of citi-
zenship in India.
π
Introduction
Scholars have drawn attention to shifting articulations between con-

structions of consumer and citizen, arguing that access to consumer
goods and the ‘‘freedom to choose’’ was considered a fundamental polit-
ical right in the West by the middle of the twentieth century.∞∞ Within
India, earlier nationalist constructions of consumption linked the con-
sumer to the exercise of citizenship through the notion of a ‘‘producer
patriot’’ in the service of the nation (Deshpande 2003). For example, as
Satish Deshpande argues, the anticolonial Swadeshi movement of the
late nineteenth and early twentieth centuries politicized the buying of
foreign goods in ways that sought to produce a new kind of nationalist
consciousness. For this movement, the consumption of commodities
was linked to an image of the economy as a locus of production in the
service of the nation (Deshpande 2003). The elite, reformist, moderniz-
ing middle class, as the vanguard of the new nation, was sometimes
imagined as comprising consumers whose practices of consumption
were tied to appropriate forms of modern domesticity and a productivist
paradigm of citizenship.∞≤ Such discourses of consumerism, and the
ways they were linked to understandings of citizenship within India,
are marked not by arguments about high and low culture, something
that characterizes debates about consumption within the Euro-American
world, but rather by debates about westernization, tradition, and moder-
nity generated out of the problematics of colonial and postcolonial na-
tionalist cultural projects (Chua 2000).
Increasingly, forms of consumer citizenship in the era of liberalization
articulate the citizen through the notion of a right to consume, a right
that must be protected through state action. In dominant discourse, the
economy is no longer imagined only as a locus of production; it is now
more consistently imagined as a marketplace of commodities for con-
sumption, in a shift that also entails a move away from the idea of the
citizen as producer patriot to one of a ‘‘cosmopolitan consumer’’ (Maza-
rella 2003; Vedwan 2007; Deshpande 2003). In the chapters to follow, I
examine such claims as they are made by middle-class-oriented civic
groups with respect to education, claims that have important implica-
tions for understanding politics. Rather than take at face value their
image of a depoliticized and privatized citizen-consumer, I examine how
consumerism intersects with state-centric discourses and the practices
of education, development, politics, and citizenship formation. Rather
∫
Introduction
than see consumer citizenship as simply displacing older notions of

citizenship, as these groups do, I examine the articulation between new
discourses and practices of consumption and the ongoing productions
of public life across the boundaries of gender, class, and caste.
I deploy an expansive anthropological understanding of citizenship in
order to explore the crucial role of consumption in the self-fashioning of
young people as part and parcel of their negotiations of public life.
Moving beyond formal, legal, and constitutional definitions—or, citizen-
ship understood narrowly as rights and obligations with respect to a
state—anthropological approaches to citizenship formation have em-
phasized the everyday practices of belonging through which social mem-
bership is negotiated.∞≥ Here, citizenship is understood as ‘‘an on-going
process, a social practice, and a cultural performance rather than a static
category. It entails . . . struggles over the definition of social member-
ship, over the categories and practices of inclusion and exclusion, and
over di√erent forms of participation in public life’’ (Berdahl 2005, 236).
The framework of citizenship is thus a useful entry point for understand-
ing how the changing practices and discourses of consumption, gen-
erated by globalization, are reconfiguring the dynamics of public life
in India.∞∂
The intensification and expansion of commodity flows through the
liberalization of the Indian economy have made consumption of goods
and mass-mediated images a key site for producing youth identities.∞∑
Rather than simply view youth as consumers, I examine the contradic-
tions and entailments for young men and women of being marked not
simply as consumers but as commodities as well. I focus on the terrain
of public culture in India—fashion shows, beauty pageants, ice cream
parlors, youth fashions, and movies—in order to argue that it is crucial
to pay attention to the ways in which di√erent cultural and political
fields shape everyday consumer practices (cf. Appadurai and Brecken-
ridge 1988). Scholars tend to depict the consumer in neoliberalism as a
depoliticized and privatized elite in withdrawal from the state. If they
consider a wider population, they contrast the sphere of the citizen-
consumer with that of traditional citizenship. Nestor García Canclini
(2001, 15), for one, argues that consumer citizenship is the reworking of
citizenship under conditions of globalization in ways that displace older
languages of politics, democracy, and citizenship: ‘‘Men and women
Ω
Introduction
increasingly feel that many of the questions proper to citizenship—where

do I belong, what rights accrue to me, how can I get information, who
represents my interests?—are being answered in the private realm of
commodity consumption and the mass media more than the abstract
rules of democracy or collective participation in public spaces.’’ While
paying attention to the dynamics of privatization and changing notions
of politics, this book draws attention to consumer citizenship not as a
form of ‘‘private behavior’’ but rather as a form of cultural politics at the
intersection of history, culture, and power with implications for how
citizens negotiate public life within and beyond the boundaries of the
elite, nationalist, middle class.
So I consider young people as citizens in the making and colleges as
sites where society produces them as such.∞∏ That is, I situate the eth-
nography in places—a street, the college hostel, the college compound, a
performance stage, corridors, classrooms, an ice cream parlor, a train
station, or bus stand—but these ‘‘places’’ are not self-evident sites for the
location of ethnography. I variously understand them as representing
di√erent kinds of publics—consuming, democratic, political, national,
and intimate—which also rely on various notions of the private. I exam-
ine how notions of the ‘‘public’’ get linked to conceptions of citizenship,
consumption, and politics.∞π
I examine notions of public citizenship within the college that include
young women within ‘‘civic’’ conceptions of the public yet marginalize or
exclude them from a ‘‘political’’ public, and I consider how liberalizing
discourses of consumption address these notions. Such discourses and
practices of consumption rework education as a formal institution for the
production of citizens, and they also transform the everyday negotia-
tions of public life that mark young women and men’s sense of belonging
and social membership. I also focus on education as part and parcel of
social reform movements begun in the colonial period to ‘‘uplift’’ low-
caste communities, in particular the Ezhava caste community in Kerala.
I attend to the ways in which a community-based anticaste movement
emerges and functions within the putatively secular and democratic
space of the college and how such a caste-based college and its students
are increasingly oriented toward a transnational horizon of opportunity
and aspiration. Thus an exploration of young men and women’s par-
∞≠
Introduction
ticipation in the public spaces of college life reveals the gender, class,
and caste dimensions of the public sphere and democratic citizenship
in India.∞∫
Indeed, as I explore these struggles within the realm of education and
youth cultural life, I look beyond the nonelite students to consider how
the liberalizing middle class envisions the nation in order to lay claim to
a state that it considers corrupt and ine√ectual within a new global
dispensation. I demonstrate how their increasing global orientation has
led middle-class Indians to very actively critique the postcolonial state,
its legacies, and functioning. They are not simply leaving Indian society
by becoming more worldly; they also seek to transform it for the pur-
poses of consumption. For example, some organizations attempt to ban
student politics from colleges in Kerala because, they claim, such poli-
tics prevents the smooth functioning of educational institutions and the
preparation of students for a new global economy. A privatizing educa-
tional industry links such arguments to conceptions of education as a
commodity rather than a public good; in these conceptions, it juxtaposes
the rights of citizens as consumers to a more long-standing notion of
citizens as producers for the nation. I explore how this elite, middle-class
‘‘consumer patriotism’’ of liberalization encounters new consumer iden-
tities among nonelite, nonmetropolitan young people in the small town
in Kerala where this study is located.∞Ω
In the end, my conceptualization of consumer citizenship has several
consequences for understanding globalization and citizenship.≤≠ Phe-
nomena that transcend the boundaries of nation, such as the extensive
circuit of transnational migration, commodities, and remittances be-
tween Kerala and the Persian Gulf and the construction of the Non-
Resident Indian (nri), are crucial to the chapters that follow. My work
here builds on discussions of globalization and citizenship that focus on
the deterritorializing e√ects of globalization that challenge nation-state–
derived conceptions of citizenship. That focus has led to a wide variety of
scholarship on ‘‘postnational,’’ ‘‘cosmopolitan,’’ and ‘‘global’’ forms of
citizenship.≤∞ However, I examine these phenomena in terms of the re-
configurations of region, nation, and world within Kerala, drawing atten-
tion to the dynamic relationship between deterritorialization and reter-
ritorialization within processes of globalization.≤≤
∞∞
Introduction
Engendering Youth and Globalization

Female students like Priya have historically enjoyed high rates of literacy,
health care, and education in Kerala, making the state a model of gender
equality, development, and successful modernization elsewhere in the
world.≤≥ Built into the discourse of ‘‘India Rising,’’ however, is the prom-
ise of a better path to liberation from traditional family and kinship
structures into a world marked by greater gender equality. When she was
faced with the destroyed garden, her exasperated remark that ‘‘here,
there is no modernization’’ resonated for me with several possibilities:
her marginalization from a long-standing masculinist political culture
that is central to Kerala’s postcolonial development experience, her sense
that the celebrations of gender and education in Kerala might obscure its
more ambivalent consequences for young women, and her embrace of
liberalization as a more promising path toward greater gender equality
and class mobility.
While Priya embraces the opportunities of liberalization, there is a
wider sense that globalization is undermining Kerala’s reputation as a
model of development and is transforming the understanding of the state
as a highly developed place that treats women well. Priya is a middle-class
aspirant of liberalizing India, someone who is studying computer sci-
ence on the side, along with her regular studies, in the hope of getting a
high-paying it job and the lifestyle that might come with it either within
India or abroad. Yet the prevalence and persistence of moral panics about
and protest against beauty pageants, fashion shows, and the celebration
of Valentine’s Day in colleges suggest the ambivalent and contested na-
ture of young women’s opportunities in globalized India. Such objec-
tions to liberalization reveal how celebrations of liberalization’s prom-
ises provoke anxious discourses and regulations of young women, their
bodies, their sexuality, and their vulnerability. In exploring such debates,
I also consider how struggles among young people about their roles as
student-citizens and as political actors—as opposed to youth as con-
sumers engaged in an expanding and youthful commodity culture—
position women and men and define masculinity and femininity.
A central argument of the book is that anxieties over globalization
surface in highly gendered politics about the place of women in public
and the specter of sexual exploitation in an ever-expanding commodity
∞≤
Introduction
culture. A crucial node in the crisis-ridden narratives about Kerala in the

1990s, such anxieties have a long history in the production of modernity
in Kerala, and they have become the conditions under which young
women and men negotiate globalization. I show that young middle-class
women are central to struggles over the cultural meaning and impact of
globalization, both on the part of an assertive Hindu nationalism that
emerged in the 1990s and the feminist left as it confronts and contests
globalization. The middle-class New Indian Woman of earlier articula-
tions of modern gender is now figured as more aggressively public and
sexual through her consuming practices, while continuing to be regu-
lated in a variety of ways; at the same time, liberalization has also gener-
ated contemporary forms of lower-caste and class masculinity that are
newly tied to commodity cultures. These commodified genders become
another axis of exclusion for lower-caste and lower-class young women.
In Kerala, the lack of job prospects and extremely high rates of educa-
tion have transformed life for a large group of young men and women.
Instead of moving quickly into marriage and employment, they spend an
extended period pursuing one educational degree or course after an-
other, all the while negotiating jobs and marriage prospects at home and
abroad. This extension of youth has created a consumer-driven social
and cultural world that young people increasingly understand on its own
terms. I explore the contours of this sociocultural world in arenas em-
blematic of youth: fashion, romance, politics, and education. However, I
do not render this world as a ‘‘subculture’’ with its own logic, something
that has characterized much of the cultural studies literature on youth.≤∂
Rather, in order to apprehend these figurations of youth and the ways
that young people inhabit them, I reconceptualize youth as a social cate-
gory that sits at the crossroads between familial and educational con-
texts, a category that is structured by job, marriage, and consumer mar-
kets.≤∑ It is moreover a category that closely links education and the
possibilities of migration and creates the conditions for a complex medi-
ation between consumption and citizenship. Consumer and state-centric
developmentalist projects seek to turn people in this category into con-
sumers and citizens, and as a category youth is receptive to global migra-
tion and changing ideas about sex and marriage.
In particular, I consider a variety of masculinities and femininities
through which young people navigate public spaces of education and a
∞≥
Introduction
wider commodity culture. While femininity is often equated with ‘‘di√er-

ence’’ and ‘‘tradition,’’ one task of this book is to link such analysis to the
ways modernity is in turn central to gender.≤∏ Understanding how gender
is modern in Kerala entails a complicated and nuanced mapping of the
public/private dichotomy.≤π I consider the gendered demeanors young
women and young men deploy as they navigate the public spaces of
education and new consumer spaces. I contrast the notions of femininity
and masculinity that accompany these demeanors, considering them in
terms of the embodied politics of public life.
For example, I track the assertion of new forms of masculinity among
lower-caste, lower-class young men tied to fashion and commodities as
these forms intersect with reconfigurations of upper-class, upper-caste
femininity as aggressively public and sexualized in the aftermath of liber-
alization. I examine how these terrains of masculinity and femininity,
marked by young people’s engagements with consumption, deny lower-
caste, lower-class young women access to forms of commodified femi-
ninity in ways that make their claims on the public spaces of education
and commodity culture tenuous at best. Moreover, I show that within the
context of globalization, processes of reterritorialization often hinge on
the young female form, which bears what I call ‘‘the burden of locality’’
on an increasingly global scale. Thus my analysis of gendered spatial
divisions tracks the deployment of class-specific, caste-specific, and
gender-specific constructions of masculinity and femininity in ways that
unsettle and cross the oppositions between public and private and tradi-
tion and modernity.≤∫
Finally, I mediate multiple locations for the production of knowledge
about gender in India and Kerala. In particular, because I am an anthro-
pologist interested in questions of gender and globalization and am
located within the United States, my knowledge production emerges
from feminist intellectual and political fields within the American acad-
emy and within India. Part of the challenge of writing this book was to
pay attention to the complexities of the ethnographic encounter between
myself as a U.S.-based academic and my informants in Kerala; to the
fields of debate and politics about gender and globalization across Ker-
ala, India as a whole, and the United States; and to naturalized hier-
archies of the relationship between these sites of knowledge production.
∞∂
Introduction
Genealogies/Sites/Themes
My interest in youth, gender, and globalization in Kerala emerged from
my own experiences and that of my family as members of a global Kerala
diaspora. I was born into a Christian family in Kerala, raised in north
India and the United States, and returned to Kerala as a U.S.-based
anthropologist. My religion, nation, class, and gender shaped both my
fieldwork and my analysis. In particular, as what the state identifies as a
‘‘Non-Resident Keralite’’ woman, I have lived and negotiated the gen-
dered cultural politics explored in this book, a politics of foreignness
shaped by the migratory circuits of the global Kerala diaspora.
The hierarchies of gender, class, education, and geography within my
own family—our members are dispersed among Kerala, other parts of
India, the United States, Canada, Australia, the Persian Gulf, and Europe
—were puzzling and remarkable to me while I grew up. Because my
immediate family and I followed a classic U.S. immigrant pattern of
social mobility through education, I wondered, even as a young woman,
about the role of education as a site for social change in Kerala, with its
di√erent histories of colonialism, political radicalism, and migration. As
India’s emerging reputation as a global power transformed my own
experience of being an Indian immigrant in the United States, family
visits to Kerala over the years showed me how globalization and experi-
ences of transnational migration were changing what it meant to be
young in Kerala.
The central focus of this ethnography is a midsize (3,500 students)
coeducational college on the outskirts of a town in southern Kerala.
My most intensive period of ethnographic fieldwork there began in the
mid-1990s for a period of two years, followed by shorter fieldwork stays
over the years. Situated on the national highway that runs through this
small yet commercially important town, the college is easily reached by
bus, and the railway station is within walking distance of the campus.
It is part of a concentration of institutions and businesses that cater
to students: several other private colleges, hostels, tutorial centers, book-
stores, small restaurants, ice cream parlors, and shops selling drinks,
sweets, snacks, and newspapers. While some of its students live in
nearby hostels, most come from both the town itself and from the vil-
lages surrounding the town. Many travel between one and two hours,
∞∑
Introduction
sometimes three, to attend college there. The college is one of a large

number of private colleges in the state, all of which are a≈liated with one
of the seven state universities.≤Ω Founded in the 1950s by a private trust,
this institution is an obc college: obc refers to other backward classes,
the o≈cial state category under which the Ezhava caste community is
classified.≥≠ The trust itself is a≈liated with the Sree Narayana Dharma
Paripalana (sndp), a social reform movement that challenged the caste
hierarchy of the region beginning in the latter half of the nineteenth
century from the position of a formerly untouchable caste. It draws a
cross-section of students from within the Ezhava caste community, com-
prising students from middle-class families in town and those from
more rural and peasant backgrounds. However, while it is managed
by this trust and has a mandate to serve the Ezhava caste community
through what is called its ‘‘management quota’’ which allows it to set
aside admissions for its constituency, state policies, the college’s size
and reputation, and the range of subjects it o√ers, draw a diverse student
population from di√erent caste and religious communities. At the time
of my most extensive fieldwork, the college granted degrees equivalent
to a bachelor’s in the United States and o√ered postgraduate master’s
courses in a few subjects. In addition, higher education in this college
was organized such that the eleventh and twelfth years of schooling were
included in colleges and understood as ‘‘pre-degree’’ courses.≥∞ This
meant that the students in the college ranged in age from approximately
sixteen to twenty-three years.
During the intensive fieldwork period, I lived in an a≈liated student
and working women’s hostel, run by the same trust and within walking
distance of the college. Many of my hostelmates’ homes were too far
away for them to live at home and commute. While the majority of my
hostelmates were students of the college, the hostel also housed women
just beyond their college years, who were usually unmarried and working
at their first jobs in and around the town. There were also a few older
women, sometimes married with children who lived at home while they
spent the working week at the hostel and others who were not. Some,
like me, came from other parts of India or abroad. Most of my hos-
telmates were Malayalee (with a few exceptions), Malayalam being the
dominant language of the state.
My fieldwork involved living in the hostel, attending classes at the
∞∏
Introduction
college, and generally participating in the everyday activities of a college

student. I also pored over documents at the college library, went to youth
festivals, traveled with students for various projects and trips, attended
political marches and rallies, and participated in many other activities. I
went shopping, attended movies, watched television, listened to music,
and frequented ice cream parlors and restaurants. Apart from participant
observation, I conducted more systematic interviews with a variety of
students, teachers, and administrators. At the time of my most intensive
fieldwork, I was only several years older than the oldest students at the
college, making it relatively easy for me to navigate the formal and infor-
mal spaces of student life. My status as a social scientist from the United
States conducting gaveshanam (research) was simultaneously apprehen-
sible within an institution of higher education and curious to students,
teachers, and administrators. While both students and teachers were
extremely helpful, providing me with documentary materials, helping
me find places to conduct interviews and participating in them, they were
puzzled that I could a√ord to spend a year or two in Kerala. With little
funds available to them for conducting research, especially within non-
elite, regional institutions, many were struck by the fact that a funded
grant enabled me to do research for so long. I also conducted research
among students in the nearby capital city while I lived in a student hostel
for several months. That research focused on a student population that
was more urban, middle-class, and upper-caste and provided some com-
parative data that was useful for situating my main ethnographic focus.
Before the ethnographic chapters, chapter 2 provides background on
Kerala. The state has a global reputation as a model for development,
based on its unusual achievements in the area of gender and education,
among other development indices. I show that standard explanations
of these achievements draw on elements of Kerala’s modern history—
largely focused on its historically important systems of matrilineal
kinship among dominant castes, enlightened nineteenth-century local
rulers, caste and class mobilization, and the rise of the communist left—
that elide the emergence of a modern and patriarchal gender regime that
structures such development gains. Through various projects of social
reform, this regime di√erentially positioned women along the axes of
tradition/modernity and public/private. Through women’s increasing
assertions into public life, further shifts in this modern gender system
∞π
Introduction
through the 1920s and 1930s allowed women greater access to education
and jobs, albeit in gender-specific ways. Nonetheless, by midcentury, a
modern norm of middle-class domesticity rooted in the nuclear family
was established, something that came to buttress the postcolonial de-
velopmental state. I trace a modern gender ideology that underwrites
social reform e√orts across a variety of caste and community reform
movements, including the Sree Narayana movement, in order to high-
light the emergence and consolidation of a middle-class norm rooted in
ideas about modern education. However, this gender norm was di√eren-
tially articulated and experienced along the vectors of caste, class, and
community. This ‘‘model’’ came into crisis in the 1990s through global
transformations and the increasing importance of transnational mi-
gration, which led to the emergence of discourses and practices that
newly fashioned Kerala as a consumer society.
The following four ethnographic chapters focus respectively on fash-
ion, romance, politics, and education. I explore how these emblematic
youth cultural and social practices are situated at the intersection of both
conceptual and literal spaces defined as private and public, modern and
traditional. I examine the ways in which these ideas of public and private
mutually implicate each other and the ways in which people live and
contest them along the axes of gender, caste, and class through various
kinds of embodied performance. I also situate the ethnographic objects
within the colonial and nationalist histories of these practices. For exam-
ple, I examine how a range of clothing styles index particular kinds of
femininity and masculinity that enable and constrain young people as
they navigate the boundaries between long-standing notions of private
and the public and ideas of tradition and modernity in ways that allow
di√erential access to modern, globally inflected publics. The chapters on
fashion and romance explore the e√ects of new productions of con-
sumer identity on highly gendered negotiations by young women and
men of the public spaces of commodity culture and education. These
chapters specify how the upper-middle-class ‘‘modern’’ girl who is now
understood to be more aggressively public and sexual intersects with the
production of new forms of commodified, lower-caste and lower-class
masculinity in ways that marginalize lower-class and lower-caste forms
of femininity.
Chapter 2, on fashion, examines how new, globally inflected patterns
∞∫
Introduction
of consumption among young people (through fashion, movies, and the

staging of beauty pageants) become a new axis of belonging that di√er-
entially mediates young women and men’s claims on public life. Chapter
3 demonstrates how narratives of modern romance, linked to transfor-
mations in the gender regimes of Kerala’s colonial modernity, shape how
young women understand and navigate their entry into the worlds of
education and work, all within the horizon of normative understandings
of marriage. Eschewing a sharp distinction between private and public, I
examine romance as a form of public intimacy. Given that a college and
its environs are one of the few spaces available for heterosocial inter-
action, the construction of romantic intimacy, more often than not, must
be initiated and sustained in public. I track the ways in which practices of
romance emerge through a negotiation of the meanings of social inter-
action between peers within public spaces of education and an expand-
ing commodity culture. Movies turned out to be a key source for mediat-
ing the romantic ideal. These and other narratives demonstrate how
romance enables and constrains a young woman’s entry into and experi-
ence of a wider public world.
The next chapters shift the focus to youth practices that are more self-
evidently enactments of citizenship: politics and education. I demon-
strate how these practices emerge out of colonial and postcolonial con-
figurations of culture and power and how contemporary discourses and
practices of consumption are transforming them. In chapter 4, I treat
‘‘politics’’ (rashtriyam) as an objectified discourse and domain of activity
in which youth confront the state. As such, politics is a crucial aspect of
Kerala’s political history and highly salient in everyday life as well as in
the workings of the college itself. Although it would be easy for me to
construct a narrative of exclusion in addressing the lack of women’s
participation in this ‘‘political public’’ and in the practices and institu-
tions of democratic citizenship, I instead examine the masculinist under-
pinnings of the space of student politics, rooted as it is in gendered
notions of mobility and traversal. I track a contemporary debate about
‘‘politics,’’ in which a privatized, neoliberal, consumerist, and civic-
minded public confronts a disorderly politicized public that has its roots
in colonial and postcolonial political developments. This debate is cru-
cial to the field of education in Kerala, where education is both an object
of political contestation and a place for its enactment. I elaborate how
∞Ω
Introduction
older narratives of Nehruvian nationalism tied to service to the nation are

changed by discourses of consumption that reconfigure the very mean-
ing of politics within an increasingly commoditized and privatized edu-
cational context. In chapter 5, I turn to education itself, considering it as
a strategy of social transformation and mobility. I situate the college
within a colonial-era social reform movement for the eradication of
untouchability while locating this anticaste project within an increas-
ingly transnational educational trajectory. Taking up the critique of caste
that has defined recent South Asian anthropology, the chapter argues
for a ‘‘post-Orientalist’’ anthropology of caste in contemporary India
that locates caste within the spaces and practices of secular citizenship.
Through an exploration of the politics of identity and secularism within
this low-caste college, the chapter goes on to examine contemporary
transformations of caste, community, and religion in a Kerala increas-
ingly a√ected by Hindu nationalism. The chapter also examines the poli-
tics of the English language in the college.
In the epilogue, I discuss some of the implications of this research
on youth and globalization in Kerala for understanding figurations of
liberalization’s children as well as point to some more recent shifts
and continuities in the cultural politics of globalization in contemporary
India.
The book focuses on key cultural practices that young people under-
stand, in highly self-conscious ways, to be emblematic of their lives as
consumers and citizens. The unfolding of the ethnographic chapters on
fashion, romance, politics and education—in that order—develops an
argument about the intersections between consumption and citizenship
that seeks to foreground consumer citizenship as constitutive of young
people’s lives in liberalizing India. While the chapters on fashion and
romance highlight the gendered stakes of consumption, the chapters on
politics and education feature explicit gendered discourses and practices
of citizenship. The ordering of chapters also charts a temporal trajectory
of entry and exit from the space of youth. Through fashion and romance,
we get a sense of what is entailed for young people in gaining entry to
and navigating the spaces of college student life, while the focus on
politics provides us a sense of how the college is inhabited by them. As
the focus shifts to education and strategies for social mobility, the world
of adulthood in the form of jobs and setting up households begins to
≤≠
Introduction
impinge on the highly demarcated zone of commodified youth culture

and student politics.
While this book is focused on the region of Kerala within a larger
Indian context, my focus on consumer citizenship at the intersection of
gender and youth illuminates a wide-ranging and contested set of trans-
formations wrought by contemporary globalization. Consumer practices
and discourses of rampant consumerism, especially among young peo-
ple, have become emblematic of globalization’s reach and impact around
the world. Through the framework of consumer citizenship, I hope this
book will expand understandings of consumption and globalization by
drawing attention to the ways practices of consumption and discourses
of consumerism intersect with public politics and understandings of
citizenship. Moving beyond denunciations or celebrations of consump-
tion as a harbinger of globalization, especially with respect to young
people, I invite a more careful assessment of what is at stake in consumer
practices for young people, their families, and the nations and states to
which they belong. I hope this book will expand our understandings of
globalization by drawing attention not only to how globalization struc-
tures lifeworlds but also to the ways it becomes an explicit object of con-
testation and negotiation within everyday contexts. Through the frame-
work of consumer citizenship, paying attention to the cultural politics of
globalization carefully contextualized within local and national histories
enables a nuanced assessment of both popular and scholarly claims
about globalization as a radical new force in the world.
≤∞
doi: 10.1111/aepr.12239 Asian Economic Policy Review (2019) 14, 46–62
India’s Economic Reforms: Achievements and

Next Steps
Montek S. AHLUWALIA†
Former Deputy Chairman of the Planning Commission of India
This paper reviews the impact of India’s reforms since 1991 on the performance of the Indian
economy. It shows that the reforms definitely achieved a significant acceleration in growth and
they also succeeded in reducing poverty. However, they have been less successful in generating
good quality jobs. There was progress in providing better access to education, health services ,
and clean drinking water and sanitation, but less than was hoped. The area where performance
has been most disappointing is environmental sustainability. The paper concludes by identifying
some of the critical policy challenges in the years ahead.
Key words: economic reforms, employment, inclusive growth, India, poverty
JEL codes: N00, E01, I31
Accepted: 11 July 2018
1. Introduction
This paper presents an assessment of India’s economic policies focusing on the reforms
initiated in 1991 and their subsequent evolution over time, through successive govern-
ments. Section 1 describes the main features of the 1991 reforms and shows how they
were significantly different from the 1980s. Section 2 identifies the areas where reforms
have succeeded, as well as those where achievements have fallen short of targets.
Section 3 presents a brief assessment of the critical policy challenges that need to be
addressed if the Indian economy is to realize its full growth potential over the next
decade and more.
2. The Reforms of 1991
For three decades after gaining Independence in 1947, India followed an economic
strategy with a strong bias in favor of the public sector, strict government controls over
private sector investment, and insulating the economy from the rest of the world
I am grateful to Utkarsh Patel for extremely careful research assistance. Thanks are also due to
the participants in the Asian Economic Policy Review conference in Tokyo where this paper was
presented, and especially to the discussants M Chatib Basri and Hideki Esho. Needless to say the
errors that remain are entirely mine.
†Correspondence: Montek S. Ahluwalia, Former Deputy Chairman of the Planning Commission
of India. Email: monteksingh.ahluwalia@gmail.com
46 © 2018 Japan Center for Economic Research

Montek S. Ahluwalia India’s Economic Reforms: Achievements and Next Steps
through a combination of import licensing and high tariffs. Foreign investment was
discouraged, and the import of technology was strictly controlled.
The economy performed reasonably well under this control system in the first
15 years 1950–1951 to 1964–1965, when the rate of growth of gross domestic product
(GDP) (at factor cost) averaged 4.1% per year. This was lower than the plan targets of
5%, but much better than the growth rate in the pre-independence period. Besides,
other developing countries were not performing much better. However, the inefficiency
of the system became evident in the 1970s, when India was seen to be growing much
more slowly than other countries in South East Asia. It became more starkly evident in
the 1980s, when China’s dramatic reforms began to show results.
A process of liberalizing the control regime had started in the first half of the
1980s, under Prime Minister Indira Gandhi, and was intensified in the second half
of the decade under Prime Minister Rajiv Gandhi. However, these changes were
incremental rather than structural. In essence, the basic control system remained in
place, but it was made more flexible at the margin. Industrial licensing continued,
but some industries were exempted from industrial licensing. Existing enterprises
were allowed an automatic expansion of approved capacity every 5 years to allow
them to undertake debottlenecking, and new licenses were given for larger-sized
plants in order to exploit economies of scale. Import licensing continued, but sev-
eral items were made freely importable and this list was slowly widened. Foreign
technology continued to require government approvals, but these were given more
freely.
The real break with the past came in 1991, when a new Congress led coalition gov-
ernment, under Prime Minister Narasimha Rao, with Dr Manmohan Singh as Finance
Minister, had to deal with an exceptionally severe balance of payments crisis. The
country had gone through two unstable minority governments in the previous
18 months which had failed to manage the balance of payments. Foreign exchange
reserves had run down to $1.1 billion by the end of June 1991, barely enough for
2 weeks of imports, and there were widespread fears that India might be forced to
default on its external debt payments. The new government moved decisively to con-
tain the crisis through a classic stabilization program consisting of a reduction in the
fiscal deficit and a currency devaluation. It also initiated a program of structural
reforms to raise the growth rate to something nearer the true potential of the economy.
To support these efforts it negotiated a International Monetary Fund (IMF) loan in
1991, along with structural assistance loans from the World Bank and the Asian
Development Bank.
2.1. Stabilization and reforms

The stabilization component of what was attempted in 1991 was conventional but very
effective. India was able to end the IMF program much earlier than expected (see
Ahluwalia, 2016). The structural reforms were a distinct departure from the incremen-
tal changes attempted earlier. They signaled a clear shift toward a much more market-
© 2018 Japan Center for Economic Research 47

India’s Economic Reforms: Achievements and Next Steps Montek S. Ahluwalia
oriented economy, with a much larger role for the private sector and greater openness
to trade and foreign investment. The reforms were consciously designed to be a holistic
mutually reinforcing set of changes that could achieve the desired transformation. This
can be seen from the following summary of the major changes.
1 Industrial licensing, which was earlier applicable for all industries except a defined
list, was now abolished for all but a handful of industries. This meant investment in
new plants and capacity expansion in existing plants could now be undertaken for a
very wide range of industries without any approval from the central government.
Since the location of industries was previously specified in the license, the abolition
of industrial licenses meant that location was left to investors to decide, setting the
stage for different states to compete with each other to attract private investment.
2 The list of 18 industries earlier reserved exclusively for the public sector was reduced
to 8, and this was further pruned later. This effectively ended the earlier perception
that the public sector must “occupy the commanding heights of the economy”.
3 Earlier, the Monopolies and Restrictive Trade Practices (MRTP) Act provided that
all investments by companies with total assets exceeding Rs 1 billion needed special
scrutiny to ensure that it would not increase concentration of economic power.
These restrictions were abolished and the MRTP Act was to be used to check anti-
competitive behavior.
4 Foreign Direct Investment (FDI) was earlier allowed only in a defined list of high
priority industries and each application needed to be cleared on a case-by-case basis,
with foreign equity limited to 40%. FDI was now freely allowed up to 51% in this list
and higher limits were considered on the merits of each case. The government also
announced that it would seek foreign investment pro-actively in areas where it could
make a major contribution.
5 Foreign technology agreements, which earlier needed individual approval, became
eligible for automatic approval provided royalties and technology fees were within
specified parameters.
6 There was a very substantial liberalization in trade policy. Capital goods, raw mate-
rials, components and other intermediate goods needed for production were made
freely importable against tradable import licenses called Eximscrips, which were issued
to exporters at 30% of the fob value of exports (40% for some items). This system was
quickly replaced by a system in which all items except consumer goods could be freely
imported using foreign exchange purchased from the market. (However, consumer
goods remained on the banned list, and were finally liberalized only in 2002).
7 A Committee on Tax Reforms was appointed, under the chairmanship of Raja Chel-
liah, to make recommendations for the reform of both direct and indirect taxes. It
recommended a switch towards a regime of low tax rates with a broader base, a
reduction in the number of indirect tax rates, and a gradual reduction in customs
duties to expose Indian industry to competition from abroad. The reduction in
import duties was made possible by the devaluation in 1991 and the subsequent shift
to a flexible exchange rate.

8 Financial sector reforms were seen as an essential accompaniment to industrial liber-

alization, and a Committee on the Financial System was appointed under
M. Narasimham to make recommendations in this area. It recommended liberaliza-
tion of controls over the interest rates charged by banks for different types of loans,
a reduction in preemption of credit via high statutory liquidity requirements, and
the introduction of tighter prudential and supervisory norms in line with the Basel I
requirements that prevailed at the time. It also recommended abolishing government
controls on capital issues in the stock market and on pricing of these issues, leaving
both to be regulated by a statutorily empowered Securities and Exchanges Board of
India.
9 In 1992, qualified foreign institutional investors (FIIs) were allowed to bring in capi-
tal to purchase shares in listed companies through the stock exchange. There was a
cap of 24% on the total equity in an individual company that could be held by FIIs.
While liberalizing portfolio equity flows, short-term bank debt, which had been the
source of destabilizing movements in many countries, remained under strict control.
The holistic nature of the 1991 reforms is evident when we consider the package
of measures introduced and their mutually supportive nature. Removing controls
over investment without liberalizing import controls would only have shifted the
point of control to the import licensing authority as investors would have to queue
up for import licenses. Equally, liberalizing imports and lowering import duties were
only feasible if the exchange rate was made flexible to take the brunt of any excess
demand for imports. Financial liberalization was critical to support private sector
expansion.
There was much speculation at the time on whether the reform agenda was thrust
upon the Indian government by the IMF as part of its assistance program. I have
argued in Ahluwalia (2016) that the ideas implemented in the reform had been exten-
sively discussed domestically, well before the crisis, and while they figured in the con-
ditionality associated with the Fund’s assistance, the IMF was not the principal driver.
It would be more accurate to say that reformers in the government saw the crisis as an
opportunity to implement changes that were being discussed earlier, but were politi-
cally not acceptable. The fact that the IMF program ended in 1994, but the reforms
continued is proof that the reforms were home grown.
There were missing links in the reform agenda reflecting political sensitivities.
Reform of the public sector was barely touched. Privatization was simply not politically
acceptable across the political spectrum and all that the government was willing to say
was that public sector enterprises (PSEs) would be given greater managerial autonomy
to improve their financial performance. However, little was done to make this a reality.
It was also said that irremediably loss-making PSEs would be closed down, but this
was never attempted. The only new initiative was that 20% of the equity of profit-
making PSEs would be sold to mutual funds and other financial institutions in the
hope that the induction of nongovernment shareholders would increase the commer-
cial orientation of PSEs.

Another area which was left untouched initially was the policy of reserving certain
items for production in the small-scale sector. Almost 900 items, including simple con-
sumer goods such as electronic toys, garments, shoes, electric kettles, and many house-
hold goods were reserved for production only by small-scale units. Since these were
precisely the items which had a strong export potential, the policy of reservation pre-
vented upgrading products to bring them up to export quality. The policy was meant
to protect employment, but over the longer run it prevented India from tapping world
markets and creating better quality employment from export orientation. This weak-
ness in the policy was known, but there was no attempt to change policy in this area
because it was felt to be too sensitive politically.
2.2. Gradualism and continuity over time

India’s reforms have often been called gradualist rather than of the “big bang” variety.
Gradualism had the obvious disadvantage that the reforms took a long time, and the
flow of benefits was therefore delayed. However, they had the advantage of making
small changes to begin with and allowing time to build a broader consensus across
parties. Making policy changes in a democratic polity poses special challenges. Democ-
racy is not a consensual form of government. It is an intensely competitive and adver-
sarial form, in which political parties in opposition will engage in heated criticism of
those in power. However, while criticism from the opposition is essential for democ-
racy, economic actors also want assurance that policies that have worked well, will not
be reversed every time there is a change of government.
It can be argued that India’s gradualist approach helped build a consensus across
political parties that enabled the reforms to continue, even as the political parties run-
ning the government changed. The United Front (UF) government, which followed
the Narasimha Rao government which initiated the reforms, was in power from 1996
to 1998. It was a coalition which included the Communist Party of India, but it also
had as Finance Minister P. Chidambaram, a former Congress party member who had
an impeccable record as a reformer.1 Chidambaram’s presence in the UF ensured that
the government continued to implement many of the tax reforms initiated in 1991. He
continued the process of reducing import duties and articulated the objective of bring-
ing customs duties down to East Asian levels by 2000. The UF government also pushed
for opening the insurance sector to new private players, with foreign insurance compa-
nies allowed to have up to 26% foreign equity. However, this was strongly opposed by
the BJP. The government started the process of reducing the number of items reserved
for the small-scale sector by taking out 15 items in 1997. It also tried to introduce a
more rational approach to public sector reform by setting up the Disinvestment Com-
mission and asking it to recommend transparent ways of selling off PSEs, including
the possibility of handing over some PSEs entirely to the private sector.
The UF government was succeeded by the National Democratic Alliance (NDA)
coalition led by the BJP which was in power from 1998 to 2004. It continued the pro-
cess of tax reforms including the reduction in customs duties. More importantly, it

continued the policy of openness to foreign investment, setting to rest the fears of
many who felt that while the BJP was pro-domestic business, it would be anti-FDI. It
introduced legislation opening the insurance sector to new private insurers with for-
eign insurance companies allowed to hold 26% foreign equity, an initiative it had
strongly opposed when the UF tried to do it. It also lifted the ban on imports of con-
sumer goods in 2002.
The Congress-led United Progressive Alliance (UPA) government, with Manmohan
Singh as the Prime Minister, was in power from 2004 to 2014. Since Manmohan Singh
was the architect of the 1991 reforms, it was expected that reforms would continue
and they did, albeit in a gradualist manner. A major signal of continuity was that the
government undertook a commitment to fiscal consolidation implied by the Fiscal
Responsibility and Budget Management Act, which was passed by the previous govern-
ment a year earlier. The combined fiscal deficit of the central and state governments
declined sharply between 2003–2004 and 2007–2008 which created a supportive mac-
roeconomic environment for private investment. The gradualist process of reducing
import duties continued and at the end of the period the peak rate of duty was reduced
to 10%. The scope for FDI was expanded to increase the percentage of foreign equity
in Telecom from 49 to 74%, and in airlines from 26 to 49%. FDI in retailing was also
opened up, initially for “single brand retail”. Department stores engaged in multibrand
retailing were opened up much later, but subject to onerous conditions.
The UPA also launched an ambitious program of infrastructure development
through Public Private Partnerships (PPPs). The infrastructure deficit had become a
major constraint holding back India’s economic performance, and a massive increase
in investment was needed. This could not be done using budget resources alone,
because there were too many other claims on the budget. The strategy adopted was to
rely on PPP wherever possible. The effort was very successful for several years, with
PPP projects in roads, ports, airports, and power generation. However, it soon ran into
implementation problems because of delays in receiving environmental clearances, and
an inability to handle disputes efficiently. Reviving the momentum of this particular
reform should have high priority for the future.
Another important initiative of the UPA was the creation of Aadhar, a biometric
identity verification system to cover all residents. This was to be used to promote
financial inclusion and facilitate direct transfer of benefits in government subsidy
schemes. This was started by the UPA, but has been greatly expanded by the NDA
government that followed.
The UPA government also began the process of getting the states to agree to an
integrated goods and services tax in which both the center and the states would tax
goods and services with full provision of input tax credit. This was an important step
in reform of indirect taxation. It needed a Constitutional Amendment since the cen-
ter cannot tax beyond the production stage, whereas a value added tax requires an
unbroken chain extending to the retail stage. A bill was introduced in parliament,
but could not be passed during the tenure of the UPA due to opposition from BJP-
ruled states.

The current government under Prime Minister Narendra Modi took office in 2014
and its 5-year term runs up to 2019. There are sharp differences between the govern-
ment and opposition parties on social issues, most especially on growing incidents of
violence against minorities and the dalits, which are widely attributed to aggressive
Hindu nationalism and majoritarianism. However, the economic policy of the govern-
ment is not very different from the gradualist reforms attempted by earlier govern-
ments. Perhaps the only initiative which does not fit into the description of
continuity was the surprise demonetization of the two highest value notes (Rs 1000
and Rs 500) announced in November 2016. The move was officially justified on the
grounds that it would help uncover hidden cash hoards from income that had
escaped taxation, discourage counterfeiting and terrorist financing, reduce cash trans-
actions in the economy and thus would discourage illegal and tax-avoiding activity.
There is now a growing consensus that this initiative has proved to be much more
disruptive than the government expected and has not contributed much to the other
stated objectives.
On other economic issues, there is a high degree of continuity especially on the
following.
1 Reaffirmation of the commitment to follow a fiscally prudent policy, but with a new
time path for reducing the central government fiscal deficit to 3% of GDP by
2020–2021;
2 Continuation of the liberal industrial policy with efforts being made to improve the
ease of doing business;
3 Continuation of the policy of openness to foreign trade, though customs duties on a
number of items were raised in the 2018–2019 budget. It is not clear how the cur-
rent global concern about trade wars will evolve but that could disrupt continuity in
this area.
4 Continued openness to FDI with an expansion of the areas where it is allowed,
including most notably defense, and also raising the equity cap in insurance from 26
to 49%.
5 Reiterating the commitment to improve infrastructure through a combination of
public investment and PPPs.
6 Creating a digital IT infrastructure, based on Aadhar, the biometric identity system
introduced by the UPA government, and using it to achieve financial inclusion and
direct benefit transfers.
The most important new step taken by the Modi government is the introduction of
a Goods and Services Tax (GST). This major reform of the system of domestic indirect
taxes was initiated by the UPA government and was opposed at the time by the BJP-
ruled states. However, the government can legitimately claim the credit for having got
the Constitutional amendment done and introducing the system from mid-2017
onward. There are criticisms of the implementation of the GST. There are too many
rates, too large a set of commodities has been excluded, and the system is more

complex than it needs to be especially in the matter of crediting taxes paid on inputs
and providing refunds to exporters. The government has acknowledged many of these
problems and hopefully, they will be addressed over time. Once that is done, India will
have a state-of-the-art domestic indirect tax system.
A second major reform is the Insolvency and Bankruptcy Code which is expected
to speed up the process of debt recovery from companies defaulting on debt payments.
The first few companies are now emerging from this process, with large haircuts for
the banks and a complete loss of the company for the defaulting owners. Hopefully, as
more successful resolutions emerge, it will create the right incentives for bankers to
accept haircuts that are transparently determined and for borrowers to repay debts or
face the consequences.
A new initiative in labor market reforms is the introduction of a system of fixed-
term contracts for employees which allows the automatic termination of a service at
the end of the contract period. It remains to be seen whether this will introduce the
much needed flexibility in hiring labor, with a possibility of downsizing when market
conditions require.
3. Impact of the Reforms on Growth
We now present an assessment of the impact of the reforms on different aspects of

performance. For this purpose, the reform agenda is not just what was announced in
1991, but the whole agenda as it has evolved over time with some additions under suc-
cessive governments.
3.1. Impact on growth

The immediate impact on growth was clearly positive, with the rate of growth of GDP
averaging 6.5% in the 8 years 1992–1993 to 1999–2000. However, De Long (2003) pre-
sents a more negative assessment, based on comparing the growth performance in the
1980s with the 1990s.
De Long points out that the incremental reforms in the 1980s had produced an average
growth rate of 5.6% in the period 1980–1981 to 1989–1990, which was a full 2 percentage
points higher than the long-term growth achieved before 1980. Since the growth rate in the
1990s, at 5.8%, was only marginally higher than in the previous decade, De Long suggests
that perhaps the reforms of the 1980s, which consisted mainly of operating the existing con-
trol system with a more pro-business approach, had a much greater impact on growth than
the so-called deeper reforms of 1991. Rodrik and Subramanian (2004), build on the De Long
critique to argue that the emphasis on external liberalization in trade and foreign investment
in the reforms of the 1990s may have been much applauded by international organizations,
but was actually much less important than operating the domestic controls in a more result-
oriented manner.
I have argued against the De Long and Rodrik-Subramanian thesis in Ahluwalia
(2016) on several grounds. First, the high growth of the 1980s was fueled in part by an

excessively expansionary fiscal policy. The combined fiscal deficit of the center and
states averaged 6.9% of GDP in the first half of the 1980s and increased to 8.6% in the
second half. This was bound to have a negative effect on GDP growth, and it did sur-
face in the form of the crisis of 1991–1992. The measured growth rate in the 1980s is,
therefore, not an appropriate basis because it was not sustainable. Furthermore, the cri-
sis it created lowered growth in the early years of the 1990s. The growth rate for the
1990s as a whole includes the crisis year of 1991–1992, and, therefore, understates the
effect of the reforms. If we consider only the post reform years, the growth rate in the
eight post reforms years 1992–1993 to 1999–2000 was 6.5%, which is fairly respectable.
It can be argued that a growth of 6.5% is an “underwhelming” response for a major
reform effort. The reason is that the reforms, though bold in scope, were implemented
only gradually, and, therefore, took time to have their full impact. For example, the
reduction in customs duties was stretched over several years as was the dereservation
of production for the small-scale sector. Reforms in state indirect taxes took place only
in 2005, and the integrated GST for the center and states combined, a major bipartisan
reform, happened only in July 2017.
The 15-year period 2003–2004 to 2017–2018 therefore provides a better measure of
the impact of the reforms. The average growth rate of GDP in this period comes to
7.6%, which is a full 2.0 percentage points higher than the growth rate of 5.6% in the
period 1980–1981 to 1991–1992. This growth performance is not as good as that dis-
played by the original Gang of Four (Hong Kong, Singapore, South Korea, and Tai-
wan), or more recently by China which grew at a phenomenal 10% per year over a
30-year period! However, growing at 7.6% over 15 years is a remarkable achievement.
Table 1 presents a comparison of India’s growth performance with that of China,
the ASEAN group, and all other Emerging Markets and Developing Economies
(EMDEs). It shows that in the prereforms period 1980–1991, India grew much more
slowly than China and even slower than the ASEAN 10, though it grew faster than the
group of other EMDEs excluding India and China. In the first post-reforms period
1992–2002, India’s growth was still much slower than China’s, but it edged above the
Table 1 India’s GDP growth compared to other countries/groups of countries
1980–1991 1992–2002 2003–2017 2018–2023
Advanced economies 3.0 2.7 1.7 1.9

All EMDEs 3.4 3.8 6.0 5.0
India 5.2 5.8 7.6 7.9
China 9.2 10.2 9.4 6.1
ASEAN-10 6.1 4.6 5.4 5.0
All EMDEs excl. India and China 2.6 2.6 4.3 3.7
Source: IMF (2017).

ASEAN-10 stands for the ten members of the Association of South East Asian Nations; EMDE
stands for emerging markets and developing economies.

14%
Indira Rajiv Narasimha Narendra
Gandhi Gandhi Rao AB Vajpayee Manmohan Singh Modi
12% (INC) (INC) (INC) (NDA) (UPA) (NDA)
5.5% 5.7% 5.2% 6.0% 7.8% 7.2%
10%
8%
6%
4%
2%
0%
Figure 1 Growth rates of GDP.

Source: CSO (various years).
Notes: (i) Growth rates up to 2011–12 are from the old series of GDP at factor cost, 2004–05
prices. Growth rates from 2012–13 onwards are from the new series for GVA at 2011–12 prices.
GVA corresponds broadly with GDP at factor cost. (ii) Arrows indicate the span of different
governments under different Prime Ministers. The United Front government, which was there
only for two years from 1996 to 1998, is not indicated. The percentages shown below the arrows
are the average growth rate in the span of the government. Since the terms of governments do
not coincide with fiscal years, there is an unavoidable approximation.
ASEAN 10. In the second post-reforms period 2003–2017, India grew significantly fas-
ter than the ASEAN 10, but still slower than China, though the gap narrowed. The
IMF’s projection for the period 2018–2023 shows that China is expected to slow down
to 6.1% per year, while India’s growth rate will average 7.9% per year overtaking
China’s. It is reasonable to conclude that the cumulative effect of India’s reforms has been
to unleash a fairly robust growth process, even if they have taken a little too long to do so.
Figure 1 provides a graphical picture of India’s growth from 1980 onward indicat-
ing the growth rates under different governments. It presents a picture of gradually
increasing growth in successive governments.
3.2. Were the reforms inclusive?

Traditionally, inclusiveness in India has been viewed in terms of the impact on poverty
reduction. Viewed from this lens, there is no doubt that the reforms reduced poverty
once the high growth kicked in. Table 2 summarizes the picture using the official esti-
mates of poverty based on a poverty line, which is actually very close to the

Table 2 Growth and poverty in India
Annual growth of GDP (%) Population in poverty
Economy Agriculture % in poverty Millions
1993–1994 — — 45.3 403.7

2004–2005 6.2 2.9 37.2 407.1
2011–2012 8.5 3.5 21.9 269.8
Note: The annual averages are for the period preceding the year indicated. Thus, 6.2% is the
annual average growth of GSP from 1993–1994 to 2004–2005.
Source: Central Statistics Office (2014) and Rangarajan (2014).
international poverty line used by the World Bank. The first 11 years of the reforms
saw a decline in the percentage of the population in poverty from 45.3% to 37.2%.
However, this decline was not sharp enough to offset the increase in total population,
so the absolute number of people living below poverty line actually increased margin-
ally. In the latest period 2004–2005 to 2011–2012, the situation changed dramatically.
The percentage in poverty declined much more sharply, and the numbers in poverty
fell by 137 million.
The sharper reduction in poverty in the most recent period can be attributed to
three distinct factors. First, as shown in Table 2, the growth rate of GDP averaged
8.5% per year (about 7% per capita), in the most recent period compared with only
6.2% (4.2% per capita) in the earlier period. The faster growth rate in per-capita
income would be expected to reduce the extent of poverty provided there is no signifi-
cant change in the share of income going to the lower income groups. This is the “pure
trickle down” effect from faster growth. Second, the composition of growth in the lat-
ter period was different as agricultural growth accelerated to 3.5% per year compared
with only 2.9% in the earlier period. This demonstrates the importance of the composi-
tion of growth which makes some growth processes more likely to ensure trickling.
Third, the expansion of targeted anti-poverty programs in the second period, including
especially the rural employment guarantee, the program for supply of subsidized food
to lower income groups, and various rural livelihood support programs, may also have
contributed to a faster reduction in poverty (e.g. Himanshu & Sen, 2013).
Advocates of poverty reduction strategies tend to focus almost exclusively on pro-
grams directed at poverty alleviation, but the other two factors are also important.
More research is needed to quantify the relative importance of these three components
in different periods of time and perhaps also in different states.
3.3. Employment generation

A somewhat different test of inclusiveness is whether the growth generated sufficient
employment. Paucity of data on the extent of employment makes it difficult to assess
the nature and extent of the problem. The only official data on employment come

from the Employment and Unemployment Surveys conducted every 5 years by the
National Sample Survey Office (NSSO) and the latest data available are for
2011–2012.2 These data show unemployment at 3.14% in 2011–2012. However, the
low levels of open unemployment do not mean that employment is not a problem. In
India’s economic circumstances, a lack of employment opportunities will not show up
as open unemployment for the simple reason that people cannot afford to remain
unemployed for long. In the absence of social security payments, they take up whatever
jobs they can find to eke out a living.
The real problem is that too many people are engaged in forms of employment that
do not come up to their expectations. This is especially so for the more educated youn-
ger members of the labor force. This problem was probably moderated in recent years
as children stayed longer in schools. However, as these cohorts reach school leaving
age, we will have young people joining the labor force who have gained an education,
and are hoping to get good-quality nonagricultural jobs in urban areas. They are
unlikely to be satisfied with low productivity self-employment, and will look for more
secure employment in the organized sector.
The NSSO data show that organized sector employment expanded by 58 million
between 2004–2005 and 2011–2012, but 84% of the increase was in what is called
“informal employment,” that is, employment of temporary workers on contracts with-
out the full benefits of social security. The better educated youth entering the labor
force will not be satisfied by these jobs. They are looking for jobs in line with what
they believe are their superior qualifications.
One of the reasons put forward for the slow growth of employment is that the
manufacturing sector has not grown as rapidly as was hoped. The fact is that
manufacturing did accelerate from an average of 5% growth per year in the pre-
reforms period 1980–1981 to 1991–1992 to 8.3% in the period 2003–2004 to
2017–2018. However, this is much slower than the double-digit growth rate in
manufacturing often mentioned in government documents as the target.
A possible reason for the slow growth in manufacturing is that units engaged in
manufacturing are increasingly outsourcing activities such as cleaning, catering for fac-
tory canteens, gardening, transport activities, and the provision of security to third
parties. This reduces measured value added in manufacturing, shifting it to the services
sector. The National accounts data do show that service sector GDP growth accelerated
sharply through these years from an average 6.3% in the period 1980–1981 to
1991–1992 to 9% in the period 2003–2004 to 2017–2018. The growth in employment
in the services sector would have offset any decline in employment in the manufactur-
ing sector, but the quality of service sector employment would have been poorer, with
less social security and lower wages.
It is sometimes said that India need not pursue high growth in manufacturing if it
can leap frog to being a services economy. There is no doubt that India has a compara-
tive advantage in certain high end services in the information technology (IT) sector,
but that is not a reason for accepting low growth in manufacturing. The high growth
in IT-related services is slowing down as the base expands, but more importantly

manufacturing jobs need less-skilled persons than high end services. Advanced coun-
tries are seeing a decline in the share of the manufacturing sector because it is more
cost effective for them to import manufactured goods from developing countries. India
should try to improve its competitiveness in manufacturing, not only to meet a large
part of its own demand, but also to seek a reasonable share in the global market for
exports of manufactures.
There are many reasons why India’s reforms have failed to generate the kind of
growth in labor-intensive manufacturing that was achieved by East Asian countries.
One reason, mentioned earlier, is that many of the goods which could have formed the
basis for such an export strategy, remained reserved for small-scale production in the
first 10 years of the reforms! This particular policy constraint is now behind us, but
there are others in play. India has yet to develop infrastructure of the quality which is
essential to support export-oriented industrialization. India’s labor laws also have to
share the blame. They make it extremely difficult to close down a unit or retrench
labor, and they are also unduly complex. Achieving a better employment outcome in
manufacturing depends upon finding solutions to these problems.
3.4. Education, health services, clean drinking water, and sanitation

An inclusive strategy must ensure the delivery of critical services such as education,
health, clean drinking water, and sanitation to the mass of the population. This would
not only directly improve welfare, it would also improve human capabilities, and have
a positive impact on growth. The following is a highly encapsulated assessment of the
performance in these dimensions.
1 Access to schools has improved considerably, with the enrolment of children in pri-
mary school now being virtually universal. Gender gaps in enrollment have nar-
rowed and pupil teacher ratios have also improved. However, learning outcomes
remain poor. ASER Centre (2017) reported that about 57% of Standard VIII stu-
dents in rural India could not do simple division, and 25% could not read a Stan-
dard II text. With such weak foundations, a large proportion of the children in
school are bound to fall behind in learning as they progress to higher stages leading
to very low learning.
2 Health outcome indicators such as life expectancy, infant mortality, maternal mor-
tality, measures of stunting, and weight for age of children have all shown improve-
ment, but the rate of improvement is too slow. This is an area where performance
needs to be greatly improved.
3 Sanitation is directly linked to health status, especially for children, and this has long
been a problem area. However, the situation is improving. In 1993, only 12% of the
rural households had access to a toilet. This has increased to 50% in 2016 (NSSO,
2017). The government’s Swatch Bharat program has emphasized the provision of
toilets for every rural household, and there is evidence that it is making a difference.

3.5. Inequality of income and wealth

The degree of inequality in income and wealth is attracting attention globally and
India is no exception. There are no official data on the distribution of income. The
only information available is from the two India Human Development Surveys con-
ducted jointly by the National Council of Applied Economic Research (NCAER) and
the University of Maryland. They show a Gini coefficient of income distribution of
0.54 in 2005 and 0.55 in 2012. This puts India among the countries with relatively high
levels of inequality.
An aspect of inequality that has received growing attention is the concentration of
wealth. The 2018 Forbes list of billionaires reports 119 billionaires in India, the largest
number after the USA, China, and Germany. While some of them have created their
own fortunes, and added a great deal to the GDP in the process, a very large propor-
tion have inherited their wealth.
Inequalities in income and wealth can create a perception of unfairness which can
greatly weaken the social fabric. What is perceived to be unfair is ultimately a subjec-
tive judgement, but in a democracy it is also amenable to political manipulation. Policy
makers have to be alert to deal credibly with growing dissatisfaction on this count.
3.6. Environmental sustainability

An exhaustive treatment of the environmental issues is beyond the scope of this paper,
but it is necessary to acknowledge that this is the area where progress is least evident.
There are several metrics associated with environmental sustainability such as main-
taining the cleanliness of natural water bodies such as lakes and rivers, controlling air
pollution in our cities, preventing excessive withdrawal of ground water, containing
the growth of carbon emissions, and expanding the size as well as the quality of forest
cover. Unlike the case with health and education, where there are shortfalls from tar-
gets but at least all indicators show progress, in the case of the environment, all rele-
vant indicators show continuing deterioration!
The good news is that this aspect is now recognized in policy-making circles, and
there is also much greater public awareness. The bad news is that this awareness has
not yet reached the stage where it puts strong political pressure on governments at dif-
ferent levels to take strong action. As a result, we have yet to evolve credible plans for
turning around the continuing deterioration.
4. Prospects for the Future
The present government has not set any official targets for growth in the medium
term, but government spokespersons have talked of returning to a growth trajectory of
“8% plus” in the near future. This is not an unreasonable target since the economy did
achieve 8.35% growth over the 9-year period 2003–2004 to 2011–2012. However, one
should keep in mind that nothing is preordained and there are many examples of
countries that have grown rapidly for a while and then hit a ceiling when other

constraints become binding. This is the basic idea behind the so-called middle income
trap which builds on the notion that countries can get from low to middle income sta-
tus by dealing with some basic problems, but they then face more complex challenges
which call for new policy responses and perhaps even the development of new
institutions.
What are the key policy reforms that India needs to work on? It is easy to compile
a long list by skimming recent Plan documents prepared by the erstwhile Planning
Commission, or the reports of its successor the NITI Aayog. What is important is to
identify the critical reforms that will address the most important constraints holding
back the economy at present. The following six items stand out from the discussion in
this paper.
1 Macroeconomic stability is a precondition for successful growth in an open econ-

omy and the key elements are a credible monetary policy, fiscal sustainability, and
sensible exchange rate management. The recent establishment of a monetary policy
committee, independent of the government, takes care of one leg of this tripod.
However, fiscal sustainability is a weak point. The combined fiscal deficit of the cen-
tre and the states is 6.7% of GDP which is twice that in other emerging market
countries. The central government has announced a trajectory for reducing its fiscal
deficit over the next three years. A similar trajectory is expected to be put in place for
the states based on the recommendations of the Finance Commission expected in
2019. Performance against these trajectories will be carefully watched especially since
similar trajectories announced earlier have not been adhered to. Credible progress in
fiscal consolidation is particularly important at a time when India faces an expanded
current account deficit. India should be able to finance a current account deficit of
around 2% of GDP by long term capital inflows, but nothing scares foreign capital as
much as fiscal irresponsibility and a sudden outflow can be seriously destabilizing.)
Exchange rate management, the third leg of the tripod, will also be a challenge in a
world which is highly interconnected and also volatile. This issue is discussed in
Mohan and Ray (2018) and it is mentioned here mainly to emphasize its importance.
2 Infrastructure deficiencies pose an immediate challenge for India. If India is to
aim at 8 plus percent growth, we need to ensure that the rate of investment in
infrastructure as a percent of GDP goes up to 9% as was envisaged in the Twelfth
Plan. Since the availability of public resources is limited, and there are heavy
demands for these resources from other sectors, much of the infrastructure invest-
ment will have to come from PPP and this requires urgent resolution of the many
constraints which interrupted the growth of PPP in infrastructure. Possible
responses include: (a) early resolution of the problems faced by ongoing infra-
structure projects which are “stuck” for one reason or another; (b) the passing of
an Act of Parliament which would establish the legal framework within which
PPPs in infrastructure would be attempted; and (c) the establishment of an over-
arching dispute resolution process to deal with disputes arising from PPPs in all
sectors.

3 India will need to invest more in health and education, and this burden must be
borne by both the central government and the state governments. More impor-
tantly, resources are only part of the problem. There is also a problem of state
capacity. The administrative structures that deliver these essential services are all
at the state and local government levels. Strong notions of state sovereignty will
ensure that states will resist micro-management by the centre, and in any case
such micro-management is unlikely to work. Strengthening state level systems is
critical and this can only be done by the relevant political processes at the state
and local levels
4 Top priority needs to be given to resolve the problems afflicting the GST. Amending
the Constitution to make a GST possible was a major advance, but the GST that has
emerged is structurally flawed. Far too many commodities have been excluded and
there are also too many rates. It is unlikely that this can be changed before the gen-
eral election of 2019, but a major effort should be made to clean up the GST imme-
diately afterward, so that the economy can get the full benefit that was expected
from the GST.
5 The Insolvency and Bankruptcy Code has become operational and, assuming it is
not derailed through court interventions, it will put in place the right incentives for
debtors in future. It will also speed up the problem of resolution of nonperforming
assets, but the public sector banks will have to take large haircuts which will erode
their capital. This presents the government with some strategic choices. If the gov-
ernment insists on retaining a 51% share in the equity of these banks, it will have to
make large capital contributions from the budget, but this will either seriously dis-
rupt the trajectory of reducing the fiscal deficit, or force a highly disruptive cut in
other expenditures. Alternatively, the government could agree to reduce the govern-
ment’s stake in at least some of the public sector banks below 51% and try to attract
private capital including by strategic investors. This would be a desirable step but is
not likely to be attempted in the year of a general election. It will not be politically
easy afterwards either, but the issue needs to be thoroughly debated so that an
informed view can be taken.
6 More generally, the economy needs to be run in a manner which places domestic
producers under competitive pressure to modernize their production and remain
competitive internationally. This can only be done if the economy remains open to
both foreign trade and FDI. This has been the consistent thrust of the gradualist
reforms pursued by successive governments, but the rise of protectionism in
developed countries poses a danger. It could give a fillip to those who favor greater
protection for domestic industry. It will require wisdom and statesmanship to stay
the course and remain open, while responding to the legitimate concerns of
domestic producers where changes in government policy could increase their
competitiveness.
These are only some of the priority areas emerging from this paper. There are
many others related to reforms in agriculture, energy pricing, management of scarce

water resources, and managing the challenge of urbanization. Constraints of space have
ruled out exploring these issues.
Notes
1 Chidambaram had left the Congress Party when the Tamil Nadu wing of the party, led by
G. Moopanar, broke with Narasimha Rao on the issue of aligning with the AIADMK for the
1996 general election. Moopanar formed the Tamil Maanila Congress (TMC) and Chidam-
baram was elected on a TMC ticket and was the Finance Minister of the UF government.
2 The NSSO have decided to conduct surveys annually, but no new data are available as yet.
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from URL: www.planningcommission.nic.in
Rodrik D. & Subramanian A. (2004). From “Hindu growth” to productivity surge: The mystery
of the Indian growth transition. IMF Staff Papers, 52 (2), 193–228.

PRIVATIZATION
Outline
• What is privatization?
• Causes of Privatization
• The objectives/purpose of disinvestment
• Imp. aspects of privatization in India

• What is privatization?
• Privatization (P) is closely associated with the L&G
• Privatization is the transfer of control of ownership of

economic resources from the public sector to the private
sector.
• It means a decline in the role of the public sector as there is a

shift in the property rights from the state to private ownership.
• For e.g, shedding of the ownership or management of a
government owned enterprise.
• Govt. companies are converted into private
companies by:
• (a) withdrawal of the government from
ownership and management of public sector
companies, and/or
• (b) by outright sale of public sector companies.
• Causes of Privatization
• The public sector had been experiencing various problems,

since planning, such as low efficiency and profitability,
mounting losses, excessive political interference, lack of
autonomy, labour problems and delays in completion of
projects.
• Hence, to remedy this situation, with NEP in 1991
privatization was also initiated into the Indian economy.
• Another term for privatization is Disinvestment.
• i.e, Privatisation of the public sector enterprises by
selling off part of the equity of PSEs to the public
(private sector) is known as disinvestment.
• The objectives/purpose of disinvestment, according to
the government:
• to raise efficiency of PSUs through increased
competition, increase consumer satisfaction with better
quality goods and services, facilitate modernisation
(upgrading technology) and most importantly removing
political interference.
• It was also envisaged that private capital and managerial
capabilities could be effectively utilised to improve the
performance of the PSUs.
• The govt. envisaged that privatisation could provide
strong impetus to the inflow of FDI.
• Imp. aspects of privatization in India:
• 1) Dereservation of Public Sector : The number of

industries reserved for (managed by) the public sector
were reduced in a phased manner. (Now few are left:
Railways, etc.). This has opened more areas of
investment for the private sector and increased
competition for the public sector forcing greater
accountability and efficiency.
• 2) Disinvestment Policies : Till 1999-2000
disinvestment was done basically through sale of
minority shares but since then the government has
undertaken strategic sale of it’s equity to the private
sector handing over complete management control.
• 3) Autonomy to Public sector :
• The government has also made attempts to
improve the efficiency of PSUs by giving them
autonomy in taking managerial decisions.
• For e.g., Greater autonomy was granted to
some PSUs with special status as maharatnas,
navratnas and miniratnas, to take their own
decisions.
Public Enterprise Policies and Navratnas
• In order to improve efficiency, infuse professionalism and enable
them to compete more effectively in the liberalised global
environment, the government identifies PSEs and Declare/designate
them with different status (such as maharatnas, navratnas and
miniratnas).
• A few examples of public enterprises with their status are as
follows:
• (i) Maharatnas – BHEL, BPCL, HPCL, ONGC, SAIL, NTPC,
IOCL, etc.
• (ii) Navratnas – HAL (Hindustan Aeronautics Limited), NALCO,
etc.
• (iii) Miniratnas – BSNL, Airport Authority of India, IRCTC, etc.
• Many of these profitable PSEs were originally
formed during the 1950s and 1960s when self-
reliance was an important element of public policy.
They were set up with the intention of providing
infrastructure and direct employment to the public so
that quality end-product reaches the masses at a
nominal cost and the companies themselves were
made accountable to all stakeholders.
• The granting of status resulted in better performance of these
companies.
• Scholars allege that instead of facilitating public enterprises in
their expansion and enabling them to become global players,
the government partly privatised them through disinvestment.
• Of late, the government has decided to retain them in the
public sector and enable them to expand themselves in the
global markets and raise resources by themselves from
financial markets.
• They were given greater managerial and operational
autonomy, in taking various decisions to run the
company efficiently and thus increase their profits.
• (Greater operational, financial and managerial
autonomy has also been granted to profit-making
enterprises referred to as miniratnas).
Liberalisation And Globalisation: WHERE IS INDIA HEADING?
Author(s): Manmohan Singh
Source: World Affairs: The Journal of International Issues , JANUARY-MARCH 1997,
Vol. 1, No. 1 (JANUARY-MARCH 1997), pp. 16-42
Published by: Kapur Surya Foundation
Stable URL: https://www.jstor.org/stable/45064397
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INTE RV I E W
Liberalisation
And Globalisation:
WHERE IS INDIA HEADING?
Manmohan Singh,
the architect of India's new economic track,
reflects on India's Development Strategies - Past, Present
Future
World Affairs:
You have, for almost a quarter of a century, been associ
policy formulation as an economist, as Vice Chairman of the Planni
and as Finance Minister. Inspite of the positive trends during the last
position has drifted to a point where we are ranked 137th in the
Nations (UN) reports on the human development index. This is far
other countries in Asia and other areas except Africa. Why does
opinion, find itself in such a position?
Manmohan Singh : The first thing I would like to say is that

India's position to 137th in these UN reports is in no way con
the policies of the last five years. In fact, but for the econom
India's socio-economic situation would have been even wor
showing as per the UN index is the cumulative result of the s
growth and of the inadequate attention that has been paid to
ment, in particular to universalisation of elementary educatio
control of infant mortality over the last forty years. The thru
reforms initiated in 1991 was to move the economy to a high
growth, to gain additional manoeuvrability in dealing with
backlog in important social sectors such as education and health
social safety nets to protect the vulnerable sections during th
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MANMOHAN SINGH
phase. Fundamentally, if India is to move up

we ought to grow at an annual rate of 7-8 pe
many East and Southeast Asian countries. To
ductivity of investible resources, particularly
Government gets a return of no moire than 2 p
In fact, this rate of return is much lower th
borrowing by which these investments have
unsustainable, and is a major cause of the se
ment now faces. Apart from improving the r
tor investments both at the Centre and at t
must reduce its many explicit and implicit su
usefulness and divert their proceeds for incr
health, and for the establishment of credible
people. India also needs to improve its saving
to which is a sharp increase in the rate of the
rently are insignificant. To improve overall p
Government must also encourage internal an
Indian products become internationally com
time. The viability of our balance of payme
the growth of the economy. For this a sharp
absolutely essential which depends on their
A sound export performance will also enh
which we need in order to increase investib
technology and management skills.
WA: In sum your central argument is that a hig

fundamental precondition? It is only after we hav
we can have a real spillover effect into the social sect
MS: Yes the first precondition is acceleration

the difference I have with the UN reports. O
writing about development but never come
questions as to how you are going to find th
growth and increased spending on social secto
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INTERVIEW
We adopted a strategy growth rate of only 3.5 per cent will
where steel was the king- never spillover; large growth rates do
pin, whereas we live in a spread out provided you have cho-

society where knowledge is sen an appropriate strategy of devel-
power. In a country such as opment. If you opt for a labour
ours where you have a lit- intensive strategy, which does not
eracy rate of 53 per cent lay emphasis on excessive capital
intensity, you will have fast expan-
with a dubious quality, it is
sion of employment. This is the
not surprising that our
quickest route to provide social
growth rate is so low.
benefits in our country.
WA: Would you say that the development strategy that India adopted after
independence was seriously ßawed insofar as there was too much pre-occupation with
transferring our limited resources to the social sector as against industry and other
productive sectors?
MS: No, this was not the case. We have not paid adequate attention to social
sectors in our development strategy. We adopted a strategy where steel was
the kingpin, whereas we live in a society where knowledge is power. In a
country such as ours where you have a literacy rate of 53 per cent with a
dubious quality, it is not surprising that our growth rate is so low. We put a
lot of money into industry in the hope that this input would accelerate our
growth. Jawaharlal Nehru's idea of the public sector was very different from
the way it has evolved through the years. Whether you have a socialist or a
capitalist economy, profits have always been the principal source of accumula-
tion. Therefore, if you socialise profits through the public sector you will kill
two birds with one stone: first, you accelerate the rate of saving through the
prevention of superfluous consumption by the rich and thereby accelerate the
process of accumulation; second, by socialising profits you can reduce the
inequalities of income and wealth. Nehru hoped that we would have a public
sector that would generate large surpluses. But the public sector in our econ-
omy doesn't even yield a return to pay the interest on the capital the govern-
ment has borrowed. This kind of public sector neither serves the cause of
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MANMOHAN SINGH
growth nor the cause of social justice. Our g

aged 3.5 per cent during the first three deca
the annual increase of population by 2.2 to 2.3
ment in national income was devoted to the
tion. As a result, there was no improvement
the proportion of people living below the pov
the first three decades of India's independenc
WA: How does India's growth rate of the 1990s co

the Third World? Haven't all these attempts to
resulted in this serious indebtedness?
MS: In the 1980s, certainly, India's growth ra

and it compares favourably with the growth
and Africa. It has not been as good as East and
is true that this growth was financed by exc
and abroad. The accumulation of this debt
making economic management more difficul
WA: How is it that all of a sudden between 1989-

the extent that it did?
MS: Because we heavily relied on borrowin

were on commercial terms. In the 1980s India
drastically cut as a result of China's entry int
Association. With India's balance of payment
which had reached 2 to 3 per cent of the
we had to rely on commercial borrowings. N
of interest with a 10-year grace period, the
borrow on commercial terms at the market r
the debt situation becomes explosive resultin
dence. And this is what happened. With the
the Indian government tottering, the m
making the task of managing our balance of
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INTERVIEW
During the last five years we have not increa

mercial borrowings; It has become very sma
dollars per annum. When our Government c
debt was about 41 per cent of the GDP. Now
thing I can say is that the management of ext
In terms of the GDP, the debt service ratio
than 26 per cent. On the other hand, we have
ing internal debt. Its proportion has not cha
but it has not decreased either. For more effe
nal debt there is really no other way except t
ing fiscal deficits.
W A: Does it mean that there is nothing much t

about expenditures?
MS: Cutting expenditures is difficult. It mea

interests. Besides, there were a number of po
Babri Masjid, general elections in 1996, elec
this made our task difficult. Even
The tax structure must remain then, in the first two years deter-
mined efforts were made to cut
moderate, simple, broad-based
expenditures. Export subsidies
and easy for people to comply
were abolished. We raised fer-
with. The tax structure we had,
whether direct or indirect, was tiliser prices in one go by 30 per
cent. Then we decontrolled
so complex that it took me a
phosphates and potash. There are
full five years to set it right.
limits to what one can do in
expenditure cuts. On the other

hand, there is a large scope for tax increases. But, we must be careful in no
raising the tax rates. They must remain moderate, simple, broad-based and
easy for people to comply with. The tax structure we had, whether direct o
indirect, was so complex that it took me a full five years to set it right. I think
that the overall structure now is in reasonably good shape. I have no doubt
my mind that there is still massive tax evasion in the country, evasion of
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MANMOHAN SINGH
income tax, of excise tax, and others. A tighte

situation somewhat better. In fact, it is already
ing of the tax rate has led to an improvement
our GDP. But it is still not enough. Improvem
now a priority concern. So also, is the task of
tivity and profitability of the public sector.
WA: Since you are one of the architects of India's

highlight the broad framework of this policy? W
accomplishments and its principal failure?
MS: As I said in my reply to the first questio

the new economic policy was to restore macr
national confidence in our economy. When
power, India's foreign exchange reserves had
to pledge abroad official gold to raise even a
imports. Non-resident Indians were withdr
banks. The fiscal deficit of the Central Govern
per cent of GDP in 1990-91. Similarly, the ba
current account in 1990-91 was at an unsusta
our GDP. When we came into office, inflati
digit levels and reached over 17 per cent in S
duction and exports were sliding downwar
threatened a severe recession and large-scale u
We grappled firmly with this immediate cr
programme to address the basic issue of co
resource use in various sectors of the econo
everyone to see. In the crisis year 1991-92
growth of 1.8 per cent. But in the subsequent
rate of the economy was 5.8 per cent, better
5.6 per cent. In 1995-96, the economy grew a
industrial production increased by nearly 12
suffered due to the disappearance of our trad
Soviet Union, but in the last three years our
VOL 1 NO 1 JAN - MAR 1997 WORLD AFFAIRS 21

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value terms at an annual rate of 18 - 21 per

improvement in our balance of payments.
declined from 3.5 per cent of the GDP in 19
1995-96. There has also been a sharp improvem
Since 1993-94, India has been able to attract p
and direct, at an average annual rate of US$5
Central Government was 8.2 per cent of t
it was reduced to 5.9 per cent.
When our Government left
Although critics have been office, the annual inflation rate
claiming that the proportion was less than 5 per cent. In the
of people living below the initial 2 years, fiscal compression
poverty line has increased did affect our ability to increase
during the last four years, social spending. However since
they have not produced any 1993-94, the expenditure on
credible evidence to that social services and on anti-poverty
effect. Besides, five programmes
years is has greatly increased.
too short a period toAlthough
make critics
a have been claim-
precise analysis of theing impact
that the proportion of people
of new policies on the living below the poverty line has
poverty profile. increased during the last four
years, they have not produced any
credible evidence to that effect.
Besides, five years is too short a period to make a precise analysis of the
impact of new policies on the poverty profile. However, I am convinced that
the longer-term impact will be to reduce and ultimately eliminate the hard
core of poverty.
Our strategy was to bring about macro-economic stability in the shortest
possible period and then to launch a wide-ranging programme of structural
reforms to increase the dynamism of our industrial economy, exports and the
financial system. We sought to reverse the process of declining terms of
trade of agriculture by providing our farmers more remunerative prices,
encouraging the growth of agro-processing and agricultural exports. Zonal
restrictions on the movement of foodgrains were removed.
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MANMOHAN SINGH
On the international plane, we opened up t

pate more effectively in the evolving world
our technology management and marketing
import liberalisation would destroy India
unfounded. In fact, it has strengthened bo
exports. Growth of industrial production an
96 are testimony to this fact.
Programmes of social development - anti-po
health, and rural housing - received special at
duced a nation-wide scheme to provide schoo
and to allocate a monthly pension of Rs 75
and above living below the poverty line. Pre
grant of Rs 300 for every pregnancy to buy
selves and their children.
Under the Indira Niwas Yojana, one million
for the poor in rural areas. The Jawahar Yojana,
and the Prime Minister's Rozgar Yojana prov
employment support to the vulnerable sections
Thus our strategy was two-fold:
(i) To remove industrial and import contro

more rapid growth of our economy and its m
(ii) To use accelerated growth to find large
problems of poverty, ignorance and disease.
The public distribution system was revamp
ticular attention to the needs of people li
blocks which contain the largest mass of poo
WA: Many argue, both inside and outside India , tha

Do you agree with this assessment? And do you thin
economic upliftmenťof this country through this met
MS: In essence, we are continuing with the

us by Nehru. However, as he used to say: "W

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INTERVIEW
one cannot be a prisoner of the past." Soci

be adjusted to suit the changing needs of th
changes in our economic policies for indus
and the role of foreign capital. Howeve
unchanged. These are to build an economy
want and exploitation, to provide equal opp
lead a Ufe of dignity and self-respect, and
reliance in the sense that we should not be
external support props (such as
Government to Government
Our objective is to build a concessional aid) to sustain our
dynamic competitive economy growth. Self reliance, as Nehru
and a compassionate society. himself recognised, was not to
be equated to autarky.
It has to be understood that by
following a policy of meeting our import needs by way of exports an
mal commercial inflows of capital, we remain faithful to our goal of s
reliance. Thanks to improved export performance, our exports now fi
nearly 85 per cent of our imports as compared to 60 per cent or less b
our Government came into office.
I am confident that if our economy grows at the annual rate of 6-7 per
cent per annum and the pattern of growth is sufficiently labour-intensive, we
shall be able to abolish the hard core of poverty in the next 10 or 15 years. We
shall be able to create new employment opportunities on a scale large enough
to absorb all the new entrants to the labour force. We shall also be able to
expand social safety nets to take care of those who, because of various disabili-
ties, are unable to take part in mainstream economic activities. Our objective
is to build a dynamic competitive economy and a compassionate society.
WA: In other words, the mixed economy Nehruvian model is no more valid today
even if basic objectives remain unchanged?
MS: If you are in a hurry to industrialise, there is probably no other alter-

native to large-scale public investment. This is what happened in Russia

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MANMOHAN SINGH
and this is what happened to Japan during t

century. Thus Nehru was right when he insi
ing a leading role in the initial stages of the
you must remember that if you want this in
frontiers of sophisticated technology and re
an effective incentive system that is built int
well as into the macro-economy. In most cou
sector entrprises have not found effective
This is why we have had to make some b
policies. However, we remain committed t
evolved by Nehru.
WA: At the time of the inauguration of the new p

conceived, well-conceptualised and well-defined fr
pragmatically with adhoc applications as you went alo
MS: The Government did not have a detailed

gress election manifesto written by Rajiv
ideas which were later included in the econ
Government. However, after coming back fr
I had thought a good deal about the economi
In my Convocation address to the Indian Ins
lore in April 1991, I had presented a broad o
needed to cope with the difficulties. After w
sons, including members of the cabinet, C
senior civil servants, helped to give a coheren
views of international financial institutions
Fund (IMF) and World Bank - were also avail
cy formulation. However, the content of th
our own concerns and its priorities were als
the light of the evolving economic and politic
WA: What are the factors and circumstances that

external or internal, or was the change influenced by
VOL 1 NO 1 JAN - MAR 1 9 97 WORLD AFFAIRS 25

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INTERVIEW
MS: The grave economic crisis that we were

the command economy model in Eastern
mindset. Since the early 1980s, there was a g
that the old centralised planning model was n
Several committees had recommended liberalisation of the old control
regime. The events of 1990-91 gave added impetus to this Hne of thinking.
Both internal and external factors thus played a role in inducing change in
our thinking and gaining public acceptability for it.
WA: All these are general factors that certainly existed. But what about an accelerator?
Was there an event or an inddent that pushed the government onto the new track?
MS: As I said, the country found itself in the midst of a serious foreign
exchange crisis. Even our friends in the Bank of England declared that we
could not raise the badly-needed loan of US$500 million unless we physical-
ly shifted our gold to its vaults. What could be more humiliating than this.
WA: Specifically were there any external constraints? What about the IMF?
MS: IMF pressures come in if you want money. If you do not need money,
then you do not have to worry about the IMF. Bilaterally, nobody was willing
to come to our assistance. Yashwant Sinha, as finance minister, went to Japan
to seek assistance but there was no effective response. He visited Washington
as well to mobilise international support but was not successful. A terrible
experience for a country of 950 million people.
WA: But was there no other alternative for India?
MS: I didn't see any. The present government has not proposed an alternative
plan. They are doing more or less what we did, apart from some cosmetic
changes.
WA: They are talking about collecting taxes and improving the revenues of the
country.
26 VORID AFFAIRS JAN - MAR. 1 997 VOLINOI

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MANMOHAN SINGH
MS: But who is opposing that? We have neve

zcollect more taxes. The present Finance Minister
that a broad-based tax system should be introduc
collecting taxes. I have no quarrel with that. The
concrete measures to improve the effectiveness of o
WA: We would like to come back to the factors that real

to adopt the new track.
MS: The collapse of the Soviet Union also discr

there was in the 1980s, a consensus in the gover
system was not working. Rajiv Gandhi himself m
the Congress session in support of the policy of
opposition from people with the old mindset an
greatly diluted. On reflection, I feel that if the
with liberalisation in the 1980s, we would have be
WA: At this point of time, how do you think that the n

will generate sustainable growth ?
MS: I have no doubt that if pursued consistently

will help the Indian economy to emerge as a
economy. It will also provide credible solutions
poverty and unemployment.
WA: One of the major ramifications of this new policy i

pressures to direct development strategies in directions th
corporations. The recent literature on economic globalisat
colonialism" to describe this phenomena. Do you accept
MS: Transnational corporations exercise imm

world. They are the masters of modern technol
ments. Their decisions exert a powerful influen
production and trade. Thus, the power of the tra

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INTERVIEW
not be wished away. The challenge before us

cooperate with them to our mutual benefit. I
are, in the final analysis, power relations and
tating terms to the weak cannot be ignored. B
ing country (which normally has a populatio
We are a country of 950 million people, with
managerial skills and a fairly sizeable dom
democracies, public opinion is now a major
including policies of transna-
I do not buy thetional corporations who
argument want
that
we should avoid to appear reasonable and
expanding good
our
economic relations with the US corporate citizens. We can
therefore strike better bargain-
because it might enable the US
ing deals with transnational
to put undue pressure on us.
corporations than many other
developing countries. However,
we need to pool all our intellectual resources for this purpose. There has to
be careful advance planning spelling out our objectives, options and negotiat-
ing strategies for dealing with multinational corporations. The negotiating
ability of our enterprises needs to be gready strengthened. In the public sec-
tor, there is need for greater transparency to avoid unnecessary and often
uninformed criticism. There ought to be a clear framework of policies within
which sectoral negotiations with transnational corporations are conducted.
Wherever possible, autonomous regulatory authorities ought to be estab-
lished to provide transparency and consistency to our dealings.
WA: India can be subjected to economic and political pressures. The only country that
is in a position to exercise such pressures is the US. Should we not diversify our
economic relations in order to avoid such pressures?
MS: We should of course diversify our economic relations. We should not

put all our eggs into one basket. However, I do not buy the argument that
we should avoid expanding our economic relations with the US because it
might enable the US to put undue pressure on us. China has a very large

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MANMOHAN SINGH
trade surplus with the US and their restrict

greatly hurt the Chinese economy. Yet the
WAÈ. But all the Sinic countries like China, H

surplus. They are the richest countries of the wor
MS: The large trade surplus that these coun

pear if the US becomes more protection
domestic pressures for protection, the US
omy of the world. The Japanese and Eur
there are strong protectionist pressures in
developing countries that have successf
because of easy access to the US market fo
is the only country where manufacturer a
active collision.
WA: In the midst of the total breakdown of the ethical and moral order in the national
and international environment, and given the trends that we are witnessing in our own
country, could we safely steer our movement towards globalisation?
MS: Science and technology, particularly developments in transport,

telecommunications and information technologies, coupled with the progres-
sive removal of restrictions on flows of international trade and capital move-
ments, are indeed creating a new global economy. In this sort of economy,
access to new knowledge is the very foundation of power and wealth. Fortu-
nately, knowledge can be acquired through proper emphasis on human
resource development. Countries like India with vast reservoirs of human
resources do not have to fear the future provided we have a clear sense of
national purpose. However, it goes without saying that in a world of unequal
power structures, the strong have the capability to coerce the weak. In that
sense, poor countries need multilateral, rule-based systems much more than
rich countries. Through combined action in multilateral systems, weak
countries can to a certain extent contain the exploitative potential of the big
powers. Even then, if new knowledge is to lead to wisdom, it has to be

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INTERVIEW
embedded with new ethical

The Indian system would have
shown its myriad inefficiencies imperatives which respect
much earlier if all this assistance cultural, religious and lin-
had not been available. The Indi- guistic diversities. India with
its ancient civilisational val-
an development strategy and
Indian model were in serious dif- ues and commitment to
ficulties in 1957 and had to be unity in diversity can lead
sustained by a substantialthe world in this regard.

inflow
of external assistance from the However, before embarking
on such a mission, we must
international community.
find credible solutions for
dealing with divisive and dis-
ruptive tendencies in our own society whereby our people get divided on the
basis of religion, caste and creed. Simultaneously, we must take effective mea-
sures to tone up the moral fibre of our nation. It is only then that our peo-
ple's faith in politics as a purposeful instrument of social change can be
restored. In the final analysis we have to be intellectually alert and India has
to be economically strong to influence the course of world events. Further-
more, there is a compulsive need for a sense of ethics both in national and
international relations.
WA: Do you think India has received adequate international assistance?
MS: It is my honest opinion that India has not been unfairly treated by the
international system. You tell me of any country which has, during the past 30
to 40 years, been receiving billions of dollars of aid at zero or very low interest
rates repayable over 40-50 years with a grace period of 10 years. We have not
always made good use of this money. The Indian system would have shown its
myriad inefficiencies much earlier if all this assistance had not been available. The
Indian development strategy and Indian model were in serious difficulties in
1957 and had to be sustained by a substantial inflow of external assistance from
the international community. We designed the Second Five Year Plan but made
no provision for meeting the balance of payments deficits. Within a few months,
our foreign exchange reserves were exhausted. The world community came to

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MANMOHAN SINGH
our rescue and set up the Aid India Consortiu

lead in the establishment of the International De
term window of the World Bank and 40 per c
meant for India. Of course, these initiatives wer
sons. The US thought of India as a counter t
supported India at that juncture, the Indian h
been derailed. Agriculture did not receive adeq
Year Plan and the resulting food shortages had t
from the US under PL-480. These imports also
provided the rupee resources for financing the
WA: Covert and overt operations inside and outsi

of serious tensions. Has this in any way jeopardi
were the liberalisation policies timely?
MS: In the increasingly interdependent world

our development from the external political a
faced with. The 1960s wars with China (1962
affect the pace of our development. In the 1
disruptive factor. The Iraqi-Kuwait conflict of
ment. In the same way, the externally-aided
Northeastern region and in Jammu and Kash
ment. All these events forced us to divert our
and social development to meet external threa
They also hurt the climate of enterprise in t
overall impression is that the slow pace of Ind
ment cannot be explained in terms of a hostil
be pointed out that there have been major fai
example, many countries of Southeast Asia an
successful than us in capturing international ma
capital. Regarding the timing of the liberalisatio
much earlier than the 1990s. China chose liber
only in the 1990s that its fruits became visib
realising the frill benefits of mutations in econ
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WA: But hasn't this process of liberalisation and d

Indian companies to compete effectively or even
entering the country? Wasn't the time-scale to l
thereby making the task of the Indian business co
them have become so afraid that they appear to
question is, shouldn't there have been a greater t
deregulatory policies?
MS: If we had not done what we did in 1991,

same sorry state as Russia is today. For captain
course become more difficult than before. No
petition. Under the old system, all they had
ence to get a licence, obtain money from p
negative rates of interest and sell whatever they
behind highly protective tariffs and import c
have to pay more attention to cost and quali
for the domestic economy as well as for our
shows that economic reforms have helped our
at a faster pace. The liberalisation process has
en the competitiveness of our industry.
WA: But don't you think that asymmetrical rela

multinationals and their Indian counterparts place
position?
MS: By that logic we should never open up because the world is not a world
of equals. Countries of East and Southeast Asia have shown that it is possible
to prosper despite these assymmetrical relations. If you are going to wait for
levelled fields, you are wasting your time; for they won't come. They don't
exist. Our objective should be to leapfrog in the race for social and eco-
nomic progress. I do believe that late-comers have ample opportunities in
the international markets. Look at China. Despite political disputes with
western countries, China has succeeded in building huge markets for itself in
developed countries - countries which were trying to stop China's entry into
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Who were the beneficiaries?

the General Agreement for The
smuggler
Trade and Tariffi (GATT)and
andtheir leaders who
are now doing the same
became with
power brokers. The old
regard to the World Trade
system stifled competition and
Organisation (WTO). In the
encouraged smuggling and tax
1970s, India's and China's evasion. With liberalisation, Indi-
exports were roughly of the an industry has greater incentive
same order i.e. US$10-13 bil-
to be efficient. Smuggling is also
lion. But China's exports now
less profitable now.
exceed US $130 billion a year.
You can certainly make a case
for protectionism; you can
point out all the disadvantages of participating in the global economy. Wel
this case, you will have to content yourself with a low level of subsisten
economy - an economy that is inefficient, is unable to meet the aspiration
its people for a better standard of living and an economy that will also pro
added scope for smuggling. If you went to Mumbai, Calcutta or Chen
before 1991, you could get anything - including the most sophisticat
imported consumer goods - at three weeks' notice. Who were the benefic
ries? The smuggler and their leaders who became power brokers. The
system stifled competition and encouraged smuggling and tax evasion. W
liberalisation, Indian industry has greater incentive to be efficient. Smugg
is also less profitable now. Moreover, the whole programme has been
designed that industrial production and exports should increase rapidly. Th
are, of course, people who complain about the pace of liberalisation being
fast but they are in a minority. And very often, the criticism is born out of
desire to maintain their monopoly position in the domestic market. Ove
there is no evidence that the pace of liberalisation and reform was much
fast. It was carefully calibrated. For example, in 1992 itself we indicated
captains of industry the contemplated phased reduction of import duties o
the succeeding five years, thus giving them sufficient time to face the ch
lenge of increased competition. Besides, we have by no means followe
laissez-faire policy. We have effectively used the exchange rate mechanism
provide credible protection to most industries. People complain about liber
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INTERVIEW
sation, but if we take the combined impact o

level of protection to Indian industry has declin
WA: There is a general fear that the present trend o

ing a serious disequilibrium in the national economy.
thing needs to be done?
MS: India has received relatively small amounts o

about US $2 billion per annum. To argue tha
serious disequilibrium in our national econom
year got US $37 billion of direct foreign inve
whether this foreign investment is displacin
industry which, in fact, has grown at an imp
as foreign investments create more productio
them. Some people complain that we should n
consumer goods. This is irrational, particularl
and management skills with it. In any case, the
ment in consumer goods is largely because of
and non-tariff - that we give to consumer i
more rational protection structure, the car indu
have attracted the attention of foreign inve
correct these distortions in our tariff and non-
investments will flow only into those areas whe
comparative advantage. Reform of our tarif
regime is essential if we are to derive max
efficient production and increased exports from
WA: According to a recent UNDP report, the liberal

generated a polarised situation under which "the net
to the combined income of 45 per cent of the wo
your opinion, will India be able to deal with the logic
MS: I do not know how much significance sh

facts such as those quoted in this report. Many
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MANMOHAN SINGH
tional institutions, particularly UN institutio

rise to a feeling of helplessness in developing
tional system is not a game of equals. There a
which have to be recognised in planning our
there are opportunities for late-comers to lea
economic development. Countries of East and
clearly shown that with all its inequities, th
opportunities provided a country has the wi
explain the fact that China
Most countries
today has the largest of East and
trade sur-
Southeast
plus with the US? Most Asiacoun-
have developed
tries of East and Southeast Asia their economies largely by
have developed their economies exploiting the export potential
largely by exploiting the export offered by the US market. By
potential offered by the US contrast, countries which go on
market. By contrast, countries complaining about American
which go on complaining protectionism and do nothing
about American protectionism to develop their own export
and do nothing to develop their potential have missed the bus.
own export potential have India falls into this category.
missed the bus. India falls into
this category. We can still make up for lost time if we devise sensible economic
policies. Today, when tariffi have ceased to be a major influence on world trade
of developed countries, and integration of the world's capital markets has
created opportunities for import of capital to supplement domestic savings,
there are real opportunities for leap-frogging. It is up to our policy makers to
exploit these opportunities to our country's advantage.
WA: We are facing a severe environment problem. There is a great concern that this
consideration should be reflected in our policy formulation. Do you agree with the
validity of these concerns?
MS: Environmental concerns ought to be built into all our development

processes. Degradation of land and water and the growing pollution of air in our

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INTERVIEW
cities are already adversely affecting the li

people. Although environmental concerns a
projects, more could be done to create prope
issues and in particular the role of uncontro
mental degradation in India. Our ener
gy policies also need to show a greate
Sustainable development is
awareness of environmental degrada-
a concept which has to be
tion. In fact, all major enterprises ough
operationalised and it to submit themselves to a periodic
must not remain simplyassessment
a on this question. However
buzz world. We cannot
it is also important that the environ
safeguard the environment
ment protection movement should no
by perpetuating poverty.
degenerate into an anti-developmen
lobby. Sustainable development is a
concept which has to be operationalised and it must not remain
world. We cannot safeguard the environment by perpetuating pove
WA: It is true that the environment lobby must not become an anti-deve
in India. But, donft you think that these are basic issues of a serious natu
MS: India needs a strong national movement to protect our

However, the environmental concerns of India cannot be a carbo
environmental concerns as voiced by the non-governmental or
the developed countries. We have to devise our own strategies
programmes to prevent the degradation of India's land and wate
to deal with other pollutants. The need is to ensure that these
consistent with and are supportive of accelerated economic grow
WA: Do you think that trends in wage disparities for the same
industries, and the massive rise in real estate prices and rents are inescap
liberalisation and globalisation?
MS: Liberalisation and the inflow of foreign investments in w

States like Maharashtra, have certainly led to an increase in rea
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They may have also contributed to the rise in

persons. However, the answer is to look into t
ceiling act which creates artificial scarcity of l
be persuaded to create an investment-friendly
investment is not concentrated in the western St
the proper course would be to lay greater emp
for skills that are in greater demand. Given the t
40 per cent, I would not be too worried about
persons with really scarce skills can secure in t
should be on increasing the supply of these sca
tions on salaries and wages imposed from outs
payments and the proliferation of black mon
financial institutions, who are important shar
enterprises, to keep a watch on salary levels be
ial personnel. But to legislate on the question w
WAš. In a number of companies persons who wer

now getting Rs 15000. In the process, many comp
had to reduce their staff by half.
MS: But this also applies to purely Indian conce

no need for any governmental regulation in
including our financial institutions, should kee
transitory problem and not a perpetual one. If yo
controls, a large part of the remuneration w
under the table.
WA: Agriculture provides one-third of the GDP an

we afford to ignore this in our liberalisation frame
position in our new economic policy?
MS: We cannot afford to ignore agriculture. H

State subject. The combined Centre and State
agriculture in India compares favourably with
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INTERVIEW
ingly however, this expenditure takes th

inputs such as fertiliser, electricity and i
spending on irrigation and other vital inve
to re-orient government expenditure on ag
Simultaneously, there is a need to revamp ag
pay greater attention to the needs of dry lan
needs of small and marginal farmers. Additio
also needs to be revamped. Frequent attem
vitiated the climate for recovery of loans. Th
cultural credit has to become a more dyn
agriculture. More systematic attention has al
dation of Indias land and water resources.
WA: In the light of the new policy, do we not have to re-think and re-design Centre-
State relations in the economic sector?
MS: I do not think there is need for radical changes in Centre-State economic
relations. After the liberalisation of our economic policies since 1991 - particu-
larly in the field of industrial licensing and import controls - the States have
acquired new manoeuvrability in charting out the course of their development.
They have now much less cause for complaining about excessive centralisation
than in 1991.
The States' complaint about the plethora of central and centrally-sponsored

schemes in areas which are essentially on the State list, need to be looked into
even though they are often exaggerated. Many of these schemes have been
introduced on the suggestions of various State governments. In any case, I am
not against reducing the number of such schemes and transferring that money
to the States. We can also agree to the proposal of the Tenth Finance Commis-
sion to share all taxes of the Centre with the States. However, it should be
recognised that if the States get more money from the Centre by way of devo-
lution of taxes, they will get less by way of discretionary transfer through the
Planning Commission. In a situation in which the Central government has a
large fiscal deficit, re-arranging Central-State financial relations, however desir-
able it may be, cannot add to the pool of resources available to the States. Thus
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MANMOHAN SINGH
there is no alternative to States' improving the m

and shunning, patently populist and in the long run
To an extent this question of reviewing Centre-
bogey than a reality, particularly after the chan
There was excessive concentration of all the app
Import licensing and industrial licensing got con
have done away with import licensing - the bul
with industrial licensing. People like Jyoti Basu a
now have much greater manoeuvrability than bef
development of various States will depend much m
policies of the respective State
Govenments thanWe havepolicies
the a three-tier structure
of the Centre. Now the ball is of Government: local bodies,
in the court of the States. state governments and the cen-
There are complaints about tral government. The citizen is
the large number of central the same. All three compete for
and centrally-assisted schemes his affection.
in areas such as agriculture and
education which are essentially in State sectors. But the reality is that whenever
some centrally-supported schemes have been abolished, they have come back
under pressure from the State governments. The Janata Party Government in
1978, for example, did away with a large number of centrally-sponsored
schemes. Money was given to the States. But in three years' time, most of the
schemes came back because the departments most adversely affected by this
devolution were the development departments; they came and said: "We can-
not persuade our chief minister and finance minister to give money for family
welfare, we cannot persuade them to give money for education. So please do
something at the central level." Fundamentally, the overlapping nature of func-
tions performed by the Centre and the States is inherent in our Constitution.
We have a three-tier structure of Government, local bodies, state governments
and the central government. The citizen is the same. All three compete for his
affection. Therefore, so long as our constitutional system remains as it is, this
overlapping will persist. I am not against reducing the number of centrally-
sponsored schemes. But not much saving can be expected from this source.
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INTERVIEW
WA: What about the villages in all this?
MS: We need greater emphasis on decentral

ment to tackle the problems of our rural ec
been amended. The 73rd Amendment of the
for all these local bodies ( Panchayati Raj insti
for which they will be given adequate admin
Tenth Finance Commission has transferred
lion) of Central resources to the States for
States, which are obliged
Countries which are pragmatic under the Constitution to
enough recognise that with all itsdo a similar thing, are hes-
itant, because state-level
inequities, the present international
system does provide opportunities politicians do not want
for leap-frogging in the race for the local-level politicians
social and economic development. to get more power and

Countries of East and Southeast prestige. So, the problem
today is essentially be-
Asia provide a living example of the
tween the state-level
validity of this line of thought. The
old North-South debate and its politician and the local
bodies rather than be-
rhetoric have very few attentive
tween the Centre and the
listeners in the developed countries. States. It is true that the
States are responsible for
half of the public expenditure in India and their own revenue resources are
much less than that. A case can be made for sharing with States revenue from all
the taxes levied by the Central Government. I had made such a suggestion to
the Tenth Finance Commission, but that requires a Constitutional amendment.
Even if it is done, this does not mean that the States will get more resources
because the Centre is faced with serious fiscal imbalances. If it gives more by
way of devolution to the States, it will give less by way of discretionary transfers.
Therefore, I have been telling State Governments that reordering of Centre-
State relations cannot bale them out of the consequences of fiscal mismanage-
ment, implicit in proliferation of subsidies and populist handouts.
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MANMOHAN SINGH
IVA: How do you see the North-South dimension in
MS: The demise of the Soviet Union and Socialist countries of Eastern
Europe has certainly enhanced the bargaining power of the Western, devel-
oped countries in the management of the international system. The old
political compulsions to pay some attention to the plight of poor countries
do not exist any longer. There is today no enthusiasm in the developed
countries in favour of development assistance. The economic crisis of the
1980s which affected a large number of developing countries in Africa and
Latin America has led to a rethinking of their economic policies. Very few
of them are able to restructure international relations along lines that were
fashionable in international discussions in the 1970s. At the same time, coun-
tries which are pragmatic enough recognise that with all its inequities, the
present international system does provide opportunities for leap-frogging in
the race for social and economic development. Countries of East and South-
east Asia provide a living example of the validity of this line of thought. The
old North-South debate and its rhetoric have very few attentive listeners in
the developed countries. And the harassed finance ministers of poor coun-
tries also do not find this rhetoric much of an aid in finding practical solu-
tions to their pressing economic problems. The fact that the Group of 15,
launched at the Belgrade Summit of the Non- Aligned countries in 1989, is
now languishing for want of support is a telling reflection of the mood of the
stronger among developing countries. Movements such as the Non-Aligned
Movement have to re-think their agenda to remain relevant in the changed
world setting. More emphasis has to be laid on increasing economic coopera-
tion among developing countries and for strengthening the rule of law in
international relations.
WA: All these are undoubtedly major mutations. In this connection, how do you
explain your intellectual journey from socialism to market economy?
MS: If by socialism you mean a passion for equity and equality, I still remain
committed to it as an ideal to work for. However, I have never believed that a
loss-making public sector or a highly-controlled private sector and an autarkic
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INTERVIEW
economy necessarily lead to the socialist econ

have also never been in favour of confiscato
never be made effective. I have always believed
problems of acute poverty can only be foun
expanding economy. At one time I believed
could be an important instrument for b
development. However, the
At one time I believed that a actual performance of the
profit-making public sector public sector has belied these
could be an important instru- expectations. I do not now
ment for both accelerated and believe that political
equitable development. However,conditions in India are
the actual performance of the favourable for the public

public sector has belied these sector really becoming an
expectations. I do not now engine of growth. It neither
believe that political conditions
generates surpluses even to pay
in India are favourable for the for the loans the government
has raised to finance these
public sector really becoming an
engine of growth. investments, nor does it
accelerate growth or promote
equity. I therefore, now believe that private sector and market forces need
greater emphasis in our development policies than was fashionable in the past. I
also believe that profit-making public sector enterprises should be given all
opportunities for expansion, though I do not support creating monopolies
either in the public or in the private sector. I also remain convinced that the
State must continue to provide an overall sense of direction to the economy,
articulate our national objectives and concerns, and also play an active role in
providing such basic social services as education, health, basic research and
development and social safety nets for the vulnerable sections of society. The
State has also a major role to play in the provision of infrastructure. The State,
in my scheme of things, has a fairly large agenda for action. To ensure that the
State does perform its task with reasonable efficiency, we have to modernise
both our political processes and delivery systems, with much greater
commitment to excellence, service and integrity, than is the case at present.
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GLOBALIZATION
• Globalization generally means integration of the national economy
(economy of the country) with the world economy.
• It implies a free flow of information, ideas, technology, goods and

services, capital and even people across different countries and
societies.
• It increases connectivity between different countries in the form of

trade, investments and cultural exchanges.
• It refers to transnational connectedness and encompasses important
economic, political, cultural, and environmental dimensions. lt creates
new opportunities and constraints, possibilities and vulnerabilities.
• It is turning the world into one whole or creating a borderless world.
• Global connectivity – reduces space and time limitations - global

village
• Globalisation attempts to establish links in such a way that the

happenings in India can be influenced by events happening miles
away.
• Interdependence.
• E.g., Outsourcing is an imp. outcome of G:
• In outsourcing, a company hires regular service from external sources,

mostly from other countries. As a form of economic activity, outsourcing
has intensified, in recent times, because of the growth of fast modes of
communication, particularly the growth of IT.
• Many of the services such as voice-based business processes (popularly

known as BPO or call centres), clinical advice, book publishing work or
even teaching are being outsourced by companies in developed countries to
India.
• E.g., book publishing work.
• Affect of cyclone and floods in Chennai (2015) on Routledge in
London
• An illustration of a trend of globalization
• Most [of the people] are returning [to Carriacou, an island in the Grenada,
West Indies] from overseas work in New York, Britain, or mainland Europe,
where they worked for a few years as maids and cleaners or at other
service jobs.
• Carrying gifts of CD players, clothing, shoes, and other items manufactured
outside their island, they will be greeted warmly by their relatives, whom
they have alerted by phone or e-mail about the time of their arrival.
• Most returnees have already wired home money they saved from their off-
island work and are beginning to think about using it to build a house or
buy items that will make their lives easier and more secure.
• Globalization consists of powerful forces that reshape local
conditions on an ever-intensifying scale.
• Although places such as Carriacou may seem peripheral to
globalization, the impact of international money, tourists,
transportation, goods, communication, and the movement of the
island’s peoples to other parts of the world have all affected the way
people live there.
• And their experience is repeated in many other parts of the world.
Global flows
• Movement is a key feature of today’s world economy.

• Manufacturing jobs move from wealthier nations to poorer ones.
• An enormous variety of goods and raw materials travels by air, sea
and rail to every part of the world.
• And more and more, so do people.
• Most come from poor nations to find work in rich ones. At first most
were men; today many are women.
• Arjun Appadurai (1990), five dimensions of global cultural
flows that can be termed (a) ethnoscapes, (b) mediascapes,
(c) technoscapes, (d) financescapes, and (e) ideoscapes.
• Human/people movement, technological/machinery flow,

financial/money transfers, images, and ideas
Global Women: Globalization of traditional
female services
• In a book, Global Woman: Nannies, Maids, and Sex Workers in the
New Economy, Barbara Ehrenreich and Arlie Russell Hochschild (2002)
describe the history of female immigration, the reasons women
migrate, the kinds of jobs they take in wealthier nations, the stresses
their absence has on their own families, their lives in the families of
others when they serve as nannies, and consequences for relative
wealth among the world’s nations.
• The authors conclude that women, both rich and poor, seek to better
their condition and that migration increases interdependence among
nations.
• Women from poor, developing countries are migrating to developed
nations to work as maids and nannies to raise other people’s children
but are not able to raise their own children back in their home
countries.
• Poverty pushes these women to leave their home countries.
• These women can either live in their home country and raise their
children in very difficult conditions or live in a wealthy country and
make money to provide for their own children but not get to raise
them—a disheartening choice for poor women of developing
countries.
• Also, a number of young women and girls, due to dire poverty, are,
knowingly or unknowingly, forced into prostitution.
• These trends are another part of the current globalization process.
When Mother Comes Home for Christmas, directed by Nilita Vachani
• A woman, Josephine works as a babysitter in Athens (Greece). She

returns home (to Sri Lanka) for one Christmas to meet her children
after an absence of 10 years.
• Josephine’s story unfolds in an extraordinary documentary film, When
Mother Comes Home for Christmas, directed by Nilita Vachani.
UNIT
UNIT
II
III
ECONOMIC REFORMS
SINCE 1991
2020-21
After forty years of planned development, India
has been able to achieve a strong industrial base
and became self-sufficient in the production of food
grains. Nevertheless, a major segment of the
population continues to depend on agriculture for
its livelihood. In 1991, a crisis in the balance of
payments led to the introduction of economic
reforms in the country. This unit is an appraisal of
the reform process and its implications for India.
2020-21
3
LIBERALISATION, PRIVATISATION
AND
GLOBALISATION: AN APPRAISAL
After studying this chapter, the learners will
• understand the background of the reform policies introduced in India

in 1991
• understand the mechanism through which reform policies were
introduced
• comprehend the process of globalisation and its implications for India
• be aware of the impact of the reform process in various sectors.
2020-21
There is a consensus in the world today that economic development is not all
and the GDP is not necessarily a measure of progress of a society.
K.R. Narayanan, Former President of India
3.1 I NTRODUCTION policy measures which changed the

direction of our developmental
You have studied in the previous
strategies. In this chapter, we will
chapter that, since independence,
look at the background of the crisis,
India followed the mixed economy
measures that the government has
framework by combining the
adopted and their impact on various
advantages of the capitalist economic
sectors of the economy.
system with those of the socialist
economic system. Some scholars argue
3.2 BACKGROUND
that, over the years, this policy resulted
in the establishment of a variety of The origin of the financial crisis can
rules and laws, which were aimed at be traced from the inefficient
controlling and regulating the management of the Indian economy
economy, ended up instead in in the 1980s. We know that for
hampering the process of growth and implementing various policies and
development. Others state that India, its general administration, the
which started its developmental path government generates funds from
from near stagnation, has since been various sources such as taxation,
able to achieve growth in savings, running of public sector enterprises
developed a diversified industrial etc. When expenditure is more than
sector which produces a variety of income, the government borrows to
goods and has experienced sustained finance the deficit from banks and
expansion of agricultural output also from people within the country
which has ensured food security. and from international financial
In 1991, India met with an institutions. When we import goods
economic crisis relating to its external like petroleum, we pay in dollars
debt — the government was not which we earn from our exports.
able to make repayments on its Development policies required that
borrowings from abroad; foreign even though the revenues were
exchange reserves, which we very low, the government had
generally maintain to import petroleum to overshoot its revenue to meet
and other important items, dropped challenges like unemployment,
to levels that were not sufficient for poverty and population explosion. The
even a fortnight. The crisis was continued spending on development
further compounded by rising prices programmes of the government did not
of essential goods. All these led the generate additional revenue. Moreover,
government to introduce a new set of the government was not able to
LIBERALISATION, PRIVATISATION AND GLOBALISATION: AN APPRAISAL 39
2020-21
generate sufficiently from internal and received $7 billion as loan to
sources such as taxation. When the manage the crisis. For availing the
government was spending a large loan, these international agencies
share of its income on areas which do expected India to liberalise and open
not provide immediate returns such as up the economy by removing
the social sector and defence, there was restrictions on the private sector,
a need to utilise the rest of its revenue reduce the role of the government in
in a highly efficient manner. The many areas and remove trade
income from public sector restrictions between India and other
undertakings was also not very high to countries.
meet the growing expenditure. At India agreed to the conditionalities
times, our f o r e i g n e x c h a n g e , of World Bank and IMF and
borrowed from other countries and announced the New Economic Policy
international financial institutions, (NEP). The NEP consisted of wide
was spent on meeting consumption ranging economic reforms. The
needs. Neither was an attempt made to thrust of the policies was towards
reduce such profligate spending nor creating a more competitive
sufficient attention was given to boost environment in the economy and
exports to pay for the growing imports. removing the barriers to entry and
In the late 1980s, government growth of firms. This set of policies
expenditure began to exceed its can broadly be classified into two
revenue by such large margins that groups: the stabilisation measures
meeting the expenditure through and the structural reform measures.
borrowings became unsustainable. Stabilisation measures are short-
Prices of many essential goods rose term measures, intended to correct
sharply. Imports grew at a very high some of the weaknesses that have
rate without matching growth of developed in the balance of
exports. As pointed out earlier, foreign payments and to bring inflation
exchange reserves declined to a level under control. In simple words, this
that was not adequate to finance means that there was a need to
imports for more than two weeks. maintain sufficient foreign exchange
There was also not sufficient foreign reserves and keep the rising prices
exchange to pay the interest that under control. On the other hand,
needed to be paid to international structural reform policies are long-term
lenders. Also no country or international measures, aimed at improving the
funder was willing to lend to India. efficiency of the economy and increasing
India approached the International its international competitiveness by
Bank for Reconstruction and removing the rigidities in various
Development (IBRD), popularly segments of the Indian economy. The
known as World Bank and the government initiated a variety of
International Monetary Fund (IMF), policies which fall under three heads
40 INDIAN ECONOMIC DEVELOPMENT
2020-21
viz., liberalisation, privatisation and The reform policies introduced in
globalisation. and after 1991 removed many of
these restrictions. Industrial
3.3 L IBERALISATION licensing was abolished for almost all
As pointed out in the beginning, but product categories — alcohol,
cigarettes, hazardous chemicals,
rules and laws which were aimed at
industrial explosives, electronics,
regulating the economic activities
aerospace and drugs and pharma-
became major hindrances in growth
ceuticals. The only industries which
and development. Liberalisation was
are now reserved for the public sector
introduced to put an end to these
are a part of defence equipment,
restrictions and open various sectors
atomic energy generation and railway
of the economy. Though a few
transport. Many goods produced by
liberalisation measures were
small-scale industries have now been
introduced in 1980s in areas of
dereserved. In many industries, the
industrial licensing, export-import
market has been allowed to
policy, technology upgradation,
determine the prices.
fiscal policy and foreign investment,
reform policies initiated in 1991 were Financial Sector Reforms:
more comprehensive. Let us study Financial sector includes financial
some important areas, such as the institutions, such as commercial
industrial sector, financial sector, tax banks, investment banks, stock
reforms, foreign exchange markets exchange operations and foreign
and trade and investment sectors exchange market. The financial
which received greater attention in sector in India is regulated by the
and after 1991. Reserve Bank of India (RBI). You may
be aware that all banks and other
Deregulation of Industrial Sector: In financial institutions in India are
India, regulatory mechanisms were regulated through various norms and
enforced in various ways (i) industrial regulations of the RBI. The RBI
licensing under which every entrepreneur decides the amount of money that
had to get permission from government the banks can keep with themselves,
officials to start a firm, close a firm fixes interest rates, nature of lending
or decide the amount of goods to various sectors, etc. One of the
that could be produced (ii) private major aims of financial sector reforms
sector was not allowed in many is to reduce the role of RBI from
industries (iii) some goods could be regulator to facilitator of financial
produced only in small-scale industries, sector. This means that the financial
and (iv) controls on price fixation and sector may be allowed to take
distribution of selected industrial decisions on many matters without
products. consulting the RBI.
2020-21
The reform policies led to the establishment of a common national
establishment of private sector banks, market for goods and commodities.
Indian as well as foreign. Foreign In 2016, the Indian Parliament
investment limit in banks was raised to passed a law, Goods and Services Tax
around 74 per cent. Those banks which Act 2016, to simplify and introduce a
fulfil certain conditions have been given unified indirect tax system in India.
freedom to set up new branches This law came into effect from July
without the approval of the RBI and 2017. This is expected to generate
rationalise their existing branch additional revenue for the government,
networks. Though banks have been reduce tax evasion and create ‘one
given permission to generate resources nation, one tax and one market’.
from India and abroad, certain Another component of reform in this
managerial aspects have been retained area is simplification. In order to
with the RBI to safeguard the interests encourage better compliance on the
of the account-holders and the nation. part of taxpayers, many procedures
Foreign Institutional Investors (FII), have been simplified and the rates also
such as merchant bankers, mutual substantially lowered.
funds and pension funds, are now
allowed to invest in Indian financial Foreign Exchange Reforms: The first
markets. important reform in the external sector
was made in the foreign exchange
Tax Reforms: Tax reforms are market. In 1991, as an immediate
concerned with the reforms in the measure to resolve the balance of
government’s taxation and public payments crisis, the rupee was
expenditure policies, which are devalued against foreign currencies.
collectively known as its fiscal policy. This led to an increase in the inflow of
There are two types of taxes: direct and foreign exchange. It also set the tone to
indirect. Direct taxes consist of taxes free the determination of rupee value
on incomes of individuals, as well as, in the foreign exchange market from
profits of business enterprises. Since government control. Now, more often
1991, there has been a continuous than not, markets determine exchange
reduction in the taxes on individual rates based on the demand and supply
incomes as it was felt that high rates of of foreign exchange.
income tax were an important reason
for tax evasion. It is now widely Trade and Investment Policy
accepted that moderate rates of income Reforms: Liberalisation of trade and
tax encourage savings and voluntary investment regime was initiated to
disclosure of income. The rate of increase international competitiveness of
corporation tax, which was very high industrial production and also foreign
earlier, has been gradually reduced. investments and technology into the
Efforts have also been made to reform economy. The aim was also to promote
the indirect taxes, taxes levied on the efficiency of local industries and
commodities, in order to facilitate the adoption of modern technologies.
2020-21
In order to protect domestic of tariff rates and (iii) removal of
industries, India was following a regime licensing procedures for imports.
of quantitative restrictions on Import licensing was abolished except
imports. This was encouraged through in case of hazardous and
tight control over imports and by environmentally sensitive industries.
keeping the tariffs very high. These Quantitative restrictions on imports of
policies reduced efficiency and manufactured consumer goods and
competitiveness which led to slow agricultural products were also fully
growth of the manufacturing sector. removed from April 2001. Export
The trade policy reforms aimed at (i) duties have been removed to increase
dismantling of quantitative restrictions the competitive position of Indian goods
on imports and exports (ii) reduction in the international markets.
Work These Out
Ø Give an example each of nationalised bank, private bank, private foreign

bank, FII and a mutual fund.
Ø Visit a bank in your locality with your parents. Observe and find out the
functions it performs. Discuss the same with your classmates and prepare
a chart on it.
Ø Find out from your parents if they pay taxes. If yes, why do they do so and
how?
Ø Do you know that for a very long time countries used to keep silver and gold
as reserves to make payments abroad? Find out in what form do we keep
our foreign exchange reserves and find out from newspapers, magazines
and the Economic Survey how much foreign exchange reserves India had
during the last year. Also find the foreign currency of the following countries
and its latest rupee exchange rate.
Country Currency Value of 1(one) unit of foreign

currency in Indian rupee
U.S.A.
U.K.
Japan
China
Korea
Singapore
Germany
2020-21
3.4 PRIVATISATION Privatisation of the public sector
It implies shedding of the ownership enterprises by selling off part of the
or management of a government equity of PSEs to the public is known
o w n e d e n t e r p r i s e. G o v e r n m e n t as disinvestment. The purpose of the
companies are converted into private sale, according to the government,
c o m p a n i e s i n t w o w a y s ( i) b y was mainly to improve financial
withdrawal of the government from discipline and facilitate modernisation.
ownership and management of It was also envisaged that private
public sector companies and or (ii) by capital and managerial capabilities
outright sale of public sector could be effectively utilised to
companies. improve the performance of the PSUs.
Box 3.1: Navratnas and Public Enterprise Policies

You must have read in your childhood about the famous Navratnas or Nine
Jewels in the Imperial Court of King Vikramaditya who were eminent persons
of excellence in the fields of art, literature and knowledge. In order to improve
efficiency, infuse professionalism and enable them to compete more effectively
in the liberalised global environment, the government identifies PSEs and
declare them as maharatnas, navratnas and miniratnas. They were given greater
managerial and operational autonomy, in taking various decisions to run the
company efficiently and thus increase their profits. Greater operational,
financial and managerial autonomy has also been granted to profit-making
enterprises referred to as miniratnas.
The Central Public Sector Enterprises are designated with different status.
A few examples of public enterprises with their status are as follows:
(i) Maharatnas – (a) Indian Oil Corporation Limited, and (b) Steel Authority of
India Limited, (ii) Navratnas – (a) Hindustan Aeronautics Limited,
(b) Mahanagar Telephone Nigam Limited; and (iii) Miniratnas – (a) Bharat
Sanchar Nigam Limited; (b) Airport Authority of India and (c) Indian Railway
Catering and Tourism Corporation Limited.
Many of these profitable PSEs were originally formed during the 1950s
and 1960s when self-reliance was an important element of public policy. They
were set up with the intention of providing infrastructure and direct employment
to the public so that quality end-product reaches the masses at a nominal
cost and the companies themselves were made accountable to all stakeholders.
The granting of status resulted in better performance of these companies.
Scholars allege that instead of facilitating public enterprises in their expansion
and enabling them to become global players, the government partly privatised
them through disinvesment. Of late, the government has decided to retain
them in the public sector and enable them to expand themselves in the global
markets and raise resources by themselves from financial markets.
2020-21
Work These Out
Ø Some scholars refer to disinvestment as the wave of privatisation spreading

all over the world to improve the performance of public sector enterprises
whereas others call it as outright sale of public property to the vested
interests. What do you think?
Ø Prepare a poster which contains 10-15 news clippings which you consider
as important and relating to navaratnas from newspapers. Also collect the
logos and advertisements of these PSEs. Put these on the notice board and
discuss them in the classroom.
Ø Do you think only loss making companies should be privatised? Why?
Ø Losses incurred by public sector enterprises are to be met out of the public
budget. Do you agree with this statement? Discuss.
The government envisaged that links in such a way that the happenings
privatisation could provide strong in India can be influenced by events
impetus to the inflow of FDI. happening miles away. It is turning the
The government has also made world into one whole or creating a
attempts to improve the efficiency of borderless world.
PSUs by giving them autonomy
Outsourcing: This is one of the
in taking managerial decisions. For
important outcomes of the
instance, some PSUs have been
globalisation process. In outsourcing,
granted special status as maharatnas,
a company hires regular service from
navratnas and miniratnas (see
external sources, mostly from other
Box 3.1).
countries, which was previously
provided internally or from within the
3.5 G LOBALISATION
country (like legal advice, computer
Although globalisation is generally service, advertisement, security —
understood to mean integration of the each provided by respective
economy of the country with the world departments of the company). As a
economy, it is a complex phenomenon. form of economic activity, outsourcing
It is an outcome of the set of various has intensified, in recent times,
policies that are aimed at transforming because of the growth of fast modes
the world towards greater of communication, particularly the
interdependence and integration. It growth of Information Technology
involves creation of networks and (IT). Many of the services such as
activities transcending economic, social voice-based business processes
and geographical boundaries. (popularly known as BPO or
Globalisation attempts to establish call centres), record keeping,
2020-21
Box 3.2: Global Footprint!
Owing to globalisation, you might find many Indian companies have expanded
their wings to many other countries. For example, ONGC Videsh, a subsidiary of
the Indian public sector enterprise, Oil and Natural Gas Corporation engaged in
oil and gas exploration and production has projects in 16 countries. Tata Steel, a
private company established in 1907, is one of the top ten global steel companies
in the world which have operations in 26 countries and sell its products in 50
countries. It employs nearly 50,000 persons in other countries. HCL Technologies,
one of the top five IT companies in India has offices in 31 countries and employs
about 15,000 persons abroad. Dr Reddy's Laboratories, initially was a small
company supplying pharmaceutical goods to big Indian companies, today has
manufacturing plants and research centres across the world.
Source: www.rediff.com accessed on 14.10.2014.
accountancy, banking services, music be availed at a cheaper cost with

recording, film editing, book reasonable degree of skill and
transcription, clinical advice or even accuracy. The low wage rates and
teaching are being outsourced by availability of skilled manpower in
companies in developed countries to India have made it a destination for
India. With the help of modern global outsourcing in the post-reform
telecommunication links including the period.
Internet, the text, voice and visual data
in respect of these services is digitised World Trade Organisation (WTO):
and transmitted in real time over The WTO was founded in 1995 as
continents and national boundaries. the successor organisation to the
Most multinational corporations, and General Agreement on Trade and
even small companies, are outsourcing Tariff (GATT). GATT was established
their services to India where they can in 1948 with 23 countries as the
global trade organisation
to administer all
multilateral trade
agreements by providing
equal opportunities to
all countries in the
international market for
trading purposes. WTO is
expected to establish a
rule-based trading regime
in which nations cannot
place arbitrary restrictions
on trade. In addition, its
Fig. 3.1 Outsourcing: a new employment opportunity in big cities purpose is also to enlarge
2020-21
Work These Out
Ø Many scholars argue that globalisation is a threat as it reduces the role of

the government in many sectors. Some counter argue that it is an
opportunity as it opens up markets to compete in and capture. Debate in
the classroom.
Ø Prepare a chart consisting of a list of five companies that have BPO services
in India, along with their turnover.
Ø Read this excerpt of a news item from a daily newspaper describing
something that is now becoming increasingly common.
“On a morning, a few minutes before 7 A.M., Greeshma sat in front of
her computer with her headset on and said in accented English ‘Hello,
Daniella’. Seconds later, she gets the reply, ‘Hello, Greeshma’. The two chatted
excitedly before Greeshma said that ‘we will work on pronouns today’.
Nothing unusual about this chat except that Greeshma, 22, was in Kochi
and her student Daniella, 13, was at her home in Malibu, California. Using
a simulated whiteboard on their computers, connected by the Internet, and
a copy of Daniella’s textbook in front of Greeshma, she guides the teenager
through the intricacies of nouns, adjectives and verbs. Greeshma, who grew
up speaking Malayalam, was teaching Daniella English grammar,
comprehension and writing.”
ü How has this become possible? Why can’t Daniella get lessons in her
own country? Why is she getting English lessons from India, where
English is not the mother tongue?
ü India is benefiting from liberalisation and integration of world markets.
Do you agree?
Ø Is employment in call centres sustainable? What kinds of skills should people
working in call centres acquire to get a regular income?
Ø If the multinational companies outsource many services to countries like
India because of cheap manpower, what will happen to people living in the
countries where the companies are located? Discuss.
production and trade of services, to As an important member of WTO,

ensure optimum utilisation of world India has been in the forefront of
resources and to protect the framing fair global rules, regulations
environment. The WTO agreements and safeguards and advocating the
cover trade in goods as well as services interests of the developing world.
to facilitate international trade India has kept its commitments
(bilateral and multilateral) through towards liberalisation of trade, made
removal of tariff as well as non-tariff in the WTO, by removing quantitative
barriers and providing greater market restrictions on imports and reducing
access to all member countries. tariff rates.
2020-21
TABLE 3.1
Growth of GDP and Major Sectors (in %)
Sector 1980-91 1992-2001 2002-07 2007-12 2012-13 2013-14 2014-15

Agriculture 3.6 3.3 2.3 3.2 1.5 4.2 – 0.2*
Industry 7.1 6.5 9.4 7.4 3.6 5 7.0*
Services 6.7 8.2 7.8 10 8.1 7.8 9.8*
Total 5.6 6.4 7.8 8.2 5.6 6.6 7.4
Source: Economic Survey for various years, Ministry of Finance, Government of India.
Note: *Data pertaining to Gross Value Added (GVA). The GVA is estimated from GDP by adding
subsidies on production and subtracting indirect taxes.
Some scholars question the Indian economy during this period. In
usefulness of India being a member of economics, the growth of an economy
the WTO as a major volume of is measured by the Gross Domestic
international trade occurs among the Product. Look at Table 3.1. The post–
developed nations. They also say that 1991 India witnessed a rapid growth
while developed countries file in GDP on a continual basis for two
complaints over agricultural subsidies decades. The growth of GDP increased
given in their countries, developing from 5.6 per cent during 1980–91 to
countries feel cheated as they are forced 8.2 per cent during 2007–12. During
to open their markets for developed the reform period, the growth of
countries but are not allowed access to agriculture has declined. While the
industrial sector reported fluctuation,
the markets of developed countries.
the growth of the service sector has gone
What do you think?
up. This indicates that this growth is
mainly driven by growth in the service
sector. During 2012-15, there has been
a setback in the growth rates of different
sectors witnessed post–1991. While
agriculture recorded a high growth rate
during 2013–14, this sector witnessed
negative growth in the subsequent year.
While the service sector continued to
witness a high level of growth — higher
than the overall GDP growth in 2014–
Fig. 3.2 IT industry is seen as a major contributor 15, this sector witnessed the high
to India’s exports growth rate of 9.8 per cent. The
3.6 INDIAN ECONOMY DURING industrial sector witnessed a steep
decline during 2012–13, in the
R EFORMS: AN A SSESSMENT
subsequent years it began to show a
The reform process has completed continuous positive growth.
three decades since its introduction. Let The opening of the economy has led
us now look at the performance of the to a rapid increase in foreign direct
2020-21
investment and foreign exchange India is seen as a successful exporter
reserves. The foreign investment, of auto parts, engineering goods, IT
which includes foreign direct software and textiles in the reform
investment (FDI) and foreign period. Rising prices have also been
institutional investment (FII), has kept under control.
increased from about US $100 million On the other hand, the reform
in 1990-91 to US $ 30 billion in process has been widely criticised
2017-18. There has been an increase for not being able to address some
in the foreign exchange reserves from of the basic problems facing our
about US $ 6 billion in 1990-91 to economy especially in areas of
about US $ 413 billion in 2018-19. employment, agriculture, industry,
India is one of the largest foreign infrastructure development and fiscal
exchange reserve holders in the world. management.
Work These Out
Ø In the previous chapter, you might have studied about subsidies in various
sectors, including agriculture. Some scholars argue that subsidy in agriculture
should be removed to make the sector internationally competitive. Do you
agree? If so, how can it be done? Discuss in class.
Ø Read the following passage and discuss in class.
Groundnut is a major oilseed crop in Andhra Pradesh. Mahadeva, who
was a farmer in Anantpur district of Andhra Pradesh, used to spend Rs. 10,000
for growing groundnut on his plot of half an acre. The cost included expenditure
on raw material (seeds, fertilisers, etc.), labour, bullock power and machinery
used. On an average, Mahadeva used to get two quintals of groundnut, and
each quintal was sold for Rs. 7,000. Mahadeva, thus, was spending Rs. 10,000
and getting an income of Rs. 14,000. Anantpur district is a drought-prone
area. As a result of economic reforms, the government did not undertake any
major irrigation project. Recently, groundnut crop in Anantpur is facing
problems due to crop disease. Research and extension work has gone down
due to lower government expenditure. Mahadeva and his friends brought this
matter repeatedly to the notice of the government officials entrusted with this
responsibility, but failed. Subsidy was reduced on material (seeds, fertilisers)
which increased Mahadeva’s cost of cultivation. Moreover, the local markets
were flooded with cheap imported edible oils, which was a result of removal of
restriction on imports. Mahadeva was not able to sell his groundnut in the
market as he was not getting the price to cover his cost.
What could be done to farmers like Mahadeva from incurring losses?
Discuss in the class.
2020-21
Growth and Employment: Though the Reforms in Industry: Industrial
GDP growth rate has increased in the growth has also recorded a slowdown.
reform period, scholars point out that the This is because of decreasing demand
reform-led growth has not generated of industrial products due to
sufficient employment opportunities in various reasons such as cheaper
the country. You will study the link imports, inadequate investment in
between different aspects of employment infrastructure etc. In a globalised
and growth in the next unit. world, developing countries are
compelled to open up their economies
Reforms in Agriculture: Reforms have to greater flow of goods and capital
not been able to benefit agriculture, from developed countries and
where the growth rate has been rendering their industries vulnerable
decelerating. to imported goods. Cheaper imports
Public investment in agriculture have, thus, replaced the demand
sector especially in infrastructure, for domestic goods. Domestic
which includes irrigation, power, roads, manufacturers are facing competition
market linkages and research and from imports. The infrastructure
extension (which played a crucial role facilities, including power supply, have
in the Green Revolution), has fallen in remained inadequate due to lack of
the reform period. Further, the partial investment. Globalisation is, thus,
removal of fertiliser subsidy has led to often seen as creating conditions for
increase in the cost of production, which the free movement of goods and
has severely affected the small and services from foreign countries that
marginal farmers. This sector has been adversely affect the local industries
experiencing a number of policy and employment opportunities in
changes such as reduction in import developing countries.
duties on agricultural products, low Moreover, a developing country
like India still does not have the access
minimum support price and lifting of
to developed countries’ markets
quantitative restrictions on the imports
because of high non-tariff barriers. For
of agricultural products. These have
example, although all quota
adversely affected Indian farmers as
restrictions on exports of textiles and
they now have to face increased clothing have been removed in India,
international competition. USA has not removed their quota
Moreover, because of export- restriction on import of textiles from
oriented policy strategies in agriculture, India and China.
there has been a shift from production
for the domestic market towards Disinvestment: Every year, the
production for the export market government fixes a target for
focusing on cash crops in lieu of disinvestment of PSEs. For instance,
production of food grains. This puts in 1991-92, it was targeted to mobilise
pressure on prices of food grains. Rs 2500 crore through disinvestment.
2020-21
The government was able to mobilise evasion, have not resulted in increase
` 3,040 crore more than the target. In in tax revenue for the government. Also,
2017–18, the target was about the reform policies, involving tariff
` 1,00,000 crore, whereas, the reduction, have curtailed the scope for
achievement was about ` 1,00,057 raising revenue through custom duties.
crore. Critics point out that the assets In order to attract foreign investment,
of PSEs have been undervalued and tax incentives are provided to foreign
sold to the private sector. This means investors which further reduced the
that there has been a substantial loss scope for raising tax revenues. This has
to the government. Moreover, the a negative impact on developmental
proceeds from disinvestment are used and welfare expenditures.
to offset the shortage of government
revenues rather than using it for the
3.7 CONCLUSION
development of PSEs and building
social infrastructure in the country. Do The process of globalisation through
you think selling a part of the liberalisation and privatisation policies
properties of government companies is has produced positive, as well as,
the best way to improve their negative results both for India and
efficiency? other countries. Some scholars argue
that globalisation should be seen as
Reforms and Fiscal Policies: an opportunity in terms of greater
Economic reforms have placed limits on access to global markets, high
the growth of public expenditure, technology and increased possibility of
especially in social sectors. The tax large industries of developing
reductions in the reform period, aimed countries to become important players
at yielding larger revenue and curb tax in the international arena.
Box 3.3: Siricilla Tragedy!

Power sector reforms in many Indian states led to do away with the supply of
electricity at subsidised rates and steep rise in power tariff. This has affected
workers engaged in small industries. Powerloom textile industry in Andhra
Pradesh is an example. Since the wages of the powerloom workers are linked
to the production of cloth, power cut means cut in wages of weavers, who
were already suffering from hike in tariff. A few years ago, this led to a crisis
in the livelihood of the weavers and 50 powerloom workers committed suicide
in a small town called ‘Siricilla’ in Andhra Pradesh.
Ø Do you think the power tariff should not be raised?
Ø What would be your suggestions to revive small industries affected by
reforms?
2020-21
On the contrary, the critics argue policies initiated as a response to the
that globalisation is a strategy of the crisis by the government, with
developed countries to expand their externally advised policy package,
markets in other countries. According further aggravated the inequalities.
to them, it has compromised the Further, it has increased the income
welfare and identity of people and quality of consumption of only
belonging to poor countries. It has high-income groups and the growth
further been pointed out that has been concentrated only in
market-driven globalisation has some select areas in the services
widened the economic disparities sector such as telecommunication,
among nations and people. information technology, finance,
Viewed from the Indian context, entertainment, travel and hospitality
some studies have stated that the services, real estate and trade,
crisis that erupted in the early 1990s rather than vital sectors such as
was basically an outcome of the agriculture and industry which
deep-rooted inequalities in Indian provide livelihoods to millions of
society and the economic reform people in the country.
Recap
Ø The economy was facing problems of declining foreign exchange, growing
imports without matching rise in exports and high inflation. India changed
its economic policies in 1991 due to a financial crisis and pressure from
international organisations like the World Bank and IMF.
Ø In the domestic economy, major reforms were undertaken in the industrial
and financial sectors. Major external sector reforms included foreign
exchange deregulations and import liberalisation.
Ø With a view to improving the performance of the public sector, there was a
consensus on reducing its role and opening it up to the private sector. This
was done through disinvestment and liberalisation measures.
Ø Globalisation is the outcome of the policies of liberalisation and privatisation.
It means an integration of the economy of the country with the world
economy.
Ø Outsourcing is an emerging business activity.
Ø The objective of the WTO is to establish a rule based trade regime to ensure
optimum utilisation of world resources.
Ø During the reforms, growth of agriculture and industry has gone down but
the service sector has registered growth.
Ø Reforms have not benefited the agriculture sector. There has also been a
decline in public investment in this sector.
Ø Industrial sector growth has slowed down due to availability of cheaper
imports and lower investment.
2020-21
EXERCISES
1. Why were reforms introduced in India?

2. Why is it necessary to became a member of WTO?
3. Why did RBI have to change its role from controller to facilitator of
financial sector in India?
4. How is RBI controlling the commercial banks?
5. What do you understand by devaluation of rupee?
6. Distinguish between the following
(i) Strategic and Minority sale
(ii) Bilateral and Multi-lateral trade
(iii) Tariff and Non-tariff barriers.
7. Why are tariffs imposed?
8. What is the meaning of quantitative restrictions?
9. Those public sector undertakings which are making profits
should be privatised. Do you agree with this view? Why?
10. Do you think outsourcing is good for India? Why are developed
countries opposing it?
11. India has certain advantages which makes it a favourite outsourcing
destination. What are these advantages?
12. Do you think the navaratna policy of the government helps in
improving the performance of public sector undertakings in India?
How?
13. What are the major factors responsible for the high growth of the
service sector?
14. Agriculture sector appears to be adversely affected by the reform
process. Why?
15. Why has the industrial sector performed poorly in the reform
period?
16. Discuss economic reforms in India in the light of social justice
and welfare.
2020-21
SUGGESTED ADDITIONAL ACTIVITIES
1. The table given below shows the GDP growth rate at 2004-05
prices. You have studied about the techniques of presentation
of data in your Statistics for Economics course. Draw a time
series line graph based on the data given in the table and inter-
pret the same.
Year GDP Growth Rate (%)
2005-06 9.5
2006-07 9.6
2007-08 9.3
2008-09 6.7
2009-10 8.6
2010-11 8.9
2011-12 6.7
2012-13 5.4
2013-14 6.4
2014-15 7.4
2. Observe around you — you will find State Electricity Boards

(SEBs), BSES and many public and private organisations sup-
plying electricity in different states and union territories. There are
private buses on roads alongside the goverment bus services and
so on.
(i) What do you think about this dual system of the co-existence
of public and private sectors?
(ii) What are the merits and demerits of such a dual system?
Discuss.
3. With the help of your parents and grandparents prepare a list of
multinational companies that existed in India at the time of
independence. Now put a (ü ) mark against those which are still
growing and a (× ) against those which do not exist any more. Are
there any companies whose names have changed? Find out the
new names, the country of origin, nature of product, logo and
prepare charts and display in your class.
2020-21
4. Give appropriate examples for the following:
Nature of Product Name of a Foreign Company

Biscuits
Shoes
Computers
Cars
TV and Refrigerators
Stationery
Now, find out if these companies which are mentioned above existed
in India before 1991, or came after the New Economic Policy. For this,
take the help of your teacher, parents, grandparents and shopkeepers.
5. Collect a few relevant newspaper cuttings on meetings organised
by WTO. Discuss the issues debated in these meetings, and find
out how WTO facilitates world trade.
6. Was it necessary for India to introduce economic reforms at the
behest of World Bank and International Monetary Fund? Was there
no alternative for the government to solve the balance of pay-
ments crisis? Discuss in the classroom.
REFERENCES
Books
ACHARYA, S. 2003. India’s Economy: Some Issues and Answers. Academic

Foundation, New Delhi.
ALTERNATIVE SURVEY GROUP. 2005. Alternative Economic Survey, India 2004–05,
Disequalising Growth. Daanish Books, Delhi.
AHLUWALIA , I.J. and I.M.D. LITTLE . 1998. India’s Economic Reforms and
Development. Oxford University Press, New Delhi.
BARDHAN , PRANAB. 1998. The Political Economy of Development in India.
Oxford University Press, Delhi.
BHADURI, AMIT and D EEPAK N AYYAR . 1996. The Intelligent Person’s Guide to
Liberalisation. Penguin, Delhi.
BHAGWATI, J AGDISH. 1992. India in Transition: Freeing the Economy. Oxford
University Press, Delhi.
2020-21
BYRES, TERENCE J. 1997. The State, Development Planning and
Liberalisation in India. Oxford University Press, Delhi.
C HADHA, G.K. 1994. Policy Perspectives in Indian Economic Development.
Har-Anand, Delhi.
C HELLIAH, R AJA J. 1996. Towards Sustainable Growth: Essays in Fiscal
and Financial Sector Reforms in India. Oxford University Press, New
Delhi.
D EBROY , B. and R AHUL M UKHERJI (Eds.). 2004. The Political Economy of
Reforms. Bookwell Publication, New Delhi.
D REZE , J EAN and AMARTYA S EN. 1996. India: Economic Development and
Social Opportunity. Oxford University Press, New Delhi.
D UTT, RUDDAR AND K.P.M. SUNDARAM. 2005. Indian Economy. S. Chand and
Company, New Delhi.
G UHA , A SHOK (Ed.) 1990. Economic Liberalisation, Industrial Structure
and Growth in India. Oxford University Press, New Delhi.
J ALAN , B IMAL . 1993. India’s Economic Crisis: The Way Ahead. Oxford
University Press, New Delhi.
J ALAN , B IMAL . 1996. India’s Economic Policy: Preparing for the Twenty
First Century. Viking, Delhi.
J OSHI , V IJAY and I.M.D. L ITTLE. 1996. India’s Economic Reforms 1991-2001.
Oxford University Press, New Delhi,
K APILA , Uma. 2005. Understanding the Problems of Indian Economy.
Academic Foundation, New Delhi.
M AHAJAN, V.S. 1994. Indian Economy Towards 2000 A.D. Deep & Deep,
Delhi.
P AREKH , KIRIT and RADHAKRISHNA , 2002, India Development Report 2001-02.
Oxford University Press, New Delhi.
R AO, C.H. HANUMANTHA. and H ANS LINNEMANN. 1996. Economic Reforms and
Poverty Alleviation in India, Sage Publication, Delhi.
SACHS , JEFFREY D., ASHUTOSH VARSHNEY and NIRUPAM BAJPAI.1999. India in the
Era of Economic Reforms. Oxford University Press, New Delhi.
Government Reports and Websites
Economic Survey for various years. Ministry of Finance, Government of
India. Published by Oxford University Press, New Delhi.
Tenth Five Year Plan 1997-2002. Vol. 1. Government of India, Planning
Commission, New Delhi.
Appraisal Document of Twelfth Five Year Plan 2012-2017, NITI Aayog,
Government of India.
https://dipam.gov.in
Handbook of Statistics on Indian Economy, Reserve Bank of India for various
years, Mumbai.
2020-21
Unit 2
Land and Livelihoods in Neoliberal India

Outline
• Land and its significance for people
• Some of the emerging issues related to land in India
• Land Reforms
• Land Acquisition and Dispossession
• Agrarian Crisis
• Land and Livelihoods Diversification
Land and its significance for people
• Land is a vital natural resource for human life.

• Land, for most people is not merely an economic resource
(source of livelihood), but also a symbol/basis of social status
and identity (of individuals, communities), security and self-
reliance.
Some of the emerging issues related to land in India
• Demographic pressure,
• massive and uncontrolled changes in land use,
• large-scale land acquisition drive by the Indian state for domestic and
foreign capital,
• conversion of agricultural and irrigated land for non-agricultural purposes
and related sustainability issues,
• vanishing common property resources,
• changing agrarian relations,
Some of the emerging issues related to land in India ….
• Marginalisation of landless agricultural labourers and tenants,

• growth of landlessness across all social categories,
• continuities and changes in tenancy,
• rise of the rich agrarian classes and newer forms of agrarian
accumulation,
• Gender issues in land,
• forest rights to tribals and other forest dwellers
Land Reforms
• Land reforms (ownership and control over land, land ceilings, redistribution and
tenancy reforms) remained on the agenda of policy reforms for decades.
• The Indian state has virtually abandoned its redistributive agenda of land reform
and instead is pursuing land titling regime through land records modernisation
programme.
• The political costs of land reforms were considered to be too high for the ruling
classes, and thus, given the limitations imposed by the electoral process, other
forms of welfarist interventions, viz. public distribution of food, employment
creation and subsidisation of credit, were preferred even when the state explicitly
favoured developmentalist interventions
• the government took a major step towards recognising the land rights
of the forest dwellers and other forest-dependent communities in India
through the Forest Rights Act (The Scheduled Tribes and Other
Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006),
although the implementation has been rather unimpressive, and
attempts have been made to dilute some of its provisions.
Land Acquisition and Dispossession
• Under neoliberalism, the question of control over and access to land

has acquired a new salience in India.
• The question of land acquisition has become one of the most
contentious issues in neoliberal India.
• Neoliberal development required rapid conversion of agricultural land
for non-agricultural uses, and it intensified the conflicts over land.
• Many of the conflicts, such as Nandigram and Singur in West Bengal,
Kashipur, Posco and Niyamgiri in Odisha, led to prolonged protests
that had implications for provincial as well as national politics.
• Amidst various struggles, the colonial era land acquisition law was
replaced by the “Right to Fair Compensation and Transparency in
Land Acquisition, Rehabilitation and Resettlement Act, 2013”
• Among the key provisions of the act are
• (a) higher compensation for the farmers;
• (b) expansion of the coverage of compensation by including people
whose livelihoods (not necessarily land) are affected;
• (c) compulsory rehabilitation and resettlement of people evicted from
their land;
• (d) mandatory and informed consent of people losing their land in the
case of land acquisition by private sector; and
• (e) social impact assessment to judge livelihoods impacts and to
identify all affected persons
• Later the government attempted to amend/modify the Act through an
ordinance, diluting certain provisions – SIA, prior consent.
• Also, various state governments enacted their specific laws that diluted
the provisions of the Act
Agrarian Crisis
• The post-reform period in India has been associated with a drastic

slowing down of agricultural growth and increasing rural distress.
• The withdrawal of input subsidies (on electricity, water, fertilisers and
seeds),
• declining public investment in agriculture, particularly in irrigation,
• and the decline in credit flow to agriculture have increased the private
costs of agricultural production
• The increasing control of the private sector on the input and output
markets and dependence on informal credit have increased risks for
the farmers.
• On the other hand, with the dismantling of state support, cost of
education, health care, transport and other essential expenditures have
increased for the rural households.
• An estimate based on the NSS data pointed out that out of the monthly
income of a farmer household in India, only 46 per cent of income is
generated from cultivation; while around 50 per cent of income is
earned from wages and non-farm activities together.
• And also agricultural households, other than those with holdings of 10
acres and more, cannot generate enough income from agricultural
production to cover their consumption expenditure.
• Farmers suicides: While high levels of suicides by farmers pointed to
the extent of desperation among the farmers, the frequency and
regional dispersion of suicides point to the systematic nature of the
crisis.
• The agrarian crisis is not only affected small-scale farmers (alone), and
labour also faces a crisis of livelihood.
• ‘super-exploitation of rural labour’ is also part of the agrarian crisis.
• Agricultural surplus is increasingly invested outside agriculture, and
the non-agrarian sectors.
• Wherever some dynamism has been noted within agriculture, these are
less labour absorbing and are often marked by seasonal labour or
piece-rate labour contracts. Thus, the scope for survival within
agriculture, either as self-employment or petty commodity production
or as casual labour, seems limited.
• Harriss-White (2016a, p. 494) notes, ‘in agricultural production, a
small capitalist class is diversifying its portfolios, straddling
agriculture and non-agriculture; a large, growing but unorganized
barely landed class of rural labour moves in and out of agriculture …
most land-based …. are now failing to meet their reproduction costs
from agriculture alone…
• ….declining earnings from agricultural land….
Land and Livelihoods Diversification
• Understanding the interrelationship between the land and livelihoods in

neoliberal India holds the key to understand the emerging dynamics of
structural transformation in rural India.
• The ongoing structural transformation of the Indian economy shows a
drastic decline in the contribution of agriculture to the national income, but
a slower shift of workers from agriculture to non-agricultural occupations.
• The transition to a predominantly non-farm rural economy has been
increasing.
• The prolonged agrarian crisis in rural India has led to an exodus of farmers
from cultivation.
• the rural out-migration is attributed to a host of factors, including the rise in
labour demand in the construction sector following a post-reform
infrastructure and real estate sector boom, as well as the rising aspirations.
• However, as Jodhka points out even though ‘the diversification of the rural
economy is positively entrepreneurial, a lot of it is also born out of
desperation of poverty and sometimes out of aspirations for mobility for the
younger generations’.
• An essential aspect of this rural out-migration is its spatial dimension
• Spatial or linguistic barriers no longer deter people from migrating to other
states in search of employment and better earnings.
• A substantial portion of this migration is from the demographically and
economically backward states in the north and east India to the relatively
developed southern states.
• Typically, upper caste, rich and middle peasants, and those already in
non-farm occupations, and living in relatively developed regions are
more likely to be long-term migrants.
• Those belonging to landless, land poor categories, the scheduled caste
and scheduled tribe households, and living in less developed regions
are more likely to be short-term, circular migrants.
• An important unfolding dimension of this rural transformation is the
interrelationship between out-migration of labour and the crisis of
petty commodity production in agriculture.
• There are indications that the circular migration of labour from the
rural area has led to a greater reliance on family labour for crop
cultivation and allied agricultural activities, particularly through a shift
of responsibility to female labour.
• It is assumed that such temporary, seasonal migration of labour will
gradually weaken their ties to agricultural livelihoods. Studies also
suggest that remittances are being used for purchase of land (or release
of land from mortgage) and also towards working capital required for
agricultural operations.
• It is important to note here that the demand for land from the poor and
the semi-proletariats has intensified, along with that of the state and
capital, and, in that sense, the land question remains relevant.
Suggested Readings:
• Mishra, D. K and P. Nayak (eds.). 2020. Land and Livelihoods in
Neoliberal India. Singapore: Palgrave Macmillan.
(Chapter 1: Introduction)
Edited by
Deepak K. Mishra
Pradeep Nayak
Land and
Livelihoods in
Neoliberal India
Land and Livelihoods in Neoliberal India
Deepak K. Mishra • Pradeep Nayak
Editors
Land and Livelihoods

in Neoliberal India
Editors
Deepak K. Mishra Pradeep Nayak
Centre for the Study of Regional Odisha State Disaster Management
Development Authority
School of Social Sciences Bhubaneswar, Odisha, India
Jawaharlal Nehru University
New Delhi, Delhi, India
ISBN 978-981-15-3510-9 ISBN 978-981-15-3511-6 (eBook)

https://doi.org/10.1007/978-981-15-3511-6
© The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer
Nature Singapore Pte Ltd. 2020
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189721, Singapore
Preface and Acknowledgements
Land is not just a valuable economic resource; people relate to land at

multiple levels. It is often seen as a source of identity and belongingness.
With the gradual decline in the significance of agriculture in the economy
and the associated changes in the structure of output and employment,
the non-farm drivers of growth are expected to be the critical force behind
the process of economic development. The slow shift of labour out of
agriculture on the one hand and the ‘jobless’ character of the growth pro-
cess, in countries like India, on the other hand, have brought the question
of livelihood security of the populations dependent upon agriculture to
the forefront of academic and policy discourse. As more and more people
move out of agriculture and the rural areas, the prospect of employment,
particularly decent employment with social security, appears to have
declined—many of those who have found employment in the informal
economy work under precarious conditions. At the same time, economic
growth has ensured new investment and earning opportunities for a sec-
tion of the people. Thus, the process of economic transformation has led
to highly unequal outcomes for different classes and groups of people.
The process of neoliberal economic growth has necessitated changes in
the pattern of land utilisation. Not only that there has been a need for
conversion of land to non-agricultural uses, for real estate and infrastruc-
ture development, industrial projects and so on, but there has also been a
move to shift the pattern of land use from food to non-food crops within
agriculture. These processes have unfolded in different ways in different
countries or even in different regions within the country, but these have
heightened the conflicts around land. Apart from the specific features of
v
vi PREFACE AND ACKNOWLEDGEMENTS
‘land’ as a resource and as a commodity, the institutional histories of land

management have also created specific challenges for developing an equi-
table and efficient land policy. Land is also a source of power and wealth
in many rural, agrarian contexts. The legacies of unequal access to and
control over land are being renewed under the new circumstances, often
leading to adverse consequences for traditionally marginalised groups.
With the consolidation of neoliberal ideas, the power relations that govern
and mediate access to land, mainly through the state institutions, have
undergone significant changes. As governments compete with each other
to attract domestic and internal capital, the ability to provide land cheaply,
with reduced transaction costs, and without much delay has emerged as a
critical aspect of being attractive to capital. The challenge of meeting the
expectations of capital in an electoral democracy, where those who are
involuntarily displaced from their land or livelihoods also have a voice, is
formidable. The studies included in this book attempt to explore the
unravelling of these questions in India in specific regional contexts.
Most of these studies were initially presented and discussed at a seminar
in 2017 at the Indian Institute of Advanced Studies, Shimla. We express
our gratitude to the authorities and the staff of the institute for providing
us with all the necessary support. The conversations around the theme of
land and livelihood continued in the following months, and the chapters
have been revised and updated for the volume. We are immensely thankful
to the authors who have contributed to the edited volume for their
patience and support throughout the process of developing this volume.
We are grateful to Prof. Raju Das, York University, Toronto, and the
anonymous referees of Palgrave Macmillan whose insightful comments on
previous drafts have been helpful to revise the chapters. We appreciate the
editorial and academic support of Mr. Krishna Surjya Das, a research
scholar at the Centre for the Study of Regional Development, JNU.
The editors are grateful to their respective colleagues and friends for the
formal and informal discussions which have helped to shape some of the
arguments presented here. We thank our respective families for all the sup-
port and encouragement.
It has been our pleasure to work with the Palgrave Macmillan team. We
thank them for their professionalism and very competent assistance at
every stage in bringing out this volume.
New Delhi, India Deepak K. Mishra

Bhubaneswar, Odisha, India Pradeep Nayak
Contents
1 Introduction: The Political Economy Land and

Livelihoods in Contemporary India 1
Deepak K. Mishra and Pradeep Nayak
2 Land Titling or Land Reforms: India’s Policy Dilemma 35

Pradeep Nayak
3 Ownership Versus Control: The Changing Dynamics of

Land Use in Liberalised Agricultural Context of India 57
Sukhpal Singh
4 Contextualizing Land Question in a Green Revolution

Area: Agrarian Transformation and Politics in Western
Uttar Pradesh 71
Jagpal Singh
5 Landowners as Non-farm Workers: A Case of Small

Farmer Migrants in Karnataka 85
Sheetal Patil and Seema Purushothaman
6 Globalising Agrarian Markets and Changing Production

Relations: Village-Level Evidence from India103
Anish Gupta
vii
viii Contents
7 Land, Caste and Class in Rural West Bengal123

Dayabati Roy
8 Agricultural Land Markets in India: A Case

of Maharashtra141
Ch. Sankar Rao
9 Dispossession, Neoliberal Urbanism and Societal

Transformation: Insight into Rajarhat New Township in
West Bengal169
Animesh Roy
10 Land, Labour and Industrialisation in Rural and Urban

Areas: A Case Study of Reliance SEZ in Gujarat195
Amita Shah, Aditi Patil, and Dipak Nandani
11 Neoliberal Governing as Production of Fantasy:

Contemporary Transformations in Ahmedabad’s
Landscape221
Navdeep Mathur and Harsh Mittal
12 The Expressway to Agra—Two Roads, Same Destination:

Land Acquisition under Old and New Land Acquisition
Regimes235
Prashant K. Trivedi
13 LARR 2013: What Does It Deliver?249

Dhanmanjiri Sathe
14 Land Issues and Liberalisation in Northeast India265

Walter Fernandes
15 The Gendered Transformation of Land Rights and

Feminisation of Hill Agriculture in Arunachal Pradesh:
Insights from Field Survey283
Vandana Upadhyay
Index309
Notes on Contributors
Walter Fernandes founded the North Eastern Social Research Centre in

2000 and served as its director till 2011. As a Senior Fellow, Dr. Fernandes
continues to pursue diverse research topics. He is involved in the study of
development-induced displacement in Northeast India. Formerly, he was
the director of the Indian Social Institute, Delhi, and the editor of its
quarterly, Social Action. He has done extensive studies on tribal rights,
livelihood issues, land rights, climate justice and peace initiatives and writ-
ten and edited several books and articles. Some of his recent books are
Search for Peace with Justice, Relations Across Borders, and Uprooted for
Whose Cost?
Anish Gupta teaches at the University of Delhi. He has a PhD from
Jawaharlal Nehru University. His work has appeared in reputed academic
journals including the Economic and Political Weekly.
Navdeep Mathur is Associate Professor in the Public Systems Group at
the Indian Institute of Management Ahmedabad. He is founding co-
editor of Critical Policy Studies and serves on the editorial board of Public
Administration and Development. Before joining IIM Ahmedabad,
Navdeep was a Research Fellow at the Institute of Local Government
Studies, School of Public Policy, University of Birmingham, UK. Along
with two co-authors he was awarded the UK Public Administration
Consortium Prize. He is a Fellow at the Dr. Seaker Chan Centre, School
of International Relations and Public Administration, and Indian repre-
sentative on the BRICS Governance and Development Scientific
Committee at Fudan University, Shanghai. He conducts research on
ix
x Notes on Contributors
urbanism, resistance and alternatives to top-down urban planning and

institutional design, and teaches courses on social justice, politics, inter-
pretive methods, and public policy.
Deepak K. Mishra is Professor of Economics at the Centre for the Study
of Regional Development, School of Social Sciences, Jawaharlal Nehru
University, New Delhi. His research interests are in the areas of the politi-
cal economy of agrarian change, rural livelihoods and agrarian institutions,
migration, gender, and human development. He has co-authored The
Unfolding Crisis in Assam’s Tea Plantations: Employment and Occupational
Mobility (2012) and has edited Internal Migration in Contemporary India
(2016). Recently, he has co-edited Rethinking Economic Development in
Northeast India: The Emerging Dynamics (2017).
Harsh Mittal is a doctoral candidate at the Public Systems Group, IIM
Ahmedabad. His thesis conducts a post-structural examination of India’s
urban policy-making, focusing on how practices of knowledge production
shape and influence urban decision-making. His broader research interests
are in advancing Deleuzian assemblage thinking and STS perspectives in
policy analysis.
Dipak Nandani holds a postgraduate degree in Rural Management. He
has sound research experience and has a number of research papers in
journals of repute. Earlier, he was associated with the Gujarat Institute of
Development Research, Ahmedabad. He works as an independent
researcher on issues like migration, rural development, agriculture, natural
resource management, land issues, industrial development. A journalist of
repute, he has contributed close to 100 columns in Gujarati newspapers
like Gujarat Samachar, Sandesh, Jansatta and Loksatta. He is also associ-
ated with a number of NGOs, wherein he focuses on inequality, poverty
and class conflicts.
Pradeep Nayak is a civil servant in the Odisha Government. He holds a
PhD in law and governance studies from JNU. He is a former Fellow at
Indian Institute of Advanced Studies, Shimla. His recent book is The State
and Land Records Modernisation (2015). He has also authored Party
Politics and Communalism: A Study of Ram Janamabhoomi and Babri
Masjid Dispute (1993) and co-edited a book Communalisation and Tenth
Lok Sabha Elections. (1993). He has contributed several papers to journals
and edited books.
Notes on Contributors xi
Aditi Patil was trained as a computer engineer and spent her early career
in India’s software industry. Having lived and worked across different
parts of the country, she witnessed a range of socio-environmental issues
plaguing the nation. She then quit her IT job to pursue a Master’s in
Development Studies. Since then she has worked on diverse environmen-
tal and conservation projects with WWF India, Gujarat Forest Department
and Columbia University. She is a contributing researcher for an indepen-
dent data journalism portal called the Land Conflict Watch. Aditi is
employed by the Ministry of Environment, Forest and Climate Change,
New Delhi, as a young professional.
Sheetal Patil is a researcher with Azim Premji University, Bangalore.
With formal training in engineering and computer applications, her
research interest is in policy impacts on agricultural sustainability and its
assessment at the micro level. Using the lens of sustainability, she focuses
on agrarian and related issues that range from natural resource manage-
ment to food security to livelihood sustenance to alternate institutions to
safeguarding traditional and cultural knowledge.
Seema Purushothaman is a professor at Azim Premji University. She
uses interdisciplinary approaches to study social, ecological and economic
change in livelihoods and polices in India, investigating their linkage to
food and agrarian crises. Her research spans across the concept and issues
of sustainability in and around forests and family farms. Her teaching
interest includes sustainability as a concept, as an agrarian concern as well
as from an economic perspective.
Ch. Sankar Rao has a PhD in Economics from Jawaharlal Nehru
University. He is Lecturer in Economics, TRR Govt Degree College,
Kandukur, Andhra Pradesh. He has also worked at the Council for Social
Development, Hyderabad. His areas of research interests include agricul-
tural development, agricultural markets and rural development. His work
has appeared in the Economic and Political Weekly and Journal of Rural
Development.
Animesh Roy received his doctoral degree from Jawaharlal Nehru
University, New Delhi, in 2015. He is working as an assistant professor at
the Giri Institute of Development Studies, Lucknow, India. His wide
interests of research include dynamics of development and livelihood,
political economy, peri-urban land rush, tourism, and matrilineal society.
He has been writing extensively on these issues and many of his solo
xii Notes on Contributors
research articles and critical observation have appeared in reputed journals

such as the Journal of Land and Rural Studies, Chinese Sociological
Dialogue, Social Change, Asian Profile, Journal of Rural Development,
Punjab Geographer, Asian Studies, and the Economic and Political Weekly.
He is working on his independent major research project ‘Development,
Dispossession and Class Formation’ funded by the Indian Council of
Social Science Research, New Delhi.
Dayabati Roy is a Sociologist by training and is a Senior Fellow at the
Department of Social and Cultural Anthropology, University of Helsinki,
Helsinki, Finland. She is also affiliated with the Centre for Studies in Social
Sciences, Calcutta. Her research interests cover India’s political economy,
decentralization and democracy, rural politics, castes, social movement,
women and gender issues. She is the author of the books Rural Politics in
India: Political Stratification and Governance in West Bengal (2013) and
Employment, Poverty and Rights in India (2018).
Dhanmanjiri Sathe is a professor at the Savitribai Phule Pune University,
Pune. She has been a professor at the Centre for Economic Studies and
Planning, Jawaharlal Nehru University, New Delhi. She has recently pub-
lished a book titled, The Political Economy of Land Acquisition in India:
How a Village Stops Being One. Her research interests include local gover-
nance with special reference to the village level issues. She has been a visit-
ing faculty at the University of Goettingen, Germany, and Cevro Institute,
University of Prague, Czech Republic. She was awarded the Fulbright-
Nehru Senior Research Fellowship for the year 2012–13.
Amita Shah is an economist, a former professor and the director of
Gujarat Institute of Development Research, Ahmedabad. More than 75
papers written by Dr. Shah on topics such as dry land agriculture and for-
estry, environment, employment, chronic poverty, industry- agriculture
interface and migration related issues have appeared in national and inter-
national journals. She also has four books, to her credit. She has been
associated with INSEE right from its inception and was its president from
2012 to 2014. She has worked extensively with government and non-
government organisations and bilateral and multilateral international
agencies. She is Honorary Fellow at the Centre for Development
Alternatives, Ahmedabad.
Jagpal Singh is Professor of Political Science, IGNOU, New Delhi.
Previously he taught at Dyal Singh of Delhi University and Department of
Notes on Contributors xiii
Political Science, NEHU, Shillong. He holds a PhD from the Centre for
Political Studies, JNU, New Delhi. His areas of interest are democracy and
development, identity politics, and agrarian politics in India. He has
authored Capitalism and Dependence: Agrarian Politics in Western Uttar
Pradesh, 1951–1991 (1992). His work has appeared in many reputed
journals including the Economic and Political Weekly.
Sukhpal Singh is a professor, Centre for Management in Agriculture
(CMA), Indian Institute of Management (IIM), Ahmedabad, Gujarat,
INDIA, and a founding co-editor, Millennial Asia—an International
Journal of Asian Studies. He is author of nine books, more recent ones
being Fresh food retail chains in India (2011, co-authored), Producer
Companies in India (2014, co-authored), and Institutional innovations in
the delivery of farm services in India: A smallholder perspective (2017).
More than 120 research papers have appeared in international/national
journals/edited books, and more than 70 review articles/articles have
appeared in popular dailies/magazines. He has been a visiting fellow at the
IDS, Sussex (Brighton), UK; Chulalongkorn University, Bangkok,
Thailand; the University of Manchester, UK and the Copenhagen Business
School, Copenhagen, Denmark, and a member of various committees/
working groups of the Government of India.
Prashant K. Trivedi is an associate professor at the Giri Institute of
Development Studies, Lucknow. He has done his doctorate on Dalit
Women and Social Development: A Sociological Study of Lucknow
District of Uttar Pradesh from the University of Lucknow in Sociology.
His research interests include political economy of land reforms, rural
studies and issues relating to Dalits, Muslims and Women with a special
focus on Uttar Pradesh, India. He has authored articles on a variety of
subjects including gender and law, caste and violence and inequality in
development and these have appeared in various journals including the
Economic and Political Weekly, Journal of Indian School of Political Economy
and Social Change. His latest book Land to the Tiller—Revisiting the
Unfinished Land Reforms Agenda came out in 2016. Before this he edited
The Globalisation Turbulence: Emerging Tensions in India Society and co-
authored Weapon of the Oppressed: An Inventory of People’s Rights in India.
Before joining the Giri Institute, he was faculty at the Council for Social
Development, New Delhi, since 2006. During this period, he was Book
Review Editor of a peer-reviewed journal Social Change.
xiv Notes on Contributors
Vandana Upadhyay is a professor, Department of Economics, Rajiv

Gandhi University, Itanagar, Arunachal Pradesh. Her research interests are
in the areas of gender, work and environment, labour and employment,
human development, rural livelihoods in mountain economies and the
informal sector. Her publications include The Unfolding Crisis in Assam’s
Tea Plantations: Employment and Occupational Mobility (co-authored,
2012) and Rethinking Economic Development in Northeast India: The
Emerging Dynamics (co-edited, 2017).
Abbreviations
AAPSU All Arunachal Pradesh Students’ Union

ABD Accumulation by Dispossession
AMC Ahmedabad Municipal Corporation
ASEAN Association of Southeast Asian Nations
BIMARU Bihar Madhya Pradesh Rajasthan Uttar Pradesh
BJP Bharatiya Janata Party
BSE Bombay Stock Exchange
BSP Bahujan Samaj Party
CAG Comptroller and Auditor General of India
CAGR Compound Annual Growth Rate
CDB Community Development Block
CFR–LA Community Forest Rights-Learning and Advocacy Process
CHT Chittagong Hill Tracts
CIDCO City Industrial Development Corporation of
Maharashtra Ltd.
CM Chief Minister
CPLR Common Property Land Resource
CPR Common Property Resource
CSDS Centre for Study of Developing Societies
CSR Corporate Social Responsibility
DID Development-Induced Displacement
DILRMP Digital India Land Records Modernization Programme
EPZ Export Promotion Zone
FGDs Focused Group Discussions
FMOH Female Managed Operation Holdings
FRBMA Fiscal Responsibility and Budget Management Act
FSI Floor Space Index
xv
xvi ABBREVIATIONS
GDP Gross Domestic Product

GIFT Gujarat International Finance Tec (City)
GNIDA Greater Noida Industrial Development Authority
GO Government Order
GOAP Government of Arunachal Pradesh
GSDP Gross State Domestic Product
HCL Hindustan Computers Limited
HEP Hydro-Electric Projects
HUDCO Housing and Urban Development Corporation Limited
ICSSR Indian Council of Social Sciences Research
IFSC International Financial Services Centre
IL&FS Infrastructure Leasing & Financial Services
IRDA Insurance Regulatory and Development Authority
IT Information Technology
ITES Information Technology Enabled Services
JAL Jaiprakash Associate Limited
JNNURM Jawaharlal Nehru National Urban Renewal Mission
JPGA Jalandhar Potato Growers’ Association
LAA Land Acquisition Act
LARR Land Acquisition, Rehabilitation and Resettlement Act
LEP Look East Policy
LFG Left-Front Government
LFPR Labour Force Participation Rates
LOC Land Occupation Certificate
LPC Land Possession Certificate
MBC Most Backward Classes
MDGs Millennium Development Goals
MGNREGA Mahatma Gandhi National Rural Employment
Guarantee Act
MIDC Maharashtra Industrial Development Corporation
MLA Member of Legislative Assembly
MP Member of Parliament
MPCE Monthly Per Capita Consumption Expenditure
NBA Narmada Bachao Andolan
NCR National Capital Region
NDA National Democratic Alliance
NEI North East India
NEP New Economic Policy
NGO Non-Governmental Organisations
NITI National Institution for Transforming India
NLRMP National Land Records Modernisation Programme
NMIA Navi Mumbai International Airport
ABBREVIATIONS xvii
NSCN-IM National Socialist Council of Nagaland-Isac Muivah

NSE National Stock Exchange
NSS National Sample Survey
NSSO National Sample Survey Organisation
OBC Other Backward Classes
PDS Public Distribution System
PESA Panchayats Extension of Scheduled Areas Act
PIL Public Interest Litigation
POSCON Potato Growers’ Confederation
PPP Public-Private Partnership
PRIs Panchayati Raj Institutions
R&R Rehabilitation and Resettlement
RBI Reserve Bank of India
RFCTLARR/
RTFCATILARR Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act
RIL Reliance Industries Limited
RLD Rashtriya Lok Dal
SC Scheduled Castes
SDGs Sustainable Development Goals
SEBI Securities and Exchange Regulatory Authority
SEZ Special Economic Zone
SIAC Singapore International Arbitration Centre
SIDBI Small Industries Development Bank of India
SNA System of National Accounts
SNAM Sabarmati Nagarik Adhikar Manch
SP Samajwadi Party
ST Scheduled Tribes
TCS Tata Consultancy Services
TDR Transfer Development Rights
UP Uttar Pradesh
UPA United Progressive Alliance
UPEIDA Uttar Pradesh Expressway Industrial Development Authority
WPR Workforce Participation Rate
WTO World Trade Organisation
YEW Yamuna Express Way
List of Figures
Fig. 6.1 Land distribution in Mankhera. (Source: Primary Survey 2007,

2013)112
Fig. 8.1 Trends of price of agricultural land per acre in total surveyed
villages in Maharashtra—At constant prices (Base year 2001 of
CPI-AL) (in Rs Lakh). (Source: Field Survey (2017)) 147
Fig. 10.1 Changes in land holding pattern before 2008–09 and now i. e.
in 2017. (Source: Field Surveys) 210
xix
List of Tables
Table 5.1 Ratio of urban-to-rural income in Karnataka and India 89

Table 5.2 Land holders and migrants across social groups (percentage) 90
Table 5.3 Mean annual income, expenses and loans
(INR per household) 97
Table 6.1 Farm dynamics and land fragmentation in Mankhera 107
Table 6.2 Lease in as per cent of total landowning, by social groups,
Mankhera, 2007 108
Table 6.3 Distribution of area (in acres/per cent) under different
form of tenancy by size class of ownership holding,
Mankhera, 2007 109
Table 6.4 Per cent of land leasing in/out (in acres/per cent) by
different social groups 110
Table 6.5 Changes in farm dynamics and land fragmentation in
Mankhera113
Table 6.6 Cropping pattern in Mankhera, Kharif season,
2007 and 2013 114
Table 6.7 Lease in as per cent of total landowning by social group 116
Table 6.8 Distribution of area (in acres/per cent) under different
form of tenancy by size class of ownership holding,
Mankhera, 2013 117
Table 6.9 Land leased in/out (in acres/per cent) by different social
groups117
Table 6.10 Number of unmarried males with education <=15 years in
Mankhera (Phase 1) 118
Table 8.1 Village selection and sample map 146
Table 8.2 Extent of sale and average area of sale of agricultural land in
total surveyed villages of Maharashtra (%) 148
xxi
xxii List of Tables
Table 8.3 Sale price, net income and price-income ratio of agricultural
land in total surveyed villages in Maharashtra 150
Table 8.4 Area share of land transacted across occupation of sellers
and buyers in surveyed villages of Maharashtra (%) 152
Table 8.5 Farm size wise area share of land sold and bought by the
cultivating households in Maharashtra (%) 152
Table 8.6 Area share of land sold across various households’ reasons
of selling and buying in the total surveyed villages of
Maharashtra (%) 155
Table 8.7 Land under agricultural and non-agricultural purposes in
Maharashtra158
Table 8.8 Average annual growth rates of agricultural and non-
agricultural sectors in Maharashtra (%) 158
Table 8.9 Area share of land transacted under different type of middle
persons in Maharashtra (%) 161
Table 8.10 Area share of land purchased under different type of
cultivations in Maharashtra (%) 162
Table 9.1 Revenue villages in Rajarhat C.D. block wherefrom land
was acquired 176
Table 9.2 Household size category wise land acquired and change in
mean size of landholdings among the dispossessed
households179
Table 9.3 Landholding size category wise change in prime economic
activity of the dispossessed households 181
Table 9.4 Sources of household income in the pre- and post-
acquisition stage 183
Table 9.5 Landholding size category-wise MPCE (at real price, base
year: 2009) of dispossessed households and farming
households unaffected by acquisition 185
Table 9.6 Results of two independent samples T-test on MPCE (Rs.) 185
Table 9.7 Simplified Gini coefficient values of MPCE (Rs.) of
dispossessed households and farming households
unaffected by acquisition 186
Table 9.8 Scenario of land parcels purchased by different buyers from
partially land lost households between 2004 and 2016 189
Table 10.1 State-wise area under SEZs across sectors in India: 2017 199
Table 10.2 Acquisition of restricted land for SEZ in the various states 200
Table 10.3 Targets of SEZs and shortfalls 203
Table 10.4 Change in occupational profile of respondents 211
Table 10.5 Positive impact on economic conditions of people 212
Table 10.6 Negative impact of SEZ 212
List of Tables xxiii
Table 15.1 Size-class-wise distribution of operational holdings in

Arunachal Pradesh: 1970–71 to 2015–16 288
Table 15.2 Size-class-wise share of ST operated holdings in total
holdings and area in Arunachal Pradesh: 1980–81 to
2015–16289
Table 15.3 Size-class-wise distribution and share of female managed
operational holdings in Arunachal Pradesh: 2000–2001
and 2015–16 290
Table 15.4 Workforce participation rates (UPSS) in Arunachal Pradesh 294
Table 15.5 Labour force participation rates (UPSS) in Arunachal Pradesh 295
Table 15.6 Sectoral distribution of UPSS workers in Arunachal
Pradesh and the NER (%) 296
Table 15.7 Distribution of workers by their status and location in
Arunachal Pradesh (%) 297
Table 15.8 Share of female workers in broad sectors of Arunachal
Pradesh and NER (%) 298
Table 15.9 Average weekly time spent by gender on different activities
in the villages of Arunachal Pradesh (2010) 300
Table 15.10 Average weekly time spent gender-wise on different
activities in the villages of Arunachal Pradesh (2017) 300
Table 15.11 Land ownership in Arunachal Pradesh 301
Table 15.12 Tasks performed by the women in the Jhum and the
agriculture field in Arunachal Pradesh 303
CHAPTER 1
Introduction: The Political Economy Land

and Livelihoods in Contemporary India
Deepak K. Mishra and Pradeep Nayak
1 Introduction
Economic development is generally assumed to be a process of gradual
decline in the dependence of populations on land and land-based liveli-
hoods. However, the question of land, in its multiple dimensions, contin-
ues to be among the most controversial issues in the Global South. Land,
which is a key natural resource for addressing global hunger and malnutri-
tion, accelerating agricultural productivity, eradicating poverty, achieving
sustainable development goals, mitigating climate change impacts, man-
aging and assisting urbanisation and industrialisation, is also considered to
be an essential marker of political and social power and identities of
nations, communities and individuals.1 Historically, increasing productivity
1
The diversity of the ways through which people relate to land—as a natural resource,
as an economic asset, as a source of livelihood, security and as a basis of identity and
D. K. Mishra (*)
Centre for the Study of Regional Development, School of Social Sciences,
Jawaharlal Nehru University, New Delhi, Delhi, India
P. Nayak
Odisha State Disaster Management Authority, Bhubaneswar, Odisha, India
© The Author(s) 2020 1

D. K. Mishra, P. Nayak (eds.), Land and Livelihoods in Neoliberal
India, https://doi.org/10.1007/978-981-15-3511-6_1
2 D. K. MISHRA AND P. NAYAK
of agriculture and mobilisation of the agrarian surplus for industrialisation

and the associated infrastructure creation have been considered as a critical
constraint in the path of economic development.
The global debates around land show remarkable continuity and change in
recent years. While the issues of food and nutrition security in the context of
the Millennium Development Goals (MDGs) and Sustainable Development
Goals (SDGs), increasing environmental degradation, including soil degrada-
tion, deforestation, pollution and declining water availability in the backdrop
of climate change, the implications of changing land-use practices and the
relationship between access to land and poverty have been at the centre-stage
of global discussions, it is the issue of control over and access to land that has
emerged as flashpoint of discussions around the land question.
2 Land Questions Under Neoliberalism

Neoliberalism2 broadly refers ‘to the new political, economic, and social
arrangements within society that emphasize market relations, re-tasking
the role of the state, and individual responsibility’ (Springer et al. 2016,
p. 2). At a basic level, it involves a fundamental faith in free markets as ‘the
most moral and the most efficient means for producing and distributing
goods and services’ (Cahill 2012, p. 111) and its extension into all areas
of life, including the economy, politics and society. Neoliberalism, under-
stood as ‘the restoration and reinforcement of class power’ (Harvey 2005),
is also an ideological project that promotes a market-led policy framework
of economic development and identifies unregulated markets and the ‘ani-
mal spirit’ of private entrepreneurs, as essential for unleashing growth
potentials. From the Marxist political economy perspective, it is primarily
seen as a class project of the capitalist class. In the Indian context, the
sweeping pro-market reforms since the early 1990s are seen as a phase of
the dominance of neoliberalism (Chandrasekhar 2012; Das 2015). As the
state is engaged in facilitating the accumulation projects of domestic and
international capital, there is a geographical dimension to neoliberalism; it
involves ‘massive restructuring of space relations, producing geographical
belongingness—calls for a plural understanding of the significance of land in the contem-

porary world. Among the critical foundations of the neoliberal understanding of land is
that it is merely an economic asset, which ideally should be allocated through the market
mechanism.
2
For a detailed discussion on the evolution and implications of neoliberalism as a project,
see Harvey (2005, Mirowski (2013) and Springer et al. (2016).
1 INTRODUCTION: THE POLITICAL ECONOMY LAND AND LIVELIHOODS… 3
unevenness at multiple scales’ (Das 2015, p. 719). Among the several
ways through which these spatial accumulation dynamics unfold are
investments in built environments, the commodification of space and
restructuring of property rights over natural resources—all of which
involve changes in the ‘land relations’.
Land grabbing, particularly by foreign countries and multinational cor-
porations in many developing countries, which has been described as ‘for-
eignisation of space’ has generated a global debate on the control and
management of land (Kaag and Zoomers 2014; Zoomers 2010; Zoomers
and Otsuki 2017). Although the empirical basis, as well as the conceptual
foundations of the land grabbing discourse, has been questioned (Edelman
2013; Oya 2013), the plurality of the contexts under which land is being
acquired at various scales, by different actors and for multiple purposes,
has ‘both continuity and change’ from the historical episodes of enclo-
sures (Borras Jr and Franco 2012; White et al. 2012). Underemphasising
the historical connections often ‘leads researchers to ignore or underesti-
mate the extent to which pre-existing social relations shape rural spaces in
which contemporary land deals occur’ (Edelman and León 2013, p. 1697;
Mollett 2016), while the newness of contemporary land control is not
only limited to ‘land grabbing or ownership but also new crops with new
labor processes and objectives for the growers, new actors and subjects,
and new legal and practical instruments for possessing, expropriating, or
challenging previous land controls’ (Peluso and Lund 2011, p. 668).
With relentless expansion of the reach of capital across space and a rapid
transformation of the economies of the developing countries, capitalist
globalisation has brought back some of the well-known debates on the
agrarian transition to the centre-stage with a contemporary salience
(Akram-Lodhi and Kay 2010; Editors Agrarian South 2012; Lerche et al.
2013; Mohanty 2016). Neoliberalism, with its overwhelming emphasis on
the ability of ubiquitous, impersonal and efficient markets as a central
institution for economic decisions, has encountered some of its most for-
midable political and academic challenges on the question of land. As part
of its broader framework of agrarian restructuring, which ‘seeks to liber-
alise international trade in food and agricultural products, deregulate the
operation of domestic agricultural markets, privatise rural parastatals, and
formalise the ownership and control of property that had been held in
public, in common or, in some cases, privately but monopolistically’
(Akram-Lodhi 2007, p. 1438), neoliberal enclosures through market-
based land policies result in the deepening of capitalist property relations
in the South (Akram-Lodhi 2007).
The on-going nature of dispossession has revived scholarly interest in

the question of primitive accumulation in the writings of Marx (Adnan
2015; Byres 2005). Primitive accumulation, originally theorised as a pre-
cursor to the development of capitalism, had three distinct aspects to it:
(a) the expulsion of independent producers from the ownership of means
of production; (b) the appropriation of the resources for capitalist accu-
mulation; and (c) the creation of free labour as a class whose survival
depends on the sale of labour power (Chatterjee 2017). The use of force,
often through the use of state power, was an essential feature of the early
development of capitalism (Marx 1976). The continuing dispossession of
peasants (and others) from their land has led some scholars to argue that
primitive accumulation is a continuing feature of capitalism. Although
capital attempts to replace human labour by machines, ‘it also seeks to
bring in new workers under its command as an exploitable human resource’
and hence, ‘capitalist accumulation must depend on the continuous sepa-
ration of the labourer from the means of production’ (Mitra et al. 2017,
p. 3). Harvey (2003, pp. 137–182) has drawn attention to the relevance
of such dispossessions to global capitalism, through the notion of accumu-
lation by dispossession (ABD), which has generated a great deal of attention
to the diverse forms of dispossessions across the world (Adnan 2015;
Glassman 2006; Hall 2013; Levien 2013b). Sanyal (2014) and Chatterjee
(2008), among others, argue that primitive accumulation does not consti-
tute the pre-history of capitalism, but is one of the conditions of its exis-
tence. While the logic of capital is accumulation, that of the non-capital is
need. An essential feature of post-colonial capitalist development is that all
those who are dispossessed from land are not absorbed in the capitalist
sector, a majority of them join the non-capitalist, ‘informal sector’, which
interacts with the capital sector and is ‘recreated and renewed by the
developmental interventions’ of the state (Sanyal 2014).3
3
While arguing against the basic premises of capitalist transition, Sanyal (2014) makes a
number of critical points on the nature and significance of primitive accumulation in the
post-colonial context. Of particular relevance are the following. (i) Although the need econ-
omy, the ‘wasteland’ produced by primitive accumulation, to which the dispossessed are
condemned, is embedded in market-mediated relations, ‘capital and the need economy (the
site of non-capital) are not locked in a relation in which economic surplus flows from the later
to the former’. ‘It is a relationship based on exclusion and formation rather than inclusion
and extraction’ (pp. 73). The need economy does not exist because capital needs it. (ii) It is
not the result of ‘any weakening of the transformative capacity of capital’ (pp. 66). (iii) This
formulation displaces the questions of capitalist transition, and post-colonial capitalism is
By locating the genesis of the problem in the overaccumulation of capi-

tal under contemporary capitalism, and by linking it to the spatio-tempo-
ral fix that capitalism needs to tackle overaccumulation, Harvey frees the
notion of dispossession from its historical specificity. However, by theoris-
ing ABD as part of market rather than non-market relations, and also by
clubbing a variety of neoliberal attacks on the working classes and the
ordinary people under the rubric of ABD, Harvey has made the distinc-
tion between ABD and expanded reproduction under capitalism blurred4
(Levien 2017). Levien argues, that since ‘Harvey does not provide a clear
definition of accumulation by dispossession, and explicitly claims that it is
“primarily economic rather than extra-economic” … it is not clear what
these different processes share, or what separates accumulation by dispos-
session from other “fixes” to the other problems of over-accumulation or
from the “normal” expanded reproduction of capital’ (Levien 2017,
p. 55). Levien (2013a) has pointed to the diversity of contexts under
which contemporary dispossessions have taken place and has sought to
distinguish between the regimes of dispossession. He suggests that rather
than focusing on the ‘transition between mode of production’ the focus
should shift to ‘variations in regimes of dispossession within the capitalist
mode of production’ (Levien 2017, p. 53–4). However, it is the intercon-
nectedness across the different regimes of dispossession that is central to
the understanding of dispossessions under neoliberalism. In understand-
ing the diverse patterns and outcomes of primitive accumulation, the sig-
nificance of the ways through which various forms of dispossession interact
with processes of exploitation of labour and capital within the overall sys-
tem of capitalist class relation, as suggested by Das (2017), assumes impor-
tance, which means that coercive dispossession, separation from property
based on class differentiation and exploitation of labour must be seen as
conceptualised as ‘the structural articulation of capital and non-capital residing in the com-
modity space’ (pp. 70). For a critique of Sanyal’s formulations, on theoretical and empirical
grounds, see Basu (2019). While these questions have important implications for under-
standing the questions of land and livelihoods in contemporary India, we do not engage with
the agrarian transition debate here (for a recent discussion on the related issue see,
Mohanty 2016).
4
Mitra et al. (2017, p. 3) point out that ‘We cannot take transition for granted, merely
because history happened that way. The “extra-economic” factors are always present in the
economic, and only in this way, an adequate understanding of capitalism becomes possible’.
On the related question of the continuing evidence of ‘unfreedom’ and ‘bondage’ under
contemporary globalisation, see Brass (2011).
three interconnected moments of capital (ibid). Thus, ‘primitive accumu-

lation can be regarded as a generic capitalism-facilitating process, which
can assume particular forms such as ABD at specific sociohistorical con-
junctures’ (Adnan 2017, p. 92 emphases in original).
A relatively less discussed question in the context of dispossession is the
differentiation of the peasant producers under expanded reproduction.
Mishra (2011) points to the gradual but systematic displacement from
sources of livelihoods, as dispossession-in-slow motion. While disposses-
sion is generally associated with catastrophic and abrupt disruption of live-
lihoods, a combination of state and market power has also worked towards
systematic undermining of the basis of survival, through diverse processes
such as destruction of natural resources (land, water and forest), privatisa-
tion of commons and weakening of institutional safeguards against pau-
perisation and dispossession (Mishra 2018b). This is one of the ways
through which the land and the livelihoods questions get intertwined
(Mishra 2018a).
3 The Land and Livelihoods Questions

in Neoliberal India: Major Debates
The ‘unanticipated’ turnaround of India’s economic growth since the

mid-1980s and particularly after the sweeping pro-market reforms since
early 1990s has generated a lot of enthusiasm among economists, policy-
makers and others. The post-reform phase of growth has been spectacular
not only in relation to economic growth in other middle- and high-income
countries, but also in comparison to India’s earlier phases of growth in the
post-independence period. India’s rise has been celebrated as a neoliberal
growth story, emphasising the need for other less developed economies to
follow a similar path. However, the initial euphoria over India’s rise has
given way to more sober understandings of the significant challenges in
maintaining the initial spurts in growth. Among the many concerns that
have been raised on the nature of this growth process are the distributive
implications of this growth (Ghosh 2011). The uneven impacts of growth
on various regions, social groups, classes and communities have generated
concerns on some of the fundamental aspects of neoliberal growth (Ghosh
2012; Hirashima et al. 2011; Kar and Sakthivel 2007).
India, as a developing economy, has also confronted the land question
in diverse forms and the policy response to these challenges has also been
varied and complex. Demographic pressure, massive and uncontrolled

changes in land use, large-scale land acquisition drive by the Indian state
for domestic and foreign capital, conversion of agricultural and irrigated
land for non-agricultural purposes and related sustainability issues, vanish-
ing common property resources, changing agrarian relations, marginalisa-
tion of landless agricultural labourers and tenants, growth of landlessness
across all social categories, continuities and changes in tenancy, rise of the
rich agrarian classes and newer forms of agrarian accumulation, gender
issues in land, forest rights to tribals and other forest dwellers are some of
the emerging issues related to land in India.5 The agrarian question(s) in
neoliberal India encompasses all these seemingly varied but interrelated
questions. Politically, land rights and dispossession continue to be intensely
contested with implications for electoral politics and beyond. The Indian
state has virtually abandoned its redistributive agenda of land reform and
instead is pursuing land titling regime through land records modernisa-
tion programme (Nayak 2015).
On the other hand, with a prolonged agrarian crisis and out-migration
of labour from agriculture, in parts of rural India, a process of depeasanti-
sation has already been noticed in parts of the green revolution states
(Singh et al. 2009). There has been a spur of out-migration from the rural
areas, and the share of cultivators is declining (Mishra 2016a). The minia-
turisation of holdings has continued. Urbanisation and peri-urban growth,
the rise of the so-called rurban phenomenon and urban villages, point
towards diverse ways through which the urban land question is getting
manifested under neoliberalism. The real estate boom, closely associated
with the rise of the middle classes and their globalised lifestyle aspirations
and the growth of the IT sector, has led to the rapid conversion of peri-
urban agricultural land. Though the global connections of these new
urban spaces are too conspicuous to miss, these ‘fragmented landscapes’
that create and sustain glaring inequalities across class, religion and caste6
(Chaterjee 2017) are simultaneously anchored to local informal politics,
often exercised through a system of ‘calculated informality’ (Roy 2009).
5
We have selectively focused on some of the issues related to land in this chapter that helps
contextualising the issues raised by the authors of different chapters in this volume and have
not attempted to be comprehensive.
6
In the long-term study of economic transformation of ‘middle’ India, based on multiple
rounds of field surveys in Arni, Harriss-White (2016b, p. 20) points out the significance of
‘social regulation such as caste, religion and gender that are able to support the process of
accumulation’.
Neoliberal restructuring of the urban space, through the interlinked pro-

cesses of commodification, valorisation and devalorisation, segregation
and policing, has generated a process of exclusion that has affected the
working and living conditions of the working classes, poor and other dis-
advantaged sections7 (Banerjee-Guha 2009, 2013; Harvey 2010).
3.1 Land Reforms
In the post-colonial quest for development, the land question has emerged
as a crucial aspect of state intervention in India. The ownership and con-
trol over land continue to be highly skewed in India (Sharma 1994). The
colonial administration not only created a system of land administration
that was aimed at maximising land revenue, but in the process also initi-
ated a range of administrative reforms that sustained or created classes of
intermediaries.8 The plight of the hapless peasants was among the key
economic issues that were articulated through the national movement,
although its articulation showed a great deal of diversity across space and
time (Joshi 1974). The leadership of the newly independent nation was
well aware of the need for institutional reforms in agriculture, particularly
concerning the ownership over and control of land, as a prerequisite for
agricultural transformation. However, it is the class character of the politi-
cal elite and the nature of the Indian state that prevented the possibilities
of an elaborate restructuring of ownership rights over land9 (Joshi 1974).
7
The neo-liberal city is a manifestation of the central social contradiction of contemporary
global capitalism, that is, ‘increased return from global connectedness accompanied by
hyper-commodification of land and new forms of social marginalisation, most notably the
increasing informality of labour and life’, a process by which the migrants, mostly coming
from the rural areas, remain deeply affected (Samaddar 2016).
8
The regionally differentiated nature of these interventions, mapped over agrarian regions
by Thorner, had an enduring relevance for understanding the regional patterns of agricul-
tural development in India (Bhalla and Singh 2009; Mishra and Harriss-White 2015;
Thorner and Han-Seng 1996).
9
Joshi (1974) draws a distinction between the ideology of land reform, which was generally
anti-landlord, and claimed to represent the general interests of the peasantry and the pro-
gramme of land reforms that was to serve the interests of the superior tenants and under
proprietors rather than the interests of the rural poor.
Linking the outcomes of the land reforms policy to the form and the context of the post-
colonial Indian state, Raju J. Das argues that ‘[i]ts democratic form and the class alignment
in the society formed the context of the policy and set some limit within which it had to act
when carrying out that policy’ (Das 1999, p. 2120).
Nevertheless, land reforms remained on the agenda of policy reforms for

decades. Some aspects of land reforms such as the abolition of the control
of the rulers of the princely states over their subjects were relatively easily
accomplished. However, there was a less spectacular success in other
aspects such as land ceilings, redistribution and tenancy reforms, with a
few notable exceptions. The Planning Commission’s Task Force on
Agrarian Relations (1973) summed up the outcome in the following
words: ‘The programmes of land reform adopted since Independence
have failed to bring about the required changes in the agrarian structure’
(Planning Commission 1973, p. 3). The report also blamed ‘the lack of
political will, absence of pressure from below, inadequacies of administra-
tive machinery, judicial intervention, the absence of correct and up-to-
date records and the lack of supporting facilities for the beneficiaries’ for
the failure of land reforms. In specific regional contexts, such as in West
Bengal and Kerala, sustained land reforms were initiated by the left front
governments with relatively more success (Ramachandran 1997; Sengupta
and Gazdar 1996). Empirical evidence suggests that the success of land
reforms was driven by political factors and that political power of peasants
and presence of left-wing governments had a positive impact on land
reforms (See, Ghatak 2007).
The inability of the state to carry out a thorough and effective land
reform had long-term consequences for the political economy of develop-
ment.10 The green revolution strategy that dominated the agricultural
development policy was an attempt to bring in a technological revolution
without substantial institutional and agrarian reforms. The political costs
of land reforms were considered to be too high for the ruling classes
(Mohanty 2011), and thus, given the limitations imposed by the electoral
process, other forms of welfarist interventions, viz. public distribution of
10
Jayati Ghosh has summarised the impacts of the failure of (or the limited nature of) land
reforms succinctly. ‘The absence of any radical land redistribution across most of the country
meant that the domestic market, especially for manufactured goods, remained socially nar-
rowly based. It also meant that the growth of agricultural output in the aggregate, though
far greater than in the colonial period, remained well below its potential. Such growth as did
occur was largely confined to a relatively narrow stratum of landlords-turned-capitalists and
sections of rich peasants who had improved their economic status. And the large mass of
peasantry, faced with insecure conditions of tenure and often obtaining a small share in the
outputs they produced, had neither the means nor the incentive to invest. The prospect of
increasing productivity and incomes in rural India (which was home to the majority of its
population) in order to stimulate domestic demand was therefore restricted’ (Ghosh 2004,
p. 295).
food, employment creation and subsidisation of credit, were preferred

even when the state explicitly favoured developmentalist interventions.11
This has been conceptualised as a passive revolution in India. It is impor-
tant to note here that the uneven access to land is not simply a manifesta-
tion of economic inequality. Ownership and control over land overlap
with the caste-based inequality, and denial of access to land has been
among the major constituting factors of discrimination and social exclu-
sion of Dalits and Adivasis in India (Harriss-White 2004; Thorat and
Neuman 2012).
As neoliberal economic reforms started to occupy the centre-stage of
economic policy, the issue of land reform came to be thought of from a
different perspective, often termed as ‘market-based land reform’.12
Land regulations, particularly tenancy reform laws, are seen as an imped-
iment to agricultural growth. A new set of institutional reforms, con-
cerning the removal of restrictions over sale and lease of land, was
advocated as essential for ushering an era of entrepreneurship in agricul-
ture. The Niti Aayog13 (2016) had constituted a committee to develop a
model land leasing act.
However, the questions of the rights of various marginalised categories
to land were not altogether absent from the policy discourse. An expert
group constituted by the Planning Commission, Government of India, to
look into development challenges in extremist-affected areas, for exam-
ple, did emphasise the role of landlessness, dispossession and rising
inequality in land ownership in the conflict zones. And its recommenda-
tions were unambiguous: ‘the right to livelihood, the right to life and a
dignified and honourable existence’ should be brought back to the
agenda (Planning Commission 2008). Similarly, the government took a
major step towards recognising the land rights of the forest dwellers and
other forest-dependent communities in India through the Forest Rights
Act, although the implementation has been rather unimpressive, and
11
The substantial price support for farm products, and provision of subsidised inputs and
institutional credit under the green revolution strategy, was largely ensured state support for
the rich peasants (Bardhan 1994, p. 46)
12
As pointed out by V K Ramachandran (2011, p. 670), ‘land reform is by its very nature
a non-market intervention, undertaken by governments and people because markets cannot
deliver that redistribution of land and assets that is essential for progressive social change.
“Market-based land reform” is thus a contradiction in terms, and a cover-up for the aban-
donment of genuine land reform’.
13
In 2014, India’s Planning Commission was scrapped and was replaced by NITI (National
Institute for Transforming India) Aayog, a think tank.
attempts have been made to dilute some of its provisions (Kumar and
Kerr 2012; Kumar et al. 2017; Sarap et al. 2013).
3.2 Land Acquisition and Dispossession

The question of land acquisition has, of course, become one of the most
contentious issues in neoliberal India. In the post-independence period,
development-induced displacement has been carried out by invoking the
colonial era land acquisition act. Development projects, particularly large
dams, industries, mining and infrastructure development, were the pri-
mary reason behind such involuntary displacement. In the absence of
credible official data on the exact number of people displaced, scholars
have attempted to estimate the total number of people affected by such
projects (Fernandes 2008).14 Scholars and social activists have identified a
number of glaring injustices that were built into the act or were very much
part of its implementation. For example, the definition of displaced and
project-affected people who deserve any compensation was too narrow
and it excluded those who did not have legal claims over the land, but
whose livelihoods were adversely affected because of the project. Claims
over common property rights were simply ignored, as these lands were
classified as the property of the government. The amount of compensation
was too low (Chakravorty 2016). Economically weaker and socially mar-
ginalised groups—such as women, children, landless labourers, pastoral-
ists, nomads and scheduled tribes—became the worst victims of such
development. The scheduled tribes population, in particular, were dis-
placed disproportionately as their habitats were selected for mining, indus-
trialisation and conservation projects. Their marginalised position within
the structures of power further accentuated their vulnerability. Gradually,
the localised protests against involuntary displacement started becoming
visible both at the international and national level politics.
Under neoliberalism, the question of control over and access to land
has acquired a new salience in India. Amit Bhaduri puts the implications
of forced displacement under neoliberalism unambiguously. ‘A ruthless
drive towards land acquisition on grounds of efficiency in the multiparty
14
Fernandes (2004) estimated that during 1947–2000, the total number of persons
directly displaced by land acquisition Displaced Persons (DPs) and persons who lost their
livelihoods without moving away from their habitat Project Affected Persons (PAPs) was
probably around 50 million. The tribal communities were disproportionately affected by
land acquisitions.
competitive democracy of a predominantly agrarian economy with massive

poverty can sustain itself only through a dangerous mutualism between
corporation and political parties. If this mutualism crystallizes over land
acquisition, an oligarchic democracy would emerge, oligarchic in content
but democratic in form’ (Bhaduri 2017, p. 31). Neoliberal development
required rapid conversion of agricultural land for non-agricultural uses,
and it intensified the conflicts over land. However, the mechanisms and
processes through which various actors responded to these conflicts varied
a lot. Sud (2014), for example, draws attention to the diversity of the poli-
tics of land at the sub-national level. As states (and cities) competed to
attract domestic and foreign capital (a process that has been termed as
‘provincial Darwinism’), one of the major ways through which the busi-
ness-friendliness of governments was projected was through their willing-
ness and ability to provide land to capital. Many of the conflicts, such as
Nandigram and Singur in West Bengal, Kashipur, Posco and Niyamgiri in
Odisha, led to prolonged protests that had implications for provincial as
well as national politics. In central India, Maoist insurgents were active in
opposing displacement of tribal communities, and it led to violent conflict.
Amidst these conflicts, the colonial era land acquisition law was replaced
by the Land Acquisition, Rehabilitation and Resettlement Act, 2013
(LARR). Among the key provisions of the act are (a) higher compensation
for the farmers; (b) expansion of the coverage of compensation by includ-
ing people whose livelihoods (not necessarily land) are affected; (c) com-
pulsory rehabilitation and resettlement of people evicted from their land;
(d) mandatory and informed consent of people losing their land in the
case of land acquisition by private sector; and (e) social impact assessment
to judge livelihoods impacts and to identify all affected persons
(Chakravorty 2016). However, with changes in the government, the act
was modified through an ordinance, diluting the provisions for which
prior consent was needed. Also, various state governments enacted their
specific laws that diluted the provisions of the act (Sonak 2018).
Even when there is a growing influence of the market fundamentalism
in the mainstream economic policymaking, social movements, civil society
institutions and some political parties have relentlessly questioned the jus-
tifications of dispossessions of various kinds. Persistent conflicts over land-
related questions have forced the governments at various levels to come
up with policies, programmes and counter-strategies to contain and
address the issues of land. Needless to add, given the diversity in the nature
of these conflicts and the responses to such conflict, it is erroneous to
discuss the land question in India, rather, as emphasised above, there are
multiple questions centring around the ownership, control and manage-
ment of land.
3.3 Gender and Land Rights

The intra-family distribution of resources and power is both a cause and a
consequence of unequal access to land and other assets. Land is among the
most valued assets in rural India. It is not just a source of financial security;
it is also the marker of one’s position within and outside the households.
Studies have shown that denial of inheritance rights to women leads to
significant bottlenecks for them to survive and grow as individuals. It has
been identified as one of the factors sustaining patriarchal control and
denial of equal rights to women. Also, it hinders their other capabilities
and makes them perpetually dependent upon the male members for their
survival. The implications of the marginalised position of women within
the household also influence their self-perceived and socially perceived
status in the public sphere. It is only recently, after years of painstaking
research and political movement, that women are being seen and recog-
nised as a distinct group by the state. The uncritical acceptance of the
patriarchal idea of the household or family as a single unit and the disre-
gard for intra-family differences, exclusion and exploitation by the state
have resulted in the systematic denial of rights to women (Kabeer 1994).
Agarwal (1994, pp. 27–45) has argued in favour of independent rights in
arable land on four interrelated grounds: welfare, efficiency, equality and
empowerment.
This persistent denial of land rights to women gets further aggravated
during massive scale eviction from the land. As such, the history of com-
pensation to the displaced and project-affected persons is replete with
negligence and denial, but women within the group have been found to
be a specially vulnerable group. As such they are not seen as legitimate
claimants on the basis of their not having the land rights on the records,
and further, even when the household receives some compensation—
monetary or otherwise—it is mostly under the control of the male mem-
bers of the households. In the packages for resettlement and rehabilitation,
often the specific needs of women are ignored. It is important to note that
while women participate in different types of household production, their
subjugated position results in intra-family exploitation of household labour.
3.4 Agrarian Crisis
The post-reform period in India, particularly the decade of 1990s, has
been associated with a drastic slowing down of agricultural growth and
increasing rural distress (Deshpande and Arora 2010; Reddy and Mishra
2009a).15 While high levels of suicides by farmers pointed to the extent of
desperation among the farmers, the frequency and regional dispersion of
suicides point to the systematic nature of the crisis16 (Assadi 2006; Mishra
2014; Mohanakumar and Sharma 2006; Mohanty and Lenka 2019).
Patnaik (2012, pp. 39–40) argues that:
since the growth of peasant agriculture—even when we have the develop-

ment of capitalism from within the sector itself—requires support of the state,
[neoliberal] regimes are typically characterised by agricultural stagnation.
And since out of such stagnant agriculture, ‘exports’ of a variety of non-food
crops have to be squeezed for the capitalist segment (including of land for
use by those who live off the economic surplus of the capitalist segment),
per capita food grain output tends to decline, which has the effect of reduc-
ing per capita food grain absorption by the working population of
the economy.
Lerche (2013), following Bernstein (2006), has argued that as agrarian

accumulation is no longer a binding constraint for capital, there has been
less interest in productive investment in it. On the other hand, notwith-
standing the recent talks about a revival in agriculture, farm households in
vast areas of rural India increasingly find it difficult to survive within agri-
culture. Non-agricultural livelihoods are increasingly central to both accu-
mulative and survival strategies of rural households. Based on estimates
from the National Sample Survey (NSS) data, Basole and Basu (2011)
have pointed out that out of the monthly income of a farmer household in
India, only 46 per cent of income is generated from cultivation; while
15
An analytical distinction has been made in the literature between crisis of the agriculture
sector, which most visibly manifests itself through decelerations in the growth of productiv-
ity, and a larger agrarian and rural crisis that creates conditions of distress for a large section
of the rural population (Radhakrishna 2007; Reddy and Mishra 2009a).
16
However, farmer suicides are an extreme manifestation of the agrarian crisis. Even in the
absence of farmer suicides, there are other signs of rural distress, such as mass out-migration
of labour households under various forms of unfreedom. Ranjana Padhi, in her study on the
women survivors, draws attention to the gender implications of suicides and also to the mul-
tiple forms of the exclusion and deprivation that the survivors face (Padhi 2012).
around 50 per cent of income is earned from wages and non-farm business
together; and also that agricultural households, other than those with
holdings of 10 acres and more, cannot generate enough income from
agricultural production to cover their consumption expenditure.
While the agrarian crisis has been partly caused by long-term factors
responsible for the failure to foster productivity growth in Indian agricul-
ture and could have different drivers in a specific regional context, most
scholars attribute it to the neoliberal reforms since the 1990s (Patnaik
2003). The withdrawal of input subsidies (on electricity, water, fertilisers
and seeds), declining public investment in agriculture, particularly in irri-
gation, and the decline in credit flow to agriculture have increased the
private costs of agricultural production. Further, interlocking transactions
involving input dealers, commission agents and traders have aggravated
the crisis for farmers (Mishra 2008). The increasing control of the private
sector on the input and output markets and dependence on informal credit
have increased risks for the farmers (Mishra 2008). On the other hand,
with the dismantling of state support, cost of education, health care, trans-
port and other essential expenditures have increased for the rural house-
holds. Locating the agrarian crisis in the global context as a crisis of petty
commodity production, Das (2013) argues that agrarian crisis, to a large
extent, is a crisis of small owners, including small-scale capitalists, within
the capitalist system driven by the law of value. However, the agrarian
crisis, seen from that standpoint, is not only about small-scale farmers
alone; as labour also faces a crisis of livelihood, ‘super-exploitation of rural
labour’ is also part of the agrarian crisis.
Agricultural surplus is increasingly invested outside agriculture, and the
non-agrarian characteristics of rural elites are being noted in diverse con-
texts (Vijay 2012; Harriss-White et al. 2009). Wherever some dynamism
has been noted within agriculture, these are less labour absorbing and are
often marked by seasonal labour or piece-rate labour contracts. Thus, the
scope for survival within agriculture, either as self-employment or petty
commodity production or as casual labour, seems limited. Harriss-White
(2016a, p. 494) notes, ‘in agricultural production, a small capitalist class is
diversifying its portfolios, straddling agriculture and non-agriculture; a
large, growing but unorganized barely landed class of rural labour moves
in and out of agriculture … most land-based PCP fails to accumulate, few
being free of oppressive debt while many are now failing to meet their
reproduction costs from agriculture alone and fulfilling the conditions for
disguised wage-labour’. It is in this context of declining earnings from
agricultural land, increasing soil and environmental degradation, water

shortage and climate-induced vulnerability, as well as the precariousness of
labour, that the land and livelihoods questions in neoliberal India need to
be located and understood.
3.5 Land and Livelihoods Diversification

We argue that understanding the interrelationship between the land and
livelihoods questions in neoliberal India holds the key to understand the
emerging dynamics of structural transformation in rural India. The on-
going structural transformation of the Indian economy shows a drastic
decline in the contribution of agriculture to the national income, but a
slower shift of workers from agriculture to non-agricultural occupations.
Moreover, the shift of workers from agriculture to non-agriculture is not
only varied across the regions but also across gender, communities and
social groups. In this uneven transition to a predominantly non-farm rural
economy, the inequality among cultivators as well as among rural house-
holds has been increasing. The prolonged agrarian crisis in rural India,
discussed above, has led to an exodus of farmers from cultivation, although
scholars have attributed the rural out-migration to a host of other factors,
including the rise in labour demand in the construction sector following a
post-reform infrastructure and real estate sector boom, as well as the rising
aspirations. However, as Jodhka points out even though ‘the diversifica-
tion of the rural economy is positively entrepreneurial, a lot of it is also
born out of desperation of poverty and sometimes out of aspirations for
mobility for the younger generations’ (Jodhka 2018, p. 7).
An essential aspect of this rural out-migration is its spatial dimension.
Recent evidence not only suggests that there has been a spur in migration,
but also that inter-state migration for work has increased. Language barri-
ers, considered to be a significant deterrent in the past, are no longer able
to stop people from migrating to other states in search of employment and
better earnings (Government of India 2017). A substantial portion of this
migration is from the demographically and economically backward states
in the north and east India to the relatively developed southern states.
Typically, upper caste, rich and middle peasants, and those already in non-
farm occupations, and living in relatively developed regions are more likely
to be long-term migrants, those belonging to landless, land poor catego-
ries, the scheduled caste and scheduled tribe households, and living in less
developed regions are more likely to be short-term, circular migrants

(Keshri and Bhagat 2012; Mishra 2016b; Sharma 2005).
An important unfolding dimension of this rural transformation is the
interrelationship between out-migration of labour and the crisis of petty
commodity production in agriculture. There are indications that the cir-
cular migration of labour from the rural area has led to a greater reliance
on family labour for crop cultivation and allied agricultural activities, par-
ticularly through a shift of responsibility to female labour. While it is rea-
sonable to assume that such temporary, seasonal migration of labour will
gradually weaken their ties to agricultural livelihoods, studies also suggest
that remittances are being used for purchase of land (or release of land
from mortgage) and also towards working capital required for agricultural
operations. It is important to note here that the demand for land from the
poor and the semi-proletariats has intensified, along with that of the state
and capital, and, in that sense, the land question remains relevant (Editors
Agrarian South 2012).
4 The Organisation of the Book

Neoliberalism has brought significant changes in the way the land ques-
tion was addressed in a developing economy. This book seeks to bring out
important developments emerging around the land questions in India in
the context of India’s neoliberal economic development and its changing
political economy. The contributors in this volume have sought to cover
many issues that have been impinging the political economy in land and
livelihoods in India since the 1990s.
The contributions, despite the diversity of approaches and methodolo-
gies, have in their findings brought out new and hitherto unexplored
and/or less researched issues on the emerging land question in India,
apart from addressing some widely discussed questions. The range of
issues addressed in the volume encompasses the contemporary develop-
ments in the political economy of land, land dispossession, Special
Economic Zone (SEZs), agrarian changes, urbanisation and the drive for
the commodification of land across India. The role of the state in promot-
ing the capitalist transformation in India and continuities and changes
emerging in the context of land liberalisation and market-friendly eco-
nomic reforms have also been examined by the authors. By bringing out
in a clear manner the emerging land–agrarian relations like the decline of
peasantry, the growth of informality of the state in land matters, processes
of exclusion, adverse inclusion and marginalisation, the working of the

new land acquisitions and rehabilitation law, as well as the changing nature
of land administration, the contributors to this volume have explored the
emerging linkages between land and livelihoods in India.
Neoliberal land policies, typically based on the allocative efficiency of
market, argue that state sanctioned private property rights or land titles
and ‘efficient’ land markets, preferably without any restrictions imposed
on transactions in land and land-lease markets, increase productivity and
aggregate welfare (Deinlnger and Binswanger 1999; Feder and Nishio
1998; Gould et al. 2006). Apart from the primary benefits of transferring
property rights to the most efficient users, such market-based solutions, it
is argued, are likely to facilitate transaction in credit and insurance markets
as well (Feder and Feeny 1991). Thus, the focus is on modernisation and
digitisation of land records and reduction in transaction costs for efficient
land administration. While it is assumed that the principles are universally
true, local historical and geographical factors have also been found to be
influencing the outcomes (see, Gould et al. 2006). There is evidence that
suggests that such land titling could be biased against women (Deere and
Leon 2001), facilitates the privatisation of the commons, might create
new forms of insecurities for the poor (Jansen and Roquas 1998; Wolford
2007) and even lead to increasing land concentration. Also, the evidence
on the benefits of such land titling is at best mixed (Ballantyne et al. 2000;
Holden and Ghebru 2016; Payne et al. 2009).
As market fundamentalism has started making deeper inroads, the
framework of engagement of the Indian state on the question of land
rights has changed, notwithstanding the ambiguities and contradictions
among different policies. Pradeep Nayak (Chap. 2) argues that the land
policies of the Indian state have been undergoing a paradigmatic change
under neoliberalism. The abandonment of the redistributive agenda of
land reform programme and right-ward shift of the land policy of the
Indian state is evident in the implementation of the centrally sponsored
schemes like the National Land Records Modernisation Programme
(NLRMP), in which it is clearly envisaged that the state would promote
secure property rights in land regime by guaranteeing title to land and
replace the existing presumptive nature of ownership of land. Such policy
shifts certainly mark a historic reorientation of the land policy of the state.
The chapter brings out two dominant but seemingly contradictory land
questions arising before the Indian state. On the one hand, there is a scope
for revisiting the land reform programme through promoting rights-based
agenda like addressing gender inequality, insecurity and exclusion of
tenants and protecting the land rights of tribal communities. The political
compulsions of electoral democracy have provided the context for a right-
based approach, although the durability of the same should not be taken
as guaranteed. On the other hand, there is an emphasis on promoting the
policy of land titling and land market by liberalising land regimes in states.
Such a shift is being justified through the arguments of market efficiency.
As noted above, the prolonged agrarian crisis has resulted in changes in
the intra-household allocation of labour within and outside agriculture.
Given the preponderance of small and marginal farmers in the agrarian
structure and the high participation of such farmers in the land-lease mar-
ket, it has been argued that liberalising the land-lease market is likely to
benefit the small farmers while increasing productivity in agriculture and
facilitating rural livelihoods diversification (Niti Aayog 2016). Taking a
nuanced view of land leasing in rural India, Sukhpal Singh (Chap. 3)
points to the increasing clout of the new agrarian capitalists in the green
revolution belt in north-west India as well as the need for credit and other
institutional supports to the small tenants. While favouring the restrictions
on leasing of land by corporate houses, he argues for a decentralised and
regional policy framework that supports land leasing by small farmers and
puts a ceiling on the amount of land leased-in by individuals to limit the
scope for land concentration. Although contract farming has been
advanced as a viable alternative to corporate farming, he also takes note of
the possibilities of exclusion as well as adverse inclusion of marginalised
social groups and poor farmers in such contracts.
The literature on agrarian crisis in India suggests that (a) large sections
of peasantry are not able to earn a sustainable livelihood from crop farm-
ing alone and (b), inter alia, have been forced to supplement their earnings
either from the local non-farm economy or in the urban informal sector
(Lerche 2011; Rupakula 2016). At the same time, relatively better-off,
more affluent rural classes have started investing the agricultural surplus in
the non-farm businesses. Both these processes imply a restructuring of
rural livelihoods that involves a reduced dependence on farming and land-
based livelihoods. Such a process is not merely about the processes of
economic restructuring of property relations; it is equally about the social
processes of differentiation, exclusion, marginalisation and contestations
around that. The diverse aspects of such rural transformation have been
examined by the authors in specific regional contexts, viz. Uttar Pradesh
(J. Singh in Chap. 4), Karnataka (Purusothaman and Patil in Chap. 5),
Rajasthan (Gupta in Chap. 6), West Bengal (Roy in Chap. 7) and
Maharashtra (Rao in Chap. 8).
Jagpal Singh (Chap. 4) in his field-survey-based exploration of the rural

transformation in western Uttar Pradesh notes the post-green revolution
rise of social identities. With the rise of new and decline of old social
classes, fragmentation of landholdings, aversion to traditional occupations
which includes farming, and search for vocation alternative to agriculture,
and deagrarianisation, not only of the livelihoods but also of aspirations,
emerge as vital aspects of the changing rural landscape. Locating the land
acquisition in the regional politics of Uttar Pradesh, he draws attention to
the fact that the politics of land acquisition has shifted to a level where
farmers, despite being organised and resourceful, become marginal play-
ers. From the perspective of the farmers, the rapid changes in the social
and the economic processes have resulted in the weakening of their emo-
tional and economic attachment to land.
Purusothaman and Patil (Chap. 5) examine the implications of the out-
migration of labour from rural areas of Karnataka. Their study reveals that
both the persistence of the agrarian crisis and the lure of urban opportuni-
ties have induced small farm holders to join non-farm occupations in man-
ufacturing and construction sectors in nearby urban centres. They also
find that although better infrastructure, muted caste hierarchy and
employment options for the whole family do provide a pull to the city,
small farmers are more often pushed to migration by ecological changes,
indebtedness, land acquisition or social conflicts. The authors argue, such
migration may be a ‘corrective measure’ to escape from mounting debt
and unreliable rains, which must be seen in the context of the crisis in
petty commodity production accentuated by neoliberal reforms (Das
2013; Reddy and Mishra 2009b).
Anish Gupta (Chap. 6) in his study on agrarian changes in post-reform
period in a village in Rajasthan, based on field surveys in 2007 and 2013,
has found that the increasing number of uneconomic farm plots is due to
the continuous division of land and lack of alternative job opportunities in
rural areas. Livelihoods have diversified, and tenancy has declined. The
study notes that it is the marginal farmers who are leasing-out land as cul-
tivation has become unviable due to high fragmentation and uneconomic
size of farm plots. The study also shows that these changes have had an
adverse impact on the livelihood of marginal and landless tenant farmers
mainly belonging to scheduled castes and scheduled tribes who were
dependent on leasing-in land for cultivation. This category of farmers has
gradually been pushed into agriculture labour.
The regional specificities of the on-going rural transformation have

been brought to the forefront by Dayabati Roy (Chap. 7), where she
examines the caste and class interface in rural West Bengal. She argues that
the issues of land are shaped through a complex process of dynamic inter-
action between class, caste and capital, with different implications for dif-
ferent social groups. An examination of the ways through which the state
and its policies intervene to shape the issues of land in rural areas shows
the privileging of capital as well as of the landed class belonging to higher
castes at the expense of the labouring class belonging to subordinate caste
groups. The study also notes the significance of out-migration of the
labouring classes in changing the power relations in rural areas. The com-
mercialisation of the agrarian economy creates unequal opportunities; and
the state interventions on the ground, mediated through the local power
structures, fail to support those at the bottom of the class-caste hierarchy.
Land prices in India have been rising in the past decades. C.S. Rao
(Chap. 8) investigates the rising land prices in rural Maharashtra, a phe-
nomenon that the author argues has no relationship with the productivity
of the land. The study finds sharp rise in the prices of land in a land sale
market that has become more active in the recent period. It is primarily
non-agricultural surplus that is being used to buy agricultural land, and
also the non-cultivating landholders are becoming a dominant player in
the countryside. Also, it is essential to underline that mostly it is the small
farmers who are selling land, while the medium farmers are buying
the land.
The implications of land acquisition and the legal framework for acquir-
ing land have been among the widely debated questions concerning land.
Four chapters specifically address the issue from different vantage points
and relate their findings to the larger questions on land acquisitions.
Animesh Roy (Chap. 9) examines the case of dispossessions in Rajarhat
area of Kolkata; Shah, Patil and Nandani (Chap. 10) present a study of
displacement due to SEZ in Gujarat; Prashant K. Trivedi (Chap. 12) stud-
ies the land acquisition process for highway development in Uttar Pradesh;
and Dhanmanjari Sathe examines the LARR, in the context of land acqui-
sition in Maharashtra (Chap. 13). All these contributions taken together
point to the diversity of the outcomes of land acquisition that does not
necessarily fit into a single narrative of dispossession, and, hence, calls for
a nuanced understanding of the local conditions, including the power
dynamics on the ground, might affect the outcomes of land acquisition.
Based on the household surveys conducted at two points of time (2009

and 2016) in Rajarhat adjoining Kolkata, where the land was acquired for
building an urban centre and an IT hub, Roy (Chap. 9) explores the
changes in livelihoods of people affected by an urban township project.
His study reports that the dispossessed farmers do not enter the labour
market as wage earners, rather most of them start working in the urban
informal economy as self-employed in petty trading and businesses, often
relying on multiple sources of livelihoods. While the earnings of such
households have increased more than the farmers in the nearby areas who
were not displaced, income inequality has also gone up in the case of the
former group.
Shah et al. (Chap. 10), in their case study on land acquisition in Gujarat,
a state that has been at the forefront of neoliberal development policy,17
bring out the diversity in the outcomes of SEZs for different classes of
people. Through a two-period field study of those affected by an SEZ at
Jamnagar, the authors find that post-dispossession, there has been an
increase in landlessness, and an increase in the share of both marginal and
large landholders, implying a process of restructuring of the agrarian
structure, that includes both depeasantisation and increasing concentra-
tion of land. While a few have been able to purchase land by utilising the
money that they got as compensation, many have tried to gain a foothold
in the non-farm economy. There has been an increase in the shares of self-
employed and salaried workers, along with an increase in the proportion
of casual workers. While an increase in income is reported by nearly 55 per
cent of the households and an increase in employment opportunities for
migrant labour is noted, the findings also suggest a rise in conflicts, growth
of consumerist culture and environmental degradation.
Trivedi (Chap. 12) studies the case of land acquisition for two road
infrastructure projects in Uttar Pradesh, one that was built by a private
corporation, before the LARR 2013 was enacted, and another for which
land acquisition was done by the government after the enactment of the
LARR. In the second case, land was purchased by the government directly
from the individual landowners, under which, the author reports, a higher
price was paid to the landowners and it did not face the kind of resistance
that the earlier project encountered. The move to shift to the ‘purchase’
mode appears to be partly motivated by the pro-landowners’ provisions of
17
For a detailed analysis of the implications of the ‘Gujarat Model of Development’, see
Sood (2012).
the LARR, 2013. The nature of transactions in the deal, argues the author,
reveals vast inequality between the financial power of corporates and state
institutions vis-a-vis the farmers.
Dhamanajri Sathe (Chap. 13) examines the Land Acquisition,
Rehabilitation and Resettlement Act 2013, both through its different pro-
visions and the manner of its enactment. She cites the cases where land
acquisition did not lead to violent protests and attempts to examine the
efficacy of the LARR for ‘sustainable land acquisition’. She argues that the
LARR, 2013, was passed in a hurry and without the kind of consensus-
building that would be necessary for making a contentious legislation
work on the ground. On the other hand, she points to the cases where
governments with the required will and ability to negotiate with varied
interests could reduce conflicts around the land acquisition.
Mathur and Mittal (Chap. 11) provide an account of two infrastructure
projects in Gujarat to illustrate the ideological strategies of neoliberal
transformation of space. New imaginaries that seek to transform cities
according to global visions have a distinctive set of impacts on its people
and spaces. Cities in India have only been a by-product of urban planning
and mostly made through the everyday practices of survival of long-term
inhabitants and migrants. Through an unravelling of the underlying strat-
egies of the Smart Cities initiatives, in particular, they argue that neoliberal
approaches to urban spaces altogether abstract away the reality of Indian
cities and articulate the urban through technological fantasy. The unfold-
ing trajectory of urban development shows that dispossession of the mar-
ginalised goes ‘hand in hand with production of a fantasy materialized in
real-estate development and environmentally “friendly” uses of land such
as jogging tracks and (gated) leisure parks replacing “lower value” uses
such as open informal markets or informal homesteads’. The chapter
draws attention to the myriad ways through which a consensus is manu-
factured, and ‘participation’ is narrowly defined to make the ideological
project of neoliberalism hegemonic under a democratic order.
Often the regional specificities of the land question are overlooked in
discussions focusing on the national scenario, particularly in the case of
large countries like India. Two chapters, Fernandes (Chap. 14) focusing
on the broad contours of the land issues in north-east India and Upadhyaya
(Chap. 15) focusing on the transformation in land relations and liveli-
hoods in Arunachal Pradesh, through the gender lens, bring out the
salience of the local, regional dynamics in understanding the land ques-
tion. Charting a broad canvas, Fernandes addresses the historical
evolution as well as the recent changes in rights over land (and, by implica-
tion, other natural resources), in India’s diverse north-eastern region. The
framework for economic development for the region has undergone sig-
nificant changes under neoliberalism (Mishra and Upadhyay 2017), and
the ‘big ticket’ development projects, such as hydro-power, mining and
road construction, require huge land acquisition in the backdrop of
incredible institutional diversity. Locating the land question in relation to
immigration, collective identity and ethnic assertion, Fernandes draws
attention to the role of community in the land question. The contradic-
tions between community rights over land, and its relationship with the
collective identities of communities, and the institutional priorities of the
neoliberal development strategy that prioritises individual property rights
are going to determine the unfolding of the land question in the region.
Even in the presence of strong community institutions which manage
use-rights over land, unless the state commits itself to the protection of
collective ownership, a combination of dispossession from outside
(through which corporates acquire land with support of the state) and
dispossession from within (through which elite capture of state and com-
munity institutions leads to informal and formal privatisation of commu-
nity land in favour of powerful groups within the community) might
facilitate a weakening of collective control of land (Mishra 2018b).
Upadhyay (Chap. 15) links the changing land rights in Arunachal Pradesh
to the gendered transformation of the employment structure and the
emerging patterns of livelihoods diversification. While there has been a
decline in jhum or shifting cultivation, a number of demographic, social
and economic factors have led to the individualisation of land rights,
whereby land is generally transferred in the name of the male heads of the
households. Women, who still are very much part of the agricultural work-
force, have been reduced to the status of ‘disinherited peasants’. A two-
period time-use survey reveals the increasing feminisation of agricultural
operations, in the backdrop of male-selective livelihoods diversification
and out-migration.
5 Conclusion
Given the wide diversity of issues related to land and livelihoods in con-
temporary India, it is difficult for a single book to provide comprehensive
coverage of all the relevant questions. However, by weaving a narrative
that encompasses both the theoretical concerns and the empirical evidence
on land and livelihoods in neoliberal India, the contributions to this study

bring out the general as well as specific issues that attempt to explain the
land-livelihoods nexus in contemporary India. The authors of the chapters
do not necessarily follow a similar frame to pose and probe the land ques-
tion, nor do they come to similar conclusions regarding the outcomes of
the on-going processes of land acquisition and agrarian change. However,
these contributions, hopefully, enrich the on-going discussion on the
question of land, by bringing land and livelihoods questions within the
same frame and also by locating the outcomes at the local, regional levels.
The relevance of the questions raised in this volume goes beyond the spe-
cific contexts in which those have been examined by the authors. The
interconnected themes of capitalist accumulation and its implications for
the livelihoods of people directly or indirectly dependent upon land have
global ramifications.
As neoliberalism has established itself at the centre-stage of develop-
ment thinking, the issues that raised the volume are likely to have broader
relevance to understanding the questions related to control, use and man-
agement of land in the Global South. While the state has been forced to
acknowledge the widespread land conflicts and has attempted to carve out
spaces for compromise, through legislations like the LARR, 2013, and the
Forest Rights Act in India, the ultimate outcomes of these interventions
rest on the responses of the land losers and those who tend to gain out of
the land acquisition process. The contributions to this volume point to a
wider range of issues, relating to rural livelihoods transformation and spa-
tial relocation of labour and the persistence of the informal sector as a
destination of displaced labour, within which the land questions need to
be placed.
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in Modern India. New Delhi: Oxford University Press.
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Splendored Thing. Antipode, 39(3), 550–570.
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CHAPTER 2
Land Titling or Land Reforms:

India’s Policy Dilemma
Pradeep Nayak
Without a powerful will of the state, explicitly defined and forcefully asserted
from above, land reform programmes in the hands of officials alone would
continue to flounder on the rocks of conservatism and defense of sta-
tus quo.1
In the wake of economic liberalisation, land reform seems to have lost its
flavor and favour with the government. However, as a general proposition,
it may be stated that land reform should remain an essential element of
national agricultural and rural development strategies not only because land
based agricultural occupation must continue to provide livelihoods to a vast
majority of rural population, but also because macro-economic growth in
most contexts has failed to create improved prospects for the rural poor to
acquire assets, gain employment, or increase their income and quality of life.2
1
Government of India. (1976). Report of the National Committee on Agriculture-Part XV,
Agrarian Reforms, Ministry of Agriculture and Irrigation. New Delhi, p. 90.
2
Government of India. (2006). Report of the Working Group on Land Relations for
Formulation of Eleventh Five Year Plan, New Delhi: Planning Commission, Yojana Bhawan,
July 31, p. 10.
P. Nayak (*)
Odisha State Disaster Management Authority, Bhubaneswar, Odisha, India

36 P. NAYAK
This chapter argues that there has been growth of two competing but
contradictory political and economic developments around land in India
since the adoption of neoliberal economic reforms in the 1990s. The
recent policy orientation of the state in India is to liberalise and deregulate
the land regimes to facilitate the growth of land market. On the other
hand, there is demand for revisiting land reforms for promoting right-
based agendas like the land rights for women, tenants, tribals, dalits and
other vulnerable sections that have occupied the centre of politics and
economics of the Indian state. Interestingly, the development of urbanisa-
tion, the rise of urban middle class and the policy push for liberalising the
urban land market and land use norms for building smart cities as invest-
ment destination by the Indian state have brought out the question of
secure property rights in land to the centre of urban governance.
The neoliberal paradigm of development advocates for secure property
right in land as the basis of market-oriented economic development and
growth. In the land titling regime, the state would provide a conclusive
title to land to the property holders by making it legible, clear and easily
transferable as commodity and indemnify it through title insurance. It has
emerged as an alternative policy option to the redistributive land reform
agenda of the Indian state thanks to economic liberalisation. The imple-
mentation of the world’s largest land records digitisation drive under
National Land Records Modernisation Programme (NLRMP/DILRMP)
is the driving force behind the “reform by stealth” approach to land titling.
This implies absence of any serious political discussion on adoption of land
title regime and an incremental techno-managerial approach to change
the extant property rights regime in land under the mask of continuity.
The land policies of the Indian state, it is argued, are undergoing paradig-
matic change or “historic reorientation” in the context of neoliberal eco-
nomic development of India. The entries in the land records or record of
rights3 depicting the ownership details of the land are presumptive in
nature, which means that the evidentiary value of the property rights is
presumptive unless proved contrary by the court of law. The record of
rights of a land holder thus never attends finality. Changes take place
continuously on different grounds like transfer, inheritance, government
grants and court orders. This is a colonial legacy of property rights in land
as the colonial authorities were not able to confer conclusive property
3
It means a cadastral map and khatian depicting the ownership rights, interests and title
to land.
2 LAND TITLING OR LAND REFORMS: INDIA’S POLICY DILEMMA 37
rights in land due to various complex factors surrounding the property

ownership. In the current land records modernisation programme, one
can find a subtle policy change in land reforms policy objective. The state
is no longer ideologically inclined to update and modernise the land
records for implementing redistributive agenda of land reforms rather it is
making concerted efforts to promote secure property rights regime of
land titling through digitisation of land records (Nayak 2013).
The components of programme were renamed as National Land
Records Modernisation Programme (NLRMP) in 2008. The programme
has been renamed again as Digital India Land Records Modernisation
Programme (DILRMP) in April 2016 in both rural and urban areas. It
states that:
The main objective of the NLRMP is to develop a modern, comprehensive

and transparent land records management system in the country with the
aim to implement the conclusive land-titling system with title guarantee,
which will be based on four basic principles, i.e., (i) a single window to
handle land records (including the maintenance and updating of textual
records, maps, survey and settlement operations and registration of immov-
able property), (ii) the mirror principle, which refers to the fact that cadas-
tral records mirror the ground reality, (iii) the curtain principle, which
indicates that the record of title is a true depiction of the ownership status,
mutation is automated and automatic following registration and the refer-
ence to past records is not necessary, and (iv) title insurance, which guaran-
tees the title for its correctness and indemnifies the title holder against loss
arising on account of any defect therein. (Government of India 2008: 8)
The union government claims that the implementation of Digital India

Land Records Modernisation Programme would lead to the following
outcomes in land records management:
Integrated Land Information Management System with automated upda-

tion of land records on mutation (process of correction of land records
owing to sale, gift, etc.),
Integration of spatial databases (cadastral map) with textual Record
of Rights,
(a) Delivery of citizen services like digitalised maps and computerised
Record of Rights,
(b) Online issuance of digitalised maps and computerised Record
of Rights,
38 P. NAYAK
(c) Online transmission of relevant/required information from the inte-

grated land information management system from one office/agency to
another and
d) Provide online single window at-a glance access to all available, rele-
vant information to give a fair comprehensive position of any plot of land in
question to the land owner, concerned offices/agencies and interested per-
sons/entrepreneurs, etc. (Government of India 2018: 223)
The Indian state claims that the National Land Records Modernisation
Programme is the biggest e-governance programme in the world and the
first successful e-governance initiative for the “common man” (Government
of India 2018: 155). A perusal of the techno-managerial programme
would undoubtedly lead one to conclude that the land issues are sought
to be addressed through technical fixes and bureaucratic manner.
1 The Context: Land Reform to a Secure

Property Rights in Land
The current Digital India Land Records Modernisation Programme seeks
to develop a land market through integration of registration with muta-
tion (process of correction of records) and textual land records with spa-
tial/cadastral maps. Since the 1950s to the launch of the Eighth Five Year
Plan in 1988, land reform had carried a symbolic political and economic
importance for the planners, though state agencies admitted their failures
in implementing the radical land redistributive measures. The Report of the
National Committee on Agriculture-Part XV, Agrarian Reforms (1976)
in its study had admitted that the overall performance of land reforms had
been disappointing. Lack of political will on the part of the political lead-
ership and the administrative will on the part of the administrators is to be
blamed for the failure. The report notes that “the answer to the question
lies in the fact that since land reforms involve certain basic structural
changes in rural society affecting property rights in land, the officials on
their own cannot function as change agency in this field” (Government of
India 2018: 90). Recording the passivity and lack of activism among the
peasants and the landless labourers on demanding land for land reform,
the Report of the Task Force on Agrarian Relations (1973) appointed by
Planning Commission has observed that the land reform is a benign gift
by government, “the beneficiaries of land reform, particularly the socially-
economically vulnerable people are weighed down by the crippling
social–economic disabilities. Except in a few scattered pockets, hardly we

found the organised resistance by the landless poor for land reform”
(Government of India 1973: 9). Since the 1990s, the issue of land man-
agement, coupled with land records maintenance, has come to occupy a
prominent place in the public policy agenda. Because, it is admitted that
“the land issue of the marginalised was overwhelmed by the shift in the
development paradigm towards neoliberalisation” (Government of India
2009a: 144). The response by the government of India appears to be a
shift from its left-of-centre to right-of-centre path under the influence of
the World Bank’s agenda of liberalising the land revenue laws for facilitat-
ing growth of land market. The objective of the DILRMP is therefore to
achieve the conclusive title regime of secure property rights in India. Such
formalisation of property rights institutions in a developing country like
India will facilitate investment and growth of land market.4
The developments of India’s political economy and demography and
urbanisation have driven some scholars to advocate for liberalisation and
pro-market land reform. They openly question the capacity of the state to
implement redistributive agenda of land reform in the contemporary neo-
liberal political economy, consolidation of intermediate landed castes in
provincial politics and propertied middle class in urban areas. They argue
that such measures for deregulation of land laws are not only inevitable
but expedient in the interest of the poor. The role of the state would be to
play a facilitating role in making a shift of interventionist strategy to open-
ing up the restrictive provisions of land reforms such as tenancy abolition.
Scholars like Hanstad, Haque and Nielsen (2008) in a study on improving
land access for India’s rural poor have argued that the restrictive provi-
sions of land tenancy have had its negative effect on the growth of land
market. They argue that the oral nature of tenancy is exploitative in nature
and suits to the interests of the land owners. The tenancy legislations in
the states in India enacted in the 1960s and 1970s have enabled to confer
occupancy rights to only 4 per cent of India’s agricultural land. The ten-
ancy restrictions have reduced land supply and rental market which affect
the poor hard and also to a large extent the landowners afraid of leasing
out land to landless. The liberalisation of land rental market would help
the tenants to lease in land and increase his household income and
4
For details, see in detail the Chapter Sixth on land issues in the first Volume of Twelfth
Five Year Plan, 2012–2017, Government of India, Planning Commission, New Delhi.
40 P. NAYAK
encourage the large land owner to opt for non-farm activities and thereby
reduce the pressure on agriculture.5
2 The World Bank’s Advocacy for Land Titling

Without an understanding of the World Bank’s sustained advocacy for
liberalisation of land regime in India, it will be impossible to understand
the ideas, institutions and interests behind the advocacy for land title
regime by the Indian state. In fact, it would be interesting to refer here
that a cursory reading of the land policy of the state in India outlined in
the Eighth Five Year Plan and the World Bank’s (2007) report on land
policy for growth and poverty reduction would show interesting similari-
ties like advocacy for liberalising land tenures, tenancy, digitisation of land
records and a switch over to land title guarantee regime. The Bank advo-
cates that the state must take policy initiatives to ease restrictions on land
market growth by legalising tenancy and land leasing and replacing the
ceiling laws with regulations to facilitate the rental markets (World Bank
2007: 60–2).
3 Demand for Land Reforms and Their Relevance

The demand for land reforms measures like land to the landless is rising at
the grassroots level. The dalits in Gujarat have been demanding land to
them so that they would not be forced to engage in the traditional occupa-
tions like skinning the dead cattle which invites violent wrath of the cow
protection vigilantes (Patel 2016; Krishnan 2016). The massive mobilisa-
tion by a civil society organisation (the Ekta Parishad) in the countryside
that had culminated in a march of 100,000 poor persons from Gwalior to
Delhi started on 2 October 2012 demanding for effective implementation
of land reforms for the poor sections, speedy disposal of cases of land
alienation by the courts, loss of farm land, updating land records, secure
land rights, pro-poor land reforms and so on have again revived the need
for revisiting land reforms. The agreement signed between Jairam Ramesh,
then Minister for Rural Development, and P.V. Rajagopal, on behalf of the
Ekta Parishad on 12 October 2012, in Agra, underlines many of the
emerging issues that can be argued as an offshoot of the unfinished agenda
5
See, Hanstad, Haque and Nielsen (2008). The World Bank’s report on India’s land poli-
cies have similarly advocated for a liberalised land regime.
of land reforms. The agreement had called for measures to address the
agricultural land questions for the landless and agricultural landless tribals
displaced by involuntary settlement, nomads internally displaced due to
civil strife, migrants to cities, domestic workers, maid servants, fisher folks
affected by natural calamity, tourism project, tea tribes, released bonded
labourers, transgender people and HIV affected people which have thrown
up new questions of rights for different social categories of homesteadless
people. The land questions raised by different social classes are: cultivating
land by the tillers without title, granted land records but not in possession,
land lost to the powerful social group or land mafia, land lost through
Benami transactions, lands distributed to the poor by the state but acquired
for Special Economic Zones (SEZ), non-implementation of progressive
legislation, the Panchayats Extension of Scheduled Areas Act, 1996
(PESA), the Forest Right Act, 2006, tenancy abolition, settlement of dis-
putes over the boundary of village and forest by involving the villagers,
survey and recording of the common property resources, setting up fast
track land dispute tribunals, setting up Task force on Land Reforms and so
on. There is demand for lowering the ceiling limits and curbing malprac-
tices in ceiling, taking away excess lands from plantation companies, put-
ting a ban on the farmhouse culture, prohibition to keep land idle,
distributing unused land kept under the companies and religious bodies,
prohibiting absentee land holding and so on. On the other hand, there is
demand for more land for the industry, infrastructure, farmhouse for the
rich and affluent middle classes, land for leisure industries, and the land for
the real estate purposes.6 This wide array of land questions, in brief, high-
lights the emerging political economy in land and development that char-
acterises the social relations and the livelihood interests of the marginalised
around land issues requiring the state intervention (Rajgopal 2013).7
The union government had responded to such mobilisations by bring-
ing out a Draft National Land Reforms Policy, 2013, for discussion and
comment on 18 July 2013. The draft has found that, in India, nearly 70
per cent of people depend on land as farmers and farm labourers and the
6
See also Author (2013, April). Janasatyagraha: Shamatise se Karybahi Ki Aur, Publisher,
New Delhi.
7
Centre for Legislative Research and Advocacy (2011). Land Reforms in India: Unfinished
Task-Policy Brief for Parliamentarians-Series No 14, 2011, November, 1–8. Similarly, the
pathalgadi movement that erupts from time to time in some schedule areas like Jharkhand,
Chhattisgarh and Odisha demanding the implementation of the PESA Act may be viewed as
similar demands for securing community rights in land, forest and water.
42 P. NAYAK
country is home to the world’s largest number of landless population in

the world. The draft admitted that the way the land uses are taking place
has raised several policy issues and calls for revisiting the land reforms as
more relevant policy than even before. Quoting the 59th round of
National Sample Survey Office (NSSO) data of 2003, the draft admits that
nearly 60 per cent of the country’s population has right over only 5 per
cent of the country’s land whereas 10 per cent of the population has con-
trol over 55 per cent of land. The draft land reforms policy paper has taken
note of the increasing demand of land for land acquisition, urbanisation,
diversion of agricultural land, the stagnating agricultural yields, increasing
participation of women in agricultural activities and so on. The language
and meaning of draft land reforms policy are essentially to revisit land
reforms agenda and promote a right-based agenda for the weaker and
vulnerable sections and streamline the land revenue administration.
According to the findings of the Koneru Ranga Rao Commission on Land
(2006) appointed by the Andhra Pradesh government, in the undivided
Andhra Pradesh, the percentage of the scheduled caste population consti-
tutes 16 per cent of the population but they own only 7.5 per cent of the
operated area in the state. The Commission has recommended the land
reforms agenda must be pursued vigorously in the state where a “piquant
situation” has arisen as the traditional land-owning castes are moving out
of agriculture to other means of livelihood but the scheduled castes, the
poor and other socially disadvantaged are not getting access to land legally
(Government of Andhra Pradesh 2006: 5–7).
4 Relevance of Land Reforms Agenda

We refer here briefly some of the observations of the government-
appointed commissions on relevance of land reforms to point out the
importance of land reforms as public policy, which advocates as an agenda
for inclusive growth and social justice. A brief reference to some of these
reports is relevant here as the Indian state continues to maintain its sym-
bolical commitment to land reform goals that were adopted in the 1950s
owing to political compulsion arising out of the pressure for land rights by
the poor and marginalised. The Report of the State of Indian Agriculture,
2012–2013, taking note of declining size of average land holdings and net
shown areas across the country has suggested for the necessity of strength-
ening the implementation of laws related to land reforms, legalising ten-
ancy as an urgent need to protect the tenant farmers and land owners,
need for a land user policy for sustainable use of land (Government of
India 2013: 10). Similarly, the National Policy for Farmers, 2007, in its
report has called for strengthening implementation of land reforms laws
considering the skewed nature of land ownership with emphasis on
reforming tenancy laws, land leasing, distribution of ceiling surplus land
and waste land, providing adequate access to the common property and
wasteland resources and support services for effective implementation of
recently amended Hindu Succession (Amendment) Act, 2005
(Government of India 2007: 4–5). Taking note of the emergence of mar-
ginal and vulnerable sections in the agrarian questions, the final report of
the Twelfth Five Year Plan Working Group on Disadvantaged and Women
Farmers has suggested for a right-based approach for the economically,
socially and regionally disadvantaged farmers, which is significant pointer
to the uncritical advocates of land titling regime in India. The findings of
the report had influenced the formulation of Twelfth Five Year Plan’s
strategy. The report defines economically disadvantaged farmers as land-
less, near landless or small size of owned or operated holdings, socially
disadvantaged on grounds of gender, caste or tribe, ecologically and
regionally disadvantaged farmers located in regions which are arid, rain
fed, disaster prone, poorly irrigated or geographically remote. In the
report, the categorisation of diverse nature of social category-based land-
holding patterns of the disadvantaged groups in India calls for an inter-
ventionist nature of the state in promoting the land rights and land access
for these groups.
5 Gender Issues and Land

The discourse on land reforms, land rights and land title had got a new
turn with the emergence of gender agenda as emerging land question.
The absence of women land rights since the First Five Year Plan in the
1950s till the formulation of Sixth Five Year Plan (1980–1985) is a signifi-
cant omission of the gender issue in land. But various developments like
the rise of feminisation of agriculture, the agenda of empowering women
by increasing their bargaining power through conferring effective legal
rights on land and the pressure from the women rights activists have
pushed up the agenda of land rights. The report of the Working Group on
Empowerment of Women in the Eleventh Five Year Plan had noted that the
women workforce constitutes 40 per cent of workforce and the trend is on
the rise. Nearly 20 per cent of rural households are de facto female headed
44 P. NAYAK
due to widowhood, desertion or male out-migration. As the agricultural

productivity is increasingly dependent on the ability of women to function
effectively as farmers, the working group had suggested a two-pronged
approach:
(a) Ensuring effective (rights being rights not just in law but also in practice)
and independent (rights being rights that women enjoy in their own capac-
ity and of those enjoyed by men) land rights for women and (b) Strengthening
women’s agricultural capacities is desirable. (Government of India
2006a: 30)
The women’s access to land is given critical importance in public policy

perspectives in the interest of family welfare, agricultural productivity,
poverty reduction and women’s empowerment. The demands by the civil
society groups, women organisations, various progressive court judgments
and the larger developments in the political economy around land have
necessitated the urgency of securing the land rights for women. It may be
argued that the agenda of land rights for women in India is very challeng-
ing. It may lead to revisit of land reforms agenda of the contemporary
neoliberal state should the Indian state take up policy measures for confer-
ring effective and independent land rights by way of providing incentives
and disincentives.
6 Left-Wing Extremism and Tribal Land Questions

The land questions for the tribals in India are becoming more complex
and challenging day by day due to the state policy and socio-economic
changes within the tribal societies. The Committee on State Agrarian
Relations and the Unfinished Task in Land Reforms has noted that nearly
77 per cent of dalits and 90 per cent of tribals are either de jure landless or
de facto landless though uniform data on them across India is not avail-
able. Therefore, the tribals are bearing the brunt of forced displacement
and resettlement and consequent disruption of their socio-economic lives.
The Committee has noted that “most tribal areas in Central India are the
abode to the Naxalites, whose presence is a response both to the past and
future land alienation, the failure of the government to live up to its con-
stitutional mandate and the withdrawal of the state from its responsibility
to protect the tribal realm” (Government of India 2009a: 129). The
“development paradigm” of the post-colonial Indian state has aggravated
tribal problems
‘by destroying their social organisation, cultural identity, and resource base,
and communal solidarity’. The Report on development challenges in the
extremist affected areas emphasizes that as land is crucial for the survival of
tribals, the past development experience shows that, wherever the tradi-
tional ‘community ownership and individual use’ is continuing, there is no
land alienation. So long as land is traded as property and a commodity it will
pass over to the persons with money, especially in the current milieu of lib-
eralization. The crucial element that renders even the most radical laws
infructuous is the unfamiliar setting of the judicial process, in which the
simple tribal feels lost (Government of India 2008a: 39, 51)
7 Tribal Land Rights in the Northeast

The land tenure system in the northeast and the traditional local institu-
tions has special features which arise due to the prevailing agricultural
practices. The village lands, individual-owned lands and the clan lands are
used for the land tenure system in Jhum (slash and burn cultivation/shift-
ing cultivation) area characterised by communal ownerships but opera-
tional management is done separately by the households. In the state’s
policy language, such community-controlled land holding is acting as dis-
incentive for improvement of the agricultural productivity. The National
Committee on the Development of Backward Areas in its report in November
1981 had observed that the widespread community holdings need to be
changed to individual holdings of land ownerships for agricultural devel-
opment in the region (Government of India 1981). Similarly, the North
East Region Vision 2020 document of the Government of India and the
seven northeastern states advocate for promotion of all forms of animal
husbandry, fisheries, dairying, plantation of commercial crops, horticul-
ture, floriculture, medicinal plants, herbs, organic farming by progressively
phasing out of jhumming practice by offering remunerative practices/
alternatives. Agricultural productivity is constrained by absence of indi-
vidual ownership in northeast which can be explained as one of the factors
and the popularity of jhum (slash and burn) cultivation in the hills
(Government of India 2008b: 52).
In the northeastern region, four types of land alienation are taking
place, that is, transfer to non-tribals, encroachments by acquisition for
development projects without recognising community rights, encroach-
ments by immigrants and monopolisation of community land by tribal
46 P. NAYAK
elite or what is called as internal alienation. The diversity of land tenure

system is one of the distinguishing features in the northeastern region.
The pressure on the land, inter-community and intra-community schism
are on the rise. The absence of codified customary or community laws
governing the land tenure also complicates the situation.8 The committee
has noted that the effectiveness of the tribal institutions/village institu-
tions have been eroded in the northeast despite constitutional sanction
given to these institutions due to politicisation and factionalism among
the tribal councils and the affiliations among the emerging tribal elites
with the political parties for securing their political interest.9 It has how-
ever strongly recommended for the continuance of these institutions
(CFR–LA 2016: 244). The Committee has also put up some suggestions
after summarising the problems in northeast:
(i) Major problems dealing with common lands are

(a) Encroachment on the common lands
(b) Discrepancies in Land Records
(c) Low productivity of common lands especially those being
called wastelands
(ii) Most of the forest areas have problems related to
(a) Encroachments on Forest Lands by local people or immi-
grants from Bangladesh, etc.
(b) Improper and incorrect Surveys and Settlements.
(c) Unsettled forest villages.
(d) Irregular declaration of state forests.
(iii) Pasture lands have reduced drastically.
(iv) Diversion of agriculture land for non-agriculture purposes through
the Land Acquisition Act
(a) Brick Kiln
(b) Creation of Industrial Parks
(c) Residential Areas
8
See an interesting study with inter-state comparison of the implementation of the Forest
Rights Act, 2006, in Promise and Performance: Ten Years of the Forest Rights Act in India,
2016, CFRR–LA (2016).
9
On the question of land rights in the northeast, recently an important change has been
made to the land laws in Arunachal, which paves the way for individualisation of land rights.
See Mishra (2018) and Sharma and Borgohain (2019) for details.
(v) Major changes in the land use through other land use practices like
(a) Mono-cultivation
(b) Tea – Estates
(c) Privatization of common lands
(d) Monocropping practices in agriculture areas and forest planta-
tions threaten bio-diversity. (CFRR-LA 2016: 247)
8 Towards Legalising Tenancy

The three-decade old land records modernisation programme initiated by
the Indian state has revealed that the programme of digitisation of land
records and maps confine to recording the existing land holders. It does
not leave any scope for recording in the records of rights of the other
informal rights and interest holders of the land such as tenants/sharecrop-
pers to secure their status (Government of Bihar 2008: 54–7; Government
of India 2009a; Nayak 2015). The process of land records modernisation
of existing old records hinders an effective land reform initiative of record-
ing the tenancy. Though it is favoured in recent micro studies for revisiting
the tenancy practice, yet no study has come out with a practicable solution
for recording the tenancy and balancing the interests of tenant’s tenure
security and the property rights of the lessers. It requires many legal and
institutional changes in the existing arrangements of land records particu-
larly the record of rights. A series of suggestions by Bihar Land Reforms
Commission’s Report (2009), in brief, that both the tenants and landlords
should be given a certificate of land schedule of tenanted lands and the
same should be recorded in the record of rights (RoRs) after detail field
enquiry to identify tenants (bataidars) by the revenue officials with the
help of local ward members of Gram Panchayats (village council); legal
presumption in favour of tenant of his land holding; burden of proof on
the person who challenges the status of tenant; heritable right of cultiva-
tion of the tenants; the tenants should be given records clearly indicating
the name of the land owner and the numbers of plots he is cultivating;
recording the names of the tenant in the record of rights; involvement of
Panchayati Raj members for accuracy of the recording of the tenanted
land in the villages; right of resumption of the tenanted land by the land
owner only for his livelihood; no voluntary surrender of tenanted land
would be allowed unless the appropriate revenue officer causes an enquiry
and heard from both the parties; transfer of property cannot be used as a
48 P. NAYAK
means to evict or eject the tenants and so on, only explains the serious
legal and political challenges that lie in recording the tenancy. The main-
tenance of such land records of tenants and landlords and dovetailing the
tenancy with a host of institutional measures to facilitate access to institu-
tional credits to the tenants to sustain the land lease are important institu-
tional and political challenges for the state (Government of Bihar 2009:
54–7). The report has been rejected by the Bihar government due to
political compulsion.
The changes in land use, the decline in per capita land holdings, con-
version of agriculture land for non-agricultural purposes, demographic
pressure on land, commodification of land in urban areas, setting up of
industrial corridors and Special Economic Zones on acquired farm land,
changing land labour relations in rural areas, rapid urbanisation and above
all, the shifting land policy of the Indian state from land reforms to pro-
moting land titling and land liberalisation regime in land are indicators of
the changes in the political economy of land and development in India.
Some liberal scholars like Barbara Hariss-White have forcefully argued that
the large-scale demographic and political economic changes in the agrar-
ian sectors have diluted the polarising relationship between large landlords
and tenants and farmers. For them, the semi-feudal relations no longer
exist in the Indian countryside (Lerche et al. 2013). The prevalence of
landlordism as of significance to land and agrarian relations problems is
evident from the changing political economy in rural Bihar and massive
outstate migration there. But it is argued that there exists strong case for
redistributive land reforms. The factors responsible for decline of land-
lordism and feudalism are due to “declining power of caste hierarchies,”
which reduced significance of village. Though the semi-feudal relations
are changing, yet the rural society is characterised by inequality, social
exclusion and caste-based relations and networks. What we find that the
developments in political economy in land call for a revisiting land reforms
agenda and a strong state intervention due to some expected and unex-
pected outcomes of land reform programmes and the larger developments
in the political economy. The issues are not confined to only redistribution
and social justice but to sustainable development and intergenerational
equity as well. The indicators of commodification of land are: conversion
of land, pressure on land use, vanishing common property resources,
Special Economic Zones and industrial corridors, urban growth in rurban
areas and development of the so-called smart cities.
9 A Contested Transformation

The National Commission on Farmers’ in its fourth report (2006) on
Serving Farmers and Saving Farming has recommended that the land
reforms should be “mainstreamed within the national development
agenda” with a thrust on secure access of land, water and tenurial relation-
ships through like Panchayati Raj institutions. It has realised that the redis-
tributive land reforms programme would invite resistance from the
propertied classes who want to promote commodification of land and pro-
mote agri-business and corporatisation of agriculture. So the Commission
advocates for harmonising the interests of both the beneficiaries and losers
of redistributive land reforms programme, while it has suggested for legal-
ising tenancy and liberalising contract farming, for thoughtful implemen-
tations of land reform laws. Therefore, the “old land reform” programmes
should be revisited and revitalised in view of changing political economy
such as globalisation, liberalisation, crop diversification, off-farm employ-
ment, public private partnerships, revival of rural cooperatives, group
farming and so on, but the interests of all farmers must be kept at the
centre of development process (Government of India 2006b: 92, 131).
Thus, the report advocates for a balanced reorientation of land policy of
the Indian state in view of the changed political economy of land and
development.
We have so far found a statist discourse in the form of advocating
liberalisation of land regime in the Five Year Plans, which is in confor-
mity with the World Bank’s advocacy for liberalising India’s land regime.
On the other hand, findings of the government-appointed committees
referred in the paper and agitations by landless famers belonging to
deprived communities across the country advocate strongly for revisit-
ing land reforms agenda. Interestingly, the importance of land reform
agenda has been sidelined in the public policy but the importance of
land questions for the poor and deprived sections and for women has
been kept alive and burning. An example of how the neoliberal eco-
nomic policy of the state stands in conflict with the livelihood and rights
of the forest dwellers is the recent dilution of the Forest Rights Act,
2005, that premises “to recognise and to vest the forest rights and
occupation in forest land in forest dwelling Scheduled Tribes and other
traditional forest dwellers who have been residing in such forests for
generations but whose rights could not be recorded … during the colo-
nial period as well as in Independent India resulting in historical
50 P. NAYAK
injustice” (emphasis added). It is a unique right-based law that recog-

nises and secure the interrelated rights to land, forest, water and liveli-
hood of the forest dwellers, but more than ten years of implementation
of the act reveals that structural reasons like poor quality of forest rights
emanating asymmetric power relations of forest bureaucracy and power-
less forest dwellers, competing claims of forest by industry, corporate
and forest dwellers due to contemporary political economy that advo-
cate market-driven development, lack of political will to implement the
act, passing of compensatory forest act, 2016, that advocates for regen-
eration, investment in environmental service and net present value of
investment, lack of coordination between forest, revenue and tribal
departments, non-recognition of community forest rights, minor forest
produce, contradictory provisions in multiple laws of state laws hinder
effective implementation of the Forest Rights Act, 2005. More impor-
tantly, the proposed draft amendment of the Indian Forest Act, 1927,
dilutes the rights of forest dwellers by vesting overriding power on the
forest bureaucracy and creation of village forests (Oxfam India 2018;
EPW 2019: 9).
The redistributive agenda of land reforms initiated by the Indian state
in the 1950s has had limited success in so far as removing the intermediar-
ies in the areas with permanent settlement tenures with payment of com-
pensation. The commodification of land is evident in growing conversion
of agricultural land for non-agricultural purpose and rise in informal land
leasing market. The land questions like failure to tackle land alienation of
tribal land, rise in landlessness and homesteadless population and the
growing importance of addressing the women land rights due to large-
scale feminisation of labour and growing feminist movement cannot be
addressed by adoption of land titling regime. There is, therefore, justifica-
tion for a second generation of land reforms for addressing the land rights
and access to land for dalits, tribals, women, common property resources
for sustainable resource use and management. The fixation of ceiling on
land holdings and its implementation not been properly carried out (Scaria
2016; Government of India 2009a).
The larger development in the political economy in land and develop-
ment has moved many scholars to argue that India has not witnessed clas-
sic agrarian scenario marked by the rise of a large army of agrarian
proletariats and big landlords. It is argued that the rise of circular or
migrant labour force in rural areas of India has contributed to the multiple
means of livelihood. The semi-feudal nature of landlord-tenant relation-

ship and attached labour or bondage labour practices with landlords no
longer exist in rural areas. The landless agricultural labourers are no longer
dependent on agricultural work for their sustenance because of the growth
of non-farm sectors like construction, trade, hotels, manufacturing, large
capitalist farming and other petty commodity production sectors. The rise
of reverse tenancy in which the small farmers are leasing out their land to
large farmers and integration of tenancy with capitalist relations in agricul-
ture require revisiting the earlier approach to tenancy (Shah and Harriss-
White 2011). Interestingly, such argument misses its point when we refer
the findings of the government-appointed commission like the Report of
the Bihar Land Reforms Commission (2006–2008). The Commission in its
report has found that in the state of Bihar, nearly 74 per cent of workforce
is engaged in the agriculture which gives nearly 33 per cent to state domes-
tic product. The Commission has observed that the demands of the left-
wing extremists like the Maoists/Naxals to seize the uncultivated and
ceiling surplus lands and community property resources from the control
of the land-owning upper classes and distribute among the poor and land-
less agricultural labourers as legitimate and legal as these have been
reflected in India’s Five Year Plans formulated since the 1950s (Government
of Bihar 2008: 15–9).
Our examination of the emerging political economy of land and devel-
opment in India thus reveals that the asymmetric and unequal land rela-
tions continue though the big landholdings are on decline, yet there has
been the rise of intermediate landed castes and rise of the new landlords
like the land hungry castes from the so-called non-cultivating peasant
households. For these non-cultivating middle-class households, land is a
commodity. The historic legacy like the tenancy and the gender bias in
landholding continues till today with the signs of reverse tenancy and fem-
inisation of agriculture. Interestingly, the macro and micro developments
that we have referred in our study of the emerging land questions have
also generated a renewed interest to revisit the much discussed land reform
programmes of the Indian state. The demand for land reform by the mar-
ginalised sections among the tribes, the scheduled castes and other land-
less vulnerable social groups remains a burning issue. Thus, one can argue
that the land questions for the neoliberal state and its citizens are contra-
dictory in nature.
52 P. NAYAK
10 Conclusion
This chapter thus has presented two approaches to the land questions in
India that are interestingly similar to the contemporary debates on land
reforms (Assies 2009). There is strong advocacy for liberalising land laws
and policies to develop land market. The other approach sees land rights
in terms of livelihood concern and human rights issues anchored on con-
stitutional governance of India. The demands for engendering land rights
and ownership, protecting the tribal land from alienation, strengthening
their community land rights and recording the tenancy for safeguarding
the interests of the tenants and the landlords dominate the contemporary
land questions. Redistributive land reform programmes in the contempo-
rary neoliberal political economy have lost their political credence. But at
the grassroots level, for the poor and marginalised sections, land reform
implies secured land rights for homesteadless persons, land for landless
persons and effective land rights for women, the secured rights over com-
mon property resources and their protection from encroachments and
degradation. Interestingly, guaranteed title to land has not been the
agenda of discussion in the policy documents such as national policy on
agriculture, national policy for farmers or the draft land reforms agenda.
The imperative of promoting land market by providing individualised
secure landed property is missing in the whole gamut of literature on land
questions. Except by the motivated advocacy by the World Bank and its
funded research organisations and consultants and the Indian govern-
ment’s policy planners advocating for “land liberalisation,” hardly we find
any serious scholastic work that advocates for guaranteed title to land as a
panacea for growth and poverty reductions. The numerous reports of the
statutory committees and commissions rather advocate for revisiting the
land reforms agenda to protect the interests of the poor and landless
persons.
In the context of neoliberal political economy, the debate on revisiting
land reform and promoting land titling regime can be seen as challenge or
dilemma before the Indian state. The market pressure of efficiency and
economy in land management and the imperativeness to promote social
justice and equity in land and agrarian relations by the state require revisit-
ing the land reforms agenda. The larger developments in the political
economy in land across India suggest two inevitable trends in the land.
First, commodification of land and the need for expanding land market by
easing of regulations and consequently the importance of land records like
clear property rights. Second, the need for the interventionist state to
secure and promote land rights of the landless, small and marginal farmers,
other vulnerable sections, and the secondary interest holders in land.
It is argued by the votaries of land titling that it enhances tenure secu-
rity and tenure insecurities arising out of challenge to possession and the
cost of defending possession of land would be lessened. This argument
does not hold good in the context of India’s extant presumptive land
records with conclusive evidentiary value. It still serves as prima facie doc-
ument of title with conclusive evidentiary value. No court judgment on
land title has ever questioned or observed the legality of the presumptive
nature of land records in India. Similarly, no bank has ever questioned the
legal validity of the presumptive nature of land records and cited it as the
problem in giving credit or making the land as collateral as the advocates
of land titling claim. Interestingly, the guaranteed land title regime does
not provide any legal solution to replace the presumptive land records
with conclusive evidentiary value. The continuance of the presumptive
nature of land ownership records is a historical reality as we have found in
our examination of the record of rights of major Indian states. The com-
plex and localised nature of land disputes, the phenomena of land grab-
bing as highlighted in land grabbing acts in some states are not addressed
in the proposed land titling regime. Rather the main idea behind such land
titling policy strategy is to create the regime of individualisation of land
holding through land titling and remove restrictions on land transactions
so that the land market can grow.
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CHAPTER 3
Ownership Versus Control: The Changing

Dynamics of Land Use in Liberalised
Agricultural Context of India
Sukhpal Singh
1 Introduction: Control Versus

Ownership of Land
In India, land remains an important asset as a productive resource though
it is debated whether its importance as a status symbol in rural India has
declined (Harriss 2013). In fact, ‘Land is at the centre of lives in rural
India. Land has inherent value, and it creates value. A plot of land can
provide a household with physical, financial and nutritional security, and a
source of wages. Land is a basis for identity and status within family and
community. Land can also be a foundation for political power’ (Hanstad
et al. 2004, p. 1). Thus, land has human value for human health, skill
development and food security; financial value in terms of income, credit,
crops and livestock; social value in terms of networks and labour relation-
ships; natural resource preservation value; physical value for housing and
other structures; and political value as source of power and voice. Besides
S. Singh (*)
Indian Institute of Management (IIM), Ahmedabad, India
e-mail: sukhpal@iima.ac.in

58 S. SINGH
farm production for subsistence and for the market, land is also used as a
collateral for providing credit as lenders prefer assets whose ownership and
value are easily determinable, while borrowers prefer assets where there is
minimal disagreement in valuation with lenders. Also, land is more liquid
as collateral and can be disposed of quickly in case of default. For lenders,
land as a collateral is easy to locate and identify, easy to value and has rea-
sonable liquidity. In India, land assumes a unique position as it is widely
sought after as cultural norms favour land ownership across all sections of
the society. More than 65% of Indians own landed property and a large
proportion of loans to individuals and corporates utilise land as a collat-
eral. But, there is no single land market in India as land is, by and large, a
state subject and each state is able to frame policies to manage its own land
markets. The classical example is the recent land acquisition Act framed by
the Union Government being left to the states to be implemented in their
own ways. Land constitutes 73% of the total assets base in rural house-
holds and even urban households owned 92% of their assets in land and
buildings. Land is the primary means of credit access for rural households
and for small businesses. Farm and non-farm loans are provided against
agricultural land and more than 80% of agricultural loans have land as a
collateral. But, due to poor quality of land titling, 90% of the land parcels
in India are subject to legal disputes, and land-related disputes account for
60%–70% of all civil litigations (Krishnan et al. 2017). What needs to be
recognised is that contribution of farm production as a source of liveli-
hoods has come down and now less than 50% of farmer household income
comes from farming and there is high concentration of land with 91%
owners with only 43% of cultivated area and 88% operators cultivating
only 42% of total area, besides one-third households being landless.
Major land issues in India include: nature of land markets, land laws
and their violation, use and abuse of so-called wastelands, and ownership
versus control of farm lands in the nature of leasing and contract farming.
The land markets which deal with only 5% of land in terms of sale and
purchase as markets are inactive more so in north India than in the south
of India for reasons of land ceilings, pricing, credit and transaction cost
besides compensation, and inheritance, and tribal and other laws which
make the market imperfect. This results in differential impacts in different
areas like negative impacts on small and landless in green revolution areas
due to reverse tenancy and positive impacts in other areas but overall
impact being negative as seen in higher landlessness and migrant owners
in local area. The ceilings on land holdings and corporate farming wherein
3 OWNERSHIP VERSUS CONTROL: THE CHANGING DYNAMICS OF LAND… 59
some states like Gujarat have amended the Act to give away ceiling surplus
land to corporates instead of landless rural households are also important
policy issues. The Hooda Committee also argued for recommended liber-
alisation of land ceiling limits. The use of so-called wastelands for corpo-
rate farming instead of recognising their value as common property
resource for rural poor and landless for fodder, fuel and food besides the
less explored issue of ownership versus control of prime farm lands in the
form of growing trend of reverse tenancy (across even states of Odisha,
Bihar, Karnataka and West Bengal) due to growth of private water mar-
kets, institutional credit constraints for landless and marginal farmers and
input and output market advantage for large farmers (Mukherjee 2017)
are other major issues. In fact, the liberalisation of land leasing laws across
states is the focus of this chapter.
Commercial farming, especially of high-value crops like coffee, cocoa,
oil palm rubber or such other crops, could also affect land markets and
land control (Hall 2011). This kind of crop booms changes the value of
land for different stakeholders, which includes control by certain stake-
holders as against others. These could include not only large agribusiness
corporations but also state, migrant-would-be-small holders and small
holders. This control is acquired through regulation, market, force and
legitimisation which are manifest in state rules, prices, violence and threats
and principled arguments about governance of land respectively. These
different actors are interested in crop booms as they bring foreign exchange
which makes agribusiness entities, farmers and others involved directly or
indirectly richer by ‘get-rich-quick’ phenomenon and in the process also
raises the price or value of such lands. By being a part of the value chains,
even smallholders benefit as they become contract growers and migrant
farmers also lease in land for contract production and over time try to own
land as has been seen in Indian states of Punjab and Andhra Pradesh in
recent years in cash crops of potato/vegetables and chilly respectively
being grown for exporting companies and domestic processors and food
supermarkets (Singh 2008; Pritchard and Connell 2011).
The processes involved in acquiring control over land during crop
boom involve a mix of various tools stated above and involve intimate
exclusions (involving new claims on local land, common land and flexible
tenure land), sale to migrants after rentals for some time, seizure by
migrants of traditional community land, state and corporate engagement
with smallholders on state land like forest areas which may have presence
of smallholders, seizure by companies and state actors and use of crop
60 S. SINGH
booms to strengthen claims on land by promoting specific crops which

lead to indebtedness and certain economic circumstances. But, this con-
trol is not enough to make money and requires other resources like capi-
tal, networking and skills to make farming profitable. But, popular
resistance as seen in Thailand to large-scale commercial farming can lead
to the limits on plantation type of farming and promotion of smallholder
production unlike other contexts like Indonesia, Vietnam and Laos (Hall
2011). The contemporary land control deals differ in scale and geography
and form different outcomes for local people. Forms of control may
involve outright purchase or dispossession but equally also involve short-
or long-term leasing arrangements or contract farming (Vicol 2017).
Contract farming is also being seen as a tool to control land and its use,
while being promoted as an inclusive alternative to corporate farming.
Contract farming, it is argued, may result in equally negative impacts on
smallholder communities like land acquisition, including loss of control
over land-use decisions, increasing inequality, capture of benefits by local
elites and eventually outright loss of land (Vicol 2017).
In this framework of control versus ownership where I argue that it is
control not necessarily ownership which matters for various stakeholders,
this paper examines the question of ownership versus control of land in
the Indian smallholder and large landlessness context by focusing on the
land lease market which facilitates various new interventions in the farm
sector like contract farming and implications of such policy and practice
on the livelihoods of small and landless farmers. Section 2 examines the
nature and dynamics of tenancy from a small operator perspective fol-
lowed by Sect. 3 which discusses the role of the state in terms of policy
and institutions, with special reference to the latest land leasing report
and proposed model land leasing Act by the NITI Aayog. Finally, this
chapter makes inferences in Sect. 4 about managing land in a sustainable
way, including institutional approaches, from a smallholder and farm
worker perspective.
2 Nature and Dynamics of Tenancy

Micro-studies from different states show that the proportion of leased in
land is significantly higher than reported by both the National Sample Survey
(NSS) and the Agricultural Census. The actual leased in holdings are
reported to be as high as 10%–50% of the operated holdings across states
(Gupta and Giri 2016). Despite the practice of reverse tenancy in many
states, especially those impacted by Green Revolution, it is marginal, small

and landless farmers who lease in land. At the all India level, 36% of the
tenants are landless and another 56% of tenants are marginal land owners
who are net leasers than being net lessors, thus 92% leasees being from
marginalised categories (NITI Aayog 2016). On the other hand, in
Punjab, it was large and medium farmers (>10 acres) who accounted for
one-third of the leased in land where their share in farmer household pop-
ulation was only 21%. Further, in the case of 59% of the sample farmers in
a survey based study in Punjab who had leased land, leased land was 46%
of their average operated holding. On an average, a farmer leased 7–10
acres in the study district of Ludhiana (Sangwan et al. 2013).
Further, dominant tenancy contracts in an area differ depending on the
crop and technology and the extent of market development besides social
and economic environment (Eswaran and Kotwal 1985). Each crop has its
own logic for tenancy and has implications for labour opportunity and
nature of labour contracts (Gidwani 2001). Also, more than one contract
types can coexist in a given area due to the factors, besides risk sharing and
transactions costs, like worker or tenant qualities and imperfections in
both land and other input markets. In tenancy contracts where produce as
well as input sharing is involved, labour availability with the tenant, espe-
cially family labour, supervision of labour and quality of decision making
about farming issues like crop choice and input choice and management
also matter (Eswaran and Kotwal 1985). Also, tenancy is a product of
many historical, cultural, sociological and legal processes besides the
nature of markets in different regions (Vijay and Srinivasulu 2013).
In India, there are various types of arrangements for use of land between
owners and users in the form of tenancy. The most common form of ten-
ancy is one under which small or landless farmers lease in or share crop
lands of other small, medium or large farmers under different terms of
lease or share cropping in different parts of India. But what is of special
significance in the context of ownership versus control of land issues is the
‘reverse tenancy’ in many parts of India especially the Green Revolution
regions since the 1980s. In the Indian state of Punjab, the shifting land
control can be seen clearly. Small farmers in Punjab are moving out of
farming due to the phenomenon of ‘reverse tenancy’. Importantly, Punjab
is the only state in India where the size of operational holding is increasing
unlike other states and the all India trend of declining average size of oper-
ated holding. A recent study shows that during the last decade, 1.28 lakh
smallholders had leased out their land to larger holders and operators and
62 S. SINGH
were themselves out of farming. Another 72,000 had sold their land to
larger farmers. Out of these two lakh smallholders, about 22% had joined
the ranks of agricultural or other labour (Singh et al. 2009). This, in a situ-
ation of mechanized farming in the state which had led to lower labour
intensity in general over the last few decades as most of the work on two
major crops (paddy and wheat with 73% of GCA) is carried out with
machines like paddy transplanters, harvesters and reapers.
The small and marginal holdings in Punjab declined by as much
as two lakh over the decade of 1990s when the overall decline in holdings
was only 1.2 lakh. This indicates growing concentration of land in a fewer
hands in the state. The policy bias and lack of representation of small-
holder interest have resulted in corporatisation of the farm sector wherein
larger operators are increasingly taking control of the sector and manipu-
lating agricultural policies to their advantage in the name of smallholders
and farm crisis. Exclusion of smallholders is perpetuated through selection
of crops, farmers, farm technologies and practices and market linkage
models for diversification and agricultural growth. Majority of the farmers
from marginal and small categories left farming (two-third) after 2000
only, and low income from farming was the major reason followed by too
small size of holding and repayment of debt. Half of those who left farm-
ing had totally or partially sold their land and one-third of those selling
land were worse off after than before and those who only leased out land
were not worse off in general (Singh et al. 2009).
In Punjab, leasing helps control of land for commercial production
and, therefore, large commercial farmers called ‘potato kings’ lease in
thousands of acres of land for corporate farming. Most of these are
Punjab’s so-called Progressive farmers and cultivate more than 50 acres
each and are educated and eager to increase their incomes through diver-
sification and new technologies. It is important to note that Punjab’s aver-
age large farmer (8% of total) is larger than India’s average large farmer
(1% of total). They lease in large chunks of land, from non-resident
Punjabis in the area which is known for immigration or from local small
and marginal farmers as a ‘reverse tenancy’ practice which is well con-
nected with Punjab’s Green Revolution now (as against tenancy practice
elsewhere in India) for commercial farming for open markets or for con-
tract farming for agribusinesses. They live in palatial houses mostly outside
the main village and frequently own multiple tractors and tube wells, com-
bine harvesters, or other machines for modern farming, and cars for per-
sonal use. They are eager to get the land ceilings Act relaxed and push for
promotion of agro exports. For these farmers, state support in the form of
contract farming or extension is a bonus as even otherwise they would
have grown these new crops (Witsoe 2006).
These potato kings include three families that collectively cultivate
12,000 acres of seed potato on leased in land and possess cold storage
facilities capable of storing their entire produce. The lease is typically for 3
years through informal contracts as formal tenancy laws do not permit
such long leases. The largest of these three potato kings—described locally
as the largest seed potato farmer in the word—cultivates 5500 acres and
has built this empire over 20 years and leased land in dozens of villages.
His farm employed 5000 labourers during peak periods, mostly migrant
labour from Bihar who lived in makeshift tents next to the potato fields.
They were recruited through ‘contractors’ and managed by managers spe-
cially hired for this purpose (Witsoe 2006).
The Jalandhar Potato Growers’ Association (JPGA), which was initially
organised to protect the interest of relatively smaller potato seed growers
(with holdings of above 50 acres each) and later joined in by the potato
kings, has 125 active members (with >50 acres of land holding) and 500
secondary members (with <50 acres of land). These association members
either take land on lease or organise contract farming with other smaller
growers for potato production, with each one working with about 50–70
growers each. The main markets for produced seed potatoes are West
Bengal, Gujarat, Karnataka, Maharashtra and MP. It has begun export of
potatoes to Pakistan in collaboration with Markfed (a state-run co-
operative) and is in the process of getting GlobalGAP certification for its
members for exports to Europe. In 2007, they even staked claim for a
local legislative assembly seat from the main political parties. More recently,
there has been a split in the association and another one, Potato Growers’
Confederation (POSCON), has been formed under the patronage of a
former state minister of agriculture. The state has also set up Potato
Development Board with 11 members and it is, by and large, dominated
by the potato kings.
This is also happening in Karnataka and Odisha where large farmers
from Andhra Pradesh lease in lands and do commercial farming of high-
value crops as contract farmers of chilli and other crops (Pritchard and
Connell 2011; Singh 2013). This is changing the way land plays a role in
rural community livelihoods as operational control takes away all the ben-
efits of farming from owners especially small ones and also of government
incentives and subsidies as they are not able to access some of these
64 S. SINGH
benefits of state policies. Further, in states like Punjab, the practice of large
land owners indulging in leasing of lands creates competition for small and
landless tenant farmers who fail to compete with large farmers on lease
rates in local areas. This further perpetuates reverse tenancy and moves
smallholders out of farming.
3 Tenancy and State Policy

The issue of land leasing and tenancy has acquired renewed policy focus
with the NITI Aayog report on the issue recently (Niti Aayog 2016)
which also drafted a model land leasing act with a draft lease agreement.
The report argues for and recommends liberalisation of land leasing and a
formal law on it on grounds of efficiency and equity in terms of protecting
the owner’s rights on land, providing access to institutional credit and
other support services to the tenants and providing occupational mobility
to land owners as farmers and making tenants incentivised to invest in the
leased lands, thus putting farm lands in most desirable hands from produc-
tivity point of view—whether landless or marginal or small farmers who
have family labour or medium or large farmers who have resources for
farming and can take risk (Niti Aayog 2016). It also argues that with the
political power available to rural poor through Panchayati Raj Institutions
(PRIs), and other democratic processes, the tenancy relationship need not
be exploitative anymore.
3.1 Proposed Land Leasing Act and Issues

The Draft Agricultural Land Leasing Act 2016 proposed in the report
includes various types of farmer groups like Self Help Groups, Joint
Liability Groups and Farmer Producer Organizations as those who can
lease in land. It specifies that the lessor and the lessee shall enter into a
written lease agreement for which it even provides a model agreement.
But, at the same time, it also provides for an oral lease to be legal to pro-
tect the land owner. This is contradictory as if an oral lease can be legal,
then why should a written lease agreement be prescribed? It recommends
the government not to fix a minimum or maximum lease amount in fixed
cash or kind or share of produce to be given to the land owner as this is to
be mutually agreed upon by the two parties. This again is not well founded
as there have been cases of excessive lease rates being charged in many
parts of India in the recent years which are not justified by the crops grown
and incomes expected. Therefore, there is a need to cap the lease rates
depending on the cropping pattern so that the livelihoods of tenants who
are landless or marginal and small farmers are not jeopardised by excessive
lease rates or other tenancy terms. As there are crop-specific bhaagidar
shares in output in the case of bhaagidari (labour tenancy) in Gujarat,
there is logic in capping lease rates or lessor crop shares for different crops.
The Aayog report claims that with the spread of PRIs and other demo-
cratic institutions, the tenancy can’t be exploitative anymore. But, if the
cases of lease rates in Punjab and the bhagidaari system in Gujarat are any
indication, the exploitation still exists in the form of excessive lease rates
and low share of bhagidaar for his labour in the crop though he does not
take any risk and through him of the farm labour. This is also underscored
by Rutten (1986) writing about bhaagidari system in Gujarat:
by way of organizing the agricultural work on the field and the recruitment of
labour in an entrepreneurial manner, these middle-large farmers have solved
the problem of fluctuations in supply and demand of labour while still exercis-
ing control over the process of agricultural production. This, however, is
entirely at the expense of the casual labourers working in their fields who most
of the year do not earn more than Rs. 6 to Rs. 8 per day and that only on days
they are able to find work…Thus, creation of an intermediate stratum has
become an important aspect of the entrepreneurial way of farm management
in which responsibility for the welfare of labourers working in the fields is abdi-
cated to an increasing extent to a lower layer in rural society. (1986, p. A-19)
The model Act goes on to say that the lease agreement may or may not
be registered depending on the mutual agreement of the two parties, but
if it is a written lease agreement, it may be attested by village revenue offi-
cer or sarpanch or local bank officer or a notary with two witnesses. While
specifying the rights and responsibilities of land owner, it states that owner
will not interfere as long as the tenant does not default in the payment of
lease amount, does not cause damage to soil health, does not use the land
for purposes other than agreed and does not sub-lease land to any other
person. On the rights of the tenant, it provides for the expected value of
output from leased in land during the lease period to be used as collateral
by credit institutions for advancing loan to the tenant if this is mutually
agreed between the financial institution and the tenant. This recommen-
dation is half-hearted as it does not make it mandatory for the institution
to accept a written lease agreement. The pledging of tenant’s share of
produce is not likely for getting access to credit as the land owner exercises
66 S. SINGH
control over produce in practice especially when it is sharecropping involv-

ing inputs and output or bhagidaari (labour tenancy) arrangement, as
seen in the case of Andhra Pradesh licenced tenant cultivators Act which
the Niti Aayog report recognises and is well documented elsewhere
(Vakulabharanam et al. 2011).
The standard lease agreement provided by the committee specifies only
fixed quantity or share of harvested crop as the two types ignoring many
other forms and systems of payment like sharing of inputs and output and
the labour tenancy in many parts of India. In some states like Gujarat,
there is labour tenancy wherein the tenant provides only labour, and in
turn, gets a share of crop/produce which varies from 33% in food crops to
20%–25% in cash crops. The land owner meets all input expenses other
than labour and takes all management decisions about the farm. There is
also practice of another form of labour tenancy where the permanent
worker (known as siri (partner) in north India) provides only labour and
gets one-tenth of the produce called pavda bhaag in Gujarat (Bhatt 2008).
Further, since irrigation is becoming increasingly crucial for farming, there
is even water tenancy emerging in some parts of India like Gujarat where
water provision to a farmer gets a share in produce from the farm. These
contracts are of two types: bi-partite contracts where water sellers provide
irrigation and share 50% of the cash expenses (except labour) and claim
50% of the output, and tripartite contracts under which water seller, owner
and tenant labour share equally the cash expenses as well as crop output
(Saleth 2004). Similarly, there is tenancy in animal husbandry in Haryana
wherein lower caste landless or marginal land owners lease in bovines
(cows and buffaloes and calves) from owners for raising them by sharing
the costs or otherwise and value of animals in a pre-decided proportion
(Birwal 2017). The NITI Aayog report (2016) does not even show aware-
ness of these types of tenancy. It separates the provision of input sharing
from the payment of lease amount and specifies major inputs like seeds,
fertilisers, pesticides and labour, missing out on important ones like farm
machinery or irrigation.
4 Conclusion and Policy Issues

There is no doubt that there is a need to amend leasing laws to make them
allow legal leasing and permit more efficient use of such land but there
should be ceiling on the amount of land leased by a person/entity so that
concentration of leased land does not take place beyond a point. The land
ceiling limits for ownership in each state can be considered as ceilings for
leasing in of land to prevent excessive concentration of operated land in a
few hands. Though NITI Aayog (2016) also suggests this but it only
refers to private corporate investors in this context and not local large and
medium farmers. While the ban on tenancy by corporate agencies must
continue, leasing in by individuals, farming groups and farm cooperatives
suitably defined to prevent bogus entities acting as fronts for corporate
agents, should be encouraged. This will also put to rest the case for
removal of ceilings on land holdings for large land owners or corporate
businesses to reap economies of scale, on grounds of size limitation (Vyas
2001; Dogra 2002). The leasing policy also needs to take into account the
regional specificities of leasing practices like the bhagidaari system in
Gujarat which is a form of labour tenancy which is not even mentioned in
the NITI Aayog report.
Legalising tenancy will also help poor leasee farmers access credit from
institutional sources (Deshpande n.d.) and expand the size of small hold-
ings (Chand 2009), but the Andhra crop holiday opposition to Andhra
Pradesh licensed cultivators Act also shows that the change would not be
easy to come about as the vested interests would oppose empowering the
landless and marginal farmers with institutional credit access and other
measures (Vakulabharanam et al. 2011). But, here is another angle to this
reform which looks at it as a way out of farming for small and marginal
owners who find farming unviable (Ahluwalia 2011) which needs to be
watched.
Finally, there is a need to look at contract farming alternative as it meets
the needs of both corporate agribusinesses as well as small producers. The
superiority of contract farming over corporate farming is evident in its
more widespread and sustained practice as compared with corporate farm-
ing experiences (Winson 1990) and in its positive impacts like producer
link up with profitable markets, better farm incomes, skill upgradation due
to transfer of technology and sharing of market risk even in India (Dileep
et al. 2002; Deshingkar et al. 2003; Singh 2008). But, a case study in
Maharashtra across contract, formal contract and non-contract farmers
and across various castes within each category brought out the implica-
tions of the contract farming scheme ran by a multinational through a
local agent which were in the nature of unequal spread of contract farming
across different household types and the exclusion of smaller and lower
caste households as there were minimum land holding conditions for par-
ticipation. The dynamics of participation and power challenge the
68 S. SINGH
optimistic view of contract farming as a mode of agricultural development.

The scheme did not represent a win-win solution for all households
because the dynamics of the contract scheme do not fit with the local live-
lihood patterns and promotes differentiation in the local communities.
Though the farmers retain the ownership of land and have freedom to
withdraw from the scheme but they are entangled in a new relationship of
capital, dearth, debt and power that do not result in the pro-poor rural
development outcomes (Vicol 2017).
There is a need to provide for ecological concerns into contract farming
programmes and policies. This can be done by way of land use planning
based on soil depth, soil quality, land slope and suitable water availability.
It is also important to understand previous land use and make it manda-
tory to follow crop rotation, if necessary. It is important to realise that
value of land for farming lies more in soil quality and irrigation than land
per se, but land does provide access to these equally crucial determinants
of farm production.
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CHAPTER 4
Contextualizing Land Question in a Green

Revolution Area: Agrarian Transformation
and Politics in Western Uttar Pradesh
Jagpal Singh
1 Introduction
In Uttar Pradesh (UP), Mulayam Singh regime in February 2004 and
Mayawati regime in March 2008 acquired land from the farmers to
develop Special Economic Zone (SEZ) for setting up power plant in Dadri
(Gautam Buddh Nagar) and for developing Yamuna Expressway (YEW)
and megacities across seven districts—Ghaziabad, Panchsheel Nagar,
Gautam Buddh Nagar, Aligarh, Mathura, Bulandshahar and Agra—
respectively in western parts of the state. These districts have witnessed
green revolution. The acquisition of land formed part of development
agenda in UP which was informed by the neoliberal reforms in India.
Initially welcomed by the farmers, the land acquisition provoked agita-
tions, both against the SEZ in Dadri (2006) and the YEW and megacities
(2009–2011). This chapter seeks to address the land question with ref-
erence to these two cases, land acquisition for setting up SEZ by Mulayam
J. Singh (*)
School of Social Sciences, Indira Gandhi National Open University, Maidan
Garhi, New Delhi, India

72 J. SINGH
Singh regime in Dadri and by Mayawati in the six districts for construction
of YEW and megacities. Specifically, it deals with the roles of stake holders
in the land question: farmers, political parties, civil society organizations,
builders/entrepreneurs/corporate groups and the state. This chapter
largely draws upon the field work which I have been doing over the years
in several phases in villages of Meerut, Muzaffarnagar, Ghaziabad and
Gautam Buddh Nagar districts of western UP (Singh 1992, 2012). It
argues that notion of land during the neoliberal or post-green revolution
period has undergone changes. Unlike in the earlier period, now the farm-
ers no longer feel emotionally or culturally attached to land. They are no
longer interested in farming or sticking to land. A farmer does not mind
selling land provided he is given fair price and compensation, and land is
acquired with his consent. The land question has become a contested issue
in politics between different stake holders. However, the arguments and
observation in this chapter are specific to the area of study—an area that
has witnessed green revolution. They defy generalizations.
The chapter is organized into four sections. Section 1 is about some
conceptual issues on land question. Section 2 is about the agrarian trans-
formation in western UP, changing famer-land relation and the conse-
quent extent of significance of land. Section 3 discusses land acquisition
policies of the two regimes—Mulayam Singh’s and Mayawati’s—and situ-
ates them in context of neoliberal regime. Section 4 is about the politics of
land acquisition in UP.
2 Conceptual Issues

What Is the Land Question? Land question can be viewed in relation to
different aspects such as land distribution for tilling, imposition of land
ceiling and redistribution of surplus land, consolidation of land holdings,
availability of land for housing the poor, construction of toilets or for
other necessities, land acquisition for development—industrialization
(SEZs), expressways or real estate—farmers’ emotional/cultural attach-
ment to land and the extent of relevance of land to overall economy of
farmers. Significance of these aspects varies in the contexts of time and
space. If land remains the most important aspect of rural society in the
backward regions or in those developed areas of the country where land
ceiling rules have not been implemented, it is no longer the most impor-
tant concern in those developed areas where land ceiling rules have been
implemented or size of landholdings is small. Several parts of western UP
fall in the latter category.
4 CONTEXTUALIZING LAND QUESTION IN A GREEN REVOLUTION AREA… 73
3 Agrarian Transformation in Western

UP and Land Question (The New Land Grabbers)
The contemporary land question has direct relationship to the nature of
agrarian systems that had existed during the pre-Independence period.
These legacies had implications for economic developments; areas which
had zamindari system are backward in comparison to the areas which had
raiytwari system (Banerjee and Iyer 2005). In western UP also, the lega-
cies of agrarian of the past were reflected in the land question. Prior to
major state intervention in the agrarian structure through land reforms,
green revolution and welfare schemes, there were mainly two agrarian
systems in western UP—bhaiachara and zamindari (Singh 1992; Hasan
1989). The impact of the agrarian legacies was reflected in the results of
state policies, especially land reforms. Notwithstanding the differences in
villages with two different agrarian legacies, the middle peasant emerged
as the dominant class in the villages. Green revolution of the 1960s–1970s
led to not only differentiation within the peasantry but also displacement
of human labour in agriculture. Overall, land question in terms of redistri-
bution of land has not been an issue in western UP. However, it has been
an issue for the poor and low caste in a different sense—for defecation,
getting fodder for buffaloes (see Singh 1992).1 A witness to green revolu-
tion, western UP is undergoing the pangs of post-green revolution phase.
Roughly starting in the 1980s, most part of this phase (i.e. since 1990) has
witnessed implementation of neoliberal reforms and rise of social identi-
ties. This period has witnessed transformation of agrarian society. One of
my studies of Meerut and Muzaffarnagar districts notices the features of
this transformation as follows: rise of new and decline of old social classes
(entrepreneurs, middle classes, footloose labour, unemployed and only
agriculturists), fragmentation of landholdings, aversion to traditional
occupations which includes farming, and search for vocation alternative to
agriculture. Only 8.5 per cent (17 out of 211) persons are exclusively
engaged in agriculture as a full-time occupation (Singh 2016). The
farmers-land relationship has changed not only in economic terms but in
cultural and emotional terms also.
1
In western UP, the poorer sections—Dalits and MBC marginal farmers and landless
classes—depend on the land of the landowning classes for dual purposes: cutting grass from
the fields to use as fodder for their cattle and for defecation in the fields. This dependence has
social and political repercussions which are disadvantageous to the poorer classes (for details
see Singh 1992, chapter IV).
74 J. SINGH
My fieldwork in the villages affected by land acquisition by Mulayam

Singh and Mayawati also confirms these features. The agrarian crisis
marked by depletion of water tables and unfavourable rate of returns in
agriculture have further added to farmers’ relations to land. This has cre-
ated stereotypes: the farmer is “poor”/“naïve”/“innocent”, exploited by
the state/market and so on; land to the farmers is an ethical/moral entity;
it is mother to him; it is sole means of his livelihood and so on; acquisition
of land not only deprives him of the means of livelihood, but from his
culture and moral ethos also; acquisition of land from farmers is like
snatching his mother from him. Such perception of farmers-land relation
leads to the argument that non-farmers, corporate sectors, government
and so on acquire land for non-agricultural purposes harming the interests
of the naïve farmers. The villages which have seen agitations against the
land acquisition policies of the NCR in western UP—Dadri (Ghaziabad/
Gautam Buddh Nagar), Bajna (Mathura), Tappal (Aligarh), Bhatta-Parsaul
(Gautam Buddh Nagar) and Etmadpur (Agra)—are no longer stereotypi-
cal villages; in the recent past they have seen changes in agrarian economy
mentioned above. The farmers are no longer averse to selling the land; nor
does the land signify a farmer’s cultural or emotional bond to land. If the
land is sold on their terms and conditions, that is, marketable price, com-
pensation and so on, the farmers are willing to sell it. Indeed, as men-
tioned earlier, farmers are not interested in carrying on agriculture as an
occupation; they prefer an alternative. The aversion of farmers to agricul-
ture represents a general pattern in the country (see Bhalla 2006).
4 Neoliberal Agenda and Regimes’ Land

Acquisition Policies in Western UP
There have been three different types of political regimes since the advent
of neoliberal reforms in India, that is, since 1990. They were different in
terms of social and ideological support base: in terms of ideologies of
social justice, socialism and Hindutva, social bases among Dalits, OBCs or
Hindutva (across the caste groups). Three major parties in the state—
Samajwadi Party (SP), BSP or the BJP—have led political regimes mostly
in alliance with other parties. Though the identity-based politics has been
trademark of these regimes and parties which led them, the policy agendas
of regimes in UP have been informed to a considerable extent by the neo-
liberal atmosphere. There seems to be a continuity in the attitude of
different regimes in UP towards the need to introduce reforms in UP—

the regimes led by BJP, the SP and the BSP (Congress has not been a
major player in the government formation in the state). However, as I shall
discuss in Sect. 4, differences regarding reforms crop up among the politi-
cal regimes led by the BJP, the SP and the BSP due to political reasons
such as party competition and populism to gain support. Attempts to fol-
low neoliberal agenda by all three kinds of regimes in UP were made sym-
bolically since 1990 itself (for details see Singh 2012).2 But it was almost
after one decade of the advent of neoliberal agenda that more emphatic
attempts centring on the land question (acquisition of land) were made.3
The SEZ Act in India was passed in 2005, and different state governments
adopted it at different points of time (see Aggarwal 2012). Even before
the passage of SEZ in 2005, the centre and some state governments took
stances which were informed by the reform/liberal agenda (Jenkins 2011).
The dismal economic conditions which were prevailing in UP on the
commencement of the 1990s necessitated adoption of neoliberal policies
by different regimes in UP, like in case of the central government during
this period.4 Since the 1990s the economy of UP, which was still unable to
come out of BIMARU status unlike some other states, showed negative
tendencies of development. Studies show that UP was suffering from fiscal
crisis; priority of expenditure included non-development agenda; its
growth rate and per capita income were as low as half the national level—
UP had shown the lowest growth rate and per capita income in compari-
son to other states, except Bihar; it has been heavily indebted; on account
of mounting debt and interest the government resorted to withdraw from
“public account” including reserves and Employees’ Provident Fund. Due
to these reasons it did not have the requisite money to invest in the
2
Even the BJP governments which did not involve in a big way to acquire land (except
initial attempts by the Kalyan Singh government) did not remain unaffected by the reform
agenda (see Pai 2005).
3
The economic reforms in India have passed through three generations: the first was
related to efforts to liberalize macroeconomic policy environment; the second was related to
creation of institutions for regulating a market economy; and the third is about the facilita-
tion of global presence for India’s largest private sector firms and rapid enhancement of
physical infrastructure within which such firms operate (Jenkins 2004). The SEZ belongs to
the third generation of reforms.
4
Economy of UP can be divided into four stages of development: (a) Period I
(1951–1975)—period of economic stagnation; (b) Period II (1975–1990)—period of accel-
erated growth (green revolution phase); (c) Period III (1990–2002)—period of decelera-
tion; (d) Period IV (2002–2007)—period of slow recovery source (Singh 2009).
76 J. SINGH
developmental issues. Priority sectors—health, education and infrastruc-

ture—were neglected (for discussion, see Singh 2012). The state govern-
ment responded to the fiscal crisis by adopting a restructuring programme
and adopting a Fiscal Responsibility and Budget Management Act
(FRBMA) in 2004 (Mulayam Singh regime). These measures were con-
strained by political instability and lack of political will (see Shankar 2007).
Contrary to the opinions of the supporters of neoliberal policies, the fiscal
crisis in UP, like in several other states, has not happened due to the poli-
cies of the state governments (see Jha and Das 2007).
During the third regime of Mulayam Singh, development became a
prominent policy agenda in UP (see Parihar 2007). Influenced by the
neoliberal agenda, Mulayam Singh set up Development Council in the
state to promote industrial development. This industrial policy focused on
two sectors—sugar and power. This opened space of collaboration between
politicians and private sector/industrialists (PPP model). Indeed, com-
pared to Mayawati regimes some found Mulayam Singh regime more
encouraging to industry. Siddarth Sriram, Chairman and Managing
Director of Mawana Sugars said “The Samajwadi Party was always more
balanced and never extractive like the Bahujan Samaj Party”.5 Amar Singh,
the member of the newly constituted Development Council, lobbied with
industrialists such Anil Ambani, Lanco and MGR to attract investment in
the state (The Economic Times, December 23, 2011). In February 2004,
Mulayam Singh Yadav’s government acquired 903.444 hectare of land
from eight villages for development of SEZ in Dadri (Block Dhaulana). It
allowed the Reliance Mega Power Project to set up first gas-based power
plant in the land belonging to some villages of Dadri tehsil (Block
Dhaulana) of Gautam Buddh Nagar district.
The neoliberal development agenda in UP was taken further by
Mayawati government in its land acquisition policy from 2008 to 2011. As
mentioned earlier, the state government was unfree to not adopt the neo-
liberal development agenda. In this context, the BSP contended that it
had to adopt PPP policy model because it was forced to depend on the
private sector due to the non-cooperation by the centre. Mayawati claimed
that main reason for inviting private sector was the need to mobilize funds
since the state government did not have enough funds due to the
5
Nidhi Nath Srinivas and Manmohan Rai “Sugar Cos Hope for Sweeter Sops: Expect the
new Samajwadi Party government to revive UP’s old pro-industry investment policy”, The
Economic Times, March 7, 2012.
discriminatory attitude of the centre.6 In March 2008, the Mayawati gov-

ernment acquired land from the western UP farmers for the development
of YEW linking Greater Noida to Agra covering six districts. Indeed, this
regime made changes in the land acquisition in response to almost every
political situation between 2009 and 2011.7
4.1 Government-Business Nexus and Land Acquisition

Once the state governments in UP decided to acquire land for establishing
SEZ, developing YEW and megacities, several stake holders—national
level corporate groups and newly emergent local entrepreneurs—got
involved in the act of land acquisition. For them, land became an impor-
tant item but not in conventional sense: in terms of a commodity for
investment which would pay the investors in future. It is important to
underline that two patterns about transfer of land from cultivators are
emerging in western UP: one, individual transfer of land in the villages to
the members of newly emergent classes such as contractors and lawyers;
and two, transfer of land under state policy (PPP) for setting up SEZ or
infrastructure. In the former pattern, it is generally the deceit and fraudu-
lent means through which the land of individual farmers, often from poor
most backward class (MBC) background, is acquired; such farmers trans-
fer land under economic compulsion (Singh 2011). In the latter pattern,
farmers are not always unwilling; the dispute arises mainly for political
reasons or because of “loss of innocence or naivety” of the farmers.
As the neoliberal policies became virtually effective in UP, that is, since
the late 1990s, the relationship between corporate houses and political
regimes became an important factor in the development agenda of
UP. During this time five corporate houses have been involved in land
acquisition. Two of these have been close to Mulayam Singh’s regimes
6
This point has been amply mentioned in the advertisements issued by the Department of
Information, Government of Uttar Pradesh, published by the Government of Uttar Pradesh
on different occasions from 2007 to 2008. The Centre sought to impose conditions on the
state governments through the Eleventh Finance Commission (EFC) (see Jha and Das 2007,
pp. 318–319).
7
These situations included an agreement between Mayawati government and leader of the
first phase of the agitation, Ram Babu Kathailya (Bajna agitation); Rahul Gandhi’s Yatra in
the villages affected by the land acquisition and rally in Aligarh; the central government’s
response; and the judicial response.
78 J. SINGH
and two to Mayawati’s regimes.8 Having acquired the land from the farm-
ers, the Mayawati government sold it to the Jaypee Group under the
PPP. The Jaypee Group used the land for two purposes: one, for the con-
struction of the YEW, and, two, for developing the megacity9 on the land
acquired from five villages in Tappal block of Khair Tehsil of Aligarh dis-
trict. The latter also covered some villages from Mathura and Agra district.
The work on the construction of the YEW ensued for some months and
road was in its semifinal stage of completion at the time of my fieldwork in
2010–2011: it was inaugurated by Akhilesh Yadav, UP chief minister on
August 9, 2012. The Jaypee Group had also started work on construction
of the megacity near Tappal (which covered Aligarh as well as Mathura)
and Bhatta-Parsaul.
Change in political regimes gets manifested in the attitude of the cor-
porate houses. Change of the favourable regime to the one which is not
favourably disposed towards a corporate house might make situation
adverse for the latter. For example, Mayawati’s regime has been harsh to
Reliance and Sahara Groups who were supposed to be close to Mulayam
Singh’s regime. Therefore, the corporate houses in UP devise their sur-
vival strategies by keeping in mind the change of favourable or adverse
regimes. According to one report when a favourable regime is in power
the corporate groups make as much profit as it enables them to survive in
case any adverse regime takes over (The Economic Times, December 12,
2012). Perhaps wary of the defeat of the BSP in the then incumbent 2012
election in UP, the Jaypee Group/Jaiprakash Associate Limited (JAL)
withdrew its proposal of developing Ganga Expressway. However, the rea-
sons cited by the Jaypee Group for the withdrawal was the delay in getting
the environment clearance from the government of UP.10 The Income Tax
8
In an instance of personal loyalty to Mayawati and influence of her brother on decision
process, Mayawati allotted land to Jaypee Group considered close to her after having prom-
ised to allot land in Bundelkhand region to Tata (see Kohli 2012, p. 175).
9
The data here is provided on the basis of my field work in villages near Tappal block of
the Khair Tehsil of Aligarh district. It, however, needs to be noted that media gives conflict-
ing reports. One report mentions that township spreads to two districts—Gautam Buddh
Nagar and Bulandshahr covering 131 villages of Gautam Buddh Nagar and 40 villages of
Bulandshahr (Arvind Singh Bisht, “Green row over e-way town: Township Marked for
Industry, Marketed For Housing” The Times of India, October 24, 2011). It does not men-
tion the villages near Tappal in Aligarh district. In fact, Tappal was a precursor to the Bhatta-
Parsaul agitation.
10
See Purusharth Aradhak “Jaypee pulls out of Ganga e-way project”, The Times of India,
January 13, 2012.
department raided several business places and residences of Ponty

Chaddha. The Income Tax department had been tracing Ponty Chadha
for four months.11 The action of the Income Tax department against
Ponty Chadha was explained as the political stance by the central govern-
ment in the context of 2012 assembly election in UP. Indeed, as soon as
the result to the assembly election established absolute majority of the SP
in UP and defeat of Mayawati government, their impact was felt in the
corporate sector. The stokes of the companies of Anil Ambani (ADAG)
who has been close to Mulayam Singh showed an increase and those of
Jaypee Group close to Mayawati declined. The Economic Times editorial
underlined that SP had changed since 1997 when Mulayam Singh as the
defence minister in the united front government backed reform of India’s
oil price policies. The SP is no longer traditional English baiting lathi-
wielding party; its profile has changed to computer, I-pad-savvy party (see
The Economic Times, March 8, 2012).
5 Blaming and Counter-Blaming: The Politics

of Land Acquisition
The unanimity shown by diverse regimes on land acquisition/develop-

ment model was disturbed by shifting political stances of political parties.
The land acquisition policy of the UP government became subjected to
the series of litigations within some time of its introduction. Litigations
coupled with the politicization of land acquisition have derailed the pro-
cess of development in the state.12 All stakeholders—the farmers, builders,
GNIDA(Greater Noida Industrial Development Authority)/UP govern-
ment, buyers or investors in the housing projects, contractors (last ones to
raise their problems), labourers who have been working in the projects
(nobody talks about them), and plot owners in issue of land acquisition in
Gautam Buddh Nagar—have directly or indirectly been involved in the
11
Davesh K. Pandey, “IT team unearths ‘large chest’ at liquor baron’s mall: Ponty Chadha’s
financial transactions under the scanner for four months”, The Hindu, February 2, 2012.
12
The Supreme Court verdict (Shahberi and Patwari villages cases discussed later) quash-
ing the decision of the UP government to convert the purpose of land into construction of
houses, and directing the builders to return land to the farmers, affected 14 projects of 11
builders in Greater Noida area: Eco Village (Supertech), Leisure Valley, La Residentia, Ultra
Homes (Amrapali), Wellentia (Wellentia), Arden (Arhant), Estate (Nirala), Sampoornam
(Ajay Enterprises), Mayfair Garden (Supercity), Neo Town (Patel) and Gayatri Aura
(Gayatri).
80 J. SINGH
litigations. The litigants included even those farmers who “grabbed the
opportunity” when they got offer to sell land to construction of the YEW
and megacities, for the purpose of making money. The agitations of land
acquisition did not see significant participation of the non-farming com-
munities such as Dalits and the MBCs; they were largely dominated by
politically influential farming castes—Rajputs, Gujars and Jats. In fact, in
Tappal agitation Dalits had launched a counter-movement in support of
land acquisition for YEW and megacities. One could observe during the
field work some farmers cultivating the land which they were supposed to
have stopped after receiving the compensation following the court
verdict.13
Indeed, during entire period covered by the reform agenda, develop-
ment in UP was not priority of regimes in UP. Atul Kohli contends
“Successive governments in U.P. have not simply focused on develop-
ment, irrespective of whether one conceives development in terms of
growth, or redistribution, or human development, or building institutions
or infrastructure” (Kohli 2012, p. 176). Political expediency has been the
priority of the parties and regimes in UP. The parties oppose the policies,
political stances of the rival political parties when in opposition parties
oppose the policies of the ruling party; but when they become ruling par-
ties or share power with a ruling party, they support these policies and
vice-versa. When BSP assumed office in 2007, it reversed the decision of
Mulayam Singh government to acquire land for Dadri SEZ. In fact, prior
to its last regime (2007–2012), it gave priority to Dalit agenda over the
development agenda. World Bank and the central government criticized
the BSP government (the third regime) for diluting development agenda
due to its priority to Dalit agenda and frequent transfer of the government
officials. The transfer was affecting the development projects.14
13
The visit to the site was shocking to me. Indeed, I had the notion that some construction
of infrastructure might have been going on there. But except the wall, there was no sight of
anything which could indicate that this land was acquired. It gave the look of a well-culti-
vated land in any village of western UP full of green wheat crop awaiting to be harvested after
two months, as well as green fodder. I was told that cultivation of land was resumed after the
court ordered the return of land to the farmers if they paid back the amount of compensa-
tion, which they had got for the sale of the land. It is to be noted that even the farmers who
did not pay back the compensation had also started cultivation.
14
Purnima S. Tripathi “Mayawati in Double Trouble”, Purnima Tripathi, Frontline,
September 14–27, 2002, Vol. 19, No. 19.
6 Politics on Cases of Land Acquisition
6.1 Political Responses to SEZ in Dadri

The Dadri SEZ issue evoked political responses from six quarters: one,
from the farmers; two, from the Bharatiya Kisan Union led by Mahendra
Singh Tikait; three, from the individual politicians like the former Prime
Minister VP Singh and film actor and the Member of Parliament Raj
Babbar (President of the Jan Morcha) under banner of Jan Morcha/Kisan
Morcha15; four, from the civil society organisations; and, five, from the
political regime headed by the BSP (after it got absolute majority in 2007
election) which was in opposition when decision to set up Dadri SEZ was
taken (Singh 2012). These responses had some specific features: (1) they
were evoked in specific political context—of around one year which pre-
ceded the 2007 assembly election in UP; (2) unlike in West Bengal or
Odisha, farmers initially did not oppose the land acquisition (as mentioned
earlier, they “grabbed the opportunity”); in fact, the farmers’ response
which took place under the banner of Dehat Morcha also was a part of the
broad response of the professional politicians; (3) the responses of VP
Singh and Raj Babbar (Raj Babbar was earlier in the SP) under the banner
of Jan Morcha/Kisan Morcha were informed by the political consider-
ations; the Jan Morcha contested 2007 assembly election in order to defeat
the Samajwadi Party whose regime introduced the Dadri SEZ winning
only one seat out of several contested in western UP. Both of them became
inactive on the issues as soon as the 2007 election was over; Raj Babbar
was expelled from the SP and he joined the Congress; (4) even the
response of BKU leader Tikait was not as strong as it was in farmers’
movement of 1989–1990; (5) as stated earlier, there was near lack of
participation of the non-farming castes like Dalits and the most backward
classes in the agitations against the Dadri SEZ—these were basically
monopolized by two dominant castes—Rajputs and Gujars; and (6) the
response of the BSP regime which came to capture power in UP after the
defeat of the SP in 2007 election was to thwart the Dadri SEZ on the
technical ground. The BSP regime took a hostile attitude towards the
15
I visited the Behera Khurd village on March 16, 2012. In Behera Khurd village the vil-
lagers faced problem of water supply which was cut off due to occupation of 500 acres land
for Reliance Mega Power Project. V.P. Singh flagged off Mukti Sangharsh Yatra against the
injustice to the farmers and threatened to launch a movement on December 12, 2006 (The
Hindu, Dec. 8, 2006).
82 J. SINGH
establishment of SEZ in Dadri. It alleged that the land was acquired in

violation of the land; the land acquired was not contiguous. It wrote to
the centre to cancel the land allotted for Dadri SEZ. Consequently, Dadri
SEZ is on hold.
6.2 Three Agitations Against YEW and Mega City Project:

Bajna, Tappal and Bhatta-Parsaul
After one year of the land acquisition for development of YEW the farmers
launched three agitations in sharp succession; one, in Bajna (2009) in
Mathura district, in Tappal (2010) in Aligarh, Mathura and Agra districts,
and in Bhatta-Parsaul and other villages (2011) in Gautam Buddh Nagar
and Ghaziabad districts (Singh 2012); second, the agitation which took
place in August 2010 in Aligarh, Mathura and Agra districts; third, the
agitation which took place in May 2011 in Gautam Buddh Nagar.
These agitations have been led by professional politicians with the
Congress and the RLD playing the most prominent roles. It is important
to note that just like the agitation against the SEZ the one in Dadri was
launched just before the 2007 assembly election was held and those against
the YEW and megacity were held before 2012 assembly election. It is
irrespective of the fact that in both these elections, the land acquisition did
not impact the electoral outcome. These agitations, especially against the
YEW, were marked by intra-Jat competition between the traditional
Congress supporter (Ram Babu Katheliya) and an Ajit Singh supporter
(Man Bir Singh Teotia).
My field work, interviews and discussions with the respondents con-
ducted in September and October 2010 from different castes in Tappal
and five neighbouring villages and with political leaders in Mathura reflect
division in every aspect related to the agitation. There were divisions
among castes regarding the land acquisition policies of UP government;
need for land acquisition, compensation and so on, and support, opposi-
tion or indifference to the agitations. In Tappal, there were two agitations
relating to the same issue, that is, land acquisition: one led by the Dalits
(Jatavs) and another by Jats. The one led by Jatavs was confined to hold-
ing a dharna in Tappal and meeting the District Magistrate of Aligarh in
support of the megacity and was not noticed by the mass media; and
another led by Jats was widespread and lasted longer. Dalits emphasized
that the Tappal agitation was an attempt to dislodge Mayawati govern-
ment by the Jat politicians who had come from outside their region.
Dalits, the supporters of Mayawati government, argued that the police did
not let loose terror during the Tappal agitation as claimed by the support-
ers of the agitation. The caste divide among the villagers was echoed by
the political leadership (from Congress, BJP, BSP, RLD), depending on
which side of the political divide they stood.16 The politics of land acquisi-
tion in western UP has now shifted to another level. This level does not
involve farmers. It is played out beyond the land, beyond the villages, in
the court of law between middle-class aspiring house owners and the
builders. Some of them are products of post-agrarian changes in western
UP. This shows the symbolic death of an ideal farmer in a post-agrarian
society: he perhaps wants it.
In conclusion, land question in the post-green revolution has become
redundant so far as introduction of land reforms in traditional sense of the
terms is concerned. It is relevant in other senses of the terms, land for
homesteads for the poor and for construction of toilets, for getting grass
for the cattle economy of the poor remains or availability of land for pro-
viding durable means of livelihood to the non-farming and (ex)-farming
communities as alternative to traditional occupations. The question also
remains relevant for setting up SEZs or for building infrastructure in the
contemporary period, which is also the period of neoliberal reforms. For a
symbolically dead farmer, erosion of his cultural and emotional bond to
land is complete. But the farmer is not naïve or ignorant. Like the politi-
cians, he also takes advantage of electoral politics. This raises serious issues
about the relationships between democracy and development in India.
References
Aggarwal, A. (2012). Social and Economic Impact of SEZs in India. New Delhi:
Banerjee, A., & Iyer, L. (2005). History, Institutions, and Economic Performance:
The Legacy of Colonial Land Tenure Systems in India. The American Economic
Review, 95(4), 1190–1213.
16
The discussion on this point is based on interviews of seven politicians and one farmer
(hailing from Bajna, who also participated in the Tappal agitation), conducted in Mathura on
September 4–5, 2010: Shyam Sunder Verma, MLA BSP dated September 4; Rajkumar
Sharma Vice President BSP Mathura Dist, dated September 4; Amit Srivastava, Congress
leader Mathura September 4; Jagat Kumar Singh, a farmer from Bajna (village of centre of
agitation), September 4; Puran Prakash, RLD MLA from Mathura district, September 4;
Pradeep Mathur, Congress MLA, Mathura, September 5; Thakur Kishore Singh, President
Samajwadi Party, Mathura, September 5.
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Bhalla, G. S. (2006). Conditions of Indian Peasantry. New Delhi: National

Book Trust.
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14736480490895660.
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Jha, P., & Das, S. (2007). Fiscal Strains in the Era of Neo-liberal Reforms: A Study
of Uttar Pradesh. In S. Pai (Ed.), Political Process in Uttar Pradesh: Identity,
Economic Reforms and Governance (pp. 308–344). New Delhi:
Pearson Longman.
Kohli, A. (2012). Poverty Amid Plenty in the New India. Cambridge: Cambridge
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Pradesh. In J. Mooij (Ed.), The Politics of Economic Reforms in India
(pp. 98–129). New Delhi: Sage Publications.
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Baron’s Mall. The Hindu.
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(Unpublished M.Phil. Dissertation). Jawaharlal Nehru University, New
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Debt Trap. In S. Pai (Ed.), Political Process in Uttar Pradesh: Identity, Economic
Reforms, and Governance (pp. 295–307). New Delhi: Pearson Longman.
Singh, J. (1992). Capitalism and Dependence: Agrarian Politics in Western Uttar
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and Politics. Economic & Political Weekly, 51(31), 94–101.
CHAPTER 5
Landowners as Non-farm Workers: A Case

of Small Farmer Migrants in Karnataka
Sheetal Patil and Seema Purushothaman
1 Introduction
Population in India, like capital, has become increasingly mobile in recent
times. People migrate for various reasons across administrative boundar-
ies. Reasons could be voluntary or involuntary, depending on the relative
force of push and pull factors. Based on physical distance travelled and
duration of stay at a given place, migration can be classified into four types
viz. internal, international, temporary and permanent. Migration may
involve individual or entire family, a group of individuals or families,
depending on the factors determining the movement.
Census of India classifies migration into four types, based on adminis-
trative boundaries—intra-district migration, inter-district but within the
state, inter-state and international migration. Based on place of birth,
place of last residence and place of enumeration, internal migration is clas-
sified into four types such as rural to rural, rural to urban, urban to rural
and urban to urban. Our concern is land-owning small-scale farmers from
rural Karnataka belonging to any of the first three categories engaged in
S. Patil (*) • S. Purushothaman

Azim Premji University, Bengaluru, India
e-mail: sheetal.patil@apu.edu.in; seema.purushothaman@apu.edu.in

86 S. PATIL AND S. PURUSHOTHAMAN
intra-state migration. This chapter looks at the push and pull factors
behind this phenomenon and how small holders fare with and without
migration.
During 2015–16, we conducted detailed household surveys among a
sample of small farmers from different parts of Karnataka migrating to
various urban areas of the state. Main objective of the survey was to under-
stand the direct and indirect drivers behind farmers’ decision to switch
occupation and location. The major questions that this study took up and
this chapter discusses include the following:
• What are the factors that influence the decision of small farmers to
move away from farming?
• Who among the small farmers actually make the move?
• Where do they go, for what kind of occupations and for how long?
• How do they keep alive their connections with land and community
in their native village?
• How do they fare in the new place and/or occupation?
Since data on migration with respect to the place of origin and original
occupation of migrants was absent, we identified out-migrants from the
study sites. For this, we adopted snow-ball sampling starting from selected
agrarian regions. We studied a small sample of both rural-to-urban and
rural-to-rural migrants among the small farmers. We also conducted inter-
views with small farmer households that continue farming in the same vil-
lages. A comparative study of both the categories of respondents (migrant
and non-migrant farmers) will be used to address the questions posed above.
2 Farmers in Transition: Existing Studies

Why do farmers dislike and quit farming? Why do they migrate to cities for
non-farm work?—such questions researched in developed countries’ con-
text (Barkley 1990; Bentley and Saupe 1990; Kimhi 2000) focus on selec-
tive aspects related to non-farm employment (Glauben et al. (2006) for
West Germany and Goetz and Debertin (2001) for the United States).
Studies from developing countries like Birthal et al. (2015) and Kang
(2006) include farmers’ preferences along with factors that drive farmer’s
choice. The outflow of farmers from the rural production landscapes is
generally attributed to low and uncertain agricultural incomes resulting
from market or climate fluctuations. This exodus of rural people could be
5 LANDOWNERS AS NON-FARM WORKERS: A CASE OF SMALL FARMER… 87
temporary, permanent or circular. The decision about whether to migrate,

where to and for what is complex and involves a variety of factors like
transport and communication, education, quality of city life and social
networks.
With systemic analysis of data from Situation Assessment Survey of
2003 (National Sample Survey Organisation of India), Agarwal and
Agrawal (2017) tried to understand what type of farmers dislike farming
and why. Largely the results imply that migrants are those who are smaller
in holding size, with inadequate family labour and natural resources (like
water and biomass). They were literate, lower in social status, living in
remote areas and unaware of agricultural schemes and policies. Such stud-
ies are in agreement with others like Imai et al. (2014) and Christiaensen
and Todo (2013) in the fact that moving from agriculture to megacities
does not reduce poverty, in fact it could worsen it.
However, multi-fold and long-term agrarian crisis alongside urban
opportunities result in small farm holders switching to manufacturing and
construction sectors in nearby urban centres. A survey of farmers by the
Centre for Study of Developing Societies (CSDS) in 2014 re-confirmed
the agrarian crisis in India. The survey found that 40 per cent of land-
owning small holders in the country prefer to take up some non-farm
work. Although better infrastructure, muted caste hierarchy and employ-
ment options for the whole family do provide the ‘pull’ towards the city,
small farmers are more often ‘push’ed to migration by indebtedness, land
acquisition, ecological changes or social conflicts. The change in quality of
life with migration is quite varied and unpredictable with most of them
becoming the face of urban poverty. If this is true, then it is imperative to
study the lot of farmers who quit farming and move out for non-farm work.
This points towards a pertinent gap in literature about change in per-
sonal as well as social wellbeing after moving out of farming. Although
many factors influence their decision to migrate, when they really move
out, they land up in totally different challenges while chasing livelihoods.
Their well-being might also be dependent on their past and present ties
with land, which they might still be legally owning in the village. Such
questions are attempted in the study in the context of land-owning
migrants in Karnataka.
3 Migration in Karnataka: A Brief History

The most talked about migration tale in the state happened in the late
nineteenth century when parts of present-day Maharashtra, Telangana and
northern Karnataka were under one region—Hyderabad Karnataka.
Workers from northern Karnataka used to be smuggled to work in the
mines of the neighbouring coastal region of Goa under the Portuguese,
from the 1850s till early twentieth century.1 There were also two major
instances of in-migration to Karnataka from Goa: first in the thirteenth
century during Mughal period and the second during the sixteenth-cen-
tury Portuguese invasion. The first wave was of Hindu farmers and the
second wave was of Christians skilled in business and administration.
In the south interior parts of present-day Karnataka—erstwhile Mysore
state—large-scale movement of labour has been rather late, compared to
the northern parts of the state. Migration by farm labour to work in the
pre-colonial industries and then for labour required by the East India
Company are recorded in historical texts on old Mysore (Rice 1897). The
first modern industry established in Mysore state was a textile mill, in
Bengaluru during 1884. Industries like timber (for construction and
expansion of railways), tea and other plantations needed more labour
force. With the emergence of manufacturing industries and mines, labour
moved in many scattered directions. Subsequently, circular migration and
return migration by labour from urban areas to rural areas also started to
occur as mentioned by Iyer (2017). Once again during the period of inde-
pendent India’s public sector industrial growth, human resource from
rural landscapes moved to emerging urban India. Thus began the ebb and
flow of labour movement during the first notable industrialization in parts
of present-day Karnataka.
There seems to be a vast difference between the pattern of rural out-
migration in the colonial period and at present. The nature of migration
seems to have changed from pre-colonial and colonial times towards aspi-
rational reasons than extractive and forced movement. But recently there
seems to be other push factors than external force. The year 2015–16 was
marked as the worst drought year that affected around 30 million people
and 22,759 villages of Karnataka, leading to massive exodus of rural
1
Sharma R. (2004) A history of migration. Frontline, 21(24) – 3 December 2004.
(Accessed on 2 August 2019 at https://frontline.thehindu.com/static/html/fl2124/sto-
ries/20041203001905400.htm).
people. In independent India with multiple welfare schemes in the rural,

there must be other reasons which actually eject livelihoods and people
from their origins apart from just the pattern of rainfall. Amidst the din on
farm suicides, subsidies and loan waivers, not enough light has been shed
on these factors as well as on the fate of farmers during and after the pro-
cess of the shift in place and occupation.
Two obvious drivers of migration by farmers are land ownership and
farm income. Differential and incomplete implementation of land reforms
in Karnataka determined to an extent the presence of landless population
as well as the pattern of land-owning classes. Wage differential between
the rural and the urban areas also influence migration.2 Karnataka’s urban-
rural per capita income differential (Dholakia et al. 2014) seems to have
widened from the early 2000s. Till then its urban-rural income differential
was less than that of the country as a whole (Table 5.1).
In 2004–05, per person income in urban areas was 2.5 times more than
that of rural Karnataka (Economic Survey 2005). Thus probability of
migration from rural to urban areas or farm to non-farm work increased
with urbanization in the region. The recent period of rapid economic
growth increased the demand for skilled and unskilled workers in urban
areas where economic growth is concentrated. This gives rise to the
impression that rural-to-urban movement of farmers dominates among all
types of intra- and inter-state migrations. Though it is true that the cities
of Karnataka attract labour migrants from many other parts of India, far
and near to Karnataka (Bihar, Orissa, Assam, West Bengal, Andhra
Pradesh, etc.), this chapter focuses only on internal farmer migrants
between parts of the state.
Table 5.1 Ratio of urban-to-rural income in Karnataka and India

1993–94 1999–2000 2004–05 2011–12
Karnataka 1.664 1.979 2.541 2.110

India 1.910 2.070 2.152 2.074
Source: Various economic surveys of Karnataka and India

2
‘From highly drought prone Anantapur, Andhra Pradesh, migration increased between
1980 and 2001 to Bengaluru, where wages were Rs. 100 to 150 per day, nearly three times
the local wage’ (Rao 2001 in Deshingkar 2008).
4 Prevalent Pattern of Farmer Migration

in Karnataka
The correlation of incidence of migration with rate of urbanisation dis-

cussed in the previous section can be interpreted as the correlation of
migration with the pattern of economic growth in the country.
It has been observed that the role of intra-state migration has been
more dominant than that of inter-state migration in the development pro-
cess of Karnataka, a state performing relatively well, with respect to gross
domestic product (GDP) (Bhattacharyya 1986).3 The 64th Round of
National Sample Survey conducted during 2007–08 reported 38 per cent
internal migrants in the migrant population of Karnataka. Among the
internal migrants, rural-to-rural migration constitutes 56.1 per cent and
rural-to-urban 21 per cent. As far as the reason is concerned, for men, it
was employment and for women it was marriage that makes them move
out from their village. The above survey also revealed that with 41 per
cent share in all internal migrants, OBCs are the largest migrating social
group. OBCs being the largest land-owning social group also formed the
largest landed migrant group.4 Though SCs and STs hold much less pro-
portion of land holdings compared to OBCs and other communities,
share of migrants within them was higher (Table 5.2).
Significantly, rural-to-rural migration is highest among SC/ST groups.
This could be in search of agricultural wage labour from dry to irrigated
areas or from subsistence crop areas to commercial crop areas. Whereas,
Table 5.2 Land holders and migrants across social groups (percentage)
Social Landholders Rate of migration Rural-rural Rural-urban
group (2010–11) (2007–08) migrants migrants
(2007–08) (2007–08)
SC 11.74 34 73 14
ST 6.10 26 78 16
OBC 82.16 41 58 20
Others 38 42 25
Source: Agricultural Census 2010–11 and NSS, 64th Round
3
Annual average gross domestic product growth for Karnataka during the years from 1999
to 2010 was 13.9 per cent compared to 7.52 per cent for the country during the same time.
4
About 48.9 per cent of land holdings is with OBCs.
there is no set pattern of social class in rural-urban internal migration,

which is mostly seasonal during summer months from drier areas to cities
for semi-skilled or unskilled work.5 Migrants from north-eastern Karnataka
formed 35–40 per cent of all passengers of the state road transport corpo-
ration in the months from January to April 2016, generating a revenue of
INR 172 crores (Ashwini 2016). Thus distress in the agrarian hinterlands
helps the transport corporations and the informal economy of the city.
Although it is not directly relevant to this chapter, this migration pat-
tern can be read along with in-migration of farmers from other states to
Karnataka. Three consecutive censuses (1991, 2001 and 2011) report
migration from neighbouring regions into Karnataka (along with other
similar richer states like Maharashtra and Gujarat) in those decades. Census
2011 also shows how Karnataka attracted 51 per cent more migrants than
in 2001, contributing to a growth of 15.7 per cent in total population of
the state. It has been said that because of relatively better socio-economic
conditions, south Indian states attract more migrant labour.6
With respect to in-migration of farmers into Karnataka, there are couple
of instances of farmers from other states leasing in farmlands for both long-
and short-term periods for growing entirely new crops. Reddy camps in
north-eastern districts of Karnataka set up by enterprising farmers from
Andhra Pradesh is one such instance (Purushothaman and Patil 2019a).
They lease-in large tracts of land from the locals and show that the rural-
urban income differential can be manipulated by investing in irrigation and
commercial crops (Khandelwal 2002). Another such instance is ginger cul-
tivators from northern Kerala moving further northwards (Munster 2015)
into south and south-west districts of Karnataka where climatic conditions
are similar to their home town, again investing borrowed money in inten-
sive cultivation by severe exploitation of soil and water.
In this study, we considered small farmer intra-state migrants as those
farmers who made a shift from farming, either partially or fully. Thus the
study is about farmers who scale down farming or abandon it. These
5
Herds of private vehicles during these months transport migrant farmers from interior
villages along with the minimum essentials required for 4–5 months. Special trips are made
from drought-hit villages to ferry passengers to Bangalore, Goa and Belgaum. Usually, one
member from each family moves out in search of job (http://www.thehindubusinessline.
com/specials/drought-the-distress-in-rural-karnataka/article8528948.ece).
6
Shaikh Z (2016) Every 3rd Indian migrant, most headed south. The Indian Express, 5
December 2016 (accessed on 2 August 2019 at https://indianexpress.com/article/
explained/tamil-nadu-kerala-daily-wages-migrant-population-4410694/).
farmers currently could be engaged in non-farm sector either in rural or

urban areas, as the case may be. Small holders who scale down farming in
terms of the area cultivated or have de-intensified cultivation in terms of
inputs or management generally would depend mainly on non-farm
income and spend more time in non-farm jobs. If their current location of
engaging in wage labour is different from that of their place of origin, they
would be undertaking regular or irregular cycles of migration, while keep-
ing alive links with their people and land.
5 Identifying Farmer Migrants: Methods

and Tools
Thus small farmers who had shifted partially or fully to non-farm occupa-
tions but remaining within the state formed the constituency of this study.
As indicated earlier in this chapter, secondary data on internal migrants
based on their original place of residence and occupation was unavailable,
except for a few location-specific studies. Hence we started identifying
migrant respondents from our rural study sites. As the main objective of
the study was to explore the interface between urban and agrarian changes,
the selection of study sites was based on the urbanization process (for a
typology of urbanization, see Purushothaman et al. (2016)). Urbanization
types included a metropolitan city, a small town near the metropolitan
area, an agro-industrial town and a remote town. The villages selected for
detailed study within each of these urban types belonged to eight taluks
from five districts —Bengaluru, Ramanagara, Mandya and Yadgir—cor-
responding to the above urban typology.
Studying farmer migrants from the households of these regions involved
identifying the farmers (or farm households) who undertake migration.
We did this by gathering their contacts from relatives in the villages and
getting in touch with migrants in their present locations. During village
visits, we conducted group discussions around the topic of migration and
gathered information on migrated farmers who had moved to other vil-
lages, nearby towns or to Bengaluru for non-farm occupations. The aim
was to examine factors that made farmers take up non-farm occupations.
Often the contacts established through farmer households in the villages
worked well to get hold of migrant respondents. If they weren’t interested
or available, they helped us find other migrants from the same village or
neighbouring village.
The range of occurrence of migration from the selected villages was

between 15 and 25 per cent of the households depending on the kind of
urbanization happening in the vicinity. Based on the average number of
farmer migrants from each village and information about farmer migrants,
we selected ten from the remote site (25 per cent of farmer households),
eight each from small town and from the metropolitan city (20 per cent of
farmer households) and six from the agro-industrial town (15 per cent of
farmer households).
We started to establish contact with the migrant households through
phone calls. As migrants from the same village either were available in the
same location or knew the whereabouts of each other, we could gather
them during late evenings for group interactions in the labour sheds. We
conducted five such group discussions in the study areas. Such discussions
started with their work and life in the present place of residence and then
moved to land in their native village, how they diverted to non-farm occu-
pation, whereabouts of their family members and so on. The discussions
were otherwise unstructured. It could divert into many other things like
how they travel back for medical care or child-birth.
After a couple of group interactions with them, we approached a few of
them for detailed interviews, based on their willingness to share details
about their household, their availability and convenience for sitting with
us in late evenings after a hard day’s work at construction sites in Bengaluru
or around garment or manufacturing industries in other parts.
A semi-structured questionnaire was prepared for the farmer migrant
interviews. It was tested in the initial interactions and finalized after some
modifications. The questions included details about family, occupation,
housing, migration—place, duration, work—land details in native village,
contribution to farming, liabilities, visits to native village, family welfare,
environmental conditions, socialization, social networks and so on.
With the process mentioned above, it wasn’t easy to trace a total of 32
occupational migrant households from different sites to be interviewed.
Out of the 32 respondents, 19 households had migrated to urban areas
and 13 households had migrated to rural areas and 15 per cent were
women migrants. Survey data was analysed for simple statistics and quali-
tative information was applied in social network analysis. Detailed profile
of the respondents, along with discussion on findings, follows in the next
sections.
6 What We Found: Results and Discussion
6.1 Who Migrates?
In terms of numbers, highest migrant population was from the remote
north-east districts of the state and lowest from agro-industrial towns that
hosted numerous small- and medium-sized agriculture-based industries.
There was no difference between farmer migrants in terms of land holding
size within the remote region. But inaccessibility and non-availability of
irrigation water determined the migrant households from these regions.
As much as 20 per cent of migrant households were from lower castes, 70
per cent from other backward castes and only 10 per cent belonged to
upper castes. Farmers burdened with loans for longer period of time seem
to have migrated to urban areas. Mostly nuclear families with two to three
adult members ranging in age from 25 to 35 years chose to migrate.
Almost 85 per cent of the migrant families had their household head edu-
cated up to 12th class or trained in technical education after matriculation.
Half of the migrant families have their own house in their native village
where their parents and grandparents reside.
6.2 Where Do They Go?

Among the migrant respondents, 59 per cent moved to urban areas. Of
these migrants, about 26 per cent are farmers migrated to urban areas
within their district itself and the rest moved to other districts. Farmers
who migrated to other districts were from north-east part of the state,
who moved mostly to Bengaluru for non-farm work. This finding reso-
nates with data from Census 2001, in which migration tables reveal that
long-distance migration increased significantly between 1971 and 2001.
Farmers from remote rural areas are generally skilled only in farm-related
work. As migrants they usually take up only unskilled construction work
or work as security personnel in cities.
Farmer respondents who migrated to rural areas (41 per cent of total
migrant respondents) were originally from the small town and agro-
industrial town. This kind of movement is possible when non-farm oppor-
tunities are available in rural areas. In case of farmer migrants from the
agro-industrial town, they move to other rural areas where semi-skilled
non-farm occupations such as factory supervisor, electrician and small
enterprises (like bike repair shops, small eateries, mobile recharge shops,
etc.) are available. With respect to small towns, most farmers remain in
their places of origin but commute daily for working in non-farm semi-
skilled work such as driving, supervising factory workers, labour and civil
work contractors and so on. Respondent farmer migrants had been shifted
out from their native place for an average of 7 years, ranging from 2 to 15
years. Only a few of them have repeatedly been shifting from one place to
another.
6.3 How Is the Decision to Migrate Taken?

Decision to migrate is always taken together by the entire family. This
decision is greatly influenced by friends or relatives who already have
tasted life and work outside the village. Mobile phones and kin network
are important for this. The most important push factors were indebted-
ness, water problem and crop loss in their descending order of impor-
tance. Chances of farmers moving out exclusively due to crop loss or water
problem are less than when being indebted, without the former two
reasons.
Though caste and class disparities are experienced by many small hold-
ers, the convergence of these two is seen largely in remote villages, adding
to other push factors mentioned above. The growing need for manual
labour in the informal sector of a growing economy embodied in global-
ized cities like Bengaluru provides the pull factor. This, for our respon-
dents, is also the space where caste and gender disparities often get
camouflaged. Having spent many years in circular migration between the
city and their rural native places, they were reasonably confident in their
responses to our questions.
6.4 How Do Farmer Migrants Feel in Their New Place

and Occupation?
Most migrant respondents were reportedly contended in their new places.
But contentment among migrated farmers was more among those coming
from remote areas than those coming from places not-so remote. Farmer
migrants from remote villages of Yadgir feel happier in the city, having
faced severe social conflicts in their native villages.
On the other hand, migrant farmers from not-so-remote villages, espe-
cially from areas close to the agro-industrial town of Mandya, felt worse
off than their counterparts in the new place of work and residence. This
kind of feeling was also reported by women of the migrant households.

Women from those households from remote villages valued migration
more and those coming from villages around agro-commercial towns felt
worse off than in their native villages.
Many women migrant respondents whom we interacted with felt that
their men were more responsible as migrant, went to work every day and
helped in household chores. Women felt happy that their children attend
school regularly in the city. Although women construction workers are
considered as just supplementary hands to their husbands who migrate
from Yadgir, they feel much more dignified given unavailability of non-
farm work and much lower wages rates in their native place. This reinforces
two things: first, that farm families around agro-commercial towns like
Mandya migrate the least and are better off in their native villages and,
second, that women migrants from remote areas value cities for the oppor-
tunity to be out-going women. Contrarily, Bowers (2016) finds that the
hierarchal nature of global knowledge economy such as in Bengaluru often
overlooks the contributions by informal and manual workers. Poor living
conditions and absence of basic facilities in informal and illegal migrant
workers’ settlements in the city highlight the societal obliviousness towards
thousands of invisible migrant construction workers who contribute to
build IT parks, shopping malls and high-rise apartment complexes largely
to be used by urbanites including migrant white- and blue-collared workers.
Air and water quality around their new locations were worse than in
their native places. Even asset wise, city life appeared better only for farm-
ers from the remote villages of Yadgir and not for migrants from villages
near Mandya and from small towns around Bengaluru.
6.5 Financial Status of Farmer Migrants: Income, Expenses,

Loans and Small Capital
Migrants partially engage in their own farming too while farmers partially
engage in off- or non-farm work in their surroundings also. Surprisingly,
both income wise (gross farm and non-farm income together) and expense
wise, migrants were worse off than farmers in their native villages
(Table 5.3).
Farmer migrants working in the informal unskilled and semi-skilled
salaried jobs, such as security guards or as office boys in hospitals, facto-
ries, airport and offices of private establishments, mostly come from vil-
lages in the immediate peripheries of the city of Bengaluru. Semi-skilled
Table 5.3 Mean annual income, expenses and loans (INR per household)
Small farm household Migrant households
Gross farm income 314,511 8721

Total farm expenses 92,927 12,828
Gross non-farm income 31,832 139,943
Total household expensesa 156,340 124,749
Overdue loans 226,912 396,900
Family size (including children) 5 2
Source: Farmer and migrant interviews in 2015

Excludes farm expenses
a
jobs in factories, masonry, driving and so on are sought by short-term

migrants from these peripheries of new and old Bengaluru. The second
common engagement of farmer migrants was in wage labour—skilled or
unskilled. Farmers without other skills from remote areas work mostly at
the construction sites or with security agencies. The fact that most unskilled
migrants come from remote villages (like those from our study villages in
Yadgir) reinforces for the third time (after the finding that migration is
more among farmers in the remote villages and that women from remote
areas find the migrated destination more pleasant and liberating) that
farmers in the remote areas are doing worse than those in other parts.
Long-term migrants to Bengaluru city, engaged in vending perishables,
domestic labour and taxi driving, are usually from the rural peripheries of
the old parts of the city. These migrants in turn depend on their friends
and relatives for the capital needed for their small enterprises. Aspiration
of an unskilled (‘unskilled’ for urban jobs) migrant is to become employed
in a long-term, semi-skilled job in the city core.
The next surprising finding was that migrant families spend much less
on everything including food, health care and education. However, the
fact was that only 25 per cent of migrant families had school-going chil-
dren with them in the place of migration. Also, despite visiting their native
places on an average five times in a year, migrants’ expenses on transporta-
tion were much less than that of non-migrants.
The food expenses of migrants should be considered along with their
habit of bringing food grains from their village. Nearly 45 per cent of
migrants brought food grains from their village to the tune of 237 kg
per annum. The grains included jowar, ragi, pulses, rice, chili powder,
tamarind, coconut, groundnut and so on. For a family of three people
living in the city, this much of food grain would last for at least 6 months.
The fact that the farmers remaining in their original village spent more on
food, is a matter of concern.
One significant disadvantage is that migrant families were indebted.
Farmer migrants had much more loans to clear than their non-migrated
counterparts in their own villages (Table 5.3). Analysis of indebtedness
revealed two more points—one is that migrants depended on friends and
relatives for availing credit and that micro-credit institutions were unavail-
able for migrated families. Next to friends and relatives, banks and money
lenders were the sources of credit for them. Indebtedness is generally trig-
gered by these two factors—price fluctuations and the expenditure
incurred in medical exigencies, customary rituals and ceremonies. Almost
half of the indebted migrants had migrated for servicing loans that they
had availed for conducting marriage functions in the family. For few such
families, migration to pay-off loan lasts for about 3–4 years.
Migrant farmers seemed to be heavily burdened with loans. Comparatively,
migrants from peripheries of Bengaluru city were burdened with more
loans than other sites, and many of them had loans from multiple sources.
Thus indebtedness as the decision-making factor to migrate found in the
initial responses of migrants is substantiated by their financial status.
6.6 Small Farmer Migrants and Their Village Connect

Migrant farmers visit their village five times a year on an average, each for
almost a week’s duration. Their land (which is typically smaller in size than
a non-migrant farmer’s) is generally leased out to someone in the village.
Hence these visits are mostly for meeting relatives or for celebrating festi-
vals. Here emerged another pointer that farmers with too small holdings
appear to be vulnerable if dependent entirely on farming. Our observation
is that small farmer households that remained in their villages and did
farming had around 2 hectares of land of their own for cultivation. On the
other hand, 60 per cent of migrant households had only 0.8 hectare of
land and the rest had sold their entire land before moving to different
places. This confirms the role of land reforms in making agrarian commu-
nities self-reliant.
Most village revenue lands lie undivided across generations, with mul-
tiple owners and associated conflicts, often making it difficult to be sold
off. Thus even in instances where migrants would like to sell off their land,
it may just not be feasible and if at all it is, may not be in demand,
especially in remote areas where urbanization is still far off. Thus it was
difficult in many ways for farmers to sever ties with their rural roots.
6.7 Social Networks and Small Farmer Migrants

Friends and relatives emerged important for migrant households both in
decision making and as a source for credit. These friends and relatives
could be often from small farm households. Apart from friends and rela-
tives, government and non-government agencies as well as local politicians
appear to play some role. Many migrant households (compared to farming
households) were connected with agencies such as public distribution cen-
tres, schools, hospitals, anganwadis, panchayat office or corporation ward
office for their welfare entitlements. Non-governmental agencies were
contacted purely for social networking in order to learn about job and skill
development opportunities in the migrated localities. Religious leaders
and private money lenders were also important social network agents. It
can be only speculated that agents from various religions would have been
consulted for customs and rituals. Private money lenders’ role in the time
of emergencies in the new place continues to be crucial. However, the
density of social network of migrants was much less than that in the social
networks of farming households in any study site. It appears that farmer
migrants are in connection with lot of individuals as well as groups, which
may be helping them stay put in farming, while being away for many
months in a year.
7 Migration of Small Farmers in Karnataka:

Emerging Pointers
This section summarizes the responses emerging from the study to the
questions posed at the beginning of this chapter. It appears that the farm-
ers who migrate out of farming partially or fully are those with relatively
smaller holding size (about 0.8 hectare or less) and facing irrigation water
crisis. Farmers from irrigated villages around agro-industrial towns like
Mandya migrate the least and those in the remote rainfed villages like
Yadgir migrate the most. About 25 per cent of migrant households with
farmlands in their native place have irrigation facility.
Social disparity emerges as something that migrants are relieved to be
away from, but not something that drives them out of their rural origins.
Many respondents rued the fact that disparity only changes its colour from
‘caste’ in the rural to ‘class’ in the urban context.
Women from remote villages say that they are better off in the migrated
cities. For all migrants except those from around agro-commercial towns
like Mandya, life in the migration destinations is better than life in their
villages. Migrants as a whole generally earn less and spend more than their
counterparts who remain in the village. Farmer migrants to other rural
areas are generally better skilled and better off than those who migrate to
urban areas. Most farmers who aspire to migrate generally target big cities,
but if they are skilled, may also target industrial areas located in any rural
area; and the latter apparently earns better income. Other farmers trying
to escape deprivation of various kinds in the rural landscape do not seem
to be better off in their destinations and in fact appear worse off in terms
of potential family income.
To conclude, as most small growers won’t and/or cannot sever ties
with their land and village, their migration appears circular but semi-
permanent, less aspirational and more distress driven, coping but also
accumulative in outcome. Purushothaman and Patil (2019b) also confirm
this phenomenon while comparing migrants with households who con-
tinue to farm. Many do migrate to non-farm activities in other rural areas.
Most migrants would like to return for good after a stint with multi-
locational families and hybrid lifestyles after repaying their loans.
Thus the well-known answers to the questions about farmers quitting
farming discussed in the initial section of this chapter do not fit with the
finding we came up with from this study. Neither more income in non-
farm work nor non-ownership of land seems the reason for farmer quitting
farming (Agarwal and Agrawal 2017; Imai et al. 2015). It is too much to
think about migration by farmers as a preventive action, but our study
suggests that it is a corrective measure. When mounting debt and unreli-
able rains strike them hard, farmers explore non-farm options outside their
villages supposedly better than only the worst, when some even end
their lives.
Acknowledgements We gratefully acknowledge Azim Premji University,

Bengaluru, for supporting the study. Siddhartha Lodha, Sridhar Bellubbi and
Ashwatha Gowda supported us with data collection. We sincerely thank farmers
and farmer migrants in the study sites for actively partaking in the discussions.
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Kimhi, A. (2000). Is Part-Time Farming Really a Step in the Way Out of
Agriculture? American Journal of Agricultural Economics, 82, 38–48.
Munster, D. (2015). “Ginger Is a Gamble” – Crop Booms, Rural Uncertainty and
the Neoliberalisation of Agriculture in South India. Focaal – Journal of Global
and Historical Anthropology, 71, 100–113.
Purushothaman, S., & Patil, S. (2019a). Family Farms in Yadgir District. In
Agrarian change and Urbanisation in Southern India: City and the
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Purushothaman, S., & Patil, S. (2019b). Withering Family Farms. In Agrarian
change and Urbanisation in Southern India: City and the Peasant, 245–282.
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Transformation in the Indian Peri-urban Interface – Emerging Questions.
Bengaluru: Azim Premji University.
Rice, B. L. (1897). “History of Districts”, Mysore: A Gazetteer Compiled for the
Government, Volume II, Mysore, By Districts. Westminster: Archibald
Constable and Company.
CHAPTER 6
Globalising Agrarian Markets and Changing

Production Relations: Village-Level Evidence
from India
Anish Gupta
1 Agriculture in Rajasthan

Rajasthan has an agrarian economy with approximately two-thirds of the
state’s population dependent on agriculture (Government of Rajasthan
2001a). Agriculture and allied activities like animal husbandry are the
most important source of livelihood, employment and food security for
the people of Rajasthan. Large parts of Rajasthan have an arid climate with
low rainfall and limited irrigation potential. Despite these limitations, con-
siderable change in the cropping pattern has taken place in some parts of
Rajasthan (Government of Rajasthan 2001b). Most important of these
relate to growth of cultivation of oilseeds, wheat and cotton and more
recent one is kharif crop guar.1
Land is an important determinant of position of a household in the
system of agrarian economy. In an economy characterised by widespread
1
Statistics used here have been taken from various volumes of Agricultural Statistics,
Rajasthan.
A. Gupta (*)
Department of Commerce, DBRAC, University of Delhi, Delhi, India

104 A. GUPTA
unemployment, ownership of productive land can provide reliable source

of livelihood. Typically, unequal distribution of land forms the structural
basis for an unequal distribution of income. Land can not only be used for
self-cultivation, but can also be rented out. It is easy in an agrarian econ-
omy to find rental market for the land and the livelihood of a lot of people
is dependent on income from renting in/out land both. Different rounds
of National Sample Survey (NSS) report indicates that a sizable portion of
land is leased in Rajasthan. The 59th and 70th rounds of NSS report show
that share of land leased-in to total operated area in Rajasthan was 3.40
per cent in 2002–03, which increased to around 6.83 per cent in 2012–13.
The share of households leasing in land also reveals a similar tendency. The
land leased in by pure tenants also increased from around 16.96 per cent in
2002–03 to 19.03 per cent in 2012–13 (NSS 2004, 2014).
The core of this chapter is based on primary data collected from a vil-
lage in Alwar district of eastern Rajasthan. The primary data were collected
from this village at two different periods of time, in June 2007 and June
2013, to enable comparison.
2 Introduction to the Study Village

Mankhera is a village in Laxmangarh tehsil of Alwar district in the state of
Rajasthan. Mankhera is about 4 kilometres away from nearest town,
Kathoomer,2 and about 66 kilometres away from its district headquarter.
This village is 1 kilometre away from the Laxmangarh3-Kathoomer road.
The residential area of the whole village is surrounded by the crop land.
Mankhera has an upper primary school just at the entry of the village. The
village doesn’t have any health centre and in case of emergency, people go
to nearby town Kathoomer which is 4 kilometres away from the village.
Population Composition There were 123 households and 1034 people in

Mankhera at the time of survey in May–June 2007. All households in the
village belong to Hindu religion. Of the total 123 households, 69 were Jat
(OBC), 26 Chamar (SC) households, 16 Brahmin households (higher
caste) and 6 were Meena (ST) households. Other six households belonged
to Jangid (OBC), Kumhar (OBC) and Valmiki (SC) castes.
2
A tehsil in Alwar District.
3
A tehsil in Alwar District.
6 GLOBALISING AGRARIAN MARKETS AND CHANGING PRODUCTION… 105
The demographic composition of the village changed a little in six years

between the duration of two surveys. The number of households increased
from 27 to 33 in SC community, 74 to 89 in OBC and 16 to 20 in the
general category. However, the number of households remained the same
in the ST community. Six households in the village had left the village by
the time second survey started. By then, 14 new households had settled in
the village. A total of 18 new households had been added due to division
in the family. Two households were united into one. This way, effectively,
25 new households had been added to the village by the second round of
the survey. Among the 14 newly settled households, three belonged to
Bhangi caste. These households had migrated to Jaipur in search of job at
the time of first survey, but came back due to loss of work in Jaipur.
Place of Birth/Migration Mankhera village settlement is approximately

150 years old. As the village in itself doesn’t have any job opportunities,
just one family migrated in to settle. The main reason for this family to
settle in Mankhera village was some dispute or conflict in their native vil-
lage. Approximately 99 per cent of the population in Mankhera was born
in the village itself. The number of outsiders settled into the village
remained the same over the period.
Sex Ratio The sex ratio in Mankhera was 891 females per 1000 males in
2007. This was in consonance with the figure for state which stood at
887 in 2011; however, the village’s sex ratio fell to considerably low level
of 835 in 2013. Caste-wise analysis indicated that the sex ratio of Brahmins
and OBC was very poor in 2007, which deteriorated especially for OBC
in 2013.
Economic Activity/Occupational Structure The primary activities of all the

villagers have been divided into 15 categories. Approximately 54 per cent
of the population of the village was involved in economic activities.
Out of 836 persons, 457 were working in Mankhera in 2007.
Approximately 72.4 per cent were involved in agricultural activities, self-
cultivation or cultivating others’ land, 1.3 per cent relied exclusively on
agricultural labour, 8.8 per cent on casual labour, 2 per cent were shep-
herds, 5.7 per cent were government employees, 2.2 per cent were private
formal sector employees, 2.2 per cent private informal sector workers and
5.5 per cent were self-employees. Thus, agriculture was the main primary
occupation of the villagers, followed by labouring, government jobs and
106 A. GUPTA
self-employment. Caste composition of employment shows that OBCs

were mainly engaged in agriculture, SCs in labouring, STs in cattle grazing
and Brahmins in agriculture followed by government jobs.
There was a marginal fall in the percentage of people working in the
village. In 2013, agriculture was still the main source of livelihood in the
village. But it witnessed a fall in the percentage of population engaged in
agriculture across all the categories compared to 2007. This fall has been
the highest for SC, followed by the Brahmin households. However, the
reasons for a fall in agriculture-related activities were different for both the
communities. For Brahmins, the paradigm shift has been from agriculture
to government jobs. In the case of SC/ST, it has mostly a shift from self-
cultivation/tenant cultivation to agricultural labouring or casual labour.
Irrigation Mankhera does not have any source of irrigation other than
wells or tube wells. Approximately 95 per cent of the total land owned by
villagers was irrigated. Due to the high fragmentation of landholding in
the village, most households were dependent on each other for water. Self-
ownership of tube well without partnership was rare in the village. In some
cases, there were more than ten partners for a tube well. Even the two
biggest water sellers, who were selling water to almost 35 per cent of the
land of the village, were also buying water for some of their own farm
plots. This was because land was so small and fragmented that the cost of
digging a well in every distinct farm plot was not only uneconomic in
terms of financial burden but also in terms of wastage of cropland used for
digging well. In some interesting cases, cultivators were using more than
two sources of water for the same farm plot. This case was more prevalent
when their own well doesn’t have sufficient water, and they sometimes
wanted to keep it for an emergency. Even the fuel cost of extracting water
to irrigate 1 acre of land requires diesel ranging between 14 and 30 litres
each time.
3 Land Ownership Pattern in 2007

The village of Mankhera was characterised by a high degree of inequality
in ownership of land across social groups. However, the incidence of land-
lessness was high among SC/ST compared to non-SC/ST. In percentage
terms, approximately 7.3 per cent households did not have any land at all
in 2007. Approximately 18.2 per cent of the SC/ST households and 3.3
per cent of the households belonging to non-SC/ST were landless
Table 6.1 Farm dynamics and land fragmentation in Mankhera

Variables (year-2007) SC/ST Non-SC/ST Total
Per cent of total households 26.8 73.2 100

Per cent of total land owned 6 94 100
Access index of land 0.2 1.3 1
Average landholding of all households in acres 0.9 4.9 3.8
(including landless)
Average landholding of landowning households in acres 1.1 5.07 4.1
(excluding landless)
Average fragments per farm holding (number) 2.5 5.3 4.6
Average size of fragments (acre) 0.42 0.92 0.84
Per cent of submarginal fragments (0–1 acre) 96.6 70.3 73.3
Per cent of total area under submarginal fragments 90.1 40.3 43.3
(0–1 acre)
Per cent of other marginal fragments (1–2.5 acre) 3.4 24.5 22.1
Per cent of total area under other marginal fragments 9.9 39.6 37.8
(1–2.5 acre)
Absolute landless households as per cent of total 18.2 3.3 7.3
households
Source: Primary Survey 2007

Note: The access index of land is defined as the ratio of the ith class in total land to the share of ith class
in population
(Table 6.1). Even among SC/ST, the Valmiki community was the poorest
landless community.
A look at the averages in 2007 show that non-SC/ST on average owned
4.9 acres of land, while SC/ST owned only 0.9 acres of land. If we exclude
landless, this average shows a bit increase for both the social groups, but
comparatively higher for SC/ST due to higher landlessness among them.
The access index of land, measure of relative inequality, was 1.3 for non-
SC/ST and only 0.2 for SC/ST. A ratio of one indicates that the selected
social group owns land proportion to its share in population.
In 2007, approximately 73.3 per cent of distinct farm plots in Mankhera
were sized between 0 and 1 acre and the area under these extremely mar-
ginal farm plots was 43.3 per cent of the total land. Among the rest, 22.1
per cent of the farm plots were of size between 1 and 2.5 acres (also mar-
ginal), while remaining 4.4 per cent of the farm plots were falling under
small and semi-medium category. There was no farm plot of size medium
and large in the village.
The increasing average number of fragments and decreasing average
size of landholding with a cultivator has led to a decrease in the average
108 A. GUPTA
size of fragment for both social groups. The average size of fragment for
SC/ST was 0.42 acre, while the same for non-SC/ST was 0.92 acres. This
indicates that majority of farm fragments were less than even 1 acre in the
village for all the communities.
4 Tenancy Pattern in 2007

Tenancy was not very widespread in Mankhera. Table 6.2 shows that 8.1
per cent of total landholding was being leased in, but among the SC/STs,
it was very important as it was a major source of their livelihood. SC/STs
were more dependent on tenancy as area leased in as per cent of their total
landowning was approximately 75.6 per cent of total land owned by them.
However, the same for non-SC/ST was just 3.7 per cent.
The land was being leased in only on the basis of annual contracts. The
first part of Table 6.3 shows the absolute area under different tenancy forms
by size of economic holding, while the second part shows their respective
per cent shares. It is clear from Table 6.3 that area leased in under share rent
was higher than that under fixed rent while area leased out under fixed rent
was higher than share rent. Contrary to state- and country-wide trends,
where a sizable proportion of land is being leased in by pure tenants, there
wasn’t any landless household leasing in in the village. Landless do not lease
in land due to unviability of starting a new work which requires investments
in farm implements. This may be an indication of reduced profitability in
cultivation, where landless found labouring to be more meaningful and risk-
less than leasing in. It also shows that as long as the size of ownership hold-
ing increases, instances of leasing in/out decreases.
Leasing in/out and mortgaging out was a phenomenon observed
mainly among marginal landowners followed by small landowners.
Table 6.2 Lease in as per cent of total landowning, by social groups,

Mankhera, 2007
Social group Total area under Total landowning Area under tenancy as per cent of
tenancy in acres in acres total landowning
SC/ST 21.4 28.3 75.6

Non-SC/ST 16.5 441.2 3.7
Total 37.9 469.6 8.1

Table 6.3 Distribution of area (in acres/per cent) under different form of ten-
ancy by size class of ownership holding, Mankhera, 2007
Size class Phase 1 leased in (in acres) Phase 1 leased out (in acres)
Fixed Share Mortgage Total Fixed Share Mortgage Total

rent rent in rent rent out
Landless 0 0 0 0 0 0 0 0
Marginal 11 14.4 0 25.4 3.9 0 6.7 10.6
(0.6)∗
Small 0 8.8 0 8.8 1.1 0 0 1.1
Semi 3.8 0 0 3.8 0 0 0 0
medium (3.8)∗
Medium 0 0 0 0 0 0 0 0
Large 0 0 0 0 0 0 0 0
Total 14.8 23.2 0 38 5 0 6.7 11.7
(4.4)∗
In terms of per cent of total land leased in/out in a particular tenancy contract
Landless 0 0 0 0 0 0 0 0
Marginal 74.3 62.1 0 66.8 78 0 100 90.6
(4.1)∗
Small 0 37.9 0 23.2 22 0 0 9.4
Semi- 25.7 0 0 10 0 0 0 0
medium (25.7)∗
Medium 0 0 0 0 0 0 0 0
Large 0 0 0 0 0 0 0 0
Total 100 100 0 100 100 0 100 100

*Values in parenthesis are land leased in from government on fixed rent basis
Medium and large landowners were not participating in land rental

market. If we do not take into account the land leased in from the gov-
ernment, we find that land leased in was also limited to marginal and
small landowners. However, the semi-medium landowners were leasing
in only government land on fixed rent basis. Approximately 66.8 per
cent of the total land leased in was by the marginal landowners, while
rest 23.2 per cent and 10.0 per cent were being leased in by small and
semi-medium landowners respectively. The marginal landowners were
dominating in both the major forms of tenancy viz. fixed rent and
share rent.
Similarly, approximately 90.6 per cent of all the land leased out was by
marginal landowners followed by small landowners (9.4 per cent). There
110 A. GUPTA
was no case of leased out on share rent in the village in 2007. There is a
huge difference between land lease/mortgage in and lease/mortgage out
that can be noticed in the village.4
If we compare lessor and lessee by social groups, we find that SCs/STs
were leasing more land than non-SCs/STs despite the fact that their pop-
ulation is far lower than non-SCs/STs. However, government land was
leased in only by non-SC/ST and SC/ST who do not have any access to
it. It is worth mentioning here that fixed rent on government land is far
lower than market rent that is why only politically powerful households
have access to it. All the instances of mortgaging out were found among
SC/ST. Due to lack of resources and less risk-bearing capacity SCs/STs
were mainly involved in shared rent basis while non-SCs/STs were more
involved in fixed rent (Table 6.4).
Table 6.4 Per cent of land leasing in/out (in acres/per cent) by different
social groups
Social group of Lease/mortgage in Lease/mortgage out
tenants
rent rent rent rent
SC/ST 1.4 20 0 21.4 0.3 0 6.7 7

Non-SC/ST 13.3 3.1 0 16.5 4.7 0 0 6.2
(4.4)a
Total 14.8 23.1 0 37.9 5 0 6.7 13.2

a
Values in parenthesis are land leased in from government on fixed rent basis
4
This was not a discrepancy. It was mainly due to specific socio-economic and geographical
situation of the village. This village is 2–3 kilometre far from the town Kathoomer. A lot of
comparatively well to do people, non-resident of Mankhera, living in this nearby town are
involved in the land-related business in Mankhera. As these people are settled in the town,
they don’t have time or much interest in visiting the town but do land business in the village.
They generally tend to lease out land and mortgaged in the land from the villagers. As these
people are not the part of this village and do not live in village they are not entitled to be
surveyed. This is the reason we have amount of land leased in and mortgaged out higher in
comparison to leased out and mortgaged in. Another reason is that the government land
would be reflected in the total land leased in but would not reflect in total land leased out, as
government is not a household to survey.
5 Changes in Landownership Pattern 2013

Lot of changes were noticed in land-related variables between 2007 and
2013. Average landowning fell due to division of land and no further
scope of increase in the amount of land. The average ownership of land of
SC/ST fell to 0.7 acres while the same for non-SC/ST fell to 4.2 acres of
land. This fall has been higher for SC/ST (17.5 per cent) compared to
non-SC/ST (13.6 per cent). The Lorenz curve in Fig. 6.1 suggests that in
the year 2013, the land distribution has gone against bottom 35 per cent
of population and has gone in favour of top 25 per cent of the population.
However surprisingly for the middle 50 per cent of population, the land
distribution has been almost same as was in 2007.
The tendency of landlessness increased in 2013 and the number of
landless households increased from 9 in 2007 to 21 in 2013. Out of these
21, 14 households belonged to SC/ST while 7 were non-SC/
ST. Approximately 14.2 per cent of the total households in the village
were landless in 2013. The condition is more pathetic for SCs, as percent-
age of landless households among SC/ST was 35.9 per cent in 2013,
while the same for non-SC/ST was 6.4 per cent. This shows that the
landlessness and the tendency of becoming landless both were higher
among SC/ST households in Mankhera. However, the reasons for increase
in the number of landless were different between SC/ST and non-SC/
ST. Apart from division in landless household and selling land at the time
of division, the increased landless among SC/ST was due to return migra-
tion of few landless families due to loss of job in the city.
The access index of land, a measure of relative inequality of land, shows
that the level of inequality across social groups remained unchanged
(Table 6.5). It was mainly due to the reason that the agriculture land of
SC/ST cannot be bought by non-SC/ST. By 2013, average number of
plots increased while average size of landholding decreased for both the
social groups. This resulted in drastic fall in average size of a farm plot.
The average size of farm plot for SC/ST used to be 0.42 acres in 2007,
which fell to 0.27 in 2013, while the same for non-SC/ST was 0.92 acres
in 2007, which fell to 0.77 acres in 2013. Adding to the woes of the vil-
lage the percentage of farm plot size less than 1 acre increased to 78.2 per
cent in 2013. Approximately 19 per cent of the farm plots were of size
1–2.5 acres, 2.4 per cent of 2.5–5 acres and only 0.3 per cent of 5–10
acres. The per cent share of all land size group fell except of size group of
0–1 acre in 2013.
112
A. GUPTA
100
90
80
70
60 2007
50 2013
40 Equality line
30
% OF LAND OWNERSHIP
20
10
0
0 20 40 60 80 100
% OF HOUSEHOLDS
Fig. 6.1 Land distribution in Mankhera. (Source: Primary Survey 2007, 2013)
Table 6.5 Changes in farm dynamics and land fragmentation in Mankhera

Variables (year-2013) SC/ST Non-SC/ST Total
Access index of land 0.2 1.3 1

Difference between 2007 and 2013 0 0 0
Average landholding of all households in acres 0.7 4.2 3.3
(including landless)
Per cent change between 2007 and 2013 −17.5 −13.6 −13.4
Average landholding of landowning households 1.1 4.5 3.9
in acres (excluding landless)
Per cent change between 2007 and 2013 0 −11.5 −6.2
Average fragments per farm holding (number) 2.5 5.3 4.6
Per cent change between 2007 and 2013 19.1 3.2 7.7
Average size of fragments (acre) 0.27 0.77 0.67
Per cent of submarginal fragments (0–1 acre) 98.5 75.8 78.2
Per cent of total area under submarginal fragments 94.3 47.8 50.4
(0–1 acre)
Per cent of other marginal fragments (1–2.5 acre) 1.5 21.1 19
Per cent of total area under other marginal fragments 5.7 39.5 37.6
(1–2.5 acre)
Absolute landless households as per cent of total 35.9 6.4 14.2
households
Source: Primary Survey 2007, 2013

Note: The access index of land is defined as the ratio of the ith class in total land to the share of ith class
in population
Table 6.5 shows that in 2013 approximately 98.5 per cent of farm plots
of SC/ST were of size less than 1 acre which covers 94.3 per cent of land
owned by them. The condition of non-SC/ST was somewhat better than
SC/ST in 2013. They have at least some farm plots in size class of 2.5–5
acres and 5–10 acres. But 75.8 per cent farm plots of theirs were sized less
or equal to 1 acre covering 47.8 per cent of land owned by them. This
shows fragmentation of farm plots has increased over the time and size of
farm plots is mainly converging towards lowest strata of 0–1 acre. However,
the speed of convergence towards lowest strata is higher among SC/ST
than non-SC/ST.
114 A. GUPTA
6 Changes in Prices and Cropping Pattern in 2013

Cropping pattern in Mankhera had undergone a lot of changes in 2013.
Especially the Kharif season witnessed a lot of changes in the cropping
pattern in 2013 (Table 6.6). Area sown under bajra and jowar both fell.
This period can be marked as increasing importance of commercial crops
such as guar and Dhaincha. Almost all the area fallen into bajra and jowar
went to guar and Dhaincha. In 2013, the per cent of area sown in kharif
season under bajra and jowar were 38.5 and 32.9, while it increased for
guar and dhaincha to 16.4 and 11.0 per cent respectively.
The selling price of two crops viz. guar and jowar was not available for
year 2007 for the village since there was no selling of these crops as these
crops were being produced for household consumption only. Information
related to the prices of these two crops have been obtained from the sec-
ondary sources (Agricultural Statistics of Rajasthan, 2007–08), for the
sake of comparison. Though selling price of all the crops have increased in
2013, but it had gone more in the favour of some crops like dhaincha and
guar. The effect of high demand of guar seed was too high that it rose by
527 per cent between 2007 and 2013,5 though the increase in the price of
guar was higher in 2012 than in 2013. The other crop whose prices have
increased substantially was Dhaincha,6 its price jumped by 173 per cent
during this period. However, the prices of other crops rose within the
range of 65–86 per cent.
Table 6.6 Cropping pattern in Mankhera, Kharif season, 2007 and 2013
Name of crop Area under crops in 2007 Area under crops in 2013
Area in acres Per cent share Area in acres Per cent share
Bajra 108 44.7 97 38.5

Dhaincha 6 2.5 27.6 11
Fodder 3.4 1.4 1 0.4
Guar 3.6 1.5 41.4 16.4
Jowar 114.9 47.6 82.8 32.9
Other 5.8 2.4 2.2 0.9
Total 241.6 100 252.1 100
5
Increase in the price of guar can be attributed to alternative use of guar in the production
of guar gum which is highly demanded in the OPEC countries.
6
The main reason for increase in the price of dhaincha, as discussed earlier, was the adulter-
ated use of the crop for mixing in pulses.
7 Changes in Tenancy Pattern in 2013

The sudden exorbitant increase in the price of guar in international mar-
ket in 2012 not only increased the area under this crop from 2013, but
had a deep impact on the pattern and preference of forms of tenancy.
There was a growing importance of share rent contracts.7 Due to
increased profitability in cultivation, landless also started leasing in on
share rent while many marginal landowners started self-cultivation on
their highly fragment farm plots which they earlier were leasing out due
to unviability.
Table 6.7 indicates that the SCs/STs were still mostly involved in ten-
ancy. They were leasing in approximately 43.5 per cent of their total land-
owning, which indicates that tenancy was one of the major sources of their
livelihood. However, the absolute area, as well as percentage of area under
tenancy, has fallen for SC/ST, on the other hand, the area under tenancy
for non-SC/ST has increased marginally in 2013.
It is clear from Table 6.8 that not only the overall area under tenancy
has fallen under both major forms of tenancy, but the area under share
tenancy has fallen more proportionately than fixed rent. The class base of
lessor and lessee has expanded; however, there was still dominance of mar-
ginal landowners in leasing in/out. The mortgaging in/out land is still a
marginal farmers’ phenomenon. Similar to the trend of 2007, medium
and large landowners were not leasing in land. All leased in land on fixed
rent was either from government sources or people not living in the vil-
lage. However, marginal farmers did not have any access to government
land for leasing, and they were leasing in only on share rent basis.
A look at internal composition of land under tenancy, as indicated in
Table 6.9, provides some interesting observations. Though the total area
under tenancy has fallen marginally, its internal composition has witnessed
a lot of change. Similar to the trend in 2007, SCs/STs were mainly leasing
in land on share rent basis and are not getting any land on fixed rent from
7
The demand for lease is increased due to increase in profitability in the cultivation, as a
result of which there was pressure in the market to raise the fixed rent, but most of the tenant
cultivators were unwilling to do so as they were not sure that this high price of guar will
persist in the long run. Future uncertainty of persistence of high price of guar made the shift
of tenancy contract from fixed rent contract to share rent contract, as share rent contract was
safer for the tenants and landlord both.
116 A. GUPTA
Table 6.7 Lease in as per cent of total landowning by social group

Social Total area under Total landowning Area under tenancy as per cent of
group tenancy in acres in acres total landowning
SC/ST 12 27.6 43.50%

Non-SC/ 23.3 461.7 5%
ST
Total 35.3 489.3 7.20%
the government. The area under all forms of tenancy for non-SC/ST has
increased in 2013 compared to 2007. This was mainly because of expan-
sion in the area leased out by government on fixed rent basis.
Contrary to the situation in 2007, non-SCs/STs were leasing in more
land than SCs/STs in 2013. Similar to the trend in 2007, SCs/STs were
still not able to lease in government land. However, mortgaging out land
was still an SC/ST phenomenon. No household in the village was leasing
out land on fixed rent basis.
8 Emergence of New Social Problem

The division of land left a cumulative effect. On the one hand, it was mak-
ing farm plots less economic and, on the other hand, it was making a
household incapable to run a family. The village has started getting adverse
impact of falling land size along with declining sex ratio. An emerging
problem is an increasing number of unmarried males in the village. In
order to put more light on the issue, two sets of unmarried males from the
village have been compared. The first set comprises of unmarried males
whose education is less or equals 15 (graduation) and have attained age
28. Second set of unmarried males also have education less or equals 15
but have attained the age of 40.
The reason why education was constrained to a level of 15 in the study
was to ensure that these people are either undergraduate or less. Mostly
people engaged in higher education remained unmarried in the wait of a
government job. The most common course in the villages is pursuance of
B.Ed. course, which also requires attainment of 17 years of education.
There is very little possibility of other reasons for a male left unmarried
even after attaining the age of 28 and especially when not pursuing any
education. There were as many as seven (age 28+) such instances noticed
Table 6.8 Distribution of area (in acres/per cent) under different form of ten-
ancy by size class of ownership holding, Mankhera, 2013
Size class Area under leased in Area under leased out

rent rent in rent rent out
Landless 0 4.7 0 4.7 0 0 0 0

Marginal 4.4 11.7 0.9 17 0 2.2 1.8 4
Small 9.4 3 0 12.3 0 3 0 3
(9.4)a
Semi 1.3 0 0 1.3 0 3.8 0 3.8
medium (1.3)a
Medium 0 0 0 0 0 0 0 0
Total 15 19.4 0.9 35.3 0 9 1.8 10.8
In terms of per cent of area under a particular contract
Landless 0 24.2 0 13.3 0 0 0
Marginal 29.3 60.3 100 48.2 24.4 100 37
Small 62.7 15.5 0 34.8 33.3 0 27.8
(62.7)a
Semi- 8.7 0 0 3.7 42.2 0 35.2
medium (1.3)a
Medium 0 0 0 0 0 0 0
Total 100 100 100 100 100 100 100

Values in parenthesis are land leased in from government on fixed rent basis
a
Table 6.9 Land leased in/out (in acres/per cent) by different social groups
Social Lease/mortgage in Lease/mortgage out
groups
rent rent rent rent
SC/ST 0 11.1 0.9 12 0 3 1.8 4.8

Non- 15 8.3 0 23.3 0 6 0 6
SC/ST (10.7) ∗
Total 15 19.4 0.9 35.3 0 8.9 1.8 10.7

*Values in parenthesis are land leased in from government on fixed rent basis
118 A. GUPTA
in 2007. In the second set of unmarried males (age 40+), four instances
were noticed (Table 6.10). The trend is very unusual in the villages, espe-
cially when a majority of the population got married before the legal age
of marriage and there wasn’t any unmarried girl greater than age of 19 not
pursuing any education. There was only one girl of age 23 found studying,
but she was also living in Jaipur city.8
In 2013, within a span of just 6 years, the number of unmarried males
age equal or above 28, increased to 12, while the same equal or above age
40 increased to 5.
It was found that one male was unmarried especially when a family has
two or more male child. The trend was noticed only among households
owning land in the middle or upper strata of size of land landowning since
they were more concerned about division of land. This was basically to
stop the further division of family land and paving the way for the other
brother to get a suitable match in a reputed family which depends on the
size of land owned by the groom. If confessions of a bold household are
to be believed, in reality, it is the informal arrangement of sharing the wife
between the two brothers. The household further disclosed that this has
become accepted norm, unofficially, and now an ‘open secret’ in the vil-
lage. As polyandry doesn’t have any legal backing, it is difficult to obtain
reliable data on the same. This trend was most prevalent among forward
agricultural communities, for whom the land is the only means of produc-
tion. However, the trend was not found among SCs and brahmins. The
consequences of this new social order need to be studied in details (Gupta
and Sarkar 2015).
Table 6.10 Number of unmarried males with education <=15 years in Mankhera
(Phase 1)
Age Survey-2007 Survey-2013
Persons age=> 28 7 (5.7%)a 12 (8.1%)a

Persons age=> 40 4 (3.3%)a 5 (3.4%)a

Values in parenthesis are the percentage of households having at least one member unmarried in the family
a
8
Capital city of the state of Rajasthan.
9 Discussions and Conclusions

With the initiation of policies of economic reforms in 1991, it was being
expected that these reforms will benefit agriculture sector and farmers
both in various ways. On the one hand, increased foreign investment
would generate jobs in non-primary sector, which will further reduce pop-
ulation dependent on agriculture for livelihood. This will automatically
check the problem of falling size of average landholding and increasing
fragmentation due to division of landholdings. On the other hand, it was
also being expected that there will be a shift in terms of trade in favour of
agriculture, which will raise the surplus of cultivators and induce long-
term investment on land.
However, none of these expectations seems to have been fulfilled in
post-reform period. While comparing performance of agrarian sector in
post-reform period in comparison to the pre-reform period, Roy (2017)
found deterioration in the growth rate of agriculture sector as a whole and
across major crops. Even the population dependent on agriculture also
remained unchanged during both the periods. Further, there wasn’t any
sign of improvement in terms of trade in favour of agriculture and absence
of any report to substantiate gain to cultivators from more exposure to
international market and prices.
The evidence collected for this chapter from the study village in
Rajasthan between 2007 and 2013 is a reflection of broader agrarian pic-
ture of the country. Proportion of population dependent on agriculture
did not change during this period, and landholdings continue to be frag-
mented to non-economic size. The effect of this high fragmentation of
already small farm plots was reflected in the fact that same marginal farmer
is involved in leasing in his neighbouring farm while leasing out his distant
farm. Land rental market has confined to just neighbour cultivators since
it was not viable for any other tenant to cultivate such small piece of land
in isolation. Classic premise of inverse relation (Sen 1964; Bhagwati and
Chakravarty 1969; Barrett 1996) between land size and productivity
seems to be non-existent among highly fragmented and extremely small
size of distinct farm plots. This is also responsible for increasing landless-
ness in the village without any meaningful alternative job opportunities.
The evidence from the study village indicates that except for some
short-term unexpected gains, as happened due to sudden rise in the price
of guar in international market in 2012, there hasn’t been any sign of
long-run permanent benefits from opening up of international market for
120 A. GUPTA
agriculture. The cost of these benefits has been very high in terms of fluc-
tuations in the prices resulting in high instability in the income. The results
of this study show that most vulnerable among farming community have
been the tenant cultivators since a sudden increase in the price of guar in
2012 has put upward pressure on the fixed rent and change in the terms
of share rent contracts (owner-tenant share in input and output was
changed from 50:50 to 70:30 or 80:20). This resulted in eviction of ten-
ant cultivators who wanted their existing contracts to be honoured. Since
all tenancy contracts in the survey village were oral rather than written, it
was easier for the lessor to evict and deprive them from all government
benefits (Gupta and Giri 2016).
Indeed, the agriculture sector and farmers are both in crisis precisely
because increasing integration with global markets has left domestic agri-
culture to the vagaries of global demand and supply movements. However,
in the absence of any comprehensive state policy to address price fluctua-
tions of all major crops, this will only aggravate agrarian distress.
References
Barrett, C. B. (1996). On Price Risk and the Inverse Farm Size-Productivity
Relationship. Journal of Development Economics, 51(2), 193–215.
Bhagwati, J. N., & Chakravarty, S. (1969). Contributions to Indian Economic
Analysis: A Survey. The American Economic Review, 59(4), 1–73.
Government of Rajasthan. (2001a–14). Agricultural Statistics, Rajasthan
(2001a–02 to 2013–14). Published by Directorate of Economics and Statistics,
Government of Rajasthan.
Government of Rajasthan. (2001b–2014). Basic Statistics. Published by Jaipur:
Directorate of Economics and Statistics, Government of Rajasthan.
Gupta, A., & Giri, A. (2016). Suicides Despite Compensation. Economic &
Gupta, A., & Sarkar, T. (2015, August 31). Possessed with Land. Down to Earth
[Web Log Post]. Retrieve at September 9, 2015, from https://www.down-
toearth.org.in/news/economy/possessed-by-land-50884
National Sample Survey Office Report. (2004). Some Aspects of Operational Land
Holdings in India, 2002–03, NSS 59th Round. New Delhi: National Sample
Survey Office.
National Sample Survey Office Report. (2014). Situation Assessment Survey of
Agricultural Households, All India Debt and Investment & Land and Livestock
Holdings in India (January’2013–December’2013), NSS 70th Round. New
Delhi: National Sample Survey Office.
Roy, S. D. (2017). Economic Reforms and Agricultural Growth in India. Economic
Sen, A. K. (1964, February). Size of Holdings and Productivity. The Economic
Political Weekly, Annual Number, pp. 323–326.
CHAPTER 7
Land, Caste and Class in Rural West Bengal
Dayabati Roy
This chapter aims to understand the question of land in rural West Bengal
in terms of class and caste. As in the Indian case, Damodaran correctly
states, ‘economic behaviour is embedded in concrete social relations’
(2008: 1), the analysis of land issues in context of caste might yield fruitful
results so as to understand the problem more insightfully. As capitalism
develops, the scholar observes, ‘through a number of business communi-
ties rather than an integrated business class’ (Ibid.: 2), the issues of land
also tend to revolve around more through the dynamics of caste rather
than through the dynamics of class. By mapping the trajectories of chang-
ing dynamics in land relations in both colonial and postcolonial periods,
this chapter explains the way the land has been determining the economy
in rural hinterland. Upon examining the field work data gathered in recent
period, it reveals, first, that the issues of land are shaped through a com-
plex process of dynamic interaction between class, caste and capital.
Second, the way the state and its policies do intervene in this complex
process in order to shape the issues of land in rural areas has actually been
complicating the matter further by privileging the capital and the landed
class belonging to higher castes at expense of the labouring class from
D. Roy (*)
Department of Social and Cultural Anthropology, University of Helsinki,
Helsinki, Finland

124 D. ROY
subordinate castes. The first section of this chapter explores, on the one
hand, the trajectory of transformations in land relations and the role of the
upper caste landholding group in shaping the phenomenon of landlessness
and, on the other, the implication of policy intervention on the part of the
government on all rural classes and groups, particularly on the subordi-
nate land-poor groups. The second section explains the dynamics of ascen-
dancy of the rich peasantry to power in rural West Bengal by means of land
ownership and authority over labour, and its politics within the state
domain, and beyond, in shaping the condition of labour in the province.
The third section examines the way the subordinate labouring class in
rural West Bengal do cope with the predicament of their landlessness, and
subsequently construct their politics in order to shape, on the one hand,
the dynamic consequences of landlessness and on the other, the state poli-
cies aiming at generating employment. This chapter concludes that owing
to the determinant role of capital whatsoever in agriculture the state of
rural economy of India, particularly of West Bengal, has deteriorated lead-
ing to transform the class configuration and the rural economy further by
means of marketization of farming and other livelihoods.
1 Land, Landed Class and Caste

In its attempt to carry on ‘the extraction of a part of the surplus in the
form of land revenue’ (Chatterjee 1984: 6), the colonial government had
undertaken several try-outs in vain before permanently being settled with
the Permanent Settlement. Tellingly, the enactment of Permanent
Settlement seemed to be the first attempt to make a decree in the ‘vast
network of laws’, as the scholars argue, ‘created to legally enshrine specific
rights to various groups across the country’ (Nielsen and Oskarsson 2016:
69). Most historical narratives written about the experiences of the
Permanent Settlement in Bengal reveal more or less the same story that
the economy of the province ceased to prosper anymore, rather decaying
every now and then, despite the repeated attempts of reviewing the situa-
tion and the subsequent policy intervention, be it new or revised form, by
the colonial government. Diverse kinds of interests articulated by several
numbers of classes, sections and groups thus came to the fore with their
own ambiguous rights, identities and demands as consequences of, par-
ticularly, the intervention of the organized domain of politics therein. In
contrast to the interests of the British colonial state which was imagined as
the ‘sovereign authority’ of all revenues, three categories of main classes
7 LAND, CASTE AND CLASS IN RURAL WEST BENGAL 125
made their appearance with their overlapping—sometimes conflictual,

sometimes cooperative—demands and interests in the ‘political drama’
performed in colonial Bengal during the last three decades.
First, the class at the top of the agrarian structure was of the zamindars,
the proprietors of the soil. The folks mainly from the upper castes consti-
tuted this category by utilizing the opportunities opened by the Permanent
Settlement. Apart from the old established landholding families, many oth-
ers from among the upper castes took the opportunities to become either
the ‘collectors of revenues’ or the privileged ‘farmers’, and later in due
course transformed into a zamindar class. Sarkar (2016) rightly argues that
even the businessmen who were once prosperous had become zamindars
afterwards. The affluent section of professionals who made their fortunes
by way of practicing law and medicines had invested their surplus money
either to buy the company’s newspapers or the ‘zamindari’ (Sarkar 2016).
He attributes this trend to the lack of interest on the part of Bengali people
in business. Sarkar seemed to fail to observe two important reasons why the
Bengali people tempted to buy the zamindari. The affluent Bengali persons
were tempted to buy the zamindari because, on the one hand, the zamind-
ari was very lucrative, that is, prosperous at that time and, on the other, the
business and trades were then progressively turned into loss-making sectors
due to the invasion of British imperialist capital. However, Sarkar’s narra-
tive depicts one trend clearly that many people, mostly the upper castes,1
who were already settled in other sectors had conveniently become the
zamindars owing to the facilitating arrangement provided by the Permanent
Settlement. But their days were not stable and began to evaporate since
particularly the beginning of the twentieth century. Now this upper caste
landholding class made a venture towards cities and urban areas to grab all
new opportunities in the bureaucracy and trade after the scope of rentier
economy began to vanish. This category began to face a two-pronged chal-
lenge, on the one hand, from the mass of peasantry and, on the other, from
a new class of rich peasant-moneylender-traders. Do we read it on caste
term and say that the upper castes began to face challenges both from the
lower castes and the middle castes as far as land is concerned?
Second, by utilizing the growing land market, commercial farming and
farm-related trading, and, of course, the scope of expansion of agriculture
in newer stretches of lands, a new class of people had emerged during the
1
The list of zamindars provided by Sarkar entails that many of them actually belonged to
the upper castes.
126 D. ROY
period of late colonialism. This new class can be called as the ‘rich peasant-
moneylender-trader’ class. The people of this class had in the main come
from the middle and lower castes as indicated in the studies by Chatterjee
(1984, 1987), Sanyal (1981) and others and became prosperous gradually
through cultivating new land either by purchasing from the debt-trapped
peasantry or from the decaying zamindar class who already began to leave
the soil of rural Bengal. Considering the case of West Bengal, the castes
like Sadgope, Mahishya, Ugrakshatriya among the middle castes and
Poundra Kshatriya and Rajbanshi among the scheduled castes (SCs) would
constitute this new class. We would also find that a considerable section of
Muslim peasants falls in this class inhabited mainly in Bangladesh and in
some parts of the northern region of West Bengal. The history of emer-
gence of this class is thus not so old. Hence, the way the castes belonging
to this class could shape their trajectory of development in both economic
and political terms is very significant to understand the economy and poli-
tics of rural West Bengal. The narrative of this class seems also to be
important since it has established its ‘control over the land and the pro-
duce of the peasantry’ by ‘challenging the erstwhile dominance of the
landed proprietor’ (Chatterjee 1984: 62).
The third category is the mass of peasantry in rural West Bengal. The
people of this category were the worst victims of the breakdown of small
peasant economy in Bengal during the period of late colonialism. The
peasantry at large who were once mostly the rent payee raiyats turned into
marginal in terms of their dismal economic condition. Due to the stress
exerted both from the upper caste proprietors and the colonial state, many
of them were forced to lose their land and subsequently had become poor
peasants. They were turned into either the sharecroppers by losing owner-
ship rights or agricultural labours by losing even the occupancy rights to
land. The category of marginal peasants includes the poor peasants, the
sharecroppers2 and the raiyats (also under-raiyats). A fierce conflict
between the upper caste proprietors and the mass of peasantry actually had
torn the eastern part of undivided Bengal apart. The lower castes includ-
ing the middle castes and the scheduled castes as well as the scheduled
tribes (STs) had constituted this category for which most of the govern-
ment policies are aimed at.
If we take stock of the current status of these classes/castes, we will find
an interesting trajectory of class/caste dynamics at the grassroots of
2
The sharecroppers include the bhagchasi, bargadar or adhiar.
Bengal. My ethnographic research (Roy 2013) reveals that most of the

local zamindars belonging to the upper castes have eventually fled from
their ancestral villages owing to the resistance of the peasantry belonging
mainly to the SC and ST and also in some occasions to the middle-caste
Mahishya under the leadership of Communist Left during the period of
1960s and 1970s (Ibid.). The upper-caste families (here the Kayasthas)
have either sold off their land or still have kept it in their possession. In the
latter case, they are to engage the sharecroppers for cultivating their land.
Most of them have actually taken modern professions and so settled in
cities like Kolkata. In my recent survey conducted in 18 villages in 18 dis-
tricts of West Bengal, I found another interesting phenomenon. Among
these 18 villages that had been randomly selected, there is no noticeable
trace of the upper castes in as more as 12 villages. This phenomenon is
attributable to the proactive roles of the Left Front government and its
constitutive parties, to be precise, of the upper castes in implementing
and, to some extent, improvising the land reform policies in rural West
Bengal. In so doing, the upper castes who had once been the proprietors
of land and the perpetrators of rural distress attempted to cut down to size
the power of their erstwhile rival, the class of rich peasant-moneylender-
traders and thereby establishing their base among the poor peasantry. Do
their roles, in that case, indicate any antagonism between two dominant
classes, as suggested by the theorists of passive revolution? I mean to say,
is this a class contradiction between two classes, that is, the landed elites or
rich peasantry, on the one hand, and the bureaucracy, that is, the upper
castes, on the other?
Whether or not this effort of the Left Front is a manifestation of per-
petual class antagonism between two dominant classes is actually not a
factor here to influence the role of the upper castes in policy making on
land front. Being the communist (Marxist), the members of these parties
could never cross beyond their class boundary and so have hardly left any
imprints, in good sense, in rural areas to turn the situation upside down.
What these upper castes have done is actually the same as their counter-
parts in other states intended to do. This is to mean a closer look would
easily reveal what the erstwhile proprietors of land have scripted are noth-
ing but the end-products of their caste-class ideologies. The land reform
programmes are not meant for the absolute benefit of landless peasants in
long term, instead, are devised keeping in mind the case of the labouring
class. This means the issues of landlessness are not here prioritized. Instead,
it seems that the aim of the land reform policies is to at best reduce the rate
128 D. ROY
of poverty. The causes of rural unemployment are reasoned from the

standpoint of the upper echelon of the society in class and caste terms, so
are the measures of employment generation.
2 Land, Peasantry and the Dominant Caste

Notwithstanding the fact that there are various sets of data regarding the
evolution of landholding structures in West Bengal, the data about caste-
specific landholding structure are really fewer. I would divide the peas-
antry purposefully into two categories, the rich peasantry and the poor
peasantry. Ignoring the consistent debates and confusions regarding dif-
ferent contradictory sets of data, I would reiterate advantageously the con-
ventional supposition that the rich peasantry in general do represent the
lower or middle castes particularly in south-western part of Bengal and,
partially, two scheduled castes Poundra kshatriya and Rajbanshi in south-
ern part and the northern part of West Bengal respectively.3 Needless to
say, the poor peasantry would represent the scheduled caste and the sched-
uled tribe. Long before the penetration of organized state politics, two
numerically significant middle castes in southern West Bengal, presently
called as Sadgope and Mahishya,4 had chosen their route of social mobility
in the middle of sixteenth century. Sanyal’s magisterial study (1981) has
revealed that these castes had first broken away from their parent body
known as Gope (a pastoral group) and Chasi Kaibartas (a fishing commu-
nity) respectively and shifted steadily to agriculture as their new profes-
sion. Both the dissident groups, particularly the Sadgope, ‘spread over the
territory extending between the left bank of Bhagirathi river and the
south-western fringe of Bengal, became settled agriculturalist, traders, and
officials of the state and of the zamindars’ (Ibid.: 45).
Within a short period of time, they had become prosperous cultivators
and also substantial landowners and subsequently established themselves
as a political power in a vast region. The amalgamation of economic power
in terms of land occupation and ownership, and political power helped
these castes to achieve cultural superiority by means of ‘instituting social
3
In both the cases, a proportion though being very small from Poundra Kshatrya and
Rajbanshi is having large amount of landed property and locally dominant. The social, politi-
cal and economic dominance of this section of people are huge.
4
Two other castes, namely Tili and Bhumij-Kshatriyas, had taken successfully the same way
of social mobility movements.
services like temple building and offering lucrative grants, such as rent-
free land, to the Brahmans’. Subsequently, these factors altogether made
Sadgopes and Mahishyas recognized as Nabasakh5 castes. Since then, these
two castes have been enjoying cultural superiority and posing as dominant
castes until recently in the vast tracts of southern West Bengal. Recent
ethnographies by the present author on the two castes show the way the
Sadgope and the Mahishya do endeavour to continue their domination,
cultural, economic and political, in everyday lives of the rural people. The
relationship between the dominant castes and the subordinate castes in
that region has not only been hierarchical but also a source of severe dis-
crimination in regard to various socio-economic aspects. The hierarchy or
discrimination is such that the people of these dominant middle castes are
often called as bhadralok and that of the subordinate castes are considered
as chhotoloks.
The economy of this category of rich peasant-moneylenders-traders
though been risen steeply in the first half of postcolonial period began to
collapse gradually in the recent period. The green revolution technology
had brought advantage to this category in the preliminary period, but
tended to disadvantage them mainly due to the government’s apathy to
the distress call of the peasantry. While the peasantry have consistently
been distressed due to the determinant role of the unfavourable market,
the government instead of protecting them by way of reducing the
onslaught of the ‘elite’ commercial and capitalist classes did aid the latter
in their venture of profit accumulation. Victimized both in the field of
production and in the field of marketing, the peasantry at large, particu-
larly, the rich peasantry, rarely does embrace a solvent position so that they
could pose a challenge to the dominance of the upper castes. Notably, a
small group of rich farmers who are having a substantial proportion of
land could make their fortune even until the recent period through
exploiting the scope of profit making by means of hoarding crops coupled
5
The Nabasakh rank in the caste hierarchy in Bengal is said to have been formed of nine
(nava) branches (sakha) of the clean sudras. But its rank now includes 14 castes, in some
places in Bengal even 15 or 16 castes. In general social estimation, the nabasakh castes remain
below the Baidyas and Kayasthas as the latter are mostly land owners and professionals, while
the Nabasakh castes are traditionally and predominantly artisans, agriculturalists and traders.
But like these two castes, they enjoy the right to offer drinking water to the Brahmans.
Hence they are jalacharaniya, that is, water (jal) served by them is acceptable to the
Brahmans. The nabasakh castes are entitled to receive the services of the clean Brahmans in
their religious functions. (Sanyal 1981: 39–41).
130 D. ROY
with farming.6 However, the rural dominant categories though being in

the forefront to manage the electoral support for the urban dominant
categories do not assume adequate power and have been subordinate in
terms of decision making. The rich peasantry has, therefore, been unable
to be a part of the coalition of dominant classes, as the theorists of passive
revolution argue, as far as the politics of West Bengal is concerned. Rather,
as the situation of the state betrays, the upper castes/classes or the bureau-
cracy, allied with the capitalist classes, have been dominating the politics of
West Bengal often at the expense of interests of the peasantry at large. The
rich peasantry or ‘the dominant castes’ have hardly any role in formulation
of the policies and acts aimed at all rural classes, including their own class.
The main reason behind this phenomenon seems to be, I argue, the
rich peasants’ lack in economic and political power even in the field of
political institutions and legislatures in the state. Unlike their counterparts
in other states, they could not even decide the policies that affect their
own issues within and outside the parties and mass organizations since as
the leadership of those parties and mass organizations were captured by
the upper strata. The political representation of ‘agriculturists’, the rich
peasants in context of West Bengal, however, in Pariliament had increased
consistenly during the period of 1952-1967 while the proportion in the
Parliament of the professionals, particularly, the lawyers who were more
active in the party during the pre-independence India was in decline. The
proportion of the ‘agriculturists’ in Parliament had increased from 18.3
per cent in 1952 to 36.8 per cent in 1967. If we count it in all party terms,
we would see that the proportion has increased from 22.4 per cent in
1952 to 31.1 per cent in 1967. The proportion of agriculturists, in fact, in
the Parliament has increased progressively throughout the years. The pro-
portion of the same class in Parliament reached its highest, that is to say,
49.06 per cent in the 12th Parliamentary elections, whereas it is 39 per
cent in the last elections (2014) (16th) (Parliament of India website).7
The increasing proportion of the agriculturalists or the ‘large landlords’ in
Parliament might indicate the fact that the political power of the said class
has increased substantially to influence at least numerically the policies and
acts meant for rural and agricultural issues. Chatterjee rightly states that
the legislature of the states like Punjab and Haryana has, therefore, been
6
It is true, as Chatterjee argues, ‘whatever growth did occur was for a limited period, in
specific regions and among owners of large holding’ (1999: 53).
7
Downloadable at www.parliamentofindia.nic.in/jpi/March2000/CHAP-5htm
witnessing the fiery debates ‘on land ceilings or the procurement price of
food grains’ (1999: 53).
However, the question is whether West Bengal has witnessed any such
stormy debate on the issues mentioned above at the political arena, be it
the legislature or the political parties. Presumably, the state has barely wit-
nessed such kind of fierce debates in the legislature and in the political
parties that initiated on the part of the representatives of rich peasants.
Indeed, the list of the MPs elected in West Bengal, whatever their party
identities may be, clearly reveals that not even a single MP in West Bengal
belongs to the rich peasantry at least as far as their profession is concerned.
It might be the case that at least a few of the MPs though have been
elected from seats of the rural region and belonging to the rich peasantry
class have preferred to mention business or social work as their profession
to farming whatever the reasons may be. In no case, however, the repre-
sentation of the rich peasants in the political arena doesn’t count much, so
does the issue of rich peasants. During my field work in the state, I found
that the rich peasants, especially, in the Hooghly district instantly vented
their grievances against the governments for its failure to aid them in their
acute distress. One rich farmer asserts, ‘we don’t have our own party or
platform on behalf of which we can negotiate our issues or requirements
with the government. In other states, the farmers are organized and so do
succeed to garner the benefit in a united way in regard to farming. For
instance, the farmers of the other states have largely benefited by way of
subsidization in tariff for electric pumps’.8 It is easily discernible at this
stage how far the rich farmers could get capacity to influence the govern-
mental policies, especially the policies aimed at land issues in rural areas,
while they themselves are in want of scope to place their own demands on
the government.
The rich peasants are, however, not in need of scope to exert their influ-
ence in shaping the nature of outcomes of the governmental policies when
the latter are moving downwards for implementation to the rural grass-
roots. The classes that are dominant in the rural West Bengal do then
become the custodians of governmental policies and make every effort to
determine its fate, of course in collaborating with the upper castes-classes
who are living in the cities. The top political leaders as well as the bureau-
cracy most of whom belonging to the upper castes–class are seemingly
8
In 1999, the NSSO report says, only 12 per cent of all pump sets used by the farmers in
West Bengal are electrified.
132 D. ROY
agreed at least to some extent to compromise on some issues proposed by

the rural dominant class. Presumably, due to this very reason, the Left
Front leaders, as we have seen, who were very active in formulating the
MGNREGA at the Centre had visibly been reluctant at the initial period
to implement this act in the state in 2006. The rural leaders of both of the
party and the panchayat especially those belonging to the landowning
higher castes do usually interpret their tasks of implementing the act in
terms of supplicant modality, particularly if and when the benefit seekers
do belong to the landless subordinate groups and the vice versa. As hordes
of uncertainty prevailed in every step of implementation of the programme
ranging from creating of work to payment of wages, the beneficiaries are
seen to be immensely dependent on the leaders of the respective fields and
so eventually become supplicant for even small things to be done.
However, castes seem to provide more signifying terms than class through
which the social relations and the subsequent supplicant modality are
perceived.
3 Landlessness, Employment

and the Subordinate Castes
It has been described the way the category of peasants most of whom
belonging to the lower castes particularly the scheduled castes9 in West
Bengal have become increasingly poor and so be the target of various gov-
ernmental policies ever since even the colonial period. The poor peasantry,
that is, the landless peasants, the sharecroppers and the marginal land
owners, could hardly improve considerably their position throughout
these years. Many people from this category seem to still remain unem-
ployed or underemployed during most part of the year all over the state.
If we try to gauge the extent of their predicament in terms of poverty
discourse, it may appear that their economic condition has improved. But,
the ethnographic enquiry into their joblessness would soon make us disil-
lusioned, and we would find that a particular section of people in every
village is consistently in search of work. This is the section which consti-
tutes the poor peasantry in West Bengal. This is the section which neither
flourishes in economic terms, nor ‘advances’ in social position. This is the
section in the rural areas which identifies that the land and land relations
9
This category includes most obviously the ST and the lower castes among the Muslims.
As they are beyond our purview of discussion, I would skip their cause.
are the basis of all their problems in regard to work. History shows the
way in which this section of peasantry would mobilize itself in the late
colonial period under the banner of political parties taking the issues of
land. However, it has also elucidated that the penetration of the state in
matter of land and land relations has only complicated the issues by ren-
dering a section of peasantry increasingly vulnerable by way of making
them either landless or sharecropper.
From the Permanent Settlement to assorted kinds of Land Reform Act
passed in postcolonial India including the recent tenancy reforms initiated
by the West Bengal government during the end of 1970s, as my recent
work shows (Roy 2018), the predicament of the people of this group has
essentially hardly changed. The people of this section who are enormously
variegated in terms of proprietary and occupancy rights in question of land
have administratively been identified since long as various names, for
example, the raiyats, under-raiyats, tenants, sharecroppers, bargadars and
so on, while the forms of precarity that are associated with their liveli-
hoods have remained the same. A longitudinal survey of the policies might
reveal that most of the policies and the acts in rural areas are meant for the
benefit of this section of people. This is the reason why this section of the
people is the most politicized population in India. Why does the politics
of the state fail to deliver justice to this section of people notwithstanding
its consistent efforts by way of its policy intervention into the latter? The
belief that the state is neutral and supposed to be maintaining a balance
among various classes and categories that existed at a particular point of
time seems to have been a real culprit in making our understanding
blurred. How does the state take a neutral position and maintain a balance
among various classes in the societies which have already been skewed
towards the propertied classes? Does not the state require having a labour-
ing class skew in order to establish some forms of equality?
It is, of course, undeniable that the characters of the classes which con-
stitute the power have great roles in determining and shaping the nature
of policies and its implementation at the grassroots. However, I would
argue, what is more significant is the guiding ideology which does prompt
the ruling classes to construct their respective policies. The ideology
decides the fate of capital and its accumulation in a particular society. Take
the land reform acts and policies, for instance, to understand its impacts
on the landless peasants of West Bengal in employment terms. During the
period of colonialism, the Permanent Settlement which was marked as the
beginning of colonial policy regime in regard to land was just the sheer
134 D. ROY
reflection of the British capitalist interest to extract the profit from land in
terms of revenues. The subsequent land policies or acts, for instance, the
Bengal Tenancy Act, which have been followed since were of no excep-
tion. It may appear that those policies were having a marginal peasant
category skew. But a thorough historical analysis would prove that these
were aimed at only to maintain the small peasant economy for its uninter-
rupted exploitation in Bengal in longer term. All these policies, however,
were doomed to failure due mainly to the growing class contradiction in
society and eventually culminated in the recommendation of Floud
Commission. The land reform acts that were undertaken in postcolonial
India are nothing but a reproduction of the Floud Commission which
recommends, on the one hand, the withdrawal of intermediaries and the
direct relation between the state and tenants and on the other hand, the
landlords’ keeping hold of land though to a certain amount and the grant
of compensation whatsoever for departure from the zamindari. The first
part of the recommendation is nothing new but the imitation of indige-
nous tradition under which the peasants of Bengal had remained for long.
The second part of the recommendation is definitely drafted with an aim
to benefit the landlord class. But, needless to say, it was meant mainly for
the enhancement of capital.
Whatever it may be, I have attempted to explain the impact of imple-
mentation of the land reform acts on the peasants of two different settings
of West Bengal which are distinct from each other not only in terms of its
geography and proximity to city, but also of its ethnographic components.
The northern part and the southern part of West Bengal are these two
distinct regions. The landless peasants belonging to the ST community
who were at the forefront of the land struggles led by the Communists in
the northern part could hardly manage to get any land vested and distrib-
uted by the party. There exists a sense of latent discontent among the
landless labourers as most of the land that were seized from the jotedars
families had been distributed among the ardent followers of the top party
leaders.10 On the contrary, the erstwhile jotedars families could retain
most part of their lands and still own around 100 bighas of land as
informed by the present member of the panchayat. Most of them are to
supplement their income from agriculture, be it as cultivator or as day
labourer. The villagers get lots of scope to involve themselves in various
10
One respondent informs that the ardent followers of the top leaders of the CPI (M)
party live in the neighbouring villages.
odd jobs owing to the village’s proximity to the city. Agriculture is not
considered usually gainful by most of the landowners due to the very fact
that most of the lands are not multi-crop and well-irrigated. The green
revolution technology seems to have not been useful in this particular
area. Rather, as informed, land inside the village has often been traded
with the outsiders at soaring price, thanks to the rapid urbanization. It
transpires the fact that the land is not as useful in terms of agriculture as it
is in terms of trade. Therefore, despite the concentration of land in few
hands, agriculture did not grow with reference to productivity of land, and
the capitalist expansion in agriculture too is somewhat moderate. The sur-
plus from land has not been accumulated in such a way that the class con-
figuration would change. The employment or livelihoods of most of the
families irrespective of class and communities are not fully based on the
village economy with scores of people among them increasingly fleeing
the village for making both ends meet.
The out-migration of the people from the villages in the southern part
of the state, however, as mentioned earlier, is no less important to under-
stand the recent crisis in work in rural areas. But the issues of land and
agriculture in this region seem to transpire a different story. The SC and
ST families constitute, not surprisingly, the category of landless.
Interestingly, analysed separately, the SC families do hardly have land due
only to the reason that they didn’t obtain almost any patta land from the
then party in power. On the contrary, some ST families being the passion-
ate loyal to the erstwhile ruling party could manage to obtain 0.25 bigha
of land each on an average. The empirical findings transpire the fact that
the village economy which is characterized by farm-based work and agri-
culture has been viable by way of providing employment for almost all
villagers as main source of income. Non-farm works whatsoever are being
created at the margin even if sporadically have also been sustained by the
activities associated with farming. The landowners, particularly the sub-
stantial landowners, seem to have been prospering the most by diversify-
ing their professions into a number of other fields based mainly on
sustainable agriculture thanks to private irrigation initiatives.11 Besides,
these farmers do also enjoy the advantage of investing the incomes from
other occupations, be it the business and the service, in farming only in
11
Boro paddy and potato are grown extensively by the farmers as commercial crops. The
Shallow Tube Well (STW)s and Deep Tube Well (DTW)s are used for irrigation purpose if
or when necessary.
136 D. ROY
order to make it more profitable. The class relations in terms of land and
other occupations are sharply reflected in the village reality.
Interestingly, the agricultural wages prevalent in both two sets of vil-
lages are lower to a great extent than the wages stipulated by the govern-
ment.12 The question arises that in what way the rural labourers would
experience the indirect outcomes from the MGNREGA when they are not
even drawing the minimum wages prescribed by the government. What
has been possible, as Carswell and Neve (2014) observed, in Tiruppur
district of Tamil Nadu that the rural poor could experience some real gains
of MGNREGA is actually still a dream to the rural labourers of West
Bengal. Unlike their counterparts in Tamil Nadu, the labourers in West
Bengal do hardly experience ‘indirect outcomes include the availability of
an employment alternative, the increase in agricultural wages’ and ‘the
improvements in labourers’ bargaining power vis-à-vis employers’ (Ibid.:
583). This is due to not only the fact that the programmes under the
MGNREGA are not effective in terms of both creation of work and regu-
lar payment of wages, but also the very reason that the work under this act
do not create a pressure on the supply chain of labour-pool as mentioned
earlier. Now let’s examine the outcomes of implementation of the provi-
sions to benefit directly the marginal peasants, that is, the sharecroppers as
well as the so-called deprived sections like the SC and ST people in terms
of creating durable assets in the context of caste and class. It is often
thought that the revisions of the MGNREGA by way of notifications
issued by the government are skewed towards the interests of the labour-
ing class and of the deprived social categories. It has no doubt, however,
that the likelihood of implementation of the provisions which are thought
to be skewed towards the interests of the labouring class and of the
deprived social categories is often curtailed in the villages wherein the
dominant castes and the substantial landowners are in the helm of local
power. As far as the prevailing caste-class dynamics in West Bengal is con-
cerned, it seems to be not an easygoing task that the party and panchayat
leaders, the land owners belonging to the higher castes, would follow the
order of the governments and implement immediately.
The class seems also to be a factor in carrying out the provisions meant
for a definite class. Would the people of the landholding class who require
12
The men labourers earn around Rs. 150.00 with some food as breakfast in the morning
as per day wages whereas the wage stipulated by the state government of West Bengal was
Rs. 206 with food per day during the same period.
the agricultural labourers to cultivate their lands pay attention to imple-

ment the provisions that would benefit their labourers? The findings reveal
that despite the fact that the landholding class and the landless class, the
would-be beneficiaries, belong to the same SC categories, these provisions
have hardly been followed. In the south-western districts, a renowned
NGO has been devising projects of creating water harvesters on the lands
of the SC and ST people mainly for the purpose of irrigation. These water
harvesters, locally called as Hapa, are obviously beneficial and ‘can bring
substantial changes’ to the livelihoods of the hapa-owners (Banerjee 2012:
11).13 The acute scarcity of water for irrigation debars even the landown-
ers to make a decent livelihood in these districts. By providing the irriga-
tion water for agriculture, these water harvesters no doubt are changing
the lives of the landowners. Various cost-benefit analyses show the way
their entrepreneurship has increased and they are cultivating various crops
‘with an eye to the market’. Whether or not these water harvesters have
changed their lives once for all, however, would remain as a question for
the future. The question which probably concerns us more is about
whether the lives of the landless labourers are also changing accordingly
after the construction of these water harvesters? The answers are, I sup-
pose, mostly negative. Initially, the labourers got work for some days
whatsoever under the scheme of ‘making harvesters’ as part of MGNREGA,
but the creation of jobs didn’t continue for long. After a while, they would
remain again unemployed as usual. One budding phenomenon has rather
increasingly been prominent at the grassroots that the small and marginal
cultivators who have in their possession the newly made water harvesters
are accumulating profits accrued from the land by way of high yielding of
land, multi-crop cultivation and, above all, multi-uses of water from the
harvesters. They even try to make profit by selling irrigation water to other
owner cultivators, be it the sharecroppers or the landowners. Has there
been a contrast class relation emerging at the margin among the marginal
peasants most of whom are belonging to the same community? The classes
are going to be distinct, but it remains to be seen how sharp they are.
The issues of land and work in rural areas are thus intensely rooted in
the dynamic relations of castes and classes. We must have to analyse the
intricate relations among various castes and classes, if we endeavour to
13
This is an ‘Impact study of Hapa and its multiple uses in Bankura district’. The study has
been conducted in Hirbandh block, Bankura, in the year 2012. The report of the study is
downloadable at www.iwmi.cgir.org. Delhi.
138 D. ROY
understand the problem of poverty and unemployment in India. The capi-

talist transformations at the rural hinterland since the early time under the
British colonial rule have, of course, problematized the domain of land
and work in India to a great extent. The roles of the state, both the colo-
nial and the postcolonial, in shaping the nature of the issues associated
with land are also of immense importance. By exploring the nature of capi-
talist transformation in the domain of land and work at the rural hinter-
land of West Bengal through a comparative analysis of different zones
which are distinct from each other in terms of not only its proximity to city
but also its ethnographic components, this chapter reveals that the nature
of land relations and work varies greatly on the basis of specificities of a
particular social reality. The rural India has changed enormously since the
liberalization of its economy in late 1980s, and the dynamic condition of
work including its security has subsequently taken new forms all over the
country. Rural West Bengal is no exception. While the ‘determinant’ role
of capital whatsoever leads to transform the class configuration and the
economy in rural areas by means of marketization of farming and other
occupations, the government’s attempts aimed at supporting the rural
labour through particularly the MGNREGA do complicate the issue fur-
ther. The question that arises is the way in which the contemporary rural
is changing as a result of marketization and, similarly, in what way do the
politics of rural people shape the outcomes of capitalist transformation.
How do the rural people across class, caste, religion and gender shape the
economic restructuring of global capital in their lives and livelihoods? By
examining these questions critically, this chapter reveals that while the eco-
nomic transformations do impact differently on different classes of people
in terms of land and work, a specific local setting having particular forms
of inequalities engender distinct capitalist dynamics.
References
Banerjee, P. S. (2012). Impact Study of Hapa and Its Multiple Uses in Bankura
District. Colombo: International Water Management Institute (IWMI).
Carswell, G., & De Neve, G. (2014). MGNREGA in Tamil Nadu: A Story of
Success and Transformation? Journal of Agrarian Change, 14(4), 564–585.
https://doi.org/10.1111/joac.12054.
Chatterjee, P. (1984). Bengal, 1920–1947, the Land Question. Calcutta: K.P.
Bagchi and co.
Chatterjee, P. (1999). The Partha Chatterjee Omnibus. Delhi: Oxford

University Press.
Damodaran, H. (2008). Indian’s New Capitalists: Caste, Business, and Industries
in a Modern Nation. Basingstoke: Palgrave Macmillan.
Nielsen, K. B., & Oskarsson, P. (2016). Development Deadlocks of the New
Indian State. Economic and Political Weekly, 51(4), 67–69.
Roy, D. (2013). Rural Politics India: Political Stratification and Governance in
West Bengal. Delhi: Cambridge University Press.
Roy, D. (2018). Employment, Poverty and Rights in India. Abingdon: Routledge.
Sanyal, H. (1981). Social Mobility in Bengal. Calcutta: Papyrus.
Sarkar, B. K. (2016). Banglar Jamidar (In Bengali) [Landlords of Bangla].
Kolkata: Serbian.
CHAPTER 8
Agricultural Land Markets in India: A Case

of Maharashtra
Ch. Sankar Rao
1 Introduction
Property in the soil is the original source of all wealth (Marx 1970). For
many households in rural India, agricultural land is not only a production
factor but also key asset. The well-functioning of markets for such soil,
that is, land is important for its equitable access and efficient use. In an
expanding economy like India, the market for agricultural land has been
undergoing many changes, especially in the late reforms period. The land
prices in India have exponentially increased during post-liberalization
period, much above the prices in advanced nations (Chakravarthy 2013).1
There is a situation of land price bubble during rapid but skewed eco-
nomic growth period (Hirashima 2008). There were contrasting evidences
about the benefits of land sale markets in India. Some studies found that
1
The average price of agricultural land per acre in India is close to the price of Illinois, a
high-productive corn-belt state in the United States, and is more than the average prices in
Spain, France and Germany. But the productivity of land in India is much lower than in the
above countries (Chakravarty 2013).
Ch. S. Rao (*)

Department of Economics, T.R.R. Government Degree College,
Kandukur, Prakasam District, Andhra Pradesh, India

142 CH. S. RAO
land markets acted against small farmers and landless poor (Cain 1981;
Bardhan 1984; Carter and Barham 1996; Mani and Pandey 2009). Other
studies found that the land sale market in India as a whole has benefited
the relatively land-poor and labour-abundant to improve their level of
asset ownership and welfare and transferred the land to better cultivators
(Deininger et al. 2007). Some other studies also found that the land sale
market has benefited the small and lower social group famers to gain land
in specific political economy situations in Uttar Pradesh, Bihar and West
Bengal (Shergill 1986; Dreze 1997; Saith and Tankha 1997; Rawal 2001).
Creating free-market conditions for selling agricultural land is crucial
not only to maximize productivity of land use and facilitate optimal
resource allocation but also for the financial use of land as collateral that
may reduce the cost of credit (Binswanger et al. 1993; Deininger et al.
2007). But, in developing countries like India, the agricultural land for a
cultivator is ‘much more than a commodity’. The imperfections in mar-
kets like historic inequalities in land access, interlinkages with other input
market, together with the danger of distress sales and tendencies towards
speculative acquisition and thus concentration of land, make ground for
government’s legal interventions on operation of land sale markets by the
way of restricting land sales to avoid undesirable social and economic
effects. In India, few states like Maharashtra and Uttar Pradesh favoured
restrictive sale market for agricultural land. As per the existing law, agricul-
tural land sale market in the state is largely confined to agricultural house-
holds and hence, legally, there is no free competitive market for the
agricultural land in Maharashtra. This situation provokes us to probe the
conditions of market operation and prices of agricultural land in the state.
The private sector-led economic expansion and the skewed economic
growth bypassing the agriculture sector during post-reforms period in
India across the states posed many challenges on land sale markets and
their prices, all of which will have implications on the issues of allocation
by market, equity in access and efficiency in use of agricultural land, which
is the primary means of production in agriculture sector. This paper aims
to understand these above issues in a specific state (Maharashtra) context
in India during late reforms period since 2001 where no studies are
available.
It was argued in the literature that the inactive land sale market in India
where it’s only less than two percent of agricultural land was transacted
per annum (Shergill 1986; Basu 1986; Saith and Tankha 1997; Dreze
1997; Sarap 1996; Vijay 2002, 2009).
8 AGRICULTURAL LAND MARKETS IN INDIA: A CASE OF MAHARASHTRA 143
The reasons for the sale of farmland is mostly led by distressed reasons
like indebtedness, random shocks due to health issues, accidents and so
on, socio-cultural reasons like dowry, marriage, other ceremonies, educa-
tion and so on. Most of the transactions in the early period were in the
nature of disposing off the excess land by the urban migration of big land-
lords for either other capital or consumption needs. The poor owners were
also reported to sell the land due to random shocks or distressed condi-
tions, or social and cultural needs (Sarap 1996; Dreze 1997; Vijay 2009).
There is a debate around the benefits of agricultural land sale market
operations: whether it has benefited the landless and small farmers in gain-
ing the land or not. The initial phase of land reforms up to 1965, though
inactive, has worked in favour of the landless, tenants and small farmers in
expanding their land base in Ryotwari regions of Maharashtra (Rao 1972).
Unless forced by extreme circumstances, a resident villager does not sell
his/her land (Bardhan 1984). In the case of poorer farmers, land sale were
mostly involuntary in nature (Cain 1981). The land sale markets are rarely
level playing field for the poor (Carter and Barham 1996). It is the more
of large farmers who have gained in the villages in Uttar Pradesh (Mani
and Pandey 2009). The non-cultivators emerge as large-scale buyers of
land in the villages of Andhra Pradesh who consider land as a store of value
and which has a speculative motive (Vijay 2009).
But village studies in Uttar Pradesh (Palanpur and Parhil) and Punjab
have determined that the small and lower social group famers have gained
land (Shergill 1986; Dreze 1997; Saith and Tankha 1997). The sale mar-
kets worked in favour of smaller farmers in the better land reforms imple-
mented state—West Bengal (Rawal 2001). The land sale market in India
as a whole has benefited the relatively land-poor and labour-abundant to
improve their level of asset ownership and welfare and transferred the land
to better cultivators (Deininger et al. 2007).
Number of studies, across the regions in India, have established the fact
the rural markets are interlinked (Bhaduri 1983; Basu 1986; Sarap 1991,
1996). The imperfections in credit and labour markets have resulted in
imperfection in land markets (Eswaran and Kotwal 1985). The assured
supply of credit and liquidity would reduce interim transactions and may
empower the small farmers to buy land (Vijay 2009).
As the economy is being transformed from traditional agricultural to
modern manufacture and service-based economy, the demand for land
increases both from agriculture and non-agriculture-manufacture and ser-
vice. The increasing demand influences the price of the land and this
144 CH. S. RAO
influence is higher after land acquires the nature of inelastic supply. The
rise in population also exerts pressure on the per capita supply of the land
and its prices. The institutions operating around the use of land such as
ownership pattern, tenancy, credit market and so on also influence the
price of the land.
The rising prices during 1970s and 80s were due to the impact of Green
Revolution and the diversification of rural economy (Shergill 1986; Sarap
1996). The rate of growth of agricultural land was approximately 7.5 per
cent per annum during 1970–87 in Parhil, a village in Utter Pradesh,
which is slightly faster than the growth of sale price of wheat (5 per cent
per annum) (Saith and Tankha 1997). The price per unit of land is inversely
correlated with the size of plot. Higher price per unit of land would be
commanded when farm land is transacted for residential and other non-
agricultural use (Saith and Tankha 1997). The non-productive use of agri-
cultural land, like collateral use (Lancaster 1966), store over value for
surplus money, speculative motive, tax benefits and so on may increase the
purchase price of agricultural land over and above the present value of net
returns. The differential growth rate between rent and land price of land
is attributable, inter alia, to the unregulated land market and excess liquid-
ity at the micro level (Hirashima 2008) and to increasing land scarcity with
increasing money supply from expanded credit, rising incomes from white,
black and foreign sources and also increasing wealth inequalities
(Chakravorthy 2013). When transactions occur within relatives, friends
and same community, the price may be lesser than the market price (Sarap
1998; Saith and Tankha 1997; Tsoodle et al. 2006). The ‘land bubble’ has
accelerated in recent years with rapid economic growth under free play of
land market (Hirashima 2008) and it has sustained for longer period as it
is funded by rising incomes from white, black and foreign money
(Chakravorthy 2013). The income of land purchasers is not correlated
with agriculture production and hence demand for land mostly comes
from people with non-agricultural income sources (Sarap 1996) and non-
cultivating households (Vijay 2012).
All the above studies are based on the data prior to 2000 from where
actually the land prices have started accelerating, but were much lower
than the current prices in real terms. There is no specific empirical field-
based study on contemporary understanding on operation of markets for
agricultural land sale during higher land price period, their factors and
implications, especially in a differential market system like in Maharashtra
during late post-reforms period. The present study attempts to fill this
research gap.
It is in this context that this chapter studies the operation of agricultural

land sale markets, rise in land sale prices and their factors and implications
in the state of Maharashtra, which has distinct market conditions for agri-
cultural land sales due to legal restrictions on its purchase by the
non-agriculturalist.2
2 Data and Methodology

The agricultural land is transacted under different purposes such as sale,
lease and mortgage, where first one is permanent and other two are interim
transactions in nature. The current study focuses only on the sale market
for agricultural land in Maharashtra. It is based on both secondary and
primary information from village surveys and also secondary data on land,
population and GSDP from Statistical Abstract of Maharashtra. Secondary
data on area of agricultural land sales since 2001 in the village is obtained
from village revenue offices (Talathi). Primary information on actual land
sale price, motivation of transaction, occupational details of agents and
other related information on land sale transaction was obtained from land-
transacting households (buyers and sellers) in six sample villages. These
villages were purposively chosen from three different districts from three
different level of agricultural development regions in the state based on
the District Agricultural Productivity Index in Gurmail Singh’s study
(2007). The selected districts are Kolhapur from developed, Bhandara
from semi-developed and Beed from underdeveloped regions. Two vil-
lages from each district out of which one is urban proximate and the other
is from remote area are selected (see the Table 8.1).
The study considered the land transaction rather than household for
drawing the sampling. This is because, though one household engaged
in multiple transactions during the study period, each transaction of
agricultural land sale/purchase by the household may be distinct based
on its time, motivation/purpose to sell or buy, irrigation facility, road
proximity, soil quality, the market conditions of the day and so on.
Following this methodology, about 70 sample sale transactions from
2
Section 63 of the Maharashtra Tenancy and Agricultural Lands Act 1948 barred transfer
of Agricultural lands to Non-Agriculturist without the permission of the Collector or Officer
authorized by the State Government. Later on, with the effect of an amendment, section
63-1A provided for transfer of Agricultural land to Non-Agriculturist for bonafide industrial
use and for special township projects, notwithstanding the bar u/s 63 of the Act.
146 CH. S. RAO
Table 8.1 Village selection and sample map

Agricultural District Urban proximity Revenue village Sample Size
region of village (N = 457)
Developed Kolhapur Urban periphery Male (V1) Seller-40

Buyer-35
Remote Bhendavde (V2) Seller-42
Buyer-35
Semi-developed Bandara Urban periphery Muzibe (V3) Seller-42
Buyer-30
Remote Chandoori (V4) Seller-43
Buyer-36
Underdeveloped Beed Urban periphery Waravati (V5) Seller-40
Buyer-32
Remote Karzani (V6) Seller-44
Buyer-38
Note: District selection is based on the District Agricultural Productivity Index in Gurmail Singh (2007) –
Growth of Indian Agriculture: A District Level Study, Planning Commission, GOI
each sample village were drawn from the total list of agricultural land
transactions of the village during 2001–02 to 2016–17 based on strati-
fied random sampling method covering all the years. Finally, the survey
covers total 457 agricultural land sale transactions in the state contain-
ing both buyers and sellers since 2001 to 2017 (see the Table 8.1 for
the details of samples). The survey was administered by the schedules
questionnaire to selected sample transaction households and personal
interviews from key informants in the village. The village field survey
was conducted during April to June 2017.
The study period covers the late reforms period from 2001–02 to
2016–17. The rationale for choosing this period is to understand the sale
market operations and fast rising prices during late-reforms period. To
provide a comparative analysis between low and high price period, the
total study period was divided into two sub-periods based on the trend of
agricultural land price in figures where first sub-period is from 2001–02 to
2009–10 as low price period and the second sub-period is from 2010–11
to 2016–17 as high price period for agricultural land in the state, which
could be seen in Fig. 8.1. The study is both empirical and analytical in
nature. Basic statistics, compound growth rates and tabulation methods
are used to analyse the quantitative data.
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Fig. 8.1 Trends of price of agricultural land per acre in total surveyed villages in
Maharashtra—At constant prices (Base year 2001 of CPI-AL) (in Rs Lakh).
(Source: Field Survey (2017))
3 The Plan of the Study

After the above introduction, Sect. 4 analyses the operation of agricultural
land sale market in terms of extent of sale, prices, net returns/income and
price-income ratio of land. Section 5 details the profile of market agents
(sellers and buyers). Section 6 discusses the reasons of households for
transaction and higher prices. Section 7 study the implication of land sale
markets and higher land prices and Sect. 8 provides the summary
conclusion.
4 Results and Discussion
4.1 Operation of Market for Agricultural Land Sale
4.1.1 Extent of Sale3

Market for agricultural land sale is discussed in every surveyed village in
the state, especially the villages which are near to either urban area or
national or state highways, not because of increasing sale but because of
3
The extent of agricultural land sale is the percentage share of total agricultural land area
sold in total cultivable area (net sown area plus total fallow land) during an agricultural year
in the village. This explains the intensity of sale market for agricultural land in the village.
148 CH. S. RAO
Table 8.2 Extent of sale and average area of sale of agricultural land in total
surveyed villages of Maharashtra (%)
Extent of sale (%) Average area of sale (Acre)
2001–03 1.09 1.47

2004–06 1.52 1.77
2007–09 1.05 1.61
2010–12 1.12 1.08
2013–16 1.02 1.08
2001–09 1.22 (0.32) 1.62 (0.30)
2010–16 1.06 (0.44) 1.08 (0.22)
2001–16 1.15 (0.39) 1.38 (0.38)
Note: Figures in parenthesis are values of Standard Deviation

Source: Computed based on data obtained respective Village Revenue Office (Talati) in Maharashtra
increasing unit prices. The results (Table 8.2) of extent of agricultural land

sale show that about 1 per cent to 1.5 per cent of agricultural land is trans-
acted under sale market in the total surveyed villages of Maharashtra dur-
ing the study period. It is relatively low during the second sub-period
(1.06 per cent) than the first one (1.22 per cent), which indicates a slight
declining trend in agricultural land sale over the years which may be due
to the sudden rise of land prices discussed in the forthcoming analysis. It
varies across the individual villages where the extent is relatively high in
villages of semi- and underdeveloped regions than that of villages in devel-
oped region. This extent of sale fluctuates across the years and is relatively
more during second sub-period than the first one, as shown by the figures
of standard deviation.
But when we observe the total study period of 16 years, total 18.5 per
cent of agricultural land was transacted under the sale market for total sur-
veyed villages. It was observed from the field that, barring few rare cases,
there was no resale or second-time sale of land in this total sold area during
the study period. Hence this is a considerable share of agricultural land
transacted in sale market to have significant influence on the aspects of allo-
cation, equity and efficiency in the land sale markets in Maharashtra. The
extent of the agricultural land sale of the surveyed villages of Maharashtra is
close to earlier individual studies4 (around 1 per cent) in other states.
4
Rawal (2001) in West Bengal (1.7 per cent), Sarap (1998) in Madhya Pradesh (1.23 per
cent), Sarap (1996) in Haryana (0.273 per cent), Dreze etc. all (1997) in Bihar (1.70
per cent).
The average area of sale (Table 8.2) stands at 1.38 acre for the total
study period and ranges from 1 acre to 1.77 acre across the years for the
total surveyed villages in Maharashtra. It has declined from first sub-period
(1.62 acre) to second sub-period (1.08 acre), indicating the decreasing
size of land sale in the state. The higher unit prices might have an influence
on the declining average sale area. It is relatively high in villages of under-
developed regions compared to others. It was found in field survey that
the average sale size is low when the transaction is between land neighbours.
4.2 Prices and Income/Returns of Agricultural Land

Generally, in an economy based on private property rights on agricultural
land, the prices of it signal the scarcity or productivity/returns. Higher
prices imply the higher level of either scarcity or productivity/returns or
both. The use of land and its prices including agricultural land have been
undergoing huge changes in India especially since 2000s where the
reforms are speeded up under private sector-led growth. There was a huge
acquisition of land for various projects of industrial, infrastructure, hous-
ing and so on.
The results (Table 8.3) show that the sale price of agricultural land per
acre at both current and constant prices for the total surveyed villages in
Maharashtra has witnessed fast-increasing trend during 2001 to 2016.
The price trend follows two phases: the slow rise of prices during 2001 to
2009 and the fast rise of prices during 2010 to 2016 (Fig. 8.1). The aver-
age price at constant prices of per acre agricultural land for total surveyed
villages in Maharashtra has increased from Rs 1.4 lakh in 2001–03 to 4.6
lakh in 2015–16, that is more than 3.3 times rise with compound annual
growth rate (CAGR) of 8.6 per cent and rate of change 228.6 per cent.
The price is high in villages from agriculturally developed regions com-
pared to villages from the other two regions. However, the price gap
between these villages has been gradually reducing during second sub-
period because of the rapid growth in price of agricultural land in villages
from semi- and underdeveloped regions.
As per the convention economic theory, the price of a commodity
depends on its return. In case of fixed assets like agricultural land, the price
of it is expected to depend on the discounted flow of annual net returns
from the land. Following this, the price of agricultural land shall depend
150 CH. S. RAO
Table 8.3 Sale price, net income and price-income ratio of agricultural land in
total surveyed villages in Maharashtra
Average land sale price Annul net income from land Price-income
(Rs Lakh) per acre (Rs) ratio
At current At constant At current At constant

prices prices (At 2001 prices prices (At
prices) 2001 prices)
2001–03 1.4 1.4 5105 4939 28.6

2004–06 2.6 2.2 6510 5446 39.8
2007–09 4 2.6 7921 5230 50
2010–12 7.3 3.3 9886 4626 75.6
2013–14 10.5 3.9 10,255 3841 102.3
2015–16 13.5 4.6 11,799 4001 123.2
2001–09 2.7 (1.1) 2.1 (0.6) 6512 (1298) 5205 (699) 39.4 (9.85)
2010–16 10.0 (2.9) 3.9 (0.6) 10,538 (2032) 4223 (965) 96.8 (29.36)
2001–16 5.9 (4.3) 2.8 (1.1) 8273 (2597) 4775 (959) 64.6 (35.25)
CAGR (2001 17.9a 8.6a 5.9a −2.6a 11.4a
to 2016) (%)
Note: For Constant Prices the current prices are deflated CPI-AL at base year 2001. Figures in parenthesis
are values of Standard Deviation. CAGR is Compound annual growth rate of land sale values were esti-
mated by using the semi-log liner model i.e. Log Yi = a + bt, where Yi is sale value of agricultural land per
acre, ‘a’ is constant, ‘t’ is time; ‘b’ is coefficients of Y. The compound growth rate is (antilog b-1)∗100
Significant at 1 per cent level
a
Source: Field Survey (2017)
on the multiple of annual net returns5 from it. It is in this context that the
analysis of annual net income/returns from the land is important to
understand the prices of agricultural land. The average annual net income
per acre agricultural land at current prices for total surveyed villages in
Maharashtra increased from Rs 5105 in 2001–03 to Rs 11,799 in 2015–16
with CAGR of 5.9 per cent. It is relatively high in assured irrigated vil-
lages. But at the constant prices, it has declined from Rs 4939 in 2001–03
to Rs 4001 in 2015–16 at CAGR of −2.6 per cent (Table 8.3).
This study has calculated the ratio of agricultural land sale price to
annual net income from the land.6 This ratio tells how many years of net
5
The annual net income on the unit land is calculated as surplus over A2 cost that is total
annual output value minus total annual paid-out cost on a unit area of land.
6
For the purpose of simplicity, the calculation avoids the interest component of the income
from the land.
income from a unit agricultural land is needed to purchase the same unit
of land. It also tells us the opportunity cost of owning agricultural land for
its primary dependent households.
The results (Table 8.3) show that, for all the surveyed villages in
Maharashtra, the price–income ratio of agricultural land has increased
from about 28.6 in 2001–03 to 123.2 in 2015–16 with annual compound
growth rate of 15.3 per cent. It has increased from first to second sub-
period about 2.5 times. It means that, on an average, about 125 years
income from a unit agricultural land is needed to buy the same unit of
land. The ratio is high in urban proximate and highway-side villages.
These ratios are starkly higher than in the best fertile lands in United
States of America which are about 50 as noted by Chakravorty’s study
(2013). This high price–income ratio of agricultural land has implications
on the opportunity cost of holding the ownership of land and equity in
access to the land sale markets, which are discussed in the forthcoming
sections.
5 Profile of Agents

It is important to detail the profile (occupation and farm size) of market
agents (sellers and buyers) of agricultural land sale markets to understand
the reasons/factors and implications or consequences of land markets and
high prices. The study provides analysis on principle occupation of house-
holds. The occupations and reasons of the market agents are analysed
based on the area share of land sold or bought under particular occupation
and reason of the seller or buyer in total area of land sold or bought.
5.1 Profile of Sellers
The results (Table 8.4) show that in the surveyed villages of Maharashtra,
the proportionate share of area sold by the cultivators is very high (95.1
per cent) and little is sold by non-cultivators during the total study period.
No significant change is reported in these proportionate shares of area
sold in the sale market between the two sub-periods. A similar trend is
observed among the individual villages with slight differences like the land
sale by the business occupations is slightly high in urban proximate village
in developed region and by employees in remote village in underdevel-
oped village.
152 CH. S. RAO
Table 8.4 Area share of land transacted across occupation of sellers and buyers
in surveyed villages of Maharashtra (%)
Occupation Sellers Buyers
type
2001–2009 2010–2016 2001–2016 2001–2009 2010–2016 2001–2016
Cultivation 96.3 94.1 95.1 61.7 46.7 53.3

Cultivation+ 0.1 0 0.1 6.3 4.2 5.1
non-cultivation
Business & real 0.3 2.2 1.4 15.9 39.8 29.3
estate
Employees 2.6 3.2 3 15.8 9 12
Others 0.6 0.5 0.5 0.2 0.3 0.2
All 100 100 100 100 100 100
Table 8.5 Farm size wise area share of land sold and bought by the cultivating
households in Maharashtra (%)
Farm size Sellers Buyers
class
2001–2009 2010–2016 2001–2016 2001–2009 2010–2016 2001–2016
Marginal 6.8 6.5 6.7 19.7 9.4 13.2

Small 51.5 63.5 58.8 64.5 44.3 54.8
Medium 29.1 27.9 28.4 15.2 37.9 27.5
Large 12.5 2 6.1 0.5 8.4 4.5
Total 100 100 100 100 100 100
Note: Farm size classification is based on the Land ownership by the cultivator before the transaction (sell-
ing or buying). The size classification follows marginal is <= 2.50 acre, small is 2.51 to 5.00 acre, medium
is 5.01 to 10 acre and large is >10 acre
Within cultivator it is the small-size cultivator (58.7 per cent) who are
selling the land and their share has increased during high price-based sec-
ond sub-period (Table 8.5). It is the marginal and small farmers in the
villages in developed region but small and medium farmers in the villages
of semi- and underdeveloped regions who sell more of their agricultural
lands. This trend was intensive during the second sub-period across the
surveyed villages.
Therefore, it can be concluded that it is the cultivators and not the non-
cultivators, especially the small-size cultivators, who are selling their agri-
cultural land in surveyed villages of Maharashtra during the late-reforms
period. Also, sadly these trends are increasing at a fast pace during the high
price-based second sub-period, which is a matter of worry ifor then own-
ership of agricultural land in the state. This indicates that the land sale
market does not favour the small-size farmers as they are not gaining the
land but losing it out.
5.2 Profile of Buyers
The profile of the households buying the agricultural land in terms of both
occupation and farm size within cultivators has been under rapid change,
especially during high price period. The results (Table 8.4) show that for
total surveyed villages in Maharashtra during the total study period,
though the cultivators account for high share of area (53.3 per cent) in
total purchased land, a significant share of land was purchased by the non-
cultivators with different occupations: business (29.3 per cent); employed
(12 per cent); and cultivators with non-farm income households (5.1 per
cent). It can be noticed that their total purchased share has considerably
increased from low price-based first sub-period (38 per cent) to high
price-based second sub-period (53 per cent). The urban proximate and
roadside villages in all the regions have higher share by the non-cultivators
than the remote villages. This happens despite legal restrictions on buying
agricultural land by non-agriculturalists in the state of Maharashtra, which
amounts to circumvention of law.
Within cultivators, it is the small- (54.8 per cent) and medium- (27.5
per cent) sized farmers who are buying the agricultural land in the total
surveyed villages in Maharashtra during the total study period (Table 8.5).
It could be noticed that the share of marginal and small-size cultivators in
the total purchased land has been declining from low price-based first sub-
period (84 per cent) to high price-based second sub-period (54 per cent).
On the other hand, the share of medium- and large-size cultivators has
been increasing during the same period. This indicates the exclusion of the
marginal and small farmer from buying the land, rather they remain only
on the selling side. However, compared to high land price-based villages
in developed region, the small farmers have relatively better roles in buy-
er’s market in villages of semi- and underdeveloped regions in the state.
This could be because of relatively lower prices. Hence the buyers’ market
also disfavours the small farmers.
154 CH. S. RAO
These trends pose challenges on the issue of equity in agricultural land

sale markets by the small-size farmers and landless groups to buy any piece
of land. These results are contrary to the results of the Deininger (2007)
study which found that land-poor and labour-surplus households bene-
fited from land sale markets in India in gaining the land asset during 1982
to 1999. This gain could be possible in such low price period. But the high
market prices during post-reforms period has dented these benefits.
The continuation of this trend will have adverse impact on the equity
and efficiency in the agricultural land sale market in the states where the
ownership of agricultural land is slowly moving from the hands of the
cultivators to non-cultivators which will increase the fallow land and ten-
ancy. This will have bearing on the efficiency of agricultural land use.
Increasing ownership by non-cultivating households constrains the growth
of agriculture because these households have low incentives to invest in
agriculture and tend to use land for residential purposes, thus reducing the
cropped area (Vijay 2012; Bhue and Vijay, 2016).
6 Reasons of Agricultural Land Sale Transactions

and Prices
6.1 Households’ Reason for Land Transactions

Generally, households have multiple reasons for a land transaction (selling
or buying) either in differential or equal degrees of importance. This study
provides the analysis of the first important reason to understand the most
compelling reasons. It explains the reason to sell and buy the agricultural
land as percentage of area transacted (sold or bought) under the specific
reason in total area transacted.
6.1.1 Reasons to Sell

The results (Table 8.6) show that social expenditure on dowry and mar-
riage expenditure (24 per cent), availability of higher market price (191.3
per cent), indebtedness (14.2 per cent) and irrigation problems (11.8 per
cent) are the most compelling reasons for households to sell agricultural
land in total surveyed villages in Maharashtra during the total study period.
The reasons of expenditure on education and health, infertile soil, buying
other property and absence of male inheritors are other significant rea-
sons. Higher market price is most important reason in urban proximate
Table 8.6 Area share of land sold across various households’ reasons of selling
and buying in the total surveyed villages of Maharashtra (%)
Type of reason 2001–2009 2010–2016 2001–2016
Selling
Non-remunerative cultivation 1.3 1.3 1.3
Indebtedness 17.4 9.2 14.2
Irrigation problems 14.1 8.4 11.8
Dowry or marriage exp 26.9 19.5 24.0
Education & health exp 5.8 4.3 5.2
Absence of male inheritors 4.7 3.5 4.2
Far distance/unfertile soil 8.6 1.3 5.8
To buy other property 3.5 8.3 5.4
Higher market pricea 7 38.7 19.3
Others 10.6 5.6 8.7
All 100 100 100
Buying
Cultivation 85.7 55.9 74.1
Store of value for surplus money 7.8 32.3 17.4
Trading speculation 6.2 9.4 7.4
Others 0.3 2.4 1.1
All 100 100 100
Note: The reason of Availability of Higher price for land mostly accompanied by any other distressed reason
a
and national highway-side villages in developed and semi-developed vil-

lages. While indebtedness is the main reason in remote villages in devel-
oped region, expenditure on dowry/marriage is the main reason in remote
villages in developed and underdeveloped villages.
There has been a clear shift in the order of sale reasons from low price
period to high price period where the availability of higher market prices
has emerged as the single-most important reason (38.7 per cent during
second sub-period). The availability of higher price for agricultural land
increases the opportunity cost of holding the ownership of it especially
during when real returns from the land are falling. This situation tempts
the small land owners to sell their agricultural land to fulfil temporary
consumption needs like private education, health, housing and so on.
6.1.2 Reasons to Buy

In the changing context of agricultural land with increasing scarcity, decreas-
ing returns, increasing preference by non-cultivators to purchase the land
156 CH. S. RAO
for its non-agricultural use and so on during post reforms period, the con-
ventional reasons to buy the land get to change. The results (Table 8.6)
show that though cultivation (74.1 per cent) is the biggest reason to buy
agricultural land for total surveyed villages in Maharashtra during the total
study period, but its importance has been declining from low price-based
first sub-period (85.7 per cent) to high price-based second sub-period (55.9
per cent). On the other hand, the non-productive reasons of store of value
for surplus money (17.4 per cent) and speculative trading (7.4 per cent) are
significant and they are fast increasing from low-price (14 per cent) to high-
price period (42 per cent). These trends are witnessed across all the surveyed
villages and even more vibrant during second sub-period in the urban proxi-
mate and national highway-side villages in developed and semi-developed
regions. The speculative trading is more prevalent in urban proximate vil-
lages and store of value is more in remote villages.
In the present context of skewed development, where there are deplet-
ing returns from agricultural land on one side and high incomes in non-
agricultural sectors, especially in service sector, on the other, the reason of
agricultural land price shift from production-related factors to no-
production- related factors like speculation, store of value for surplus
money (either white or black), tax havens7 and so on, which are mostly led
by the rich non-cultivators.
6.2 Endogenous Reasons
The endogenous aspects of the agricultural land like soil quality, irrigation,
location of land like urban proximity, industrial location, highways, local
roads and so on, all influence its price.
The land with good soil quality like alluvial or black cotton is priced
more because of its higher productivity. The irrigation facility with its suf-
ficiency of water also gets higher price to the land. The good irrigation
facility can overcome the problem of soil quality in raising the land price.
These two factors (soil quality and irrigation) of agricultural land prices in
the state were effective only during low-price based first sub-period. But
their influence has been overshadowed by other reasons like distance from
the main road or possibility for its commercial use during second
sub period.
7
As per section 10(1) in Income Tax Act 1961, agricultural income earned by the taxpayer
in India is exempt from tax.
The distance of the land from the local field road, main road, state
highway and national highway is the most important reason in influencing
the price. Shorter the distance from the road, higher the land sale price.
The land which is poor in soil and irrigation aspect but located near to
road fetches higher price than the land which is good in soil and irrigation
but located far away from the road. This works more when the buyer is
non-resident and rich non-cultivator who may want to use the land for
non-cultivational commercial use. The land which is located beside the
state or national highway is priced very high because of its possibility for
non-agricultural commercial use. This speculative buying operates more in
such kind of lands. This can be seen in case of lands located near to road-
side villages in all the regions in Maharashtra.
6.3 Institutional Reasons
Apart from the abovementioned conventional reasons, the agricultural
land sale prices are also influenced by other factors like decreasing land–
man ratio of agricultural land and increasing use of land under non-
agricultural purposes, skewed economic growth.
6.3.1 Land–Man Ratio

The results (Table 8.7) show that in Maharashtra, the land under agricul-
tural purpose has decreased from 198 hectare per 1000 population in
2001 to 153 hectares per 1000 population in 2015. In the same period
the land under non-agricultural purpose has slightly increased in the state
from 11.5 hectare per 1000 population in 2001 to 12.1 hectare per 1000
population in 2015. Similar trends are observed in all the districts except
Beed district. This situation of decreasing land–man ratio of agricultural
land and increasing use of land for non-agricultural purpose might have
pushed up the prices of agricultural land in the state.
6.3.2 easons of Skewed Growth and Rise

R
of Non-Cultivating Households
The state has been witnessing a skewed growth pattern with high growth
rates in the non-agricultural sectors and relatively low growth rates in the
agricultural sector. The results (Table 8.8) show that the growth rates of
non-agriculture sector is much higher than the growth rates of agricultural
sector in Maharashtra during the study period. The average annual growth
rate of non-agricultural sectors during the total study period stands at
158 CH. S. RAO
Table 8.7 Land under agricultural and non-agricultural purposes in Maharashtra

District/ Land under agricultural purpose per Land under non-agricultural purpose
State 1000 population (hectare) per 1000 population (hectare)
2001–02 2005–06 2010–11 2015–16 2001–02 2005–06 2010–11 2015–16
Kolhapur 127.4 125.1 120.4 117.0 9.5 10.2 10.0 9.3

Bhandara 158.2 155.6 154.6 151.5 28.1 30.7 31.4 30.6
Beed 398.5 396.7 355.2 340.5 16.3 18.8 16.8 15.0
Maharashtra 198.2 196.6 180.4 153.3 11.5 13.9 13.1 12.1
Note: Land under agricultural purpose includes net sown area plus total fallow land
Source: Calculated from data from various reports of statistical abstract of Maharashtra—Population and
land utilization statistics
Table 8.8 Average annual growth rates of agricultural and non-agricultural sec-
tors in Maharashtra (%)
Year/period Maharashtra
Agriculture Non-agriculture Total
2001–2003 1.4 3.0 2.7

2004–2006 3.3 11.8 10.6
2007–2009 −0.1 7.7 6.9
2010–2012 6.7 7.4 7.3
2013–2014 0.4 7.4 6.4
2015–2016 −4.3 9.1 7.5
2001–2009 2.9 8.2 7.5
2010–2016 2.7 7.7 7.0
2001–2016 2.8 8.0 7.3
Source: Computed from data obtained from various reports of statistical abstract of Maharashtra
8 per cent, which is much above the growth rate of agricultural sector for
the same period (2.8 per cent). Given the situation of high employment
dependency on agriculture sector and relatively lower dependency on
non-agricultural sectors in the state, this skewed growth would have
resulted in high incomes (white or black) by the households in non-
agricultural sector than their counterparts. The agricultural land is seen as
the better option by these non-agricultural households for the purpose of
storing the surplus money, speculative trading, tax benefits, social prestige
of land ownership etc. Because of such reasons, these households would
have offered a relatively higher price for buying agricultural land to fulfil
their motives. Hence, we could see the entry of non-agriculturalists in the

buyers’ markets in the total surveyed villages in Maharashtra, especially
during high price-based second sub-period as was seen in the previous
analysis.
6.3.3 Spread Effects

The spread effects of land sale markets and higher prices in villages located
either in urban periphery or highways had caused the rapid rise in prices of
agricultural land in remote villages too. The households, mostly cultiva-
tors who sold their agricultural lands located in the urban periphery and
along the side of highways at higher price or who were compensated heav-
ily for the loss of their land in highway expansion, are left with huge sums
of money. In order to compensate their agricultural land, they buy agricul-
tural lands from remote villages by offering relatively higher prices than
the locally prevailing prices. In this way, their entry into these villages
triggers the local land market and suddenly pushes the land prices up. This
situation was found in all the remote villages surveyed in Maharashtra.
6.3.4 Interplay of Multiple Reasons

The land prices depend on multiple reasons which often interplay each
other in influencing the prices. It was found from the field survey that
there are inter-region, inter-village and intra-village variations in the char-
acter of agricultural land that would influence the prices. Within the same
village, the land located far away from the main road but with good soil
quality, sufficient irrigation, high productivity and higher net annual
returns is priced much lesser than the land located near to road but with
poor soil quality, no irrigation, low productivity and lower net annual
returns.
Within the urban proximate village, the lands facing the urban side of
the village have much higher price than the lands on the other side of the
village. The irrigated and highly productive land in remote villages in
underdeveloped regions have lesser price than land with no irrigation and
low productivity in semi-developed or developed region.
The sale price of the highly productive land owned by the household
that is caught in distressed condition like huge debt or random shocks like
hospitalization and so on, is much lesser than that of households in non-
distressed condition. The purchase price of the household with non-agri-
cultural occupation with high income is much higher than the price by the
agricultural dependent cultivating household.
160 CH. S. RAO
7 Implications of Agricultural Land Sale Markets

and Prices
This section discusses the implications of the land sale markets and higher
prices in terms of various aspects such as changes in buyers’ profile, equity
in access to sale markets, transactions cost, commodification of land, cul-
tivation type and emergence of non-cultivating big land owners.
7.1 Changes in Buyers Profile, Reasons to buy and Equity Issues

As already seen in the earlier discussion in Sects. 5.2 and 6.1.2, the high
price-based second sub-period has witnessed huge changes in the profile
of buyers in the agricultural land sale markets where the area share in total
purchased land by non-cultivators has increased from 38.3 per cent during
low price-based first sub-period to 53.3 per cent during high price-based
second sub-period. Agricultural land is being increasingly bought for non-
cultivating reasons (from 14 per cent during 2001–2009 to 44 per cent
during 2010–2016) such as speculative trading, store of value for surplus
money, tax haven, the prestige of owning more land. These reasons lead
to the rise of commodification of agricultural land in the surveyed villages
in Maharashtra. The commodification-driven high prices for agricultural
land tempt/instigate the land owners to sell off the land to realize other
needs or dreams. This is more when there is increasing opportunity cost of
owning land as there is fast decline in real returns from the land. This situ-
ation was found in all the surveyed villages in Maharashtra.
The sudden and unexpected rise in agricultural land sale prices bene-
fited few sellers who had diversified either by themselves or by their chil-
dren, but caused loss to the households who could not diversify. In the
long run, they are worse off for losing their livelihood-earning property.
7.2 Changes in Transaction Cost and Middle Men

The land sale transaction involves the transaction cost in terms of registra-
tion cost, fee to middlemen (broker), and so on. The registration cost
depends on the rules set by the governments that vary from time to time.
The buyers need to pay stamp duty and registration fee as the percentage
of official unit value of the land as declared by the governments. This offi-
cial declaration of unit value of the agricultural land varies from dry to wet
land and varies across the Districts, Mandals/Tehsils and villages based on
the local market value. It was found in the field survey that the total regis-
tration cost of the agricultural land was approximately 10 per cent of the
official unit value of the land. It is also true that the official unit value of
agricultural land in all the villages in Maharashtra is much lesser than the
actual market price where the transaction is done. The buyers show the
sale/consideration price of the land equal to official unit value, though it
is much higher in real, for the sake of reducing their stamp duty which is
the percentage of the consideration value. Because of ever-increasing land
prices, the governments are also frequently raising the unit value of the
land in all areas; this has increased the registration cost of agricultural land
which was observed in the surveyed villages in Maharashtra.
Generally, land transaction takes place with or without the help of a
third party, that is a middle person who may be either a friend or relative or
known villagers in the non-commercial set up and commission agent (bro-
kers) in commercial set up. Unlike in the past, the current agricultural land
sale markets have been witnessing the emergence of the commission agents
like brokers. This is mainly because of the high land prices and rise of non-
resident and non-cultivating buyer in the land sale markets who face infor-
mation asymmetry problems. Brokers fill up such asymmetry problem.
The results (Table 8.9) show that for the total surveyed villages in
Maharashtra, majority of the agricultural land sale transactions operate
through the non-commercial agents like known villagers and relatives/
friends and the role of commercial commission agents/broker is also sig-
nificant (23.1 per cent) in total transacted area in total surveyed villages
during the total study period. This was mainly because of their greater role
in villages in developed and semi-developed villages where the land is
bought primarily by the non-cultivators. It can be noticed that the role of
brokers has fast increased during high price-based second sub-period.
Table 8.9 Area share of land transacted under different type of middle persons
in Maharashtra (%)
Type of middle person 2001–2009 2010–2016 2001–2016
Broker 13.3 30.8 23.1

Relatives/friends 6.7 3.5 4.9
Known villagers 80 65.7 72
Total 100 100 100

162 CH. S. RAO
It was observed in the field survey that the role of the broker has spread
to land transactions even between the known villagers, especially in high
price-based markets. The brokers also artificially manipulate the land
prices in their favour especially the when there are non-resident buyers and
distressed sellers in the market. They do not reveal the maximum offered
price of the buyers to the sellers and vice versa. To ensure that they do not
land in any trouble, they avoid face-to-face meetings between the buyers
and the sellers. Generally, they charge commission as a percentage of the
total sale value of the land which ranges from 1 per cent to 5 per cent from
both the seller and the buyer. This broker’s commission varies from 1 per
cent to 2 per cent in developed villages and from 2 per cent to 5 per cent
in the semi-developed and underdeveloped villages. Sometimes they also
accept a lumpsum amount depending on their relationship with buyer or
seller. As a result, brokers have earned huge amounts of money in a short
span of time and started buying lands.
7.2.1 Changes in Type of Cultivation of Purchased Land

It is important to understand the type of cultivation of purchased agricul-
tural land, either self or non-self (lease or fallow), especially in the context
of rise in non-cultivators among the buyers.
The results (Table 8.10) show that for the total surveyed villages in
Maharashtra, a large proportion of the purchased land (75.4 per cent) is
self-cultivated during the total study period. But a relatively considerable
share of purchased land is left fallow (7.6 per cent) and very small portion is
leased out (3 per cent). Area share of leased out and fallow land has increased
from first to second sub-period. It is found more in villages of semi-devel-
oped regions and the trend has increased more in second sub-period. The
continuation of these trends will adversely affect the efficiency in use of
Table 8.10 Area share of land purchased under different type of cultivations in
Maharashtra (%)
Cultivation type 2001–2009 2010–2016 2001–2016
Self-cultivation 91.4 60.8 75.4

Lease-out 2.9 13.1 7.6
Left fallow 5.7 26.1 17
Total 100 100 100

purchased agricultural land especially when there are imperfections in lease

market where tenant is not recognized and not provided with state subsidies
like credit, seed, machinery, extension services and so on.
7.3 Emergence of Non-cultivating Big Land Owners

The temptation to sell the agricultural land at higher prices by the small
land owners helped the rich non-cultivators to accumulate the land in
large size during the study period. This pattern was found in the surveyed
villages where at least one or more households (either resident or non-
resident) emerged as biggest land owner/s who are also mostly non-
cultivators. In the case of urban proximate village (V1) in developed
region, a big politician bought more than 50 acres of agricultural land
under the pretext of educational institution, but half of it is left fallow.
Also, few urban households bought about 10 acres along the roadside. In
a remote village (V2) of the same region, two urban households bought
more than 10 acres of land to store their surplus money. In urban proxi-
mate village (V3) in semi-developed region, an industrialist bought more
than 75 acres for a farmhouse. In remote village (V4) of the same region,
a retired government employee from Collectorate office bought more
than 50 acres to store the surplus money. In urban proximate village (V5)
in underdeveloped region, a Trust bought more than 30 acres as a specu-
lative investment. A gold businessman and a professor bought more than
20 acres each as a store of value and speculative investment. In a remote
village (V6) of the same region, few households from other highway side
villages who were compensated for the loss of their lands in highway
expansion and had sold lands at higher prices, have bought more than 15
acres each for the self-cultivation. These trends show that the higher land
prices have either forced or tempted the small farm size households to sell
the agricultural land and helped few households to emerge as big land
owners in every surveyed village in Maharashtra.
8 Conclusion
Compared to the first sub-period (2001–2009), the second sub-period
(2010–2016) witnessed a fast rise in agricultural land prices but slightly
less extent of land sale. The price–income ratio of agricultural land has
increased from 39.4 in the first sub-period to 96.8 in the second sub-
period. The high price-based second sub-period (2010–2016) has also
164 CH. S. RAO
witnessed a sudden rise in buyers with non-cultivating nature whose moti-

vation of buying the land is for non-agricultural purposes and who treat
agricultural land as a non-productive asset like gold to be used for surplus
funds (white or black), speculative trading, tax benefits, etc. On the other
side, among the cultivators, small-size farmers are increasingly selling the
agricultural land whereas big farmers are increasingly buying the agricul-
tural land.
The reasons of selling and buying the agricultural land have varied
widely during this high price period. The sellers are selling more of agri-
cultural land for higher prices, distressed sale, buying property from other
places, especially at the time of increasing opportunity cost of holding
ownership of agricultural land. The expenditure on health and education
remain significant reasons throughout the years. Among buyers, non-
cultivating reasons dominate the conventional reasons. The factors such as
proximity, skewed economic growth with relatively high income to non-
agricultural households, increasing entry of non-cultivators in buyer’s
market, decreasing land–man ratio for agricultural purpose, increasing
ratio for non-agricultural purpose and spread effects contributed to the
rise in agricultural land prices in the remote villages.
This high price period also caused implications on agricultural sector.
The rise of non-cultivating households with the purpose of non-cultivating
reasons resulted in the commodification of agricultural land and rise of
middle persons and the transaction cost. The buyers’ markets are not equi-
table for the small-size farmers and landless poor. The small farmers are
being tempted to sell the land which may be a loss of livelihood-earning
asset in the long term. The purchased agricultural land by the non-culti-
vating households is increasingly either leased out or left fallow, all of
which have implications on efficiency in use of the land. There is also a rise
of big non-cultivating landowners in every surveyed village.
It can be concluded from the above discussion that that agricultural land
sale markets at higher prices in the surveyed villages of Maharashtra are in no
way related to net return from the land and are increasingly pushed by the
non-cultivating households for the purpose of non-cultivating reasons like
store of value for parking the surplus money and speculative trading. This
kind of trends in the operation of markets for the agricultural land in the state
exclude the cultivators who do not have non-farm income from the demand
side of the market but they are confined only on supply side of the market.
The continuation of this trend will have adverse impact on the equity and
inclusiveness in the agriculture in the state where the ownership of agricul-

tural land is slowly moving away from the hands of the cultivators.
Though small, but continuation of these trends poses great challenge
on allocation, equity in access and efficiency in use of agricultural land in
the state. The existing law on restricting the purchase of agricultural land
by the non-agriculturalist seems to be not working because of its circum-
vention, but removing it may open the floodgates of commodification of
agricultural land and related consequences on allocation, equity and effi-
ciency issues as discussed. These is a need for comprehensive approach to
address the agrarian distress with special focus on small farmers, so that
there is a limitation on distressed sale or temptation to sell the agricultural
land which is important not only for livelihood but for security and
credit needs.
Acknowledgement This work is part of ICSSR-sponsored project on “Land

Markets, Rising Agricultural Land Prices and Implications for Agricultural and
Allied Productive Activities: A Comparative Study of Andhra Pradesh and
Maharashtra”.
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CHAPTER 9
Dispossession, Neoliberal Urbanism

and Societal Transformation: Insight into
Rajarhat New Township in West Bengal
Animesh Roy
1 Introduction
A fact that has become a cliché in context of the neoliberal development
in India is that the present form of land-based development largely driven
by private capital under the aegis of the state apparatus is against the wel-
fare and benefit of the farming communities. The most ‘contentious issue’
of development that the country is facing today is ‘land’ and ‘livelihood’
of the dispossessed. The critics and activists, nonetheless, consider the shift
in development paradigm a symbol of ‘the hegemony of predatory neolib-
eral capitalism in the globalised Indian economy’ and an immoral conniv-
ance between the state and the capitalists, where the former promotes an
intrusion of the latter by dispossessing and displacing peasants (Banerjee
and Roy 2007; Nielsen 2010, 146–149). Agricultural land has thus
become a central ‘locus’ of such dispossession in India (Levien 2012) and
many other developing countries including China (Walker 2006) and the
central and southern African countries (Millar 2016; Arrighi et al. 2010),
A. Roy (*)
Giri Institute of Development Studies, Lucknow, India

170 A. ROY
bringing the government and capitalists into conflict and agrarian upris-
ing, popularly dubbed ‘land war’ (Levien 2013, 352).
Since the 1990s, land happens to be a source of perpetual debate and
conflicts between the states and the peasants or the capitalists and the
peasants regionally, nationally (Cernea 1997; Fernandes 2007; Roy 2014;
Sharma 2010), and subsequently globally (Li 2014; Millar 2016; Walker
2006, 2008). Many recent scholarships attempt to emphasise the gravity
and magnitude of these phenomena by phrasing synonymous terms, such
as ‘land grab’ (Li 2011; Levien 2012, 2013), ‘land seizure’ (Walker 2008),
‘land war’ (Levien 2012, 2013) and ‘land rush’ (Millar 2016) which have
explicitly entered the lexicon of contemporary land debate, denoting the
exercise of the ‘eminent domain power’ by the state apparatus to expropri-
ate agricultural land from the farmers involuntarily for increasingly priva-
tised industrial, infrastructural and real estate projects (Levien 2013).
While one strand across the developing countries argue that the disposses-
sion of farmers from agricultural land results in destruction of traditional
livelihoods, deprivation of the property rights and marginalisation (Cernea
1997; Fernandes 2007; Hui and Bao 2013; Millar 2016), the other con-
sider it an engine of oppression that leads to social exclusion, unemploy-
ment, and eventually destitution (Sau 2008; Venkatesan 2011). The
Marxian ‘primitive accumulation’ (1976), and the Harveyian ‘accumula-
tion by dispossession’ (2003)—which is actually a reconstruction and
redeployment of the primitive accumulation within the capitalist countries
of the Global North (Glassman 2006, 608) in a larger sense have also
gained attention in some recent scholarships in the Global South, focusing
on the state-driven dispossession of farmers from their land and liveli-
hoods in India, China and the southern African countries (Whitehead
2003; Walker 2006; Samaddar 2009; Arrighi et al. 2010; Banerjee-Guha
2010; Levien 2012; Dey et al. 2011; Millar 2016). To them, the land
given to the neoliberal capitalist mode of production by the state at a
cheaper rate, by stripping out peasants from their means of subsistence, is
an example of primitive accumulation or accumulation by dispossession as
it facilitates generating profit and wealth. I would, however, here argue
that the land given to the capitalist mode of production at cheaper rate
under the aegis of the state apparatus does not always necessarily lead to
the primitive accumulation, and furthermore, the accumulation by dispos-
session should also be distinguished from the primitive accumulation,
rather than considering the two ‘synonymous’ (as assumed by Arrighi
et al. 2010), keeping their mechanism and outcome in view. Based on a
9 DISPOSSESSION, NEOLIBERAL URBANISM AND SOCIETAL… 171
longitudinal sample survey, this chapter would, however, illuminate these

aspects, keeping the analytical lens focused on Rajarhat in West Bengal
(India) a community development block (CDB) adjoining Kolkata
Metropolis and the Kolkata Airport that lately witnessed the largest dis-
possession of farmers from land (6933.72 acres) and livelihoods during
the prolonged communist rule (June 1977 to April 2011) in the state and
remained unobserved (unlike Singur and Nandigram) by a majority of the
citizenry in the country. Rajarhat was destined to develop a major hub for
Information Technology (IT) parks, business centres, institutions and
dwelling units now recognised as ‘Rajarhat Newtown’. It would, however,
exhibit why a large-scale dispossession of farmers from land for a planned
urban centre (Rajarhat Newtown) adjoining a metropolis (Kolkata) does
not corroborate what generally happened in other development ventures
in faraway rural areas.
The process of proletarianisation that lies at the core of primitive accu-
mulation has long been central to discussions in development studies
(Glassman 2006). However, the notion and suitability of implicating the
Marxian primitive accumulation and the postulation of marginalisation
and destitution in the neoliberal land-based development in several states
in India, especially in West Bengal (see Samaddar 2009 and Dey et al.
2011) where landholdings are highly fragmented with an average land-
holding size of 1.95 acres (Chakravorty 2013; Roy 2016) and the income
from agriculture ‘under WTO rules’ (Harvey 2003, 161) is no more lucra-
tive and substantial (Gupta 2005; Chakravorty 2013), call for a serious
empirical concern and theoretical debate. This is because the extent,
mode, context, purpose, location (adjacent or away from a large city), and
the political economy of dispossession of farmers from land and subse-
quent livelihood opportunities (direct or indirect) vary across states and
the development ventures. In what follows, I portray a brief elaboration
on ‘primitive accumulation’ and ‘accumulation by dispossession’, which
would help comprehend their intelligence and fecundity in West Bengal,
and Rajarhat in particular, in the later part of discussion.
Marx’s primitive accumulation is etymologically connected to the
enactment of the ‘Enclosure Acts’1 in England in the seventeenth and
1
‘Enclosure’ refers to the consolidation of farm land. The British Enclosures Acts removed
the prior rights of peasants to rural land cultivated for generations. The dispossessed peasants
were compensated with an alternative land of smaller scope and inferior quality, and eventu-
ally migrated to manufacturing industrial cities. The lands seized by the acts were then con-
172 A. ROY
early eighteenth centuries that led to the development of large commercial

farms and ‘set free’ a large number of peasants as proletarians and created
a new organisation of classes (Marx 1976, 725) with capitalist class rela-
tions (Walker 2006, 6). It refers to the historical process of creating two
transformations, whereby the social means of subsistence and production
are turned into capital, and the immediate producers are turned into free
wage labourers (Marx 1976, 874). Accumulation by dispossession, on the
other hand, involves various forces of commodification, corporatisation
and privatisation that turn the land and other resources (water, forest, sea
coasts and air) into capital (Harvey 2003, 147). It implies to ‘a panoply of
contemporary forms of dispossession’ (Levien 2012, 938) of private and
common property resources for stock promotions, ponzi schemes, large-
scale agricultural plantations, agribusiness, dams, real estate development,
infrastructure projects, SEZs, slum clearances and privatisation of educa-
tional institutes and other public services (Harvey 2003). It focuses more
on the means (multiple forces) of conversion of resources into capital
(Marx’s first transformation) than the result (Marx’s second transforma-
tion: proletarianisation).
Rajarhat is a ‘fluid and dynamic’ space (Kundu 2016, 94). The spatial
restructuring of the acquired agricultural land into a planned township has
sprung an outburst in socio-economic transformation of the dispossessed
people characterised by a dramatic change in the erstwhile livelihood activ-
ities. The societal complexity deepens with the advent of non-traditional
actors, especially realtors and speculators, of rural land in the post-
acquisition stage, originating a ‘subaltern phase of land conversion’, social
differentiations and rural transformation. This chapter, however, illumi-
nates how a planned township adjoining a metropolis through a large-
scale dispossession of land gives birth to numerous new forms of livelihoods
to the dispossessed households and contravenes the fundamental axiom
(proletarianisation) of primitive accumulation. It also attempts to analyse
how post-acquisition real estate escalation develops a subaltern degree of
conversion of existing land and leads to social differentiations and
inequalities.
solidated into individual and privately owned farms, with large, politically connected farmers
receiving the best land. Often, small landowners could not afford the legal and other associ-
ated costs of enclosure and thus were forced out (see Stromberg 1995 for detail).
2 Data, Sample Design and Methodology

The data and information for this study had primarily been obtained from
a longitudinal sample household survey carried out in two points of time
(2009 and 2016) in two revenue villages of Rajarhat: Rekjuani and
Chandpur-Champagachhi. While Rekjuani is a project- affected revenue
village, Chandpur-Champagachhi is an unaffected revenue village.
The sampling design was planned on the basis of an assumption that
acquisition of agricultural land and its conversion into non-agricultural
land has substantially changed the livelihood and economic status of the
dispossessed households. Because the longitudinal sample survey was con-
ducted in the post-acquisition stage, two different sets (strata) of sample
households were purposively selected. The first set comprised only dispos-
sessed households that lost agricultural land partially or completely in the
acquisition, and the second set (the control samples) included unaffected
farming households that did not lose any land and were engaged in agri-
culture with cropping patterns that resembled those of the dispossessed
households before acquisition. In other words, both sets of samples (dis-
possessed and unaffected farming households) were identical before
acquisition. Until the commencement of the first phase of household sur-
vey, Rekjuani being the top acquisition-torn revenue village in terms of the
magnitude of land loss was chosen for drawing the first set of samples.
However, the control samples were drawn from Chandpur-Champagachhi
revenue village.2 One hundred and seventy-seven households were ran-
domly drawn for the first phase that included 117 dispossessed households
and 60 unaffected farming households. The dispossessed households were
surveyed first, and based on their mean size of landholdings (1.95 acres)
in the pre-acquisition stage, they were grouped into four categories: large
(more than 2.65 acres), medium (1.65 to 2.65 acres), small (0.65 to 1.65
acres) and marginal (less than 0.65 acre) households. Now, to keep the
parity and derive unbiased results, control samples were drawn, such that
the shares of large, medium, small and marginal households in the control
2
Rekjuani was not chosen for drawing control samples because of two reasons. First, only
a handful of farming households, as informed by the sample dispossessed households during
the survey, remained unaffected by acquisition. Second, the unaffected households were
mostly actuated with the speculative rise in land prices caused by the post-acquisition real
estate escalation and sold off their land in part or full. They thus lost the ‘identical character-
istics’, and based on the testimonials of the concerned panchayat prodhan (head), Chandapur-
Champagachhi was selected for drawing control samples.
174 A. ROY
set remained nearly equal in proportion to those of dispossessed house-

holds. Also, in 2016, a third set comprising 104 partially dispossessed
households3 that sold a part or whole of existing agricultural land in the
post-acquisition stage was surveyed and was drawn (through snowball/
referral sampling) from two project-affected revenue villages: Rekjuani
and Patharghata. The rationale behind its inclusion was to excogitate the
impact of the exigency of urban development-driven real estate escalation.
The information of the dispossessed households collected through a
questionnaire-based sample survey was also complemented by observa-
tions and informal discussions with the fellow villagers, and other local key
informants: panchayat members, school teachers and a few government
officials at their homes or tea stalls. T-tests have been used to compare the
economic status of different sample sets in terms of monthly per capita
consumption expenditure (MPCE) in rupees estimated for some selected
food items, education, transportation and other essential stuffs4 at house-
hold. The inflation on MPCE estimated for 2016 had been adjusted with
the consumer price index for West Bengal provided by the Ministry of
Statistics and Programme Implementation. Gini coefficient simplified by
Angus Deaton (1997) has been used to examine the level of inequality in
terms of MPCE between the dispossessed households and farming house-
holds unaffected by acquisition. The simplified formula for the Gini coef-
ficient is:
N +1 2 æ n ö
G= - ç åPi Xi ÷ ,
N - 1 N ( N - 1) u è i =1 ø

3
Third set, to be noted, contains those 18 dispossessed households of the first set that sold
off their existing land after acquisition.
4
The food, other consumable items, education and transport expenses which had been
selected for the estimation of consumption expenditure at household level were: (i) cere-
als—rice, wheat, suji/sewai, bread, muri and other rice product; (ii) pulses—arhar, moong,
masur, soyabean and besan; (iii) milk and milk products—milk, milk powder, curd and but-
ter; (iv) egg, fish and meat; (v) vegetables—potato, onion, carrot, pumpkin, papaya, cauli-
flower, cabbage, leafy vegetables, tomato, capsicum, lemon, garlic and ginger; (vi) fruits—banana,
coconut, guava, orange fruits, litchi, apple, grapes and other citrus fruits; (vii) education—
books, journals, newspapers, stationery, tuition and institution fees; (viii) telephone/mobile,
transport and domestic servants (ix) others—sugar, salt, chillies, tea and coffee, cold bever-
ages, smoking, kerosene and dung cake, LPG and coal, clothes and footwear.
where ‘N’ is the total number of households and ‘u’ is the average per
capita consumption expenditure among the households. Pi is the per cap-
ita consumption expenditure rank ‘P’ of ith household with ‘X’ per capita
consumption expenditure, such that the household with the highest per
capita consumption expenditure receives a rank of 1 and the poorest a rank
of n. The value of Gini coefficient (G) ranges between 0 and 1. Zero cor-
responds to perfect equality (i.e. every household has same per capita con-
sumption expenditure), and one corresponds to perfect inequality.
3 Context: Planned Urban Centre in Rural

Rajarhat, West Bengal
Following the post-liberalisation growth model that de-prioritised agricul-
ture while rendering greater leniency towards a ‘knowledge-based econ-
omy’, in 1993–94, the LFG of West Bengal under the chief ministership
of veteran communist leader Jyoti Basu adopted a bypass approach to
urbanisation, attempting to decongest its only post-colonial metropolis
Kolkata by developing a new planned township on its north-eastern rural
periphery: Rajarhat. The planned township in Rajarhat was destined to be
a new economy of knowledge-based activities, businesses and residential
apartments largely driven by the national and global private capital, and
was officially recognised in 2010 as ‘Rajarhat Newtown’. The master plan
was excogitated for five different purposes, namely IT hubs (6.50 per
cent), new business district (7.60 per cent), residential apartments (50.50
per cent), roads (9.70 per cent) and open space and water bodies (25.70
per cent) over a spatial dimension of 13,343.40 acres. However, the gov-
ernment could acquire only 6933.72 acres of agricultural land from about
15,000 landowners and registered tenants of 26 revenue villages
(Table 9.1). Acquisition, unlike Singur, was not executed at one go, rather
it was attained with a piecemeal, step-by-step method over a span of
16 years between April 1995 and March 2011 (Roy 2016). To eliminate
the potential of speculative appreciation in the market value of land in the
following years, the available sales agreements for 1995 in the locality were
considered as base data for calculation of the market rate with an annual
premium of five per cent for 1996 and thereafter (CAG 2007). The com-
pensation for an acre of land in 1995, regardless of its type and quality, was
rupees (Rs.) 0.32 million. However, in 2003, the rate was revised and
raised to 0.78 million. In 2001, Rajarhat was predominantly inhabited by
176
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Table 9.1 Revenue villages in Rajarhat C.D. block wherefrom land was acquired
Panchayat Project affected Mouza Area acquired Duration in which land Revenue villages
revenue villages J.L. No (acre) acquisition continued unaffected by
acquisition
1. Patharghata 1. Patharghata 36 948.97 2001 to 2009 1. Ganragari

2. Akandakeshari 55 267.59 2003 to 2006 2. Kalikapur
3. Baligari 34 34.61 2002 to 2009 3. Kasinathpur
4. Chakpachuria 33 724.32 1998 to 2006
5. Chapna 35 176.14 2003 to 2011
6. Kadampukur 25 342.265 2002 to 2007
2. Jyangra-Hatiara-II 7. Ghuni 23 473.29 1998 to 2002 —
8. Jatragachhi 24 537.797 1998 to 2005
9. Sulanggari 22 26.83 1998 to 2001
10. Hatiara 14 249.624 1998 to 2002
3. Mohisbathan-II 11. Tarulia 15 157.06 1998 to 1999 —
12. Mohisgot 20 196.77 1995 to 2001
13. Thakdari 19 314.01 1998 to 2002
14. Mohisbathan 18 85.54 1998 to 2003
15. Dhapamanpur 21 42.44 2003 to 2004
4. Rajarhat-Bishnupur-I 16. Rekjuani 13 945.52 1998 to 2003 4. Bhatenda
5. Kalaberia
6. Khamar
5. Chandpur 17. Hudarait 54 n.a. 2006 to 2009# 7. Arbelia
8. Bagdobamachhi
9. Bagu
10. Chandpur-
Champagachhi
11. Jalgachhi
12. Mubarekpur
13. Nawabad
14. Panapukuria
6. Rajarhat-Gopalpur @ 18. Atghara 10 8.581 1996 to 2005 —
19. Chandiberia 15 23.54 1998 to 2000
20. Dashdron 4 n.a. 1998 to 2000#
21. Gopalpur 2 193.95 2000 to 2006
22. Kaikhali 5 1.76 1995 to 2002
23. Krisnapur 17 1.95 1995 to 1999
24. Raigachhi 12 204.02 2000 to 2003
25. Noapara 11 150.466 1998 to 2003
26. Tegharia 9 8.349 1995 to 2002
Total 26 Revenue villages 6933.72 1995 to 2011 14 Revenue villages
Source: WBHIDCO, 2011 and Household Survey, 2009 and 2016

Note: (1) @ – Municipality; (2) n.a. – not available. (3) # – Panchayat/municipality office information
9 DISPOSSESSION, NEOLIBERAL URBANISM AND SOCIETAL…
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178 A. ROY
a rural population (95.37 per cent), whereas in 2011, 52.81 per cent of its
total population was recognised as urban population. The total size of
population also increased from 0.15 million to 0.19 million over the same
time period (Primary Census Abstract 2001 and 2011).
Agriculture was never highly developed in Rajarhat (Roy 2016, 35).
Due to relatively lower location of the cultivable land, and a regular delug-
ing in the rainy season, a major portion of the acquired agricultural land
used to be cultivated by the farmers with two types of paddy, namely aman
and boro successively during the rainy and summer seasons. Only some
dispossessed households could cultivate several vegetables, such as cab-
bage, cauliflower, potato, radish, brinjal, carrot and some leafy vegetables
only on the higher land adjoining their homesteads in the winter season.
Despite being close to the Kolkata metropolis, the majority households
earned their living solely from cultivation before acquisition. The cultiva-
ble land is, however, now almost vanished from the project affected vil-
lages, and is undergoing a utilitarian transformation due to rapid real
estate boom.
4 Land Dispossession and the Changing

Agrarian Status
Agricultural land is the ‘pre-eminent asset’ (Bardhan et al. 2011, 1) to the
farming households. Hence, size of landholdings among the dispossessed
households in the pre-acquisition stage had been considered an important
indicator to assess the agrarian status. While a large proportion of dispos-
sessed households (44.44 per cent) in Rekjuani (Rajarhat), as per our cat-
egorisation, belonged to small farming households in the pre-acquisition
stage, a little more than a quarter and close to one-fifth of sample house-
holds successively reported themselves as medium and large households
with landholding sizes above 1.65 acres (Table 9.2). However, acquisition
of land on a large-scale trimmed down their agrarian status. Nobody
claimed the status of a large or medium farmer in the post-acquisition
stage. In the pre-acquisition stage, no sample household was landless, but
the state-driven acquisition made 81.20 per cent (95) households agricul-
tural landless (completely lost), implying thereby that 18.80 per cent
(117−95 = 22 households) lost their agricultural land partially, and there-
fore, possessed some land after acquisition (Table 9.2). The share of small
farming households also declined substantially while the marginal
Table 9.2 Household size category wise land acquired and change in mean size of landholdings among the dispossessed
households
Category of farming Before acquisition After acquisition
households
Households Land (in acre) Mean size of Land acquired Households Land remaining Mean size of
landholdings (in acre) (in acre) landholdings
(in acre) (in acre)
Large (above 2.65 acres) 22 (18.80) 103.00 (45.17) 4.68 101.17 (44.37) – – –
Medium (1.65–2.65 acres) 31 (26.50) 64.93 (28.47) 2.09 62.12 (27.24) – – –
Small (0.65–1.65 acres) 52 (44.44) 55.04 (24.14) 1.06 52.81 (23.16) 4 (3.42) 5.19 (2.28) 1.30
Marginal (below 0.65 acres) 12 (10.26) 5.05 (2.21) 0.42 4.92 (2.15) 18 (15.38) 1.81 (0.83) 0.10
Sample household without – – – – 95 (81.20) – –
agricultural land
All sample households 117 (100.00) 228.02 (100.00) 1.95 221.02 (96.93) 117 (100.00) 7.00 (3.07) 0.06
Source: Household Survey, 2009

Note: Figures in parentheses indicate per cent of total
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180 A. ROY
households witnessed a marginal increase in share due to a truncation of

all other landholding categories. The average size of landholdings at
household sharply dropped from 1.95 acres to 0.06 acre.
5 Land Dispossession and the Changing

Livelihood of the Dispossessed Households
Alternative livelihood of the affected by acquisition projects has long been
central to the contestation of development ventures on land expropriated
from the farmers. It would, therefore, be crucial to analyse how effectively
dispossessed households of agricultural land in Rajarhat took hold of the
post-acquisition livelihood opportunities under the neoliberal urbanism.
Acquisition of agricultural land on a large scale almost eradicated culti-
vation from the project affected sample village (Rekjuani). Private capital-
intensive urbanisation lodging IT parks, business centres, institutions and
gated multistoried housing colonies in Rajarhat Newtown opened up
diverse employment possibilities. Consequently, the livelihood activities of
the dispossessed households underwent a dramatic transformation in the
post-acquisition stage. In a rapidly changing and urbanising social milieu,
a large section of dispossessed households, regardless of their agrarian sta-
tus in the pre-acquisition stage, established their foothold in non-farm
economic activities (Table 9.3) that include employment as mason, car-
penter, e-rickshaw driver, taxi-driver, conductor, contractor, security
guard, salesman in malls, grill-maker, cycle and motorbike mechanic and
so on. On the other hand, one-third preferred to be engaged in self-
employed activities, which included both petty and flourished businesses.
While the former included vegetables and fruit shops, tea and betel shop,
snacks on the trolley, and small restaurant and grocery shop run mainly by
the small and marginal dispossessed households, the latter comprised gar-
ment shops, mobile and electronic shops, selling and supplying construc-
tion materials (household hardware shop), motorbike service centres,
motorbike and car accessory shops, packaged drinking water plants, real
estate agents and renting out properties. Establishing a foothold in petty
business by the smaller dispossessed households was more of a ‘compul-
sion’ than a ‘priority choice’. Faster pace of urbanisation and changing
market structure with a growing population in the newly constructed mul-
tistoried apartments and their daily demands encouraged them to under-
take these employment opportunities. Working as real estate brokers,
Table 9.3 Landholding size category wise change in prime economic activity of the dispossessed households
Change in prime 2009 2016
economic activity after
acquisition Large Medium Small Marginal Total Large Medium Small Marginal Total
No change in – 1 (3.23) – – 1 (0.85) – – – – –

occupation
Cultivator to 6 (27.27) 10 (32.26) 25 (48.08) 6 (50.00) 47 (40.17) 6 (27.27) 7 (22.58) 24 (46.15) 7 (58.33) 44 (37.61)
non-farm worker
Cultivator to business 9 (40.91) 12 (38.71) 16 (30.77) 2 (16.67) 39 (33.33) 9 (40.91) 13 (41.94) 16 (30.77) 2 (16.67) 40 (34.19)
Cultivator to others 5 (22.73) 6 (19.35) 7 (13.46) 3 (25.00) 21 (17.95) 5 (22.73) 9 (29.03) 10 (19.23) 3 (25.00) 27 (23.08)
(driver, e-rickshaw
driver, conductor,
security guard etc.)
Cultivator to – – 2 (3.85) – 2 (1.71) – – 1 (1.92) – 1 (0.85)
agricultural labourer
Cultivator to jobless – – 1 (1.92) 1 (8.33) 2 (1.71) – – – – –
Cultivation was not a 2 (9.09) 2 (6.45) 1 (1.92) – 5 (4.27) 2 (9.09) 2 (6.45) 1 (1.92) – 5 (4.27)
prime activity in
pre-acquisition stage
Total 22 31 52 12 117 22 31 52 12 117
(100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00)
Source: Household Survey, 2009 and 2016

Note: Figures in parentheses indicate per cent of total
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182 A. ROY
some younger men are making a sound fortune, earning commissions of

2–3 per cent on each sale agreement (Roy 2016; Kundu 2016). The cross-
category analysis, however, brought forth three reservations (Table 9.3).
First, although a section of dispossessed households from each category
chose business as their primary activity in the post-acquisition stage, the
share of dispossessed households belonging to the large category (40.91
per cent) has surpassed all others. Second, the proportion of dispossessed
households engaged in low profile non-farm activities reflected an increas-
ing trend with a decreasing size of landholdings. Third, the share of
medium and small households engaged in business, driving commercial
vehicles (taxis: Ola, Uber and Radio cabs) and e-rickshaws and sentinelling
has increased over time.
Thus far, many global IT giants and corporates have set up their enter-
prises in Rajarhat Newtown to generate profits and accumulate capital,
and a handful are yet to take off. However, the employment generated by
these enterprises (knowledge-based economy) has been hegemonised by
the well-educated and well-skilled workers, the ‘immaterial labour’ who
design programming and simulations, and provide logistics and supply
chain management. No one from the sample dispossessed households suc-
ceeded to take hold of the benefit of such employment avenues. However,
some men and women with low level of education were absorbed as secu-
rity guards. Dey et al. (2011, 237–8) viewed the dispossession of farmers
from their lands in Rajarhat, where the neoliberal urbanism is coinciding
with an increasing market-oriented capitalism, as ‘historically a demon-
strable case of primitive accumulation’ free of protest and repression.
However, I argue that such a proposition was nuanced neither adequately
nor carefully, because the study covered only an unfinished phase of acqui-
sition, and therefore, could not capture the employment possibilities of
urban development. In a recent study, Kundu (2016, 98) contrarily argued
that the various new livelihood activities of the dispossessed households
and their entrepreneurial spirit, an emerging sense of wealth and competi-
tion, and constant efforts to improve one’s property (wealth generation)
have percolated the atmosphere of the project affected villages in Rajarhat.
Now, one should recall here that proletarianisation, which is often viewed
as the most important form of downward social mobility, is an inherent
component of Marx’s ‘two-fold’ elements of primitive accumulation.
However, the present employment scenario of the dispossessed house-
holds in rapidly urbanising Rajarhat in the post-acquisition stage does not
exactly corroborate primitive accumulation.
Because the majority lost agricultural land completely and the land-
holding size among the remainder trimmed down substantially (Table 9.2),
cultivation lost its importance as a staple source of household income. No
dispossessed household reported cultivation as its sole source of income in
the post-acquisition stage (Table 9.4). The restructuring of rural space by
building the Rajarhat Newtown that has opened up various new employ-
ment avenues have led the dispossessed households to diversify their
sources of income to a greater extent. Also, our longitudinal observation
establishes an increasing trend in the share of dispossessed households
earning income from more than two sources over time (Table 9.4). Such
a diversification in economic activities was, as explained by the dispos-
sessed while asking during the second phase of survey in 2016, a conscious
and vehement livelihood strategy to maximise the opportunity and gain in
the newly burgeoning market economy, and to cope with the stresses and
shocks of such a large-scale land loss.
Table 9.4 Sources of household income in the pre- and post-acquisition stage
Sources of household Before acquisition After acquisition After acquisition
income (2009) (2016)
Households Per cent Households Per cent Households Per cent
Cultivation is only source 90 76.92 – – – –

of income
Two sources, cultivation 19 16.24 4 3.42 – –
is one of them
Three or more sources 8 6.84 – – – –
and cultivation is one
of them
Single source but not – – 66 56.41 53 45.30
cultivation
Two sources but – – 30 25.64 47 40.17
cultivation is not among
them
Three or more sources – – 15 12.82 17 14.53
but cultivation is none
of them
No source of income – – 2 1.71 – –
(jobless)
Total households 117 100.00 117 100.00 117 100.00

184 A. ROY
6 Dispossessed Vis-à-Vis Unaffected Farming

Households: A Longitudinal Profile
of Household Consumption
Under the doctrines of neoliberal economy, all major constituent states,

including West Bengal, have promoted market-oriented private capital-
driven development, in which land acquisition has played a central part.
The ability of the states to render land for development activities on a large-
scale has become the most important factor in inter-state competition for
investment (Levien 2012, 946). One strand of scholars (Banerjee-Guha
2010; Arrighi et al. 2010; Samaddar 2009) argue that acquisition of agri-
cultural land for development activities under the neoliberalism strips out
one class (farmers) for another (capitalists) in order to serve the capitalist
class’s interests and leads to accumulation by dispossession or/and primi-
tive accumulation. Guha (2004) and Fernandes (2007) contend that the
dispossessed farmers are not able to establish a foothold on direct or indi-
rect employment opportunities of the development ventures, and are more
likely to be marginalised by losing their means of production. However, all
these scholarships have largely studied those development ventures (e.g.
large dams, highways, mining, thermal plants and industrial enterprises
without a substantial urbanism) that, unlike the Rajarhat Newtown project,
took off in a faraway rural setting without yielding substantial indirect or
direct possibilities for the dispossessed to earn alternative livelihoods.
The two important indicators by which the economic status of a family
or society is well measured are: per capita income and monthly per capita
consumption expenditure (MPCE). However, because getting a correct
figure on total or per capita income of farming households in rural India
is very difficult and also prone to be underreported, the MPCE estimated
for last 30 days from the day of survey in a sample household had been
chosen to analyse the economic status. The quantity of selected food and
other items consumed by a household in this period was multiplied by the
per unit local market price prevailing at the time of survey, and total
monthly consumption expenditure in rupees (Rs.) at each sample house-
hold was estimated. The longitudinal field study, however, shows that the
MPCE of the dispossessed households, by landholding size category, is
greater than that of the farming households unaffected by acquisition for
both the base and latest years (Table 9.5). Although each household cat-
egory of both sample sets has enjoyed an increase in MPCE over the study
period, the incremental rate of the former has exceeded the later, and it is
Table 9.5 Landholding size category-wise MPCE (at real price, base year: 2009)
of dispossessed households and farming households unaffected by acquisition
Sample category Household category Households Mean MPCE (Rs.) Change
(by landholding size) of households (%) in
mean
2009 2016 MPCE
Dispossessed Large 22 (18.80) 1125 1692 50.40

households Medium 31 (26.50) 815 1205 34.67
Small 52 (44.44) 514 720 18.31
Marginal 12 (10.26) 268 293 2.22
All households 117 (100.00) 684 988 27.11
Farming Large 11 (18.33) 846 972 11.20
households Medium 16 (26.67) 796 862 5.87
unaffected by Small 27 (45.00) 502 566 5.69
acquisition Marginal 6 (10.00) 255 272 1.51
All households 60 (100.00) 619 690 6.31

Note: Figures in parentheses indicate percentage of their respective total
Table 9.6 Results of two independent samples T-test on MPCE (Rs.)

Year Sample category N M SD t p
2009: Dispossessed households 117 683.5385 288.23669 1.737 0.008

Phase –I Farming households 60 618.8667 201.43969
unaffected by acquisition
2016: Dispossessed households 117 987.7521 442.60787 4.892 0.001
Phase-II Farming households 60 690.0167 224.8964
unaffected by acquisition
positively related with the size of landholdings. The average incremental

rate of the estimated consumption expenditure of the dispossessed house-
holds has been four times greater than that of the farming households
unaffected by acquisition. The T-test results for two independent samples
establish that the mean MPCE of the dispossessed households is signifi-
cantly greater than the unaffected farming households (Table 9.6). Now,
one could argue that the financial illiteracy and lack of managerial capacity
would lead the dispossessed households to squander the compensation
money in the post-acquisition stage. Chakravorty (2013), however, argues
186 A. ROY
Table 9.7 Simplified Gini coefficient values of MPCE (Rs.) of dispossessed

households and farming households unaffected by acquisition
Year Dispossessed households Farming households unaffected
by acquisition (control sample)
2009: Phase -I 0.23 0.174

2016: Phase- II 0.26 0.175
that the land losers today keep more information and knowledge than
what they had in earlier decades, and the information asymmetries of the
past are now dissolved by the media, civil society organisations and politi-
cal parties. Ghatak et al. (2013) also reported otherwise five years down
the year of acquisition in Singur (2006), where a majority of the dispos-
sessed households deposited the compensation money (though it was
claimed to be undercompensated for a substantial fraction) in the bank
and the interest on it exceeded the loss in crop income, which is indirectly
denotative to the idea of eminent sociologist Dipankar Gupta’s ‘agricul-
ture in the villages today is an economic residue’. The idea of economic
residue is again reinforced by an estimation of Sanjoy Chakravorty in his
outstanding scholarship ‘The Price of Land: Acquisition, Conflict, and
Consequence’, showing a meagre annual income (only Rs. 5472) from an
acre of agricultural land in West Bengal (2013, p. 158. Table A4). The
simplified Gini coefficient values of MPCE among the dispossessed house-
holds for both the base and latest years are, however, larger than that of
the farming households unaffected by acquisition (Table 9.7), which
implicates a higher degree of economic inequality among the former. And
the higher inequality is an effect of the heterogeneity in livelihood activi-
ties of the dispossessed households in the rapidly transforming urban
milieu, leading to varying propensities to consume. The inequality among
the dispossessed households has, however, increased over time while it has
remained almost steady among the control sample.
7 Real Estate Intervention, Changing Land

Market and the Changing Social Scenario
The market liberalisation and privatisation, and the subsequent policy
reforms in 1993–94 by the LFG with a master plan of Rajarhat Newtown
in the north-eastern rural periphery of Kolkata sprouted the speculative
real estate surge.
Rajarhat is a ‘space in transition’ a place which is in the process of trans-

forming from a largely rural and agrarian space to a globalised knowledge-
based urban centre. Rapid urbanisation on agricultural land acquired from
the farmers in the form of a planned township is dramatically changing the
characteristics of rural areas, and the relationship of traditional farmers with
land. Apportionment of plots from the acquired land among the global IT
firms, such as IBM, Genpact, Tech Mahindra, Hindustan Computers
Limited (HCL), Tata Consultancy Services (TCS), Infosys and Wipro, and
the large commercial real estate developers by the LFG to set up their
enterprises and business centres (shopping malls, luxury star hotels, private
hospitals etc.) triggered the subsequent conversion of existing agricultural
land. The development venture on a large scale in the rural periphery has
thus attracted the non-traditional actors such as realtors, speculators and
local housing developers who consider agricultural land to be more con-
sumptive than a productive good. The price of land, as argued by
Chakravorty (2013), is determined by its utility. These actors have led to an
escalation in the existing land price many folds and are purchasing the left-
over agricultural land, particularly from the partially lost households, to
whom agriculture happened to be less of an attractive activity in the post-
acquisition stage due to acquisition-induced downsizing of landholdings.
The data on transactions of agricultural land in the post-acquisition
stage rendered by the partially lost households (sellers) reflects a phenom-
enal increase in land price. In 2004 that immediately followed the comple-
tion of acquisition in Rekjuani, the average price for an acre of agricultural
land was Rs. 6.6 million, which increased to 31.90 million in 2016, a
growth of 383 per cent. To be noted here, in 2003, the total compensa-
tion for an acre of land received by a dispossessed household was only Rs.
0.78 million (Household Survey 2009). This rapid rise in land price in the
post-acquisition stage was, however, an upshot of the master plan to reor-
ganise and transform rural spaces into an urban one—the economic value
of any given piece of land is contingent upon the development ventures in
the vicinity (Morris and Pandey 2009); an increase in demand motored by,
as Chakravorty (2013, 14) argued, the high economic growth in the
2000s; growth in size and income of the middle class (in which implemen-
tation of the sixth pay commission played a central role); availability of the
housing credit;5 and the black money that led to the real estate sector
5
Chakravorty argued that the access to housing credit by the middle class was of para-
mount importance. As recently as the mid-1990s, almost all sales in the housing market bore
cash transactions. A buyer without the necessary cash could not enter the market. However,
since 2000 the credit market in housing grew rapidly and by 2009 it was over 7 per cent of
the country’s GDP.
188 A. ROY
grow faster. Alongside them were the active land market, involvement of
many agents (heterogeneous buyers and sellers, unlike monopsony) and
the up-to-date information about land prices among the farmers. The sud-
den rise in land value in the post-acquisition stage perhaps reached the
‘reservation price’ (Chakravorty 2013, 143) a price at which an owner is
willing to sell that played a catalytic role in actuating partially lost house-
holds to alienate their remaining land, and facilitated capturing its poten-
tial benefits. It is these benefits that made a section of partially lost
households with comparatively larger existing landholdings very prosper-
ous and led to transform their lifestyle completely by constructing syba-
ritic houses and acquiring luxury goods like cars, motorbikes, light
emitting diode (LED) televisions, washing machines, microwaves, and so
on resulting in growing social differentiations within the dispossessed
households which used to be homogeneous to a larger magnitude in the
pre-acquisition stage characterised by the houses with walls mostly made
of mud, bamboo or woods and roofs made of thatch, tin or fired clay tiles
(Roy 2016; Kundu 2016). In other words, the partially lost households
undertook the new opportunities to navigate the post-acquisition land
market, which in turn produced the new forms of social differentiations
and asset inequalities. The unheard-of sums involved in the post-acquisition
land speculation has produced the basis for ‘inequality of a magnitude’
(Levien 2012) that was never possible in rural Rajarhat without the
restructuring of rural spaces into an urban one. The newly established
market economy has brought city life to the dispossessed households.
According to a large dispossessed farmer in Rekjuani, ‘the Newtown proj-
ect has emerged as lotteries (chances of events), whereby many erstwhile
poor farmers with smaller landholdings outside the project have become
owners of mansions, cars and motorbikes’.
Realtors and speculators have turned the erstwhile rural land market in
their favour. 56.08 per cent of the total land plots sold by the partially lost
households had been possessed by the realtors while the speculators pur-
chased a one-third (Table 9.8). However, the former with a wide leeway of
capital and an easy access to financial institutions had mostly purchased the
larger plots (0.33 acre and above). Unlike realtors, speculators act as short-
term owners who buy and sell land to only maximise profit, and to them,
land is less a factor of production than a commodity to be traded. Speculative
buying delivers higher disposable income (Chakravorty 2013). Individuals
had played a little role in the post-acquisition land market in Rajarhat.
More than two-third (67.37 per cent) of the total land sold by partially lost
Table 9.8 Scenario of land parcels purchased by different buyers from partially land lost households between 2004
and 2016
Parcel of Households Land No. of No. of parcels purchased by Land area (acre) purchased by
land (acre) sold land sold parcels
(acre) sold Realtor Per cent Speculator Per cent Individual Per cent Realtor Speculator Individual
Above 0.50 14 19.31 30 24 16.22 6 4.05 – – 15.81 3.5 –

0.33–0.50 24 15.83 35 25 16.89 10 6.76 – – 11.2 4.63 –
0.17–0.33 34 13.19 48 30 20.27 16 10.81 2 1.35 8.76 4.1 0.33
Below 0.17 32 5.45 35 4 2.70 17 11.49 14 9.46 0.46 2.62 2.37
Total 104 53.78 148 83 56.08 49 33.11 16 10.81 36.23 14.85 2.7 (5.02)
(67.37) (27.61)
Source: Household Survey, 2016
Note: (1) Figures in parentheses indicate per cent to total land sold. (2) Categorisation is made by considering the median value (0.42 acre) of the acreage
sold by the partially lost household
189
190 A. ROY
households was purchased by the realtors alone who accumulate capital

through its commodification by developing it with modern infrastructures
and ‘making it available by the ‘square foot’ in a fully capitalist land market’
(Levien 2012, 948). Contrarily, Kundu (2016) discovers that the capital
formation is also visible among a section of affected villagers who are invest-
ing in rental properties as a strategy to establish a foothold in the game of
land and real estate market in Rajarhat. I, therefore, argue that the ongoing
mechanism of commodification, corporatisation and transformation of
non-capitalist means of production (land) into capital through acquisition
of land on a large-scale in Rajarhat may be considered an instance of accu-
mulation by dispossession, not primitive accumulation. This is because the
former intrinsically focuses on the means of conversion of resources into
capital, whereas the latter includes means as well as its result (proletarianisa-
tion) that expands reproduction. The diversified livelihoods of the dispos-
sessed households, and their entrepreneurship in business ventures and
wealth creation in the post-acquisition stage under the neoliberal planned
urbanism does not equate with the Marxian proletarianisation.
8 Conclusion
Dispossession of peasants from the land has long been identified a condition
of successful capitalist development (Arrighi et al. 2010). Over the last two
decades under neoliberalism, the land-based development ventures initiated
by the Indian states in the form of industrial enterprises, new townships and
infrastructure projects have predominantly, unlike the Nehruvian develop-
ment model called ‘modern temple’ (Sharma 2010), been private capital-
intensive. In West Bengal until today, land required for such activities has
mostly come from agriculture which has always been considered a coveted
and preeminent resource substantially shaping the rural livelihood.
The case studied here, however, reveals that acquisition of agricultural
land on a large-scale for the establishment of business hubs, IT parks, institu-
tions and dwelling units in the form of a planned township in Rajarhat
adjoining Kolkata Metropolis has touched off a process of socio-economic
transformation of the dispossessed households, expunging the traditional
mode of production (cultivation) and opening up various livelihood possi-
bilities that include employment as garment shops, mobile and electronic
shops, selling and supplying construction materials (household hardware
shop), motorbike service centres, motorbike and car accessory shops, pack-
aged drinking water plants, real estate agents and renting out properties,
lodge and restaurants, vegetables and fruit shops, tea and betel shops, snacks
on the trolley and grocery shops. Given these possibilities, a substantial pro-
portion of dispossessed households have established their foothold in two or
more economic activities as a conscious and vehement livelihood strategy to
maximise the opportunities in the burgeoning urban market as a process of
economic change. In terms of MPCE, the dispossessed households are found
to be significantly better-off compared to the farming households unaffected
by acquisition. However, the magnitude of inequality is greater among the
former, in which diversified livelihood activities play a central role.
The real estate driven speculative land value and unprecedented sums
involved in the post-acquisition land transactions catalyse the partially lost
households to sell off their remaining land and help capture the potential
benefits. In other words, the partially lost households get hold of new
opportunities to navigate the active land market after acquisition, which in
turn produces new forms of social differentiations and asset inequalities
among the dispossessed households. Accumulation of capital by the real
estate and corporate in Rajarhat is about commoditising agricultural land
as an object of financial investment and speculation, not the exploitation
of labour force of dispossessed households. The diverse livelihood activi-
ties and ‘entrepreneurial spirit’ (Kundu 2016) of dispossessed households,
especially in business ventures in Rajarhat in the post-acquisition stage,
therefore, do not corroborate the Marxian ‘proletarianization’ and nullify
an instance to be considered primitive accumulation. This chapter, how-
ever, does not attempt to freeze off the merit of ‘primitive accumulation’
under the neoliberalism. Instead, it argues that not all capital-intensive
development ventures on land acquired from the farmers in India lead to
primitive accumulation, especially a large geographical space acquired for
and destined to a planned urban centre adjoining a large city that emerges
as a potential genitor of various non-farm employment possibilities for the
dispossessed households in a process of economic change and helps raise
household income (Roy 2016) and consumption.
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CHAPTER 10
Land, Labour and Industrialisation in Rural

and Urban Areas: A Case Study of Reliance
SEZ in Gujarat
Amita Shah, Aditi Patil, and Dipak Nandani
1 The Context

The question of access and use of land, specifically for industries, in rural
and semi-urban areas has taken a major shift within the rapidly changing
socio-economic, political and demographic context. After all, land, as a
key resource, becomes unquestionable, working simultaneously on
demand as well as supply side. It is often argued that the post-reform
period has started shifting the attention of Indian industries, especially in
the organised sector to focus more on exports, perhaps at the cost of pro-
moting industries for domestic demand, which continues to grow given
the country’s large and increasing population (Papola 2013). The analysis,
therefore, argues that industrial growth needs to be supported keeping in
mind the increasing demand within the changing economic process, and
thereby creating new demand. This calls for a policy environment that
facilitates industries in becoming globally competitive and sustainable, as
well as profitable. The creation of Special Economic Zones (SEZs) was an
A. Shah (*) • A. Patil • D. Nandani

Gujarat Institute of Development Research, Ahmedabad, India

196 A. SHAH ET AL.
essential part of this process to facilitate competitiveness. It is expected

that the SEZs will induce growth, augment exports and create much
needed employment.
There are a number of questions that are often raised regarding both
the analytical approach and measurement of impacts, such as what was the
initial rationale behind setting up SEZs, how have the SEZs impacted the
economy and the people, where do they stand in terms of their cost and
benefit to the country at macro as well as micro level, and have they actu-
ally achieved the objectives with which they were set up. This chapter tries
to address some of these issues through secondary evidence and a case
study of Jamnagar Reliance SEZ in Gujarat. The first section is devoted to
a review of SEZs and the land issue at a macro level, and the second sec-
tion presents the findings of a quick resurvey of Reliance SEZ at Jamnagar,
on the people whose land was acquired, to assess the impact of SEZs on
people and their livelihoods (Shah and Kashyap 1989). The resurvey also
compares the findings with an earlier survey conducted by the author
approximately a decade ago. It will help to clarify the changes that have
taken place in the lives of people over time and the kind of impact such a
strategy makes in the long run (over a period of about 10 years).
2 Morphology of SEZs in India

The predecessors of SEZs, the Export Promotion Zones (EPZs) have
existed in India since 1965, when the first EPZ was established in Kandla,
Gujarat. Subsequently, six more EPZs, namely Santacruz EPZ (set up in
1973), was followed by Noida EPZ, Falta (West Bengal) EPZ, Cochin
EPZ and Chennai EPZ, all set up in 1984. Vishakhapatnam, the last of the
six EPZs was set up in 1989. Following the first SEZ Policy 2000, 12
SEZs were established between 2000 and 2005. However, from 2000 to
2006, the SEZs functioned under the provisions of the Foreign Trade
Policy.1 The website of the Ministry of Commerce and Industries,
Government of India, on SEZs states that ‘With a view to overcome the
shortcomings experienced on account of the multiplicity of controls and
1
Special Economic Zone (SEZ) is defined in the Foreign Trade Policy (2003) of India as
‘a specifically delineated duty free enclave and shall be deemed to be foreign territory for the
purpose of trade operations and duties and tariffs’. The Comptroller and Auditor General of
India defines the SEZs as ‘A Special Economic Zone is a geographical region within a Nation
State in which a distinct legal frame-work provides for more liberal economic policies and
governance arrangements than prevail in the country at large’ (CAG 2014, p. 1).
10 LAND, LABOUR AND INDUSTRIALISATION IN RURAL AND URBAN AREAS… 197
clearances; absence of world-class infrastructure, and an unstable fiscal

regime and with a view to attract larger foreign investments in India, the
SEZs Policy was announced in April 2000…’. Thus, the main idea behind
creating SEZs was to push economic growth by supporting industry to
face global competition. To further streamline the development of SEZs,
The SEZ Act, 2005 was passed by Parliament in May 2005, and, sup-
ported by SEZ Rules, it came into effect on 10 February 2006.
The major objectives of the SEZ Act were: (i) generation of additional
economic activity; (ii) promotion of exports of goods and services; (iii) pro-
motion of investment from domestic and foreign sources; (iv) creation of
employment opportunities; and (e) development of infrastructure facilities.
It intended to facilitate a hassle-free business environment and an array
of concessions and benefits that were not available to the industries out-
side the SEZs (for details on concessions and benefits see Annexure 1).
SEZs have been classified into four categories, depending upon their size
and product mix, with the smallest SEZ measuring 10 hectares and the
largest 5000 hectares (see Annexure 2 for details).
As per the Fact Sheet on SEZs in India, published by the Ministry of
Commerce and Industries, Government of India, dated 7 September 2017,
formal approval was accorded to 424 SEZs of which 374 were notified and
222 were operational as on 30 June 2017. In addition, 31 in-principle
approvals for setting up SEZs were also granted by this date, as well as
approval for 4643 units that are operating in various SEZs. The invest-
ments in SEZs grew from Rs. 4035.51 crore in February 2006 to Rs.
4,33,142 crore in June 2017, an over 106-fold increase. The correspond-
ing figures for employment were 1,34,704 people in 2006 and 17,78,851
people in 2017, a growth of over 12-fold in approximately 11 years.
Similarly, the export figures for 2006–07 were Rs. 34,615 crore, which
grew to Rs. 5,23,637 crore in 2016–17, an impressive growth of over
15-fold (for details, see Annexure 3). However, such a sterling performance
of SEZs has been challenged in the past. Therefore, there is reason to view
the information presented in the Fact Sheet with a degree of scepticism.2
2
While the claims of the government as per the Fact Sheet are impressive, such optimism
has been challenged by the Comptroller and Auditor General of India in its Report on SEZs
presented to Parliament in 2014. The report mentions, ‘Though the objective of the SEZ
and the fact sheet on … its performance claimed large scale employment generation, invest-
ment, exports and economic growth, however, the trends of the national databases … on
economic growth of the country, trade, infrastructure, investment, employment, etc. do not
indicate any impact of the functioning of the SEZs’ (p. 10).
198 A. SHAH ET AL.
Currently, the total area under the formally approved SEZs is

49,204.0283 hectares, of which Gujarat SEZs are spread over 15,417
hectares, which is a 31.33 per cent area of the country covered under
SEZs, despite the fact that it accommodates only 28 SEZs compared to,
for example, Maharashtra that owns 57 SEZs or Telangana with 64 SEZs
where the corresponding land under SEZs is only 13.70 per cent and 3 63
per cent respectively. This indicates that the SEZs particularly in Telangana
are very small in size, as reflected by their composition. In all, 49 of the 64
SEZs pertain to IT/ITES (see Table 10.1). The other major states in
terms of land mass under the SEZs are Andhra Pradesh (21.51 per cent),
Karnataka (5.57 per cent), Tamil Nadu (9.04 per cent), Odisha (3.70 per
cent), Madhya Pradesh (3.24 per cent), Kerala (2.10 per cent) and Uttar
Pradesh (1.31 per cent). Sectorally, IT/ITES dominates the distribution
with 254 SEZs (59.90 per cent) followed by multi-products/services and
electronics, 26 (6.13 per cent) each, biotechnology (5.42 per cent), engi-
neering (3.07 per cent) and Textiles (1.65 per cent). The remaining
approximately 14 per cent belongs to the Others category, with 60 SEZs.
One observation that could be made is that the average size of the multi-
products SEZs is quite large compared to any other sector.
3 The Land Question and the SEZs

The government is creating SEZs across the country to provide ‘world
class infrastructure’, in addition to a range of incentives to give them a
competitive edge over their global rivals. Since it is difficult for govern-
ment to accomplish this task at such a large scale and in a short period of
time, it invites collaboration from the private sector. However, the private
sector demands its ‘pound of flesh’ in terms of various facilities, conces-
sions and subsidies to establish such SEZs.
To create these SEZs, land is being acquired from agricultural areas,
forests or coastal fishing zones, at times located near big cities or commu-
nication networks, in semi-rural areas, in the outer peripheries of metro-
politan regions, green zones and even defence land (see Table 10.2).
In the process of creating these SEZs, a large number of people such as
farmers, agricultural labourers, fisherfolk and allied workers, whose living
Table 10.1 State-wise area under SEZs across sectors in India: 2017
Sr. State Size of area under SEZs Percentage share of major sectors
No.
Total area %age IT/ITES Biotech Pharma- Textiles Multi-product/ Engineering Electronics Others Total
in hectares ceuticals Services
1 Andhra Pradesh 10584.804 21.51 0.73 (5) 0.51(3) 5.32 (4) 5.99 (2) 73.30 (7) – – 14.16 (9) 100 (30)
2 Chandigarh 58.4566 0.12 46.12 (1) – – – – – 53.88 (1) – 100 (02)
3 Chhattisgarh 111.77 0.23 9.64 (1) – – – – – – 90.36 (1) 100 (02)
4 Delhi 27.25 0.06 38.61 (1) – – – – – – 61.39 (1) 100 (02)
5 Goa 369.98 0.75 44.51 (3) 18.60 (2) 33.3 (1) – – – – 3.59 (1) 100 (07)
6 Gujarat 15417.42 31.33 1.37 (9) 0.10 (1) 3.12 (4) 0.25 (1) 86.76 (5) 1.67 (2) 0.07 (1) 6.67 (5) 100 (28)
7 Haryana 401.1797 0.82 84.46 (20) 3.76 (1) – – – – 2.75 (1) 9.03 (2) 100 (24)
8 Jharkhand 36.00 0.07 – – – – – 100 (1) – – 100 (01)
9 Karnataka 2740.56 5.57 34.70 (47) 2.08 (3) 10.26 (1) 8.51 (1) 21.46 (1) 9.46 (1) 6.02 (6) 7.51 (2) 100 (62)
10 Kerala 1030.9861 2.10 43.20 (21) – – – – – 1.18 (1) 55.62 (7) 100 (29)
11 Madhya Pradesh 1594.00 3.24 16.51 (8) – – – 82.8 (1) – – 0.69 (1) 100 (10)
12 Maharashtra 6740.660 13.70 15.5 (31) 1.28 (5) 4.16 (3) – 62.29 (6) 3.25 (2) 1.12 (3) 12.39 (7) 100 (57)
13 Manipur 10.85 0.02 100.00 (1) – – – – – – – 100 (01)
14 Nagaland 340 0.69 – – – – 85.29 (1) – – 14.71 (1) 100 (02)
15 Odisha 1820.61 3.70 10.90 (3) – – – 64.43 (1) 5.56 (1) – 19.11 (2) 100 (07)
16 Pondicherry 346 0.70 – – – – 100 (I) – – – 100 (01)
17 Punjab 93.71 0.19 54.23 (3) – 34.15 (1) – – – 11.62 (1) – 100 (05)
18 Rajasthan 443.2605 0.90 20.81 (4) – – 20.81 (1) – 23.54 (1) 6.77 (2) 25.55 (1) 100 (09)
19 Tamil Nadu 4448.89 9.04 18.26 (23) 0.39 (1) 2.28 (1) 25.66 (2) 14.76 (4) 11.58 (6) 27.08 (13) 100 (50)
20 Telangana 1786.57 3.63 59.06 (49) 6.47 (7) 5.66 (1) – – 6.72 (1) 0.63 (2) 21.46 (4) 100 (64)
21 Uttar Pradesh 646.98 1.31 43.96 (17) – – 7.85 (1) 16.02 (1) – 6.31 (2) 25.86 (3) 100 (24)
22 West Bengal 154.09 0.31 100 (7) – – – – – – – 100 (07)
All India % of 49204.0283 100.00 254∗ 23∗ 15∗ 7∗ (1.65%) 26∗ (6.13%) 13∗ (3.07%) 26∗ 60 (14.15%) 100 (424∗)
SEZs (59.90%) (5.42%) (3.54%) (6.13%)
10 LAND, LABOUR AND INDUSTRIALISATION IN RURAL AND URBAN AREAS…
Source: Based on ‘Formal approvals granted in the Board of Approvals after coming into force of SEZ Rules as on 07.09.2017’ (∗No. of SEZs) http://www.sezindia.
nic.in/writereaddata/pdf/ListofFormalapprovals.pdf
199
200 A. SHAH ET AL.
Table 10.2 Acquisition of restricted land for SEZ in the various states
Nature of land State Area of land (in hectares) % of restricted
land notified
Notified as Under the restricted as SEZ
SEZ category
Defence land Andhra Pradesh 80.93 29.54 36.5

Forest land Andhra Pradesh 331.97 331.97 100
West Bengal 36.42 21.93 60.19
Irrigated land Andhra Pradesh 3587.38 2556.14 71.25
Green zone Maharashtra 10.03 10.03 100.00
Total 4046.73 2949.61 72.89%
Source: Based on the CAG Report (2014)
is closely tied with these parcels of land, are displaced and lose their liveli-
hoods. This has often led to fierce resistance movements in different parts
of the country and resultant state atrocities and violence (Swapna Banerjee-
Guha 2008, Shah 2013). People in Nandigram and Singur in West Bengal
and Goa and Karnataka have protested against the acquisition of agricul-
tural land, inappropriate compensation and environmental impact. Large
tracts of agricultural land in Maharashtra, Odisha, Punjab, Haryana,
Gujarat, Kerala and West Bengal (including multiple cropped lands) have
been acquired/earmarked for SEZs. It is sometimes argued that primarily
wasteland under the control of government is being earmarked for SEZs.
But the acquisition of wastelands (India contains 55.2 million hectares of
wasteland) is also not without negative consequences for the poor. The
acquired land can be land with scrub, grazing land, pasture or land on
which shifting cultivation is carried out. And the poorest and most mar-
ginalised people depend on these lands for their survival. Hence, there is
much resistance against land acquisition, to safeguard the livelihoods of
thousands of hapless poor inhabiting the areas earmarked for SEZs
(Shah 2001).
Since it is not easy to acquire large tracts of land through market-driven
negotiations, capitalists insist that the government should acquire land
and hand it over to them. The government, because of its policy commit-
ments, or sometimes in collusion with the capitalists, in turn, acquires land
at rates far below market price and gives it to the private parties to develop
SEZs. Land acquired for a ‘public purpose’ can thus be used to build
luxury housing, golf courses, hotels, and shopping malls, using loopholes
in the Act. As per the SEZ Act 2005, as much as 50 per cent of land ear-
marked for an SEZ can be used for such purposes (see Annexure II). SEZs
thus complete the transition to a tyrant land broker state in which the
chief economic function of state governments is to acquire land at a sub-
market rate and allot it to the businesspeople at nominal rates for unre-
stricted private capital accumulation (see Sud 2009, 2012; Goldman 2011;
Levien 2011). In turn, capitalists become rentiers and make huge profits
in collusion with the government. SEZs therefore have come to symbolise
a pro-corporate, anti-people, anti-labour model of industrialisation
(Banerjee 2006; Nielsen 2010; Roy 2007). Naturally, people raise their
voices against this kind of unjust uprooting of their lives and livelihoods.
This resistance culminated in a number of protests, violent agitations, dis-
placement, untold miseries and even deaths of peasants and the poor in
several parts of the country, an issue we discuss later.
Since colonial rule, the Land Acquisition Act 1894 was used as an
instrument to acquire land for public use without the owner’s consent
(Morris and Pandey 2007), until the Compensation and Transparency in
Land Acquisition, Rehabilitation and Resettlement Act (RTFCATILARR
Act) came into force in 2013.3 However, there were only a few protests
against the acquisition of land. This was primarily because the land was
acquired for a genuine public purpose (though ill-defined) wherein the
ownership was retained by the government. For example, the acquisition
of land for a number of public sector undertakings did not evoke any seri-
ous protests. However, it is possible that there is another angle to the
recent upsurge against the acquisition of land for SEZs. Now the agricul-
tural land is being acquired, displacing numerous farmers and others
whose livelihoods are associated with the land, and being given to indus-
tries/businesspeople for profit. As a consequence, SEZs have become the
3
In September 2013 a new Act, namely the Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act (RTFCATILARR Act), came into force.
The government claimed that this Act gives voice to the people as it has significant participa-
tion of Panchayats. The new Act was claimed to ensure equitable compensation and fair
resettlement and rehabilitation of farmers and land owners. However, despite this Act, as we
will see later, almost nothing has changed on the ground. Now there is a move to amend this
Act to facilitate the acquisition of land for SEZs and thus for the profiteering of the private
sector. On 31 December 2014, the newly elected union government promulgated an ordi-
nance1 to amend the Act. However, given its lack of majority in the Rajya Sabha, it has, as of
now, been unable to pass the bill through Parliament, but to date the ordinance’s amend-
ments stand.
202 A. SHAH ET AL.
hub of ‘land wars’ across India, with farmers resisting the state’s tyranny
and forcible transfer of their land to capitalists (Levien 2012; Jenkins
et al. 2015).
This phenomenon has also been conceptualised by Harvey (2005,
2006) as ‘accumulation by dispossession’. What happens under ‘accumu-
lation by dispossession’ is that the government releases a set of assets at
very low (and in some instances zero) cost to capitalists, in the name of
development (e.g. creation of SEZs). ‘Over-accumulated capital can seize
hold of such assets and immediately turn them to profitable use’ (Harvey
2003, p. 149). “This concept of ABD would apply to the vast majority of
what are now called ‘land grabs’. After all, it only makes sense to talk
about a ‘grab’ when land is expropriated using means other than voluntary
market purchases. “When sellers are unwilling, or where possession or use
is not accompanied by recognized legal ownership (such as with govern-
ment land or commons), land can typically only be alienated to capital
with the backing of the state, though it might also be done by other agents
capable of exercising coercion – mafias, hired thugs, paramilitaries or rural
elites…” (Levien 2012, p. 941).4
4
In a study of the Mahindra World City SEZ, a multi-purpose ‘integrated industrial city’
25 km from Jaipur, which is supposed to include the largest IT-SEZ in India, Levien (2012)
demonstrated how the whole process of profiteering operates with the collusion of the gov-
ernment. He writes, “To facilitate this project by the real estate subsidiary of the $7 billion
Mahindra and Mahindra Company in partnership with RIICO, the Rajasthan government
(through the Jaipur Development Authority) acquired 3000 acres of land in 9 villages, of
which 2000 acres area was privately owned farmland and 1000 acres was common grazing
land (officially owned by the government). As government land, the latter was transferred to
the company with no compensation to the surrounding villages that were highly dependent
on the livestock economy it supported. The private land, under a special Rajasthan state
policy, was compensated by awarding farmers small developed plots of land next to the SEZ
totalling one quarter the size of their original land, thus giving them a small stake in the
inevitable real estate appreciation. This did not create a ‘negotiated’ consensus around a ‘fair
deal’, aside from some political elites, farmers were anyway not consulted.” (p. 946)
“Once enough industry is up and running, Mahindra will create luxury residential town-
ships – in what they call the “Lifestyle Zone” – on about 40 per cent of the area. But it must
be remembered that the SEZ developer is a state-appointed rentier and receives it’s land via
dispossession rather than the market, which makes its land artificially cheap.” (p. 947)
“Using documents obtained through the Right to Information Act and interviews with
Mahindra officials, I have attempted to calculate this rate for the MWC. If we group together
the state and private land, the average price paid by Mahindra to the state government
(including administrative fees for acquisition) was $22,679 per acre. Mahindra officials told
me that their development costs were $66,000 per acre (to build “world-class infrastruc-
ture”) and they are currently selling industrial land for $55 per sq. meter or $224,000/acre.
4 Performance of SEZs: The Unfulfilled Promises

The 130-page Report Number 21 of 2014 of the Comptroller and Auditor
General of India (CAG) on Performance of Special Economic Zones
(SEZs) was tabled in Parliament on 28 November 2014.5 The CAG
Report opened a can of worms and exposed the mismanagement, to put it
mildly, in the implementation of SEZ Policy (CAG 2014). A major finding
of the report is that the actual gains from SEZs are far short of the pro-
jected gains in terms of all quantitative indicators of performance, namely
employment (ranging from 65.95 to 96.58 per cent); investment (23.98
to 74.92 per cent); land use in processing area SEZs (31 to 93 per cent);
overall operational land (38 per cent); exports (46.16 to 93.81 per cent);
and net foreign exchange earnings (39 to 109 per cent), irrespective of the
figures given by the government (and described above) (see Table 10.3).
Moreover, in a scathing attack on the nexus between the government and
the private sector players, the Report states that ‘Many tracts of lands were
acquired invoking the “public purpose” clause. Thus, land acquired was
Table 10.3 Targets of SEZs and shortfalls

Head Projected Actual Difference Shortfall %
Employment 3,917,677 284,785 3,632,892 92.7

Investment (in Rs crore) 194,663 80,176 114,486 58.8
Exports (in Rs crore) 395,547 100,580 294,968 74.6
Source: Based on CAG Report (2014)
This makes for a profit of $135,000 per acre for industrial land parcels; it will be many times
greater when they start developing more expensive residential space.” (p. 947–48)
“If we take as a benchmark for the latter the $137 per sq. m (or $554,420 per acre) rate
for residential plots in the nearby Jaipur Greens housing development just adjacent to the
SEZ (which itself should rise over time as the SEZ develops), then the profit will ultimately
be over $465,000 per acre in this section of the project. We can say, then, that the rate of
accumulation by dispossession (the ratio of the final sale price of the land to its cost of acqui-
sition and development multiplied by 100) will be 253 per cent on the industrial land and
625 present on the residential land, or a simple average rate of 439 per cent’ (Levien 2012,
pp. 946–948).” (p. 948)
5
The CAG analysed a representative sample of 187 developers and 574 SEZ units spread
across 13 states (Andhra Pradesh, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh,
Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, and West Bengal) and
the union territory of Chandigarh for the period 2012–13.
204 A. SHAH ET AL.
not serving the objectives of the SEZ Act … Acquisition of land from the
public by the government is proving to be a major transfer of wealth from
the rural populace to the corporate world’ (CAG 2014, Chapter IV, p. 35).
‘It was observed in the audit that SEZ sectors were converted into resi-
dential as well as industrial sectors. With the conversion of zoning plan,
the implementation of SEZ was adversely affected’, it added (CAG
2014, p. 43).
On the issue of tax administration, CAG said: ‘Our review of the tax
assessments indicated several instances of extending in-eligible exemptions
to the tune of Rs 1,150.06 crore and systemic weaknesses in direct and
indirect tax administration to the tune of Rs 27,130.98 crore’ (p. 54).
Further, it added that ‘Tax concessions to SEZs for the period 2007 to
2013 works out to Rs 83,104 crore on account of direct taxes and cus-
toms’ (p. 54) that could have accrued to government had companies been
brought out of the SEZs. The Report stated that in terms of area of land,
out of 39, 245.56 hectares notified in the six states (Andhra Pradesh,
Gujarat, Karnataka, Maharashtra, Odisha, and West Bengal), 5402.22
hectares (14 per cent) were de-notified and diverted for commercial pur-
poses in several cases. It also added that 52 per cent of the land approved
for allotment to SEZs remains idle and SEZs have not had any significant
impact on economic growth, trade, infrastructure, investment or employ-
ment (p. 48).
Overall, the report raised a number of questions on the dynamics of
promoting SEZs in India. In addition to the CAG Report that looks at the
implementation of the SEZ Act, several researchers have also raised some
important issues that need to be highlighted. For example, Mitra (2006)
and Bhaduri (2007) argue that SEZs may lead to higher returns to private
capital, but not to a concomitant increase in real wages and personal
incomes of the poor. They do not necessarily ensure equitable growth.
The question remains: Growth for whom? A survey of the workers in
SEZs conducted by Sen and Dasgupta (2008) found that they work 5.3
per cent more hours than those in non-SEZs and their hourly wages are
34 per cent lower than outside the SEZs. To facilitate this, SEZs are
declared as ‘public utility services’ with several exemptions from the labour
laws, including the Minimum Wages Act and the Contract Labour
(Regulation and Abolition) Act, and where strikes will also be made ille-
gal. We are going the Chinese way where the workers are exposed to all
sorts of exploitation and much longer hours of work without being com-
pensated for those extra hours (see Hsing 2006, 2010; Walker 2006).
Earlier attempts to push industrial growth in rural areas with an objective
of integrating agricultural workers with rural industries unfortunately did
not work, mainly due to lack of expected outcomes on one hand and lack
of socio-political commitment on the other. It is important to highlight
this finding because the process of SEZ appears to be facing similar issues.
It appears that nothing has gone right with the SEZ policies and strate-
gies of the Government of India. In all the above studies, it has been
assumed that only the government acquires land at sub-market rates and
hands it over to the private sector. The private sector in turn makes a kill-
ing by treating it as a real estate project and, in some cases, getting it de-
notified for this purpose, at a later date. This has also been amply
substantiated by the CAG Report discussed above. We would like to con-
test these assumptions in what follows, by presenting our case study on
Reliance SEZ in Jamnagar, even if it could be an exception. Whereas a
large number of studies have brought forth fairly negative outcomes from
a large number of SEZs, we feel that the scenario could shift if appropriate
policies were crafted and implemented in earnest, keeping in mind new
avenues of creating employment and addressing the woes of the dispos-
sessed people. There have been cases where SEZs have created some posi-
tive and sometimes mixed results for the working population and perhaps
opened up new opportunities for the local population.
5 Findings from a Field Re-survey: A Study

of Reliance SEZ in Jamnagar
The Jamnagar Refinery is a private sector crude oil refinery owned by

Reliance Industries in Jamnagar, Gujarat. It was commissioned on 14 July
1999 with an installed capacity of 668,000 barrels per day (106,200 m3/d);
built over 3000 hectares of land. It is currently the largest refinery in the
world. Since they wanted to expand their capacity, Reliance requested the
Government of India to permit them to set up an SEZ for this purpose.
The government notified the SEZ in 2006, in Lalpur Taluka of Jamnagar.
Reliance started acquiring the land in the earmarked area consisting of five
villages, namely Kanalus, Derachikri, Navagam, Kanachhikri, and Padana
206 A. SHAH ET AL.
in Lalpur. They needed 5000 hectares of land, 4494 hectares of which

they acquired by 2008. The entire acquisition was completed in 18
months. On 25 December 2008, Reliance Petroleum Limited (RPL)
announced the commissioning of its second phase of crude oil refining
facilities in the SEZ in Jamnagar. The completion of the RPL refinery has
enabled Jamnagar to emerge as a ‘Refinery Hub’, housing the world’s
largest refining complex with an aggregate refining capacity of 1.24 mil-
lion barrels (197,000 m3) of oil per day, more than any other single loca-
tion in the world. It employs close to 35,000 workers and its exports
account for 56 per cent of the total exports from SEZs.
5.1 Why Did We Study the Jamnagar SEZ?

The case of land acquisition in Jamnagar SEZ is somewhat different than
the other SEZs in the country in that (i) it was a private sector acquisition,
without direct support of the government; (ii) the compensation for land
was based on the negotiated market prices6; and (iii) there were no plans
to utilise the acquired land for real estate purposes, as this SEZ still needs
more land to meet its requirement. Of course, it has developed its town-
ship for its own workers. Therefore, the theoretical construct of ‘accumu-
lation by dispossession’ does not apply in this case. This makes Reliance
SEZ at Jamnagar somewhat interesting and different, which motivated us
to study it in detail to understand the process of land acquisition directly
6
‘Nowhere have farmers had it so good as Jamnagar where many have fixed deals for as
high as Rs. 3.09 lakh per 2.5 acre for non-irrigated land and Rs. 4.06 lakh per 2.5 acre for
irrigated land with Reliance Industries Limited’, wrote the Times of India in its 31 March
2007 issue. Amidst this scenario, construction work at Reliance’s Jamnagar SEZ is steadily
progressing with 65,000 workers on the job at 11,000 acres proposed SEZ site and with
majority of land already acquired. This is possible only in Gujarat and Jamnagar’s people
demonstrate farmers of Jamnagar shows the way for it.”
“It is pertinent to note that the whole lot of private land is acquired for Jamnagar SEZ
through consent only and no government agency was involved in the process of consent;
except at the stage of declaration of ‘consent award’.”
“To quote the Times of India again in order to conclude: ‘the smarter among the farmers
are pumping the compensation amount into buying huge tracts of land around the new SEZ
limits to cash in on future expansion of SEZ. Others have bought LCVs, dumpers, JCBs, taxis and
have leased them to RIL’.”
(Note by Mr. Parimal Nathwani, Group President, Corporate Affairs, Reliance Industries
Ltd., Undated)
by the private sector (without government support), on negotiated mar-

ket price and with the consent of the sellers, and its overall impact on
people. However, as a caveat, it may be mentioned that 12 landowners/
farmers have gone to the High Court against the acquisition of their land
and the case is still going on.7
5.2 Why Re-survey?
A study of the Jamnagar SEZ was conducted by the main author in
2008–09.8 It may be noted that the time gap between the acquisition of
land and the earlier survey was negligible. While it had the advantage of
almost no memory gap among the respondents, the biases were also fresh
and strong in their minds, both positive and negative. Most of them had
just received the compensation and had yet to firm up their plans for
investment. However, a few of those people who had sold their land early
did utilise their compensation. Keeping all this in view, the study observed
that ‘…the scenario of SEZs and their impact in the peripheral region is
mixed and still unfolding in several ways. Coming to a firm conclusion on
mainstreaming or marginalisation, therefore, premature and not strictly
borne out by the data collected at this stage’ (Shah et al. 2012).
7
In 2008, it was under the 1894 Act that the land was acquired by the Reliance SEZ. In
2014, a group of 12 farmers moved the court seeking that the acquisition of their land be
declared lapsed because they were still in possession of it. Reliance has now challenged the
constitutional validity of section 24(2) of the Right to Fair Compensation and Transparency
in Land Acquisition, Rehabilitation and Resettlement Act of 2013. The Section 24(2) of the
new Act reads: ‘In case of land acquisition proceedings initiated under the Land Acquisition
Act of 1894 where an award under Section 11 has been made five years or more prior to the
commencement of the Act of 2013 but the physical possession of land has not been taken or
the compensation has not been paid, the proceedings shall be deemed to have lapsed as being
illegal, unconstitutional and ultra vires.
“It [Reliance] took over 4494 hectares but about 30 hectares of this, across two villages,
remained with farmers who refused to give it up. They never took money and continued
farming. Under the 2013 Act, the farmers are demanding [sic. their] right to their land.”…
“These farmers’ land in Kanachhikari and Kanalus villages is right inside Reliance’s SEZ”
(Bhatt with Dabhi), Indian Express, 12 January 2016.
8
It should be clarified that the 2008–09 study covered two more SEZs besides the Reliance
Petrochemical Ltd. SEZ, Jamnagar, that is, Dahej (District Bharuch) and Mundra Port and
SEZ (Kachchh). The process of land acquisition in two SEZs (other than the Reliance SEZ)
was very different. In the case of Mundra, the Government of Gujarat had allotted the waste-
land to the SEZ, while in the case of Dahej, the government acquired the agricultural land
and gave it to industry.
208 A. SHAH ET AL.
With this in mind, we aimed to first document the changes in Jamnagar.

The rationale for pinpointing Jamnagar also arose from the way in which
the land was acquired and the processes that followed.
This quick revisit study is based on primary data collected during June-
July 2017, from two villages falling within the catchment of the Jamnagar
SEZ. These were the same villages that were covered in the earlier study.
An attempt was made to collect the new information/data from the same
respondents (to the extent possible and subject to their availability) that
were covered under the earlier study, and to map the contours of change
that have taken place over time. We collected data from 100 respondents
(50 from each village). Let us first mention that we could trace only 42
original respondents and although the remaining respondents were new,
they were from the same population. Traceability of the original respon-
dents is always an issue in such studies. Since about 10 years have lapsed,
it is likely that quite a few people may have migrated or changed their
addresses (and a few may have even passed away).
The analysis presented in this chapter provides a basic idea for identify-
ing key changes, both positive and negative, that have taken place in about
the last 10 years. Land access and use of land are at the centre stage of this
analysis.
5.3 Recapitulating the Earlier Results

An earlier study carried out by Shah et al. (2012) examined the experi-
ences of local communities affected in three major SEZs in Gujarat. The
effect of SEZs on their peripheral regions was mixed and was still unfold-
ing. This is reconfirmed by the current analysis. During the aforemen-
tioned study, it was observed that village communities did not have any
robust mechanism with which to voice their concerns. After not being
adequately informed or prepared to shift their economic base and physical
location, a large portion of the village communities was at a loss about
shaping their lives in a rapidly changing socio-economic milieu.
Voicelessness was a major impediment in this transient situation.
Of those who reported selling their land, about 15 per cent had pur-
chased another piece of land, whereas several more were planning to buy
agriculture land in the near future. The price of buying agriculture land
varied from about Rs. 1.25 lakh to Rs. 12.5 lakh per hectare.
It is likely that a part of Common Property Land Resources (CPLR)

could be in the category of open access land; it was difficult to gauge the
magnitude of such resources in the absence of systematic data pertaining
to rights and access to land in India, especially because the processes vary
significantly, even within a state. The complexity of rights to land may be
particularly high in dry land areas with large tracts of CPLRs, wasteland
under the ownership of the Revenue Department, and groundwater as the
main source of irrigation.
The Reliance SEZ is spread over 4494 hectares. While in the early
1990s the land was purchased at the rate of Rs. 30,800 per hectare, it
subsequently increased to Rs. 1,51,000 INR in 2002. Reliance acquired
the land for between Rs. 3.09 lakh and 4.06 lakh per hectare. As per infor-
mation collected from the villages, the land price from 2007–08 to
2009–10 jumped to around Rs. 12.5 lakh per hectare after the land acqui-
sition by the Reliance SEZ. A large proportion of farmers who sold their
lands to Reliance had purchased a piece of land in the nearby villages so as
to retain their rights as farmers. Direct employment was not promised to
those who sold their land; however, this does not mean the absence of
additional economic/opportunities being created in the area. Reliance
Industries (RIL) gave employment to around 30,000 people. Moreover,
the large influx of people, mainly from outside the region and state, may
have created additional economic opportunities for people in the villages
surrounding the RIL colony. At the same time, spillover effects of the new
developments, especially for construction, housing, services and other
ancillary activities, were created in an area of 20 km around RIL.
5.4 What Did the Data Tell Us Now?

The current study was carried out in the two villages of Kanalus and
Derachikri in Lalpur Taluka of Jamnagar district. A total of 100 households,
50 in each village, were surveyed. In addition, detailed interviews were con-
ducted with a diverse set of stakeholders including landless and land-hold-
ing groups, women and owners of small businesses. Selection of area as well
as households was based on the earlier study by Shah et al. (2012), con-
ducted in the same region. A preliminary visit indicates that both these vil-
lages have undergone significant change in terms of their economic base.
The following observations are based on an analysis of data obtained
through the re-survey:
210 A. SHAH ET AL.
5.4.1 Shift in the Pattern of Land Holding

The number of landless people has increased from 57 to 64 per
cent between 2008–08 and 2017–18. If we look at those having land, the
share of those having large landholdings has increased from 39.5 per cent
to 44.4 per cent. This was followed by marginal farmers. Surprisingly, the
proportion of small landholdings has declined from 46.5 per cent to 36.1
per cent, during the corresponding period. It is possible that some of the
larger of the small farmers made an upward movement whereas a few on
the lower rungs could not sustain and joined the group of marginal farm-
ers. This explains how the number of marginal farmers seems to have risen.
The increase in landholdings among marginal and big farmers is likely due
to purchasing of new land made available during the early phase of estab-
lishing the SEZ. The increase in the number of landless could be because
some of the marginal farmers would have become landless due to very
small landholdings that they sold, with inadequate compensation to buy
land elsewhere.
They might have taken opportunities to find employment in the SEZ,
which was generally available on a somewhat temporary basis. This can be
linked to the quality of non-farm work made available to the rural masses,
perhaps due to lack of training among marginal farmers and to societal
pressure among large farmers (Fig. 10.1).
5.4.2 Changes in Occupational Profile Over Time

Table 10.4 shows the changes in occupational profiles in survey areas.
While it is seen that the percentage of cultivators has decreased by approxi-
mately 15 per cent, there has been an increase in the number of agricul-
tural labour by approximately 7 per cent. When asked further, some of the
80 64
57
60 46.5% 44.4%
36.1% 39.5%
40
14% 19.4%
20
0
Marginal Farmer Small Farmer Large Farmer Landless
Land Holding Before Land Holding Now
Fig. 10.1 Changes in land holding pattern before 2008–09 and now i. e. in
2017. (Source: Field Surveys)
Table 10.4 Change in occupational profile of respondents

Occupational profile Before (2008–09) Now (2017)
Cultivators 36.1% 21%

Salaried workers 6.4% 10.8%
Casual labour 15.8% 24.2%
Self-employed 11.5% 15%
Agriculture labour 7.5% 14.4%
Livestock 20.1% 13%
Other 2.8% 1.6%
Total 100% 100%
Source: Field Survey
landholders said that they have moved out of agriculture and entered into
business or are in service. This is reflected by the increase in the propor-
tion of self-employed and salaried workers. The farming is carried out by
their family or by them only part-time in a supervisory capacity. Several of
them have hired out their land for sharecropping. The decline in people
engaged in animal husbandry is stark. This is because most of the grazing
land has already been acquired as wasteland by the SEZ and access to fod-
der is a major problem, especially during summers. The cause of worry is
the increase in the proportion of casual workers. It is primarily a cumula-
tive impact of the loss of livestock and loss of land in some cases of mar-
ginal farmers, who had to move out of agriculture because of landholdings
with low yield.
5.4.3 Positive Economic Impact on People

The impact of the SEZ on the economic conditions of the respondents is
presented in Table 10.5. In all, 16.8 per cent of the respondents have
reportedly purchased new property that, by and large, includes land,
shops, improvement in their housing facilities and new assets like motor-
cycles, tractors and SUVs. Around 4 per cent of the respondents stated
that now they are able to enrol their children in schools and colleges.
While access to health was available earlier, about 7.3 per cent are now
able to afford it. The other way to look at it is that the incomes of as many
as 44.5 per cent of respondents have still not increased. In fact, about 5
per cent of respondents have witnessed a decline in their incomes by at
least 10 per cent. Similarly, employment remains an issue despite the SEZ,
as reflected in the number of casual labourers (Table 10.4). The capacity
212 A. SHAH ET AL.
Table 10.5 Positive
Impact Percentage
impact on economic
conditions of people Increase in income 55.5
Increase in employment 16.1
Purchase of property (land, shops, 16.8
etc.)
Increased level of education 4.4
Increase in health facility 7.3
Total 100.00
Table 10.6 Negative
Impact Percentage
impact of SEZ
Increased land-related conflict at House 47.3
Hold level
Dispute over issues other than land 42.7
Pollution-related problems 6.0
Cost of buying drinking water purified 4.0
through Reverse Osmosis System
Total 100.00
to afford education and health still eludes a very high proportion of

respondents, despite an increase in income. Incidentally, there were no
other expectations shared by the respondents, which perhaps suggests
the lack of alternatives. Possibly an ethnographic study is needed to get to
the bottom of the issue.
5.4.4 Negative Socio-Economic Impact of SEZ

As shown in Table 10.6, while maximum negative impacts were seen in
land-related conflicts at the House Hold (HH) level, the incidence of
social conflicts is no lower. However, these involved problems related to
family relations. The sales proceeds came to the male members of the fam-
ily, even if the land was in the name of a female family member. The survey
team was told by women that they have virtually no control over money
or decision making about the use of money. After receiving cash, men
behave very differently. Some have taken to alcohol, despite Gujarat being
a dry state, and this is one of the major causes of concern among women.
Usually, the impact of such financial ‘windfalls’ is observed to leed to
wasteful expenditure and is short lived, as suggested by several other
studies done about Delhi and similar spaces. It is argued that the process
of land acquisition and the conversion of land from agricultural to non-
agricultural purposes have produced a consumerist culture; and, the fresh
inflows of cash from land sales have been used to buy durable consumer
goods such as television sets and cars and to finance house repairs
(Narain 2009).
This kind of complete loss of wealth, however, was not noticed in the
case of people who sold their land in Jamnagar SEZ. Although, we do not
have detailed information on this, our discussions with the respondents,
before and now, did indicate that a major part of the sale proceeds were
invested wisely, by most of them. Though, this is a fairly positive situation,
it needs a deeper probe to understand this phenomenon adequately.
The likely adverse environmental impact was a foregone conclusion,
with a petrochemical complex just the next door. Several farmers com-
plained that their crops were being adversely affected due to pollution,
which is also affecting the quality of groundwater. Almost all the families
who can afford mineral water, buy it even at a higher price, due to under-
ground water pollution.
5.4.5 Impact of Change and Inter-State Migrants

In the last 10 years, economic growth has shifted significantly away from
agriculture as a major source of economic development in the study area.
The earlier analysis by Shah (2002) showed that the growth in employ-
ment has taken place both in rural and urban areas, without achieving
a significant increase in manufacturing. The informal sector has been the
key employer. However, employment in this sector has its own issues. In
order to move out of this stagnant scenario, the SEZ has been used as an
important approach to impact growth. While this was part of the ongoing
process, it has been found that growth and employment in the industrial
sector, especially in ‘rurban’ areas, may become a robust way of reaching
out to the poor.
The earlier understanding was that people respond to opportunities,
but these are structured by initial economic, political and even socio-
cultural conditions (Haan 2011). However, our brief assessment indicates
that it could be possible that the growth process due to the SEZ reaches
out to increasingly large numbers of the poor/unemployed population
even in far-flung states like Odisha. We take this opportunity to make a few
propositions that could be realised in the next 5–10 years.
214 A. SHAH ET AL.
i. Workers coming from highly poverty-inflicted areas like Odisha

have found an opportunity to work in SEZs in Gujarat. This seems
to be a positive outcome of this development process. These work-
ers hope this is an opportunity which will lead to better prospects.
This is particularly so because workers from nearby areas are already
in the process of moving out.
ii. This may also involve a geographic shift from a few industrial and
urban hubs to Jamnagar, which is typically ‘rurban’ in character.
iii. The workers from Odisha did not see any kind of resistance from
the local people. This is very important for spatial growth, which is
crucial for the overall growth of the economy.
Rurban industrialisation thus needs to be pushed at a faster rate so as to

achieve higher overall growth in employment, especially in non-farm sec-
tors. It has become important to move faster from low-road to high-road
employment as well as increasing wages in industries that play a vital role
in overall growth. Employment in the SEZs is a part of this process.
6 Concluding Observations

The changing scenario of economic growth and land use along with labour
has been undergoing a rapid change in the present neo-liberalised eco-
nomic environment. The current situation, as indicated by various debates,
presents a somewhat negative scenario for employment creation, even in
the industrial sector. The focus of the current discourse in India is on
exploring the ways to create employment, especially in ‘rurban’ areas.
Disguised unemployment further adds to these woes. In view of the lim-
ited avenues of employment creation, the academic discussion has signifi-
cantly moved towards basic universal income, generally through subsidies.
However, the sustainability of such approaches has always been suspect.
This raises the need for a strategy to provide employment that goes beyond
disguised unemployment or provision of basic universal income, and
which is sustainable. SEZs to an extent offer such a possibility.
Given this context, the detailed review of SEZs in India and the case
study of the SEZ in Jamnagar leads to six key conclusions for future devel-
opment, where land is at centre stage: a) manufacturing is at the core of
employment, especially in rurban areas; b) the shift of rural population
due to the emergence of SEZs is likely to lead to skill-based employment
and incomes, with alternate understanding of development for all; c) the
previous two conclusions will require shifting towards societal growth by

changing the course for integrating economic growth with labour; d) the
acquisition of land and its allocation could be more specific and focused,
keeping people at the forefront; e) employment of local ‘dispossessed’
people and their welfare could be at the core of the establishment of an
SEZ; and f) the shift of rural populations through SEZs could bring newer
opportunities for employment and self-employment.
Annexure 1
Advantages of Operating in an SEZ

• Simplified procedures for development, operation and maintenance
of the SEZs and for setting up units and conducting business in SEZs;
• Single-window clearance for setting up an SEZ;
• Single-window clearance for setting up a unit in an SEZ;
• Single-window clearance on matters relating to Central as well as
state governments;
• Simplified compliance procedures and documentation with an
emphasis on self-certification.
Incentives and Facilities Offered to the SEZs

• Duty-free imports/domestic procurement of goods for develop-
ment, operation and maintenance of SEZ units;
• One hundred per cent Income Tax exemption on export income for
SEZ units under Section 10AA of the Income Tax Act for first 5
years, 50 per cent for next 5 years thereafter and 50 per cent of the
ploughed back export profit for next 5 years;
• Exemption from minimum alternate tax under section 115JB of the
Income Tax Act;
• External commercial borrowing by SEZ units up to the US$ 500
million in a year without any maturity restriction through recognised
banking channels;
• Exemption from Central Sales Tax;
• Exemption from Service Tax;
• Single-window clearance for Central and state-level approvals;
• Exemption from state sales tax and other levies as extended by the
respective state governments.
216 A. SHAH ET AL.
The Major Incentives and Facilities Available to SEZ Developers Include

• Exemption from customs/excise duties for the development of SEZs
for authorised operations approved by the Board of Approval;
• Income Tax exemption on income derived from the business of
development of the SEZ in a block of 10 years in 15 years under
Section 80-IAB of the Income Tax Act;
• Exemption from Central Sales Tax;
• Exemption from Service Tax (Section 7, 26 and Second Schedule of
the SEZ Act).
http://www.sezindia.nic.in/about-fi.asp
Annexure 2
Classification of SEZs
Sr. Type of SEZ Minimum area required (in Hectares) Minimum

No. processing area
1 Multi-product 100 hectares to 5000 hectares (maximum) 50%

(To promote widespread development in
certain states and union territories the
minimum area requirement has been
reduced to 200 hectares)
2 Multi services/ 100 hectare (To promote widespread 50%
sector specific development in certain states and union
territories the minimum area requirement
has been reduced to 50 hectares)
3 IT/ITES, gems and 10 hectares with a minimum built-up area 50%
jewelry, bio-tech of:
and non- 1,00,000 sq. meters for IT
conventional energy 50,000 sq. meters for gems and jewelry
40,000 for bio-tech and non-
conventional energy
4 Free Trade 40 hectares with a minimum built-up area 50%
Warehousing Zone of 1,00,000 sq. meters
Annexure 3
Fact Sheet on Special Economic Zones
Number of Formal 424

approvals ( As on 07.09.2017)
Number of notified SEZs 354 + (7 Central Govt. + 11 State/Pvt. SEZs)
(As on 07.09.2017)
Number of In-Principle 31
Approvals (As on
07.09.2017)
Operational SEZs (As on 222
30th June 2017)
Units approved in SEZs (As 4643
on 30th June 2017)
INVESTMENT Investment Incremental Total Investment
(Rs. Crore) Investment (Rs. Crore)
(As in February (Rs. Crore) (As on 30th June 2017)
2006)
Central Government SEZs 2279.20 13,694.80 15,974
State/Pvt. SEZs set up 1756.31 9721.69 11,478
before 2006
SEZs Notified under the – 4,05,690 4,05,690
Act 2005
Total 4035.51 4,29,106.49 4,33,142
EMPLOYMENT Employment Incremental Total
(No. of persons) (No. of Employment
(As on February persons) (No. of persons)
2006) Employment (As on 30th June
2017)
Central Government SEZs 1,22,236 1,12,625 2,34,861
State/Pvt. SEZs set up 12,468 83,502 95,970
before 2006
SEZs Notified under the 0 persons 14,48,020 14,48,020
Act
Total 1,34,704 16,44,147 17,78,851
Exports in 2006–07 Rs. 34,615 Crore a
Exports in 2014–15 Rs. 4,63,770 Crore

Exports in 2017–18 Rs. 1,35,248 Crore (Growth of 15.39% over the exports
(As on 30th June 2017) of the corresponding period of FY 2016–17)
Source: http://www.sezindia.nic.in/writereaddata/pdf/factsheet.pdf
Taken from Export Performances of SEZs http://www.sezindia.nic.in/about-ep.asp
a
218 A. SHAH ET AL.
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CHAPTER 11
Neoliberal Governing as Production

of Fantasy: Contemporary Transformations
in Ahmedabad’s Landscape
Navdeep Mathur and Harsh Mittal
On Japanese premier Abe’s visit to Ahmedabad in September 2017, the

city of Ahmedabad was extensively decorated by the authorities and the
act instantiated proliferation of images of specific parts of the city such as
the Sabarmati Riverfront1 in the national and international news. The
Prime Minister of India Narendra Modi received the Japanese premier
from the airport and the duo led a roadshow in the city that primarily
sought to communicate the proclaimed “transformation” that has been
brought about by the leader (earlier chief minister of Gujarat state and
now prime minister of the country) in the city and how this will be further
achieved through Japanese collaboration on the bullet train between
1
See the photographs of the Sabarmati Riverfront on 13 September 2017, ahead of
Shinzo Abe’s two-day visit to India available at: https://www.firstpost.com/photos/india-
gallery/ahmedabad-dazzles-as-it-gears-up-to-welcome-japanese-prime-minister-shinzo-
abe-4036803-3.html, accessed on 22.01.2020.
N. Mathur (*) • H. Mittal

Indian Institute of Management Ahmedabad, Ahmedabad, Gujarat, India
e-mail: navdeep@iima.ac.in

222 N. MATHUR AND H. MITTAL
Ahmedabad and Mumbai.2 The path of the roadshow and other places
central in the marketing effort were sanitized by measures such as removal
of all physical impediments to their movement as well as street vendors.
The transformation that is being communicated through the above
imaginaries has been articulated as the goal of a variety of schemes and
policies on India’s urban turf under the present central government regime
that promises to build world-class infrastructure and improve the quality
of life for the city residents—Smart Cities Mission, and Atal Mission for
Rejuvenation and Urban Transformation. These programs constituting
different mechanisms to build urban infrastructure draw their technocratic
rationale from the paradigm of treating “cities as engines of economic
growth” for the country wherein, the state institutions work towards
attracting private investments for building infrastructure. The transforma-
tion at the national scale has a precedent in the Ahmedabad region during
the tenure of the current prime minister as then chief minister of the
Gujarat State. Under his regime, the city of Ahmedabad advanced a series
of city-beautification and urban rejuvenation projects resulting in exten-
sive displacement of the marginalized population from city centers.
Agnostic of the state efforts to plan urbanization, city-making in India
has proceeded in myriad ways constituting survival strategies of people
over ages. Here, urban settlements have not emerged as anticipated by
planning products such as masterplans, rather through a regularization of
colonies that in the first place are rendered “unauthorized” by the plan-
ners (Benjamin 2005; Roy and Alsayyad 2004). This process has found
support in a political regime constituting elected representatives working
to extend public services to the squatting areas in the city (Benjamin
2008). Further, almost in opposition to this regime of Occupancy
Urbanism, there is an elite politics working closely with unelected state
authorities in Indian cities to carry urban infrastructure projects that cur-
tail the operating areas of the above regime.
Roy and Ong (2011) suggest that imaginaries standing for modern
examples of urbanism in Global South, such as Shanghai and Singapore,
are able to inspire citizens including the subalterns to demand urban forms
referenced in them. Drawing upon the work of May (2011) and Shatkin
2
See the photograph of Prime Minister Narendra Modi, Japanese Prime Minister Shinzo
Abe and his wife Akie at Sabarmati Ashram in Ahmedabad on 13 September 2017 available at
https://www.livemint.com/Politics/uLn8JYidnkWMMP20FprpMK/Shinzo-Abe-arrives-
India-and-Japan-likely-to-step-up-nuclea.html, accessed on 22.01.2020.
11 NEOLIBERAL GOVERNING AS PRODUCTION OF FANTASY… 223
(2011) for urban-modelling and Siu (2011) for inter-referencing, they

assert the notion of “worlding cities” to conceptualize the above practices
through which cities are experimenting to become global. Using the cases
of the Sabarmati Riverfront Development Project and that of the GIFT
city at the periphery of Ahmedabad region, we examine the role of imagi-
naries attached to transformed landscapes in driving forward the ongoing
state efforts to plan urbanization. We juxtapose the revolution of these
imaginaries among different social groups against the processes through
which cities happen to socially, politically and materially get constructed
through survival strategies of the marginalized. This juxtaposition chal-
lenges our understanding of planning and poses a sociological puzzle
regarding its purpose for state and dominant social groups. To access the
planning trajectories of the Sabarmati Riverfront Development Project
and the GIFT City, this chapter draws substantially upon the author’s
earlier writings (Mathur 2012; Mathur et al. 2019). Here we pursue the
puzzle of circulation of the imaginaries attached with these exclusionary
projects using critical theoretical perspectives on planning (Gunder 2005).
We find Michael Gunder’s work on understanding urban planning
through the Lacanian notion of fantasy as particularly useful to respond to
this puzzle. He argues that planning in the present era, primarily consti-
tutes creation of ideological fantasies promising a universal solution in
deeply divided social realities (Gunder 2005). Furthermore, the planners
who construct such fantasies, only overtly rely on the promise of techno-
logical solutions to convince “stakeholders” while actively resorting to
their own political ideology to draw support from broader discursive coali-
tions. Ahmedabad provides a case of divided social realities wherein a
dominant socio-political group has pushed for urban strategies of city-
imagineering and place-marketing with the objective of erasing from the
history of city its association with violence against Muslims (Desai 2011).
The political regime’s efforts at the erasure of that memory has resulted in
projects promising a makeover of Ahmedabad as a global mega-city
through several urban “innovations” that are largely conceptualized at
business conventions such as the bi-annual Vibrant Gujarat Summit.
As a result of these sustained efforts, Ahmedabad’s local government is
beginning to enjoy a reputation of being progressive, modern and inclu-
sive, judging by international and national awards for civic renewal and
affordable housing. Global approval for Ahmedabad’s Municipal
Corporation (AMC) are signified by its growing partnerships with
European and other international city management associations, business
and trade councils and “twinning” agreements. In Desai’s judgment, the

city branding exercises that constitute staging of mega-events like Vibrant
Gujarat summit extensively catering to investors and construction of archi-
tectural and urban projects are facilitating a discursive shift over the mean-
ings associated with the space from being a violent and unsafe city to a city
of vibrant economic development. These practices have also been related
to a shift in governance from visible and transparent institutional mecha-
nism, to profit driven arrangements between private institutions and gov-
ernment bodies (Patel 2016; Mathur et al. 2019). Below we examine the
planning trajectories of the key projects enveloped in these practices.
1 Sabarmati Riverfront Development

Ahmedabad, seventh largest city in India by population and a spread of
over 450 sq. km today, was built in medieval times by Ahmed Shah, as its
capital on the western bank of the Sabarmati River. The western part of
the city (east bank of the river) started developing only after the construc-
tion of Ellis Bridge in late nineteenth century. This connectivity allowed
the Sheths of Ahmedabad to build their residential mansions across the
river. Since the river is not perennial, the settlements on its banks had a
varied relationship across seasons with the ecology. This riverbank had
hosted a weekly market for around 600 odd years, that used to attract
more than 2,00,000 customers each Sunday before it was demolished
(Mathur and Joshi 2009).
Ahmedabad grew as an important urban center in western part of India
through the twentieth century, by nurturing a large number of cotton
textile mills, in the process also attracting the informal nickname as “the
Manchester of India”. Approximately 80 per cent of the workforce was
employed in textile and related industries. The decline and restructuring
of the textile industry led to closure of most of these large composite tex-
tile mills barring about 10. Over the course of two decades, this resulted
in a significant socio-economic transformation with a large number of
hitherto mill workers entering into various kinds of informal employment
to secure their survival, of which street vending became a significant por-
tion. This development with continued migration from tribal regions sur-
rounding Ahmedabad saw proliferation of urban poor settlements on the
Sabarmati riverbank.
Besides the class-based segregation due to the above processes,
Ahmedabad also emerged as a fertile ground for communal politics that
furthered spatial divide along religious lines. The present-day western

Ahmedabad along with its predominantly upper and middle-class residen-
tial colonies stands in sharp contrast with the settlements in the eastern
part of the city. The western-most edge of this part of the city is predomi-
nated by luxury apartments and bungalow housing, air-conditioned shop-
ping malls and entertainment complexes providing amenities to an even
more exclusive portion of the urbane upper classes. It is here that a grow-
ing number of new “International Schools” are coming up for the elite
populations, as well as private high fee charging hospitals (Mathur 2012).
The eastern part of the city in contrast predominantly caters to the low
income populations and contains 75 per cent of the shared low-income
housing (chawls) and 47 per cent of all slum units of the city, while con-
taining 44 per cent of the total housing in the Ahmedabad, as well as small
scale industries (Mathur 2012).
Developing the riverfront in the city was first discussed in 1960s when
Bernard Kohn, a French architect and Ahmedabad resident, “evoked
visions of a Parisian promenade on thirty hectares of reclaimed space on
the riverbank” (Shah 2015, p. 52). It was revived by a group of individuals
and planners in mid 1980s with a focus on improving public services to
settlements on the riverbank. In 1997, a Special Purpose vehicle, Sabarmati
Riverfront Development Corporation Limited was established to create
the project while a non-profit firm, Environmental Planning Collaborative,
headed by Bimal Patel, was invited to prepare a detailed proposal.
This detailed proposal envisaged a beautification project around the
riverbank that attempted to convert the perennial river into one with a
uniform concrete coastline. It proposed financing through sale of 20 per
cent of the “reclaimed space” to real-estate developers and using another
28 per cent for building highways. Through this scheme it envisaged cre-
ation of “new walled banks, with walkways and staggered staircases from
the street level along 9 kilometers of the banks on both sides of the river”
(Mathur 2012, p. 66). The project costs were estimated to be around
US$300 million and a timeline for completion as end of 2008. According
to this proposal “4,400 families living on the riverbank could be consid-
ered ‘project-affected’ and offered consolidated housing on the riverbank
itself at 3 locations” (Mathur 2012, p. 66). However, for the next 5 years
neither was a public announcement made about how displacees would be
evicted and rehabilitated, who counted as affected in the overall design,
whether livelihood spaces and markets would be affected and rehabili-
tated, nor did any physical construction work start on the riverfront.
In the absence of a public process informing specific plans for rehabili-

tation and resettlement, facilitated by a group of NGOs, the riverfront
settlers formed a coalition called the Sabarmati Citizens Rights Forum
(Sabarmati Nagarik Adhikar Manch or SNAM). SNAM lodged a public
interest litigation (PIL) in the Gujarat High Court pleading a stay on
project construction until a “transparent process of identification” and
coverage of affected families as well as an appropriate rehabilitation plan is
offered by the government (Desai 2012; Mathur 2012, p. 66). While this
litigation process was underway, the local authority created a new device
of “interim rehabilitation” in order to facilitate the riverfront company’s
plans to start the project by starting the evacuation of the riverfront in
smaller, less overtly visible steps. This device enabled project implementa-
tion in 2004 and began displacing settlers in city centers to dismal condi-
tions at the city periphery.
In 2005, under the so-called interim rehabilitation scheme, the river-
front company and the Ahmedabad Municipal Corporation shifted a few
thousand families with negligible support to a marshland on the city’s
former industrial edge in Piplag, Pirana Road, which lay under electricity
transmission towers and adjacent to a municipal solid-waste dump site.
They were provided chalk drawn open plots of 10 feet by 15 feet, with
little and infrequent access to drinking water and minimal sanitation facili-
ties (provided by foreign donors for a child poverty action program).
These families were “verbally promised education, health and sanitation
facilities, as well as compensations and loans to build new housing”, but
none were actually provided at the interim rehabilitation site (Mathur
2012, p. 66). Apart from a loss of livelihood, creation of greater income
insecurity and poverty, these families experienced serious adverse health
consequences and a majority of children dropped out of schools (Mathur
and Joshi 2009). The municipal corporation “provided unverified docu-
mentation in response to complaints by the SNAM to the High Court of
Gujarat about the services available at the ‘interim rehabilitation’ site”,
which in turn made the court “more amenable to the government view
than the view of the residents’ groups” (Mathur 2012, p. 66).
It is crucial to consider the agency of the planner in crafting “entirely
new modernist imaginaries into the realm of possibility” exhorting imple-
mentation of these imaginaries through a non-transparent collaboration
between government agencies and private sector experts (Mathur 2012,
p. 65). Also, it is important to consider the play out of a conflict between
these collaborative efforts and the intervention in deriding the
participatory planning efforts organized by faculty members of reputed

academic institutions in the city, including this author. Amrita Shah cap-
tures the planner’s habitus nicely in this regard:
Despite the chief minister’s ownership of the venture and the involvement
of senior officials, Bimal, as the designer and executer, has become its most
visible spokesperson. He defends the projects as seminars and in interviews.
He counters concerns about potential ecological damage, claiming that nar-
rowing the river is as hazardous as pinching a garden hose. He pacifies the
community representatives by promising to accommodate informal markets
threated by the enterprise. He moves with agility, sometimes arguing, some-
times mollifying, sometimes throwing his hands up and saying he is bound
by orders, sometimes shrugging and saying you cannot please everybody…
The last time I visit Bimal’s office he shows me the new publicity material
that is being prepared for the Sabarmati Riverfront Development Project. It
is another attempt to diffuse criticism about the project, this time through a
change of visuals. The large poster on the table is vastly different from previ-
ous stark images. For one it is colorful, because it foregrounds people rather
than cold structures. (Shah 2015, pp. 54–55)
Besides failing to rehabilitate and resettle the vulnerable population

that it displaced, the Sabarmati Riverfront Development Project also failed
to attract businesses, home buyers at a scale that was promised. Yet it has
been awarded the “Prime Minister’s National Award for Excellence in
Urban Planning and Design” in 2003, and “Innovative Infrastructure
Development” in 2011 by HUDCO. In light of the survival struggles of
riverbank settlers it appears paradoxical that Ahmedabad received the
award of best city for affordable housing and services targeted towards the
poor from the central government’s Ministry of Housing and Urban
Affairs in 2011 under the Basic Services for the Urban Poor component of
the JNNURM.
2 GIFT City

The GIFT city was idealized as a world-class financial center competing
with the ranks of Shanghai and London on the banks of Sabarmati river,
north of Ahmedabad airport, and to the south east of the city of
Gandhinagar. To attract the connoisseurs of financial capital, it was envis-
aged to be a “large scale business district with facilities of entertainment,
leisure, and housing” (Mathur et al. 2019, p. 4). The brochure of the
GIFT city declares the vision of creating “a world class financial city by
offering an unrivalled business environment to global and local financial
services enterprises”. It boasts of comparisons with the infrastructure of
the major financial centers of the world and claims to better them in terms
of its scale and ambition. It also promises a lower-cost venue as compared
to India’s financial capital of Mumbai, as well as “a competitive player on
the field with Dubai and Singapore” (Mathur et al. 2019, p. 4).
On the above grounds GIFT City asserts itself as the country’s first
International Financial Services Centre (IFSC) which acts as a node for
investing in financial products and services for “customers outside the
jurisdiction of the domestic economy” (Mishra 2015). To realize this
dream, the central government under Modi pursued a number of regula-
tory amendments to relax the requirements for financial firms to be setup
and also “to bring in a representative of Singapore International Arbitration
Centre (SIAC) for dispute resolution” (Bhayani 2016; Mathur et al. 2019,
p. 4). Furthermore, the institutions responsible for regulating the financial
sector—RBI (central bank), Securities and Exchange regulatory authority
(SEBI), and Insurance Regulatory and Development Authority (IRDA)—
eased a number of requirements for the IFSCs, for example, the condi-
tions of priority sector lending and maintaining a cash reserve ratio/
statutory liquidity ratio do not apply in the IFSC (Pathak 2013). The two
major stock exchanges, Bombay Stock Exchange (BSE) and the National
Stock Exchange (NSE), have followed these developments by announcing
their plans to establish an international bourse in the GIFT City.
The overall project costs were estimated at US$10 billion in 2012, out
of which US$55 million were earmarked for water features, and riverine
tunnels. Furthermore, to enable massive reduction in project costs, 880
acres of riverbank land was transferred by the Gujarat government to the
GIFT City for a notional cost of 20 cents (Pathak 2012). Other sources of
funding include loans from a consortium of banks and financial institu-
tions led by IL&FS (Pathak 2012). The connection of a Metro Rail to
GIFT City was part of the Ahmedabad Metro plan prepared by DMRC for
the Gujarat government in 2010. This high-speed connectivity with
Ahmedabad and Gandhinagar was significant to the marketing pitch of
GIFT city to elite social groups and businesses. However, this extension
was scrapped in the 2014 plan after it was found to be unviable in terms of
ridership estimates and the non-existent pace of development of the GIFT
City and therefore was removed from the initial phases.
The GIFT city project was slated to complete its first phase in 2016. Its
achievements till the end of 2017 were the “Hirandani Tower housing the
BSE International Exchange”, “a futuristic tier-IV data centre” and the
“Jamnabai Narsee School”. After the installation of the Modi government
at the centre, several reports of GIFT City success came out and pointed
to the increase in volume of transactions in the GIFT IFSC (PTI 2017).
In this period, the GIFT City project also got support from the local
administration that pushed companies in Gandhinagar to shift their offices
inside the GIFT City. This also came in the form of building the utility
infrastructure through public resources—which includes roads of 45 km
length, a utility tunnel of 3 km, a 66 KVA dual supply power station, a
district cooling center, and a 50 TPD water treatment plant
(Bhatnagar 2017).
Meanwhile the GIFT City continues to earn substantially from the rec-
ognition by the central government as a model greenfield city, before it
was operational on any admissible scale. It registers frequently in the busi-
ness dailies of the country with awards for its fantastical planning strate-
gies. For instance, it recently won two awards at CMO (Chief Marketing
Officers) Asia 2017 under the categories of “Best CSR Practices” and
“Asia Smart City”. These marketing strategies received a negative shock in
July 2018, when nearly all business dailies started reporting that several
subsidiaries on IL&FS (the key investor in the project) were not in a posi-
tion to pay back their loans. In August 2018, a serving independent direc-
tor and a person credited for originally conceptualizing the idea filed a
Public Interest Litigation (PIL) alleging transfer of public assets to a pri-
vate firm in a non-transparent and fraudulent manner (Dalal and Sapkale
2018). Subsequent to a default of rupees 450 crore to Small Industries
Development Bank of India (SIDBI), the Reserve Bank of India (RBI)
initiated the process of engaging major investors to revamp the business
practices of the firm and install a rescue plan. In October 2018, GoI made
interventions into the board of IL&FS while positioning the move as a
measure to contain the spread of major crises to India’s financial sector.
While these struggles of realizing the fantasy are on and there are no pub-
lic deliberations or even plans placed in public domain, observers of finan-
cial markets and infrastructure development have demanded that Gujarat
government should take control of the GIFT city and pool in an even
larger share of public resources into this fantasy.
3 Smart Cities Mission

Smart cities mission in India was officially declared in June, 2015. It was
almost one year after the current central government came to power with
a major manifesto point to create 100 new cities. While in power, the
regime made several efforts to relax the provisions of Land Acquisition
Resettlement and Rehabilitation Act but failed to convert the ordinance
into legal amendments in the parliament. These efforts suggest that when
the parliamentary route of transferring large tracts to land to private devel-
opers failed, other ways were devised, and smart cities initiative happens to
be one of them (Srivathsan 2015; Hoelscher 2016).
The official formulation of objectives of the smart cities mission is to
instrumentally use urbanization to deliver national growth and quality of
life in cities by “attracting people and investments to the city” (Ministry of
Urban Development 2015). In the process the government aims to secure
“comprehensive development of physical, institutional, social and eco-
nomic infrastructure” (Ministry of Housing and Urban Affairs 2015).
There are two kinds of projects possible under smart city—Area-based
development and Pan City development. Under the former category, only
a small part of the city is to be modernized with advanced urban infra-
structure. There are further two categories to carry out area transforma-
tion in existing cities—redevelopment and retrofitting. Yet another
area-based development can be green field cities. Each of them function-
ally differs by how much of the existing built-up area of the portion is
dismantled to create advanced infrastructure. For retrofitting the area
needs to be greater than 500 acres and for redevelopment more than 50
acres. The goal of the transformation is to make these zones elite com-
mercial hubs of the city through mandating “mixed land-use, higher FSI
and high ground coverage”.
The unprecedented scale of public consultation achieved under the
mission has been a key rhetoric. There are numbers cited by each city that
run into lakhs. If we were to believe them, responses have been collected
from every fifth person in some cities. Keeping aside the authenticity of
the responses and other methodological issues with participation exercise,
the online survey questions counted as participation, have been quite
unengaging and meaningless. For example, one of the popular questions
has been posing a multiple-choice question: “what do you want your city
to invest in – waste collection, public transport affordable housing”. Some
cities have asked to rank these areas for priority for investment.
The public resources provided to the cities under the mission are
minuscule. Each city is getting 100 crores per year for the mission years.
The idea is to “leverage” these public funds to attract private funds for
creation of urban infrastructure. The authorities would ensure that these
private funds get secure returns and that the public-private partnership
succeeds here. Most cities are applying the redevelopment category to
zones which have large number of urban poor settlements in the central
business districts of the city. A private developer is to be given a contract
of creating new housing for what they refer to as “slum dwellers”. It is to
be done in a way that there is land remaining that can be sold for com-
mercial and leisure businesses in order to finance the development. There
are few cities using the category of retrofitting and renewal. But retrofit-
ting is usually justified in what are usually considered as heritage areas.
Bhubaneshwar, Pune and Jaipur have made major claims on retrofitting.
Majorly, cities are attempting to create non-motorized infrastructure in
congested parts of city. This has mostly entailed disruption of informal
markets for creation of infrastructure and creation of multi-level parking.
Under the pan-city component the promise is to make public services
efficient by inserting an ICT component in all utility networks. The smart
city proposals have suggested insertion of smart sensors for water, electric-
ity, waste collection and so on. In the project stage, the investments made
under the pan-city component has been on buying CCTV cameras to
build a command and control center. This center is being connected to the
police control room in most cities and the idea is to enable surveillance of
all public places including public transport. The promise is that it increases
the safety in the city.
Under the ABD category, a number of cities are planning to redevelop
the riverbanks in respective cities by making active references to the
Sabarmati riverfront development in Ahmedabad. For instance, cities such
as Indore, Pune, Jammu, Patna and Allahabad have proposed to develop
riverfronts. Pune Municipal Corporation, one of the leading smart cities
under official assessment, has assigned the consultancy assignment to
HCP Design, Planning and Management Private Limited, headed by
Bimal Patel. Indore Municipal Corporation plans to spend rupees four
crore under the smart city initiative for the first phase of the riverfront
development between Rambagh bridge and Krishnapura. These initial
plans formulated by the city authorities of Pune and Indore have been
identified as “success stories” by the urban development ministry on the
second anniversary of the smart cities mission.
3.1
Planning as Production of Neoliberal Fantasy
This chapter has explored the planning trajectories of two infrastructure
projects in Ahmedabad region that can be considered as a center for pro-
duction of urban fantasy for the nation. These trajectories suggests that
widespread evictions and displacements go hand in hand with production
of a fantasy materialized in real-estate development and environmentally
“friendly” uses of land such as jogging tracks and (gated) leisure parks
replacing “lower value” uses such as open informal markets or informal
homesteads. The planning activity amidst these processes appears to be an
active site of asserting elite socio-political values while as an instrument of
public policy it has marginal engagement with the ways in which cities are
made. Interaction with abstractions of social reality is geared to erase his-
tory and politics from space; however, this practice itself acts as the politi-
cal imperative through other means.
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CHAPTER 12
The Expressway to Agra—Two Roads, Same

Destination: Land Acquisition under Old
and New Land Acquisition Regimes
Prashant K. Trivedi
Scholars have recently argued that the contemporary discourse on land

acquisition is flawed in terms of conceiving the farmer as passive, emotional
and essentially at the receiving end. This argument conceptualises the farmer
as an ‘economic agent albeit with less power in the market place’ (Sathe
2016, p. 58), and the relationship between farmer and the state as ‘quasi-
market’ since the state also possesses the power of eminent domain. These
researches have claimed that farmers are ready to sell their land if the price is
acceptable, and this ensures the absence of farmers protests (Sathe 2016).
The assumption of ‘farmers as economic agent’ and ‘land as commodity’ has
been criticised for overlooking the fact that ‘land is invested with socio-cul-
tural value including bestowing identity to small farmers’, and many deci-
sions of subsistence farmers are not fully market driven (Shylendra 2018, p. 4).
On the absence of farmers’ protests, Guru (2016) focuses on ‘individu-
alisation’ for the absence of resistance by farmers. He argues that ‘the
conception of compensation that regulates this so-called rational transac-
tion effectively eliminates the grounds that are necessary for translating
P. K. Trivedi (*)
Giri Institute of Development Studies, Lucknow, India

236 P. K. TRIVEDI
individual experience into a collective shared experience. Eventually, the

corporate class in globalising times fruitfully uses libertarian means, such
as compensation, to avoid the accumulation of crises emanating from the
predatory process of dispossession. And, the element of compensation
plays a lead role in individualising the crises’ (Guru 2016, p. 22).
It appears that in Guru’s (2016) framework, individualisation is not just
about the absence of collective action but also assuming an individual
standpoint. It refers to a situation where a group of people affected by the
same phenomenon fail to take a shared stand on it, ignoring the social
basis of the crisis. It is made possible by foregrounding the notion of
‘compensation’ that obscures the ‘social’ leaving the crisis individualised.
Mostly in the form of one-time cash payment based on location and extent
of the land parcel, compensation draws focus to internal differentiation of
the land losers pushing back commonness of facing a similar phenome-
non. ‘Compensation’ also shifts the discourse from the site of livelihood to
the site of finance where the balance of power is already heavily tilted in
favour of cash-rich corporations and state agencies. The focus on three key
terms ‘individualisation’, ‘crisis’ and ‘compensation’ demands an enquiry
into perceptions of land losers. In concrete terms, this entails probing
deeper into ‘higher compensation versus no acquisition’—the dilemma
facing the peasantry of India.
In this probe one has to keep in mind that ‘generalisations cannot be
made about farmers’ inclination to part with their land without differenti-
ating on the basis of their class, caste and even gender’ (Shylendra 2018).
Other researches have also punctured the ‘homogeneity assumption’
implicit in the discourse on land acquisition (Bharathi 2012).
1 Two Roads—Two Land Acquisition Regimes

Recent times have seen two legal regimes governing land acquisition in
India. Land Acquisition Act, 1894 (LAA) continued to be principal legal
instrument till 2013, vesting the powers of land acquisition for ‘public
purpose’ in the state. After massive protests by farmers and other land los-
ers, a new law ‘The Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act, 2013’ was enacted to
replace the previous regime. This had generated high hopes among farm-
ers and other land dependent classes.
Two major roads have been built in Uttar Pradesh in the last one decade
coinciding with two different acts. The first one, 165 kilometres long
12 THE EXPRESSWAY TO AGRA—TWO ROADS, SAME DESTINATION: LAND… 237
Yamuna Expressway connecting Greater Noida to Agra, was constructed

from 2007 to 2012. Greenfield Expressway between the state capital
Lucknow and Agra covering a distance of 302 kilometres came into being
during 2014 to 2016. The first one was built by a private corporation,
Jaypee Industries, and the second one by a government agency, the Uttar
Pradesh Expressway Industrial Development Authority (UPEIDA). The
significant difference between these two roads is that the land for the first
one was acquired under the old land acquisition regime, whereas land
procurement for the second one took place after the promulgation of the
new Land Acquisition and Rehabilitation Act, 2013 (RFCTLA & RR
Act 2013).
The original plan of the Yamuna Expressway required 4300 ha of land
from more than 1400 villages. This quantum of land included land for
construction of the expressway and 25 million square metres of land along
the highway for commercial, industrial, institutional and residential devel-
opment. This extra land was given to JP Industries as a ‘sweetener’ in the
deal (Concession Agreement 2003). The Greenfield Expressway passing
through districts of Lucknow, Unnao, Aurayia, Kannauj, Etawah, Manipuri
and Agra needed around 3368 ha of land from 232 villages.1 Quantum of
land required in the case of the Greenfield Expressway was much less as
compared to the Yamuna Expressway. Actual road construction for
Yamuna Expressway needed only 1650 ha of land but more than 2500 ha
were acquired to hand over to the developer. Since the Greenfield
Expressway was constructed by the state government, only the amount of
land required was procured. It is clear from this data that much of what
has passed off as ‘land acquisition for development’ was nothing but a ploy
to usurp vast tracts of land for real estate and speculative purposes.
These two expressways have seen two different strategies for the pro-
curement of land. Land for Yamuna Expressway was acquired under the
Land Acquisition Act, 1894 (LAA) and compensation was paid to land-
owners. The Uttar Pradesh (UP) government adopted a new strategy for
the Greenfield Expressway to bypass newly enacted LARR, 2013. Under
this new model, most of the land was directly purchased by individual land
1
https://timesofindia.indiatimes.com/india/Indias-longest-e-way-tells-a-story-of-land-
acquisition-feat/articleshow/47451496.cms
238 P. K. TRIVEDI
owners by ‘Mutual Agreement’. The government paid higher than market

price for procurement under this arrangement.2
Responses of land losers have also been different in both cases. At sev-
eral places along the Yamuna Expressway, farmers protested against acqui-
sition and for higher compensation. On the other hand, land procurement
for the Greenfield Expressway happened rather without any resistance.
Against this background, this chapter raises some questions on the basis
of qualitative data collected from two locales, one each from both express-
ways. The first phase of fieldwork was conducted in 2011 in five villages
around Tappal town in Aligarh district where four persons had died in
police firing on protesting farmers on the site of the Yamuna Expressway.
The second phase of fieldwork collected data in 2017 from land losers of
the Greenfield Expressway in Unnao district.
2 The Yamuna Expressway Study

This qualitative survey was carried out in six villages: Ghaghauli, Jallagadi,
Uttawara, Kansera, Kirpalpur and Zikarpur of Khair sub-district of the
Aligarh district of Uttar Pradesh. These villages are in the vicinity of Tappal
town which became infamous for the police firing incident in August
2010.3 In all these villages, focused group discussions (FGDs) with farm-
ers were conducted. One is aware of the limitation of this kind of a tool.
FGDs in a mixed group not only give more space to the opinion of the
dominant but also participants appear to take politically correct positions.
In peasant societies cultural values never allow a person to sell off his/her
land. To overcome this limitation, key persons including NGO functionar-
ies, farmer leaders and journalists directly involved in ongoing farmer agi-
tation in the area were interviewed. Several government documents like
the Concession Agreement between the UP Government and the devel-
oper Jaiprakash Industries Limited were also considered.
2
https://timesofindia.indiatimes.com/india/Indias-longest-e-way-tells-a-story-of-land-
acquisition-feat/articleshow/47451496.cms
3
https://www.hindustantimes.com/india/two-killed-in-police-firing-in-uttar-pradesh/
story-OmfDCIZkoJQJpkgYh6VYXI.html
2.1 The Studied Area

Around 100 kilometres from the national capital, New Delhi, bordering
Haryana, is a part of Uttar Pradesh that is a highly developed agricultural
area. In this three-crop area, irrigated by canal water, farmers claim that
not a single day in a year their fields remain fallow. Wheat, basmati rice and
sugarcane are major crops. Although small and marginal holdings domi-
nate the area and there are a few large holdings, land inequality is quite
evident. On the one hand more than 61 percent of the landholdings with
an area of less than 1 hectare each cover only 20 percent of total land, on
the other hand around 36 percent smallholdings between 1 and 5 hectares
cover 62 percent land mass, 2.25 percent medium holdings having around
5 to 7 hectares cover 11 percent and less than 1 percent large holdings of
more than 7.5 hectares cover around 7 percent of total land (Agricultural
Census 2010–11). Having a more substantial interest in land, Jats are
numerically and politically influential. Brahmins also have considerable
interest in land. Dalits are either marginal landowners or some of them are
landless. Out of six studied villages, except Kirpalpur all others are numeri-
cally Jat dominant.
2.2 The Yamuna Expressway

At a cost of around Rs. 9500 crores, this 6 lanes expandable to 8 lanes,
165 kilometres road connects Greater Noida to Agra. In adjoining area of
the Tappal town where fieldwork was conducted, farmers did not oppose
land acquisition for road construction but resisted acquirement of land for
a high-tech city along the expressway. A total of 510-hectare land belong-
ing to 6 villages Birjanegla, Tappal, Kansera, Kripalpur, Udaipur and
Zikarpur was acquired. Rate of compensation was initially declared to be
Rs. 336 per square metre, which was revised to Rs. 570 after the firing
incident.
2.3 Main Findings
The researcher, after visiting a few villages that have lost their land for
Yamuna Expressway or related township project, underlines diverse per-
ceptions of different classes of farmers. One could identify four different
categories of farmers and several other factors that contribute to their
perception.
240 P. K. TRIVEDI
All farmers face a dilemma between ‘no acquisition’ and ‘higher com-
pensation’. At one level their socio-cultural life and livelihood revolve
around land and at another level a hitherto unheard amount was offered
to them for their land. In this confusing situation, several external factors
contribute to their perceptions, which are discussed later in this chapter.
The relationship between landholding size and perception about prefer-
ence to compensation or land is more complicated than it appears, and
hence our findings should be considered only as some sort of pointers.
The perceived inevitability of land acquisition is one such factor that
affects all categories of farmers. In the absence of a strong and reliable
movement against land acquisition, farmers felt that they could not fight a
powerful state which was adamant about taking over their land and give it
to the developer Jai Prakash Industries Ltd. widely known as ‘Jay Pee’.
This perception was substantiated by ruthless repression of their move-
ment. In August 2010, four youngsters were killed when police opened
fire at agitating farmers. In the previous four years, 12 people were killed
in incidences of police firing on land acquisition related protests in Western
Uttar Pradesh only. Another issue that weakened resistance to the acquisi-
tion was of agriculture increasingly becoming an unviable economic activ-
ity for small producers. This scenario reflects a more profound agrarian
crisis that had engulfed the whole of rural India.
The first category of farmers were those who had got a very small, usu-
ally less than one-acre infertile land; their resistance to land acquisition
remained weakest. Their economic conditions also deteriorate their bar-
gaining power. Majority of these farmers are Dalits, and they have got
‘land patta’ through government schemes of land distribution. It is well
known that land available for distribution through these plans is infertile
land which was kept aside by the village community for grazing and so on.
In village Kirpalpur, a Dalit dominated village, all farmers had signed con-
tracts for giving up their land except two Jat farmers. A few Dalits had
purchased land at nearby places with the compensation amount. All of
them were BSP supporters, and they believed that the government headed
by Ms. Mayawati was doing all this to bring prosperity and development
to the area.
The second category of farmers had fertile but small unviable farms.
They too resisted the land acquisition but in most of the cases settled for
a reasonable compensation. The third group of farmers was comparatively
rich in the sense that they could survive on agriculture. Their landholding
generally ranges around 10–20 acres. A few of them had got even up to 50
acres of land. They resisted the land acquisition most and also bargained
for the highest price. A section of them were willing to continue with
agriculture for their livelihood, and another section wanted to save land to
sell it later at a higher rate. Everybody knew that after completion of the
township and highway project, prices of land in its vicinity would go up
many folds.
Apart from landholding size and land fertility, the proportion of the
land to be acquired was another contributing factor. If one farmer lost his
entire land, he was more likely to offer stronger resistance to acquisition
per se than another one who was losing only a minor part. One can easily
make out the difference of opinion between generations. If the younger
generation was an open supporter of taking substantial compensation for
land, elders were nervous for not being familiar with any other profession
than farming. Absentee landowners were another section of vocal support-
ers of proper compensation. Studies conducted elsewhere have also identi-
fied the role of absentee landowners in influencing other farmers to give
up land (Shylendra 2018). In addition to these factors, indebtedness was
a significant issue in shaping the perceptions of farmers.
Although after the police firing incident, the government had taken an
official position that no land would be forcibly acquired, ground realities
reflected that the government machinery was working overtime to ensure
that the builder got the required land. This researcher could not pick up
any such case, but there was a widespread campaign among the farmers
that the police were harassing those who refuse to give up their land, and
this perception was working in favour of the developer. Government offi-
cials and the developer had physically occupied the land for the township
even before farmers signed contracts with them. In addition to all this, the
builder had developed a network of its own agents who kept spreading
words on the inevitability of acquisition and un-viability of agriculture.
They also made some extra cash payment, in addition to the official com-
pensation amount, to the farmers who signed contracts with them.
About compensation package, opinion was again divided. Comparatively
prosperous farmers focus on a higher share of developed land to be
returned whereas middle and small farmers demand a higher compensa-
tion amount combined with the rehabilitation package. In this area, the
compensation rate was around Rs. 22 lakhs per acre, which was about 5–7
times higher than prevailing market rates before the acquisition. The new
rehabilitation policy of the Uttar Pradesh government effective that year
provides Rs. 20,000 per acre per year for 33 years with an annual increase
242 P. K. TRIVEDI
of Rs. 600 and 7 percent developed land returned to the farmer if the land
was acquired for the residential purpose.4 Farmers were demanding to
raise this 7 percent share to 25 percent and the compensation rate equiva-
lent to that of Noida, which was around 35 lakhs per acre.
Most of the farmers did not have any concrete plan for utilisation of the
compensation amount. A few of them had bought land elsewhere, and this
was happening in cases of all categories of farmers. This buying had led to
a sudden jump in land prices in this area initiating a rush among the farm-
ers to sell their land first to buy the land first. Many of them planned to
build their house, repay their loans and spend on marriages. Youngsters
prepared to purchase new models of vehicles and consumer goods creat-
ing a massive market for the companies producing these items. It was clear
that if one section of corporates were taking away their land and putting
cash in their hand another section of the corporates would soon take away
a part of that money by selling their products to them. Corporate seemed
to emerge as the principal beneficiaries of this whole process as the land
they bought from farmers even at more than the market price was sold at
a very high rate after development. For instance, if farmers got Rs. 930 per
square metre for their land in Greater Noida, the same land became Rs.
10,000 to 30,000 per square metre after development. This reveals huge
inequality between the financial power of corporates and farmers as what
looked a desirable price of their land to farmers was bottom cheap for
corporates. This whole scenario also reflected enormous clout that corpo-
rates enjoyed over state institutions.
3 The Greenfield Expressway Study

The section 46 of LARR, 2013 provides that ‘Where any person other
than a specified person is purchasing land through private negotiations for
an area equal to or more than such limits, as may be notified by the appro-
priate Government’. And a ‘specified person’ has been defined as follows:
‘specified persons’ includes any person other than (i) appropriate government:
(ii) Government company; (iii) association of persons or trust or society as reg-
istered under the Societies Registration Act, 1860, wholly or partially aided by
the appropriate Government or controlled by the appropriate Government.
4
https://www.thehindu.com/news/national/other-states/Uttar-Pradesh-Govt.-announces-
rehabilitation-policy-for-farmers/article15901533.ece
This means that Rehabilitation and Resettlement (R&R) shall be appli-

cable in case of private purchase of land beyond a specified limit. R&R
shall not be a compulsion for private purchases below this threshold. This
limit is to be defined by the state governments. Uttar Pradesh government
has not defined any limit in their ‘The Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and Resettlement (Uttar
Pradesh) rules, 2015’ notified in May 2015.
In March 2015, the UP Government issued a government order (GO)
prescribing the process for direct land purchase from landowners on
mutual agreement basis. This GO refers to section 46 of LARR, 2013 and
goes on to state that due to time and labour consuming process of land
acquisition under new law and to encourage direct land purchase system,
these directions are being issued to government departments, autono-
mous bodies and authorities under government, councils and PPP proj-
ects in the state.
A close persuasion of these documents reveals that the government is
presenting and acting in the manner of a private entity, that is, a person
other than ‘specified person’ in the act.
3.1 The Greenfield Expressway

Media reports suggest that the nodal agency implementing this ambitious
project of the state government, Uttar Pradesh Expressway Industrial
Development Authority (UPEIDA), had effected around 30,000 regis-
tries to buy approximately 3000 hectares of multi-crop land in Indo-
Gangetic planes. The government adopted a policy to pay four times the
Circle Rate (CR) in rural areas and twice the CR in urban areas for the
outright purchase of land. On an average, approximately Rs. 1 crore per
hectare was paid to individual owners for the purchase of land under this
‘mutual agreement’ arrangement. Land belonging to some farmers who
were not willing to sell their land was acquired under LARR, 2013. For
over 160 hectares of land acquired under the process established by the
new land acquisition act, compensation amount was the same as ‘mutual
agreement’ arrangement. They were also paid interest prescribed under
state rules (Mathur 2015). Remaining over 300 hectares of land came
from government departments.
244 P. K. TRIVEDI
3.2 The Studied Area

For a quick survey to explore the perception of farmers on land acquisition
under the new regime, two villages, Matariya and Pilakhna-Rasidpur were
purposely selected. Both these villages of Unnao district are located about
30–40 kilometres from Lucknow city. Marginal, small and medium land-
holdings are preponderant in Hasanganj tehsil (sub-district), where both
these villages are located. Matariya hosts a population of 3025, and 1738
persons lived in Pilakhna-Rasidpur in 2011. Dependence of these villages
on farming is evident from the fact that out of a total of 488 main workers
in Matariya, 404 were cultivators. Comparable figures for Pilakhna-
Rasidpur are 352 and 298 respectively. Literacy rates are quite low in both
villages. Dalits form around two-fifths of the population, but the number
of agricultural labour is almost nil in selected villages.
In-depth interviews with the help of a semi-structured questionnaire
were conducted with 10 land losers from Matariya and 14 land losers from
Pilkhana-Rasidpur in September 2017. They were probed around the
total land owned by them and quantum of land lost to road construction,
willingness about selling land, reasons for giving land, the rate of compen-
sation, the sufficiency of compensation, the resistance offered by the vil-
lage people. They were also queried on their perception of the relative
profitability of agriculture versus selling land for road construction,
whether they wish to quit farming and reasons for it.
Besides several similarities mentioned above, the two villages exhibit
some interesting differences also. One of them relates to the caste-land
ownership congruence. In Matariya, land losers are mostly Yadavs, close to
a majority of them owning 5 to 10 acres of land. To put things in perspec-
tive, the average size of landholding in Hasanganj Tehsil is only 1.6 acres.
On the other hand, the majority of land losers of Pilakhna-Rasidpur are
‘upper caste’ households generally owning 2 to 5 acres of land. Some Dalit
households, mostly owning 1 to 5 acres, have also lost land in this village.
Regardless of holding relatively sizable quantum of land, both villages
appear agriculturally under-developed. Wheat and paddy are the main
crops in these two-crop areas. Mango orchards are also found in abun-
dance. Respondents report that it is mainly due to the absence of irriga-
tion facility. One canal passes through Matariya, but farmers need private
water pump sets to pump water in their fields. Erratic supply of electricity
and increasing price of diesel further adds to the escalating cost of cultiva-
tion. Insufficient rains in the last four years has only added to their crisis.
If this wasn’t sufficient, highway construction has almost blocked the

canal leaving it to a nalah flowing by the side of the road.
Diversification of income and employment outside agriculture is
another distinguishing feature between them. Most of the households in
Pilakhna-Rasidpur are involved in at least one economic activity other
than agriculture. A majority of them, upper caste and Dalits alike, are
occupied in dairy. Some of them are also in transport, flour mills, hiring
out of agricultural implements and so on. On the contrary, Matariya resi-
dents are mostly dependent on agriculture; few of them are involved in
dairy, PDS shops and other services.
3.3 Main Findings
Like the Yamuna Expressway probe, an attempt was made here also to
capture the perception of land losers on a ‘higher compensation versus no
acquisition’. This was to explore whether land losers agitate all out against
the acquisition of their land, or they merely demand higher compensation
for the acquired land. Since one does not expect a simple answer to this
question, the effort would be to capture complexities involved in it.
Hence, qualitative data has been collected.
In both the villages, all respondents spell out their understanding that
continued involvement in agriculture would be more profitable for them
than selling land for road construction in exchange for the attractive price
offered by the government. They often argue that cash might come and
go quickly, but the land will remain an asset for future generations.
Surprisingly, their views vary on several other issues, but this articulation is
almost unanimous, across caste and class lines, in both the villages.
But when it comes to articulate a position on quitting agriculture,
diverse opinion emerges from the two villages. In Matariya, where people
are mainly dependent on agriculture with sizable land and low education,
most of them want to remain occupied in farming in future too. They see
little prospect outside agriculture that provides them sustenance. Some
households in this village wish to diversify into business and service, but
they are not clear about their plans.
Pilakhna-Rasidpur presents a contrasting picture where most of the
households are already generating part of their income from outside agri-
culture. They feel that farming involves more arduous work and yields little
return. Except a few, most respondents want to quit agriculture in future
and increase their involvement in business, dairy, transport and so on.
246 P. K. TRIVEDI
Further, a query on their willingness to part with their land again yields
an almost unanimous negative answer. They unequivocally deny selling
their land out of their free will. This observation raises the question of the
government’s claim of land procurement without even a murmur among
the land losers.
Asked about the reasons for discontent among the land losers, the
question of compensation comes up most forcefully. Again, all the respon-
dents express their dissatisfaction with the rate and amount of compensa-
tion. In some cases, non-payment of compensation for trees is another
issue that fuels displeasure.
Actually, the rate of compensation based on circle rate varies across vil-
lages and areas, leading to two consequences in two different directions.
It might instigate discontent among the villages where the rate of com-
pensation was lower than their neighbouring villages. In some cases, land
losers of villages just outside municipal areas protested. To quell their agi-
tation, the government decided to include a few villages in the municipal
area of Lucknow and allow them a rate of compensation fixed for an urban
area.5 This variation in the rate of compensation across villages also fore-
stalled any possibility of their joining hands against the government.
Land losers also divulged stories of intimidation by the state machinery
to sign an agreement with the government. It was reported that the dis-
trict bureaucracy threatened them that if they deny selling their land, the
same will take forcefully and money would be deposited in a government
account. Then they will have to run from pillar to post to get their money
released. Police officers also threatened them of filing false charges against
them. Some of them even approached the court but lost.
Many land losers have bought land in other villages. House construc-
tion and expenses of marriages is another significant head in expenditures.
Bank deposits, household expenses, education, purchase of milch animals
and some small business are other priorities.
4 Concluding Remarks

One might not be in a position to conclusively comment on the percep-
tion of land losers on ‘higher compensation versus no acquisition’ dilemma
since this is further complicated by the perception of the inevitability of
acquisition due to helplessness before the mighty state and unviability of
5
Local Newspapers Reports.
agriculture. Sathe’s (2016) observation that farmers were ready to sell

their land at an acceptable rate overlooks the context in which this percep-
tion is shaped.
The relationship of law with the state and the people also needs atten-
tion in this context. The state vigorously implemented the old land acqui-
sition law over a century and acquired land at its own will. But when a new
law that provides nominal rights to land losers is enacted, the same state
chooses to bypass it. The government might have bought land for the
Greenfield Expressway without much protest but ‘a market based resolu-
tion of land allocation—including direct purchase of land from farmers—
could easily unleash predatory forces driven by speculative tendencies
capable of dispossessing farmers on a massive scale’ (Shylendra 2018).
We also see that on the one hand government’s agriculture policies are
leaving agriculture unviable by pushing farmers out. This provides a per-
fect setting for the acquisition of agricultural land for ‘developmental proj-
ects’, albeit at comparatively better prices. Looking from this perspective,
the link between the ensuing agrarian crisis and the weakening resistance
of the peasantry does not remain obscure. The more significant issue of
food security is equally important. Several thousand acres of multi-crop
land has been diverted from agriculture to highway and township projects.
This happens in the context of an ensuing crisis that was long in the
making. The crisis is not just about the immediate predicament of losing
land but an agrarian crisis that has already dampened the enthusiasm of
engaging with agriculture, consequently weakening the resistance against
dispossession. The crisis is so deep that whenever a collective action takes
place, it often focuses on higher compensation rather than going against
land acquisition.
References
Bharathi, M. (2012). Tribal Women’s Perspective on the Land Acquisition Bill.
Government of India. (2010–2011). Agricultural Census, 2010–11. Agriculture
Census Division, Ministry of Agriculture and Farmer Welfare, Government of India.
Guru, G. (2016). Shifting Categories in the Discourse on Caste and Class.
Mathur, S. (2015, May 28). Country’s Longest Expressway Tells a Story of Land
Acqisition. The Times of India. Retrieved from https://timesofindia.india-
times.com/city/lucknow/Countrys-longest-expressway-tells-a-story-of-land-
acqisition/articleshow/47450212.cms
248 P. K. TRIVEDI
Sathe, D. (2016). Land Acquisition Need for a Shift in Discourse? Economic &
Shylendra, H. S. (2018). Land Acquisition Need for a more Progressive Discourse.
Taj Expressway Authority. (2003, February 7). Concession Agreement, 2003.
Industrial Development Authority & Jaiprakash Industries Limited.
CHAPTER 13
LARR 2013: What Does It Deliver?
Dhanmanjiri Sathe
1 Introduction
Land acquisition has elicited heightened activism in the last few decades in
India, and interestingly the State has also shown increased sensitivity and
response to this issue, an example of which is the passing of the Right to
Fair Compensation and Transparency in Land Acquisition, Rehabilitation
and Resettlement Act, 2013 (Ministry of Law and Justice 2013), that is,
LARR 2013. Additionally, these trends also point towards the political
mainstreaming of this issue. We explore some of these trends in this chapter.
However, let me begin with some anecdotes:
The farmers in Wood County in rural north west Ohio never saw it coming.
The soldiers had arrived on the morning of Sunday, February, 2010, while
the farmers were in church. Hearing gunshots, the farmers had rushed to
their houses, which by then were already immersed in flames. While some
soldiers kept the farmers at gunpoint from rescuing their homes, others
poured gasoline over recent grain harvest in the barns and burned that as
well. One eight-year old child was trapped and died in the fire. The dairy
cows were dispatched more quickly and humanely with a burst of m
achine-gun
fire. Then the soldiers marched the more than 20,000 farmers away at rifle
point. Never come back, they were told; the land is no longer yours.
D. Sathe (*)
Department of Economics, Savitribai Phule Pune University, Pune, India

250 D. SATHE
The farmers, many of whose homesteads had been in their families for
generations, were unhappy to learn that a British company was taking their
land with the help of the soldiers. The company was going to grow forests
and then sell the timber. The farmers were even more distressed to learn that
the World Bank, an official international organization combating global
poverty, had financed and promoted the project by the British company.
The World Bank is not subject to Ohio or United States law or courts.
The farmers might have hoped that publicity would have helped them.
And indeed, a year later a British human-rights organization, Oxfam, pub-
lished a report on what had happened in Wood County in Feb. 2010. The
New York Times ran a story on the report on 21 Sep., 2011. The World
Bank the next day promised an investigation. That investigation never hap-
pened. (Easterly 2013, p. 1)
Easterly then asks if this story is true. Do we find it true? Most of us will
have a feeling of discomfort while reading this story. The reason being,
first of all, that such ‘things’ do not happen in a developed country, even
less so in the US. Why do we feel this? What is this peculiar phenomenon
of having so much confidence in the State of a distant economy? Well, we
would have to come back to the earlier statement that such ‘things’ do not
happen in a developed country.
And sure enough, Easterly has played a trick on us, because as he reveals
later, this is a story that happened in Mubende District in Uganda. Once
this is clear, suddenly the story has a familiar ring to it. Which means that
our experience has shown us that, of course, such things do not happen in
developed nations where the citizens seem to have much better rights—
especially the Right to Property, along with an active civil society and a
free press, democratic answerability and so on.
All these parameters come into play when we look at a case that did
happen in the US: the Kelo vs. New London case. The US Supreme Court
has been defining public purpose in the context of land acquisition, and
over the years it has been defining it in an increasingly broad manner. We
can look at one such important judgement. The Supreme Court decision
in Kelo v. New London (www.casebriefs.com and www.ij.org/kelo) in
2005 broadened the constitutional authority under the Fifth Amendment
(which allows the government to take private property for ‘public use’ as
long as ‘just compensation’ is paid, i.e. the doctrine of eminent domain)
for the government to take property from one private owner and grant it
to another private entity.
13 LARR 2013: WHAT DOES IT DELIVER? 251
In this specific case, there was a property that was owned by Susette
Kelo which the local government wanted to ‘take’ and transfer to the New
London Development Corporation. The purpose stated was ‘economic
development’.
The Supreme Court held that the use of eminent domain for ‘economic
development’ did not violate the ‘public use’ clause of the state and federal
constitutions. The Court held that if a legislative body finds that an eco-
nomic project will create new jobs, increase tax and other city revenues,
and revitalize a depressed urban area, then the project serves a public pur-
pose. It is surprising that this ruling was given in spite of the fact that the
development corporation was a private entity. Further, there was no
‘blight’ in the said area, a reason that had been used in the earlier judge-
ments. The public reaction to this decision was very critical, and many
believed it to be a gross violation of property rights (Sathe 2015a, p. 91).
Public opinion was very much against this judgement: ‘… there was a
hue and cry in several states, and legislation was advanced to overturn the
judgment’, state Bhagwati and Panagaria (2012, p. 157). Hence, one can
agree with the statement, ‘Ultimately, the decision on what is legitimate
social purpose for acquiring has to be democratically determined’
(Bhagwati and Panagaria 2012, p.157). This is an important example
because it was the democratically elected government that took prece-
dence over the law of the land as interpreted by the highest authority.
For democracy to take precedence it should be in existence in the first
place –in whatever form or however flawed. Unfortunately, what we see is
that democracy is not the form of government in most developing econo-
mies. In India democracy does exist, and the legislature has been playing
an active role in the case of land acquisition, as we see further along in this
chapter.
The third anecdote is from Magarpatta City, a township that has devel-
oped in Hadapsar Village, around 8 kms from Pune.
In the early 1990s, Magarpatta City consisted of around 430 acres of
land and around 120 families. Satish Magar, who owned land in this area,
conceptualized the idea of having a township here as early as 1993. Satish
Magar says, ‘I had a friend who had a small shop on MG road (an upper
end shopping area) in Pune who earned more than us with 150 acres of
land’ (Gupta et al. 2012, p. 3). ‘ … and there is also dependence on mon-
soons, markets, logistics which makes earnings from agriculture uncertain’
(Gupta et al. 2012, p. 4). This is a very important statement and a com-
plete indictment of the agricultural policy that has been followed by the
252 D. SATHE
Indian government. This is a clear indication that even with 150 acres of
land, the family was not able to earn as much as a small shopkeeper. This
statement should in fact be taken as a precursor to the data from the
National Sample Survey Office, 2005, wherein 40 per cent of the farmers
state that they do not want to engage in agriculture (Ministry of Statistics
and Programme Implementation 2005, p. 1). While there are some sec-
tions of Indian society who become nostalgic about the ‘way of life’ of
farmers, the farmers themselves—and even the ones with big landhold-
ings—wonder why their earnings are so very low as compared to those
from urban occupations.
The caste background of the Magars is the Marathas, that is, the higher,
land-owning and cultivating caste. Satish Magar belonged to a politically
influential family which was also highly educated (engineering), and in fact
his father finished engineering in 1958, a very rare occurrence in those
times. In this area most of the inhabitants were related to each other and
had the surname ‘Magar’. Magarpatta area was part of Pune Municipal
Corporation from 1960 onward. In 1991 the population of Pune city
crossed 20 lakhs, and hence there was a justified fear that this village would
come under the Urban Land Ceiling Act and would be acquired at rates
substantially lower that the market price. The farmers would have been left
high and dry as had happened in earlier cases in other parts of India. Thus
Magar used his education and political contacts to implement this ‘dream’
of his. He says,
The thoughts that went through our minds were, one, how do we convert
this land that is a raw material into a value added fine product? Two, since
we don’t want the money and don’t know what to do with the money, how
do we plough this money back and get the maximum benefit out of it?
Another important aspect was that no one should have to be displaced due
to the development process (Gupta et al. 2012, p. 5).
I am quoting Magar in full because, most often, the farmer is not able
to articulate his concerns and what he wants in a lucid manner and hence
he is susceptible to misrepresentation. Magar is an exception to this.
Magarpatta City was conceptualized as an integrated planned township
with commercial areas and residential zones along with schools, hospitals,
recreational areas and so on around 1993. Magarpatta Township
Development and Construction Company Limited was formed and the
farmers are shareholders in this company, that is, they came together and
pooled their land. The farmers acquire returns based on their original
landholding. Then, after developing the land, it is leased out to various
occupants, which means that the farmers continue to be the owners of
their original land. Very high levels of planning, consensus building and
political patronage led to the success of this case. The commercial area has
mainly IT companies. This is a case that worked in favour of the farmers.
By 2008 the whole project was concluded (based on Gupta et al. 2012;
Charaillivi 2012).
The fourth case is that of Maan Village, which is around 20 kms from
Pune. Maan Village is 5 kms away from Hinjawadi Village, where an IT
SEZ was formed in 2000. Due to the proximity of Maan to Hinjawadi, the
government of Maharashtra through Maharashtra Industrial Development
Corporation—its main industrializing agency—started to acquire land in
Maan Village in 2000. In the first two phases of acquisition the farmers
were willing to give their land but in the last phase they agitated, and the
acquisition has been at a standstill since 2005. Interestingly, the farmers
now do not want to engage in farming but rather to ‘develop’ the land
themselves. Unfortunately, however, they have not been able to replicate
the Magarpatta model in their village (based on Sathe 2017).
The fifth case is a reference to the Nandigram-Singur episodes, which
are quite well known and therefore we will refer to them in brief. In the
Nandigram-Singur cases which happened in 2006–2008 there was a com-
plete breakdown between the people of West Bengal and the state govern-
ment. Rampant violence was used by both sides (Kumar 2008; Banerjee
2006). The process of acquisition had to be left mid-way, with an enor-
mous human and financial cost to the concerned private sector (i.e. Tata
Motors Limited). But the main issue is that an attempt that was made to
start the process of industrialization, after almost three decades of de-
industrialization, was nipped in the bud (Roy 2013). Unfortunately, a
similar incident occurred in Banghar, West Bengal in 2016, where only 13
acres were required by the West Bengal government. Again there was use
of violence by both sides and the acquisition had to be abandoned.
The tragic aspect to this is that even 10 years after Nandigram- Singur,
the political economy of West Bengal does not allow for any acquisitions
in a peaceful manner. Even the ‘glue’ of corruption or imperatives of shar-
ing of ‘rents’ by the stakeholders have not been sufficient for the acquisi-
tion process to go through. Because the laws have worked quite well in
many other states, clearly it is not really the law that was at fault, but the
insensitivity and hubris of the political party in power in the state.
254 D. SATHE
Thus, the question then is: ‘What makes for a successful or sustainable
acquisition and what role does the law play in it?’ We define ‘sustainable’
acquisition as a process that does not come under threat immediately or is
not challenged in the future. Obviously, non-sustainable land acquisition
is that which leads to immediate or in-the-future non-viability, that is, usu-
ally agitations, protests, and so on.
So, can we have land acquisition that does not lead to any of these acri-
monious reactions? Yes we can because the fact remains that a lot of indus-
trialization has happened in the last 20 years or so and most of it peacefully
on acquired land, for example in Maharashtra, Gujarat, Karnataka and the
NCR region. What was done right in these states and areas?
2 Background
What we can discern from the above anecdotes is that there are varieties of
outcomes in cases of land acquisition. It should not be difficult to accept
that the outcomes are a result of the differentiated environments—politi-
cal, economic and so on—and of the diverse institutional frameworks
within which the acquisition is playing itself out. However, as Ramesh and
Khan (2015, p. 2) state, ‘… we found that countries with more evolved
legal regimes with a greater emphasis on civil rights provide the greatest
safeguards’. In other words, it also means that the overall institutional
framework in a nation has a very important bearing on the land acquisition
issues. One should not expect land acquisition issues to work themselves
out as a separate entity with a life of its own. Land acquisition would be a
part of the overall milieu in that economy. If there is suppression in other
areas of the economy and public life, then this would also be the case in
the area of land acquisition. Thus there is an organic relationship between
land acquisition and overall milieu. If property rights are weak then it
would be that much easier to acquire land, as it is when the freedom of the
press is limited. In a democracy, the government would be much more
sensitive to protests than under authoritarian rule.
Moreover, based on our experience in India, one would need to go
further and state that even within one country there can be different ways
of acquiring land and different outcomes. In India, this happens because
although land is a state government subject, land acquisition is a central
government subject (Ramesh and Khan 2015, p. 5).
We see that in the developed world, the Right to Property is very strong
and citizens are fiercely committed to it. Also, the concept and implemen-
tation of ‘Fair Compensation’ is part of the overall institutional frame-
work. Thus the citizens are able to get an idea of ‘justness’ in the workings
of the society and the polity—even if the empirical evidence is somewhat
mixed (Chang 2010).
3 From Independence to 1991

A study of India’s acquisition experience in the 1950s and 1960s is very
similar to the Ugandan experience in 2010, and one does get a sense of
déjà vu when reading that story. In the pre-liberalization phase of the
Indian economy (i.e. from 1950 to 1991), land was acquired in India
mainly by the state for purposes of industrialization, urbanization and so
on. In most of these cases, hardly any compensation was given. In this
period there were protests against the acquisitions by the state, but most
of them were crushed successfully (Vora 2009; Shah 2004). This phase has
been called the ‘traditional phase’ (Sathe 2011). In this phase, the pres-
sure on the land was relatively low, there was less activism on the part of
farmers, and there were few NGOs. Further, there were very few civil
society groups supporting the farmers’ agitations. But at this point it may
be pertinent to note that in 1984, a major amendment was passed to the
Land Acquisition Law 1894,which shows the anxiety and a felt need for a
change on the part of the state to bring the law more in alignment with
the ground reality. By then, many states had brought about their own laws
with respect to land acquisition, as this was possible under the Constitution
of India. Under Article 254(2) of the Constitution of India, for the con-
current subjects, the states can pass laws repugnant to the Central
Legislation with the approval of the President of India. As India set upon
a path of development after Independence, the demand for non-
agricultural land increased exponentially. There was also an increasing
population, which required more land especially after 1971. As the process
of Five Year planning began, the State began to set up many public sector
units all over India, which required land. With this as the developmental
backdrop, we can imagine why the leaders and the policy makers chose to
keep the Land Acquisition Act (LAA) 1894 (Sathe 2017). Nehru is
reported to have said in 1948 to the people affected by Hirakud Dam that
‘If you are to suffer, you should suffer in the interest of the country’ (Vora
2009, p. 10). There were many dams built in the period starting from the
256 D. SATHE
1950s, for example, Pong Dam in Himachal Pradesh (1970), Chandil

Dam in Bihar (1978), Bhakra Nangal (Punjab) and Tehri Dam (1976).
There were agitations attached to most of these. But, as Vora (2009,
p. 11) points out, ‘None of these agitations proved successful either in
stopping the project or getting a good resettlement package, and none
lasted more than one or two years’.
A watershed moment, however, came with the Narmada Bachao
Andolan, an anti-dam movement started by Medha Patkar and her col-
leagues against the Sardar Sarovar Project on the river Narmada in the late
1980s. The major success of this movement was that it put the issue of
compensation on the world map. Global and domestic opinion since then
have very much moved in favour of providing better compensation. Also
the World Bank and government of India have had to integrate the costs
of displacement, resettlement and so on into the total costs of a project
(Sathe 2017).
4 The Post-Liberalization Period

Let us now come to the post-liberalization period for the India economy,
that is, after 1991. One thing that seems clear is that in the post-
liberalization period the phenomenon of land acquisition became so much
more common and widespread that the party in power felt that ‘some-
thing’ had to be done on this front as the elections drew close. There were
many cases where the farmers were not happy with the acquisitions. The
Left Front had lost elections in West Bengal after Singur-Nandigram in
2006–2008 and the United Progressive Alliance (UPA) government was
accused of being ‘anti-farmer’ by the opposition.
On the other hand, in this same post-liberalization period there have
been numerous success stories. That the Indian economy could show a
high rate of growth indicates that successful and protest-free acquisition
has also happened in India.
We have already mentioned the cases of Magarpatta and Mann Village,
close to Pune city. Looking at these and other cases, we see that there have
been protests in cases of successful acquisitions also, but here the state has
increased the compensation package, that is, the state has responded to
the demands made by the farmers.
We can detect from above that there have been varieties of acquisition
episodes in this period.
5 LARR 2013

It is against background that we now analyse LARR 2013. This law was
passed in August 2013 and came into effect from 1 January 2014 (Ministry
of Law and Justice 2013; MLJ 2013).
The law of any land is expected to reflect, by and large, the ideology/
beliefs held by the people, and these are susceptible to change. A change
in a law is usually an important institutional change with far-reaching ram-
ifications. ‘Institutions are the rules of the game in a society or, more for-
mally, are the humanly devised constraint that shape human interaction’,
as defined by North (1990, p. 3). Hence the legal framework is a crucial
aspect of the overall institutional structure.
In any case, with the impending elections in 2014, the UPA (i.e. the
Congress Party and allies) put the LARR 2013 Bill in front of the Lok
Sabha, possibly with an objective of seeming a pro-poor and pro-farmer party.
Luckily for us, the then Minister for Rural Development, Jairam
Ramesh, has written a book (along with his Principal Aide Muhammad Ali
Khan) giving us a glimpse into the thinking behind having this law tabled,
giving us the perspective of an insider.
Ramesh and Ali Khan give one interesting perspective (2015, pp. 3–4).
They situate LARR 2013 within the UPA government’s approach to law-
making between 2004 and 2009. This approach was a rights-based
approach:
‘… a regime premised on the idea that the purpose of laws should be to

empower people against the State at large. Laws such as the Right to
Education Act, 2009, the Right to Information Act, 2006 and the Mahatma
Gandhi Rural Employment Guarantee Act, 2005 had firmly established this
framework. It was to this regime that the exercise of Eminent Domain had
to conform as well’.
There are many definitions of the ‘rights-based’ approach and we will

not get into them here but will continue with the characterization as given
by Ramesh and Khan (2015), namely that the purpose of the laws should
be to empower the people.
However, I think that there is a problem here. The Education and
Employment Acts that have been mentioned here are those that belong to
social security category, and these services enhance the welfare of the citi-
zens. However, it is not at all clear how they empower the people against
the State. In fact, they do not and are not expected to empower the people
258 D. SATHE
against the State. The Right to Information Act 2006 can be construed as
a weapon in the hands of the people. In this case, the State accepts self-
regulation and this Act does empower the people against the State.
We feel that the State enters into a somewhat different kind of relation-
ship with the people from whom land is being acquired (usually farmers).
In this case, the State is interested in an asset of a person (and the asset
presumably is going to be put to use in a way that is expected to increase
the overall good). There is an economic exchange that is implied here,
and the people have to be protected against the unbridled use of power
by the State, that is: What are the rights of the people in the face of a
predatory State? Eminent Domain in LARR 2013 (MLJ 2013) allows the
State to ‘take’ the land from the owners but also states that the ‘taking’
must happen for public purpose and that compensation needs to be paid.
So, in a sense, there is a balance and there are two sides involved. In the
case of Right to Education, Right to Information and Employment
Guarantee Schemes the relationship is one-way. Due to this, we feel that
LARR 2013 should not be clubbed with other welfare-istic measures
taken by the UPA.
Rather we feel that the relationship between the State and the farmers
is of a ‘quasi-market’ nature (Sathe 2016, p. 55). This is because there is
an exchange that is involved here. On one hand, the farmers have to give
up their land even if they don’t want to because the power of ‘taking’ lies
with the State. On the other hand, they have an asset, that is, the land, and
they can and do ask for a ‘sustainable’ compensation. Compensation, in
turn, is based on the market value of the land and then other components
are added onto it such as giving back developed land, jobs and annuities.
Thus, there is a ‘market dimension’ to the deal that happens. To attain the
‘sustainable’ compensation the farmers can and do engage in agitations,
and interestingly over the period the agitations have led to better and bet-
ter compensation packages, which have also been ‘sustainable’, as the
results of the agitations show.
We hypothesize that situating LARR 2013 in this kind of welfare-istic
and rights-based approach discourse has affected the law in a fundamental
manner and this has not been a positive movement. We now focus on how
LARR 2013 has dealt with the issues of Compensation and Rehabilitation
and Resettlement.
6 Compensation and Rehabilitation

and Resettlement Issues in LARR 2013
LARR 2013 had exempted 13 laws from its ambit (e.g. the Railways Act,
1989, the National Highways Act, 1956), while suggesting that they
should be included by January 2015.
The compensation has to be paid to those whose land is acquired and
to the tenants (MLJ 2013, First Schedule). Rehabilitation and resettle-
ment is to be provided to all those whose land is acquired, the tenants on
the land and also all those who were dependent on the land in some other
way, that is, those who were artisans, shopkeepers and small traders (see
the Second Schedule).
Focusing on compensation, LARR 2013 (MLJ 2013, Chap. IV) the
Collector decides the compensation to be paid after assessing and deter-
mining the market value of the land (MLJ 2013, Sec. 26:15). In short, the
market value would be based on the stamp duty that has been paid, aver-
age sale price for similar type of land in a nearby village, and consented
amount agreed upon in case the acquisition has been undertaken for pri-
vate purposes or under Public-Private Partnership. After specifying in
detail how to arrive at the market price, MLJ 2013, Sec. 26(c), Explanation
4, pg.16, states that if the Collector opines that the price to be paid is not
indicative of actual prevailing market value, then he can discount it for the
purposes of calculating the market value. Thus, the Collector has the
power to discount whatever is emerging as the market price.
It has often been mentioned that the price of the land may be underes-
timated as people, to avoid the stamp duty, do not show the real value of
land and take a large share in cash. Therefore, the price of land on paper is
much less that what it is in reality.
To arrive at the compensation, the Collector has to take into consider-
ation the market price (as defined above), as well as the value of standing
crops, damage caused by severing land and so on. Interestingly, a further
point to be taken into consideration is ‘any other ground which may be in
the interest of equity, justice and beneficial to all affected parties’ (MLJ
2013, Sec 28: 17). This is a fairly broad consideration, and using this, a
Collector could reach a price more acceptable to those losing their land.
In any case, with the land markets in India being so underdeveloped,
the possibility of arriving at a ‘genuine’ market price is slim. Further, there
is a problem even if one were to arrive at a correct market price.
260 D. SATHE
It is that, the future appreciation of the land is not included in this market
price. It can be observed that a large number of anti-land-acquisition agita-
tions in peri-urban areas have arisen in response to people losing a share in
the future appreciation of the land. To mention a more well-known case, in
Bhatta-Parsaul, Uttar Pradesh, the farmers were happy with the price offered
for their land in the first phase. However, as the acquisition moved on to the
second phase, they could see that the value of their land had increased expo-
nentially and what they were receiving was not commensurate with that
value. In addition, while doing field work in Maan, the villagers told the
author, ‘they [meaning the development agency] just make some roads,
give electricity etc and sell the same land at very high prices. We sold in acres
and they sell in square feet’ (Sathe 2014). Thus, it is imperative that wher-
ever possible the compensation package itself should give back a certain
percentage (e.g. 10 to 20 per cent) of the developed land to the original
owners. This is different from the original owners buying back the land at
the increased price (usually out of the compensation money that they have
received). If a certain percentage of developed land is going to be given back
to the original owners, then the owners may be satisfied with a lower amount
as compensation. It has been claimed that under LARR 2013 (MLJ 2013),
the price of land will greatly increase. But an option like this would have an
additional benefit of decreasing the costs to the buyer/investor. As of now,
this provision, which seems crucial to us, does not exist under ‘Compensation’
to be paid to the land owners and tenants.
LARR 2013 (MLJ 2013) states that two times the market value in
urban areas and four times the market value in rural areas must be paid as
compensation. The logic of these figures has been, quite correctly, ques-
tioned by many experts. While these can be interpreted as the minimum
that the farmer should receive, the experience at state level shows that,
since the market price can itself be erroneous, it is better if the governmen-
tal acquiring agency has the power to negotiate the price with those losing
their land without any numerical limits. Thus sometimes farmers would be
happy with a price that is lower than two-fold while at other times a price
of more than four-fold might have to be paid.
The Act then moves on to Chap. V, which deals with the issue of reha-
bilitation and resettlement (R & R), which the Collector has to provide as
per the Second Schedule. This Schedule presents a detailed list of various
kinds of rehabilitations and resettlements that would have to be given to
the displaced. This includes fishing rights, one-time resettlement allow-
ance, one-time grant to artisans and small traders, and transportation costs
to be paid.
It is here that a house needs to be provided to the land owners, tenants

and other dependents on the land (categories we have elaborated above)
as part of R&R. The Act states that land should be provided if a dam is
built and families have lost property.
One peculiar aspect of this Schedule is that, in many cases, it gives abso-
lute amounts to be given to the affected families; for example, in the case
of transportation costs a ‘one-time financial assistance’ of Rs. 50,000 is to
be paid. This happens in four instances. It does not seem to be a very good
practice as over a period of time the value of this amount is bound to
diminish and the affected families may suffer on this account. In two cases,
minimum amount is given, which may be a better practice. In case a per-
son is not happy with the compensation package, R&R, he can approach
the High Court or Supreme Court (MLJ 2013, p. 26).
As we have already mentioned, there do not seem to be any moral rea-
sons now for asking people to sacrifice their land, and this is a positive
trend. Thus the compensation and R & R has to be satisfactory to the
displaced party. And there are many ways in which this can be undertaken,
if there is willingness on the part of all involved parties.
The importance of Sec. 107, pp. 34 (MLJ 2013) becomes clear in this
context. This section notes that the states are free to enact their own laws
to add to the compensation package, and R & R. This means that the
states can have their own laws which improve upon this Act. It has been
found that many states, especially in the south and the west, have been
successful in acquiring land and have proceeded with a high rate of indus-
trialization and urbanization (even before the Act). They have developed
specific packages that are acceptable to all (Sathe, Indian Express, 2015b, c).
One recent example of this is the innovative manner in which the prob-
lem of lower Floor Space Index (FSI) in areas close to an airport has been
overcome by the Maharashtra government (Indian Express, 22 May
2015). The news item says that the CIDCO (City Industrial Development
Corporation of Maharashtra Ltd.), a state-run undertaking along with the
NMIA (Navi Mumbai International Airport) project has acquired 671
hectares from 1200 villagers. In lieu of surrendered land, the Maharashtra
government offered the owners developed land measuring 22.5 per cent
of the acquired land, in Pushpak Nagar Township that CIDCO is develop-
ing near the airport. An FSI of two has been offered to all the farmers. But
it became clear that all farmers (adding up to 18 hectares of land) could
not use this FSI due to the restrictions on construction close to the airport
(and some CIDCO rules). Hence it has been decided that the affected
262 D. SATHE
farmers would be given Transfer Development Rights in the same area. In

this manner, the farmers would be saved from economic loss. This clearly
shows that the Maharashtra government is interested in completing the
International Airport project (which has been languishing for more than a
decade and a half), has been able to make an acceptable offer to the farm-
ers, and in the face of some difficulties, has developed an alternative offer
which seems acceptable to the affected farmers.
7 Post-LARR 2013 Events

It has been pointed out above that land is a State subject and land acquisi-
tion is a Concurrent subject, as per the Indian Constitution (Ramesh and
Khan 2015, p. 5). This means that the States are allowed to pass the land
acquisition laws and, de facto, they did so. The Central Law continued to
be the Land Acquisition Act (i.e. LAA) 1894 even after the Constitution
was accepted in 1949. LAA 1984 was amended in 1962, 1967 and more
comprehensively in 1894 (Ramesh and Khan 2015, pp. 3 and pp. 9).
But in the genuine sense of the term, since most states had passed their
own laws, LAA 1894 was not being implemented. Different states had
developed different approaches and sometimes appropriate systems such
as special purpose vehicles towards acquiring the land.
Then in September 2013, the UPA government led by the Indian
National Congress passed the Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and Resettlement Act
2013, that is, LARR 2013, which became effective from 1 Jan. 2014.
There was an extended debate on this Bill. The BJP, which was in opposi-
tion at the time, suggested some amendments which were accepted. This
law was saluted as a break from the past, as it had ended the reign of the
oppressive, colonial LAA 1894 (Ramesh and Khan 2015, pg. vii).
After the Lok Sabha elections were held in April–May 2014, the
National Democratic Alliance (NDA) led by the BJP received a majority
and formed the government. They tried to pass amendments to the Act
three times, but were unsuccessful. Therefore, they passed an Ordinance
three times. But before the Ordinance lapsed for the third time, the then
finance minister opined that the states could not wait indefinitely and
should pass their own laws, which they started to do (Sathe 2015a, b, c).
Henceforth it may be more pertinent to discuss the appropriate state law
and what kind of changes have occurred in various state laws. In addition,
the various models which different states have developed, such as land
pooling developed by bifurcated Andhra Pradesh for its capital Amravati,

need to be the focus of discussion in the future.
8 Conclusion
Even if LARR 2013 is, by and large, a defunct law, its journey is very inter-
esting and needs to be studied. India is a democracy (albeit with some
flaws) and the elected representatives are answerable to the people at every
round of elections and also between the elections through media, move-
ments and agitations. The elected representatives are also interested in
being elected again and again. Thus, there is only a certain point up to
which they can ignore people. It seems that by the time the 2014 elections
were to be faced, all parties wanted to be seen as pro-poor and pro-farmer.
Hence, LARR 2013 was passed in what seems to be a hurry, but the lacu-
nae in it were to prove a predicament for the elected party. As it happened,
the UPA lost power and the NDA was elected.
There was a need for a consensus to develop between different stake-
holders in this kind of situation. However, that did not happen, as we have
observed above. This can be called a ‘weakness’ of India’s democracy. In
this matter, the Central legislature has de facto become obsolete. The
buck has been passed to the states to avoid any responsibility. This does
not point towards a healthy democracy. In the US Kelo vs New London
case, the legislature took the responsibility and overturned the ruling
passed by the US Supreme Court. This shows confidence in itself.
Unfortunately, Indian Parliament did not show any kind of cohesiveness
in view of matters of national importance.
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CHAPTER 14
Land Issues and Liberalisation

in Northeast India
Walter Fernandes
As data and many studies show, land acquisition is central to liberalisation

that was formalised through the new economic policy (NEP) of July 1991.
As the opening statement of the 1994 draft rehabilitation policy said, more
land than in the past was required after the NEP to attract Indian and for-
eign private investment. Within a decade after it many states changed their
land laws to suit the needs of the corporate sector. Land in the Northeast
(NEI) has to be situated in this context of post-NEP requirements super-
imposed on its legal system that retains its colonial traits. With focus on
Assam and a few examples from other states this chapter studies the impli-
cations of liberalisation to land in NEI. The three main sources of alien-
ation are immigration, development projects and grabbing tribal land. The
legal system influences all of them and the process culminates in the NEP.
1 Immigration and Land in the Northeast

Immigration from Bangladesh or from states of India outside the Northeast
is presented both as a threat to identity and as a communal issue. In prac-
tice land is central to it.
W. Fernandes (*)
North Eastern Social Research Centre, Guwahati, Assam, India

266 W. FERNANDES
1.1 Immigration and Land in Assam

The first step in understanding the impact of liberalisation is to know the
extent of dependence of the people of NEI on land. Investment is low
investment in the secondary sector. NEI had only 166 medium and major
industries in 1996, 118 of them in Assam (D’Souza 1999). The number
had remained unchanged eight years later. Of the 118 industries in Assam
in 2004, 21 were major and 97 medium. One major and 76 medium units
were privately owned (Director of Industries 2004–05). Except for the
Brahmaputra Gas Cracker Project very few industries have come up after
1996 but 42 units in Assam were declared sick in 2006 (The Assam Tribune
2006). Nagaland had 16 industrial units and all of them were declared sick
by the turn of the century (Ezung 2003). Because of low investment in
the secondary sector and sick industries, 70–75 per cent of the region’s
workforce depends on the primary sector against 66 per cent in India as a
whole, 6–8 per cent depend on the secondary sector against 12 per cent in
India as a whole and more than 20 per cent depend on the tertiary sector.
Immigration has to be situated in this context. The focus of people on
“illegal Muslim Bangladeshis” has led to much unrest and many conflicts.
The best known among them is the Assam Movement during 1989–1995
that began as a reaction to real or perceived rise in the non-Assamese pro-
portion during the preceding decades. It was considered a threat to their
identity. Some speakers called the agitation “Assam’s last struggle for sur-
vival” against “the cultural, political and demographic transformation by
the immigrants” who threatened to “reduce the indigenous to minorities
in their own land” (Ganguly 2013, p. 57).
Most other agitations in Assam, though presented as a reaction to the
threat to identity, are in reality around land. Migration from East Bengal
in search of land began not after the Partition as many allege, but with the
British policy of 1891 that encouraged the East Bengal peasants to migrate
to western Assam to cultivate its “wastelands”. Raising food production
and revenue of the colonial regime were its objectives (Bose 1989). What
the British called wastelands under the colonial individual ownership based
land laws were in fact the forests and other common property resources
(CPRs) that were the sustenance of the Bodo and Rabha tribes who
formed the majority in Western Assam. That laid the foundation of con-
flicts with the immigrants around land. Secondly, most zamindars in East
Bengal were Hindus while peasants were, by and large, Muslim. As a
result, 90 per cent of the immigrants were Muslim (Roy 1995). It added
a communal dimension to the threat to land.
14 LAND ISSUES AND LIBERALISATION IN NORTHEAST INDIA 267
By the 1920s the immigrants had reached Central Assam. In the 1930s
some leaders of the freedom struggle fearing that Assam was becoming a
Muslim majority province at a time when the Partition was in the air
encouraged Hindu peasants from Bihar to migrate to Assam. Nepali
migrants followed quietly (Zehol 2008). It introduced a Hindu-Muslim
divide to the immigration issue. The Adivasi of Jharkhand and Chhattisgarh
and tribal as well as non-tribal peasants of Bengal, Bihar and Orissa had
entered Assam even before 1891. Rendered landless and impoverished by
the Permanent Settlement 1793 they were brought to Assam as indentured
labour in the tea gardens (Sen 1979) land for which was taken over from
the local people through devious means by using the Assam Wasteland
Rules 1838. Because they worked on that land, the local people treated the
tea garden labourers as enemies though both they and the people of Assam
were victims of the same colonial process (Borpujari 1997). Thus land and
identity became the central issues.
The communal element attained predominance at times. Immigration
from East Bengal continued after 1947. Though the Assam Accord of
1985 fixed 25 March 1971 as the cut-off date for their recognition as
persons with domicile in Assam, the 2001 census showed an excess of
1,944,444 from 1951 to 2001. The difference in the number is accounted
for by the growth in numbers. Because of natural growth, there was an
excess of 40 lakh persons in 1971–2001, around 17 lakh of them Bengali-
speaking Muslims, presumably of Bangladesh origin, and 23 lakh Hindus
of Bihari and Nepali origin (Fernandes 2017a).
1.2 Land and Conflicts in the Rest of the Northeast

Land is the central issue also in the rest of the Northeast. Like the remain-
ing states bordering on East Pakistan, Tripura too received Hindu
Bangladeshi refugees at the Partition. Only 174,703 of them were regis-
tered from mid-1947 to February 1950, but 435,295 more were regis-
tered from 1951 to 1956. A bigger number came on their own and
resettled themselves without official registration (Bhattacharyya 1988).
The 1985 Accord with the tribal militants declared 1971 as the cut-off
year for the immigrants to remain in India. That the influx continued
beyond 1971 is seen from the fact that the tribal proportion in the state
declined from 58 per cent in 1951 (Chattopadhyay 1990) to 36.28 per
cent in 1971, to 31.1 per cent in 2001 (Banthia 2001) and 31 per cent in
2011 (Bera 2012).
268 W. FERNANDES
Of importance is the fact that the tribes of the state believe that more
than 500,000 post-1950 immigrants are not Partition refugees but immi-
grants who have come in search of land. Moreover, though the official
justification given for the Tripura Land Revenue and Land Reforms Act
1960 is land reforms, the tribes believe that its main purpose was to alien-
ate their CPRs to the immigrants because it recognised only individually
owned registered land. Approximately 84,000 acres were alienated from
them officially for refugee rehabilitation (Fernandes and Bharali 2010). To
it has to be added land alienated by the immigrants through means such
as money lending. As a result, 20–40 per cent of tribal land is estimated to
have been alienated to the immigrants in the 1960s (Bhaumik 2003).
More of their CPRs were acquired in the 1970s for the Dumbur dam on
the Gumti River despite their protests. The 32,000 acres it used displaced
8000 to 9000 families (45,000 to 50,000 people), but the state counted
only 2361 individual patta owning families (13,000 people), 2117 of
them tribal and 234 dalit (Debbarma 2008). That lit the fuse of the armed
struggle to reclaim what the tribes called their illegally occupied land
(Bhaumik 2003).
Arunachal Pradesh has received immigrants since the nineteenth cen-
tury, but in recent decades there has been a conflict around the rehabilita-
tion of the Chakma and Hajong refugees displaced in 1963 by the Kaptai
dam in the Rangamanti district of the Chittagong Hill Tracts (CHT) of
the erstwhile East Pakistan. It displaced some 100,000 Jumma, the name
given to the 11 main tribes of CHT. Around 40,000 of them took refuge
in Tripura, Mizoram and Assam. Between 1964 and 1969 the Government
of India resettled 2748 of their families (15,000 people) on 10,799 acres
of land in Lohit, Subansiri and Tirap districts of Arunachal Pradesh
(Talukdar 2008). By 1979 their population had increased to 21,500, in
1991 to 30,064 and in 2011 to 47,471. Because of this growth, in 1979
some of them were relocated in Bordumsa, Vijaynagar and Diyun in
Changlang district. Because of their growing numbers and more land
used, the Arunachalis view them as a threat to their identity. So, the All
Arunachal Pradesh Students’ Union (AAPSU) protested against “the
diminishing economic slice for the indigenous population” (Kashyap
2015). The Supreme Court has said that they should be granted citizen-
ship and allowed to vote. But the AAPSU considers it a threat to their
resources and identity and continues to oppose this order.
In Manipur the three Bills passed into law in the State Assembly on 31
August 2015 symbolise the land issue. Though presented as a means of
curbing immigration, the tribes view them as related to local ethnic ten-
sion around land. The Meitei who are 60 per cent of the state’s population
live in the Imphal Valley which is 10 per cent of its territory, so they feel
deprived. The Naga feel that that the Meitei monopolise jobs and political
power in the state and that their land is their birthright and are not pre-
pared to part with it. Moreover, the Naga nationalist outfit NSCN-IM
wants reunification of all the Nagas in Nagaland, Manipur, Assam and
Arunachal Pradesh. It would affect four of Manipur’s nine districts or 90
per cent of its territory. The Nagas have been demanding the Sixth
Schedule in order to protect their land, but in April 2010 the state went
ahead with elections to the Autonomous District Councils formed with-
out the Sixth Schedule. It resulted in a highway blockade by the Nagas for
two months. Then followed the blockade by the Kuki to demand Sadar
Hills district in the Kangpokpi area of Senapati district where they have a
majority. The Nagas oppose it since they consider the whole district theirs.
The Kuki declared one-month blockade from 1 August 2011 (Khangchian
2011). When the Manipur government announced plans to form the dis-
trict on August 30, a day before the deadline, the Naga organisations
imposed an economic blockade on all the national highways in Manipur
from 21 August 2011. It was lifted on November 22 in response to a call
given by the Union Home Minister. In this context the tribes viewed the
three bills as a threat to their land and blockaded the highway (Roy 2016).
Tension continues with no dialogue between the communities.
1.3 Immigration, Land and Conflicts

Migration is thus linked to land and identity because of the real or per-
ceived threat to the indigenous people. On one side the exchange of peo-
ples and goods was instrumental in integrating the economy of the
Northeast with that of East Bengal. The immigrants in their turn became
active economic agents. The tea garden workers, for example, built the tea
industry that is the backbone of the economy of Assam. On the other side,
they became sources of conflict because of the livelihood and identity
issues linked to demographic change. Because of a communal slant added
to the immigration issue the violence against them around land and iden-
tity “began with sporadic rural conflicts in the early 20th century, meta-
morphosed into communal politics over the decades and now to ethnic
polarisation” (Saikia 2015, p. 14).
270 W. FERNANDES
The people of NEI took a long time to accept the communal colour
introduced from outside. They are concerned less about the origin and
religion of the migrants than about encroachment on their land, most of
it tribal and other CPRs (Baruah 2005). Moreover, whether they are
Bangladeshi, Bihari or Nepali, before their migration the push factor of
most immigrants was that they were landless agricultural labourers living
in a feudal system of lack of land reforms, low wages and poverty
(Majumdar 2002). Being agricultural labourers, they are familiar with the
cultivation techniques. Once they occupy fertile land in NEI they prosper
by using these techniques to grow three crops. The economic gap that
results between them and the local people creates a conflict because the
latter feel that the immigrants prosper at their cost. That explains why,
among others, most killings in the Karbi Anglong district of Assam are of
Biharis who are the main immigrants in that area. People killed in Western
Assam are either Adivasi or Bengali-speaking Muslims (Fernandes 2017a).
The pull factors are the legal system in the Northeast and unskilled jobs
as construction workers, rickshaw pullers and so on that the local people
do not do easily. Land in the region is fertile and much of it belongs to the
tribes who run their civil affairs according to their community-based cus-
tomary law. But the land laws recognise only individual ownership and
treat land without pattas as state property. Such an interface of the two
systems creates a disjunction between the legal and social realities and
facilitates land alienation by making it easy for the immigrants to encroach
on the CPRs and for the state to appropriate their sustenance. The legal
reality facilitates land alienation both in the tribal and non-tribal areas. But
more tribal than non-tribal land has been lost both to the migrants and to
the local non-tribal population because Assam has reduced the number of
tribal blocks from which land cannot be alienated, from 35 in the 1950s
to 25 in 2005 (Shimray 2006).
The process of alienating land can be traced back to the Assam Land
Rules 1938 that were meant to help the British regime to acquire land at a
low price for tea gardens and for migrants to encroach on it. Today, since
low investment in the secondary sector results in high dependence on
land, its alienation becomes basic to conflicts. The local people consider
immigrants also a threat to their language, culture and identity. These
components too are turned into causes of an anti-immigrant stand (Datta
1990). But the fact that land plays the most important role cannot be
ignored while analysing the neo-liberal scenario.
2 Development and the Role of Land Laws

As the last section shows, the land laws that recognise only individual own-
ership go against the CPR dependants. Development-induced displace-
ment (DID) more than any other process symbolises this ambiguity.
2.1 DID in the Northeast
According to one opinion while the launching of the five-year plans in
1951 gave a boost to productive industries in India as a whole, the process
began in NEI only in the 1960s after completing refugee resettlement
(Hussain 2002). Others disagree with its link with refugee rehabilitation
and attribute the delay to the national security perception, particularly
after three wars were fought between 1962 and 1971. Every decision
including development is conditioned by security concerns. For example,
the refinery for petroleum from Assam was built at Mughalsarai in Bihar
for fear that in Assam India may not be able to defend it from a Chinese
attack. Others add “insurgency” as one more justification. Lack of invest-
ment was one of the grievances leading to the Assam Movement
(Barbora 2002).
DID in NEI has been mainly for water resources, transport, security
and refugee rehabilitation. After the Partition and the creation of new
borders, a security apparatus was built in the region. Roads and rail lines
were built through North Bengal and Assam to replace the routes that
passed through East Pakistan. As a result, except for water resources in
which the region abounds, most land acquisition has been for defence,
transportation and refugee rehabilitation. Investment has been low in the
productive sectors. Over and above land acquired for refugee rehabilita-
tion more was encroached upon by immigrants, thus giving rise to a never-
ending debate on immigration and infiltration. To some extent the trend
of treating the region as a buffer zone between China and Burma contin-
ues. Later Assam also became a source of raw materials of tea and petro-
leum. One thus wonders whether a role has been assigned to NEI. Assam
is for petroleum and tea, Meghalaya for limestone and coal, much of it
exported illegally to Bagladesh. Meghalay is also for uranium to ensure
defence against neighbouring countries (Fernandes et al. 2016). Because
of the feeling that the North East is used only as a source of raw materials,
many in the region feel that the Centre is ignoring its needs.
272 W. FERNANDES
A study of DID in Assam (1947–2000) shows another facet of the legal

reality. Since the law treats the CPRs as state property no count is kept of
it. As a result, by official count, water resources, refugee rehabilitation,
environment protection, defence, transport, and industries used 391,772.9
acres in 1947–2000 and displaced 310,142 people. The reality is not less
than 1,405,809.38 acres taken over and 1,916,085 people deprived of
livelihood during these decades (Fernandes and Bharali 2011). Thus, not
less than 1,014,036.48 acres (72.13 per cent) of CPRs are missing from
the official files because they are considered state property. Officials claim
that they need not keep records of the CPRs or count the number of per-
sons that their acquisition of state property deprives of sustenance.
The contradiction is seen not merely in the extent of land used or the
numbers deprived of livelihood but also in the type of people who pay the
price of development. The caste-tribe of 46.3 per cent of them could not
be identified. But the link between the CPRs and the type of livelihood
losers explains why 40.6 per cent of the 1,025,336 persons whose caste-
tribe was identified are tribal. There are indications that around 50 per
cent of the 884,032, whose caste-tribe is not known, are tribal and who
are 12.4 per cent of Assam’s population. Some 150,000 land losers to
environment protection are fish workers from the riverbanks or islands but
no official records exist about them. Lack of data on the CPR dependants
is true also of dams, industries, refugee rehabilitation and other projects.
It is equally true of the remaining states of the region. Since much of
the land used in Tripura is CPRs, a large number of its land losers, most of
them tribal, are not counted. As mentioned earlier, in Dumbur dam 8500
to 9000 families were displaced but only 2361 patta owning families were
counted as displaced. As stated above, because of the influx of East
Pakistani refugees immediately after the Partition and of immigrants later,
the state’s tribal proportion has declined to 31 per cent but they are 56.66
per cent of its 176,828 DP-PAPs (Fernandes and Bharali 2010). In
Mizoram and Meghalaya, the proportion of the commons is low because
of poor record keeping and because their land classification is different
from that of the formal law. So it is not easy to record their sustenance in
the language of the formal law (Nongkynrih 2008). As a result, much of
the land they lost is not counted.
2.2 DID and the Law in the Northeast

The data on immigration and development bring to the fore the legal
status of the CPRs that account for over 70 per cent of land used by
development projects and encroached upon by immigrants. It is true also

of much of the land alienated in the tribal blocks of Assam that have been
removed from the list. In Meghalaya, the CPRs are 45.7 per cent of the
land used for development projects. In Assam even private land is divided
into permanent and periodic (ek-sonia or annual) pattas. It is a relic of the
colonial zamindari system that built on the pre-British Ahom law accord-
ing to which all land belonged to the king. He allotted it to individual
families in return for a tax or free labour. As a result, no family was landless
but none could claim security of tenure. The British regime based its laws
on the fact of land being the king’s property and treated all of it as belong-
ing to the British Crown but ignored the second part of its distribution
and the livelihood security that the Ahom system provided. They formu-
lated the Assam Waste Land Settlement Rules 1838 in order to make land
acquisition at a very low price easy for the tea gardens and other schemes.
As a result, according to an estimate, even after four decades of indepen-
dence over 50 per cent of private land continues to be under ek-sonia pat-
tas. The Land Reforms Act fixed a ceiling but only 1.6 lakh hectares of
ceiling land have been acquired (Bora 1986).
A study of the Nagaon Paper Mill at Jagi Road shows that the state
accepts the ek-sonia-pattas as the norm even today. In 1967 the Forest
Department allotted two acres of land each to some tribal families in
return for five days of free labour a year for plantation work. At their dis-
placement in 1972, they were paid Rs 3000 per acre of ek-sonia patta land
against Rs 8000 for permanent patta land. Thus, the pre-independence
hidden contract system continues (Bharali 2009).
3 Liberalisation and the Northeast

The role of land after the NEP has to be situated in this context. More
land acquisition is basic to globalisation. The Union Government gave
expression to this thinking in the 1994 draft rehabilitation policy that
began with: “It is expected that there will be large scale investments, both
on account of internal generation of capital and increased inflow of foreign
investments, thereby creating an enhanced demand for land to be pro-
vided within a shorter time-span in an increasingly competitive market
ruled economic structure. Majority of our mineral resources… are located
in the remote and backward areas mostly inhabited by tribals” (Ministry of
Rural Development 1994, p. 1514).
274 W. FERNANDES
3.1 The NEP-Based Thrust

The above statement though made in a draft policy, has been taken seri-
ously as is clear from the extent of recent acquisitions in many states. The
completed and ongoing studies on development induced displacement
indicate that India has 65–70 million persons displaced of deprived of
sustenance 1947–2010 from more than 30 million hectares, over 50 per
cent of it CPRs (Fernandes et al. 2016). States like Andhra, Telangana,
West Bengal, Jharkhand and Gujarat with a big number of displaced peo-
ple have promised large chunks of land to Special Economic Zones (SEZ).
Bengal has committed 232,167 acres (97,000 hectares) to industries alone
(Ray 2006). Orissa had used 40,000 hectares for industries in 1951–1995
but planned to acquire 40,000 hectares in the succeeding decade. AP has
acquired in 1996–2000 half as much for industry as it did in 1951–1995.
Goa had acquired 3.5 per cent of its landmass in 1965–1995 but plans to
acquire 7.2 per cent more during the following decade (Fernandes 2008).
The private sector is eyeing mining land in Jharkhand and Chhattisgarh.
The Centre has been trying to change the Fifth Schedule and the
Chotanagpur Tenancy Act to make acquisition of tribal land easy. Thus,
there will be more displacement than in the last 50 years, much of it tribal
for mining in Middle India and dams in the Northeast (Vinding 2004).
In NEI its thrust areas of transport and water resources have an ASEAN
angle. On 12 March 2002, the then Minister for Power announced in the
Rajya Sabha that the Centre was in the process of finalising plans to build
13 dams in NEI whose hydro-electrical potential he put at 58,000 MW
(38 per cent of India’s total) (The Assam Tribune, 13 March 2002). On 24
May 2003 Prime Minister Mr. Atal Behari Vajpayee launched the Northeast
Initiative of 50,000 MW meant to turn the region into a powerhouse of
India and of Southeast Asia (The Telegraph 25 May 2003) that is, to supply
power to the rest of India and ASEAN. A list of 166 major hydro-electric
projects (HEP) has been drawn up for NEI (Menon et al. 2003), 89 of
them in low density Arunachal. Forty-eight are under active consideration
or construction. Because of its low density, displacement may not be high
in Arunachal but much of its biodiversity will be destroyed. The Pagladia
dam in Assam is expected to displace more than 100,000 persons. Maphitel
and Tipaimukh in Manipur and dams in Mizoram will affect around
10,000 each and those in Meghalaya will affect over 100,000 persons
(Fernandes and Bharali 2010).
The LAR&R 2013 passed by the Parliament in September 2013 states

that land is required for infrastructure building, urbanisation and industri-
alisation. There is a separate law governing SEZs most of them in the
private sector but the state may acquire up to 30 per cent of their land.
After agitation against some major projects in Singur in West Bengal and
elsewhere a decade ago, the norms for the SEZs were changed. Each SEZ
can now have 5000 hectares against the earlier norm of unlimited size. At
least 50 per cent of it should be used for productive activities against the
earlier norm of 30 per cent. The rest can be used at the will of the land
getting corporations. Often it is for real estate speculation (Ahmed 2008).
Till now only Nagaland has an SEZ in NEI. Focus in the region is on
the transport infrastructure, major HEPs and mines. Mention has already
been made of dams and the Asian Highway. Mining is the major thrust of
liberalisation in NEI and in most tribal areas of “mainland” India where
there are more than 30,000 cases of illegal mining. It is visible also in the
extent of land taken over legally for mining. In AP-Telangana, only
132,674.26 acres could be identified as used for mining in 1951–1995
but its extent taken over in 1996–2010 is 336,861.98 acres. It does not
include the enormous area of illegal mining (Fernandes et al. forthcoming).
In NEI one could identify only 585.92 acres used for mining during
1947–2000 in Meghalaya, mainly for uranium. What was used for coal
mining could not be identified since it is done through local arrangements
(Fernandes and Bharali 2010). The reality may be around 2000 acres.
However, 25,747.53 acres were identified during 2001–2010, as much as
21,151.76 acres of it forest land. It does not include land used for coal and
uranium (Fernandes et al. 2016). This thrust is visible also in the remaining
states. Mineral exploitation was non-existent in Nagaland till the 1990s.
Within three months after the 1997 ceasefire, agreements were signed for
oil exploration (Manchanda 2008). Studies indicate that a reason for the
Nagaland-Assam territorial dispute in the Merapani border region is that
the area is mineral rich and both the states want the revenue from it (Kikon
2009). Tripura did not have mining till recently but land is now being
acquired for natural gas exploration (Fernandes and Bharali 2010).
Exploration is ongoing in Manipur that had no such scheme in the past.
3.2 The Impact of Land Takeover

It is difficult to know the exact number of persons likely to be displaced by
liberalisation-related projects. One can only say that the numbers are
276 W. FERNANDES
enormous. More than a million acres will probably be acquired for the
HEPs. The quadrilateral and the Asian Highway together will need more
than 100,000 acres. As the trend in Meghalaya shows, mining, a major
land user, will probably require not less than 500,000 acres in a decade.
The 2001–2010 figure for Meghalaya does not include coal and uranium.
Most coal mining is for thermal plants. Power production is expected to
be doubled during the next decade, much of it through coal-based ther-
mal power plants. Indications are that over 3 million persons will be
deprived of their livelihood by the thermal and nuclear plants and an equal
number by industries and mines.
Employment generation is the second area of concern in NEI where
the level of education is high but employment generation is low. More
land than in the past is being taken over under the neo-liberal regime and
even jobs lost are not replaced. For example, according to the Ministry of
Commerce, Government of India, the SEZs established until 2007 on
400,000 acres had created 500,000 jobs, at an investment of Rs. 800,000
crores. By 2009 they were to create 4,000,000 with an additional invest-
ment of Rs. 3000,000 crores (Nayak 2008). It comes to Rs. 20 lakhs per
job. Mechanisation which is an IMF conditionality is the main reason for
this high cost per job in the SEZs and in most new industries. To deal with
its population growth and high unemployment India requires a labour
intensive regime of 10 million new jobs per year. Studies indicate that an
acre of agricultural land employs two persons. By creating 500,000 jobs
on 400,000 acres, the SEZs had deprived 300,000 persons of their prior
work on these lands. Moreover, very few land losers have the skills required
by a mechanised job, so they cannot get most of them. Even if one were
to count the family of an agricultural worker as three persons, since both
husband and wife may be working on that land, it would mean that a mini-
mum of 3 million persons are being affected by the SEZs (Sarkar 2007).
The third issue is the focus of the Look East Policy (LEP) on the infra-
structure of highways connecting NEI with Myanmar and the rest of
ASEAN. At this stage one does not need to discuss LEP but only the
impact of such infrastructure building on the people of NEI. This approach
is based on the view of development as infrastructure alone very little
importance accorded to people. This infrastructure is crucial for trade and
other relations with ASEAN but its negative impact is that the highways
connect major cities and ASEAN but neglect the rural areas. Good quality
educational and health institutions are concentrated in major cities. Some
civil society or church run health services and educational institutions in
the rural areas but lack of transport facilities between villages makes it dif-
ficult for children to go to such schools or for patients to access the health
facilities (Fernandes 2017b). One of its results is land alienation mostly
within the tribe. In the absence of good university colleges in their neigh-
bourhood parents have no choice but to send their wards to colleges in
Guwahati and Shillong or outside NEI. They pay for it by selling some of
their land to richer members of their tribe. In case of medical emergencies
people have no choice but to sell their best land at a throwaway price in
order to rush to the cities where good facilities are located (Kekhrieseno
2009). The infrastructure is built according to the priority accorded to
trade between nations in a liberalised economy. People pay its price with-
out getting its benefits.
Another need of the liberalised economy is computerisation of land
records presumably in order to ensure security of tenure. It can also make
land acquisition easier. However, it is being attempted without changing the
legal system that causes insecurity. Computerisation under these circum-
stances may help the corporate sector but as far as people are concerned it
can in practice modernise the inequalities and insecurity of the past and
legitimise the de facto absentee landlordism created by internal land alien-
ation in many communities. Computerisation will record this reality of inse-
curity, not the fact that much of the land under attack is people’s livelihood
that needs to be protected. It is essential to reform the land owning pattern
and provide security of tenure before computerising the records.
3.3 A Way Out

The first step towards a just process is to recognise community ownership.
It may mean accepting the community-based tribal customary law but
with modifications. In the past each tribe had its own territory. It is the
basis of the Sixth Schedule and of recognising the customary law. The
rights of one tribe are recognised within a given territory. Today very few
areas are inhabited by only one tribe. That turns continued linking of the
customary laws to one territory into a source of conflicts. A possible solu-
tion is to protect tribal land from further alienation but prevent conflicts
by de-linking territory from the customary law and turning it into per-
sonal jurisdiction. Each tribe inhabiting a territory would then be gov-
erned by its own law wherever its members live. It can provide them
security and prevent land alienation by protecting it under the customary
law and recognising community ownership but prevent ethnic conflicts.
278 W. FERNANDES
Such security can be accorded also to patta owning families and those
living by ek-sonia pattas by discontinuing the sharecropper system that
exists de facto even today in some form. The solution is to grant owner-
ship to people cultivating that land. Without granting ownership insecu-
rity of tenure and exploitation of tenure are bound to continue as the
examples of Jagi Road and elsewhere show. Change in this system can also
encourage the peasants to invest more on this land and maximise its pro-
ductivity. In other words, one does not make a plea for individual pattas
or community ownership but for security of tenure. It may take the form
of the customary law or community ownership or a better individual own-
ership pattern. The basic issue is not the type of ownership but the imposi-
tion of the formal system or computerisation on them without proper
preparation. The norm has to be security of tenure.
Similarly, the choice is not between acceptance and rejection of liberali-
sation but developing a development paradigm for NEI. The present
thrust of the infrastructure involves massive land acquisition for the private
sector while ignoring people’s needs. The shortages caused by more acqui-
sitions can mean more impoverishment and more conflicts. Of equal
importance is environmental degradation that can result from it, as one
has noticed from the extent of deforestation for mining. It can mean more
shortages, more conflicts, greater environmental degradation and threat
to biodiversity. Also the technology mix has to be studied in the region of
high unemployment. Mechanisation and SEZs that cause much land loss
and high unemployment are not meant for NEI. Finally, and most impor-
tantly, focus has to shift to the rural areas by according them priority in
educational and health services and in transport.
4 Conclusion
This chapter is an attempt to analyse the land management and ownership
pattern in NEI. Studies on immigration and DID show their implications
for land in a neo-liberal economy. It demands more land than in the past
but in much of NEI insecurity of tenure continues. If computerisation is
based on that system, it will add to insecurity. Much of the land in the
region is CPRs. Even private land often comes under ek-sonia pattas. That
has to change in order to provide security of tenure to those who have
lived on it for many decades. Such insecurity can continue to facilitate
encroachment by immigrants or allow the state to acquire it with no con-
sideration for its dependants. It can impoverish people and cause conflicts.
Change in this system and greater focus on the rural infrastructure and
employment generation can be steps towards a solution that combines
economic with human growth.
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CHAPTER 15
The Gendered Transformation of Land

Rights and Feminisation of Hill Agriculture
in Arunachal Pradesh: Insights
from Field Survey
Vandana Upadhyay
1 Introduction
The land tenure system in the hill areas of India’s north eastern region,
inhabited mostly by the tribal population, is significantly different from
the system that is prevalent in the plain areas of the region. Like most
other parts of India, in the plains of north east region too individual rights
over land holdings are transferable and buying and selling of rights is nor-
mally not restricted. However, this is not the case in the hill areas where
individual rights over land have not taken the form of full property rights
in the sense that there are certain restrictions imposed on the transfer of
these rights, if not practically possible (Bezbaruah 2007; Mishra 2015b;
Mishra and Upadhyay 2017). The non-transferability of holding rights
makes the land unsuitable as collateral for the purpose of securing institu-
tional credit to land holders, which in turn acts as a constraint on the
V. Upadhyay (*)
Department of Economics, Rajiv Gandhi University, Itanagar, India

284 V. UPADHYAY
extension of institutional credit in the hill economies of the region. The

state of Arunachal Pradesh, which shares its borders with China, Bhutan
and Myanmar, is no exception in this regard.
It is important to take note of a few specificities of the process of eco-
nomic transformation in this mountainous border state. Partly as a result
of the legacy of the past and the geo-strategic significance of the state, the
state has played a significant role in modernising the economy (Mishra
2013, 2015b). More than anywhere else, in Arunachal Pradesh, the grad-
ual commercialisation of the economy has been perpetuated both by the
state and the market forces, often acting in close collaboration with each
other (Mishra 2001, 2018; Harriss-white et al. 2009). The predominately
barter economy has almost been completely transformed into a monetised
economy within a relatively short span of time. The state has a low revenue
generation capacity and is primarily dependent on the Central government
for the funds. Under the special constitutional framework, the state has
been receiving Central funds in the ratio of 70 per cent of the state’s rev-
enue and 50 per cent of its net state domestic product. One of the out-
comes of this pattern of development is that access to service sector jobs in
general and government jobs in particular have had an overarching signifi-
cance for the upward mobility of households both in economic and social
terms (Mishra 2013, 2018). Even otherwise, among the indigenous pop-
ulation, the differential access to state-owned resources has acted as the
main source of economic differentiation (Harriss-white et al. 2009;
Mishra 2018).
Notwithstanding the well-known problems associated with the inade-
quate recognition of women’s contribution in the formal data collection
exercises, which is only more acute in states like Arunachal Pradesh (Mishra
and Upadhyay 2007, 2012), an attempt has been made to investigate as to
how land rights are being transformed and its impact on the changing
gender distribution of work and employment in rural areas of the state.
In the tribal dominated region of north east India, women are engaged
in a number of activities both in the field of agriculture as well as at the
household level, doing household chores like cooking, housekeeping,
child care, fetching fuel wood and water, collection of forest produce, care
of livestock, storing grains and so on. Most of the essential work which
deals with the maintenance and upkeep of families is predominately done
by the female members of the household. It has been recognised by aca-
demicians, both from the field of history and anthropology, that through-
out human history women were the major producers of food, textiles and
15 THE GENDERED TRANSFORMATION OF LAND RIGHTS… 285
handicraft. Even today in the small-scale subsistence sector they continue

to provide the major component of the labour input in the production
process. Women’s work is mostly invisible or partially accounted for in the
data on workforce participation. Their work also differs according to age,
gender, income, occupational group, location, size and structure of the
family. As their work is mostly for self-consumption, much of the work
they do is not recognised as ‘work’ in the national income statistics. Thus,
the present chapter will address this question with the help of primary data
generated by the socio-economic survey as well as the two rounds of time-
use survey.
2 Data Base and Methodology for the Study

The chapter is both empirical and qualitative in nature and is based both
on primary as well as secondary data. The districts of Arunachal Pradesh
have been classified into three groups, namely, developed, relatively less
developed and underdeveloped. One district each was selected from these
groups from the central, western and eastern part of the state, namely East
Siang, West Kameng and Changlang respectively. Further, three blocks
from each district and one village from each block was selected on the
basis of its remoteness from the urban centres. Physical infrastructure in
terms of road connectivity was taken into consideration, as in the state of
Arunachal Pradesh, all other infrastructure facilities are closely connected
to road connectivity. After the selection of the villages, the households
were selected on the basis of simple random sampling. In case of small vil-
lages all the households in the villages were covered and in case of large
villages around 60 per cent of the households were covered. Further, two
members from each household were interviewed through a detailed socio-
economic structured questionnaire. Two rounds of time-use survey were
conducted, one during 2010 and the other during 2017 in the three dis-
tricts of Arunachal Pradesh. Another survey was conducted in 2016 in all
the 18 districts of Arunachal Pradesh, spread across 56 villages, 3 from
each district. One woman member from each of the household was inter-
viewed, in order to capture the social, political and economic empower-
ment of women in the state. In total 1738 women respondents were
covered, out of which 1278 were women farmers.
The data on food gathering, food producing activities, income generat-
ing activities, asset holding patterns, collection of forest produce, agricul-
tural operations and so on were collected at the household level. Two
286 V. UPADHYAY
members of the household, one male and the other female, were inter-
viewed about their time allocation pattern, on the basis of a separate ques-
tionnaire. In the time-use survey, both yesterday approach and activity
approach have been used. However, information on the time spent on
different activities on a normal day in the agricultural and lean period was
collected through the recall method. The time-use study has significantly
revealed the average time spent on housework and agricultural activities by
both men and women and thus reflects the gender division of labour in
rural Arunachal Pradesh.
Focused group discussions were also undertaken and a village level
questionnaire was administered to collect information regarding the cul-
tural and institutional features of the study area and also questions relating
to gender division of household work and land use systems. Various kinds
of household work, including both regular and occasional work and work
performed outside the homestead, were also identified. Apart from the
primary data available, secondary data from the Population Census, NSSO
data on employment, Statistical Abstract of Arunachal Pradesh, District
Statistical Hand Book and other publications of the Government of
Arunachal Pradesh and the Directorate of Economics and Statistics have
been used.
3 Transformation of Land Rights and Changing

Property Rights Structures
The property rights formations in Arunachal Pradesh have undergone
substantial changes over the last six decades. Traditionally, land ownership
was largely collective, except for animals, tools and implements, which
were privately owned (Harriss-White et al. 2009). There were institutional
mechanisms in place, in the villages to resolve conflicts and to manage and
safeguard the property rights both on land and in the forest. Most of the
tribes in the villages had their own village councils, headed by male mem-
bers, very different from each other, to resolve their issues. Community
institutions managing access to land rights exhibit great variations (Mishra
2018; Das 1995; Roy Burman 2002; Harriss-white et al. 2009). The tra-
ditional shifting cultivation system was based upon highly structured and
complex networks of informal contracts, co-operation, resource pooling,
risk sharing and mutual insurance mechanisms (Mishra 2006). The shift-
ing cultivation system, which provided food security to the producers in
the past, is gradually being replaced by settled cultivation on the slopes
and in the valleys. (Mishra 2006, 2001, 2017, 2018; Roy and Kuri 2001;
Harriss-white et al. 2009; Upadhyay and Gurung 2016, Upadhyay 2017).
As per the Agricultural Census of 2015–16, around 24 per cent of the
operational holdings were marginal, operating on around 3.8 per cent of
the total operated area, and around 45 per cent were small and marginal
operational holdings operating on hardly 12 per cent of the total operated
area, whereas, on the other hand, around 6 per cent of the large holdings
covered over 27.5 per cent of the operated area. During the period
1970–71 to 2015–16 there was a substantial increase in the share of mar-
ginal, small and semi-medium holdings, while that of the medium and
large size holdings have either remained stagnant or declined (Table 15.1).
One of the important features of the agrarian structure as reflected through
the distribution of operational holdings is that there is a significant increase
in the share of smaller and marginal holdings. The average size of land
holdings in Arunachal Pradesh has declined from 6.19 ha in 1970–71 to
3.35 ha in 2015–16, clearly reflecting an increase of population pressure
on the available agriculture land. Further, it is pertinent to note that the
medium and semi-medium size of holdings together accounted for about
49 per cent of the holdings and around 61 per cent of the operated area.
This is mainly due to the relatively large holdings in Jhum cultivation. As
shifting cultivation is gradually being replaced by wet rice cultivation in
the valleys, the farmers tend to shift their cultivation in the plains, and
hence the size of operational holdings generally declines (Phuntso 2016;
Upadhyay 2017; Mishra 2006, 2015a, 2017).
People have abundant large jhum plots for smaller permanent holdings.
Also, it was observed that large plots of land were being acquired by the
neo-rich and powerful people for horticulture, tea and rubber plantation.
Another unique feature of the agrarian structure is the relative share of
holdings operated by the Arunachal Pradesh Scheduled Tribes (STs). The
Agricultural Census data clearly suggests that self-cultivation is the domi-
nant form of agriculture and tenancy has a marginal presence though in
recent years, it has been picking up in districts like Tezu, Changlang and
Tirap. With regard to the ST-operated holdings it was observed that dur-
ing 1980–81 to 1995–96 there was a marginal decline, but thereafter their
holdings have increased. In fact the operational holdings belonging to the
STs account for about 97 per cent of the holdings in the state and the size-
class distribution also follows the same trend (Table 15.2). This is signifi-
cant as we do not hear of any large-scale land alienation among the STs of
the state, which is very common among the tribals in the central and
288 V. UPADHYAY
Table 15.1 Size-class-wise distribution of operational holdings in Arunachal

Pradesh: 1970–71 to 2015–16
Year Category Size-class-wise operational holdings in (%)
Marginal Small Semi-medium Medium Large

(< 1) (1–2) (2–4) (4–10) (>10)
(1) (2) (3) (4) (5) (6) (7)
1970–71 No. 7.7 12.0 25.9 36.4 18.1

Area 0.7 2.8 11.6 35.0 49.9
1976–77 No. 9.7 18.3 27.4 27.3 17.3
Area 1.0 4.4 12.8 28.3 53.6
1980–81 No. 16.5 20.8 28.1 28.1 6.5
Area 2.3 6.9 17.8 38.9 34.2
1985–86 No. 17.2 18.9 31.2 27.0 5.8
Area 2.7 7.0 21.8 40.2 28.3
1990–91 No. 17.4 18.4 32.0 27.2 5.0
Area 2.9 7.5 24.0 42.1 23.5
1995–96 No. 19.3 19.4 29.0 26.7 5.8
Area 3.0 7.6 22.4 43.3 23.7
2000–01 No. 14.0 18.8 34.1 27.8 5.3
Area 1.9 6.7 24.6 43.5 23.3
2005–06 No. 20.3 23.1 28.1 24.6 3.9
Area 3.1 9.1 23.6 46.7 17.5
2010–11 No. 19.6 17.7 31.8 25.6 6.0
Area 3.1 6.8 24.5 40.3 25.3
2015–16 No. 24.0 21.2 25.6 23.2 6.0
Area 3.8 8.0 20.4 40.3 27.5
Source: Government of Arunachal Pradesh, Agricultural Census, various years
eastern Indian states (Mishra 2018). This may be attributed to the legal
restrictions imposed on transfer of land controlled by the tribal population
to non-tribal people and thereby effectively restricting land alienation in
Arunachal Pradesh.
As far as the female managed operation holdings (FMOH) is con-
cerned, according to the Agricultural Census 2000–01, the share of female
managed holdings was around 10.31 per cent of the total operational
holdings of the state and their share in total operated area was only 6.71
per cent. It was observed that a higher percentage of the FMOH were in
the small and marginal category. If we compare it with the data of the
Agriculture Census 2015–16, we find that there is marginal improvement
Table 15.2 Size-class-wise share of ST operated holdings in total holdings and

area in Arunachal Pradesh: 1980–81 to 2015–16
Year Category Share of ST operated holdings in Arunachal Pradesh in (%)
Marginal Small Semi-medium Medium Large All

(< 1) (1–2) (2–4) (4–10) (>10)
(1) (2) (3) (4) (5) (6) (7) (8)
1980–81 No. 96.4 93.9 92.6 98.9 99.6 95.7

Area 96.8 95.1 93.9 99.1 96.9 97.1
1985–86 No. 87.9 92.9 93.2 98.4 99.6 94.0
Area 94.4 93.7 94.8 98.7 99.5 97.6
1990–91 No. 93.8 93.8 97.4 99.0 99.9 96.7
Area 93.1 94.6 97.8 99.1 99.5 98.4
1995–96 No. 88.4 88.8 93.3 98.3 99.4 93.1
Area 87.7 88.7 93.9 98.5 99.5 96.6
2005–06 No. 94.3 94.6 95.8 99.4 99.6 96.3
Area 94.2 93.7 96.0 99.4 100.0 98.2
2010–11 No. 90.5 100.0 100.0 100.0 85.7 98.2
Area 91.7 100.0 100.0 99.4 99.0 99.0
2015–16 No. 90.1 98.0 99.3 99.7 99.5 96.9
Area 93.1 98.2 99.4 99.7 98.7 99.0
Source: Government of Arunachal Pradesh, Agricultural Census, various years
in the FMOH to 12.46 per cent and their share in total operated area has
also increased to 10.31 per cent. It is also seen that the share of FMOH
has declined steadily, as we move from lower to higher size classes
(Table 15.3). Further, it is observed that the share of FMOH in the cate-
gory of marginal and small holdings has declined during the period 2001
to 2016, but their share in the medium, semi-medium and large category
of holdings has marginally improved. In recent years, it has increasingly
been seen that large plots of plantation and horticulture land owned by
bureaucrats, contractors and the political class is held in the name of the
female members of the household.
The increase in the area under ST–operated holdings, particularly in the
relatively large size classes of holdings, clearly points to the large-scale
capture of land by the tribal elites for plantation and horticulture purpose.
It has been reported in local newspapers and has been observed, even dur-
ing the field work that many poor people are signing away their land to the
moneyed and the powerful. There are instances where poor people in
Table 15.3 Size-class-wise distribution and share of female managed operational holdings in Arunachal Pradesh: 2000–2001 and 2015–16
Size-class of operational Year Category Share of OH in Share of OH in total Size-class-wise Size-class-wise distribution Average size of
holdings in Ha. of holdings total holdings (%) area operated (%) distribution of OH (%) of area operated by OH (%) holdings (in ha).
(1) (2) (3) (4) (5) (6) (7) (8)
Marginal (0.01–1.00) 2000–01 Female 20.57 18.48 26.63 5.16 0.46

Male 79.43 81.52 11.81 1.64 0.53
2015–16 Female 17.42 15.58 31.17 5.46 0.49
Male 82.58 84.42 21.02 3.34 0.56
Small (1.00–2.00) 2000–01 Female 12.95 12.33 23.69 12.52 1.26
Male 87.05 87.67 18.31 6.40 1.33
2015–16 Female 12.06 12.22 20.81 9.65 1.29
Male 87.94 87.78 21.58 7.81 1.27
Semi-medium 2000–01 Female 9.27 9.07 30.89 33.75 2.61
(2.00–4.00) Male 90.73 90.93 34.76 24.34 2.67
2015–16 Female 11.56 11.50 24.38 23.21 2.65
Male 88.44 88.50 26.52 20.15 2.67
Medium (4.00–10.00) 2000–01 Female 6.26 5.91 17.07 39.01 5.46
Male 93.74 94.09 29.38 44.66 5.79
2015–16 Female 10.33 10.52 19.83 42.15 5.93
Male 89.67 89.48 24.49 40.45 5.81
Large (10.00 and 2000–01 Female 3.33 2.91 1.72 9.57 13.26
above) Male 96.67 97.09 5.74 22.97 15.25
2015–16 Female 7.84 7.23 3.82 19.53 14.26
Male 92.16 92.77 6.38 28.25 15.57
All 2000–01 Female 10.31 6.71 100.00 100.00 2.39
Male 89.69 93.29 100.00 100.00 3.81
2015–16 Female 12.46 10.13 100.00 100.00 2.79
Male 87.54 89.87 100.00 100.00 3.52
Note: Individual operational holdings and individual area operated has only been taken into consideration
Source: Arunachal Pradesh Agricultural Census, 2000–2001 and 2015–16 Department of Agriculture, Government of Arunachal Pradesh, Naharlagun
need of money have borrowed money from rich people of the community
with their land as collateral, with the condition that they would return the
money within a stipulated time. The borrower surrenders his land registra-
tion papers given by the government to the lender, with the condition that
in case he fails to return the money on time the land would belong to the
lender. There are several instances of default payment and in the process
tribal people are becoming land less. People are also parting away their
plot of land in the village to local officers in exchange of a government job
for their children. During the survey it was found that there were few
people who had become landless in the process. In most tribal villages, the
stigma of being landless is a heavy burden to carry. Even within the vil-
lages, the community lands are being occupied by influential members.
The poorer members of the community have absolutely no say. In most
cases the poor are indebted to the financially and politically influential
members of their own villages as they take favours in times of need—like a
trip to the hospital, college and school admissions and buying government
jobs. In every district of the state, the landed ones are the politicians or
government employees or the contractors. Basically, the moneyed class
owns almost all the lands everywhere. Those without steady income rely
on their land to bail them out of difficult circumstances and moneyed ones
do not think twice while exploiting the situation of the hapless ones. With
the cultivable communities, land slowly being grabbed by the rich and the
influential, soon there will be a class who will remain landless. Landlessness
will be followed by marginalisation in a society, where land is the only
source of livelihood. Those days of being poor yet equal are already over
in this tribal state with the advent of education and scary individualisation
in the name of community. With individualisation, comes the greed to
possess all things, even those revered, which includes the streams, the for-
ests and the land.
Property rights over land has been individualised in an ad hoc manner.
The legal framework of defining and enforcing legal rights over land was
also unclear. The Jhum Land Regulations, 1947–48, had some scope for
recognition of land rights and was the basis for land rights in the state.
After the Arunachal Pradesh (Land Settlement and Record) Act 2000 was
passed, it was hoped that the cadastral survey of land in the state would be
completed. But till date it has not been done. This act tends to recognise
individual rights over land by issuing the land occupation certificate (LOC)
to individuals. But recently the Arunachal Pradesh State Assembly passed
the Arunachal Pradesh Land Settlement and Records Amendment Act
2018, which gives the indigenous people of Arunachal Pradesh the Land
Possession certificate (LPC) along with the right to lease out their land up
292 V. UPADHYAY
to 33 years, which can be extended further by another 33 years (GOAP

2018). This clause would be helpful for the individuals in order to use
their land as collateral to get institutional credit and also pave the way for
private investment in the state (Mishra 2018).
It has been observed that ownership rights are generally being recorded
in the name of the male head of the household. In this period of transi-
tion, the state has played a deeply confusing role, by encouraging and even
allowing the gendered privatisation of land in practice, while formally rec-
ognising collective and community ownership over agricultural land.
Access to forests and jhum lands is central for ensuring food, nutrition
and energy security in Arunachal Pradesh. Privatisation, commercialisation
and degradation of forests (Mitra and Mishra 2011), have all led to women
losing their access to these resources (Mishra 2007). Women hardly have
any control over the money that comes from the commercial exploitation
of the forests (Upadhyay 2005, 2013, 2014; Mishra and Mishra 2012).
Hence, deforestation has increased the work burden of women in general
and poor women in particular (Mishra and Mishra 2012; Upadhyay 2013,
2015). Access to these forest and natural resources goes a long way in
empowering them.
4 Women and Work in Arunachal Pradesh:

The Changing Scenario
In the past few decades it has been observed that as commercialisation of
the economy is taking place, the tribal economic formation is also being
transformed drastically. Usually the tribal economies are characterised by a
high rate of participation of women in the productive activities, to such an
extent, that Boserup in her writings categorised the shifting cultivation
systems as ‘female farming system’. As a result, we observe that not only
the social valuation of women’s work has changed, but also their work
burden in terms of gender division of labour has increased substantially.
Agarwal (1994) in her study points out that in any society a transition
from collective to private ownership over land, usually results in the con-
centration of private ownership rights in the name of the male members of
the household, as a result women turn into ‘disinherited peasants’. For the
last few decades the state of Arunachal Pradesh is also experiencing this
transition (Mishra 2001, 2017, 2018; Mishra and Upadhyay 2012;
Upadhyay 2014, 2015). The dependency of the rural people on the forest
resources of the state is immense for their survival. In recent years a lot of
changes have been observed, where the rich, elite and the powerful of the
community have exploited the communally held resources for their own
vested interest (Mishra 2018). This has led to a situation where it has cre-
ated an unequal society both in terms of income and asset holdings and
has also made the lives of the rural women miserable by reducing the
resources available for them. Further, the work burden of the women has
also increased manifold, as they spend much more time to collect the for-
est produce and other resources, which is very crucial for the survival of
the households (Mishra 2007; Mishra and Mishra 2012; Mishra and
Upadhyay 2012; Upadhyay 2014, 2015, 2016).
4.1 Workforce Participation Rate

As far as the Workforce Participation Rate (WPR) in Arunachal Pradesh is
concerned, during 2011–12, it was 38.4 and 30.1 per cent in rural and
urban areas respectively. As compared to the previous round of NSS data,
that is 1993–94 and 2004–05, WPR registered varying degrees of decline.
In rural areas, WPR declined from 45.5 in 1993–94 to 38.4 in 2011–12.
In urban areas also it registered a decline from 32.6 to 30.1 during the
same time period. But in 2011–12, both in the rural and urban areas the
female WPRs in Arunachal Pradesh (27.8 and 12.7 per cent) were consid-
erably lower than the male WPRs (48.3 and 45.7 per cent) (Upadhyay and
Mishra 2009). The levels of the female WPR were 20.0 and 33.0 percent-
age points lower than that of their male counterparts in rural and urban
areas respectively. Further, there are significant rural-urban differences in
the female WPR. For instance, the urban female WPR (14.8 per cent) in
2004–05 was noticeably lower than that of rural female WPR (41.0 per
cent) (Table 15.4). It is also interesting to note that the rural-urban gap in
female WPR continues to be high during all the three 1994/2005/2012
periods. The decline in rural female WPR is more pronounced for the state
of Arunachal Pradesh as compared to other north eastern states (Upadhyay
and Mishra 2009).
Thus, we see that despite the fact that the state of Arunachal Pradesh
has experienced a declining female work participation rate since 1993–94,
it is still higher than the female work participation rate for the country.
The decline is more significant in the rural areas, whereas in the urban
areas the state has experienced a marginal increase. The most important
factor responsible for the decline in the work participation rate in the rural
294 V. UPADHYAY
Table 15.4 Workforce participation rates (UPSS) in Arunachal Pradesh

States Year Rural Urban
Male Female Person Male Female Person
(1) (2) (3) (4) (5) (6) (7) (8)
Arunachal Pradesh 1993–94 49.7 40.9 45.5 51.5 10.1 32.6

2004–05 50.0 41.0 45.8 46.1 14.8 31.9
2011–12 48.3 27.8 38.4 45.7 12.7 30.1
North-eastern region (NER) 1993–94 51.7 19.4 36.1 50.3 13.2 32.9
2004–05 55.0 25.0 40.4 51.7 15.8 34.5
2011–12 53.7 17.4 36.0 51.4 12.9 32.6
Source: Computed from unit record data of NSS employment–unemployment for various rounds
areas is a substantial increase in girls’ enrolment both at the primary and

upper primary levels. In the last one decade, it is observed that the per-
centage of enrolment of girls at higher levels of education has increased
significantly.
4.2 Labour Force Participation Rates

In case of Arunachal Pradesh, with low levels of commercialisation of the
economy and the significance of subsistence production in agriculture, we
observe that the problems of underestimation of women’s work are far
more serious.
According to the NSS data, both in the rural and urban areas of
Arunachal Pradesh it is observed that there has been a decline in the labour
force participation rate (LFPR). In 2011–12, rural LFPR declined sub-
stantially to 39.1 per cent from 46.2 per cent in 1993–94 and urban LFPR
declined marginally to 31.6 per cent from 33.5 per cent during the same
time period (Upadhyay 2012). While in urban areas male LFPR has
declined from 52.5 to 47.5 per cent, but female LFPR has increased from
10.9 to 13.9 per cent in the latest round of 2011–12. Both in rural and
urban areas female LFPR in Arunachal Pradesh is lower than that of their
male counterparts. In 2004–05, male LFPR was 50.5 (rural) and 46.6
(urban) per cent, while female LFPR was 41.3 (rural) and 15.1 (urban)
per cent in the state. But in 2011–12 male LFPR was 49.2 in rural areas
and 47.5 per cent in urban areas, while in case female LFPR it was 28.2
and 13.9 per cent in rural and urban areas respectively (Table 15.5). The
Table 15.5 Labour force participation rates (UPSS) in Arunachal Pradesh

States Year Rural Urban
(1) (2) (3) (4) (5) (6) (7) (8)
Arunachal Pradesh 1993–94 50.6 41.0 46.1 52.5 10.9 33.5

2004–05 50.5 41.3 46.2 46.6 15.1 32.3
2011–12 49.2 28.2 39.1 47.5 13.9 31.6
North-eastern region (NER) 1993–94 53.7 20.4 37.6 52.8 15.4 35.3
2004–05 56.5 25.8 41.6 55.4 18.0 37.5
2011–12 56.2 18.6 37.8 55.1 16.0 36.0
decline in rural female LFPR is more pronounced in case of Arunachal

Pradesh compared to that of the north east region as a whole (Upadhyay
and Mishra 2009). The lower female LFPR may be attributed to many
factors, like women continuing with their education and not joining the
labour market or withdrawal of women from the workforce because of
improvement in their economic conditions or due to their inadequate skill
or access to human capital (Chadha and Sahu 2002; Upadhyay and Mishra
2009; Chandrasekher and Ghosh 2011; Mishra and Upadhyay 2012;
Kannan and Reveendran 2012; Sahu and Kumar 2017).
4.3 Changes in Workforce Structure

The Arunachal economy is experiencing rapid structural transformation in
the recent decades, which is seen through increasing diversification of the
workforce, hasty and unplanned urbanisation, emergence of a modern
non-farm economy and slow assimilation with the national and regional
economy. Some important changes have been observed not only in the
production sector but also with regard to the sectoral distribution of the
workers. The share of primary sector workers has come down from 77.7
per cent in 1993–94 to 66 per cent in 2011–12. While the share of work-
ers engaged in the secondary sector has registered a marginal increase
from 6.8 per cent in 1993–94 to 7.2 per cent in 2011–12. The share of
the tertiary sector workers has also gone up from 15.5 per cent to 26.8 per
cent during the same time period (Table 15.6). The changes in the distri-
bution of workers broadly follows the direction of changes in the structure
296 V. UPADHYAY
Table 15.6 Sectoral distribution of UPSS workers in Arunachal Pradesh and

the NER (%)
States Category 1993–94 2004–05 2011–12
P S T P S T P S T
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Arunachal Pradesh Rural 86.5 4.4 9.1 82.1 5.3 12.7 77.8 5.5 16.7
Urban 7.8 26.3 65.8 11.6 11.8 76.7 14.8 14.9 70.3
Total 77.7 6.8 15.5 69.5 6.4 24.1 66.0 7.2 26.8
North-eastern region Rural 76.6 5.7 17.7 73.4 7.0 19.6 60.6 15.7 23.7
(NER) Urban 9.5 17.4 73.1 9.8 17.0 73.2 8.6 20.7 70.8
Total 67.7 7.3 25.0 64.4 8.4 27.2 51.7 16.5 31.8
Note: P Primary, S Secondary, and T Tertiary

Source: Sahu and Kumar 2017
of production, but the pace of changes in the employment structure is

much slower (Upadhyay and Mishra 2009).
The two key aspects of this changing pattern of employment in the
state of Arunachal Pradesh are, firstly, the pace of change in the rural areas
has been very slow compared to the urban areas and, secondly, women in
general, and rural women in particular, are moving out of agriculture at a
very much slow pace. Even in 2011–12, for example, 77.8 per cent of
rural workers were still engaged in the primary sector for the state as a
whole. In the case of female workers, their share in the primary sector was
40.6 per cent in 2011–12 (Upadhyay and Mishra 2009; Sahu and
Kumar 2017).
4.4 Status of Employment
As far as the distribution of workers by their status and location is con-
cerned, it is found that majority of the workers fell under the category of
self-employed. Given the nature of agriculture in the state, which is very
labour intensive, a large portion of the workers are self-employed in the
agriculture sector, of which a majority of them were women and children.
The agriculture practiced in this part of India is primarily Jhum/shifting
cultivation in which there is intensive participation of the womenfolk. It is
observed that wet rice and terrace cultivation is also picking up in many
parts of the state. During 1993–94 as high as 78 per cent of the workers
were found to be self-employed, followed by around 19 per cent as regular

salaried and 3 per cent as casual worker. In rural areas the self-employed
category of workers stood at as high as 85 per cent during the same period.
Even in 2011–12 though there has been a slight decline in the self-
employed category, it stood at as high as 73 per cent, followed by 20 per
cent in the regular salaried class and an increase in the category of casual
workers to 7 per cent (Table 15.7). Most of the self-employed workers are
in the agriculture sector doing subsistence farming or doing petty busi-
nesses like selling vegetables and running small retail shops. How far these
activities are remunerative is a cause of concern. In a very small scale, the
women of the state have started utilising the emerging opportunities in
the informal sector by setting up micro-enterprises, particularly in retail
trade, weaving, hotels and restaurants (Upadhyay and Mishra 2004;
Upadhyay 2005; Mishra and Upadhyay 2012). If one observes the share
of female workers across the broad sectors of the economy in Arunachal
Pradesh, it is found that a majority of them are in the agriculture sector
(40.6 per cent), followed by community, social and personal services (18.8
per cent), trade, hotel and restaurants (13.6 per cent) and construction
activities (12.8 per cent). There is substantial improvement in the share of
female workers in the non-farm sector, where it has improved from 11.8
per cent in 1993–94 to 32.1 per cent in 2011–12. Even in the primary
survey it was observed that women were moving out of agriculture, but at
a very slow pace (Table 15.8).
Table 15.7 Distribution of workers by their status and location in Arunachal

Pradesh (%)
States Location 1993–94 2004–05 2011–12
SE RS CW SE RS CW SE RS CW
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Arunachal Pradesh Rural 85.3 12.5 2.2 83.4 10.7 5.9 82.0 12.0 6.0
Urban 22.0 69.5 8.5 42.9 48.8 8.3 35.5 53.2 11.3
Total 78.2 18.9 2.9 76.2 17.4 6.4 73.2 19.7 7.0
North-eastern region Rural 63.3 13.2 23.4 73.4 9.3 17.3 68.9 11.4 19.7
(NER) Urban 46.2 44.0 9.9 45.1 44.5 10.4 50.8 39.6 9.6
Total 61.1 17.3 21.6 69.5 14.2 16.3 65.8 16.2 18.0
Note: SE Self-employed, RS Regular salaried, and CW Casual worker

298 V. UPADHYAY
Table 15.8 Share of female workers in broad sectors of Arunachal Pradesh

and NER (%)
States Year I II III IV V VI VII VIII IX Non- Total
Farm
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
Arunachal 1993–94 46.9 0.0 27.9 5.1 13.8 3.5 7.4 3.4 11.5 11.8 39.0
Pradesh 2004–05 49.4 – 11.6 0.0 24.8 12.0 0.0 9.4 18.9 17.0 39.5
2011–12 40.6 0.0 2.8 0.0 12.8 13.6 7.6 0.0 18.8 32.1 15.4
NER 1993–94 27.8 10.8 48.2 5.6 9.8 10.4 1.9 11.2 19.5 19.0 25.0
2004–05 35.0 8.2 35.8 3.3 7.8 12.2 3.4 9.5 23.8 17.9 28.9
2011–12 27.3 10.2 23.8 14.0 23.5 12.7 1.5 29.9 22.6 22.9 18.2
Note: I = Agriculture; II = Mining & Quarrying; III = Manufacturing; IV = Utilities; V = Construction;

VI = Trade, Hotel & Restaurants; VII = Transport, Storage, Communication etc.; VIII = Finance,
Insurance, Real estate & business services; and IX = Community, social and personal services
Source: Sahu and Kumar 2017
5 Gendered Dispossession and Feminisation

of Hill Agriculture
Feminisation of agriculture normally takes place due to out-migration of

males from low paid agriculture to high-paid industry. It is not specific to
India alone, but has also been noticed all over Asia (Da Corta and
Venkateshwarlu 1999; Srivastava 2011; De Brauw et al. 2013). In India it
is believed that this has been induced by casualisation of work, distress
migration and continuous crop failure or unprofitable crop production.
Harriss-White (2005: 2534) notes that while feminisation of agriculture
‘has been attributed to the male labour displacing impact of mechanisation
in lift irrigation, ploughing and harvesting; to male withdrawal from joint
tasks performed by both genders: to increasing local off-farm income-
earning opportunities for men; and to the tendency for men temporarily
to migrate in search of work (women often being prevented from doing
this by child care and other gender-inelastic, domestic work)’, it has also
been aggravated by ‘the displacement of women from female off-farm
livelihoods’. In the state of Arunachal Pradesh migration has been noticed
to urban areas and recently even to the construction sector, which is a
highly labour exploitative sector of the economy. Based on a field survey
in West Kameng district, Mishra (2003) had noted that with increasing
participation of males in the urban, non-farm occupations, the burden of
agricultural work has been disproportionately shared by the females.
In recent years, the state of Arunachal Pradesh in the agriculture sector

is witnessing a process of privatisation and commercialisation. These
changes are occurring during a phase of increasing gendered diversifica-
tion of the workforce and feminisation of agriculture. The major outcome
of this process of feminisation of agriculture is that it has substantially
increased the work burden of the women without increasing their income.
The burden of managing and maintaining the subsistence agriculture
wholly falls on the women members of the household. The analysis of the
two rounds of time-use pattern of rural women in the state clearly points
out that on an average the women end up spending much more labour
days in farm activities compared to their men counterparts. The average
weekly hours spent by the women folk is either more than men or is almost
equal if the primary activities are taken together (Mishra and Mishra 2012;
Upadhyay 2014, 2015, 2017).
In order to study the changing employment pattern and work burden
of women in Arunachal Pradesh two rounds of time-use survey was con-
ducted in three districts of Arunachal Pradesh, namely East Siang,
Changlang and West Kameng. The first round was conducted during
2010 and the second round was repeated again in 2017 in the same dis-
tricts. Glaring changes in their work pattern and work burden was
observed. During 2010 the average weekly time spent by men in total
SNA was higher than that of women for the state as a whole (Table 15.9).
But at a disaggregate level, in Changlang district, women spent more
hours doing work in the total SNA category. It was in the primary SNA
category where women were spending more hours in work compared to
men, except in the district of Changlang, where men were spending more
hours working in the field. In the extended SNA category it was women,
both for the state as a whole and in the district level, who were spending
much more time compared to that of men.
But during the 2017 survey it was found that as far as the average weekly
time spent in total SNA for the state as a whole was concerned, it was more
for the women compared to that of men (Table 15.10). It was observed that
large plots of common land which was used for jhum cultivation had been
captured by the powerful and rich in the community for tea and rubber
plantations. This commercialisation of agriculture in Changlang district had
further alienated the women who were already marginalised. This was a new
development in the region and it was further observed that in the primary
SNA category the average weekly hours spent by women had remained
more or less stagnant for the district Changlang, while the average weekly
hours spent by men had increased substantially. In the agriculture field it
300 V. UPADHYAY
Table 15.9 Average weekly time spent by gender on different activities in the
villages of Arunachal Pradesh (2010)
Districts Gender Primary Secondary Tertiary Total ESNA Non-
SNA SNA SNA SNA activities SNA
activities activities activities activities
(1) (2) (3) (4) (5) (6) (7) (8)
East Siang Male 24.88 4.07 21.21 50.15 14.28 101.61

Female 31.38 0.52 4.89 36.79 44.69 85.53
Total 28.19 2.34 12.87 43.40 29.46 93.62
Changlang Male 36.3 1.7 4.1 42.1 11.1 103.8
Female 32.7 11.2 3.5 47.4 24.5 87.6
Total 34.5 6.45 3.8 44.75 17.8 95.7
West Kameng Male 32.01 7.53 15.14 54.68 17.20 91.83
Female 35.46 1.41 9.54 46.41 38.90 81.99
Total 33.47 4.42 12.26 50.15 27.94 86.34
All combined Male 31.06 4.43 13.48 48.98 15.74 99.08
total Female 33.18 4.38 5.98 41.60 41.79 85.04
(Arunachal Total 32.05 4.40 9.64 43.53 28.68 91.89
Pradesh)
Note: Three villages in each of the district were surveyed

Source: Field Survey, 2010
Table 15.10 Average weekly time spent gender-wise on different activities in the
villages of Arunachal Pradesh (2017)
Districts Category SNA SNA SNA Total ESNA Non
primary secondary tertiary SNA SNA
(1) (2) (3) (4) (5) (6) (7) (8)
East Siang Male 29.8 0.8 15.6 46.2 10.5 107.9

Female 33.4 15.3 2.4 51.0 28.6 88.3
Total 31.6 8.1 9.0 48.6 19.6 98.0
Changlang Male 42.4 0.6 6.1 49.1 10.2 107.9
Female 32.6 13.3 3.7 49.7 26.6 91.7
Total 37.5 7.0 4.9 49.4 18.5 99.7
West Kameng Male 35.8 0.8 8.3 45.0 11.3 108.2
Female 38.3 9.2 5.0 52.5 23.4 92.1
Total 37.1 5.1 6.6 48.8 17.6 99.9
All combined total Male 36.0 0.7 10.1 46.8 10.6 108.0
(Arunachal Female 34.8 12.6 3.7 51.0 26.2 90.7
Pradesh) Total 35.4 6.8 6.8 49.0 18.6 99.2
Note: Three villages in each of the district were surveyed

Source: Field Survey, 2017
was found that women ended up doing all the tedious and difficult tasks in
the Jhum field which was earlier being performed by the men of the house-
holds. As the men folk move out, looking for jobs in the informal sector,
and managing their plantation sector, the work burden of women in main-
taining subsistence agriculture increases substantially. Thus, we observe that
the economic stake of women in agriculture declines despite the fact that
their contribution increases substantially.
As far as the ownership of land is concerned, women still lag behind. In
a survey conducted in 2016 in 18 districts of Arunachal Pradesh, to study
the social, political and economic empowerment of women, around 1278
women farmers spread across 56 villages were interviewed. Majority of
them (74 per cent) did not have title to the land which they claimed to
own, despite the fact that more than 78 per cent of the women farmers
said that they would regularly work in the agriculture and Jhum fields. As
high as 90 per cent, of them said that it was either, owned by their hus-
bands or their sons (Table 15.11). The women performed all tasks such as
clearing of the forest for Jhuming, weeding, sowing, harvesting, and
Table 15.11 Land ownership in Arunachal Pradesh

Arunachal Pradesh No Yes Total
Do you have title to the land you own? 940 338 1278
(73.6) (26.4) (100.0)
Do you go to the Jhum field? 285 993 1278
(22.3) (77.7) (100.0)
Is this work done independently by you? 993 285 1278
(77.7) (22.3) (100.0)
Do you retain your earnings? 341 936 1278
(26.7) (73.2) (100.0)
Does the government official harass you? 1229 49 1278
(96.2) (3.8) (100.0)
If you own the land, how did you get the land? Purchased Inherited Others Total
Arunachal Pradesh 210 981 87 1278

(16.4) (76.8) (6.8) (100.0)
Do you own the land which you till? No Yes Others Total
(31.4) (65.3) (3.3) (100.0)
If not, does your husband or son own the No Yes Other Total
land?
(7.7) (89.4) (2.9) (100.0)
Source: Field Work, 2017
302 V. UPADHYAY
collecting fire wood and dry leaves, fruit berries and leafy vegetables from
the forest and Jhum fields (Table 15.12). Most of the women farmers said
that they retained the earnings which they earned by selling the produce
as they earned a very nominal amount. We observed, in those districts
where commercialisation of agriculture had taken place, that money
earned was in total control of the male members of the family. In districts
like Lohit, Dibang Valley and Namsai it was observed that agricultural
land was given to migrant tenants mainly to grow vegetables, rice, mus-
tard and potato. Most of the owners were not staying in the district and
hence wanted to keep their land in safe custody. These migrant tenants
were either from Nepal or Bihar. It was the women and children of the
tenant household who would work in the field and then sell the produce
in the local market. If the owner’s house was nearby, then they would sup-
ply them also with some produce.
6 Conclusion
The overall picture that emerges points toward the fact that privatisation
of land and commercialisation of agriculture is taking place in a big way in
the state. In this process of transition, it is the women who are being
totally marginalised. The traditional community laws had earlier provided
only use rights to the people, but privatisation has led to a systematic pro-
cess of gendered dispossession. The state has played a deeply ambiguous
and uncertain role during this period of transition. Although community
rights over land have been protected, state institutions have encouraged
gendered privatisation in various ways.
The time-use survey clearly reflects that the work burden of women has
increased manifolds and it points out that on an average women are spend-
ing more labour days in farm operations than men and the weekly average
time spent by them in primary agricultural activities is found to be more
than men in recent years. The burden of maintaining subsistence agricul-
ture is disproportionately shared by the women and they end up doing
those tasks and activities which were earlier jointly performed by both men
and women, leading to low productivity and increased labour time of
women. The emergence of informal land-leasing involving migrant tenant
households and local landowners has introduced another class of invisible
women farmers and children, who simply work as family labour in leased-
in holdings. Thus, steps have to be taken to ensure that the gendered
transformation of land relations in Arunachal Pradesh is made more
Table 15.12 Tasks performed by the women in the Jhum and the agriculture field in Arunachal Pradesh
What work did you clearing the forest Weeding Sowing Harvesting collecting collecting fruit, Above Total
perform in the Jhum for Jhumming firewood and berries and green all
field? dry leaves leafy vegetables
Arunachal Pradesh 199 6 38 101 13 55 866 1278

(15.6) (0.5) (3.0) (7.9) (1.0) (4.3) (67.8) (100.0)
What is the work Transplanting Weeding Sowing Harvesting Clearing the Ploughing Above Total
performed by you forest for all
on the land? Jhuming
Arunachal Pradesh 44 39 61 266 121 0 747 1278
(3.4) (3.1) (4.8) (20.8) (9.5) (0.0) (58.5) (100.0)
Source: Field Work, 2017

15 THE GENDERED TRANSFORMATION OF LAND RIGHTS…
303
304 V. UPADHYAY
egalitarian. A high proportion of the workers in the state fall in the self-
employed category, wherein the proportion of female workers is also very
high. A large proportion of women within this category are unpaid work-
ers working in the family farm or leased-in land as tenants. It is to be noted
that in the absence of property rights, women have become both invisible
and voiceless. Women play a very significant role in food gathering and
food production and thereby ensuring food, nutrition and energy security
at household levels in the state, but when it comes to property rights they
are completely marginalised. Further, privatisation, commercialisation and
degradation of forests, have led to their further marginalisation, with
women losing access to these resources. In the absence of property rights,
they have no access or control over the money that comes from commer-
cial exploitation of these resources and consequently they continue to
remain disempowered and marginalised.
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Index1
A B
Accumulation by dispossession (ABD), Bhatta-Parsaul, 74, 78, 78n9,
4–6, 170–172, 184, 190, 202, 82–83, 260
203n4, 206, 231
Adivasi, 10, 267, 270
Agrarian crisis, 7, 14–16, 19, 20, 74, C
87, 240, 247 Capitalism, 4, 5, 5n4, 8n7, 14, 123,
Agrarian question, 7, 43 169, 182
Agrarian relations, 7, 48, 52 Capitalist globalisation, 3
Agrarian transition, 3, 5n3 Ceilings on land holdings, 58, 67
Agro-commercial towns, 96, 100 City-imagineering, 223
Ahmedabad, 221–232 City-making, 222
Arunachal Pradesh, 23, 24, 268, Collective identity, 24
269, 283–303 Commercial farming, 59, 60, 63, 125
Arunachal Pradesh Land Settlement Commodification of land, 17,
and Records Amendment Act 48–50, 52, 160
2018, 291 Common property resources (CPR),
Assam, 89, 265–274 7, 41, 48, 50, 52, 59, 172, 266,
Association of Southeast Asian Nations 268, 270–274, 278
(ASEAN), 274, 276 Community ownership, 45, 277,
Autonomous District Councils, 269 278, 292
Note: Page numbers followed by ‘n’ refer to notes.

1

India, https://doi.org/10.1007/978-981-15-3511-6
310 INDEX
Compensation, 11–13, 22, 50, 58, 72, E

74, 80, 80n13, 82, 134, 175, Eminent domain, 170, 235, 250, 251,
185–187, 200, 201n3, 202n4, 257, 258
206, 206n6, 207, 207n7, 210, Equity and efficiency in the
226, 235–247, 250, 255, agricultural land sale market, 154
256, 258–262 Ethnic assertion, 24
Comptroller and Auditor General of Expanded reproduction, 5, 6
India (CAG), 175, 196n1, Export Promotion Zone
197n2, 198, 203–205, 203n5 (EPZ), 196
Computerisation, of land records, 277
Concentration of land, 22, 58, 62,
135, 142 F
Contract farming, 19, 49, 58, 60, 62, Farmer suicides, 14n16
63, 67, 68 Feminisation, 24, 50, 283–303
Corporate farming, 19, 58–60, 62, 67 Feminisation of agriculture, 43, 51,
Cropping pattern, 65, 103, 114, 173 298, 299
Five Year Plan, 40, 43, 49
Floud Commission, 134
D Forest Rights Act, 10, 25,
Dalit, 10, 36, 40, 44, 50, 73n1, 74, 46n8, 49, 50
80–82, 239, 240, 244, 245, 268
Das, Raju J., vi, 2, 3, 5, 8n9, 15, 20
Decision to migrate, 87, 95 G
Depeasantisation, 7, 22 Gender and Land rights, 13
Development-induced displacement Gender disparities, 95
(DID), 11, 271–273, 278 GIFT city, 223, 227–229
Differentiation, 5, 6, 19, 68, 172, Globalisation, 5n4, 49, 273
188, 191, 236, 284 Global markets, 120
Differentiation, of the peasantry, 73 Greenfield Expressway, 237,
Digital India Land Records 238, 242–247
Modernisation Programme Green revolution, 7, 9, 10n11, 19,
(DILRMP), 36–39 58, 61, 62, 71–83, 129,
Digitisation of land records, 18, 135, 144
37, 40, 47
Discrimination and social exclusion, 10
Disinherited peasants, 24, 292 H
Dispossession, 4–7, 10–13, 17, 21, 23, Harriss-White, Barbara, 7n6, 8n8,
24, 60, 169–191, 202n4, 236, 10, 15, 51, 284, 286,
247, 298–302 287, 298
Dominant caste, 81, 128–132, 136 Harvey, David, 2, 4, 5, 8, 171,
Draft National Land Reforms Policy, 172, 202
2013, 41 High-value crops, 59, 63
INDEX 311
I Landlessness, 7, 10, 22, 50, 58, 60,

Identity-based politics, 74 106, 107, 111, 119, 124, 127,
Immigration, 24, 62, 265–272, 278 132–138, 291
Indebtedness, 20, 60, 87, 95, 98, 143, Land prices, 21, 141, 144, 146–148,
154, 155, 241 156, 159, 161–164, 173n2, 187,
Inequality, 7, 10, 16, 18, 22, 23, 48, 188, 209, 242
60, 106, 107, 111, 138, 142, Land question, 2–8, 13, 17, 18,
144, 172, 174, 175, 186, 188, 23–25, 41, 43, 45–47, 49–52,
191, 239, 242, 277 71–83, 196, 198–202
Informal credit, 15 Land reforms, 7–11, 18, 45–47, 73,
Instability in the income, 120 83, 89, 98, 127, 133, 134, 143,
268, 270
Land rights, 7, 10, 13, 18, 19, 24, 40,
J 42–47, 50, 52, 53, 283–303
Jamnagar Reliance SEZ, 196 Land rights for women, 36, 44, 52
Land sale market, 21, 141–143, 145,
147, 148, 151, 153,
K 154, 159–164
Karnataka, 19, 20, 59, 63, 85–100, Land tenure system, 45, 46, 283
200, 203n5, 204, 254 Land tenure system in the
Kolkata, 21, 22, 127, 171, 175, northeast, 45
178, 186 Land titling, 7, 18, 19, 45–47, 58
Land-use, v, 2, 7, 36, 42, 48, 57–68,
142, 154, 203, 214, 286
L Left Front, 127, 132, 256
Labour force participation rate Left Front government (LFG), 9, 127,
(LFPR), 294–295 175, 186, 187
Lacanian notion of fantasy, 223 Liberalisation of land regime, 40, 49
Land acquisition, 7, 11–13, 18, Livelihoods diversification,
20–25, 42, 58, 60, 71, 72, 16–17, 19, 24
74–79, 87, 184, 200, 206, Long-term migrants, 16, 97
207n7, 207n8, 209, 213, Look East Policy (LEP), 276
235–247, 249–251, Loss of livelihood, 226
254–256, 262, 265,
271, 273, 277, 278
Land Acquisition and Rehabilitation M
Act, 237 Magarpatta City, 251, 252
Land concentration, 18, 19 Mahatma Gandhi National Rural
Land grabbing, 3, 53 Employment Guarantee Act
Land leasing, 19, 40, 43, 50, 59, 60, (MGNREGA), 132, 136–138
64, 110, 302 Manipur, 268, 269, 274, 275
Land leasing act, 10, 60, 64–66 Market-based land reform, 10, 10n12
312 INDEX
Mayawati, 71, 72, 74, 76–79, 77n7, P

78n8, 82, 240 Panchayati Raj Institutions (PRIs),
Meghalaya, 271–276 49, 64, 65
Migrant households, 93, 94, Passive revolution, 10, 127, 130
96, 98, 99 Peasantry, 8n9, 9n10, 17, 19,
Mode of production, 5, 170, 190 124–133, 236, 247
Monthly per capita consumption Permanent Settlement, 50, 124,
expenditure (MPCE), 174, 125, 133
184–186, 191 Petty commodity production, 15,
Multi-locational families, 100 17, 20, 51
Place-marketing, 223
Post-colonial, 4, 4n3, 8, 8n9, 44
N Post-colonial capitalism, 4n3
Nagaland, 266, 269, 275 Potato kings, 62, 63
Nandigram, 12, 171, 200, 256 Price of the land, 143, 144, 161,
National Capital Region 203n4, 259
(NCR), 74, 254 Primitive accumulation, 4–6, 4n3,
National Land Records Modernisation 170–172, 182, 184, 190, 191
Programme (NLRMP), Production of neoliberal fantasy, 232
18, 36–38 Productivity of land, 135, 141n1, 142
Neoliberalism, 2–7, 11, 17, 18, Proletarianisation, 171, 172, 182,
23–25, 184, 190, 191 190, 191
Neoliberal paradigm of Property rights, 3, 11, 18, 24, 36–40,
development, 36 47, 53, 149, 170, 251, 254, 283,
Neoliberal transformation of 286–292, 304
space, 23 Public purpose, 200, 201, 203, 236,
Neoliberal urbanism, 169–191 250, 251, 258
NITI Aayog, 10, 10n13, 19, 60, 61, Punjab, 59, 61, 62, 64, 65, 130, 143,
64, 66, 67 200, 203n5, 256
Non-cultivating households, 144, 154,
157–158, 164
North east India (NEI), 23, R
265–279, 284 Rajasthan, 19, 20, 103–104, 119,
202n4, 203n5
Rate of returns in agriculture, 74
O Regimes of dispossession, 5
Occupancy Urbanism, 222 Rehabilitation, 12, 13, 18, 201n3,
Out-migration, 7, 14n16, 16, 17, 226, 241, 259, 260, 265,
20, 21, 24, 44, 88, 268, 271–273
135, 298 Reservation price, 188
INDEX 313
Resettlement and rehabilitation, Subsistence agriculture, 299, 301, 302

13, 201n3 Sustainable compensation, 258
Reverse tenancy, 51, 58–62, 64
Rich peasantry, 124, 127–131
Rural distress, 14, 14n16, 127 T
Rural livelihoods, 19, 25, 190 Tenancy reform, 9, 10, 133
Rural non-farm sector, 51, 92, 214 Terms of trade, 119, 135
Rural-to-rural migration, 90 Time-use survey, 24, 285, 286,
Rural transformation, 17, 19–21, 172 299, 302
Rurban, 7, 48, 213, 214 Tripura, 267, 268, 272, 275
Rurban industrialisation, 214
Ryotwari, 143
U
Uttar Pradesh (UP), 19–22, 71–83,
S 142, 143, 198, 203n5, 236–241,
Sabarmati Riverfront Development, 243, 260
223–227, 231
Scheduled caste (SC), 16, 20, 42, 51,
90, 104–108, 110, 111, 113, V
115, 116, 118, 126–128, Vibrant Gujarat Summit, 223, 224
132, 135–137 Village institutions, 46
Scheduled tribe (ST), 11, 16, 20, 49,
90, 104–108, 110, 111, 113,
115, 116, 126–128, 132n9, W
134–137, 287, 289 Wastelands, 4n3, 43, 46, 58, 59, 200,
Seasonal migration, 17 209, 266
Semi-feudal relations, 48 West Bengal, 9, 12, 19, 21, 59, 63, 81,
Singur, 12, 171, 175, 186, 200, 253, 89, 123–138, 142, 143, 169–191,
256, 275 200, 203n5, 204, 274, 275
Situation Assessment Survey, 87 Workforce Participation Rate
Smart cities, 36, 48, 230, 231 (WPR), 293–294
Smart Cities Mission, 222, 230–231
Social networks, 87, 93, 99
Spatio-temporal fix, 5 Y
Special Economic Zone (SEZ), 17, 21, Yadav, Mulayam Singh, 71–72,
22, 41, 48, 71, 72, 75–77, 75n3, 74, 76–80
80–83, 172, 195–217, 196n1, Yamuna Expressway (YEW), 71, 72,
253, 274–276, 278 77, 78, 80, 82–83, 237–242, 245
Speculative acquisition, 142
Spread effects, 159
Subordinate castes, 21, 124, Z
129, 132–138 Zamindari, 73, 125, 134, 273
Unit 2
Post-Liberalization Transformation and

Development Challenges in India
Neoliberal economic policies have transformed Indian economy and
society in many ways:
• Television
• Telephone
• The size of GDP and per capita income has gone up,
• absolute poverty has declined,
• access to health and education has improved immensely,
• life expectancy at birth has gone up, and
• infant mortality rate has gone down.

The new challenges pointed out by economists include:
• jobless growth,
• rising economic inequality,
• rising cost of health,
• rising cost of education,
• Growing non-standard forms of employment,
• Reduction of investments on various sectors – agriculture, social
protection,
• It has also brought in dispossession and displacement,
• unequal access to resources.
Suggested Readings:
• Mishra, Nripendra Kishore (ed.). 2020. Development Challenges of
India After Twenty Five Years of Economic Reforms: Inequality,
labour, employment and migration. Singapore: Springer.
(Chapter: Introduction)
India Studies in Business and Economics
Nripendra Kishore Mishra Editor
Development
Challenges of India
After Twenty Five Years
of Economic Reforms
Inequality, Labour, Employment and
Migration
The Indian economy is considered to be one of the fastest growing economies of the
world with India amongst the most important G-20 economies. Ever since the
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Development Challenges
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and Migration
123
Editor
Department of Economics
Banaras Hindu University
Varanasi, Uttar Pradesh, India
ISSN 2198-0012 ISSN 2198-0020 (electronic)

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Preface
India embarked on the path of economic liberalization since 1991 and witnessed
fast economic growth by the turn of the millennium. In fact, feeble attempts toward
economic reforms had already started since the mid-1980s, and most economists
agree that structural break in the growth of GDP started from the early 1980s. The
need for change in economic policy was being felt from the early 1980s, and there
were some attempts to do so in the late 1980s, which is famously known in policy
circle as ‘M Document.’ In 1980, the size of the Indian GDP was larger than that of
China, which fared poorly in all indicators of development as compared to India.
During the same period, countries of South East Asia were doing better than India
not only in terms of GDP growth but also in the indicators of human development.
Political crisis post-1989 under coalition governments halted any attempt to address
the simmering economic crisis, and it ultimately fell upon a minority government to
carry out full-fledged economic reforms from 1991 onward. These economic
reforms paid large dividends in later periods as India traced a trajectory of high
economic growth. This ‘golden run’ continued for nearly 20 years. It is now more
than a quarter of a century since the initiation of economic reforms. Slowly and
steadily, all pretensions of the mixed economy have been shed, and there is hardly
any hesitation either on the part of the state or public in accepting that India has
absolutely adopted the capitalistic path of development. Ironically, the word
‘socialist’ continues to define the state in the preamble of the constitution. The 25
years of market reforms have also seen changes in other spheres such as coalition
power politics largely based on communal and caste equations, the rise of the
middle class, and the emergence of service sector, especially IT-enabled services, as
the driver of growth and pro-business rather pro-market economic policy. By 2020,
the embrace of the market is complete, and planning as an instrument of economic
policy is a thing of the past.
These years of liberalization have been years of ‘celebration of growth,’ and
euphoria overgrowth has been the principal driving force of policy. In a very subtle
shift, the concept of development stands replaced by the idea of growth in popular
discourse with the latter being touted as a panacea for all ills. A growth in GDP is
supposed to usher in development along all social indicators as well. This view has
v
vi Preface
been advocated globally by neo-liberal economists and multilateral agencies. In

India, this shift in the perception of ‘development’ was effectuated very forcefully
in 2014 when the Hindi word for development vikas was pushed into the growth
narrative without spelling out its content. It only became evident later that it was
actually the growth that was sought to be pursued. The idea of ‘development’ itself
has become a topic of debate with a definite tilt toward pushing through growth in
the name of development. Sadly, this has been done without any theoretical or
empirical evidence as it is suited to neo-liberalism (global capital), to the ‘new’
Indian state, to newer coalitions of interest groups, and also to the new ‘aspirational
India.’
It is now time to evaluate these past 25 years under the liberalized economic
regime which has achieved substantial gains but also lost ground on several counts;
probably the latter is greater than the former. No doubt, the size of the economy and
per capita income has gone up. After some letup in the 1990s, there has been
sustained reduction in poverty, while the rate of unemployment remained fairly
stable till 2011–12. However, the rate of unemployment shot up sharply from
2011–12 to 2017–18. Indicators of health and education have improved. The pri-
vate sector has come of age. There had been some acceleration in the growth rate of
wage rate and earnings of labor, but it collapsed later. At the same time, inequality
or disparities in income/consumption and wealth have gone up considerably. There
are newer forms of inequality. Economic growth has not been poverty reducing.
The content and the process of growth have been unequalizing. Unemployment
remains a challenge as it was two decades ago. The period after 2014 has been even
more challenging according to the Centre for Monitoring Indian Economy (CMIE)
and Periodic Labor Force Surveys (PLFS). One does not have any information
about poverty after 2011–12, but there are indications that it might have gone
up. The share of labor in value added is declining. The labor class is in distress,
especially unskilled workers. Migration has become an important coping up strat-
egy with continued agrarian distress. The neglect of these issues over the last 25
years came to the fore as the economy came to a grinding halt in the Covid-19
pandemic. The pandemic exposed several fault lines in society, polity, and econ-
omy. The class character of the state, role of public institutions, and ‘othering’
of the working class, especially migrant workers, have become clearly visible. The
pandemic has proved right our presumption that the economic reforms have worked
wonders on many fronts, but they have been equally punishing on more counts.
Contributions in this volume address these questions from multiple perspectives.
Problems in conceptualization of development and Indian development model are
compared with other countries. Newer forms of vulnerability and sources of
inequality are highlighted, and distress in labor market is examined from multiple
lenses. Connections between agrarian economy and rural distress are established.
Migration is addressed in a wider conception of labor mobility. A common con-
clusion is that many vital issues of development have been neglected in the last 25
years of economic reforms in pursuit of growth.
Preface vii
This volume emanates from a seminar organized by the Department of

Economics, Banaras Hindu University, Varanasi, on the theme of 'Twenty Five
Years of Economic Reforms in India' in March 2018 in honor of Prof. Ravi
Srivastava. The sub-themes in the seminar, which constitute the sections of the
book too, were essentially areas of his work. Prof. Ravi Srivastava, who superan-
nuated in 2018 from Jawaharlal Nehru University (JNU), has had a very close
academic interaction with the Department of Economics, BHU, Varanasi. I am full
of gratitude to Prof. Srivastava as he has been a great source of inspiration to me
throughout my academic journey. I express my sincere thanks to all contributors
who are known experts in their respective areas of research. I am also thankful to
Prof. R. P. Pathak, former Dean, Faculty of Social Sciences, Prof. A. K. Gaur, the
Head of the Department, and all my colleagues and students. I am also thankful to
the Indian Council of Social Science Research, New Delhi, Department of
Planning, Government of Uttar Pradesh, and the Tata Trust, Mumbai, for their
financial support for the seminar. I am grateful to Prof. Deepak Nayyar for sparing
time to go through the manuscript and write a foreword for this volume. Ms. Sudha
Passi has very diligently done copy editing of this volume. I am thankful to
Ms. Nupoor Singh and Ms. Jayaraniprem Kumar from Springer for their cooper-
ation and valuable support.
I dedicate this volume to my parents who raised me in challenging circumstances
and encouraged my pursuit of knowledge to satiate my spirit of enquiry.
Varanasi, India Prof. Nripendra Kishore Mishra

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Challenge of Development in India

Some Reflections on Development Challenges of India . . . . . . . . . . . . . . 27
Arvind Subramanian
Development Challenges of India After 25 Years of Economic
Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Ashok K. Lahiri
Secrets of the Heart: Adding Subjectivity to Policy Prescriptions
for a Pleasant Economic Development . . . . . . . . . . . . . . . . . . . . . . . . . . 51
B. V. Singh, Siddharth Singh, Ravish Kumar Shukla, and Lav Jee
Poverty and Inequality

Toward Understanding the Nature of Inequality in India in Terms
of Changing Perceptions on Its Sources and Solutions . . . . . . . . . . . . . . 79
D. Narasimha Reddy
Growth, Inequality and Labour Force Participation . . . . . . . . . . . . . . . 101
Arup Mitra
Inclusiveness of Economic Growth in Uttar Pradesh . . . . . . . . . . . . . . . 113
Nripendra Kishore Mishra and Manish Kumar Singh
Labor, Work, and Employment

Structural Change and Increasing Precarity of Employment
in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Ravi Srivastava, Balakrushna Padhi, and Rahul Ranjan
ix
x Contents
Contemporary Capitalism and Employment Challenges:

Some Reflections on India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
Praveen Jha and Satadru Sikdar
Structural Change and Rural Households in India: An Analysis
of the Nature of Transformation in Their Economic Activities . . . . . . . 183
Vinoj Abraham
Wage Employment, Informality, and Social Networks in Indian
Labor Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203
Rajendra P. Mamgain
Entrepreneurial Avenues for Scheduled Tribe Communities
in Nonfarm Enterprise Sector: Prospects and Challenges . . . . . . . . . . . 225
Partha Pratim Sahu and Manik Kumar
MGNREGS and Rural Labour Market in India . . . . . . . . . . . . . . . . . . 247
Ashok Pankaj and Mondira Bhattacharya
Subcontracting Linkages in the Informal Manufacturing Sector
in Uttar Pradesh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261
Udai Bhan Singh
Skill Inequality Among Social Groups in India: Regional Analysis
in Uttar Pradesh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279
Ishwar Chandra Awasthi and Puneet Kumar Shrivastav
Agrarian Question
Structural Transformation and the Agrarian Question
in the Indian Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305
K. P. Kannan
Failing Agriculture and Frazzled Farmers: The Inside Story of India’s
Most Populous States—UP and Maharashtra . . . . . . . . . . . . . . . . . . . . 331
Rakesh Raman and Khursheed Ahmad Khan
Labor Mobility
Labour Mobility in Historical Perspective from East U.P, South U.P
and North Bihar: Contours of Changes and Continuity . . . . . . . . . . . . . 357
Tulika Tripathi
Migrating to the Roads in the Cities in Uttar Pradesh:
Some Reflections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379
Bhaskar Majumder and V. Narayan
Mobility and Threshold Social Security . . . . . . . . . . . . . . . . . . . . . . . . . 397
Pushpendra and Dipak Kumar Singh
Contents xi
Mapping of Migrants Based on Caste, Origin, and Destination:

An Insight into the Sugarcane Cutter Migrants in Maharashtra . . . . . . 419
Anurag Asawa
Internal Migration and Inclusive Development: Insights
from the Field . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443
Jhilam Ray, Farhat Naaz, Poulomi Khasnobis, and Rajarshi Majumder
About the Editor
Nripendra Kishore Mishra is a Professor in the Department of Economics at

Banaras Hindu University (BHU) Varanasi. He has 22 years of teaching and
research experience, specializing in development economics, and was a Visiting
Researcher at the Rural Development Institute, Chinese Academy of Social
Sciences (CASS), Beijing. He started his career at DAV College, Gorakhpur and
moved on to become a Reader and Professor at BHU, Varanasi. Prof. Mishra has
published more than 15 research papers in respected journals and has completed 9
research projects funded by national and international agencies. His work with
NCEUS and the Ministry of Minority Affairs has had a significant impact on
government policymaking. Recently, Prof. Mishra has successfully created a panel
of poor households with a gap of twenty years in backward regions of Uttar Pradesh
and Bihar. Prof. Mishra’s primary area of research of is poverty, employment,
labour, informal economy, women’s empowerment and rural non-farm sector,
particularly in Uttar Pradesh. Prof. Mishra is associated with many professional
organization and journals in various capacities.
xiii
Introduction
Abstract India has achieved high growth in the last twenty-five years of economic
reforms and is now counted as one of emerging economies in the world. There has
been a reduction in poverty, but inequality has gone up. Broad health indicators have
improved, yet it cannot be called a healthy country. Many development deficits have
been bridged in the last twenty-five years. Still, some development challenges are
persisting, and newer challenges have come up. Some of these are taken up for further
investigation.
1 Background
In the last 25 years since economic reforms were ushered in India, the country has
emerged as the world’s fifth largest economy with one of the fastest growth rates on
the globe. News that India’s GDP has surpassed that of developed countries such as
the UK and France have been greeted with jubilation.1 There is now talk of becoming
a USD five trillion economy given India’s enormous growth potential. However, lost
in this din is the discussion about the per capita income, unemployment rate, inci-
dence of poverty, health and education outcomes, and other social indicators. Growth
in itself is neither good nor bad. It does bring in more goods and services but that is
only a beginning of the complex process of development (Rao 1964; Ramirez et al.
1997; Mulok et al. 2012). What really matters is the general effect of growth on
development. But somehow growth is being passed off as development, as if it auto-
matically and proportionally results in development. This usage has been trending
of late as the generic Hindi term for development Vikas is being used to highlight
growth as if the two are synonyms. As a result, the connotation of development has
1 IMF’s October 2019 World Economic Outlook data puts India’s nominal GDP at USD 2.94 trillion
ahead of UK (USD 2.83 trillion and France (USD 2.71 trillion).
N. K. Mishra (B)
Department of Economics, Banaras Hindu University, Varanasi, India
e-mail: nripendra.mishra@gmail.com
© Springer Nature Singapore Pte Ltd. 2020 1

N. K. Mishra (ed.), Development Challenges of India After Twenty Five Years
of Economic Reforms, India Studies in Business and Economics,
https://doi.org/10.1007/978-981-15-8265-3_1
2 N. K. Mishra
shrunk to expansion of the commodity sector ignoring many other dimensions of the
term. On the contrary, it is growth that has been pushed into the narrative of ‘Vikas’.
While growth has caught the imagination of the nation, its content and nature, and
even equitability, have yet to capture popular attention and space in public debate.
No doubt, 25 years of economic reforms or neoliberal economic policies have
transformed Indian economy and society in many ways: The size of GDP and per
capita income has gone up, absolute poverty has declined, access to health and
education has improved immensely, life expectancy at birth has gone up, and infant
mortality rate has gone down. In fact, this list can be extended by adding many other
achievements, some of that have definitely come about in the new economic regime.
Also, the state has withdrawn from many sectors allowing the market forces to decide
their course. It has become the predominant ideology with subscription not only of
the ruling class but also of backing from the common man too. A new middle class
has emerged as the epitome of a ‘New India’ or ‘Aspirational India’. Indeed! India
has changed dramatically in the liberalization years.
Nevertheless, it has remained the same in more ways than some. Even as some
stubborn old issues continue to bog down growth, new challenges have emerged
putting a big question mark on the efficacy of neoliberal policies that have been in
place for a quarter of a century. Among the new challenges pointed out by economists
are jobless growth (Kannan and Raveendran 2019; Tejani 2015; Mukherjee 2014;
Alessandrini 2009; Bhalotra 1998), social protection (Jha 2013; Mehrotra et al. 2014;
Kapur and Nangia 2015), rising economic inequality (Himanshu 2019; Dev 2016;
Pal and Ghosh 2007), rising cost of health and education (Gumber et al. 2017; UGC
2008; NCEE 2005), unequal access to resources (Kumar and Saleth 2018; Barik
and Thorat 2015; Beck 1995), growing non-standard forms of employment (Landau,
Mahy, and Mitchell 2015; Srivastava 2016), and declining share of labour in value
added (Jayadev and Narayan 2018; Maiti 2018, 2019; Abraham and Sasikumar 2017).
Women are withdrawing from the labour force (Bhalla and Kaur 2011; Chaudhary
and Verick 2014; Sanghi et al. 2015) and gender differentials in wages are widening
(ILO 2018; Bhattacharjee et al. 2015; Khanna 2012). Investment in human capital
has taken a back seat. It has also brought in dispossession and displacement (Mehdi
and Chaudhry 2015; Tilak and Jandhyala 2006). Therefore, the content and nature
of growth are very important. But, realization of high growth rather than addressing
the real issues of development has gained popular attention aptly promoted by the
corporate-controlled media and political class. This suits the political class as well as
it is not compelled to grapple with the complex process of development, and a singular
focus on GDP growth rate suffices. Thus, it becomes pertinent to review these 25 years
from the perspective of development by taking stock of progress on old issues and
emerging challenges. It is also important as there has been a complete change in the
nature of the state in these years as a whole set of neoliberal policies have replaced
the earlier policy of state-mediated development (Kohli 2007). A classic case is the
decline of state role in public health and higher education sectors.
It is against this backdrop that this book seeks to revisit some old issues of devel-
opment along with the new challenges. The volume emanates from a seminar on the
same theme organized by the Department of Economics, Banaras Hindu University,
Introduction 3
Varanasi in March 2018 in honour of Professor Ravi Srivastava, Director, Centre

of Employment Study, Institute of Human Development, New Delhi, and formerly
Professor of Economics, Centre for the Study of Regional Development, Jawaharlal
Nehru University, New Delhi. The issues covered are essentially ones that have been
the area of work of Prof Srivastava. The present volume is divided into five interlinked
sections viz.
I. The challenge of development
II. Poverty and inequality
III. Labour, work, and employment
IV. The agrarian question
V. Labour mobility.
A brief overview of the structure of the volume and papers contained in each
section is discussed in the following sections.
2 The Challenge of Development
Of late, the word ‘development’ has been used in many contexts, often quite unrelated
to the received understanding of the term. A chasm in this received understanding
is used to push through the ‘convenient’ meaning of development. Therefore, there
is a need to redefine what one means by development in times of emergence of
‘aspirational India’. The perception of development is different for different classes
and regions. This has been evident in public discourse during the last 5 years. Does
the conventional conception of development in terms of material availability prop-
erly explain the observed ‘development deficit’ in India of present time? One needs
to revisit the idea of development, where the latter is defined in a much broader
sense including institutions. It also requires an exploration to know who is paying
the cost and who is reaping the benefits of development (or growth). The past 20
five years have witnessed growing inequality between various groups, suggesting
the non-inclusiveness of development (or growth). While Arvind Subramanian and
Ashok Lahiri flag many present challenges of development, B V Singh et al. take an
altogether different view of development in India.
Arvind Subramanian2 compares the Indian development experience with several
countries and concludes that the Indian model is distinctly different from any other
available development model. A striking point made here is about the sequencing
of economic development and political development. Europe had slow growth and
economic development along with political development. But East Asia and many
other countries first had economic development followed by political development.
The case of India is altogether different. It had political development in the form of
2 This paper by Dr Arvind Subramanian is an edited version of his valedictory speech delivered at
the said seminar.
4 N. K. Mishra
democracy and universal suffrage right after independence, when economic devel-
opment was in a nascent stage. In a way, it belongs to neither camp and yet has
witnessed dramatic development in the period under study. This proposition of Subra-
manian brings into discussion an important issue of relationship between political
and economic development and, by extension, between politics and economy. Sen
(1999) argues that democracy is an essential condition for sustained economic devel-
opment over a long period of time. The case of East Asia shows that investment in
human capital and welfare state are preconditions for sustained development. But,
China presents a puzzle. In the early 1980s, all indicators of development in China
were worse than India (Basu 2009; Desai 2003). The situation was reversed by the
late 1990s in spite of the fact that political development in China has not taken off at
all. So far, evidences point that sustained economic development is best executed in
a pluralist democracy. This inference has far-reaching effects on many of the current
debates in India. A section of media has linked the slowing down of economy with
political issues of the time (BBC 2019; Subramanian 2019). Kohli (2006) states that
economic policies are influenced by the political interests of ruling parties. However,
Subramanian restricts himself to comparing the Indian model with other available
models.
Ashok Lahiri in his paper on ‘Development challenges of India after twenty-five
years of economic reform’ takes the discussion further and argues that the answer to
the question of how have we done after the 1991 reforms depends on ‘relative to which
period of our own past’ and ‘relative to which other country’. While comparison
between the pre-reform and post-reform period of India shows that the last 25 years
have been ‘gratifying’, the comparison with East Asian countries (including China) is
‘sobering’. India has not done as well as East Asian countries have done in this period.
Of course, there are issues of political development in these countries as pointed out
by Subramanian. An interesting observation is that fiscal laxity in India has been
greater than many of these countries raising doubts on the role of public spending
in boosting growth. Lahiri lists eight issues as development challenge in the near
future, namely, fiscal rectitude, market versus state, agricultural reforms, farm loan
waivers, minimum support price, the role of cooperatives, physical infrastructure, and
social infrastructure. The economic policy needs to have a definite response to these
issues. So far, there has been considerable back and forth response on these issues.
However, it appears that Lahiri places greater importance on physical infrastructure
as compared with social infrastructure despite the fact that there has been a major
change in the understanding of economic theory in recent times and investment in
social infrastructure is supposed to have higher social rate of return (Bathla, Kumar,
and Joshi 2018). The emphasis on physical capital as the driver of development is
quite consistent with the new definition of development being forwarded in India in
recent times. One is still not sure whether underdevelopment of India is caused by the
lack of roads, ports, railway lines, and power or it is the absence of quality healthcare
and education. Available research is quite inconclusive (Mohanan and Hay 2016;
Sahoo 2011; ADB 2007).
A mechanical meaning of development is being propounded and there are reasons
to believe that it may not be complete. Sen (2005) raises some important questions
Introduction 5
about the process and consequences of development. Development of what, devel-

opment of whom, and who defines what development is—these are the questions
that need to be answered. There is a yearning to find an alternative meaning of
development, which is best reflected in experiments like the happiness index (Royal
Government of Bhutan 2012). Is it that the idea of development is too West-centric or
obsessed with commodities and objectivity? Is it correct to have a universal meaning
of development or a one size fits all definition of development? The ‘capability
approach’ does provide a window to peep into this question. But here again, this
issue stands unresolved.3 Alkire (2002) argues that valuable freedoms are to be
obtained from the context itself, which means that there cannot be a universal defi-
nition of development. B V Singh, Siddharth Singh, Ravish K. Shukla, and Lav
Jee attempt to understand development through an alternative method by using an
experiment in their paper on ‘Secrets of the Heart: Adding Subjectivity to the Policy
Prescriptions for a Pleasant Economic Development’. It is argued that the quest for
objectivity (which is based on pre-conceived meaning of certain terms including
development) and reliance on scientific methods has not yielded a complete under-
standing of development and consequently policy fails to address the ‘felt needs’
of intended beneficiaries. These methods rely on ex-post facto information and thus
fail to predict the future. Most of the time, the policies derived from theoretical
conclusions overlook the whole construct of human being; which includes social
relationships, impulses, political affiliation, likes–dislikes, and spiritual setting and
belief systems. Therefore, development planning needs to be supplemented by other
methods capable of deconstructing established meanings. Individual behaviour is
non-linear and often non-rational if the latter is defined in the conventional sense of
the term. This can be addressed only by including subjective elements that factor
the needs and desires of targeted people in policy and decision-making, the paper
argues citing a case study from Varanasi city on the labour force engaged in spiritual
tourism.
3 Poverty and Inequality
The concepts of equity and justice have undergone a remarkable change over time.
As intolerance over stratification and differentiation has grown, the very concept of
inequality has undergone a radical transformation with the discussion now focused
on ‘inequality of what’ and ‘inequality among whom’. The need of the hour now is to
extend the idea of the transformed notion of inequality to development, so as to reflect
its implications for ‘growth with justice’ in the Indian context. While the earlier belief
in an inverted U-shape curve describing the relationship between economic growth
and economic inequality has been questioned in light of extensive cross-country
data for longer periods, there is a very little analytical exploration into what might
happen to inequality between different social groups, or across spatial units, in terms
3 For details, see debate between Sen (1993) and (Nussbaum 2003, 2011).
6 N. K. Mishra
of income and non-income dimensions in the course of rapid economic development.

In spite of renewed interest in the issue of inequality across the world, discussions
on inequalities based on ethnic, racial, or caste groups have been less visible than
general or interpersonal inequality. Rising disparities has become a defining feature
of the last 25 years of the Indian economy. The conventional way of looking at
inequality only in terms of income is no longer considered appropriate. It is also not
clear how growth has impacted inequality and what has been the functional impact
of inequality on issues like labour force participation. This issue needs investigation
by bringing in a wider conception of inequality. Declining share of labour in value
added is directly linked with rising functional inequality.
The idea of inequality has undergone many changes; believed to be a non-
issue by classical economists and considered as the most important issue by Marx-
ists. Somehow, there was either neglect or tolerance of inequality in mainstream
economics, at times considered as the only natural in human society. Interestingly,
Kaldor (1955) and Kuznet (1955) are celebrated while Kalecki is ignored by main-
stream economics. D N Reddy, in his paper ‘Toward understanding the nature of
inequality in India in terms of changing perceptions on its sources and solutions’,
traces the evolution of this concept right from Mill, Marshall, and Clark to Piketty.
He shows how conceptualization of inequality has changed with time and how multi-
lateral institutions like IMF, which did not accord much importance to the inequality
question till the late 1990s, have changed their position and now regard it as the
central question of modern times. The Oxfam Annual Report (2017/2018) is a telling
example of newfound concern of mainstream economics with respect to inequality.
Of course, Piketty (2014) has been the pioneer in bringing the inequality discourse
on the agenda. For a long time, inequality research has been obsessed with Kuznet
(1955) without actually understanding it. Reddy points out these fallacies in the
conceptualization of inequality and argues that broadening the scope of research
on the multidimensional nature of inequality has also resulted in questioning the
conventional wisdom that disparity is the result of differences in skills and talents.
Piketty (2014) and (Stiglitz 2015) have highlighted the role of policy and politics in
inequality. Reddy argues that one of the main dimensions of contemporary political
economy is the emergence of finance capital and the complex role of finance, prop-
erty (real estate), and avoidance of taxation as drivers of inequality. It is shown that
growing inequality is a challenge to sustainable growth and reduction in poverty is
only possible through reduction in inequality. Inequality, as measured by consump-
tion Gini declined till 1970s. But, it has steadily risen after 1991. Income Gini, as
measured from IHDS data, is much higher (0.55) than consumption Gini (0.37), and
wealth Gini is even higher (0.74). Often, inequality is associated with skill premiums.
Reddy argues against this and shows that the majority of billionaires in India has ‘rent
thick’ sectors as their primary source of earnings. Post reform period has witnessed a
rise in the share of the top decile in national income and there is a clear phenomenon
of the ‘hollowing out’ of the middle class. It is suggested that income from labour
and income from capital should be differentiated and taxed differently and there is a
need to change the international tax system.
Introduction 7
Arup Mitra’s paper ‘Growth, inequality and labor force participation’ agrees with
Reddy’s findings on the rising disparity in earnings in post-reform period. Mitra
points out that inequality is being perpetuated by unequal access to health and educa-
tion between the poor and the rich. Inequality in access to education is so glaring,
that in HDR 2013, India’s education index loses more than 40% of its value once
adjusted for inequality. In other words, education and health inequality are much
sharper than expenditure inequality. However, the association between growth and
inequality presents a mixed picture at the disaggregated level. Many states regis-
tered a rapid growth and witnessed a decline in inequality in either rural or urban
areas. On the other hand, there are states that rapid growth has experienced a rise in
inequality over time. The cross-sectional picture suggests that along with economic
growth inequality tends to rise only in rural areas, while in urban areas, which show
higher levels of growth than rural areas, inequality does not necessarily rise. He
argues that inequality and poverty are mostly unrelated. In the equation for poverty
being a function of both growth and inequality, inequality shows no effect except in
the urban context for the year 2004–05 when it takes a positive coefficient as one
would expect, i.e., with an increase in inequality, poverty tends to rise. Existence
of large informal employment in the form of working poor, rise in capital intensity
even in the so-called labour-intensive organized manufacturing sector, and services
led-growth are important factors that led to a rise in inequality. The binary nature of
service sector and relative stagnancy of manufacturing sector have also contributed
to rising inequality.
There has been a revival of the ‘trickle-down’ hypothesis in policy circles—quite
contradictory to the received understanding in theory—and a narrative is being built
suggesting that growth is the panacea that would take care of poverty and inequality.
The relationship between growth and poverty is mediated by inequality. This issue
is examined by Nripendra Kishore Mishra and Manish Kumar Singh in their paper
on ‘Inclusiveness of economic growth in Uttar Pradesh’ where the state is the focus
of attention. The current focus on inequality largely originates from an observation
that recent economic growth in many countries has disproportionately benefitted the
upper income groups. India has experienced an unprecedented high rate of growth in
recent times but that has been accompanied by rising inequality in spite of poverty
reduction. But, it is yet not clear how far this growth is inclusive and what the
extents of income gain are for the poor. Mishra and Singh examine the pro-poorness
of growth in Uttar Pradesh in reference to India. The state witnessed a loss in its
growth momentum after 1970s, which has been one of the major reasons for its
not so impressive decline in poverty ratio, unlike other Indian states. Many other
states took advantage of liberalization and succeeded in accelerating their growth
rate and consequently in drastically reducing their poverty ratio. Uttar Pradesh failed
to do so, which is why it is continuously lagging the national growth rate. While
consumption Gini has gone up in rural India from 1993–94 to 2004–05 and has
remained constant from 2004–05 to 2011–12, it is almost the same in rural Uttar
Pradesh right from 1993–94 to 2011–12. And it is consistently lower than national
Gini. This suggests that even if rural MPCE in Uttar Pradesh is lower than national
rural MPCE, and the difference has widened further, inequality has not risen in rural
8 N. K. Mishra
Uttar Pradesh. This is in stark contrast with urban areas. Inequality is much higher in
urban Uttar Pradesh than India and very high as compared with rural Uttar Pradesh
in 2011–12. Growth should have reduced poverty in rural India by 12.17%. But
the actual reduction turns out to be only 8.47% because of adverse redistribution,
which has taken off 3.69% of potential decline in poverty. Redistribution effect is
able to do so only marginally (0.75%) between 2004–05 and 2011–12 in rural India,
where total change in poverty (16.10%) is very close to growth effect (16.85%). But,
actual change in poverty (12.31%) is higher than growth effect (11.55%) in case of
rural Uttar Pradesh from 2004–05 to 2011–12. Here, redistribution effect (0.75%)
is working in the same direction and helps in reduction of poverty. Redistribution
effect has played a much stronger role in urban India. Growth effect (13%) is highly
moderated by redistribution effect (6.95%) and actual change in poverty turns out to
be only 6% during 1993–94 and 2004–05. However, redistribution effect is moderated
from 2004–05 to 2011–12. Although change in total urban poverty in U.P is lower
than that of India, yet redistribution effect is stronger in Uttar Pradesh and ironically,
it is stronger during 2004–05 and 2011–12. It means that urban poverty reduction in
Uttar Pradesh has been drastically pulled down by redistribution against poor right
from 1993–94 to 2011–12. Also, it is only rural Uttar Pradesh that has demonstrated
a clear tendency towards pro-poor growth during 2004–05 and 2011–12. During the
first time period, the gap between actual growth rate (AGR) and Poverty Equivalent
Growth Rate (PEGR) had been wider in rural India but it considerably narrowed
down in the second period. While AGR of rural Uttar Pradesh was very close to
PEGR in the first time period, the former exceeded the latter in the second time
period suggesting pro-poorness of growth. There is some narrowing down of gap
between AGR and PEGR in urban India. There is only marginal narrowing down
in urban Uttar Pradesh However, it must be noted that this analysis is limited up to
2011–12 only and one has reason to believe that these inferences would stand altered
once data are available for a later period.4
4 Labour, Work, and Employment
There have been major changes in the world of work and employment during the
25 years of economic reforms. This process, in fact, had started in the 1970s itself but
gained primacy in 1990s, especially after the ‘Washington Consensus’, and has been
accelerated further in the wake of digitalization, platform economy, and artificial
intelligence (AI). The deepening of transnational production and accumulation has
essentially led to accelerated fragmentation of tasks and a significant ‘de-centring’
of production from the North (developed world) to select destinations in the South
(developing countries) with significant impacts on labour regimes. This ‘de-centring’
is characterized by a shift of production from advanced capitalist countries to a
handful of developing countries, where metropolitan capital has strengthened its
4 This inference is based on a report of Business Standard (Roychoudhury 2019).

Introduction 9
presence to take advantage of, inter alia, relatively inexpensive labour and raw mate-
rials as well as to tap the markets. Both these important features of contemporary
capitalism, organically embedded in the overall neoliberal architecture, have changed
the dynamics of labour utilization, labour reserves, conditions of work, etc. Further-
more, the world of work is changing with greater automation and digitalization. The
link between output and employment is no longer as strong as it used to be. Declining
employment elasticity is a new normal. This has important implications for labour
and employment, which is reflecting in diversification of activities of rural house-
holds. Rural labour is responding to labour market signals within its own boundaries.
This is further compounded by declining absorption of labour in agriculture and
manufacturing, resulting in out migration from rural economy and growing urban
informal employment. Thus, changes in global capitalism, agrarian crisis, migration,
unemployment, and growing urban informal economy together provide a complete
picture of the state of labour in India. This distress of labour is also reflected in the
declining quality of employment, quite contrary to ILO’s focus on decent employ-
ment. The quality of employment is also associated with skills and it is often argued
that low-quality employment is a consequence of low skills and the latter is unevenly
distributed. Lower caste5 groups are found to be working in low earning activities
in informal manufacturing. If that be the case, then how do we explain the observed
pattern of concentration of low caste groups in low skills and low earning activi-
ties? Is it the caste or skill that determines this outcome? Public wage employment
programmes like Mahatma Gandhi National Rural Employment Generated Scheme
(MGNREGS) are supposed to be one option of providing employment. Therefore,
one needs to look at the labour question in light of these newer developments and
linking it up with growing distress in rural economy.
The most striking feature of recent times in the world of work is growing informal-
ization and precarity of work. ILO detail definitions of these concepts. Ravi Srivas-
tava, Balakrishuna Padhi, and Rahul Ranjan in their paper on ‘Structural Change
and Increasing Precarity of Employment in India’ argue that observed precarity of
employment is a combination of three interrelated processes, namely, changes in
employment structure, negligible growth in total employment and slow growth in
non-agricultural employment, and growing informalization of the formal sector. A
very powerful and highly relevant argument is made by authors that informal employ-
ment in India should be determined on the basis of job security and not the avail-
ability of social security and therefore authors use written contract as designating
formal employees as those employees who have a written contract. This becomes all
the more important in present times when adhoc, incomplete and inadequate social
security measures have been provided for workers.6 It is shown that there is shift in
employment from agriculture to industry and services, increase in regular/salaried
employment, and increase in formal sector employment. The economy has failed to
create adequate employment and a major reason for this is declining LFPR. Most
of this decline is for rural areas and for women. Rising youth unemployment is a
5 Traditional categorization of Hindu society explained later.

6 This has been further highlighted by Pushpendra and Dipak Kumar Singh in this volume.
10 N. K. Mishra
very distinguishing feature. It is concluded that there has been a significant degree
of informalization of employment in the formal sector of the economy, and among
regular/salaried workers who form the predominant section of the formal sector work-
force. This has counteracted the potentially positive effect of the economy-wide shift
towards regular/salaried work and towards formal sector growth.
Labour distress in the period of economic reforms is manifested as declining share
of labour in value added, growing unemployment, decreasing employment elasticity,
and slow growth in wages. It is intricately related with global political economy
and internal dynamics of global capitalism. Therefore, only internal explanation of
distress of labour is not sufficient. Praveen Jha and Satadru Sikdar in their paper
‘Contemporary capitalism and employment challenges: some reflections on India’
attempt to take up the issue of labour distress in the country in the larger context
of functioning of global capitalism. They have spelt out some important markers of
contemporary capitalism such as doing away with controls on capital, reconstitution
of class power within ‘capital in general’ in favour of ‘finance capital’, capitalism of
generalized monopolies, and profound technological changes. These markers appear
to generate several adverse tendencies for workers across the globe and India is no
exception. Growing financialization of accumulation, structural changes in contem-
porary capitalism, and hegemony of finance capital have serious adverse conse-
quences for the world of work and workers. Jha and Sikdar, in support of their
observation, cite the recent Periodic Labor Force Survey PLFS (2017–18), wherein
the rate of unemployment has gone up and Labour Force Participation Rate—LFPR
for women has reduced drastically.7 Remarkably, wage growth has been almost close
to zero during 2011–12 and 2017–18 (Srivastava and Padhi 2020). This is organically
connected with the neoliberal economic policies that have increased the divergence
between growth rates and labour absorption. Since the mid-1990s, persistent and
deepening agrarian distress has been accompanied by the lack of gainful employment
in non-agricultural sectors. In spite of increasing GDP growth rates, labour absorp-
tion rates were stagnant till 2004–05 and have been falling subsequently. Apart from
lower absorption of labour, rise in bad quality of employment or non-standard forms
of employment (ILO 2015) has become a defining feature of the Indian labour market
and informality is one of the main reasons for it.
Vinoj Abraham in ‘Structural change and rural households in India: An analysis of
the nature of transformation in their economic activities’ explores labour distress at
the level of households. Movement of households from agriculture to non-agricultural
sector after 1993–94 entailed manifold changes in the economic activities of house-
holds. The conventional division of labour in terms of gender, skills, and age was
replaced by new arrangements. Abraham examines this shift in employment for the
period from 1993–94 to 2011–12 and finds that entry into non-agricultural employ-
ment in rural areas is gender specific, with the employment in the sector limited to
7 PLFS data, held back by the government for a long period of time, were officially released only
after 2019 general elections. The predominant view on PLFS is that the period 2011–12 to 2017–
18 has been devastating for labour (Kannan and Raveendran 2019; Mehrotra and Parida 2019).
However a divergent view is taken by (Bhandari and Dubey 2019).
Introduction 11
males while females move away from the labour market to enter either education or
domestic activities. Further, the rise in non-agricultural employment has been mainly
construction-driven. Households were found shifting completely to non-agricultural
activities rather than adopting a more risk-averse strategy of activities. Possibly, the
number of members from each household in the labour market is declining as a
household shift from agriculture to non-agriculture sector. This is especially true
for households who find agriculture unviable. The shift has necessitated increasing
division of labour both within the household and at the production site; caregiving
and social reproduction become exclusive and increasing activity of women while
the male head of household moves to non-agriculture and sons move to acquire
better education. Abraham draws a very interesting inference that propensity of the
head of a household to be in agriculture is independent of his age. According to
him, a key feature of the transformation in rural areas is that it is not dependent
on individual features such as age or factors associated with age, such as education,
health, or the age composition of population. Rather, social and economic conditions
encourage the rural population towards non-agricultural activities. The question of
inter-generational mobility is examined within limitations of available data. A large
share of sons of older parents engaged in non-agriculture preferred to remain in
non-agriculture and this tendency has accentuated with time. But preference of sons
of older parents in agriculture to remain there has also been declining with time.
Among the younger parents too, the sons tend to shift away from agriculture, but the
shift is mostly towards education. Land ownership is an important determinant of
diversification in rural households, lack of which drives sons to follow their fathers
in the non-agriculture sector. Rise in the size of landholding increases the probability
of sons of agricultural households staying put in the occupation. Yet, between 1993–
94 and 2011–12, more sons, whose fathers were in agriculture and owned land of
some size, shifted away from agriculture. Moreover, smaller the land size larger was
the propensity among sons to leave agriculture, despite their fathers being in agri-
culture. This is in contrast to landless agricultural workers; when one was landless,
there was greater propensity to be in agriculture, but when one owns land, then land
size matters inversely for sons to remain in agriculture. But, if households owned
land and even then fathers worked in non-agriculture sector, there was an increasing
tendency for sons to shift to agricultural activity as the size of the land increased.
This implies that the shift from agriculture to non-agriculture sector for sons whose
fathers were in non-agricultural employment, is governed largely by land ownership,
especially the size of landholding. In fact, a larger part of non-agriculture sector is
itself in the informal sector and this diversification of households from agriculture
to non-agriculture has significant implications for labour market. The shift to non-
agriculture is mostly in the form of casual wage labour in the informal sector. There
has been a sizable improvement in regular salaried employment also but that has
been mostly contractual and in the informal sector devoid of any social security.
Even if the regular salaried workers have better working conditions than casual
wage workers, one has little information about their method of job search. It is gener-
ally accepted that job search in informal sector is through social networking, but, it
must have changed with IT revolution, especially with mobile telephony. Rajendra
12 N. K. Mishra
P. Mamgain, in his paper on ‘Wage employment, informality, and social networks in

Indian labor market’, examines the composition of regular salaried workers and the
method of their job search. Mamgain finds almost half of regular salaried employ-
ment being in informal sector that naturally means absence of social security. It is
expected that all regular employees working in public as well as private organized
sector should have at least written job contracts and social security. Surprisingly, a
significant 38% of regular workers working in public sector do not have any written
job contract and social security indicating the precarious nature of their employment.
Based on primary data of urban labour market from four cities, viz, Lucknow, Pune,
Delhi/NCR, and Coimbatore, Mamgain concludes that contractual employment has
emerged as the new form of recruitment, wherein workers are not directly employed
by a principal employer but through a contractor for specific jobs. This form of
recruitment is increasingly being used by employers to not only reduce labour costs
but also control labour. The share of such workers both in public and private sector
has increased substantially over the years, particularly after the economic reforms
of early 1990s. Mamgain’s findings are supported by many other studies also (Jahn
2015; ILO 2015). He also finds caste8 considerations playing a significant role in
employment in the deeply stratified Indian society, as a result of which the Sched-
uled castes (SC) or former untouchables and Scheduled Tribes (ST) have lower inci-
dence of regular salaried work than other (higher) caste groups. The most prominent
source of job information is informal social networks, which include friends, rela-
tives, family members, caste networks, etc. The probability of using social networks
for job search tends to reduce with every increase in the number of years of educa-
tion. Similarly, as the income levels of workers increase, the odds in favour of using
social networks decline significantly.
The labour issue has been taken up mostly as that of wage employment in policy
and academic circles; ignoring the fact that more than half of workers are self-
employed. Often earnings of the self-employed workers are below the market wage
rate, which is a classic case of self-exploitation of labour. The shift from wage
employment to self-employment is considered a sign of maturing of economies,
provided the latter is voluntary, and brings in earnings higher than the market
wage rate. Thus, self-employment becomes a stepping stone for entrepreneurship
as observed in developed economies. Eventually, the size of self-employed workers
becomes low with the rise in per capita income of an economy. However, labour
markets in low- and middle-income countries differ fundamentally from those in
advanced economies/countries. In labour-abundant economies like India which are
characterized with high degree of unemployment, the reported large percentage of
8 Ancient Hindu tradition structures society on a hierarchical multi-tier caste system comprising
the Brahmins (priests and educators), Kshatriyas (warriors), Vaisyas (traders), and Shudras (arti-
sans and farmers). There were also the ati-shudras (outcastes engaged in lowly jobs as scavenging,
cleaning, tanning, etc.) The castes placed at the top of the hierarchy enjoy most privileges and
rights that decrease in a graded manner from the top to bottom. The purity of caste was main-
tained by proscribing inter-caste dining and inter-caste marriages. The ati-shudras were regarded
as ‘untouchables’ with no right to education and property. Although untouchability and any kind
of caste discrimination are banned in India, caste prejudices continue to run deep in the society.
Introduction 13
self-employed workers is primarily own account workers (OAWs) working in own

account enterprises (OAEs). Therefore, the rate of wage employment is low and self-
employment is high. The employment structure in poor countries contrasts drastically
with that of rich countries. In the USA, for example, own-account workers account
for only about 5% of employment, whereas about half of all employment is in firms
with more than 500 employees (Hipple 2010). Self-employment could also be an
indication of distress in the labour market. The choice between self-employment and
wage employment essentially rests on relative differentials in earnings and the prob-
ability of getting decent wage employment. One also needs to factor in implicit costs
involved in self-employment, including the use of family labour and own inputs.
Banerjee and Duflo point out that ‘while there are many petty entrepreneurs among
the Indian middle class, most of them do not seem to be capitalists in waiting. They
run businesses, but, for the most part, only because they are still relatively poor, and
every little bit helps. If they could only find the right salaried job, they might be quite
content to shut their business down’ (2007: p 21). Yet raising productivity of self-
employed workers or small businesses can contribute significantly to reducing the
vulnerability of workers at the bottom of the pyramid, provided there is no discrim-
ination. Caste-based discrimination in ownership and performance of enterprises is
prevalent in India and it is shown that SC/ST owned, and operated enterprises fail
to become a viable livelihood alternative to wage employment, which could be one
of the reasons for preponderance of SC/ST in wage employment, more so in casual
wage labour.
It thus makes sense to examine the caste profile of ownership and performance
of enterprises in India, which is carried out by P. P. Sahu and Manik Kumar in
their paper ‘Entrepreneurial avenues for Scheduled Tribes communities in non-farm-
enterprise sector: prospects and challenges’. The share of enterprises (unincorporated
enterprises as covered by National Sample Survey Organization (NSSO)) owned by
SCs and STs is lower in urban areas as compared with rural areas. The proportion
of enterprises owned by STs remained more or less stable while those owned by
SCs declined during 2011–16. In rural OAEs segment, the ST-owned enterprises
declined in manufacturing, while their share increased in trading and service sector
activities. There is a noticeable shift from manufacturing to trading and service sector
enterprises both in OAEs and establishments in rural areas. In urban areas, the share
of ST-owned enterprises is lower as compared with their rural counterparts even in
same activity. The ST-owned enterprises were limited to a very few selected activities
in manufacturing sector and were largely in traditional industry groups with highly
labour-intensive production process. Not only is the share of ST-owned enterprises
low but economic returns to their enterprises are also lower than those owned by
other social groups. Per enterprise (and per worker) gross value added for ST-owned
enterprises are lower as compared with those owned by higher castes (other social
groups). This pattern holds true both in OAEs and establishments and also in rural
and urban areas. The same trend is seen for fixed capital and gross value added as
well. The ownership of enterprises by different social groups (along with a host of
other factors) is associated with the performance indicators of an enterprise. Thus,
ST-owned OAEs do not perform better than those owned and managed by SCs,
14 N. K. Mishra
Other Backward Castes (OBCs), and other castes in terms of relative efficiency.
If earnings of enterprises owned by SC or for that matter by any lower economic
group are low, wage employment is a better source than self-employment, especially
when options like Mahatma Gandhi National Rural Employment Guarantee Scheme
(MGNREGS) are available. There have been major changes in the labour market with
the introduction of MGNREGS; important among them are tightening of rural labour
market and rise in rural wage rate. This is supported by many studies (Himanshu and
Kundu 2017; Deb et al 2014; Himanshu et al 2013).
Examining the impact of MGNREGS with latest data, Ashok Pankaj and Mondira
Bhattacharya in their paper titled ‘MGNREGS and rural labor market in India’, finds
that the scheme has not only led to a rise in wages of rural labour, reduction in
male–female, and rural–urban wage disparities, but also there is empowerment of
labour through their increased bargaining position. The idea of minimum wages had
been there on paper for long, but the enactment of MGNREGA (Mahatma Gandhi
National Rural Employment Guarantee Act) is seen as a landmark legislation making
it obligatory for the State to provide work to rural populace on demand and save
them from slipping into dire poverty. An upward push of wages due to MGNREGS
is explained by additional employment effects, increased bargaining position, and
reduced vulnerability of the rural poor through assured employment.
Aggregative analysis suffers from a serious limitation especially in geography
like India, where the national average does not always reflect regional realities.
India is one country that can be best understood only when research is disaggre-
gated, at least at the level of states. At times, the contrast is so startling that it is
difficult to accept this average value of India. One does not know whether states
are converging or diverging (Goli et al. 2013; Li et al. 2018), but one does know
that there are extremely opposite states within the country. Uttar Pradesh is one
state that poses a serious challenge to the national development effort, and there-
fore, its challenge needs to be explicitly recognized (NITI Aayog 2018; Parker and
Kozel 2005; Rasul and Sharma 2014). Out of the many questions pertinent for Uttar
Pradesh, this volume has taken up two issues, namely, subcontracting linkages in
informal enterprises and skill mismatch. In his paper, ‘Subcontracting linkages in
the informal manufacturing sector in Uttar Pradesh’, Udai Bhan Singh observes that
NSSO data in unincorporated enterprises generally report a decline in subcontracting
over time (Basole et al. 2014). He, however, finds that this decline has been sharper
in rural areas of the state. What is not mentioned is that the nature of subcontracting
has changed in last 10–15 years and the NSSO data on enterprise round have been
unable to incorporate this change. With this caveat in order, it is shown that the
extent of subcontracting significantly varies among the sub-industry categories and
sub-contracted works are prevalent in both labour-intensive and capital-intensive
enterprises. The extent of subcontracting has increased more than two times among
the relatively capital-intensive enterprises. However, it has declined significantly
among labour-intensive enterprises. Also, the manufacturing sector in Uttar Pradesh
appears to be supporting both views—stagnation and development—with respect to
subcontracting. Furthermore, subcontracting linkages between formal and informal
enterprises have developed mainly in the Western region, which is also the most
Introduction 15
industrialized part of the state, lending credence to the development view. GVA per
worker is below the notional income in almost 90% of enterprises in 2015–16. This
percentage is relatively higher in labour-intensive enterprises, i.e., mostly OAEs, and
in sub-industry categories like food products, beverages, tobacco products, cotton
ginning, cleaning and baling textiles, wearing apparel, leather products, etc., which
implies that large firms exploit informal manufacturing firms and use them for cost-
cutting. Uttar Pradesh is also marked for unemployment and its ‘not so good’ quality
of education, which is also reflected at national level in programmes like ‘Skill
India’. The central government’s argument is that there is shortage of employable
workforce despite rising Gross Enrolment Ratio (GER) in primary, secondary, and
university level education, casting doubts on the usefulness of education system of
India, which is exemplified in case of Uttar Pradesh (Goldman, Kumar, and Liu 2008;
Biswal 2011). I.C. Awasthi and Puneet Kumar Shrivastava, in their paper on ‘Skill
inequality among social groups in India: regional analysis in Uttar Pradesh’, point to
the skill gap in different regions of the state during 2003–04 and 2011–12. Decom-
position of skill inequality across regions shows a clear regional imbalance. Out of
total caste inequalities, more than 90% is due to within-group inequalities while the
remaining are due to between-group inequalities in all the four regions of the state.
Also, inequality has increased at a faster rate in the western and central regions. It is
found that inequality in general education within the disadvantaged groups is higher
as compared with the ‘general’ category or higher castes for all regions during both
time periods. While in the case of Technical and Vocational Education and Training
(TVET), the situation is just reverse—lower inequality prevailed within the weaker
sections (SC, ST, and OBCs) and higher inequality was found within the upper caste
groups (general) in all the regions.
A common thread that runs throughout this section on labour, wages, and employ-
ment is that labour distress is more pronounced in rural economy and the discussion
is mainly centred on workers in the non-agricultural sector. Yet, one has to factor in
the role of agriculture in rural distress and declining labour absorption in agriculture
as the latter still happens to be one of the largest employment providers in India. A
complete picture of the world of work and workers can be had only by including
state of agrarian economy, which is dealt within the following section.
5 The Agrarian Question
The Indian debate on agrarian transition has indeed provided great clarity on the
role of agriculture in economic and social transformation. From the perspective of
capital, agriculture assumes importance in terms of its ability to supply cheap labour
for accumulation in non-agricultural activities along with the supply of food and
acts as a market for industrial goods and services. The state looks at agriculture in a
similar way but in the context of development it has to do with generating agrarian
surplus for financing industrialization, supply of wage goods, and speeding up struc-
tural transformation of the economy to a higher level of income and development.
16 N. K. Mishra
For labour, agrarian transition assumes importance in terms of the evolving agrarian
relations that determine the share of wages or earnings in output. Simply put, it means
how much structural transformation of the economy can be enabled by agriculture,
so that alternative means of livelihood are available outside of agriculture and ulti-
mately secure a higher standard of living. While there are commonalities in these
perspectives, the impact of agrarian change can be different for different groups.
However, it is a fact that agriculture itself is going through a crisis of unprecedented
scale. Although agrarian crisis has been discussed in quite detail in the literature, yet
there is need to place it in the context of labour and employment, especially with
regards to its implications on rural to urban migration and changes in the pattern of
labour mobility.
K P Kannan, in his paper on ‘Structural transformation and the agrarian question in
the Indian Economy: some disturbing concerns from a laborist perspective’, examines
the structural change in Indian economy linking it with the agrarian question. The
observed structural transformation away from agriculture has not been accompanied
by a structural transformation away from rural employment and the rural nature of
urban employment. There is a fourfold pattern where only a few states qualify for a
meaningful structural transformation even in the limited sense of moving away from
the agricultural sector for majority employment. Also, this structural transformation
is partial and limited to three out of five broad social groups. Rural economy is
characterized by the phenomenal growth of the non-agricultural sector in terms of
output as well as employment. The incremental workforce of 91.6 million during
1993–94 and 2011–12 has wholly been absorbed by the non-agricultural sector along
with 10.9 million of those already engaged in agriculture. This has meant that a 4.6%
decline in employment in agriculture. However, it is mostly casual wage labour, which
has left agriculture. But, peasants have registered an increase during this period.
Kannan argues that this is not a sign of increasing proletarianization but increasing
peasantization of Indian agriculture that is not in tune with the spread of capitalist
market relations and transactions in the Indian rural economy. If employment is
measured in terms of ‘rurality of employment’, it is found that while much of the
movement of labour has been away from agriculture to non-agriculture, it was less
so from rural to the urban economy. Therefore, the agrarian transition question may
be replaced by a rural transition question. States with no structural transformation
so far and continuing to be in the group of low per capita income represent the most
difficult part of the structural transformation story because there it is a combination of
no structural transformation, and low per capita income accompanied by low product
per worker in both agricultural and non-agricultural sectors. These states, including
Uttar Pradesh and Bihar, account for close to 38% of the total population. The overall
picture, therefore, is one of the partial structural transformations covering 15 states
accounting for half the total population of the country.
Rakesh Raman and Khursheed Ahmad Khan, in their paper on ‘Failing agriculture
and frazzled farmers: the inside story of India’s most populous states-U.P. and Maha-
rashtra’, take a different view of rural distress. They argue that agricultural crisis and
agrarian crisis are two distinct phenomena and prefer to call it ‘crisis in agriculture’.
They have also computed a Crisis index for major states in India. Tamil Nadu, Kerala,
Introduction 17
Karnataka, Andhra Pradesh, and Maharashtra have highest index while Punjab and
Haryana have the lowest index. Crisis of agriculture is an all India phenomenon,
only its intensity varies across states, and it is more intense in southern India than the
northern states. Maharashtra and Uttar Pradesh are subjected to further investigation.
The analysis is limited to the trienniums ending 2004 and 2015. While Vidharbha
and Western regions suffer the most in Maharashtra, Marathwada is relatively better
off. In Uttar Pradesh, Bundelkhand region is the worst performer while the situation
is far better in its Western and Eastern regions. District wise analysis shows that
within the crisis-infested states/regions, there could be some ‘comfortable zones’
while within the so-called less troubled states/regions, there could be some ‘difficult
zones’. Further, marginal and small farmers have higher crisis index as compared
with the semi-medium and medium farmers. It has been found that the cropping
intensity and productivity per hectare in rupees for marginal and small farmers in
both the states are higher than that of medium and large farmers. But, very high cost
of production, adherence to old technology, high dependency of population, greater
reliance on non-institutional credit, and inability to get remunerative prices for their
produce—all combine together to turn the tide against marginal and small farmers.
Furthermore, social group is the main determining factor of the crisis followed by
total factor productivity, irrigation facilities, alternative livelihood opportunities, and
land holdings.
If there is crisis in the rural economy, its labour has two options, either to diversify
into non-agricultural sector, or to move out as a coping strategy. Limitations of the
first option have already been highlighted in earlier papers. The second option of
moving out or out-migration is often cited as the most preferred option that has been
taken up in the next section.
6 Labour Mobility
The distress in rural economy has resulted in massive out migration. As surplus
labour from agriculture is being withdrawn very rapidly, it has often been ‘erro-
neously’ pointed out that India too is reaching the ‘Lewisian turning point’. There
is a distinct difference between India and other countries having experienced the
Lewisian turning point. In case of India, the out migration is largely from rural
economy to the urban informal economy and not to the urban industrial sector. Thus,
unlike the Harris-Todaro framework, it is a push force that has generated migration
in India. Yet, migration has drastically changed the rural economy. The impact of
remittances on rural economy is a typical example. In fact, labour shortage during
peak agriculture season has been reported from even labour-abundant regions. Out
migration of males from villages has also brought about a change in gender norms
in the hinterland. There has been a change in the strategy and duration of migra-
tion too. Long-term migration is being replaced by short-term migration and daily
commuting has become an important type of labour mobility from satellite towns
and rural areas to emerging commercial hubs or centres across India. There are
18 N. K. Mishra
ample migration literatures dealing with the macro-dimension of migration based on

NSSO and Census data. Of late, the frequency or spells of migration have gone up
while duration of migration has come down, especially that of workers. However,
secondary data sources are either outdated or inadequate to capture this change in the
nature of labour mobility. It needs to be reiterated that once migration is defined in
terms of activity space instead of the conventional wisdom of defining, it in terms of
change in the usual place of residence, much of the received understanding on migra-
tion stands challenged. Four papers in this section on labour mobility are based on
primary data to unearth the hitherto neglected dimensions of labour mobility. These
papers examine labour movement in a much more nuanced way, including short-term
migrants and daily commuters; a category that has yet to receive adequate attention
in migration research.
Tulika Tripathi examines labour mobility in eastern Uttar Pradesh, southern Uttar
Pradesh, and north Bihar, based on a panel of primary data for the period from 1996–
97 to 2017–18. This is a repeat survey of Living Standard Measurement Survey
LSMS—1997 (World Bank 1998) for the selected region. This region is one of most
backward regions of India and the largest source of out migration of unskilled and
semi-skilled workers. Rural employment generation schemes such as MGNREGA
and improvement in Information Communications Technology or ICT and transport
have significantly impacted the nature of labour mobility in this region. Movement
to far off places, i.e., inter-state mobility, has increased substantially during 1997
and 2017. In fact, individuals from well-off communities, i.e., upper caste, higher
MPCE class, and land-owning class are migrating for long durations. The gender
pattern of migration remains the same; a one-off flow for men and fixity for women.
While long-term migration has increased for higher caste individuals, short duration
migration has increased for OBC and SC/ST. Over the two decades mapped for the
study, the class-caste pattern of migration has remained the same. However, there
has been a tremendous increase in migration within the same district and a sharp
decline in migration to other states. It is hypothesized that the rising service and
construction sector in small towns and cities such as Allahabad, Gorakhpur, and
Patna have generated many job opportunities making them more employable and
popular destinations of daily commuters and seasonal migrants hailing from poor
and relatively lower caste groups. Tripathi attributes the rise in seasonal migration and
daily commuting to the availability of transport, especially motorcycles in villages,
and rural penetration of ICT in the banking sector. The large presence of motorcycles
in villages has dramatically affected labour mobility in this Eastern Uttar Pradesh
and North Bihar region.
Daily commuters from rural areas to cities in search of work, mostly as casual
workers in the construction sector or in urban informal economy, have become an
important stream of migrants, which is not covered in many studies on migration.
Bhaskar Majumder and V Narayan in their paper, ‘Migrating to the roads in the cities
in Uttar Pradesh: some reflections’, capture these migrants (street labourers) from six
major cities of Uttar Pradesh in a field study. The major reasons for migration to city
are either landlessness or inadequate landholding that failed to fulfil the subsistence
needs of households in the migration zone. The average wages per month at the
Introduction 19
destination for such migrant labourers, both intra-state and inter-state, are around
four times what they earn in their native lands. Interestingly, neither the positive
rural–urban wage-differential nor agricultural wage rate, which has no impact on the
urban wage rate, is the determinant of migration for these labourers. Rather it is their
joblessness for more than 6 months in rural areas along with their landlessness that
forces them to migrate to cities. An interesting observation is made by Majumder
and Narayan about the conflict of interest between local urban labour and migrant
labour that the latter did not crowd out existing local labour has not risen as their
work profiles are different. Albeit this point as has come up in discussion about
international migration and about immigrants from Bangladesh to India (Banerjee
2020).
The question of labour mobility or migration has caught popular imagination
recently when huge mass of migrant workers started their march to their respective
source destinations after lockdown of economy. The whole question of safety nets
and social security for workers, especially migrant workers, has become a matter
of public debate. Pushpendra and Dipak Kumar Singh are motivated by this and
examine the social security architecture in their paper on ‘Mobility and Threshold
Social Security’ by assessing the policy and legal framework of social security in
India and argue for reconceptualising social security as a redistribution strategy that
creates comprehensive entitlements for migrants and other workers. It is argued that a
multidimensional, inclusive, and equity-oriented conceptualization of social security
sets a social policy agenda for the state, markets, industry associations, trade unions,
civil society organizations, and other actors and would require them to reorient their
goals accordingly. A strong case is built by authors in favour of a threshold level of
social security instead of a minimalist social security.
Another paper in this section based on extensive primary data of sugarcane-cutters
in Maharashtra examines the migration pattern of a particular class of workers.
Anurag Asawa in his paper, ‘Mapping of migrants based on caste, origin and destina-
tion: an insight into the sugarcane cutter migrants in Maharashtra’, uses a very large
field data from 2004–05 to 2012–13 to claim that most of these migrants are below the
age of 35 years and with very poor education levels. Every second migrant belongs
to the Other Backward Caste (OBC) category and out of them almost every third
migrant belongs to the Vanjari sub-caste. Beed, Ahmednagar, Jalgaon, Aurangabad,
and Nashik are districts of origin for almost 80% migrants. Ahmednagar, Pune,
Nashik, Kolhapur, and Satara are the top five districts of destination for almost 77%
migrants. The flow of migrants is from less developed areas to more developed areas,
and the caste of migrants also indicates that they belong to the poor strata of the popu-
lation. Marathas, from the general or upper-caste category, are a ‘surprise’ inclusion,
as they are seen as a very influential community in some parts of the state.
Processes and results of short-term and long-term migrations are different for
households at micro-level. So far, migration literature has not paid adequate atten-
tion to this. Ray, Naaz, Khasnobis, and Majumder in their paper titled ‘Internal
migration and inclusive development: insights from the field’, attempt to address this
research gap by using case studies from three districts of the West Bengal state in
eastern India. Temporary seasonal migration is mostly a distress phenomenon. People
20 N. K. Mishra
without adequate (farm) land in rural areas, mostly married males with little formal
education, and belonging to the socially disadvantaged groups (STs and Muslims)
are more likely to migrate. The predicted probability of migration of an unmarried
35-year-old male with 4 years of schooling and hailing from a Hindu upper caste
household of five members with 35 kathas9 of land is 19%. In contrast, for a 30-year-
old married male from an ST or Muslim landless family of four persons, without any
formal schooling, the predicted probability multiplies three times at 62%. There is
no conclusive proof of the success of migration as a coping and poverty alleviation
strategy. The nature of employment and earnings of migrants is questionable. Most of
them are in unskilled casual wage employment outside the state. Seasonal or tempo-
rary migration is facilitated mostly by labour contractors followed by family/relatives,
while long-term settled migration is facilitated more by family members or relatives.
7 Summing Up
The last 25 years of economic reforms have had a significant impact on the country’s
development. While there have been improvements in many areas, there remain areas
that have witnessed either stagnation or deterioration. This period has also been
characterized by a complete change in the nature of state. Neoliberal policies are an
accepted doctrine now; the debate is only about its degree. Papers in this volume
have highlighted some issues that continue to pose a challenge to development. The
challenge of poverty and inequality is examined and it is suggested that there has
to be a change in the nature of the growth process to make it more inclusive and
equitable. Neither the observed ‘growth euphoria’ seems to be seized of this issue
nor does the existing growth curve seems to be directed towards the desired direction
of equitability. This inability of growth accompanied by changes in global capitalism
and technology has posed a serious challenge to working class and rural economy in
India even as newer strategies, including diversification away from agriculture, are
being devised to cope with growing disparities. The present volume seeks to fill this
gap in received understanding on these issues. The researchers in this book strongly
recommend an interventionist role for the state in the current scenario. Uttar Pradesh
has been a major challenge to national development efforts. It continues to remain the
most laggard state in many development outcomes. Any national initiative is bound
to become a failure, if this most populous state in the country does not come out of
development deficit. Therefore, a special attention is given to it in this volume.
9 katha
is a traditional unit area of land measurement. It varies for different states in India. In West
Bengal and Uttar Pradesh, one katha is equivalent to 720 sq feet.
Introduction 21
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The Challenge of Development in India
Some Reflections on Development
Challenges of India
Arvind Subramanian
Abstract Indian economy started growing much before reforms of 1991. In fact,
last 25–30 years have been golden age for many other developing countries. There
are mainly two models of sequencing of economic development and political devel-
opment. But, Indian model is distinctly different from other models. One model is
Western Europe and North America that are now very rich and advanced countries
with high standards of living and fantastic social indicators. The second model of
development is of the East Asian countries that have been very successful. India
belongs to neither camp in the sense that first we neither grew as slowly as those
countries over long period of time nor have we grown very rapidly. This paper
compares Indian model with other models and shows its uniqueness. However, this
model brings up many challenges also that are discussed in this paper.
To begin with something that is actually true, not just for India but for almost the
entire developing world is that the last 25–30 years have been the best of times for the
developing world including India, China and other countries as well. So, whenever
we think about issues like poverty, inequality and many other social indicators not
doing well, one should look at all these indicators for India and for others countries
as well. Per capita GDP, the level of poverty, life expectancy, infant mortality, adult
mortality—all these indicators today are far better than they were 25 or 30 years ago.
So in some way, this is the golden age for India, not in terms of responsibility of any
one government but the cumulative effect of whats happened in the last 25–30 years.
That has been true around the developing world like China and East Asia. There are
This is an edited version of the valedictory addressed delivered by Dr Arvind Subramanian at an

international seminar on “Development Challenges of India after Twenty Five Years of Economic
Reforms” on 18 March, 2018 at Department of Economics, Banaras Hindu University, Varanasi.
A. Subramanian (B)
Former Chief Economic Advisor, Ministry of Finance, Government of India, Non-Resident Senior
Fellow, PIIE, New Delhi, India
e-mail: arvindsubramanian2011@gmail.com
Professor, Ashoka University, New Delhi, India

https://doi.org/10.1007/978-981-15-8265-3_2
28 A. Subramanian
countries in Africa, eastern Europe and Latin America which have done very well.
So we call this the age of economic convergence which means that poorer countries
are catching up or converging to the standard of living in the advanced economy. So
in that sense, this is the best of times.
Here, a small note about 25 years of economic reform is in order. One piece of
fact about India which is important to remember is that why serious reforms began in
India in 1991 only, in the aftermath of the crisis that we had. In fact, India’s growth
took on around 1980s. We had about almost 40 years of rapid economic growth of
about 6% and 6.5%. So, while the reforms may have begun in 1991, India’s economic
growth took on 10 years before reforms and in fact, in one of the papers that I have
written on the Indian Economy with Dani Rodrick, poses this as a puzzle. How come
the Indian economy started growing rapidly 10 years before the economic reforms
began? So, that is an interesting thing that one should keep in mind that the reforms
began in 1991 but India’s growth and India’s prosperity took a turn for the better
around 1979–1980. One may go into why is the case but that is something that is
useful to keep in mind.
One may ask whether the Indian economic model has been successful or not. I
would say, it is not been obviously as spectacularly successful as China or South
Korea or Japan, but on the other hand, its been much better than many other coun-
tries in Africa, in Southern Asia and so on. Now there is something very special
about the Indian development model because it is very useful to always think about
India’s performance relative to other countries. So, if we look at the last 200 years
of economic development, there have been two very successful models of economic
and political development.
One model is Western Europe and North America that are now very rich and
advanced countries with high standards of living and fantastic social indicators. Of
course, now they are also facing challenges of rising inequality, but broadly it is a
very successful economic model and political model as well. But what is distinctive
about these countries? They grew or developed over about 200 and 250 years. So their
success was gradual, they grew at about 2% to 2.5% for 150–200 years, from about
1820 till today. Over a long period of time, they grew slowly and became successful.
The other distinctive thing about them is their political development went hand in
hand with economic development. In contrast to India, not everyone got the right
to vote immediately in USA or Western Europe. It happened slowly over time. So
economic and political developments were both slow and went hand in hand. Today of
course all these countries are democracies and have very good accountable political
institutions. So, economic and political developments were slow and simultaneous,
that is the first model.
The second model of development is of the East Asian countries that have been
very successful and there the broad pattern is economic development happened much
more rapidly and in about 50–70 years in different countries in different periods. But
beginning 1950, It was Japan, Singapore, Taiwan, Korea, China, Malaysia to some
extent and Thailand. These countries grew very rapidly over a much shorter space
of time.
Some Reflections on Development Challenges of India 29
So the first contrast is that while former model is of development that is slow and
over very long period of time and the latter is of was very rapid development which
had happened relatively quickly. Second, in most of latter category of countries,
political development came after the economic development. So China, for example,
is still not a democracy. Korea became democracy much later. Indonesia became
democracy 20 and 30 years after it got started growing very rapidly. So these are the
two successful models of development one, with slow growth, slow and simultane-
ously economic and political development and second, rapid growth and sequential
development, first economic development and then political development.
India belongs to neither camp in the sense that first we neither grew as slowly as
those countries over long period of time nor have we grown very rapidly. Many of
these latter category of countries have grown at about 8% or 9% or 10% for 20, 30
or 40 years. India has grown at about 5% or 6% for about 40 years. And the second
big difference is that India’s economic development happened along with political
development. So India had to embark on this journey of economic development
being a country with universal franchise where everybody could vote. That is why
the Indian economic and political development model is actually very different from
these two models and that has created its own opportunities and own challenges.
So, I call this model of India as the precocious development model because India
became a democracy much earlier than it should have, given the experience about
other countries and also because in our economic development model we are very
different from the Asians, in a sense that we have done much more services and
much less manufacturing than those other countries did. So I call this the precocious
development model, doing things well in advance of what most countries did at a
comparable point in time. This is a very useful way of thinking about the Indian
economy.
However, this model has brought in many challenges. While some of them were
settled in the planned development process of India, many of them are still continuing.
The idea of federalism is one of that which has been brought into debate in recent
times with the introduction of Goods and Service Tax (GST). It is a major reform that
the government has undertaken. It is going to have a lot of positive effects, creating
one market in India, eliminating barriers to the movements of goods between states
of India. Also, GST has been exceptional in creating a new model of cooperative
federalism. What do we mean by cooperative federalism, essentially we think about
GST, the States have to give up the right to tax and the Centre had to also give up right
to tax but both of them have to come together and take these tax decisions together.
So now, any tax or any good or any services apart from few things that kept out had
to be decided jointly by the Centre and the 29 States in the GST Council. This is a
really fantastic model for how India needs to evolve in tackling all the challenge in
implementation of GST, which have been mentioned in last 3 months and I would
argue that those challenges can no longer be done either by the centre or by the states
acting on their own. They have to come together to do so. There are many important
issues involved like what is done for taxes, what is going about the revenue, what
is going to do for compliances, what is going to do for formalizing the economy,
bringing more people in tax slab. But above all, I think about GST as the future of
30 A. Subramanian
India in terms of creating a truly federal India where states both compete with each
other in a number of dimensions but also the state and centre come together to jointly
resolve a number of problems.
Now, let me first, then go to a most specific challenge that we all are facing which
is agriculture and let me tell you why I think the cooperative federalism model is
actually going to be very critical even in solving the problems of agriculture. Now
we all know what the problems of agriculture are. Fundamentally, we need to raise
farm incomes and agricultural productivity, that is one and also we need to protect
farmers against all the risks that they face whether in terms of prices, weather, or
some other shocks. Farmers face more variability of income than the other sectors
do. So, we need to increase their income but we also need to increase their resilience
to these weather and price shocks that are always going to affect agriculture, that is
the fundamental problem.
In the Economic Survey (2017–18), we tried and analyze what is going to be
impact of climate change on agriculture and it turns out that climate change, increases
in temperature, reduction in rainfall which we have seen largely in India, are going
to have a big effect on agricultural productivity. So, this challenge that we face in
agriculture is going to be compounded by the effect that going forward the weather
and climate are going to be much more unfavourable for agriculture. Farmers in
Maharashtra are agitating. But if you think about Maharashtra, only about 20%
of the land there is irrigated. So you see immediately water and the public using
water, irrigation and agricultural technology and research are big challenges. We are
neglecting this a lot and need to do much more on that. But my own view more and
more is that if we want to fundamentally raise, or at least protect farmers and build
some resilience, we should think seriously about giving farmers something like a
universal basic income for all farmers.
I am very excited by the fact that two states in India have started this. Telangana and
Karnataka have started the scheme, wherein Telangana, for example, from beginning
of year 2018 for every season of Kharif and Rabi, all farmers are going to get Rs 4000
per hectare as income which means Rs 8000 for every farmer based on landholding.
It is a very promising thing. Of course, there are going to be a lot of problems in
implementing this but in some ways I want to bring back cooperative federalism,
because the puzzle is this. Agriculture is a state subject. So, whenever people say
agriculture is in distress, I immediately ask the question—why have not the state
governments for the last 30–40 years responded to the problem of farmers. Why is it
always seen as something that the centre has to solve and not the centre and the states
coming together. Therefore going forward, the centre and the states should come
together and try to solve this. So, for example, if you take something like a universal
basic income for all farmers. One possibility is, for example, that the centre provides
a lot of subsidies to farmers—the fertilizer subsidy, minimum support prices and so
on. So the question is can the centre and states come together and say, look some of
these subsidies that have very harmful effects like fertilizers subsidy, for example,
have very negative consequences for soil quality, for health, for productivity in the
long run. Why cannot we change the manner in which we support farmers by instead
Some Reflections on Development Challenges of India 31
of giving them support in the form of wasteful subsidy and why not give them and
why cannot centre and the states come together in solving this problem.
Another big challenge in India, in the long run, is about human capital. There is
one area in the last 50–60 years, where India has not done very well it would be
health and education.
In the Budget, 2018–19, the Government announced big scheme for health. Let’s
see how it play out. But if you take education for example and if you look at the
studies done by ‘Pratham’ over the last 10 years, what they find is that, if you look at
the primary education in India our enrolment rates are almost close to 100. Almost
every child goes to school in India but if you look at what they actually learn in
school it’s not very encouraging. Going by ASER reports of last 10 years, learning
outcomes (the ability to read, the ability to some basic arithmetic) are at a very low
level and flat. In fact in the Economic Survey, we calculated something like a poverty
count or a poverty ratio that reflects into learning and it is found that it is actually
very high. So education or human capital is something that we are lagging behind
tremendously. There are a couple of reasons for this.
One, there is no doubt that when we became independent, there was a general
neglect of basic and primary education. There was much more of an emphasis on
higher education and we set up all these impressive institutes of higher education. But
for some reason, the early founding fathers did not emphasize the basic education.
In terms of our economic development policies that was perhaps one of the biggest
failures of early policymakers. Now, let me give second more controversial thought, of
looking around the world historically. One finds that education spread very rapidly in
many of countries, like, China, Western Europe and Scandinavia. Universal education
was something that society really valued either because the church in Europe and
Scandinnavia said we must (everyone, every child must be educated) or in Japan or
China (the Chinese communist party thought that was very important). Therefore
education spread in these countries. The controversial thought that I want to put
forward is that there is something about Indian society, namely, Indian hierarchy
that makes or that made at least universal education not so valuable. If you have a
very hierarchical society then you do not value equality as an ethic or equality as
a fundamental value. Somewhere caste system and all these other things come into
the play. And there may be historical or cultural origins for not having education. A
stratified society like caste system does not have ethics of equality. Primary education
has been a state subject forever. The thought that is always crossed my mind is why is
that in the history of India, we not had more politicians who had said that vote for me I
will educate your child or vote for me I will create a good health system or universal
education system. Why has that never happened in India? Why do the politicians
say vote for me I will give free power, vote for me I will give my community some
benefits or vote for me I will provide reservation. Fundamentally, the advancement
of human capital, health and education has never been on political agenda for some
reason and has never resonated in the political process.
I remember in the last U.P. election, there were hundreds of advertisements
counting highway between Lucknow and Delhi have been built. That was meant
to show how successful a politician was and therefore the implicit message was—I
32 A. Subramanian
build infrastructure, I build this road, therefore vote for me. Why is that no politician
had said there are 30, 40 or 50 million uneducated children and I will create good
schools. For me, this is a kind of critical political economy question that needs more
reflection and more research including why Uttar Pradesh lags behind on social and
human capital indicators. It is worth thinking about that can we create a dynamic U.P.
Why do not we make it a politically advantageous proposition for human capital, for
the government to invest in human capital?
Development Challenges of India After
25 Years of Economic Reform
Ashok K. Lahiri
Abstract Performance of Indian economy in post-reform period may be considered

to be gratifying if compared with pre-reform period. But, if compared with other
comparable countries, it is sobering only. After 25 years of economic reforms, there
are some critical challenges to be faced in near future. Fiscal rectitude is the most
important challenge. The policy also needs to settle the question of ‘market failure’
versus ‘state failure’. Agricultural reforms, availability/waiver of farm loans, role of
minimum support price and creation of physical and social infrastructure are going
to be key questions in future.
1 Crisis of 1991
The country has completed a quarter century since the economic reforms were
launched after crisis of 1991. A crisis was brewing because Indian industry was
shackled by unnecessary and harmful cobwebs of bureaucratic control in the form
of industrial licensing. In industry, Government decided who to produce, what to
produce, how to produce, for whom to produce and at what price to sell. Imports
were restricted under quotas and high tariffs. Protected from international compe-
tition, industrial efficiency suffered. Importing machinery, intermediate goods, and
industrial inputs meant navigating several bureaucratic layers to obtain the necessary
permit or license. Then, there was the emphasis on the public sector; it was supposed
to be at the commanding heights of the economy. The shortcomings of the market, the
so-called market failures, were well known. Government failure or the limitations of
the government were not. By the second 5-year plan, the famous statistician Prasanta
Chandra Mahalanobis, the doyen of statistics and the founder of the Indian Statistical
Institute, was firmly in the saddle at the Planning Commission. Mahalanobis was a
firm believer in the public sector and anticipated that in 15 years’ time surpluses of
A. K. Lahiri (B)
Member 15th Finance Commission, Government of India, Gurgaon, India
e-mail: ashoklahiriin@yahoo.com

https://doi.org/10.1007/978-981-15-8265-3_3
34 A. K. Lahiri
the public sector would render the need for extra taxation superfluous in the Indian
economy (Dhar 2003). Alas, the experience was to be quite to the contrary.
As the government borrowed and spent well above what it earned from taxes,
public debt mounted with burgeoning fiscal deficits. There were spill-over of such
deficits into frequent balance of payments crises. After the Suez crisis in 1956, the
country had been in the midst of a balance of payments crunch and had to go to the
International Monetary Fund (IMF) for a stand-by arrangement.1 Then, rapidly, in
quick succession, for balance of payments problems, India had to go to the IMF in
1962, 1963, 1965, 1981, and 1991.
Only a few had anticipated the limited capacity of the government to administer an
industrial licensing regime. One of these exceptions was Chakravarti Rajagopalachari
or Rajaji, also known as Kautilya of Indian politics of his time. In 1961, he coined
the memorable term ‘permit-quota-license raj’. Overall, it would be unfair to blame
our predecessors and policymakers of those times for their touching faith in socialist
planning and the abilities of the public sector. India was also not alone in voting in
favour of socialism; even two noted economists—Joseph Schumpeter in 1942 and
Nobel laureate Paul Samuelson in 1967—had predicted the victory of socialism over
capitalism (Schumpeter 1942; Samuelson 1967). In the 1967 edition of his famous
textbook ‘Economics: An Introductory Analysis’, Samuelson had extrapolated the
Soviet Union catching up with the USA in terms of gross national product between
1977 and 1995. In the 1973 edition, Samuelson had predicted that the Soviet Union’s
per capita income would continue to grow and probably match that of the USA by
1990 and overtake it by 2010. In the event, the Soviet Union, under Gorbachev,
disappeared by the end of 1991.
What the government under Prime Minister Narasimha Rao, with Dr Manmohan
Singh as his Finance Minister, did in 1991 was to start an end of the era of socialist
planning with industrial licensing, quantitative restrictions on imports and high-
custom tariffs. The hallmark of the 1991 reforms was external and internal liberali-
sation and the dismantling of the ‘permit-quota license raj’ and reining in the fiscal
excesses.
2 Post-reform Performance2
So, how have we done after the 1991 reforms? The answer depends on ‘relative to
which period of our own past’ and ‘relative to which other country’. If we compare
the country’s performance since the launch of the reforms in 1991 with that in the
past, the answer is gratifying. We have grown faster than in the past; poverty has
1 Indeed, India had balance of payments problems right after independence and approached the IMF
for a loan right in 1948 because of UK’s difficulties in releasing the sterling balances that it owed
to India.
2 This section is from the 5th Raja Chelliah Memorial Lecture delivered at the Madras School
of Economics, Chennai on February 9, 2018.

Development Challenges of India After 25 Years of Economic Reform 35
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Fig. 1 East Asia and India—Real GDP growth 1991–2017 (Annual, in per cent).
Source IMF Data Mapper. http://www.imf.org/external/datamapper/NGDPDPC@WEO/OEMDC/
ADVEC/WEOWORLD/CHN/HKG/IND/IDN/KOR/MYS/SGP
gone down more rapidly though not enough; we have had no periods of sustained
high inflation like after the two oil price shocks in the 1970s; and we have had no
balance of payments crisis compelling us to seek exceptional balance of payments
support from multilateral bodies such as the IMF.
Comparing how we have done relative to our not-too-distant neighbours in the
east is a more sobering experience. We take People’s Republic of China, Hong Kong,
Indonesia, Republic of Korea, Malaysia, the Philippines, Singapore, Thailand and
Vietnam for comparison. For little more than a quarter century, China has grown at
about one and a half times the speed of India (Fig. 1).3 Even Vietnam has grown
slightly faster than India. We may have done better than the other seven in terms of
growth, but not fast enough for a rapid catch up. These seven started in 1991 with
per capita incomes between two and a half to 48 times that of India.4
What about macroeconomic stability? India stands out as the country with the
highest rate of inflation, next only to Vietnam and Indonesia (Fig. 2). Our performance
on the balance of payments front has been the worst (Fig. 3).5 Among the 10 countries
under consideration, apart from Vietnam, India is the only one which had a current
account deficit.
If we look at the fiscal position of the general government, that is centre, states
and local governments combined, we find that India has had the largest general
3 By China we mean People’s Republic of China. Similarly, Korea refers to Republic of Korea.
4 In1991, compared to India’s per capita income of $318 (=100), per capita income of China
was $359 (=113), Hong Kong $15,190 (=4,775), Indonesia $848 (=266), Korea $7,523 (=2,365),
Malaysia $2,845 (=894), the Philippines $807 (=254), Singapore $14,504 (=4,560), Thailand $5,902
(=1,855) and Vietnam $2,172 (=683).
5 We consider 1997–2017, the period after the East Asian Crisis partly because current account data
are not available for China prior to 1997.

36 A. K. Lahiri
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Fig. 2 East Asia and India—Average Annual CPI Inflation 1991–2017 (In per cent).
20.0
15.0
10.0
5.0
0.0
-5.0
Fig. 3 East Asia and India—Current Account Balance, Average, 1997–2017 (as a proportion of
GDP, in per cent). Source IMF Data Mapper. http://www.imf.org/external/datamapper/NGDPDP
C@WEO/OEMDC/ADVEC/WEOWORLD/CHN/HKG/IND/IDN/KOR/MYS/SGP
10.0
5.0
0.0
-5.0
-10.0
Fig. 4 East Asia and India—General government net lending, 1991–2017 (Per cent of GDP).
government net borrowing as a proportion of GDP (Fig. 4).6 It is true that not all
countries in East Asia generate fiscal surpluses, but all the countries under consid-
eration were fiscally far more conservative than India. They incurred fiscal deficits,
but none, on the average, as large and persistent as that of India. None had as large
debts or as adverse primary balance as India.7
3 Development Challenges and Way Forward
3.1 Fiscal Rectitude
Now, in comparison with other neighbours in East Asia, the question that we can ask
is: why has India not grown faster? The answer surely does not lie in insufficient fiscal
stimulus. If government borrowing and spending more held the key to higher growth,
India should have grown faster than Vietnam and even China. It is more than likely that
structural factors, such as lack of physical infrastructure, inability to transform money
spent on public education and health into appropriate outcomes, slow agricultural
reforms and facilitation of business, and insufficient progress in liberalising land
and labour markets, inhibited growth. Over-expansionary fiscal policy resulted only
in higher inflation and weaker balance of payments outcomes. Higher inflation and
balance of payments problems may have actually hurt our growth and development
performance.
Going forward, the fiscal laxity needs to be corrected. There is no need to generate
fiscal surpluses, or even balanced budgets, but there is a need to restrict fiscal deficits
to reasonable levels. Some deficit for creating assets should be welcome as long as
productivity rises in response. But, not an excessive fiscal deficit that is inconsistent
with macroeconomic stability. Exigencies will arise and the government will need to
respond to downturns and demand recessions with fiscal stimulus. But there needs to
be restraint in normal times. Exhausting the fiscal space by expansionary stance even
in relatively normal years leaves a government with little elbow room to respond by
a stimulus package without jeopardising macroeconomic stability, when a demand
shortfall actually arises. The Fiscal Responsibility and Budget Management Acts that
the Centre and the States have need to be observed, and the story cannot continue to
be one of the missed timelines and shifting goalposts.8
6 General government net lending reported by the IMF does not correspond to general government
fiscal surplus reported by Indian official statistics primarily because of the differential treatment of
disinvestment receipts.
7 We disregard Singapore’s high public debt (110.6% of GDP in 2017 as Singapore’s public debt
consists largely of Singapore Government Securities (SGS) issued to assist the Central Provident
Fund (CPF), which administers Singapore’s defined contribution pension fund.
8 The NDA government that got the FRBMA passed did not last to promulgate the Rules. United
Progressive Alliance (UPA) came to power after the general election of 2004, and continued in office
for a second term. Under the first UPA government, the FRBM Rules came into force from July 5,
2004. While notifying the Rules on July 2, 2004, an amendment to the Act was passed for a 1-year
postponement of the target year for eliminating the revenue deficit to 2008–09. Before the ink on
38 A. K. Lahiri
3.2 Principle
With the reforms, the state has moved away from socialist planning and intervening in
general in what should be produced where, how and when, or at what price a product
has to be sold. This has been described pejoratively as a ‘neo-liberal’ move with
the state in retreat. The challenge, I believe, now is to be clear about the underlying
principle that should guide the reforms going forward. The principle that should guide
the reform is the state doing neither too little nor too much in the economic sphere.
India has suffered from the consequences of both the extremes for a considerable
period of time.
India under British rule for nearly two centuries had a government that did too little
not only for promoting industry but even in physical infrastructures such as roads
and power supply or social infrastructures such as health and education. The colonial
government’s main aim was collecting taxes, maintaining peace and order, getting
raw materials, such as tea and jute, to the home country and selling manufactured
products to India. A professed laissez-faire attitude in the colony—sometimes in
sharp contrast to what the government was doing in its own country, for example, with
the FRBM Act was dry, the Finance Minister, in his Budget Speech for 2005–06, pressed the pause
button vis-à-vis the FRBM Act because of the drastically changed pattern of devolution and funding
recommended by the 12th Finance Commission. In March 2005, Shankar Acharya published an
article in Business Standard entitled ‘Farewell fiscal responsibility?’ What followed indeed looks
like a farewell to fiscal responsibility. The FRBM path of fiscal correction was halted from 2008 to
2009 because of unanticipated changes in the prices of fuel and fertiliser. Outlays on major subsidies
shot up from Rs 67,498 crore in 2007–08 to Rs 1,23,581 crore in 2008–09. Off-budget bonds issued
to the petroleum and fertiliser companies amounted to a further Rs 95,942 crore or 1.8% of GDP in
2008–09. On August 28, 2008, the central government asked the 13th Finance Commission to lay
down a revised road map for fiscal consolidation. With elections for the 15th Lok Sabha scheduled
for April–May, 2009, an Interim Budget for 2009–10 followed on February 16, 2009. A new Finance
Minister, in office for only 3 weeks, called the economic circumstances extraordinary and announced
extraordinary measures. The FRBM targets were relaxed to boost demand and counter the impact
of the global financial meltdown. Post-election, the Budget for 2009–10 presented on July 6, 2009,
included a fiscal stimulus package. Between 2008–09 and 2009–10, as a proportion of GDP, the
fiscal deficit shot up from 6.0% to 6.5%, with an even bigger increase in revenue deficit from 4.5%
to 5.2%. Of course, the medium-term commitment to fiscal consolidation and a return to the FRBM
targets at the earliest were reiterated. In the context of FRBM, the 13th Finance Commission, in
its report submitted on December 29, 2009, argued against disturbing the existing classification of
revenue and capital expenditure in an ad hoc manner. Yet, in what was described as the ‘Godzilla of
all fudges played out in this country in the guise of fiscal consolidation’, Budget 2011–12 quietly
introduced the concept of ‘effective revenue deficit’. It is the revenue deficit adjusted for grants to
states for asset creation. The Budget of 2012–13 went farther. Through the Finance Act, known for
its missile-like efficiency for getting passed without elaborate discussion or amendments, it changed
the FRBM Act itself. The Centre’s commitment to eliminate its revenue deficit was dumped for
the elimination of the tenuous concept of ‘effective revenue deficit’. The amended FRBM Rules of
May 7, 2013, stretched the time for its elimination by 6 years to March 31, 2015, and for bringing
the fiscal deficit down to 3% of GDP by 8 years to March 31, 2017. In 2018–19, as a proportion
of GDP, the budget estimate of revenue deficit of the central government continues to be far above
zero at 2.2%! The Finance Bill currently in Parliament removes the elimination of revenue deficit
as a target and stipulates the target date for containment of fiscal deficit below 3% of GDP to March
31, 2021.
instruments such as protective tariffs—suited them well.9 There was an unwillingness

to accept anything that could even closely resemble ‘market failure’.
In the first four decades after independence, under socialist planning, what
followed is the other extreme of the state trying to do too much. If the colonial rulers
did not recognise ‘market failure’, governments in India in the first four decades after
independence refused to consider the possibility of ‘government failure’.
The right principle guiding the reforms forward should recognise the limitations
of both markets and government. Quite a few goods and services—for example,
financial markets, natural monopolies such as public utilities, markets dominated
by a few big players, or pharmaceutical products—cannot be left entirely to the
mercy of the markets. They need rules and regulations and a regulatory body such
as the Reserve Bank of India or Securities and Exchange Board of India (SEBI),
Electricity Regulatory Commission, Competition Commission, or Central Drugs
Standard Control Organization to avoid systemic risks, exploitative pricing, and
health and safety risks. Neither can markets solve the problems of illiteracy, poor
health, poor roads or water supply.
Similarly, the government cannot solve all problems, particularly the problem of
resource allocation at the micro level, that is what and how much to produce, where,
and with what technology. Undoubtedly, there has been progress in this area, but
rather haltingly. The last rites of the erstwhile Planning Commission provide a good
example of this halting progress.
After independence, in conformity with socialist practice, a formal model of
planning was adopted in India, and a Planning Commission, with the Prime Minister
as chairman and also reporting directly to the Prime Minister, was established on
March 15, 1950. There was no mention of a Planning Commission in the Constitution,
nor was it set up by law; it was simply an arm of the central Government of India set
up through a Cabinet resolution. The Planning Commission provided the institutional
structure for planning under the permit-license-quota raj. It, along with its detailed
Five Year Plans, had outlived its utility for channelling private investment after the
introduction of market-based reforms in 1991. In his first Independence Day speech
in 2014, Prime Minister Narendra Modi announced the scrapping of the Planning
Commission. By a press release on January 1, 2015, after a life of 65 years, the
erstwhile Planning Commission died to be replaced by the National Institution for
Transforming India (NITI) Ayog.10
9 For example, the British market, when the textile industry first started coming up in the island
state, was protected by duties of 70–80%. The Indian textile industry, on the other hand, during
its formative years between 1896 and 1925, had the benefit of import tariff protection of 3.5%
neutralised by an equivalent excise duty on domestic textiles.
10 http://pib.nic.in/newsite/pmreleases.aspx?mincode=61.
40 A. K. Lahiri
3.3 Agricultural Reforms
The third challenge is agricultural reforms. A sector that produces only 16–17% or
less than a sixth of the gross value added, but provides half the employment in the
economy cannot but be in distress. There is an urgent need for accelerated agricultural
reforms. The recent farm loan waivers across states totalling around 1.0–1.5% of
2017–18 gross domestic product has brought the issue of agricultural reforms to
the centre stage. The enduring solution of course lies in providing employment in
alternative sectors, particularly in industry. But, this is a task that can be achieved
only over time. Questions can be raised about the course that reform is following in
agriculture.
3.4 Cheap Farm Loans and Farm Loan Waivers
Emphasis on cheap credit had started under Indira Gandhi in 1972 with the Differen-
tial Rate of Interest (DRI) scheme. Banks, mostly government-owned, had to allocate
at least 1% of loans to weaker sections, including small and marginal farmers, at
highly subsidised 4% annual interest, a rate adopted against the advice of an expert
group appointed for this purpose. DRI continues, but with very limited success.
Targeted borrowers are apathetic about its small amounts, and the banks lukewarm
with the high administrative costs.
Loan waiver is an extreme form of cheap credit—zero interest and no repayment
date. In July 1975, the 20-point programme during the emergency included planned
liquidation of rural indebtedness through moratorium on debt recovery from landless
labourers, small farmers and artisans. Cheap credit for the rural poor to procure
income-generating assets started with a bang with the Integrated Rural Development
Program (IRDP) launched on a pilot basis in 1978. Extended rapidly to four million
households by 1987, it was adjudged the ‘worst-ever development programme’ by
some studies of effectiveness. Loans were either highjacked by the rich and well-
connected, or wasted with inadequate attention to forward (e.g. marketing of milk)
and backward (e.g. fodder for cattle) linkages.
Through loan melas in the 1980s, Sri Janardhan Poojary, Minister of State for
Finance, first under Indira Gandhi and then Rajiv Gandhi, made revolutionary contri-
bution in popularising cheap credit. Initially, the ruling Janata Party in Karnataka,
Poojary’s home state, protested. Soon realising that the senior Congress leader had
emerged as a friend of the poor by misusing banks, it declared itself not against
loan melas, but the partisan manner of allowing only Congress functionaries to
mediate loans. Imitation is the best form of flattery, and over time, by promising
and granting farm loan waivers, all parties started paying their tribute to the iconic
Poojary. Janata Party, with Devi Lal as Deputy Prime Minister, did so in 1989. After
farmers’ suicides in Vidarbha, an expert group on agricultural indebtedness, in mid-
2007, recommended a few steps, but not a debt waiver. Yet, United Progressive
Alliance’s Finance Minister Chidambaram’s Union Budget, 2008–09, went ahead

with a waiver.
Andhra Pradesh, under Telegu Desam’s Chandrababu Naidu, and Telangana under
Telangana Rashtra Samithi’s K. Chandrasekhar Rao gave such waivers in 2014. Tamil
Nadu, under AIADMK’s Puratchi Thalaivi did so in 2016. In 2017, in Uttar Pradesh,
the government announced the Kisan Karz Mafi Yojana, or Peasant Loan Waiver
Scheme to redeem the Bharatiya Janata Party’s (BJP) election promise. Rahul Gandhi
had announced ‘Karz maaf, bijli bill half” in his election campaign, and the waiver
would have come even with a Samajwadi-Congress victory in UP.
Promise of farm loan waivers in election campaigns has become standard fare for
almost all political parties. Lack of access to institutional credit and low agricultural
productivity, and reliance on unscrupulous moneylenders are at the root of rural
indebtedness. Yet, politicians prefer cheap institutional credit to more institutional
credit. Loan waivers can be given by the stroke of a pen, and before elections, their
concerns are more immediate and practical than strategic and long term.
Waivers are problematic at best. They send a wrong message on servicing of loans.
Those who repaid, regret why they did so. One waiver triggers expectation of more to
follow. The less you repay, the more you gain in the future. Incentive to repay on time
weakens. Credit culture deteriorates. Once bitten twice shy, banks avoid lending in
jurisdictions where waivers are granted. Waiver’s temporary relief comes at the cost
of lower credit inflows. Furthermore, even when the governments repay the loans on
farmers’ behalf, such repayments often come with a delay because of their stressed
fiscal situation. They also raise the question about whether paying for loan waivers
is the best use of scarce government resources in helping the agricultural sector.
Loan waivers are clearly not in conformity with the spirit of the reforms. Yet,
intense competition among parties to distribute freebies, including loan waivers,
continues. Stopping the culture of political parties promising farm loan waivers will
continue to be a challenge going forward.11
3.5 Minimum Support Price
The Indian State’s involvement in agriculture has been primarily by interventions

in the input markets, such as for fertiliser, through subsidies, and in output markets
through minimum support price (MSP), public procurement through the government-
owned Food Corporation of India (FCI) and public distribution system.
11 The freebies provoked even the judiciary to step into stop the practice. Noting the discriminatory
nature of drought-related loan waiver only to small and marginal farmers, the Hon’ble Madras High
Court has directed Tamil Nadu to extend the benefit to all farmers. The Hon’ble Supreme Court
has observed that promises of freebies to lure voters shake the roots of free and fair polls, and
directed the Election Commission (EC) to frame guidelines for regulating contents of manifestos.
In response, the guidelines issued by the Election Commission on April 24, 2015, in the form of
‘Model Code of conduct for the Guidance of the political parties and candidates’, does not hold out
much hope for success. http://eci.nic.in/eci_main1/current/manifestos_27052015.pdf.
42 A. K. Lahiri
MSP has a long history going back well before the reforms. The Government had
appointed a Foodgrains Prices Committee under the Chairmanship of L. K. Jha in
August 1964. The Committee in its report had recommended a minimum price which
would be assured to farmers through support operations as well as a procurement
price for wholesalers and retailers such that producers are able to secure ‘a rupee or
two’ more than the minimum price. The procurement price was also the ‘maximum
price’. As far as consumers were concerned, the Committee had also fixed the ex-mill
price—that is the price after the paddy has been milled, bagged and sewn—of rice as
well as the maximum retail price.12 The Committee had recommended the producer
price for three varieties of wheat—red, common white and superior—as well as for
four types of coarse grains—jowar, bajra, maize and gram and left the job of fixing
the maximum producer price for these for the Agricultural Prices Commission to be
appointed.13 From 1968 to 69, the Government announced only the MSP and the
MSP became the MSP-cum-procurement price. The MSPs were announced around
the time of sowing and applied to the period when the crop was harvested and sold.14
Politically, given the enormous farm lobby, procurement price became a very
sensitive issue. Dharm Narain (1975), Chairman of Agricultural Prices Commission
during 1970–1975, described it well by saying ‘the procurement price is more politics
than economics’. The S. R. Sen Committee was appointed in 1979 to go into the cost
of cultivation to decide the procurement price. But the procurement price often was
more than what was recommended by the Commission. Furthermore, given that
farmers often had to sell their foodgrains to traders at prices lower than the MSP,
even the decision as to where the FCI would carry out its procurement was politically
determined.
Food policy of the Government suffered from conflicting objectives, which
included promoting production and self-reliance, reducing undue fluctuations in
foodgrains prices, and protecting the vulnerable sections of the people. The Central
Government made foodgrains available to the states at the central depots at a uniform
central issue price. The Central Government also reimbursed the difference between
the economic cost of the FCI—the price paid to farmers together with other incidental
operating and storage costs including handling, transportation and wastage—and the
central issue price in the form of subsidies. Procurement incidentals, such as mandi
fees and cesses, and distribution cost could be as much as a third of the economic
12 The Committee was aware of the innumerable varieties of rice, and fixed only the minimum and
maximum prices of only one ‘coarse variety of paddy in each state’ and left the job of fixing the
prices of different varieties to the state governments.
13 http://cacp.dacnet.nic.in/ViewQuestionare.aspx?Input = 2&DocId = 1&PageId = 66&KeyId =
511 The Agricultural Prices Commission became the Commission for Agricultural Costs and Prices
in 1985.
14 ‘The agricultural crop year in India is from July to June. The Indian cropping season is
classified into two main seasons-(i) Kharif and (ii) Rabi based on the monsoon. The Kharif
cropping season is from July–October during the south-west monsoon and the Rabi crop-
ping season is from October to March (winter)’. http://www.arthapedia.in/index.php?title =
Cropping_seasons_of_India-_Kharif_%26_Rabi Rabi marketing season is April–June, and Kharif
marketing season is October–December.
cost. Beyond the central depots, the state governments shared the responsibility of
reaching the foodgrains to the fair price shops and running the PDS. The only way
the consumers could be provided with foodgrains at a reasonable price while farmers
could be paid a ‘remunerative price’ was through subsidies. Food subsidies for the
Central Government mounted as the over-all cost of procuring the grains—known
as economic cost—went up much faster than the price collected from the states for
distribution to the consumers through PDS with or without further subsidies from
such governments. A solution to the problem did not lie in increasing the central
issue price collected from the consumers because offtake was already falling short
of allocation of foodgrains.
The S. R. Sen Committee had clearly pointed out that a mechanical fixation of price
on the basis of cost of cultivation will freeze the price relationships to the demand–
supply situation prevailing in the past and thereby obstruct allocation of resources
as per changing economic situation. By the early 1970s, economists had pointed out
how the artificially high price for foodgrains and the availability of new high-yielding
varieties of seeds, particularly wheat, was leading to a shift of acreage from other
food and cash crops, and was likely to result ‘either in a progressively increasing
stockpile of wheat or will seek for it an export outlet’. Furthermore, Dharm Narain
(1972: A-6) had pointed out ‘Since, given the ruling international prices for this
cereal, domestic wheat cannot be exported without a sizeable subsidy, the feasibility
as well as the desirability of this course of action will have to be properly assessed.
The building and carrying of a progressively rising stock of wheat is, likewise, a
costly operation and it would be neither desirable nor possible to undertake it on a
continuing basis’. But, that is what precisely happened over time, stocks piled up and
grains were exported with large subsidies to cover the difference between the world
price and economic cost of procuring grains. And, now again there is demand for
mechanical fixation of MSP at levels ‘at least 50% more than the weighted average
cost of production’! This surely is not in line with the spirit of the reforms. How to
reform the agricultural output markets and the MSP regime is going to continue to
be a challenge. In this context, there are lessons to be learnt from the success story
of milk.
3.6 Lessons from Milk
Production of milk had gone up in two decades from 17 million tonnes in 1951–52
to only 22 million tonnes in 1971–72. Milk was ‘cheap, but not available’ through
the government outlets in urban centres in the late 1960s and early 1970s. With the
White Revolution, output more than doubled in each of the next two decades to 56
million tonnes in 1991–92 and 128 million tonnes in 2011–12.
The National Dairy Development Board (NDDB), founded in 1965, launched
Operation Flood with the sale of skimmed milk powder and butter oil gifted by
the European Union through the World Food Programme. The triple objectives of
‘a flood of milk’, augmenting rural incomes, and ensuring reasonable prices for
44 A. K. Lahiri
consumers were not only attained but also in a sustainable way. The backbone
of the programme was the ‘Anand Pattern’ of cooperatives of milk producers in
different parts of the country. ‘Amul’, the brand name of the Gujarat Co-operative
Milk Marketing Federation Ltd., owned by more than 3.5 million milk producers in
Gujarat, became a household name. Over time, government undertakings, such as
the Delhi Milk Scheme (DMS) or Bihar State Dairy Corporation, were handed over
to the NDDB.
Generally, success in agriculture has been limited in areas other than milk. Indeed,
relative to many other agri-products, milk has got some unique characteristics. For
example, milk is more homogenous than rice, making it easier to procure, trans-
port and store. Rice comes in many varieties such as Basmati, Gobindabhog, and
Sona Masuri. Furthermore, milk is produced every day through the year unlike many
seasonal agricultural commodities, such as mangoes. Yet, despite these unique char-
acteristics, three important lessons from milk, particularly the ‘soft touch’ nature of
government intervention, are noteworthy.
First, not government undertakings, but cooperatives, successful in many coun-
tries such as New Zealand, the Netherlands and Denmark since the 19th century,
were promoted for milk. In milk, without the shadow of a gigantic public sector
undertaking, very little entry barriers promoted competition in procurement, trans-
portation, storage, and distribution. Milk was delicensed in 1991 and subjected to
the Milk and Milk Product Order (MMPO) of 1992 under the provisions of Essential
Commodities Act, 1955. But, MMPO, even before its repeal in 2011, was more for
maintaining the quality of milk supply by large dairies.
The nature of government intervention in wheat and rice was starkly different.
The FCI was set up in 1964, a year before NDDB. FCI’s mandate was to carry out
price support operations for safeguarding the interests of the farmers, to distribute
foodgrains throughout the country for the public distribution system, and to maintain
adequate levels of operational and buffer stocks of foodgrains to ensure National Food
Security. There was even a 10-month long abortive move to nationalise the wholesale
trade in wheat in April 1973 under Indira Gandhi!
A monolithic and gigantic central government undertaking to deal with vital food-
grains along with the system of MSP and procurement at MSP made the economics of
wheat and rice, including where to procure and at what price, and also the wage bill of
the FCI, vulnerable to political pressures. Before the Punjab polls in February 2014,
Prime Minister Modi had suggested unbundling FCI into three parts for procurement,
storage and distribution.
In January 2015, the High Level Committee (HLC) under the chairmanship of
Shanta Kumar gave its report on restructuring the FCI. The HLC recommended
handing over all procurement operations of wheat and rice in Andhra Pradesh, Chhat-
tisgarh, Haryana, Madhya Pradesh, Odisha and Punjab to state governments, as they
have sufficient experience in and reasonable infrastructure for procurement. It recom-
mended that FCI should ‘move on’ to help the states in the east—like Eastern Uttar
Pradesh, Bihar, West Bengal, and Assam—which still awaited the green revolution
and where small farmers dominate and sell much below MSP. It is time to act on
either the Prime Minister’s suggestion or the HLC’s recommendation.
Second, there has been no MSP for milk. MSPs, as the HLC has pointed out,
continue to distort the market for 23 agricultural goods. Furthermore, FCI procure-
ment is restricted to wheat and rice with MSPs doubling up as procurement prices.
As recommended by the HLC, the government should revisit its MSP policy.
Third, the country has made considerable progress in horticulture with its output
of 269 million tonnes surpassing that of foodgrains for the first time in 2012–13.
But there is scope for much more progress in horticulture. Its demand is going up
rapidly with increasing income. Because of the labour-intensive nature of fruits and
vegetables and higher value realisation, their promotion can also generate prosperity
for the small farmers. For this, a major requirement is cold chain or logistics support
for storage and distribution to maintain the inventory within predetermined ambient
parameters. Particularly glaring is the acute shortage of pack-houses with conveyer
belt systems for sorting, grading, washing, drying, weighing, packaging, pre-cooling
and staging, and of reefer vehicles with active refrigeration designed for environment-
controlled carriage of products.
Much of the white revolution is due to the rapid development of milk processing
and distribution infrastructure, e.g. developing and installing automatic milk collec-
tion units for quality verification and bulk coolers at the village level, processing and
packaging plants, tankers to transport the milk at 4o c, and bulk vending machines.
A lesson from milk for horticulture is the need to facilitate the development of the
requisite infrastructure through private sector initiatives. How to make it come about
will continue to be a challenge.
3.7 Physical Infrastructure
The fourth challenge is building up our physical infrastructure. With the benefit
of hindsight, it is clear that, relative to China, we invested too little in the post-
independence period. While China invested between 31 and 39% of its GDP during
1971 and 2000, we invested only 18 to 24%. And also, we invested too little in physical
infrastructure. We realised this inadequacy late only when there were perennial power
outages, roadways choked up with traffic, urban centres starting to look more like
shanty towns and long waiting periods for getting freight moved by railways.
In infrastructure, while fast-growing emerging economies invested around 7–
10% of their GDP, India invested only about 3% of GDP in the first 50 years of
independence (Chatterjee 2017). By the late-1980s, researchers were talking about
infrastructural bottlenecks. But, even with this awareness, enhanced outlays on infras-
tructure were delayed further because of limited fiscal space. There were obvious
difficulties in the form of burgeoning fiscal deficits, and political challenge in shifting
expenditure from revenue items such as subsidies.
The publication of the India Infrastructure Report in 1996 played a major role in
attracting attention to this important sector. We have made progress since then. As a
proportion of GDP, infrastructural investment climbed from 4.8% in 2002 to a high
of 8.4% in 2011. According to the World Bank’s Logistic Performance Index, India
46 A. K. Lahiri
ranked 35 with a score of 3.42 in 2016, up from rank 54 and score 3.08 in 2014, rank
46 and score 3.08 in 2012, rank 47 and score 3.12 in 2010, and rank 39 and score 3.07
in 2007.15 The corresponding improvement in terms of infrastructure, according to
the World Bank, is to rank 38 and score 3.34 in 2016, up from rank 65 and score 2.88
in 2014, rank 52 and score 2.87 in 2012, rank 52 and score 2.91 in 2010, and rank 42
and score 2.90 in 2007. But, there are miles to go before our physical infrastructure
is adequate to support accelerated economic growth and development.
First, we need to start compiling the data on infrastructural investment with how
well or how badly we are doing. There is a lot to be learnt from Peter Drucker’s
quote ‘If you can’t measure it, you can’t improve it’. No data on infrastructural
investments are available from official sources except for the past, to the best of
my knowledge, from the erstwhile Planning Commission. The numbers about how
much we need in terms of infrastructural investment are quite intimidating. Under
the 12th Plan (2012–17), the target for infrastructure investment was Rs. 56 trillion.
Estimates suggest that actual achievement may have been only around Rs. 39 trillion
(Chatterjee 2016). Instead of 7–10% of GDP, India invested only 5.% of GDP in
infrastructure in 2015.16
Second, we need to clarify the definition of infrastructure. For a long time, we
have focused on six infrastructure or core industries, namely crude oil, petroleum
refining, coal, electricity, cement, and finished steel. Indeed, these are very important
segments of the economy, we need to monitor them closely as we have in the past,
but all of these are not what we normally mean by infrastructure. Infrastructure is
the basic physical structure and facilities which are essential for the operation of
the economy and cannot be substituted by imports.17 You can import finished steel
or refined petroleum products, but you cannot substitute facilities such as roads,
ports and power supply lines by imports. The inclusion of the six core industries in
infrastructure often leads to quite a bit of confusion. For example, when you read
about 926 infrastructure projects, worth Rs.13 trillion and accounting for 7.2% of
all outstanding projects, stalled at end-September 2017, they include a large number
of steel and cement projects (Vyas 2017, Mampatta 2017). This number does not
provide what we are looking for in terms of stalled infrastructure projects.18
15 LPI consists of six components, namely customs, infrastructure, international shipments, logistics
quality and competence, tracking and tracing and timeliness. https://lpi.worldbank.org/international/

global.
16 See ADB report ‘Meeting Asia’s Infrastructure Needs,’ February, 2017. https://www.adb.org/
publications/asia-infrastructure-needs.
17 Perhaps, infrastructure should include only electricity, roads and bridges, telecom, railways, irri-
gation, water supply and sanitation, ports, airports, storage and gas supply network. There is merit
in deliberations to decide on a rigorous definition.
18 DBOD Circular of November 25, 2013. https://rbi.org.in/Scripts/NotificationUser.aspx?Id =
8591&Mode = 0 The definition of subsectors identified by the RBI in its circular for classi-
fying credit as ‘infrastructral lending’ is more satisfactory. It divides the sectors into the following
categories—transport, energy, water and sanitation, communication, and market and social infras-
tructure. But even here, I find fertiliser (capital investment) included under ‘market and social
infrastructure’. Fertiliser is indeed very important for the economy, but I doubt if it qualifies to be
included under ‘infrastructure’.
Third, we need to fully recognise that the public sector alone cannot fill the gap
in infrastructure, and the private sector has to come in. Let us look at the numbers. If
we take Rs. 165 trillion as the ballpark figure for GDP, we need to invest Rs.12–16
trillion per year in infrastructure.19 According to the Union Government’s 2017–18
budget, the entire capital expenditure budgeted by the Central Government was Rs.
3 trillion in 2017–18. If you look at the composition of the Centre’s capital outlay,
except for the capital outlay on defence of Rs. 916 billion, for Ministry of Finance of
Rs. 411 billion, and for Ministry of Home of Rs. 132 billion, almost the entire capital
outlay is on infrastructure. For 2017–18, a back of the envelope calculation yields a
figure of Rs. 1.35 trillion capital outlays budgeted for infrastructure by the Central
Government, notably with Rs. 552 billion for railways and Rs. 542 billion for roads.20
If we make the heroic assumption of an equivalent sum spent by State Governments,
the total infrastructure investment by the general government is unlikely to have been
more than Rs. 3 trillion, or a fifth or at best a quarter of what was needed.
Given the need for fiscal consolidation, the unlikely prospect of a major jump
in revenues of the government and the limited scope for any radical expenditure
restructuring in the short run, reliance on private investment appears to be unavoid-
able.21 Private investment in infrastructure is not so much a matter of choice but a
necessity.22 Given the fiscal reality and the country’s needs, the debate about private
investment in infrastructure should be focused not on its desirability but about ‘how’
19 The Asian Development Bank, in its report titled ‘Meeting Asia’s Infrastructure Needs’, has
estimated that $4.36 trillion is needed to fix India’s infrastructure deficit by 2030. That entails more
than $300 billion of spending every year for the next 13 years.
20 Included under infrastructure investment are capital account allocations under Ministries of Civil
Aviation, Communications, Railways, Road Transport and Highways, Urban Development, Water
Resources, River Development and Ganga Rejuvenation.
21 Prior to the mid-1990 s, barring for some historic exceptions, such as Kolkata Electric Supply
or BEST in Mumbai, the public sector fully financed, owned and managed infrastructure projects
and took all the associated risks. The role of the private sector was restricted to the traditional
procurement model. The state engaged the private sector only to build (and often design) the asset.
The asset was ultimately owned and operated by the state. Experience with the state taking all the
risks was not particularly happy. With the state taking all the traffic risks in railways, money went for
connecting VIP constituencies by rail rather than expanding congested rail corridors with maximum
freight and passenger needs. Inefficiencies, delays and failures took years to come to public notice.
Recently, regulatory reasons accounting for the bulk of stalled infrastructure projects in the public
sector came to public notice expeditiously. Perhaps, without similar private sector projects stalled
by regulations, the problems would have surfaced only after a number of years.
22 India has made substantial progress in promoting private investment in infrastructure since one
of the first toll roads in India—a 12-km long toll road linking Indore to the industrial town-
ship of Pithampur in Madhya Pradesh—was opened in November 1993. Some landmarks in the
promotion of PPP in infrastructure were the delicensing of electricity generation in 1991, amend-
ment of National Highways Act 1956 in 1995, granting licences to eight cellular mobile tele-
phone service operators in four metro cities and 14 operators in 18 state circles in 1994, and
setting up of Infrastructure Development Finance Company (IDFC) in 1997. India has come a
long way in promoting public–private partnerships (PPP) in infrastructure. Some point out that
India has become the world leader in PPP. Vinayak Chatterjee: ‘PPP in India: The story so far’.
Business Standard, January 21, 2013. http://www.business-standard.com/article/opinion/vinayak-
chatterjee-ppp-in-india-the-story-so-far-112051400022_1.html Government of India’s database
48 A. K. Lahiri
to bring it in in the most efficient and welfare-enhancing way. For this what we need
is to solve the four main problems of: implementation, regulatory capture, financing,
and incomplete contracts.
The ambition behind the vision for the Three Gorges Dam in China has been
compared with that of the pyramid-building Pharaohs. The 607 feet tall and 3,319
yards wide dam has created a lake stretching over 640 kms! The National People’s
Congress approved the dam in 1992 and construction started on December 14, 1994
and was completed in 2006. The dam was expected to be fully operational in 2009,
but the last of the 32 turbines was connected to the grid only on July 4, 2012.
Now, compare this with the Bangalore-Mysore Infrastructure Corridor (BMIC) in the
southern state of Karnataka in India. It is a 4–6 lane 111 km tolled expressway project
connecting the state capital of Bengaluru (old name for Bangalore) and important
city of Mysuru (old name Mysore). A tender for developing the BMIC was invited
by the state government of Karnataka on September 28, 1988, before the People’s
Congress in China approved the Three Gorges Dam in 1992! The BMIC is still
not complete. Much of the implementation problems related to land acquisition and
obtaining the regulatory and environmental clearances. Solving these will continue
to be major challenges.
3.8 Social Infrastructure
The last, but not the least, is the challenge of improving social infrastructure, namely
education and health. We lag behind our East Asian neighbours in terms of education
and health indicators. Here, the main challenge is to shift the focus from only building
more schools, primary health centres and hospitals to making sure that there are no
problems of absentee teachers, or teachers who do not teach, health centres with no
doctor or medical staff and medical supplies. Improving the quality of service will
require active involvement of the user community. Encouraging this involvement
on infrastructure projects in the public domain lists 1,555 projects in the PPP mode. Infras-
tructureIndia.Gov.in, https://infrastructureindia.gov.in/project-list?id = 1&searchType = Govern-
ment%20Infrastructure%20Projects%20(PPP) By grants of Rs. 287 billion, the government has
entered into agreements to get these projects, costing Rs. 9.7 trillion, implemented through
the private sector. The modalities tried include build-operate-transfer (BOT), build-own-operate-
transfer (BOOT), design-build-finance-operate-transfer (DBFOT), and operation and management
contract (O&M). Duration of the concession period can be as varied as 24 months to 9,999 months,
and the bidding parameter used for the award of contract varied from highest premium or minimum
grant to tariff or user charge, annuity, revenue share, concession duration, lease rent and cost of
construction. Since January 2016, a hybrid annuity model is also being tried. Under the BOT model
though, private players build, operate and maintain the road for a specified number of years before
transferring the asset back to the government. Under the BOT-annuity model, the toll revenue risk
is taken by the government and the private party is paid a pre-fixed annuity for the construction
and maintenance of the road. Under EPC (engineering, procurement and construction) model, the
private player is paid to lay the roads with no further role for the private player in the road’s owner-
ship, toll collection or maintenance. The hybrid-annuity model combines EPC (40%, released in
five tranches linked to milestones) and BOT-Annuity (60%).
will be a major challenge going forward. In this context, what we may also consider
is the delegation of teacher recruitment and monitoring to local bodies and the levy
of a minimal user fee to generate a sense of entitlement among the users. The user
fee need not even go to the consolidated fund of the government, it can remain with
the parent–teacher society in a school or the Rogi Kalyan Samitis in health centres
or hospitals and used for purposes such as purchasing books or sports equipment in
schools, and beds and bed linen in hospitals.
4 Conclusion
Though the challenges may look formidable, pessimism is unwarranted. Other coun-
tries have met them in the recent past and India can also do it. Japan had grown at
spectacular rates during the 1950s, more than doubling its per capita GDP. Apart
from Japan, quite a few other countries to the east of India—the so-called East Asian
Tigers, namely Hong Kong, South Korea, Singapore and Taiwan—started growing
fast as well during the 1960s and 1970s. All the countries increased their per capita
GDP at constant 2010 US dollar terms by a factor of over six times between 1960
and 1990. With high single-digit rates, their per capita income doubled every decade
over much of the second half of the last century. Such historically unprecedented
growth rates of per capita income over three decades totally transformed the very
nature of living for most of the population. Korea, for example, even joined the rich
country club of OECD in 1996.
Electorate in India has matured and become enlightened, they exercise their ballot
judiciously, and are hungry for development. Their emphasis now is on ‘bijli, sadak,
pani’ and not ‘roti, kapda, makan’. Political parties’ stress on ‘vikas’ shows they
are adjusting to the new demands of the electorate and reinforces my optimism.23
‘People have a tendency to blame politicians when things don’t work, but one ‘get
the politicians one deserve’, former US President Barak Obama told Italians in May
23 In a CNN IBN Centre for the Study of Developing Societies (CSDS) all-India post-poll survey of
22,301 respondents, after the 2014 Lok Sabha election, when asked what the single most important
issue was while voting in the recent Lok Sabha election, 19.0% mentioned inflation in general and
hike in the price of LPG, petrol and diesel in particular, 11.6% corruption, 10.9% lack of develop-
ment, and 7.5% unemployment and jobs. Issues such as MNREGA, and poverty were mentioned as
the topmost issue only by 0.3% and 1.9% of the respondents. Question 5. http://www.lokniti.org/pdf/
All-India-Postpoll-2014-Survey-Findings.pdf. The survey is conducted by Lokniti—Programme
for Comparative Democracy—established in 1997 as a CSDS research programme. The National
Election Studies series attempts to understand the larger forces and the long-term changes taking
place in democratic politics and society. The most recent in the National Election series has been
the National Election Study 2009 and 2014. Question 23 d. http://www.lokniti.org/pdf/All-India-
Postpoll-2014-Survey-Findings.pdf asks: Should the government spend more on infrastructure than
on subsidising the poor? Almost half (48.3%) of the respondents strongly or somewhat agreed with
the proposition, with less than a quarter (21.3%) strongly or somewhat disagreeing and the rest
expressing no opinion.
50 A. K. Lahiri
2017. If the wisdom of the Indian electorate is not misplaced, the development
challenges after 25 years of reform will be successfully met.
References
Dhar, P. N. (2003). The Evolution of Economic Policy in India–Selected Essays. New Delhi: Oxford
University Press.
Schumpeter, Joseph. (1942). Capitalism, Socialism and Democracy. New York: Harper & Row.
Samuelson P (1967) Economics: An Introductory Analysis, McGraw Hill.
Dharm, N. (2004). Combating the wheat lobby, Cross Section, March 1975, quoted in M. Raghavan:
“Politics of Procurement and Price Support”, Economic and Political Weekly, Vol. 39, No. 5 (Jan.
31–Feb. 6, 2004), pp. 506–508.
Dharm Narain: “Growth and Imbalances in Indian Agriculture,” Economic and Political Weekly,
Review of Agriculture March 1972. P. A-6
Vinayak Chatterjee: “Is India investing enough in infrastructure?” Business Standard, April
17, 2017. http://www.rediff.com/business/special/special-is-india-investing-enough-in-infrastru
cture/20170417.htm
Vinayak Chatterjee: “A NIIF-ty solution for the times,” Business Standard, February 14, 2016
Mahesh Vyas: “Implementation-Stalled Projects inch up”, CMIE, October 4, 2017, https://www.
cmie.com/kommon/bin/sr.php?kall=warticle&dt=2017-10-03%2016:23:01&msec=266.
Sachin Mampatta: “Value of stalled projects rises to a record Rs13.22 trillion in September quarter,”
Mint, October 3, 2017. http://www.livemint.com/Politics/eJsGqshJCG4VPGvthnDUVN/Value-
of-stalled-projects-reaches-yet-another-high.html
Secrets of the Heart: Adding Subjectivity
to Policy Prescriptions for a Pleasant
Economic Development
B. V. Singh, Siddharth Singh, Ravish Kumar Shukla, and Lav Jee
Abstract Growth and development efforts worldwide and their guiding economic
principles have been well rooted in one theory or the other. They apply scientific
rational approaches as per their beliefs in positivist and postpositivist designs; they
are objective and materialistic; they believe in independence of the mind and body.
As a result, they address more to history than offer solutions to the futuristic desires
of the masses. They lack predictive ability. Therefore, most of the time development
drives produce dissatisfaction and dejection for those who were intended to benefit
from them. Also, many a time, policies derived from theoretical conclusions over-
look the whole construct of the human being. They tend to ignore subjectivity. If life
is for stability, tranquility, and felicity, development policies must recognize masses
as both angelic and corporal. For the approval of ‘heart—the seat of happiness,
aspects of subjectivity—intuitions, faiths, whims, and aspirations that one dreams
about must find their place in policies meant for people. The aspects of subjectivity
not only provide pictorial information about the real individual, but also address the
question of freedom of masses and enable them to penetrate into the future. Subjec-
tivity provides space to the “synthetic a priory” part of the construct for a pleasant
development. This paper deals with the spectrum of personal construct for secrets
of the heart by dividing the shades of spectrum into “rational” and “extra rational”
colors. It shows how shades of rationality—absolute, relative, environmental, or
emotive—are necessarily a priory analytic and posteriori synthetic; they dissect and
explain. Therefore, optimization—constrained or unconstrained—deals with partial
B. V. Singh (B) · L. Jee

e-mail: bhupendravsingh@gmail.com
L. Jee
e-mail: cmishra792@gmail.com
S. Singh
Department of Economics, DAV PG College, Varanasi, Uttar Pradesh, India
e-mail: siddharthvns19@gmail.com
R. Kumar Shukla
Department of Economics, Government College, Chinor, Gwalior, India
e-mail: ravishshuklashukla21@gmail.com

https://doi.org/10.1007/978-981-15-8265-3_4
52 B. V. Singh et al.
and loses the holistic. The “extra rational” parts—emotions and beliefs—extend the
agenda of personal construct. They are found to be better predictors. One feels, there-
fore one believes, and the belief enables a judgment that is pleasant. The scientific
neglects stages of development in which the “Principle of Pleasure” plays an impor-
tant role. It ignores the role of “identity,” “memory,” and “conscience.” It ignores
the role of the “will” and it ignores “heart” as the ruling organ. It rejects “felicity”
and as such the role of fantasies and fictions. The three parallels—Freudian, Indian
Yogic Psychology, and Arabic—approaches add holistic to the construct resulting
in chaotic and contradictory/complementary forces producing indeterminacy and
nonlinearity. It is captured by “poetic logic” as an individual’s words are vivid, livid,
and mutes. For them “time” is not linear and not equally spaced but is an intuitive
comprehension. Therefore, future can be penetrated through experiments that enable
intuitive judgments stimulated by carefully chosen “tools.” The paper concludes by
making propositions such as the individual is holistic—both physical and beyond;
the decision frontier is in a state of flux—nonlinear and chaotic; it is easier to deduce
from the whole than to add up to get the whole; it is the “Principle of Pleasure”
that governs; time and space are intuitive judgments; a futuristic data set is experi-
mental—spurred by stimulants. How one may actually do it is given as a “postscript”
to the argument. A simple case study of development of spiritual tourism in Varanasi
city is explored. The study uses experimental data and its propositions to consolidate
the subjective whims to find alternative strategies to make development a pleasant
experience for local populace. It has successfully shown the difference between opti-
mized and loved strategies. It suggests that pleasant betterment of the labor force in
spiritual tourism can be achieved by shifting them elsewhere rather than creating
more tourism options.
1 Introduction
Growth seen as an increase in aggregate physical output found its course in change
of labor, capital, and technology, where only technology had unlimited expansion
while that of labor and capital were limited.1 The question of capital accumulation,
use of the accumulated capital, capital–labor ratio, and other such considerations
guided developmental policies worldwide. Many governments invested in research
and development and in innovations; given this belief. Some others who believed this
but doubted its success due to weak and untrue assumptions found refuge in bringing
forth institutional reforms and ensuring conducive social environment.2 Growth was
pursued through a knowledge-based economy—wherein consumption and produc-
tion were based on intellectual capital. Thus, intellectual property rights became
an important addition to institutions. The Endogenous Growth Theory argued that
1 Neoclassical arguments.
2 Institutional arguments.
Secrets of the Heart: Adding Subjectivity … 53
economic growth was mainly an endogenous contribution caused by faster innova-

tion and investment in human capital.3 When growth took the form of development it
incorporated very difficult and nay saying political and economic issues. Alternative
developmental paradigms endeavored to construe the debate through cultural and
moral considerations.4 They argued for modernization through agriculture, industry,
and service sectors.5 They believed in import substitution and industrialization and
supported investment in infrastructure development.6
In addition, the question of regional development incorporated another dimension
consideration of “the space” in the discourse. Pace could be defined as a nation, part
of nation, region as socio-cultural-politico-economic divides. The spatial divides as
complete and integrated units might develop to have interrelationship as endorsed by
“Labor Division” arguments. Therefore, there could be diversified relational space
as per the specifics7 It seemed like arguing for an economic system that attracted and
caused conditions for long lasting, interdependent, and uniform development.
The “space” has wedged upon economic thinking in explaining the way an
economic system functions. It is understood as endowments generating geographic
advantages such as availability of raw materials, human and social capital, as also
economies that reduce production and transaction costs. The regional approaches
may be categorized into two main groups: locational theories and regional develop-
ment theories. The first provides a methodologically scientific disciplinary identity
using microeconomic foundations and macroeconomic methods. They use tech-
niques such as system theory that aims at extension of demand and production
areas. The second group, which is more macroeconomic in nature, talks of loca-
tional specifics. They are abstract and intend to identify regional growth determi-
nants that increase employment and individual well-being. References can be given
to regional Keynesian and neoclassical growth theories. There have been attempts
to wed the two approaches. The Growth Pole Theory of Perroux (Campbel 1974),
the role of multinationals (Lipietz 1980; Blomstrom and Kokko 1999), endogenous
determinants, learning regions deserve references.
Since 1990, there have been some efforts to incorporate the indeterminate behavior
of individuals who found a match in the concept of nonlinear dynamics in social
3 There have been efforts to understand the role of culture, trust, respect, self-determination (Khan
et al. 2010).
4 For example, Bourdieu (1985a, 1998) and Putnam (1993, 1995) seem to propose two social tradi-
tions and explain the role of “civil society” in attaining sustained development. They represent oppo-
site forces of social dimension. The discussion leads to conclude the divides of “social integration”
and “social conflicts” to ensure consensus and economic development.
5 The context of Dependency Theory. The arguments of imperialism and neo-imperialism can also
be added.
6 However, few others found no support for a relationship between infrastructure and economic
development.
7 A comprehensive account of Local Developmental Strategies has been given by the ILO imple-
mentation of economic and social interventions to create an environment where social activities
support economic objective and vice versa (ILO 2013, p. 2).
sciences. Researchers used more advanced mathematical tools to understand the qual-
itative aspects (Nijkamp and Reggiani 1992a, b; Nijkamp and Reggiani 1993a, b) of
individual behavior. These approaches relaxed assumptions of constant returns and
perfect competition. They analyzed a dynamic growth mechanism with increasing
returns and transportation costs. The system had many equilibria and it used opti-
mization techniques.8 However, these efforts also seemed to overlook the question
of disaggregate specifics as did the other traditional models.
The question of poverty found an important place in the development discourse
in the mid-70s of the last century since the emphasis shifted from relative to absolute
poverty. The failure of trickle-down theory was considered as one of the seven sins of
planning (Haq 1976). The emergence of the human development index (HDI) shifted
the debate on development to discussion on poverty. The three-dimension HDI has
now been extended to include multidimensional poverty index (MDI) (UNDP 2018).
The capability approach was seen as deprivation to lead a life one believed worth
living. Development was viewed as development vis-a-vis capability. Means without
capabilities were useless (Sen 1989a, 1999, 2004a, b).9 Sen’s critics argued that his
approach is against liberalism, more individualistic, and very difficult to theorize.
Martha Nussbaum (2011a, b) gave an extended version by annexing the theory of
justice deriving from the concept of human dignity and suggested to “guarantee the
same to all up to a defined level.”
What to do with “capabilities” has been argued by many economists. To mention a
few—Robeyns (2003a) suggested a procedural approach for experimenting capabil-
ities; emphases were given to list priorities explicitly, methodological justification,
and sensitivity to the situation. Alkire (2005a) suggested valuation in two steps; first,
theorizing and then participatory evaluation by the group.
By and large worldwide, growth and developmental efforts, guiding economic
policies, and other policies have been well rooted in one theory or the other. The inten-
tions have been justifiable, so have been the theories and policies given certain beliefs
in Scientifics—positivist and postpositivist designs and well-considered rational
approaches; admissible to reason. They are objective, materialistic, and believe in
independence of the mind and body. They use ex post facto information and rely
upon a form of world comprehendible by analytic a priori and synthetic posteriori.
In this way, these theories are more a history than ways to look into the future. These
efforts at growth seem to believe that only aggregates matter, and specifics at some
disaggregate level do not matter. For example, who owned the capital, labor, or tech-
nology seldom matter. It ignores, for that matter, the characteristics of leadership—a
good leader can make a win possible with an insufficient army.
8 See also, Pike et al. (2007).

9 Although Sen admits the importance of “consequence” and how people feel about their lives and the
overall question of distribution, he also emphasized that resources should not be treated exclusively
for fair distributional justice. His contribution may be listed as individual characteristics, local
environment and variation in social conditions, conventions and customs and distribution within
family.
2 Transcendental to the Silver Lining
But somewhere some aspects have been missing as almost all parts of the world are
facing dissatisfaction with the local masses resulting in different forms of dejec-
tion prone to insurgencies or immediate insurgencies. For example, despite, let
us say, honest efforts by the federal and several state (provincial) governments,
farmers’ suicides in India remain unanswered. Displacement of natives for develop-
ment projects caused huge demonstrations and nay saying. Mob lynching and other
emotional outbursts do have a cause of concern as extreme cases.10 The development
projects have been a failure in providing satisfaction to the local people. Everywhere,
the aspirations of local people are seen as restraints rather than guiding principles for
development drives. Such drives are considered as threats to their routine lifestyles
and places from where they are detached and displaced.11 The loss of livelihoods
(crises of water, grazing fields, and livestock); threat to culture; and crisis of identity,
traditions, social relations; and nature on the whole of which their life could have
been a part were identified as reasons of local dismay and dejection. The projects
also caused pollution threatening the existing ecosystems. All such cases of protests
portray the fact that the development drives created contrary to what they actually
aimed at and made life of the people worse than before. They were not as per people’s
needs, wishes, and imaginations.
A development project must have social approval at the grassroots level given
the diversities of the population. Most of the time, policies derived from theoretical
conclusions overlook the whole construct of human being, which include a social
relationship, impulses, political affiliation, likes–dislikes, and spiritual settings and
beliefs. Furthermore, it is an unacceptable proposition that they (the object of study)
do not understand but the intellectual elites can understand.12 There have been tenden-
cies to cut the size of existence of those for whom the exercise of development is
undertaken. As the intellectual elites have the authority they can author. Knowledge
derived from a priory analytic and posteriori synthetic has added more to scholarly
arrogance than making the life of stakeholders more vivid and expedient.
In the uproar of excess of objectivity and scientism, people’s whims have been
ignored as darkened phenomena, especially in economics. If life is also for stability,
tranquility, and felicity, then developmental policies must recognize people both as
angelic and corporal. As the question of happiness finds a place in academic discus-
sions, aspects of subjectivity—intuitions, faiths, whims, and aspirations that one
dreams about—must find their place in the toolbox to respond to the dissatisfactions
and dejections resulting in mass protests and insurgencies. The aspects of subjec-
tivity not only provide pictorial information about the real individual but also address
10 See Notes to Chap. 3, in Taleb (2007), referring wisdom (madness of the crowd: collectively
we can both get wiser or far more foolish. But my conjecture is that we fail in more complicated
predictions—economic variables for which crowds incur pathologies—two heads are worse than
one.).
11 See also Anthony (2001).
12 Who will judge the judges?
the question of freedom of masses and the use of their intuitions, faiths, whims, and
aspirations as guiding principles to penetrate into future. Avoiding them as “irra-
tional” and in turn dealing them with force is in no way prudent for a democratic
and enlightened society. And even when approved, the challenge remains on how to
incorporate the subjective aspects into objective policies.
Should we include synthetic a priori13 knowledge and regard religion, myths, and
metaphysics (and other issues of faith) as useful? Development theories and beliefs,
implicit therein, possess very weak predictive ability in the sense that they are not
able to predict outliers.14 However, not addressing outliers and catastrophes is quite
injurious to future planning. On the methodological note, they (a priory analytic and
posteriori synthetic) seem to begin with simple static models and then transform the
structure to the dynamic world by adding more complications. There are limits to
such added complications as they become insolvable gradually. It can be maintained
that deriving simple from complicated,15 static from dynamic, and partial from total
could be more useful and handy.
The present endeavor does not reject the existing conventional knowledge that is
objective, materialist, universal, quantitative, easily transformable to simple linear
mathematics and provides facilities to test them on ex post facto data with axiomatic
techniques and artificial assumptions that offer useful explanations in meaningful
ways. Rather, it claims to construe upon the individual construct to capture the
subjective whole in order to predict future aspirations. Also, it boasts of providing
alternatives to incorporate such aspirations in developmental policies to enable a
pleasant solution that is loved by people.
On the methodological side, the effort extends the agenda to find a pleasing solu-
tion and deductive arguments to add to the inductions. It intends to devise techniques
to incorporate “subjective whims” in policymaking and proposes to find solutions to
gaps between whims and authoritative developmental paradigm. It may be consid-
ered more democratic and may entail a political freedom of masses. It refers to the
freedom of the ethnic groups to choose a particular quality of development in terms
of their geographical, cultural, personal, and social value structure and relationship.
It speaks of design and to live a life they love to and have cherished for generations.
It attempts to preserve their identity that has stood the test of time vis-a-vis some
time even forsaking fruits of modern amenities. It pertains to incorporating special
problems of different socio-cultural-ethnic groups and stakeholders.
It proposes to extend the discussion of personal construct to dimensions not yet
considered to derive prescriptions. It also proposes to take the whole existence
of the individual into account—scientific, physical, or beyond. The expression of
13 “A priory synthetic judgments are possible” constitutes the central idea of Kant’s “Critique of the
Pure Reason.” (Russell Reprint 2007, p. 642).

14 The question of prediction is one important aspect where techniques in economics (may be true
for whole social sciences) have been measurably insufficient. Because it deals with phenomena of
highly nonrepetitive nature, economics is considered to be no more than at the edge of the science
(and equally on the edge of the history). (Hicks 1984; Baranzini and Scazzieri 1986).
15 Bourke (1991).
such totality finds outlets in words that are no objective representations16 of the
imagery inside. There are gestures and postures and also the mutes. Sometime silence
expresses the words. Therefore, efforts to capture such imagery by codified words
are superimposition of ideas of the observer. However, the image can find different
expressions in different individuals—seemingly illogical. They are interacted, coor-
dinated, contradicted, or concluded realities—realities that govern behavior. Given
this understanding, there are inconsistencies amid social and economic theories and
inconsistencies at the level of methodology.17
It is obvious that economists themselves may sympathize with the poor and
put forth numerous suggestions to address their pitiable conditions, assuming their
authority (over the subject) but will not permit the real economic actor—the poor—to
possess the same construct. The world (authors) has belittled the individual who has
been a victim of artificial assumptions or, to say, “ignorance.”
3 Spectrum of Personal Construct: The Rational
The pure reason that is output of intelligence belittles the world and produces igno-
rance18 ; ignorance produces sorrow that finds joy in lamentation offering explanation.
Many such theories are lamentations as they explain but do not understand19 ; they
are specially acceptance of failure to predict the future.20 The rational expectation in
purity may predict only those events that have already taken place, as assumptions
of rationality use “reason.” Reason can dissect and analyze. It can artificially gener-
alize21 (fooled by randomness). It does not foresee the “nonhappened” that perhaps
can be solved “intuitively”22 and by “faith.”
Rationality: Rationality means having reasons that are pure and perfect. They
produce what is reasonable. A rational individual attempts to optimize the uses
16 It can be seen as failure of “Picture theory of Meaning” and use the language game in expressing.
Language makes expression possible and also limits the possibility of expression.
17 “There is incongruity between the official and actual stances on methodology. Such accepted
methods presuppose, for their validity and widespread use, the ubiquity of spontaneous events regu-
larities, while the significant social regularities of the sought-after kind have yet to be discovered”
(Lawson 1997).
18 Lock says “Since the mind, in all its thoughts and reasoning, hath no other immediate object
buts its own idea, which it alone does or can contemplate, it is evident that our knowledge is only
conversant about them” and “knowledge is the perception of agreement and disagreement of two
ideas” (quoted by Russell 2017, p. 637).
19 Sorrowful person finds joy in lamentation (Gibran, Secret of Hearts).
20 See also, “Historical fractures” (Taleb 2007); “This long history*** lasted a dozen centuries,
longer than the entire history of France, encountering the first Arab sword, the Greek language and
thought, all the heritage went up in smoke, as if it never happened.”
21 Artificiality of a bell-shaped probability curve (Taleb 2007).
22 See Table 11.1 “Trader and Scientific Approach” (pp. 192, Taleb 2007). See also Thaler and
Sunstein, (2009, Soft Copy) for other such cases of judgment.

of scarce resources. This is a simplistic and artificial definition, wherein decisions

are taken by axioms. This rationality is absolute and devoid of ethics and other
considerations that are natural to human society.
In the late nineteenth century ample literature cropped up on this weakest hangover
of the Rationalist Movement in Europe. It added considerations like relative ratio-
nality and, most importantly, bounded rationality. While relative rationality trusts
good or bad reasons, admissible or not admissible reasons, useful or not so useful
reasons, bounded rationality seems to put bounds on reasons by given information.
Bounded rationality argues and tries to explain by putting limits to unlimited
information, incorporating importance of time and space. It addresses complexi-
ties of the situation. The method finds solution to problems of decision-making by
“simple” arguments rather than complex mathematical structures (Simon 1957). It
offers a simple connect between the rational and so-called psychological aspects, as
it claims. It is maintained that bounded rationality is not a departure from economic
reasoning but an extension of actual rational behavior. It helps in taking a judgment
by a process identified as heuristic or proximal. It rejects untrue optimization that
relies upon unreal and constructed assumptions about knowledge, motto, gains and
losses, and beliefs about life as a whole. Bounded rationality points out the human
limitation to resort to rational behavior rather than declaring them to be much more
than rational. However, proponents of bounded rationality lament that humans prefer
rational behavior but can practice it only in a limited sense.
On a positive note, the concept of bounded rationality incorporates the idea of an
“adaptive toolbox” and heuristic that includes collection of rules23 that are simple
to implement and are adjusted as per time and space. It focuses on context-based
solutions that are “satisficing.” It is obvious that individuals respond to different
“space and time” differently. One can argue that bounded rationality is pure rationality
with some reservations posed by time and space that are reflected as “environment.”
It incorporates psychological plausibility by continuing cognitions that are emotional
as well as paying heed to social laws.
The two other competing as well as overlapping ideas are ecological and social
rationality, the outside worlds and social considerations, respectively. Therefore, the
theoretical individual, according to Gibran (2009), is the “martyr in this belittling
world, and a victim of ignorance.”
4 Spectrum of Personal Construct: The Extra Rational
The heart has its own reasons which reason knows not. It is a journey in multidimen-
sional sky that is the reflection of being—beyond linear time and space. Therefore,
what rationality cannot solve is solved by emotions—especially love. It corresponds
to the “Throbbing heart which is like a bird flying in a spacious sky of love” (Gibran
2009).
23 For examples of such other rules, see Thaler and Sunstein (2008).
Emotions: Seeing from a view of sapiens (humans) that ignores the power of
emotions is, sadly, short-sighted. The very name Homo sapiens, or the thinking
species, is misleading in light of the new appreciations and vision of the significance
of emotion in our lives that science now offers. Our personal values are expressed
in terms of emotions. They are representatives of cultural essence. Emotions are
not necessarily postcognitive. People can experience emotions without conscious
awareness and without cognitive mediation (Goleman 1996, 2006, 1996).
They are an enabling force that fills failures of intelligence. “It is like a book—in
whose pages one reads the chapter of happiness and misery, joy and pain, laughter
and sorrow” (Gibran 2009). There could be many more. We do not know the seat
of emotions in the physical body of humans but are sure that they give shape and
realization to different cognitive resources. They energize such resources. They are
the extrarational part of the rational, as nonlinearity is to linearity and as chaos
and catastrophe are to order. They are subjective to the objective. They influence
decision-making to the extent that the motto of taking decisions is governed by
emotions. Effective decision-making stems from emotional process. We all know
from experience, when it comes to shaping our decisions and actions, the “gut feel-
ing” counts every bit as much—and more than thought. We have gone too far in
emphasizing the value and importance of pure rationality. It is a surge of relief.
“When the heart becomes congested with secret, the eyes begin to burn from searing
tears, and the ribs are about to burst with the growing of the heart’s confinement, one
cannot find expression of such a labyrinth except by surge of relief’ (Ibid). Propo-
sition that ‘our deepest feelings, our passions and longings, are essential guides that
our species owes much of its existence to their power in human affairs, that power
is extraordinary: only a potent love urgency of saving a charioted child could lead a
parent to override the impulse for personal survival.’ Seen from their self-sacrifice
was arguably irrational (Goleman 1996, 2013). Human satisfaction comes in the
form of emotional experience. Psychology considers that emotions and reasons are
contiguous. Rationality does not produce solution; finally, it is found by emotions
that are supported by other sources of belief. Therefore, emotional intelligence is the
sum total of rationality, emotions, and sets of belief systems.
Emotions and beliefs are contiguous. Emotions are guided by belief systems that
are formed by past experiences—derived by history or fiction, cultural, social, or
personal values24 pertaining to the society one lives in. On the other hand, emotions
also guide belief system. Rational actors depend upon emotional belief, so to say.
Feeling is believing that as the evidence is given by emotion. The “influence of
emotions upon beliefs can be viewed as the port through which emotions exert their
influence upon human life” (Mercer 2010). Therefore, beliefs rely on internally
generated inference most of the time alien to the scientific judgment process. It
diminishes the risk that it may be wrong (Fiedler and Bless 2000).
24 Singh (2018).
Beliefs: Belief systems25 are like information stock. It may not be real but is repre-
sentative of human construct. It enables one to take judgments. Beliefs, as they
are formed, are also representative of group behavior in that each member acts in
accordance with the collective belief, although they may act individually.
A belief system may be formed by contradictory possibilities, absence of coher-
ence, and compartmentalization. It is a broken sequence and denial of linear logic.
Therefore, group of literature (true or false), vague and scientific history, religious
practices (atonements, rituals, ceremonies, penances, etc.), and commands of priests
and pundits all contribute to formation of beliefs. They also emanate from habits,
illogical, and intuitive practices. It may be argued that people think that they are acting
rationally but ultimately it comes to their belief system to take a judgment. Reasons
enable arguments but beliefs enable judgment. Beliefs are updated and refined on the
basis of new information.26 It is also argued that beliefs distort rationality. They are
found better predictors. One feels, therefore one believes; even if he says, “I think, I
believe.”
5 Spectrum of Personal Construct: The Holistic
The individual thinks like a poet and claims:

As a most enlightened person regarding the need of heart which is like a bird flying in the
spacious sky of love… It is like a vase replenished with the wine of ages that has been pressed
for shipping souls… It is like a book in whose pages one reads the chapters of happiness
and misery, joy and pain, laughter and sorrow (Gibran 2009).
A complete human being has emotions, reasons, and information. They have social
relations and considerations, perceptions, experiences, history, and literature. They
have a physical body and capacities and a location in geography and time. Some
momentary psychic experience is not denied. There are moments of mysticism or
cosmic consciousness—intuitive glimpses into higher realities for an immortal soul,
or aesthetic apprehensions of the evolutionary in human. He has the ultimate value—
cosmic love; in one aspect cosmic love is found all aspects of existence. There is
imagery to the symbolism of subliminal consciousness. There is symbolism and
simile. The list goes on. Therefore, it is both angelic and corporal.
The development of human being can be seen to have stages in which love plays an
important role. According to Freud’s psychoanalysis, there are stages of id, ego, and
super ego, which follow the principle of pleasure, reality principle, and the principle
of morality. “Id” contains drives and memories; it is impulsive. It may not be logical
or rational; actually it is fantasy oriented. It remains with the individual forever. Ego
25 “Do you recall his dreams and beliefs”; Gibran, Secrets of the Heart.
26 Theory of Partial Belief, Laplace’s Law of Succession and Bayesian Forecasting. “Hume’s account
of partial belief is an extension in a quite natural way of his account of non-partial belief. Partial
belief, according to him, is a consequence of the mind’s capacity to divide its force equally among
distinct alternatives” (Hume et al. pp 39–60).
is that part of human construct that is influenced by worldly knowledge, or it depicts

pragmatic approach. The id is chaotic while ego is reasonable. Superego includes
values and morals of the society. It also includes conscience. But it can be argued
that it is the “Pleasure Principle” that can be fundamental while the other two can
put some restraints (bounds).
There are, however, alternative systems of the construct of the individual that have
gone unattended in the tempest of occidental reasoning. We present only a very brief
account of the oriental systems—Indian and Islamic; and then we can decide if they
are apt to extend the agenda of personal construct to further detail. Indian Vedanta
System relies on the four important constituents of human construct [Sankritayan, R,
1944 (2017)]. They are buddhi (intellect), ahankara (identity), manas (memory), and
chitta (conscience).27 The buddhi mentioned as intellect slashes the object apart and
tries to analyze. It subdivides deeper and deeper.28 It knows only the material world.29
There has been tremendous development of knowledge derived upon capabilities of
the reason. But as it derives from and refers only to past, it can only analyze that
which has occurred in the past. It artificially uses the art of “Theories of Random
Numbers.”30 It looks at the past that is present (Gibran 2009).
Ahankara (identity31 ) is fundamental to existence as it is given by a particular
body capability, color, features, family one belongs to, power position, etc. It is also
governed by geographical location, religion, and the quest to be recognized.
Manas (memory32 ) only receives and does not create. It is a faculty of mind that
coordinates sensory impressions before they are presented to the conscience. Manas
is atomic, an instrument, a sense organ, always active, nonmorphological. It is based
on sanskara (cultural essence). Perceptive materials are conversed and analyzed with
the help of manas, hence it is a super-sense (Sharma and Vyas 2015). “It is like a vase
replenished with the wine of ages …looks at life as the spring looks at the winter”
(Gibran 2009). The chitta (conscience) has different meanings. It is pure intelligence
without memory. It is the source of all creation that we know by true and divine love.
27 These four divides can be extended to 16 and with further detail they can be extended to many more.
The discussion of “evolutes” refers to 25 (Sankhya); Yoga Sutra, referred to as Yogic Psychology
classified them under five heads, (Chatterji and Dutta 2018, p. 275).The Sanskrit terms used for
constituents do not have exact equivalents in English. The translations offered in parentheses are
the closest meanings).
28 Such divisions lose properties of undivided parts. Social Intelligence and intelligence of the mass
are different (See, Goleman 2006).

29 The theories in economics are dissection and explanations; therefore, this could be one reason
why they lack predictive ability.

30 Probability is principally a branch of applied skepticism, not as engineering discipline (Taleb
2007). Rhetoric can be constructed randomly, but not genuine knowledge (Ibid, p. 72).
31 However, the term ‘Identity’ means differently; the powerful moral idea that has come down to us;
the universal human psychology of thymus. The natural demand for dignity that gives us a language
for expressing resentments if such recognition is not forthcoming (Fukayama 2018, p. 163).
32 It is also translated as mind in Sankhya System. It is made up of parts and so can come into contact
with different senses simultaneously; however, the vaisheshika differs. They argue that the organs
cannot function simultaneously (Sharma 2003; p. 161).
The Arabic and Islamic psychology and philosophy of mind give details of the
body, mind, and soul.33 Beginning with Al-Kindi and Al-Razi, they consider that
mind is part of soul (Admonson and Porman 2015; Sharif 1963). The separation
of soul and body provides the ability to know things not perceptible with empirical
means and leads to common sense, imagination, and memory. Therefore, memory
goes beyond the body. Al-Kindi describes four types of intellect: one that is universal;
two, that gives the abstract idea of the world; three, that enables part of abstract ideas
to part of acquired but passive knowledge; and four, when it becomes active after
encountering worldly objects. Al-Razi talks of three souls—the rational or the divine
one, the animal that has placed in the heart, and the vegetative that has placed in the
liver. Obviously, in the view of the two, the soul and the intellect have varying
meanings; but they go beyond worldly reasons.
Al-Farabi, another known philosopher, talks of the soul that has triple functions—
being formal, efficient, and final cause (Davidson 1992) the potential intellect that has
capabilities to possess the basic axiom of thoughts and to receive all other intelligible
notions. The individual intellect when perfected can come closer to the agent intellect.
Individual intellect leads to the form of practical intellect that perceives the senses—
likes or dislikes, attractive or repulsive—which combined with imagination lead to
action.
Avicenna argues that common sense coordinates information with already
possessed impressions (past memory) in order to produce a unified picture (He calls
it a cognitive faculty) to help take decisions.34 He proposes a function of “estimative
faculty—waham” that enables all animals including humans to sense “nonsensible”
intentions that are intrinsic to the object. They are the extrasensible property. He also
acknowledges the existence of the faculty of intuition in addition to estimation. He
observes that there are people who excel without much prior experience empirically
or rationally. The third innate power of estimative faculty is recollection—memory.
For Avicenna, the cognitive faculties deal with practical and empirical issues, the
tradition—a credible source of practical decisions—comes into play a deterministic
role only through the approval of the soul (Davidson 1992; Inati 1996). The estimation
with cognitive facilities is responsible for fantasies and fiction in our dreams and
thoughts. Similar to the concept of “tendencies” (vasana),35 he speaks of the unused
ineligibles accumulated to agent intellect and exhibited as habits.
As a concluding remark to the excerpts mentioned in preceding arguments, it is
clear that simple assumptions of rationality, be it absolute, relative, or bounded, are
only axiomatic and produce only one benefit: they are simple and understandable by
syllogisms. No single source can enable decision-making.
33 These terms connote different sets of organizations, definitions and functions with reference to
different philosophers although, many a time, there are overlaps.

34 Avicenna has divided the inner self into five parts- Hiss-i-mustalaq, Hifz-i-majmuyi, Indrak-ila
shayri, Indrak-i-shaura and Hifz-i-maani. See Sankritayan (2017) p. 120.

35 The Bhagwat Gita.
6 Spectrum of Personal Construct: The Decision-Making
The literature on decision-making begins with the definition that a decision is an

oriented and a definite choice out of at least two options. It involves mental func-
tions such as memory, reasoning, problem solving, emotions, and other motivational
functions. Although it has acknowledged the influence of conscious and unconscious
factors limited to psychoanalytic sources, it does not incorporate the direct role of
beliefs, for they are not substantiated by scientific exercises. They deal with compo-
nents in terms of decision situation, decision-maker,36 and decision process. The
literature believes in the two basic premises–humans have limited information and
limited processing capabilities. The models usually describe the process in words
and avoid mathematical treatments.37
The naturalistic models are adaptive in nature and include situational aware-
ness. Analytical models are concerned with how decision-makers select a course
of action. They assume that people use combinations of simple decision rules to find
an option that meets the minimum requirements. Kahneman and Frederick (2002)
propose two alternative systems of processing the information—reflective system
logical and analytical, based on new information with substantial efforts deduc-
tively, slowly, sequentially, and consciously; and intuitive system, wherein infor-
mation is processed automatically, effortlessly, associatively, unconsciously, and,
often, emotionally. However, Evans (1984) proposed the same in different terms;
heuristic and analytical systems. The former is not directly governed by conscious-
ness, rapid information processing; the latter refers to the opposite. Heuristics in
decision-making have certain strategies, as it is referred. They include elimination
by aspect strategy and satisficing strategies, Relevant Que Strategy and strategy of
past experience (Tversky 1972; Ginerenzer et al. 1999).
Beresford and Sloper (2008) have given an account of descriptive approaches. The
information processing approach focuses mainly on adaptive decision-maker frame-
work when none of the alternatives is declared the best. This pertains to conscious
process. The prospect theory relies on making decisions involving risk or uncertainty.
The Theory of Reasoned Action and Planned Behavior link attitude and behavior
while making choices. Heuristics strategies are adopted to solve choice problems.
The role argued for a prospect theory of emotions in decision-making has mainly
two meta goals to meet: first, minimizing the experience of negative emotions and
second, maximizing the ease of justification to oneself and to the others (Bettman
et al 1998).
36 The ethical conduct, personal integrity, willingness to assume responsibility, courage, intellectual
skills, etc. deserve a mention..

37 The descriptive theories describe how people actually think, however, normative descriptions aim
at how one ought to reason. The first has the empirical validity and the second has suggestive mode.
The essence of Prospect theory38 is the mathematical model that tries to predict.
Kahnemann and Tversky (2013) presented decision-making under risk, since then
it has been developed and modified by economists who have been striving to refine
the mathematics of the model and by psychologists who have been interested in
understanding the psychological process.
The brief account of literature on decision-making clearly outlines that it is partial,
ad hoc, and artificially defines the human being assuming that they are given with
the understanding to work to optimize. The literature mainly deals with industrial
setups and not the day to day individual perception of development strategies. Again
it is objective, materialist, attempted universal, quantitative, easily transformable to
simple linear mathematics, and provides facilities to test them on ex post facto data
with axiomatic techniques and artificial assumptions. It does not “read the chapter of
happiness and misery, joy and pain, laughter and sorrow.” It is not a “surge of relief.”
It does not take into account the whole of the human construct that can produce a
piece of knowledge useful to predict the future. It does not incorporate the role of
belief systems in taking decisions. The belief system may be formed by contradictory
possibilities, absence of coherence, and compartmentalization. It is broken sequence
and linear logic. It ignores the stages of development in which the principle of
pleasure plays an important role (Freud). It ignores the role of “identity,” “memory,”
and “conscience” (Indian Vedanta system), as also of the “will” that is responsible
for desires and dislikes and the heart as the “ruling organ.” It also ignores intelligible
imprints that originate as sensible forms and are conveyed to the “imaginations.” It
rejects “felicity” (Al-Farabi) and ignores the role of estimation that can influence
and be responsible for fantasies and fictions in our dreams and thoughts (Avicenna).
7 Spectrum of Personal Construct: The Labyrinth
The world outside is dynamic and chaotic. It shows an aperiodic behavior that makes
long-term prediction impossible (Strogatz 1994). The system is inseparable. “When-
ever parts of system interfere, or cooperate, or compete, there are nonlinear inter-
actions. Most of everyday life is nonlinear and the principle of superposition fails
spectacularly” (ibid p. 2). So is the world inside. The policies derived from theoretical
conclusions overlook the whole construct of human being; which include a social
combination of complementary, contradictory, and parallel impulses; and produce a
chaotic and catastrophic surface where upon a deterministic point of optimal decision
becomes impossible. The solution to the complex, chaotic, and aperiodic behavioral
labyrinth is found in qualitative expression that reflects representativeness of the
38 The prospect theories use canonical and axiomatic approaches including Bayesian Probability and
other standard probability models. They assume unlimited capacity of cognitive power, rationality,
and unlimited supply of information. The beliefs, intensions, knowledge, and desires are often
artificially constructed. Sometimes influences like fatigue, stress, experience, and complexity of
task are also incorporated.
individual (ibid; p. 2). Therefore, it is easier to take the intuitive39 narration from the
individual and drawing aspects of concern. Such a futuristic data set is experimental
and is generated as immediate40 and intuitive judgments spurred by stimulants. This
leads to the question of “poetic logic” and finding solutions.
The individual’s narrations do not reflect the pictorial and simple meaning of the
expression, as they are metaphorical,41 figurative, and mythopoetic. It has tropes
and euphemism. Thus, poetic logic transcends primal and primal models of experi-
ence and takes into account the human sensorium, imaginations, and the innermost
construct that include vivid, livid, and hidden parts. It is a realization of the whole.
As a result, it proposes limitations to complete reliance on mathematical formula-
tion to understand.42 In this way, all knowledge could be one and is an interacted,
coordinated, contradicted, or concluded reality. Poetic logic has a far greater role in
creating, understanding, or analyzing quantitative data. It reflects limitations to the
representativeness of data.43 Therefore, for policy prediction to comply with future
aspirations, two different riddles have to be solved: first, to get a representative of
the whole, and second, to find quantities to represent qualities—the data question.
8 Finding Sweeter and More Gentle Dreams
It is maintained that the rationalist—positivist and postpositivist—designs of devel-

opmental paradigms have caused dissatisfaction of the masses for whom they were
created. The scientific paradigm not only failed to incorporate stakeholders, but also
lacked predictability and usefulness in the terms of the desired developmental course
that leaves the world as it was ever—the permanence of development. The reason
why this kind of knowledge could not solve social problems in futuristic mode lies in
ontological and epistemological beliefs and, in turn, on the methodological reliance
on objectivity of quantities and other optimization techniques. This is due to the
reliance only on a priory analytic and posteriori synthetic canons of inquiry.
39 ‘Space and time, Kant Says, are not concepts; they are forms of “intuitions”—looking at (Russell
2017, p. 642).
40 An emotive and whimsical judgment is immediate while well-considered and delayed judgments
are cognitive (Goleman 2013).

41 No theory formulated in language can ever penetrate the world of realty. It can, however, reveal it
serendipitously, through metaphor. Metaphor is a trace to poetic thinking, which constantly creates
connections among things. This is why metaphors and “metaforms” have such emotional power;
they tie people together, allowing them to express a common sense of purpose in an interconnected
fashion. Danesi (2004).
42 A rejection of Descartes mind and body and Leibniz arguments (Thilly 2005, pp. 281,376).
43 “I defend the relevance of fiction for social science investigation. Novels can be useful for making
some economic approaches—such as behavioural economics or signalling theory—more plausible.

Novels are more like models than is commonly believed. Some novels present verbal models of
reality. I interpret other novels as a kind of simulation, akin to how simulations are used in economics.
Economics can, and has, profited from the insights contained in novels.” Cowen (2005).
With the understanding of Scientifics, a complicated model of simulation can be

constructed and the ex post facto data44 can be raised using regular sampling designs
and analytics. Given the form of the world and axioms, they produce many results
and doubts continue despite the belief of existence of universal truth—a fantasy. It
is the denial of poetic logic. Pure reason that is output of only intelligence belittles
the world and produces ignorance by offering explanations—a lamentation.
The whole construct of human being includes wills, value systems, social relation-
ships, impulses,45 political affiliations, likes–dislikes, spiritual setting, and beliefs.
There are “momentary psychic experiences, moments of cosmic consciousness, and
intuitive glimpses into higher realities of an immortal soul or only aesthetic appre-
hensions.” In one aspect of cosmic love, we find all aspects. The basic guiding force
of human behavior is love that seeks pleasure, worldly knowledge, and moral consid-
erations come later (Freud). The “intellect” dissects, “identity” transports one’s own
definition of oneself, “memory” carts special characteristics cherished by gener-
ations, and “conscience” is the ideal—transcendental to time and space-universal
memory (Indian Yogic philosophy). The construct has a role of “will,” “desires and
dislikes,” “imaginations,” and “attainment of felicity.” There is a role of “fantasies
and fictions” and “dreams and beliefs” (Persian and Arabic contribution). In all, plea-
sure principle—angelic or corporal—plays a central role. Looking through heart is
a journey into the multidimensional sky that is the reflection of being beyond linear
time and space. The being is like “a vase replenished with the wine of ages that has
been pressed for shipping soul***** It is like a book in whose pages one reads the
chapter of happiness and misery, joy and pain, laughter and sorrow.” Taking judg-
ment by heart is “a surge of relief” that has no trivial solutions. Let the sweeter and
more gentle dreams than those one encounters in awareness rule as “lovers encounter
comfort and condolences in dreams” (Gibran 2009).
We conclude by way of making the following propositions:
P1 Axiomatic and ad hoc (a priori analytic and posteriori synthetic) discussions on
development add to explanations and not to understanding. The affected party
(individual) is kept out of the decision process by making artificial assumptions.
P2 The individual is rational and emotional. He has beliefs and identity. He has
cultural essence that is “filled with the wine of ages.” He has conscience that is
transcendent. It is worldly, cosmic, and mystic. The existence is holistic—both
physical and beyond.
P3 The decision frontier of the individual comprises interacted, coordinated,
contradicted, and concluded realities. It is in a state of flux, nonlinear, and
chaotic.
P4 It is easier and useful to deduce from the qualitative whole (pictorial whole) that
is a mythopoetic expression. A simple can be derived from the complicated,
static from dynamic, and partial from total.
44 The customary data raising, it may be argued, is imposed meaning by the researcher’s perception,
as the measure is artificially found by assuming the pictorial meaning.

45 For a complete review of such impulses, see Singh (2018).
P5 The individual seldom optimizes (satisficing or heuristic) and he cannot opti-

mize; it is the Principle of Pleasure (ecstasy) that governs his thinking and
actions in chase of happiness. It is fantasy oriented.
P6 It is through love that one can penetrate the other and the future. As “time and
space” are only intuitively known, therefore, future can be known intuitively or
as a loved one.
P7 A priori synthetic solution—the intuitive one—is possible and that can add the
subjective aspect if dealt carefully.
P8 A futuristic data set is experimental—generated as immediate and intuitive
judgment spurred by stimulants.
P9 A genuine strategy can be the solution point (possibly modal point) of deductive
and inductive judgments
9 A Postscript
Theories of development neglect the subtle concerns of common man who has beliefs
and dreams regarding pleasant and happy living. Such futuristic and loved concerns
(fantasies) need to be incorporated into the development discourse to combat devel-
opmental dissonance and, in turn, individual dissonance. But individual concerns
produce a complicated decision surface such that a realistic and unique solution is
not possible. Therefore, a deductive proposition for such concerns can be derived
from a whole that enables a solution to the chaotic and complex decision surface. It
is possible through intuitive and immediate judgments.
We present development of “Spiritual Tourism” in Varanasi Region; a simple
aspect of “Creative Economy”46 as a case study for the incorporation of subjectivity
to enable a pleasant development strategy. Although it deals with many aspects, only
one dimension—Development of Labor Force for religious tourism, is taken up here.
Methodology47 : It is maintained that a complex construct produces action tenden-
cies guided by dissonance as the difference or gap between aspirations/dreams
and realized (due to government endeavor) ones—read as development dissonance.
Solution to so arrived development dissonance leads to context-specific subjective
perception of development.
46 Singh (2019).
47 For the detail and other alternative exercises, see Singh (2019).
The Variables: We started with 17 aspects (defined as variables). Some found

no place in the discussion and a few new ones were added leaving us with 14 in all
(Refer Box 1) for carrying over.
Box 1: List of Variables

Adventure Sports (ASR) Cleaning and Waste Disposal (CGW)
Improvement in Connectivity (ITC) State of Sewage Water (SWG)
Online Booking Revenue (OBR) Balance between Activities (BCW)
Labor Force for Religious Offerings (LRO) Expansion of New Town (ENN)
Darshan Hassel Reduction (DHR) Source of Information (SIC)
Crowd Management (CUS) Safety of Tourists (STC)
Tourist Visit Purpose (WRP) Opinion about Varanasi Items (OBI)
The Data: The experiment was conducted on groups of stakeholders (emic and
etic) using images48 of developed sights as stimulants to trigger the whims. Time (τ)49
is defined as intuitive judgments. For the quantification of qualitative data, five coders
were asked to make entry for each variable using the content in the transcript and video
recordings from five groups for each stage of development. Variables were given
entries for measures. Tables contained columns on directly mentioned, metaphoric,
and euphemism, respectively. A weight of 3, 2, and 1 was assigned to each of them,
respectively. Recurrence was also marked to assign additional weights to each of
the columns. A point on scale of 1–5 was marked for the remaining columns of
Intentionality, “Situationality,” Coherence, Informative, and Acceptability to assign
additional weightage to the variables.
Deciphering Dissonance: Difference equations derived from various alternative
econometric models50 —universal characteristics, pleasing to many, and pleasing to
all—have been used to trace development dissonance. The graphs are plotted for
three cases of imagery, realized, and dissonance. The analysis of the graphs helps us
to arrive at policy prescriptions.
Results: Regression Results for Realization and Imageries are given in Tables 1
and 2 (Appendix). The Expansion Path51 for Dissonance is given in Table 3 and
graphs pertaining to Table 3 in the figures that follow (Appendix) (Figs. 1, 2, 3, 4, 5
and 6).
For Table 1—The Realization—it is apparent from the perusal of OLS estimate of
the three models that coefficients of LRO remain same and only levels of confidence
48 They are—1. Pertaining to a miserable condition (at time τ − 1); 2. As the developed scenario
(Govt. efforts)—the realizations (at time τ); 3. The future imagery (the Fantasies, at time τ;).
49 τ—it is pronounced as Tau.
50 Three models—Simple Linear, deflated by Square of Errors, Step wise Correction by relevant
variables are estimated using Two Estimating Functions—OLS and Best fit(Min. χ2 )—for the data
sets. Standardized yi = [Yi – Mean Yi]/SEYi , weighted by Distance Yi * [1 – (yi − mode)/range],
Yi * [1 − (yi – max of yi)/range] are estimated.
51 ABτ + C;A, B, C are the estimated parameters of expansion path derived from the Difference
Equation yτ = extracted from the estimated models.

Table 1 Labor Force for Religious Offerings (LRO): The Realization
Universal/Mean Kernel Index as per deviation from Mode Kernel Index as per deviation from Maximum
Standardized as per t-distribution Value Value
2
Individual OLS Estimate (Min. e ) Best Fit Individual OLS Estimate
Best Fit Individual OLS Estimate
Best Fit
Variable Estimate Variable (Min. e2 ) Estimate Variable (Min. e2 ) Estimate
Coefficient (t-stat) (Min. Coefficient(t-stat) (Min. χ2 Coefficient (t-stat) (Min. χ2 ***)
χ2 *) **)
LRO 0.99 (1394.59) 0.50 LRO 3.00(463.19) 2.99 LRO 3.00(58825.41) 1980261−2E
Secrets of the Heart: Adding Subjectivity …
C 3.55E-16(1.01E-13) 0.97 C −1.35(−0.99) 0 C −0.02(−1.02) + 09

LRO 0.99(1124525)−12.73(-3878.245) – – – –
Errorˆ2 0.003(813.85)
C
LRO 0.99 (977.51) LRO 2.99(333.93) LRO 3.00(52027.82)
ENH -0.0001(-0.09) ENH 0.0006(0.22) BCD 1.10E-05(0.15)
BCD 0.002 (0.19) WRP 0.003(0.46) ENH −3.05E-06(−0.07)
WRP 0.004 (0.49) CGD 0.001(1.29) WRP 1.44E-06(0.26)
C 3.55E-16(9.50E-14) C −4.62(−1.84) C −0.03(−1.01)
Source: Singh (2019). Culture and economic development: An experiment for deciphering dissonance. Unpublished thesis, BHU
*Initial Value for Min.χ2 is coefficient from Robust Equation, **Initial Value for Min.χ2 is coefficient from Deflated Equation***Initial Value for Min.χ2 is
coefficient from Deflated Equation
69
70
Table 2 Labor Force for Religious Offerings (LRO) The Image

Universal/Mean Kernel Index as per deviation from Mode Value Kernel Index as per deviation from Maximum Value
Standardized as per t-distribution
Individual OLS
2 Estimate (Min. Best Fit Individual OLS Estimate
Best Fit Individual OLS Estimate
Best Fit
Variable e ) Estimate Variable (Min. e2 ) Estimate Variable (Min. e2 ) Estimate
Coefficient (t-stat) (Min. Coefficient(t-stat) (Min. χ2 Coefficient (t-stat) (Min. χ2 ***)
χ2 *) **)
LRO 0.99 (1859.34) 0.16 LRO 0.003 (5.59) 0.003 LRO 5.95E-07(43574.46) 5.4E + 07
C 3.55E-16 (1.35E-13) −1.38 C 0.13(0.98) 0.4 C −7.74E-09(−1.02) −19256116
LRO 0.99 (1499371) – – – –
Errorˆ2 −16.98 (−3878.24)
C 0.002 (813.85)
LRO 0.99 (1303.35) LRO 0.003(4.73) LRO 5.95E-07(38539.17)
ENH −0.0001 (−0.09) ENH 0.0001(0.60) BCD 2.94E-12(0.15)
BCD 0.0002 (0.19) WRP -3.84E-05 (-0.52) ENH -8-18E-13(-0.07)
WRP 0.0003 (0.49) CGD -0.0001(-1.18) WRP 3.87E-13(0.26)
C 3.55E-16(1.27E-13) C 0.40(1.66) C -8.72E.09(-1.01)
Source Singh (2019). Culture and economic development: An experiment for deciphering dissonance. Unpublished thesis, BHU
*Initial Value for Min.χ2 is coefficient from Robust Equation, **Initial Value for Min.χ2 is coefficient from Deflated Equation
***Initial Value for Min.χ2 is coefficient from Deflated Equation
B. V. Singh et al.
Table 3 Labor Force for Religious Offerings (LRO): The Dissonance (Dissonance = Imagery −
Realized) Expansion Path: ABγ + C
Universal/Mean Kernel Index as per Kernel Index as per
Standardized as per t- deviation from Mode deviation from Maximum
distribution
2 2
Min. e2 Min. χ2 Min. e Min. χ2 Min. e Min. χ2
Imagery A 0.2 −1.64 0.40 0.40 2592 2591.96
B 0.99 0.16 0.003 0.003 5.95E-07 −5.4E + 07
C 0.2 −1.64 0.40 0.40 8.7E-09 −0.03
Realized A 0.3 1.98 2.32 0 2592.01 2593.98
B 0.99 0.50 2.99 2.99 3 0.50
C 0.3 1.98 2.32 0 0.01 1.98
Source Singh (2019). Culture and economic development: An experiment for deciphering
dissonance. Unpublished thesis, BHU
Fig. 1 LRO_Universal 0.7

(Min. e2 ) 0.6
0.5
LRO_IMA.
0.4
0.3 V4_Imagery
0.2 V4_Realized
LRO_REAL.
0.1 V4_Dissonance
0
-0.1 1 4 7 10 13 16 19 22 25 28 LRO_DISS.
-0.2
-0.3
Fig. 2
LRO_Satisficing_Many 6E+14
(Min. e2 )
4E+14
LRO_IMA.
2E+14
0 LRO_REAL.
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
-2E+14
-4E+14 LRO_DISS.
-6E+14
V4_Imagery V4_Realized V4_Dissonance

Fig. 3 LRO_Satisficing_All 6E+17

(Min. e2 ) V4_Imagery
4E+17 LRO_IMA.
2E+17 V4_Realized
LRO_REAL.
0
V4_Dissonan
1 5 9 13 17 21 25 29
-2E+17 ce
LRO_DISS.
-4E+17
-6E+17
Fig. 4 LRO_Universal 4
(Min. χ2 )
3
2
V4_Imagery
LRO_IMA.
1
0
V4_Realized
LRO_REAL.
-1 1 4 7 10 13 16 19 22 25 28
-2
V4_Dissonan
LRO_DISS.
-3
ce
-4
-5
-6
Fig. 5 LRO_Satisficing_Many 0.45

(Min. χ2 ) 0.4
0.35
V4_Image
LRO_IMA.
0.3
ry
0.25
V4_Realiz
LRO_REAL.
0.2
ed
0.15
V4_Disson
LRO_DISS.
0.1
ance
0.05
0
1 5 9 1317212529
Fig. 6 LRO_Satisficing_All 6E+17

(Min. χ2 )
4E+17
LRO_IMA.
V4_Imagery
2E+17
V4_Realized
LRO_REAL.
0
1 5 9 13 17 21 25 29
-2E+17 LRO_DISS.
V4_Dissona
nce
-4E+17
-6E+17
change that are seldom paid heed to in policy prescriptions.52 The negative inter-
cept term (as universal belief) maybe because of perceived initial negative percep-
tion53 of past happiness by the labor force. However, the intercept and the coefficient
change giving a different perception by the masses regarding the realized minimum
(positive—0.97 increased from zero) and desired rate (0.50 decreased from 0.99)
of efforts. When loved/pleasing strategies were tried, “pleasing to many” increased
stupendously to 3.00 and an unaffordable high when resorted to “pleasing to all.”
The alternative models (rows) do not make any substantial changes.54
The future image (dreams) depicts not quite different picture for the universal
beliefs (coefficients being 0.99 and intercept being zero), but it reduces to zero
when the two alternative strategies are attempted. Can we examine the proposi-
tion that to work as religious labor force is not a dreamed occupation? A policy of
shifting such laborers to other activities is required for a pleasant solution. A clearer
picture emerges when difference equations for realization, imagery, and dissonance
are plotted. It declines continuously for universal values and declines sharply for
pleasing strategies. Can we have a combination of the two strategies as a justified
solution?
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Poverty and Inequality
Toward Understanding the Nature
of Inequality in India in Terms
of Changing Perceptions on Its Sources
and Solutions
D. Narasimha Reddy
Abstract This paper enquires about changing perceptions of inequality in terms of

its sources, consequences, and the solutions that have been thrown up by the emerging
research findings on the issue. The conception of inequality is a dynamic one and has
seen many transitions. This paper surveys this transition starting from Aristotle to
Piketty and shows that the shift to multidimensionality of inequality, besides locating
the issue in historical context in terms of social, political, and economic dimensions
also calls for differentiation of types of inequality. The conventional wisdom that
inequality is the result of the differences in skills and talents is questioned and
other sources of inequality, mainly policies and politics, are brought into debate.
The relationship of inequality with growth, poverty, and labor market outcomes
is analyzed and it is shown that inequality is a constraint on growth and poverty
reduction. If one were to simplify the problem of inequality into two dimensions,
viz., inequality of opportunities and inequality of outcomes, perhaps there is no other
country in the world other than India which faces the inequality of opportunities
as deep, because of its centuries of history, and as wide because of its universal
nature across all regions of the country. India is one of the very few countries which
do not collect information on income through household surveys. This paper uses
many alternative data sources for India and shows that there is a clear phenomenon
of ‘hollowing out’ of the middle class. Fiscal policy, especially taxation, has an
important role in reducing inequality. But, reliance on fiscal policy only may not be
sufficient and there is a need for radical policy and political mobilization.
1 Introduction
In recent times, there has been growing evidence that ever since the unfolding of the
process of economic globalization in countries under neoliberal economic regimes
that witnessed retreat of the state and the entrenchment of privatization, there has
D. Narasimha Reddy (B)

University of Hyderabad, Hyderabad, India
e-mail: duvvurunarasimha@gmail.com

https://doi.org/10.1007/978-981-15-8265-3_5
80 D. Narasimha Reddy
been unbridled increase in inequality of income and wealth, even as large sections
of people remained poor and deprived. This has drawn widespread mobilization
and protests in many countries, especially in Latin America, correctives did bring
about positive changes in favor of better life for the marginalized and the working
class in general (Roberts 2012). In India, even as it is revealed that there has been
growing inequality of income and wealth, and even as it is increasingly clear that the
accelerated growth of the last few decades, instead of “trickling down” in an inclusive
way to the lower rungs of the society, it has actually been adding wealth to the top
rungs of the rich. There is a continued obsession with “growth”, and hardly any larger
debate on the ramifications of growing inequality on the prospects of progress of the
democratic polity that would ensure equitable and fair access to the fruits of growth to
people. The limited objective of this paper is to help inform the debate on the changing
perceptions on inequality in terms of its sources, consequences, and the solutions that
have been thrown up by the emerging research findings on the issue. Based mostly
on the review of recent literature and secondary sources of data, the presentation
of this paper is divided into five sections. The brief introduction is followed by
the second section that deals briefly with the changes in the conceptualization of
inequality. The third section refers to the changes in the perceptions about the sources
or drivers of inequality, which apparently are much against the conventional wisdom.
It also brings together the findings on the adverse effects of inequality. Based on
these emerging findings on the various ramifications of inequality, the fourth section
presents the trends in inequality in India. The last section is about the emerging
policy perspectives on containing inequality within reasonable bounds that would
make growth fair, inclusive, and sustainable.
2 Inequality: A Concept in Transition
The concept of inequality has changed over time. Amartya Sen asserts: “concepts
of equity and justice have changed remarkably over history, and as the intolerance
of stratification and differentiation has grown, the very concept of inequality has
gone through radical transformation …I should argue that the historical nature of
the notion of inequality is worth bearing in mind before going into an analysis of
economic inequality as it is viewed by economists today”1 (Sen 1973). In a compre-
hensive account of inequality from Aristotle to White (2003) brings out as to how
Aristotle conceptualized inequality in ethical framework, and how ethical consider-
ations continued to dominate the Classical school particularly J. S. Mill’s egalitarian
framework, only to be challenged by the framework of subjective methodological
individualism of the Neoclassical school. And again, it was the turn of Sen to revive
the normative ethical framework in discussing inequality in the context of well-being.
1 The reference “today” should be seen as 1960s and early 1970s around which it was written and at
which point the Pareto dictum that inequality changes but “stable in the long run” was still dominant
mainstream conception.
Towards Understanding the Nature of Inequality in India … 81
Mill differentiated between “earned” income, and property obtained from free use
of mind and body, and “unearned” income from rent. He was for equal distribution
of income by taxing land. Mill insisted on equality of opportunity and the role of
education in achieving it. By the latter half of nineteenth century, there emerged a
shift from the classical economics to neoclassical rational value-free approach, and
all ethical and egalitarian considerations were sought to be purged out. For Marshall
and J.B. Clark income distribution was to be seen solely in terms of marginal produc-
tive theory. “No matter how unequal the income distribution is, as long as it follows
the marginal productivity rule, it is a good and just income distribution. …with the
rise of Pareto and the ordinalist approach to welfare economics, this non-egalitarian
criterion comes to dominate mainstream economics” (White 2003). For Pareto, the
only basis for preferring a more equal income distribution over a less equal one was
“sentiment.” Interestingly, Pareto who was known for his theoretical contributions,
was also, perhaps, one of the earliest empirical researchers. In 1895, he conducted
an empirical study of the distribution of income in different European countries and
cities at different times in the nineteenth century and concluded distribution of income
was roughly constant across these times and places. His interpretation was that “the
income distribution may change over time, but it is remarkably stable,” and become
the Pareto Law. His proposition was that attempts to decrease inequality by redistri-
bution of income were futile in the long term (White 2003). Pigou, based on better
empirical evidence questioned Pareto’s findings and theory. But Pigou’s arguments,
since it was based on utilitarian approach, were vehemently dismissed as unscientific
by Lionnel Robbins (White 2003). And Pareto’s proposition that, changes notwith-
standing, income distribution would be stable in the long run, continued to rule as
the law for the neoclassical mainstream and to inequality and income distribution
were relegated as issues of not much importance in economics. But yet the growing
evidence of increasing inequality and deliberate efforts to ignore the same, remained
an embarrassment.
It is at this historical context in the career of inequality analysis, in the 1950s
Kuznet’s undertook a systematic analysis of interpersonal income inequality with a
particular focus on the behavior of the share of the upper income groups on the basis
of innovative sources of data.2 Kuznets used for the first time a combination of the
income tax returns (USA introduced income tax in 1913) and national income tables
for the USA, in the construction of which he played a pioneering role. He presented his
results in his famous presidential address, ‘Economic Growth and Income Inequality’
(Kuznets 1955) to the American Economic Association. According to his findings,
income inequality evolved along an inverted “U,” increasing in the initial stages of
development and narrowing later on, which has become the famous “Kuznets Curve”
or “inverted U” hypothesis of income inequality and economic growth relationship.
But in the existing cold war context of the 1950s, Piketty (2014) points out, some of
Kuznets observations that his finding would help to “keep the underdeveloped coun-
tries within the orbit of the free world” acted as a political weapon, and he was seen as
a bearer of good news in the face of the spectre of Marx’s proposition that dynamics
2 Part of this paragraph draws from Haque (2019).

of private capital accumulation inevitably lead to the concentration of wealth in ever

fewer hands, resulting in a kind of apocalypse of capitalism. Though there was hardly
any work on inequality in the mainstream economics at that time, Kuznets’ hypoth-
esis which in a way resonates with “Pareto Law” that changes notwithstanding,
inequality will be stable in the long run—came to be treated as an empirical anchor
for the neoclassical a priori proposition. Thus, “Kuznets Curve” came as an ideo-
logical boost to the mainstream economics profession which hastened to convert it
as a “natural law” of development and distribution (Lee and Gerecke 2012).
The irony is that Kuznets’ more circumspect and cautious remarks were totally
ignored. Kuznets in his lecture did caution that his proposition was of speculative
nature based on “5% empirical information and 95% speculation, some of it tainted
by wishful thinking.” He went on to emphasize that inequality was much larger
issue and closed his lecture with the following words: “Effective work in this field
necessarily calls for a shift from market economics to political and social economy”
(Kuznets 1955, p. 28). Mainstream economics, instead of initiating new research
with a broader framework suggested by Kuznets, used his findings as settled conclu-
sions and propagated the notion that with the turnaround from underdevelopment
to development, growth would bring about decline in inequality and hence “growth
should take the driving seat and distribution the back seat” in economic develop-
ment (Lee and Gerecke 2012). In the mainstream neoclassical economics, the place
accorded to research on inequality has since been virtually closed. Though die-hard
mainstream may hold on to it, the impact of over three decades of globalization
with growing market orientation through deregulation and privatization, there has
been relatively high growth in most of the developed and in the large emerging
economies, but there was no sign of inequality wearing off in the latter stages of
development. On the contrary, there has been growing evidence that income dispar-
ities within countries have been on the increase, and in many cases, to the levels
inconscionable. The paradox is that multilateral agencies such as the International
Monetary Fund, which promoted the neoliberal agenda across countries, are the
very agencies that are sponsoring extensive research on the impact of inequality
and policy interventions to overcome the same (IMF 2007; Oxfam 2017a). Begin-
ning with 2000, there has been a great spurt in research on various dimensions of
inequality. But the real breakthrough in terms of methodology in the true Kuznetsian
spirit came with Piketty: “…no one has ever systematically pursued Kuznet’s work,
no doubt in part because the historical and statistical study of tax records falls into
a sort of academic no-man’s-land, too historical for economists and too economistic
for historians. That is a pity, because the dynamics of income inequality can only
be studied in a long-run perspective, which is possible only if one makes use of
tax records” (Piketty 2014, p. 17). By emphasizing that inequality is complex and
multidimensional, Piketty’s work liberates inequality research from narrow economic
confines and orients toward understanding capital and power relations by drawing
from wide range of information sources including income and wealth accounts,
household income and wealth surveys, fiscal data coming from tax sources, inheri-
tance, wealth data including wealth rankings, and of course, national income data.
In broadening the scope of inequality research “…it makes one think about the
overwhelming cultural-ideological-economic-political complex that power of wealth

creates which conditions the public to emulate values that make people band together
any threats to possession of wealth, however unequal it might be.” (Piketty 2017,
p. 545).
The shift to multidimensionality of inequality, besides locating the issue in histor-
ical context in terms of social, political, and economic dimensions also calls for
differentiation of types of inequality. Conventionally, the focus has been on the func-
tional and interpersonal distribution of income. In the classical political economy,
including Marx, the emphasis was on income and its functional distribution among
social classes based on their role in the production system as workers, capitalists,
or owners of land receiving incomes in the form of wages, profits, and rents. While
functional classification still assumes continued importance, there was a shift in
emphasis in the neoclassical period toward interpersonal distribution of income,
which overtime has come to assume significant importance in public policy both
for the purposes of measurement of inequality (UNCTAD 2011), and for public
intervention for taxation or public fiscal transfers. While both in the functional and
the personal distribution, the focus has been on the outcomes, viz., income and
wealth, which are also seen in vertical distribution at different levels. The growing
inequalities, and along with it certain social classes or groups suffering persistent low
income or wealth in spite of overall growth, have brought the dimension of inequality
of opportunities or the horizontal inequality to the fore in recent times. Horizontal
inequalities refer to inequalities between groups with specific characteristics that
their members and the others recognize as important aspects of their identity. These
groups could be defined by culture, gender, ethnicity, religion, race, caste, geographic
location, and age, among other characteristics. These are the results of systematic
discrimination and exclusion, and they can prevent individuals within marginalized
groups from achieving their full potential, and in contributing to society’s prosperity.
Horizontal inequalities manifest themselves in unequal opportunities and outcomes
across socioeconomic, political, and cultural dimensions (UNDP 2013, p. 27).
3 Changing Perception on Sources of Inequality
The broadening of the scope of research on the multidimensional nature of inequality

has also resulted in questioning the conventional wisdom that inequality is the result
of the differences in skills and talents. For over three decades, it was argued that
income inequality in the USA centered on the dispersion of wages and the increased
premium for skilled or educated workers, due to varying skill-based technological
change and globalization. But research in recent years has brought out that much
of the inequality is due to shift of income and wealth to the very top 1 to 10%.
“Stories based on the supply and demand for skills are not enough to explain the
extreme top tail of the earnings distribution; nor is it earned incomes” (Alvaredo
et al. 2013). Piketty did emphasize the role of politics and policy: “One should be
vary of any economic determinism in regard to inequality of wealth and income. The
history of the distribution of wealth has always been deeply political, and it cannot
be reduced to purely economic mechanisms” (Piketty 2017, p. 545). The Economist
(2014), supposed to be largely on the mainstream path, also endorses by pointing
out that “skill-based technological change” or “superstar economics” are incomplete
explanations of rising inequality, and they may actually leave out the more interesting
half of the story.
Stiglitz (2015) discussing the origins of inequality points out that during the
eighteenth and nineteenth centuries, there were two views on inequality, one was
the Marxist view that attributed it to exploitation and market power and the other
was neoclassical view based on their marginal productivity theory of distribution
attributing to the differences in productivity linked earnings. In the late nineteenth
and the twentieth centuries, the concern about inequality was linked to monopoly
capital. He points out that today’s capitalism is different, and that USA “inequality
is not, for the most part, the result of economic forces. It is not, in this sense, the
result of inexorable economic laws” (Stiglitz 2015, p. 427). But it is because of
policies and politics, and much of the rents are derived by using political influence in
land grants, modification of zoning of urban land, preferential provision of tax laws,
giving away of country’s natural resources and in the financial sector, insider trading
and sophisticated front running, fees for credit/debit card monopolies (Stiglitz 2015,
p. 432). Stiglitz feels that the “real issue is not capitalism in the twenty-first century,
but politics in the twenty-first century.” Under the neoliberal regimes, state acts as
the agency to shift incomes from citizens to the capital (Baker 2014). A study of
inequality in India blames squarely the policy flaws as the source (Shetty 2018).
The World Inequality Report 2018 (Alvaredo et al. 2018) brings out that in recent
decades, especially since 1980s, income inequality increased in almost all regions
of the world with different speed, ranging from the lowest in Europe to the highest
in the Middle East. Role of national policies and institutions significantly influenced
income inequality. By 1980s, the postwar egalitarian era came to an end in most of
the countries. Globalization and the ensuing neoliberal regimes witnessed extensive
shift toward deregulation and privatization. Tax systems grew less progressive and
declining share of public investment brought about massive educational inequali-
ties. Between 1980 and 2016, top 1% captured almost 50% of the growth in income.
Increasing economic inequality has been largely due to unequal ownership of capital.
Increasing privatization and income inequalities fuelled rise in wealth inequality.
Since 1980s, there have been large transfers of wealth from public to private owner-
ship. Between 1970 and 2016, the ratio of private capital to national income increased
from about 2 to 3.5 to 4 to 7 across countries. In developed countries, increase in
public wealth was negative or zero, and the ratio of net public wealth to net national
income turned negative in the USA and UK (Alvaredo et al. 2018).
Arrow et al. (2000) suggest that growing inequality is due to the demise of egal-
itarian concerns in public policy and refer to three sources of the demoralization of
the egalitarian project in the USA. First is the moral dimension, i.e., the concept of
fairness, which no longer enjoys consensus on what it entails and therefore does not
provide much guidance in egalitarian support. Second is the shift in public knowledge
of causes of inequality. Poverty and inequality, once considered systematic impedi-

ments such as discrimination and class bias in schooling and employment, are now
sought to be explained by either cultural or genetic factors. The third reason for the
demise of egalitarian consensus is the shift in public understanding of the underlying
causes of inequality, seen simply as immune to public policy to improve employ-
ment, training and expanded education. A study on rising inequalities in Asia points
to the inequality of opportunities in the form of discrimination and social exclusion
as the main source of inequality (ADB 2012). Corak (2013) draws attention to the
phenomenon of the “The Great Gatsby Curve”—more inequalities arising due to
less mobility across generations. In a more polarized labor market like that of the
USA, the substantial rise in the income shares of the top 1% will result in access
to high quality of human capital investment in their children. The intergenerational
transmission of employment and wealth would mean higher rate of transmission of
economic advantage to the top and more deeper inequality.
One of the main dimensions of contemporary political economy is the emer-
gence of finance capital and the complex role of finance, property (especially, real
estate) and the avoidance of taxation as the drivers of inequality. According to the
Organisation for Economic Cooperation and Development (OECD), the off-shore
registration of companies in low-tax jurisdictions is estimated to cost $240 billion
annually, equivalent to 4–10% of global corporate tax revenue, to the treasuries of
G-20 nations (Jones 2017). There is growing evidence that current levels of extreme
inequality exceed what can be justified by merit in terms of talent, effort, and risk
taking. Jacobs (2015), in a very significant paper that challenges the merit as the
source of inequality, reviews several sources of extreme wealth through an analyt-
ical framework known as “the ladder of demerit.” The six rungs of the ladder from
higher to lower—consists of crime, cronyism, inheritance, monopoly, globalization,
and technology. The higher rungs are clearly not meritocratic. The lower ones, it
is pointed out, reward talented people multiple times what can be justified based
on merit. By drawing empirical evidence largely from Forbe’s list of billionaires,
he provides a tentative indication of the relative importance of each rung: “Fifty
percent of the world’s billionaire wealth is found to be non-meritocratic owing to
either inheritance or a high presumption of cronyism. Another 15 percent is not meri-
tocratic owing to presumption of monopoly. All of it is non-meritocratic owing to
globalisation. By contrast, crime and technology are found to be negligible sources
of extreme wealth” (Jacobs 2015). Monopoly rents from sectors such as telecom-
munications, air travel, and broadcast frequencies fuel excess returns to owners and
shareholders at the expense of the rest of the economy (Jacobs 2015; Oxfam 2017;
Oxfam 2018). A study on the sources of wealth in India finds a similar pattern: “Out of
India’s forty-six billionaires in 2012, twenty had drawn their primary wealth (at least
originally) from sectors that can be classified as ‘rent thick’ (real estate, construc-
tion, infrastructure or ports, media, cement, and mining). The remaining twenty six
billionaires had drawn their primary wealth from ‘other’ sectors (IT/software, phar-
maceuticals and biotech, finance, liquor and automotives, and so on). Overall, 43%
of the total number of billionaires, accounting for 60% billionaires’ wealth in India,
had their primary sources of wealth from rent-thick sectors” (Gandhi and Walton
2012).
3.1 Adverse Impact of Inequality
There is growing evidence on the adverse consequences of rising inequality. Some

of the early studies like that of Berg and Ostry (2011) provide evidence as to how
inequality could undermine growth process and its sustainability. Their findings show
that “growth spells” are likely to be shorter in countries with higher inequality, and
reduced inequality and sustained growth may thus be two sides of the same coin.
Stiglitz (2012) supports these claims by showing that income inequality is associated
with unstable economies and unsustainable economic growth. Rajan (2010) argued
that the 2008 financial crisis was a consequence of high-economic inequality. His
proposition was that as the inequalities increased the U.S. consumers in the lower
rungs of income reacted to a decrease in their permanent incomes since the early
1980s by reducing saving and increasing borrowing. The debt-driven consumption
demand could not be sustained after a while, resulting in a financial bubble creating
the crisis. An extensive review paper of the IMF is devoted to the studies sparked off
by these findings (Treeck and Sturn 2012). There have been a number of studies on
the impact of inequality on labor markets. For instance in a major collection of studies
on labor markets, institutions, and inequality, Berg (2015) shows that between the
early 1990s to the early 2010s, except in Latin America and some African countries,
inequalities increased in most of the regions, including China and India. Jaumotte and
Buitron (2015) report a rise in inequality in labor markets in advanced economies,
with particular concentration of incomes at the top of the distribution. During the
same period, there was erosion of labor market institutions, decline of unionization,
and decline of minimum wages. Interestingly, it is also shown that there exists a
strong negative relationship between unionization and top earners’ income shares.
Lanker et al. (2019) using data from 164 countries comprising of 97% of the
world’s population presents a scenario of global poverty from 1981 to 2030. The
findings show that declining income inequality is likely to be more effective in
reducing poverty than rise in growth rate per se. It also finds that it would be diffi-
cult to achieve the Sustainable Development Goal-10 of reducing global poverty
to 3% of the population by 2030 without addressing reduction in inequality. UNDP
(2013) examining inequality from the perspective of well-being brings out the adverse
consequences of growing inequality. It finds inequality undermines development
by hindering economic progress, weakening democratic life, and threatening social
cohesion. Inequality, it is argued, is not only intrinsically unfair, but it makes achieve-
ment of widespread well-being difficult, if we include not only material but also
relational and subjective well-being. “Increases in income inequality over the last
20 years have been largely driven by broad globalisation, but domestic policy choices
have played an important role too” (UNDP 2013).
4 The Indian Context3
If one were to simplify the problem of inequality into two dimensions, viz., inequality
of opportunities and inequality of outcomes, perhaps there is no other country in the
world other than India which faces the inequality of opportunities as deep, because of
its centuries of history of discrimination, and as wide because of its universal spread
across all regions of the country. The inequality of opportunities was the primary
challenge with which the new Republic of India came into existence in 1950 and
the Constitution did engage with the issue and addressed it with the world’s first
comprehensive provisions of affirmative action. While the progress on the desired
lines has been acceptably limited, there exists a system of Directive Principles of
State Policy (DPSP) by effective implementation of which could be faced upto a
certain extent, if there is political will. The inequality of outcomes was expected to
be taken care by the strategy of growth with distributive justice in tandem with DPSP.
The available evidence does show that the strategy which was to a large extent the
framework for policies and programs, though was not up to the expectations, in spite
of relatively low levels of growth did bring down inequality for the first three decades
(Reddy 2019). However, with the early winds of liberalization in the 1980s and a
complete regime change toward neoliberalism and globalization since early 1990s,
there has been unbridled surge in inequalities in income and wealth with exasperating
impact on inequality of opportunities as well.
India is one of the very few countries which do not collect information on income
through household surveys. And hence it has rightly earned the snide remark that
India has entered the digital age without any surveys for collecting income data from
households (Chancel and Piketty 2017). For quite some time, consumer expenditure
data based on all-India consumer household expenditure by the NSSO served as the
proxy for income inequality estimates. But it is well known that consumption expen-
diture as a proxy for income would be gross underestimation of income especially of
the higher income groups. Notwithstanding these limitations, the consumption Gini
as a proxy for income did bring about one thing, that is, a tendency for inequality to
decline in the pre-liberalization era from mid-1950s (0.35) to mid-1970s (0.30) but
started rising later to 0.33 in 1993–94, and further to 0.37 in 2011–12 (Mahendra
Dev 2017, Barbosa et al. 2016). In the later period, the consumption expenditure gap
between different consumption classes also showed an increase. For instance, the
share of top 10% in the total consumption expenditure increased from 27% in 1983
to 33% in 2011–12.
The only other source of household income data is the India Human Develop-
ment Survey (IHDS)4 available since 2005. Though IHDS data do not cover the
entire country, the sample size is considered fairly large enough to provide indicative
measures of distribution of income. The IHDS results showed income inequality of
0.54 Gini in 2004–05, and it further increased to 0.55 by 2011–12. The IHDS data
3 This section draws partly from the author’s joint paper on a larger theme (Haque and Reddy 2019).
4 IHDS has been jointly organized by researchers from the University of Maryland and the National
Council of Applied Economic Research (NCAER), New Delhi.

act as a shock to the comfort with which the consumption expenditure based Gini
was used as a proxy to show that inequality in India was very low. Now it is clear
that India is in the highest income inequality zone, and the current estimates show
that income inequality is the second highest in the world next only to South Africa
and some Middle East countries (Milanovic 2016; Alvaredo et al. 2018).
For the estimation of household wealth in India, the only source available as of now
is the NSSO decennial All India Debt and Investment Survey (AIDIS). However, there
are some measurement issues, comparability problems, under-reporting of wealth,
under-sampling of the super-rich, etc., which point to the limitation of the data
(Jayaraj and Subramanian 2006; Anand and Thampi 2016). Yet the data do help in
capturing the broad trends, and the datasets are put to extensive analysis of inequali-
ties of not only of wealth but also income over a period across different social groups
and urban–rural areas (Anand and Thampi 2016; Vamsi 2010). The AIDIS data on
wealth reveal that the level of inequality which was already at a very high level (Gini
0.65) by mid-1990s, has steeply increased since the middle of the first decade of
2000s to reach the extreme level of 0.74. The wealth shifts have been increasingly
toward upper deciles: “Considering wealth inequality by deciles revealed that only
the topmost decile increased its share in asset ownership after 2002… this trend
of wealth consolidation has worsened since then, and narrowed to the top 10% and
perhaps even lower; by 2012, the top 5% alone owned half of the wealth” (Anand and
Thampi 2016). This is corroborated by the other sources, such as Forbes’ Indian Rich
lists, according to which the wealth of the richest Indians that it reported amounted to
“less than 2% of national income in the 1990s, but increased substantially throughout
the 2000s, reaching 10% in 2015, and with a peak of 27% before the 2008–09 finan-
cial crisis” (Chancel and Piketty 2017). A more interesting and revealing aspect is
the demystification of the notion of talent and risks that are widely propagated as the
sources of high income and wealth. As pointed out earlier, out of India’s 46 billion-
aires in 2012, 20 had drawn their primary source of wealth (at least originally) from
sectors that can be classified as “rent-thick” (real estate, construction, infrastructure
or ports sectors, media, cement, and mining) (Gandhi and Walton 2012).
The major breakthrough in the analysis of inequality comes from Piketty’s
pioneering efforts along the path set by Kuznets in utilizing innovative sources of data
and simplified methods of presentation of the results. In the case of India, income
tax data since 1922,5 the NSSO consumption expenditure survey data, the National
Accounts data, the IHDS income, and consumption data and the UN statistics popu-
lation data are utilized to estimate the levels and trends in income inequality (Chancel
and Piketty 2017; Alvaredo et al. 2018). The data enable long-term analysis right
from 1922 to 2013–14, and bring as to what difference that a regulatory regime of
growth with distributive justice in the prereform period could make compared with
the neoliberal regime with the market forces and private profit seeking as the main
driving forces of growth. Table 1 shows that there was actually an increase in the share
of bottom 50% of the adult population in the national income from 19% to 24% in
the first three decades from mid-1950s to mid-1980s. And the middle-income group
5 In India, income tax was introduced in 1922.

Table 1 Changes in income of different classes as a share of GDP (%) in India

Income Group Mid-1980s 1982–83 2000 2013–14
Top 10% 40 30 40 55
Middle 40% 40 46 40 29.6
Bottom 50% 19 23.6 20.6 14.9
Table 2 Share of different

Income group Before Liberalization After Liberalization
groups in the total national
1951–1980 1980–2014
income generated in India:
before and after liberalization All 100 100
(in percentages) Top 10% 24 66
Middle 40% 49 23
Bottom 50% 28 11
Source Chancel and Piketty 2017
too experienced an increase in the share while the share of the top 10% declined
from 40% to 30%. But the trend was completely reversed since mid-1980s with all
the increase in the income moving up to the rich top 10% while rest of the population
experienced sharp decline in the share especially since the early 2000s.
Table 2 captures the growing inequality of incomes during the three decades under
the neoliberal regime compared with the three decades of the prereform period.
What is striking is that not only that all the rise in income was shifting to the top
10% or the steep decline in the share of the middle class from about one-half of the
national income in the first 30 years to less than one-fourth in the later period. The
classification of ‘middle 40%’ includes a substantial proportion of ‘lower middle
class’ and a thin section of a relatively a rich urban middle class that enjoyed the
benefits of the globalization. Thus, it is a clear phenomenon of “hollowing out” of the
substantial section of the middle class as well. It is widely believed that it is the middle
income group that helps to boost the demand and sustain economic growth. It would
be interesting to see how the middle-income group is faring in China in comparison
with India. Table 3 shows the pace of growth of the adult per capita income of different
income groups and their respective shares in the total income generated during the
period between 1980 and 2014 in India and China. China’s overall per capita income
during the period was three to four times higher is not surprising. But the cause for
concern is that top 10% India has been appropriating two-thirds of the total income,
leaving only one-third to the rest of the 90% comprising middle- and bottom-income
groups, which certainly a case of extreme inequality in income distribution, while
the China’s story seems to the reserve with the top 10% getting less than one-third
of the total income generated during the period. What is significant is that in China
the middle 40% could get a share of 43% which is a substantial support for sustained
demand and growth, while India’s middle group ends with 23% which poses a serious
question on the possibility of future sustained growth.
Table 3 Adult Per Capita Income Growth and the Share Captured from the Growth of Income:
1980–2014 in India and China (in percentages)
Income Group Growth of Income Share Captured From
Growth of Income
India China India China
Entire adult population (100%) 187 659 100 100
Top 10% 394 1074 66 29
Middle 40% 93 615 23 43
Bottom 50% 89 312 11 13
Source Chancel and Piketty (2017) and Alvaredo et al. (2018)
In spite of the methodological improvements by way of accessing innovative

sources of data and novel ways of analysis, the unraveling of the social dimensions
of inequality of outcomes and opportunities in India still remains relatively little
explored. Though the AIDIS data provide certain broad trends on the social dimen-
sions of inequality of consumption expenditure and to an extent wealth, the income
dimension remains a dark area. Neither income tax data nor National Accounts could
help in this regard. Collection of the comprehensive income data either as a part of
the present NSSO surveys or through separate explicitly designed surveys becomes
an urgent imperative for deeper understanding of the nature of inequality in India.
In recent years, there has been increasing number of studies on inequality in India.
There are special issues of journals, and focused thematic reports with a compre-
hensive collection of studies, like, for example, India Social Development Report
2018 with a theme “Rising Inequalities in India,” (Haque and Reddy 2019). The
complexity and the spread of deep rootedness of the nature of inequalities in India
could be seen from the evidences brought as attempted to bring together in this
report, in terms of differences by gender, interstate and intrastate, rural–urban, agri-
cultural—nonagricultural, intra-agricultural and in access to employment, education
and health facilities. And yet there is no resonance of the concern among the people
and politics. There appears to be persistence of a false hope that adding a prefix
“inclusive” to each program and depicting every decimal increase in growth rates
as development could carry the day. There is still obstinate resistance to recognize
the deep damage the growing inequality does to the social fabric of the country,
and hence hardly any effort to face it head-on. The Government of India’s perfor-
mance in terms of efforts at reducing inequality could best be summed up in the
following observation: “In 2015, the leaders of 193 governments promised to reduce
inequality as part of the Sustainable Development Goals (SDGs). Without reducing
inequality, meeting the SDG to eliminate poverty will be impossible. Now Devel-
opment Finance International and Oxfam have produced the first index to measure
the commitment of governments to reducing the gap between the rich and the poor.
The index is based on a new database of indicators, covering 152 countries, which
measures government action on social spending, tax and labour rights—three areas
found to be critical to reducing the gap. This preliminary version of the Commitment
to Reducing Inequality (CRI) Index finds that 112 of the 152 countries surveyed are
doing less than half of what they could to tackle inequality. Countries such as India
and Nigeria do very badly overall, and among rich countries, the USA does very
badly. At the same time, countries such as Sweden, Chile, Namibia and Uruguay
have taken strong steps to reduce inequality” (Oxfam 2017, emphasis added).
The dualistic nature of Indian society, perpetuated by the neglect of Dalits,
Adivasis, and ethnic minorities, inequality in the distribution of education and health
care and lack of these facilities in rural areas where the poor are concentrated,
disguised unemployment, and low-labor productivity in agriculture, high incidence
of open unemployment in urban areas, slow pace of growth of rural infrastructure
and nonfarm activities, and above all inappropriate choices of investment, technology
and policies come in the way of balanced and egalitarian social and economic devel-
opment. Besides, the major challenge is the income and wealth inequalities that have
been surging at an unprecedented pace. Unless India’s policymakers come to grips
with these problems, there will continue to be large pockets of poverty, high degree of
economic inequality as well as continued marginalization of some social and ethnic
groups. Political inequality among various social groups may further accentuate the
problem, because unequal distribution of control over resources and of political influ-
ence would perpetuate institutions that protect the interests of the most powerful, to
the detriment of the have-nots.
5 Policy Perspectives
Ever since the notion that inequality is only a transitory phenomenon and that it
would wither away with growth and development is challenged, there has been a
range of measures that have been commended as a part of the policy interventions,
including policy shift that would envisage more space for state in the affairs of the
economy. Fiscal policy assumes highest priority, followed by strengthening of labor
market institutions. And of course, a kind of precondition for their effectiveness is
social and political mobilization and a broad consensus against inequality. The fiscal
measures suggested to reverse the growing inequality range from steeply progressive
income taxation, taxes on wealth and estate duties, increased public expenditure on
social goods such as education and health, fiscal transfers such as universal social
security, basic income transfers, and so on (Piketty 2014; Baker 2014; IMF 2017a;
Milanovic 2017; Oxfam 2018).
A study of the impact of tax and expenditure policies with a sample of 150
countries for the period between 1970 and 2009 (Martinez-Vazquez et al. 2012)
shows that progressive personal income taxes and corporate taxes reduce income
inequality. But it also found that the impact of corporate taxes eroded in open global-
ized economies. Interestingly, with the entrenchment of neoliberalism between 1990
and 2009, the net effect of tax policies was to increase inequality by 1.53 points of
Gini, but it was moderated by political compulsions of welfare expenditure policies
that brought a decrease of inequality by 0.97 of the Gini. However, with the back-
ground of decades of fiscal policies that prioritized fiscal consolidation at the expense
of social expenditure and progressive taxation, the shift to progressive fiscal policy
becomes challenging (UNDP 2013). There have been steep cuts in corporate taxation
in the name of making domestic economies attractive for capital. Globally, average
corporate tax rates were reduced by almost half from 49% in 1985 to 24% in 2019.
For instance, in recent years, corporate tax in India has been reduced from 35 to 25%.
Further, there has been a steep decline in income tax rates and tax burden (Shetty
2018). Since 1960s, countries that witnessed largest reductions in marginal income
tax rates are also (like USA, UK) countries that have experienced the largest increase
in top incomes, but there is no evidence that reduced tax rates increased growth rates.
Interestingly, it shows that high-income earners respond to lower top tax rates, not
by increasing productive work effort as pointed by the standard supply-side story but
instead by finding ways to extract a larger share of economic pie at the expense of
others in the economy (Saez 2017). In India, the marginal rates of income tax which
reached a peak of over 75% in the early 1970s declined to about 60% by 1990, and
since then it has been reduced down to 33% which is much lower than that of most
of the developed countries.
There are two major challenges to the shift toward more progressive taxation
measures to reverse the process of growing inequality. One is the need for political
commitment to overcome the resistances to bringing back progressive income taxa-
tion from the present comfort of the rich which is used to the neoliberal low tax
regimes. The second is an innovative restructuring of the entire income tax system
that internalizes the emerging knowledge on the sources of inequality, which means a
progressive tax system that differentiates “earned income” from “unearned income”
or “rents,” that which recognizes the role of inheritances in aggravating inequality,
that which responds to the need for plugging the loopholes in the international tax
system in which MNEs operate, and that which is designed with appropriate insti-
tutional mechanisms, both at the national and international levels to negotiate and
implement the shift.
As pointed out earlier, the present research on sources of inequality has also
thrown up new thinking on the concept of “income” and “wealth” and to differen-
tiate “income” and “wealth” by their source for treatment of regulation as well as
taxation. There is growing consensus that income from labor and income from capital
should be differentiated and taxed differently. With the exception of the salaries and
bonuses of employees like investment managers, most of the income from wages and
salaries should be treated as “earned income” and subjected to relatively less steep
rates of income tax. Most of the earnings from capital, with some exceptions, should
be treated as “unearned” income and subjected to steeply progressive taxation. It
is argued that major unearned income in the form of rents stem from government
interventions in the economy that have the effect of redistributing income upward.
The sources of such rental income would include financial sector, monopolies in
pharmaceuticals, telecommunications, etc. Taxing these sources (rents) would act to
an extent in reversing upward redistribution of income (Baker 2014). Stiglitz (2015)
differentiates returns to capital into four types, viz., pure rate of interest, returns to
risks like capital market speculation, excessive remuneration to the positions like
investment managers, and rents arising from monopoly power and suggests steeply
progressive taxation on such capital incomes. He also suggests that high levels of
taxes on land (real estate) and capital gains on land would also reduce inequality
by encouraging more investment into real economy and enhance growth. Atkinson
(2015), based on his life-long experience in the study of inequality, made 15 compre-
hensive proposals toward public policy that would contain inequality. One that is of
far-reaching significance is in terms of differential treatment of earned and unearned
income. He suggested “Earned Income Discount,” once the income is differentiated
into “earned income,” “capital gains,” “interest,” and “profit” for tax purposes. In
effect, it would mean progressively steeper taxes with the increasing element of
“unearned” nature in income.
One of the major proposals that is gaining wider support relates to inheritance
and wealth taxes (Stiglitz 2015; Saez 2017; Atkinson 2015; The Economist 2017).
Globally, there is a kind of paradox relating to inheritance tax policy. Even as the role
of inheritances is seen as the increasing source of inequality of wealth, and conse-
quently earning the epithete for the present capitalism as “patrimonial capitalism,”
there has been growing resistance to inheritance taxes in most of the countries. Except
in Japan, there is decline in inheritance taxes, even as inheritances are increasing.
For instance, flow of inheritances has tripled in France since 1950s, and among
Europe’s billionaires’ half have inherited their wealth. And this proportion is rising.
In OECD countries, share of inheritance taxes in public revenue declined from about
1% in 1960s to less than 0.5% presently. Many countries including India, Norway,
Australia, Canada and Russia abolished inheritance tax, and (it is scheduled to go
in USA by 2015) in the US (The Economist 2017). After a survey of the state of
inheritance taxes across countries, The Economist (2017) concludes: “A fair and
efficient tax system would seek to include inheritance taxes, not eliminate them.”
Atkinson (2015) suggested broader tax on wealth differentiated by source, namely,
inheritance, gifts, and property with differential tax rates.
6 Inequality and Reforms in International Tax System
One of the major sources of tax revenue loss to both developed and developing
countries is the international tax system, which enables the multinational enterprises
to shift their profits from the countries where they earn to locations widely known as
off-shore “tax havens” with low tax or hardly any tax. The evolution of tax havens
has been made possible by the “arm’s length” principles of international corporate
tax system laid down under League of Nations almost a century ago. This system
treats multinational enterprises as loosely connected “separate entities.” This, it is by
now, well known is a fiction. Multinationals with a wide network of their affiliates
that are tightly connected by the present hyper technology of communications draw
great strength by their “unitary” nature. But use this so-called “arms length” separate
entity fiction to shift profits from their affiliates operating in high-tax locations to their
affiliates in low-tax locations, causing enormous corporate tax losses to countries

where the economic activity is actually carried out. There are varying estimates of
tax losses caused to countries by the multinational enterprises under the facility of tax
havens. These range from $500 billion to $600 billion a year, of which the share of
the low-income countries could be as high as $200 billion (Shaxson 2019). Besides
corporates, rich individuals also take advantage of tax havens where they could stash
their illicit fortunes.
Though there have been growing reports of the corporate tax losses through the
system of multinational enterprises being treated as “separate entities” not much
concerted action was taken against it for a long time. But since 2008, financial crisis
the world has woken up to the fact that tax losses though tax havens have been
huge and required global action. The result has been several initiatives. One is the
Common Reporting Standard (CRS), initiated by the OECD. This is a regime to
exchange financial information automatically across the countries so as to help tax
authorities track offshore holdings of their taxpayers. Though there are limitations,
it is reported that by July 2019, the CRS enabled sharing of tax information by 90
countries on 47 million accounts with about 20–25% of tax haven deposits which
also resulted in voluntary disclosures that yielded $95 billion additional tax revenues
to OECD and the Group of 20, which includes India. The second initiative of OECD
was the “base erosion and profit sharing” (BEPS) project, to realign taxation with
economic substance. But it failed because it was within the old principle of “arm’s
length” that treats multinational enterprise affiliates as separate entities. The Inde-
pendent Commission for the Reform of International Corporate Taxation (ICRICT),
which includes scholars and tax experts, including Piketty and Stiglitz, has proposed
an alternative to the failing BEPS system. The proposal is based on the fact that multi-
nationals (MNCs) are groups of entities that are under a single management control
and have a single set of owners and should therefore be taxed as “unitary firms.” A
unitary approach would mean apportioning MNC’s global profits to different coun-
tries on the economic basis of their share in the combined global production and
sales. The ICRICT proposed “unitary tax with formulary apportionment” (ICRICT
2019; Ocampo 2019), and it is considered as simpler, fairer, and more rational than
the current system (Shaxson 2019). There has been wider support for change in the
existing system. In March 2019, the then IMF Chief, Christine Lagarde called the
“arms’ length” principle “outdated” and “especially harmful to low-income coun-
tries.” She urged “fundamental rethink” and move toward formula-based approach
to allocate income for corporate taxation (Lagarde 2019). Hope is that change would
come and help countries for better action against growing inequality through growing
international pressure. The other dimension is the regular intervention of financial
flows much of which hunts speculative profits from stock markets. There has been a
revival of the demand for “Tobin Tax” or financial transactions tax like the one in
force in countries like Japan (Piketty 2014; Baker 2014).
The other side of fiscal policy in addressing inequality relates to the public expen-
diture policy. The extent of fiscal redistribution as a corrective to inequality, besides
progressive direct taxes, would depend on the “in-kind transfer spending (such as
education and health), which can reduce the inequality of “full income” (that is
disposable income adjusted for in-kind transfers). “In-kind transfers such as those
for education and health also affect market income inequality over time by changing
the distribution of human capital, including across generations by promoting social
mobility” (IMF 2017a, p. 6). There is growing evidence on the relationship between
expenditure on education and health and reduced inequality. A study of 13 devel-
oping countries shows that “spending on education and health lowers inequality and
its marginal contribution to the overall decline in inequality is, on average, 69 percent”
(Lustig 2015). There are other studies on the relationship between income inequality
and education expansion. Educational expansion would reduce educational inequal-
ities which in turn put strong downward pressure on income inequality (IMF 2017a,
p. 9). Public expenditure toward achieving nationally appropriate social protection
systems for all (ILO 2017) would also be a critical part of mitigating inequality.
7 Beyond Fiscal Policy
Atkinson, while strongly supporting the role of fiscal policy believes that reduced
inequality cannot be achieved solely through fiscal measures (Atkinson 2015).
Emphasizing the need for moving beyond tax and transfer instruments, Atkinson
pleads for a radical policy to reduce inequality that engages the whole of govern-
ment, would include, besides taxation, technology, employment, wages, and social
security that would have an impact in reducing inequality. Though these proposals
are made with specific reference to UK, these have wider policy relevance to most of
the developed as well as developing countries. Atkinson argues that the direction of
technological change need not be assumed as being entirely exogenous but could be
subjected to policy control. Hence it should be the explicit concern of policymakers
to invest in publicly funded research toward innovations in technology that would
lead to employability of workers and take into consideration the human dimension of
service provision. Since in a market economy, the balance of power is weighed against
consumers and workers, the role of trade unions should be reinforced by founding
a Social and Economic Council involving all the social partners. There should be a
national pay policy consisting of two elements: a statutory minimum wage set at a
living wage and a code of practice for pay above minimum wage, agreed as a part of
“national conversation” involving the Social and Economic Council. The employ-
ment policy should aim at reduced unemployment and guarantee public employment
at minimum wages for those who seek it. Social security measures should be strength-
ened and child benefit should be paid to all children. Atkinson was optimistic that
these proposals are eminently doable within the capitalist system.
While the emerging fiscal and other policy measures provide a concrete basis to
move toward mitigating inequalities, and achieving fair and inclusive growth, in coun-
tries like India the equally challenging task is to engage with deep-rooted inequality
of opportunities because of centuries of history of widely prevalent social discrimina-
tion. Reducing horizontal inequalities, tackling social inclusion and ensuring equity
in access to opportunities will further require strengthening the agency, voice and
political participation of groups that experience disadvantage on account of their iden-

tity (UNDP 2013). Finally, the discussion of the policy strategies would be incom-
plete and end up as mere aspirational without any promise of its practical prospects,
if we do not find any answers to the following questions: Is the social and political
mobilization against inequality, and in favor of the shift in policy agenda possible
in the face of present entrenched neoliberalism? Are there any recent instances of
public intervention reversing the rising trend in inequality and moving toward more
inclusive development?
For these questions, we do get fairly clear answers from the economic and political
developments of one region in the world, i.e., Latin America. Roberts (2012) in his
very illuminating study of politics of inequality and redistribution in Latin America
provides a graphic picture of the developments with the neoliberal entrenchment in
the last two decades of the twentieth century (1980s and 1990s) and the developments
in the “post-adjustment” period (2002–2010). He calls the earlier period, 1980s and
1990s, as a period of “dual transitions” to political democracy and to market liberal-
ization, and the latter period, 2000–2010, as the period of “repoliticisation of inequal-
ity” and redistribution. In the first period, there was an electoral turn in most of the
political groups including left, and toward democratic governments but with polit-
ical hegemonies. On the economic front, there was almost obsessive liberalization of
trade, investment, and financial markets. The process of international integration was
near complete (Maia 2014). There was privatization of public enterprises, shift in
employment from formal to informal (UNCTAD 2011). By 1990s, 85% of job growth
was informal in nature. There was increasing labor market segmentation, weakening
of unions with sharp decline in trade union density. Labor market reforms were more
towards flexibility, and health care increasingly shifted from state to private. There
was welfare interventions first in the form of poverty relief and later in the form of
conditional cash transfer to keep children in school. Marketization had demobilizing
effect on collective activity despite democracy (Bellinger et al. 2011).
Economic downturn at the end of the twentieth century paved the way for political
mobilization and leftist electoral victories since 1998. Between 1998 and 2011, there
were leftist presidents in 11 different countries accounting for two-thirds of Latin
American population. The “left” turn appears to be with a kind of Latin American
characteristics: “…Latin America did not turn left politically because more people
came to identify as leftist; it turned left because many citizens who did not identify
themselves as leftist nevertheless began to vote for leftist candidates and parties”
(Roberts 2012, p. 10). Another characteristic that was typical of Latin America was,
in spite of neoliberal policies, citizens’ emphasis was on state, and LA remained
statist and there was strong support for state in enterprise ownership, job creation,
health care, and citizen welfare. In the later period, social mobilization resulted
in building up support for social democratic parties. Indigenous groups developed
collective strength to militate for change, celebrating indigenity, developing hori-
zontal identities, and foreign alliances across desperate ethnic groups. Evans (2017)
observes that “inequalities increased if poor people internalize stigmatized identities,
but through association and exposure to egalitarian discourses, people may revise
their self perception and believe they deserved dignity.” The revival of social mobi-
lization from below and mass protest helped “repoliticize” inequality, “politicize”
social deficits and bring redistributive policies to central place on the political agenda
(Roberts 2012). The result was equity gains both under conservative governments as
well as leftist ones. The positive trend toward reduced inequalities, and secure and
better conditions of living for workers were witness across the region. LA that had
high levels of inequality of per capita incomes experienced a declining trend from
a Gini of 0.55 in 2000 to 0.496 in 2012, largely due to longer years of schooling,
larger and more progressive transfer payments ranging from 17 to 21% of GDP,
lower dependency ratio, and higher work participation rates especially of women
(Lustig et al. 2015). Latin American experience of inequality reduction through
progressive policy turn brings to the fore the role of social movements and ideational
shifts. As Alice Evans (2017) hopes, publicizing Latin American collective success
(during 2000–2010) in reducing inequality might embolden campaigns elsewhere
for a movement against growing inequalities. Hopefully, these could be lessons for
countries like India as well.
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Growth, Inequality and Labour Force
Participation
Arup Mitra
Abstract The Indian economy has experienced high growth in recent times which
has been accompanied by a reduction in poverty with rising inequality. Rising
inequality is rooted in the nature of growth itself which is highly skewed towards the
service sector. The nature of service sector in itself is of a type which contributes to
rising inequality. This is routed through little expansion in employment opportunities
and declining labour force participation. It is argued that employment is central to
the inequality question.
1 Economic Growth
During the reform period, particularly in the 2000s, economic growth shot up to an
unprecedented high level until at least the global financial crisis occurred. Rodrik and
Subramanian (2005) further argued that growth was triggered in the reform period
by an attitudinal shift on the part of the national government towards a pro-business
(as opposed to pro-liberalization) approach. However, the composition of growth has
been primarily dominated by the services sector. Contrasting the historical experience
of many developed countries, the share of service sector in total value added increased
much before the industry could rise to a reasonable high level. Rapid productivity
growth in the services sector contributed to an accelerated economic growth in India
(Goldar and Mitra 2010).
However, the dominance of the services/tertiary sector before the secondary
sector’s relative size could outweigh that of other sectors did invite concerns at
least in the past (Rao 1954, 1986). Bhattacharya and Mitra (1989) urged that higher
is the discrepancy between the industry and agriculture growth, the higher is the
growth of services across Indian states, implying that higher levels of per capita
income originating from industrialization leads to higher demand for services. In
a later work, Bhattacharya and Mitra (1990) argued that a wide disparity arising
A. Mitra (B)
Faculty of Economics, Institute of Economic Growth, Delhi 110007, India
e-mail: arup@iegindia.org

https://doi.org/10.1007/978-981-15-8265-3_6
102 A. Mitra
between the growth of income from services and commodity-producing sector tends
to result in inflation and/or higher imports leading to the adverse balance of trade.
This is particularly so if the tertiary sector value added expands because of rising
income of those who are already employed and not due to income accruing to the
new additions to the tertiary sector workforce. In other words, if expansion in value-
added and employment generation both take place simultaneously within the tertiary
sector, there will be a commensurate increase in demand for food and other essential
goods produced in the manufacturing sector. However, if the expansion of the tertiary
sector results only from the rise in income of those who are already employed in this
sector, the additional income, as per Angel’s law, would largely generate demand for
luxury goods and other imported goods since the demand for food and other essential
items has already been met (Bhattacharya and Mitra 1989, 1990).
A variety of other reasons have also been put forth to rationalize the growth of
the services sector. Factors like increasing role of the government in implementing
the objectives of growth, employment generation and poverty reduction, expansion
of defence and public administration, the historical role of the urban middle class in
wholesale trade and distribution and demonstration effects in developing countries
creating demand patterns similar to those of high-income countries have been high-
lighted to offer a rationale for the expansion of the tertiary sector (Panchamukhi et al.
1986). As the elasticity of service consumption with respect to total consumption
expenditure is higher than unity even in countries with very low per capita consump-
tion (Sabolo 1975), the rapid growth of the tertiary sector has been further rational-
ized in terms of a strong demand base existing in the economy. Besides, sub-sectors
like transport, communication and banking do contribute significantly to the overall
economic growth as they constitute the basic physical and financial infrastructure.
Especially the role of information technology (IT) and business process outsourcing
services (BPOS) in enhancing the economic growth is said to be significant (World
Bank 2004). In addition, the new growth theorists indicate that skill-intensive activi-
ties exert positive externalities on the rest of the economy, and thus the concentration
of new activities in the tertiary sector with the initiation of IT industry can raise
productivity and growth (Romer 1990). All this tends to suggest that services too
hold the possibility of playing the role of engine of growth.
It may be important to identify certain other factors like urbanization, trade and
investment and, more importantly, increasing inequality, which possibly contributed
to the rapid growth of the tertiary sector and led to the divergence between the
relative size of the tertiary and the secondary sectors. In India, for example, public
consumption of services and consequently the pay hikes of the government and the
semi-government employees would explain the high growth of services during the
second half of the nineties. However, other than that among the demand-side factors
it is the export of services which recorded the most spectacular growth over 1997–
2005 (Rakshit 2007). Mitra (2011) further noted that the employment effects of such
rapid growth in services exports are rather limited both in the formal and the informal
sectors.
Besides, the ratio of household purchase of services to private consumption of
services has gone up speedily during this period. Household purchase of services
Growth, Inequality and Labour Force Participation 103
amounting to almost 40 per cent of services GDP has played an important role in
accelerating the growth of the tertiary sector. The household income elasticity of
services (estimated at 1.5 over the 10-year period) is indeed too high for a poor
country like India and this has resulted primarily from an increasing inequality of
income and introduction of a whole spectrum of new services which households have
started consuming (Rakshit 2007). Hence, factors affecting income distribution and
household preferences other than the government consumption and exports need to
be considered in explaining the dominance of the tertiary sector over the industry.
From policy angle, trade and financial sector reforms and lifting of barriers to
entry of private enterprises in certain services which were earlier reserved for the
public sector have also played a major role in providing an impetus to the tertiary
sector growth in India. In her analysis of developing countries, Joshi (2004) noted
that urbanization raised the share of the tertiary sector in total employment.
One important aspect, which needs to be highlighted in this context, is a positive
relationship between the level of per capita income and the intensity of use of services
in manufacturing industries (Francois and Reinert 1996). Banga and Goldar (2007)
in the Indian context noted that the importance of services as an input to production
in the manufacturing sector increased considerably in the nineties compared to the
eighties. As the authors pointed out, the real value of services used in manufacturing
grew at the rate of 0.4 per cent per annum in the 1980s and the growth rate increased
sharply to around 16 per cent per annum in the nineties. Economic policy changes
in the nineties, particularly the trade reforms, created a condition favourable for
increased use of services in manufacturing.
The positive spillover effects of the services-led growth on the rest of the economy
cannot be ignored either. It contributed to the growth in other sectors too (Mitra and
Schmidt 2008). For example, the growth in ICT led to a rise in TFPG in the manufac-
turing sector as well. But, the time series analysis (Goldar and Mitra 2010) pursued on
sectoral shares of the GDP indicates that industry’s capacity to impact on the services
sector is much more than the services’ impact on the industry. Hence, the key to
stabilization in economic growth is the growth in the industrial sector through liber-
alization of economic policy affected the nature of India’s growth pattern, providing
a boost to the services sector. Besides, the welfare implications of the services-led
growth are quite serious. There is not much scope for the productive absorption of
the unskilled and semi-skilled workers since the high productivity segment within
this sector is highly skill-intensive. The secondary effects on unskilled labour market
are actually very low.
2 Inequality Issues
Economic growth in India has been associated with rising inequality as suggested
by several indirect indicators. Unfortunately, in the Indian context, we do not have
information on income distribution and therefore it is difficult to measure income
inequality over time. However, the National Sample Survey Organization gives us
104 A. Mitra
data on consumption expenditure and the distribution of households based on expen-

diture size classes. From this, the expenditure inequality has been estimated though
it is believed to be much less than the income inequality. Since the upper income
households tend to save more and spend less, the expenditure inequality is usually
a gross underestimate. Nevertheless, there is evidence in favour of rising inequality
over time across several states.
According to the World Bank, between 1994 and 2005, the income share held by
the highest 10 per cent of the population increased from 26 per cent to 28.3 per cent,
while that of the bottom 20 per cent decreased from 9.09 per cent to 8.64 per cent.
According to the OECD, between 1993 and 2008, India’sGini coefficient increased
from 0.32 to 0.38. As per the Human Development Report (HDR) 2013, India ranked
136th (134th in 2011) in the Human Development Index (HDI). Strikingly, when the
HDI is adjusted for inequality, the index loses its value by as much as 29.3 per cent.1
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 wage
earners now make 12 times more than the bottom 10 per cent up from a ratio of six
in the 1990s. Moreover, wages are not smoothly spread out even through the middle
of the distribution. The top 10 per cent of earners make almost five times more than
the median 10 per cent, but this median 10 per cent makes just 0.4 times more than
the bottom 10 per cent.2 India’s reform process resulted in opportunities that could
be taken advantage of by a limited few or those who had access to resources. The
inequality is being perpetuated by unequal access to health and education between
the poor and the rich. Inequality in access to education is so glaring, that in HDR
2013, India’s education index loses more than 40 per cent of its value once adjusted
for inequality. In other words, education and health inequality are much sharper than
expenditure inequality. Among many other indicators India’s inequality in education
and India’s poorest people who don’t have access to basic needs like food and clean
water, and in huge numbers die from starvation, malnutrition, and treatable diseases,
are glaring distortions of development.3 Many states reported a rise in inequality
over 2004–05 and 2010–11. At the all India level growth during this period turns out
to around 7 per cent per annum but this growth has been associated with a rise in
inequality both in the rural and urban areas. India’s Gini coefficient has gone up from
0.26 to 0.28 and from 0.35 to 0.37 in the rural and urban areas respectively. There is
evidence of the growing concentration of wealth among the elite. The consumption
of the top 20 per cent of households grew at almost 3 per cent per year in the 2000s
as compared to 2 per cent in the 1990s, while the growth in consumption of the
1 K.K. Kundu (2013) “India has a problem with inequality, and it won’t be solved easily”, May 25,
Business standard. https://www.business-standard.com/article/opinion/india-has-a-problem-with-
inequality-and-it-won-t-be-solved-easily-113052500705_1.html.
2 Times of India, December 7, 2011.
3 Ground Truth by Charles M. Sennott. https://www.globalpost.com/dispatches/globalpost-blogs/
groundtruth/india-education-increasing-inequality.
bottom 20 per cent of households remained unchanged at 1 per cent per year as per
the consumption expenditure surveys of the National Sample Survey Organisation.4
In fact, at the state level, we get to see a very mixed picture. Many states registered
a rapid growth and witnessed a decline in inequality in either rural or urban areas.
On the other hand, there are states which with rapid growth experienced a rise in
inequality over time. The relationship between the change in inequality between
2004–05 and 2011–12 and per capita economic growth rate over the same period
across the Indian states indicates that higher is the growth, the lower is the extent of
rise in inequality.5 However, expenditure inequality, as mentioned above, is usually
underestimated and therefore, the expected positive relationship between growth and
income inequality may have existed.
As regards the relationship between growth and inequality we see a positive asso-
ciation in the rural context while its impact is insignificant in the urban areas. Possibly
because rural areas are at lower levels of growth, inequality tends to rise conforming
to Kuznet’s observation. On the whole, the cross-sectional picture suggests that with
economic growth inequality tends to rise only in the rural areas, while in the urban
areas which shows higher levels of growth than the rural areas, inequality does not
necessarily rise.
Based on the cross-sectional data economic growth is seen to reduce poverty,
though the role of other factors is also important. Inequality and poverty are mostly
unrelated. In the equation for poverty being a function of growth and inequality
both (Table 1), inequality again shows no effect except in the urban context for the
year 2004–05 where it takes a positive coefficient as one would expect, i.e. with an
increase in inequality poverty tends to rise. Theses results are seen, as mentioned
above, from the cross-sectional data. Otherwise, in the process of growth inequality
seems to have gone up over time.
One important indicator of gross inequality is an overwhelming proportion of
workers engaged in the informal sector. ‘Employment problem’ in the Indian context
cannot be conceptualized merely in terms of open unemployment rate because many
cannot afford to remain unemployed for long. On the other hand, the set of working
poor is prevalent, implying residual absorption of workforce in low productivity
informal sector activities. Even in the non-agricultural activities, the incidence of
the informal sector employment is over and above 70 per cent (NSS 2009–10). The
set of informal workers is extremely large which includes the self-employed in the
informal sector (ranging from street vendors to those who operate micro enterprises
with less than ten workers), regular hired workers in the petty enterprises in the
informal sector and casual and contractual workers both in the informal and formal
sectors without any employment or social security.
The services led-growth is an important factor which led to a rise in inequality in
the process of growth and the rise in inequality further led to a growth in services’
consumption by the middle- and higher income groups. The focus of government
4 Timesof India, December 7, 2011.

5 Change in inequality = 0.054 – 0.0055 growth rate in per capita Net State Domestic Product.
(2.97)* (−2.03)* Adj R 2 = 0.093.
106
Table 1 Poverty, growth and inequality

Indep Var Dep Var Dep Dep Var Dep Dep Var Dep Dep Var Dep
RPOV04-05 VarUPOV04-05 RPOV11-12 VarUPOV11-12 RPOV04-05 VarUPOV04-05 RPOV11-12 VarUPOV11-12
PCNETSDP04-05 −0.0005 −0.0004 −0.0006 −0.0004
(−2.96)** (−3.85)** (−2.60)** (−2.27)**
PCNETSDP10-11 −0.0003 −0.0002 −0.0004 −0.0003
(−3.71)** (−3.81)** (−2.62)** (−2.17)**
RLR04-05 83.43 88.19
(1.34) (1.41)
URL04-05 57.35 57.71
(2.01)* (1.96)**
RLR11-12 19.50 15.95
(0.37) (0.30)
ULR11-12 5.78 3.72
(0.25) (0.16)
URBAN2001 0.17 −0.0103
(0.93) (−0.08)
URBAN2011 0.16 0.06
(0.82) (0.43)
Constant 28.42 15.31 30.30 20.12 27.21 15.22 30.71 20.62
(2.17)** (1.76)* (2.49)*** (2.63)** (2.06)** (1.70) (2.50)** (2.62)**
Adj R2 0.18 0.32 0.31 0.29 0.18 0.30 0.30 0.27
Note R for rural and U for urban, POV for poverty and LR for Lorenz Ratio (inequality). PCNETSD is per capita net state domestic product. URBAN is the
percentage of population in urban areas
Source Author’s calculation
A. Mitra
policy has been on the services sector. In the policy circle, there is a strong view
that China may specialize in the production and export of manufacturing products
while India would pursue on the lines of services activities. However, the services-led
growth has serious implications in terms of employment generation and inequality. In
the high-productivity services sector, the labour demand exists mainly for those who
are highly skilled. Hence, the unskilled and semi-skilled labour remained mostly
outside the purview of growth except for some nominal secondary effects of the
high-productivity services sector.
The role of industry in generating employment opportunities particularly for the
unskilled variety of the workforce is much stronger than that of the high-productivity
services sector which is geared to absorbing the educated and skilled workers. Though
this sector through secondary effects could generate employment opportunities for
the unskilled and semi-skilled workers to some extent (Mitra and Schmid 2008), the
manufacturing sector holds a much greater potential to employment generation and
consequently in reducing inequality, as we have learnt from the historical experience
of the developed nations. However, in the Indian context, the spread of the industrial
sector has been highly limited being confined to a few states only. Other than this
spatial aspect, the adoption of capital-intensive technology also restricted the employ-
ment growth in the organized/registered (a synonym for the formal) manufacturing
sector. Import of technology from the developed countries, which has become cheaper
in the wake of import liberalization, holds the possibility of adding to economic
growth undoubtedly. However, the technology which is imported from abroad is
mostly capital intensive in nature because it was invented to suit the economies char-
acterized by labour scarcity. Import of such technology while contributing to growth
does not necessarily generate employment opportunities, rather it reduces the labour
content per unit of output (Kato and Mitra 2008).
On the whole, though economic growth has been quite fast and, at the same
time, the incidence of poverty has declined considerably notwithstanding a rise in
inequality the missing link between growth and poverty reduction in terms of fast
employment growth is definitely a major concern. The overall employment growth
scenario is so disheartening that it is difficult to believe that the percolation effect
of growth occurred to benefit the poor (Table 2).6 Not enough attention has been
paid to improving the quality of the labour-intensive manufacturing goods. The
most surprising part is the rise in capital intensity even in the so-called labour-
intensive organized manufacturing sector. Import of capital-intensive technology
even in labour-intensive industries has led to such sluggish growth in employment.
Though labour market reforms have not been carried out in India on a significant
scale, yet several indirect routes were followed to allow the firms to introduce labour
market flexibility without providing labour with any safety net. This seems to have
aggravated overall inequality and wage inequality especially.
6 Theoverall disheartening employment generation has been further exacerbated between 2009–10
and 2017–18 as reported by PLFS, 2018. Since, the argument does not change even with results of
PLFS, the latter is not used in analysis.
108 A. Mitra
Table 2 Long-run growth

Categories Usual Status Weekly Status Daily Status
rate in employment
(ps + ss)
(1983–2009–2010) % p.a
Rural Male 1.6 1.7 1.7
Rural Female 0.8 1.8 1.4
Urban Male 3.0 3.1 3.2
Urban Female 2.6 3.3 3.3
Total 1.7 2.1 2.0
Note Based on NSS per thousand distribution applied to population
figures derived from census estimates
Source Key Indicators of Employment and Unemployment
in India, 2009–10, NSS (66/10), Ministry of Statistics and
Programme Implementation, Government of India, June 2011
and Employment and Unemployment Situation in India, 2004–
05, (Part-I), NSS 61st Round, Report No. 515(61/10/1), National
Sample Survey Office, Ministry of Statistics and Programme
Implementation, Government of India, September 2006.
The other issue relates to enrolment and skill formation. While the jobs are increas-
ingly becoming skilled, the supply of labour is much in excess of demand in the
unskilled category. In spite of a rise in the enrolment ratio, the skill gap has risen
considerably. The efforts of the government to raise literacy and enrolment cannot
be discredited. However, when it comes to the quality of education there is a sharp
discrepancy between what is available for the low-income households and what
can be accessed by the middle and high-income households. Education inequality
is a major cause of income inequality. The quality of education available for the
low-income households is extremely poor which does not enable the labour to get
absorbed in high-productivity jobs.
Though in the rural areas the employment guarantee programmes were initiated
there are severe leakages. On the positive side, these programmes raised the rural
wage rate and provided consumption support to several households below the poverty
line. However, these programmes were carried out in a haphazard manner and hence
did not help asset creation either at the household or community level. Moreover,
these programmes are confined to rural areas only. In the urban context, there is no
major employment programme though there is the need for such programmes given
the vast size of the urban informal sector, having considerable overlaps with urban
poverty.
3 Labour Market Participation
Turning to labour market participation the male workforce participation rates for all
ages are seen to be relatively high and are nearly 50 per cent both in the rural and in
the urban areas if we consider the main or usual principal status workers (Table 3).
Table 3 Workforce
Category WFPR (%) LFPR (%)
Participation Rate (WFPR)
Population Labour Bureau-
and Labour Force
Census-2011 2011–12
Participation Rate (LFPR)
Rural Male 41.6 (17.5) 79.4 (6.4)
Rural Female 16.7 (53.2) 33.9 (48.0)
Urban Male 48.7 (15.5) 73.7 (7.6)
Urban Female 11.9 (36.0) 19.1 (46.9)
Persons Rural 29.5 57.9
Persons Urban 30.9 48.0
All Males 43.8 77.9
All Females 15.2 30.0
All Persons All Areas 29.9 55.4
Note (1) Though the Labour Bureau (LB) estimates refer to the
year 2011–12—close to the population census year, 2011—they
are not comparable with each other because the population census
estimates are work participation rates for all age groups covering
only the main (equivalent to the usual principal status) workers
whereas the LB estimates are for age groups 15 and above and
they cover all workers (usual principal and subsidiary status) and
those who are unemployed
(2) Figures in parentheses are the coefficient of variation based on
the state-level data.
Source Population Census, 2011 and Labour Bureau, 2011–12.
Secondly, the inter-state variations measured in terms of coefficient of variation are

limited (17.5 and 15.5 per cent in the rural and urban areas, respectively). On the
other hand, the female participation rates are significantly lower than their male
counterparts (Table 3) and more so in the urban areas, implying that the rural–urban
differentials in the case of women are more pronounced than in the case of males.
Besides, the inter-state variations are sizable in the case of females, reflecting the
influence of economic, social and cultural factors (coefficient of variation being 53.2
and 36.0 per cent in the rural and urban areas, respectively). The participation rates
in the north-eastern and the southern regions, for example, are considerably higher
than the northern states. A relatively lower magnitude of variation in the urban
areas may be taken to signify the possibility of convergence (to a limited extent
though), while the dominance of the social factors in the rural areas can be said to
be more prominent. But the interpretation can be quite erroneous: the female work
participation rates being by and large lower in the urban areas than in the rural areas
indicate the limited impact of education on participation in the face of social factors.
In fact, why the participation rate of Indian urban women is still so low, given that the
per capita income and the educational attainment levels are higher than their rural
counterparts, is an important research question. Participation rates and per capita
income do not suggest any significant positive relationship in the case of females
though among males such a pattern can be somewhat deciphered. In relation to
110 A. Mitra
females, only a subset of the cross-sectional observations (at the state level) at the
most may conform to this pattern.
In terms of determinants, the study by Mitra and Okada (2018) clearly brings out
the importance of infrastructure, education and health and urbanization on labour
force participation of both the gender. This, in turn, points to three types of factors
which are instrumental in resulting enhanced participation rate. The first set refers to
the creation of greater volume of jobs motivating participation, the second enhances
the ability of the individuals to participate and the third, the most important one, facil-
itates the accessibility of the capable ones to the locations where jobs are available.
Hence, strategies for creating clusters with greater employment potentials (which
in turn is cost-effective in making pro-poor growth happen), concerted efforts for
human capital formation and investments to remove barriers between jobs and their
seekers need to be pursued aggressively.
The negative impact of fertility and household size on rural female work partici-
pation comes out sharply: greater domestic burdens in large households do not allow
women to participate explicitly in the labour market. Though the urbanization level
does not show a positive effect on rural women participation at the state level, the
beneficial effects are evident at the district level for both the gender. On the other
hand, in the urban context, the participation rates of both females and males vary
positively with the level of urbanization. In other words, the urban areas in states
and districts with higher levels of urbanization unravel higher levels of participation
both for females and males in comparison to the states or districts with lower levels
of urbanization, revealing the agglomeration effects. With a greater concentration of
infrastructure and activities, labour demand tends to increase.
While industrialization and growth in services both show a positive effect on
participation, though very mildly, especially in the case of urban women, growth
shows a rising impact only in the case of urban males. Also, there is evidence of
poverty induced participation in agricultural activities, suggesting clearly the impor-
tance of rural diversification for participation to pick up in the rural context. Hence,
from the policy point of view, a great deal will have to be done in terms of building
infrastructure, initiating employment-oriented industrialization and encouraging
rural diversification.
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Inclusiveness of Economic Growth
in Uttar Pradesh
Nripendra Kishore Mishra and Manish Kumar Singh
Abstract The introduction of neo-liberalism in most of the developing countries

raged the growth–inequality debate. It is evident from various available literatures
that economic growth has been used as a major instrument to reduce poverty but,
this expansion has been also accompanied by rising inequality in many developing
countries including India. In order to deal with growing inequality, the major aim of
India’s Eleventh Five-year Plan was inclusive growth. In India, the picture at sub-
national level is completely different because many states, especially the BIMARU
(Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh) states, are lagging behind
in both traditional and economical terms hence, a disaggregated analysis at sub-
national level becomes necessary. This paper examined the impact of growth and
inequality on poverty reduction by decomposing the change in poverty into growth
effect and redistribution effect and estimating the pro-poor growth index and poverty
equivalent growth rate for the rural and urban Uttar Pradesh using the CES 1993–94
(50th round), CES 2004–05 (61st round) and CES 2011–12 (68th round) data sets.
The result indicates that poverty rate has highly declined in 2004–05 to 2011–12 as
compared to 1993–94 to 2004–05 for both rural and urban area and effect of growth
has dominant on poverty reduction in each time period. Interestingly, the growth of
rural Uttar Pradesh has been inclusive during the period of 2004–05 to 2011–12,
whereas in the urban area, increasing inequality hinders this inclusiveness.
1 Introduction
The growth–inequality debate has gained centre stage following the publication of
Thomas Piketty’s book Capital in the Twenty-first Century in 2013. This debate
has been raging for almost three decades since the introduction of neo-liberalism in
N. K. Mishra (B) · M. K. Singh

e-mail: nripendra.mishra@gmail.com
M. K. Singh
e-mail: rathourmani92@gmail.com

https://doi.org/10.1007/978-981-15-8265-3_7
114 N. K. Mishra and M. K. Singh
most developing countries as a means to bring them out of poverty. Expansion in

the world output (or growth) has no doubt witnessed a decline in absolute poverty,
as measured by Head Count Ratio (HCR), in many developing countries. However,
the period of high growth has also been accompanied by growing inequality, or
simply speaking, accumulation of wealth in the hands of a chosen few. This has
also been the experience of India, which has experienced high economic growth
with growing inequality (Chancel and Piketty 2017; Himanshu 2018). While there
has been a reduction in poverty in the last two decades, the situation has become
worse for the group at the bottom of income distribution. The current focus on
inequality largely emanates from an observation that the recent economic growth
in many countries has disproportionately benefitted the upper income groups, while
the lower income groups have received a lesser share of Gross Domestic Product
(GDP). The expansion of GDP has resulted in some income growth in lower income
groups by default and resulted in the reduction of poverty as measured by the standard
poverty line and HCR. The consequence of this has been high growth accompanied
by a rise in inequality and some decline in poverty. Had it been just the opposite,
where growth disproportionately benefitted the lower income groups, the outcome
would have been high growth accompanied by a reduction in inequality and drastic
decline (or complete removal) in poverty. This brings into question the nature of high
growth experienced by many developing countries and its relationship with poverty,
which is often discussed in the framework of ‘inclusive growth’. While economic
growth means only a high level of output or income irrespective of its distribution,
inclusive growth aims at providing benefits of growth to every section of the society.
There are two possible routes to achieve inclusive growth; either focus on the process
that actual growth includes many people who participated in that growth or focus on
the outcomes of the growth process (Klasen 2010). Inclusive growth has an indirect
relationship with pro-poor growth because the ultimate aim of both these concepts is
to reduce poverty and inequality. The debate on pro-poor growth originated from the
celebrated work of Chenery et al. (1979), where the focus was on redistribution with
growth. This model criticized the trickle-down hypothesis, which claimed that growth
itself would reduce poverty. While the term inclusive growth was never defined at
that time, it came to be known as ‘pro-poor’ during the 1990s. Pro-poor growth can
be defined as the growth which provides better opportunities to the poor in order
to uplift their economic conditions (IMF et al. 2000; OECD 2001). Kakwani et al.
(2004) defined pro-poor growth as one which benefits the poor proportionately more
than the non-poor. Thus, it shifted attention to the extent of income gains of the poor
from growth.
India has experienced an unprecedented high rate of growth in recent times that
has been accompanied by poverty reduction but rising inequality. But, it is yet not
clear how far the growth has been inclusive and what are the extents of income gains
of the poor. That is why the major aim of the country’s Eleventh Plan (2007–12) was
inclusive growth to deal with these inequalities and to promote the overall well-being
(GOI 2011b). The proposed inclusiveness is difficult to assess because of the three
reasons which may be summarized as follows.
Inclusiveness of Economic Growth in Uttar Pradesh 115
(a) Growth is multidimensional in nature,

(b) the data on inclusiveness can be found only after a time lag and
(c) its impact may not be visible immediately (Oommen 2011).
In comparison, growth performance is more logical to assess despite being a
complicated process. Inclusive growth is hard to define or capture (Ranieri and
Ramos 2013), but the identification of more features will help in the specification of
the meaning and concept of inclusive growth. Thorat and Dubey (2012) argue that
growth was more poverty-reducing during 2004–05 and 2009–10.1 Although poverty
reduction is beneficial for some groups as compared to others, yet the adverse effects
of inequality, specifically on the urban sector, have also been evident. Bhanumurthy
and Mitra (2004) argued that the growth/mean effect dominates in both periods
(1983–93 and 1993–2000) over the inequality effect and the population shift effect.
Growth effect, which is beneficial for poverty reduction, seems to have gone up in
the reform period. Mishra (2015) shows that reduction in poverty, more so in rural
areas, has occurred due to the growth in total income. It has led to a reduction in
poverty in rural areas but an increase in the urban areas.
However, these studies are very aggregative and the picture may be different at
the sub-national level. There are huge variations across states. Inter-state inequalities
in terms of per capita income and consumption have increased after the economic
reforms and states like Uttar Pradesh (U.P.) are lagging far behind (GOI 2011a).2
U.P. is also a part of BIMARU (Bihar, Madhya Pradesh, Rajasthan and U.P.) group
of states that are traditionally and economically lagging behind other states in India.
In 2012, just Bihar, Madhya Pradesh and U.P. were home to 44% of the poor in the
country (Narayan and Murgai 2016). U.P. has the largest share in India’s population
and poverty, making it the highest shareholder of poverty among BIMARU states
(Pathak 2011). U.P. was once positioned as the pacesetter for India’s economic and
social development. But now it shows far less promise (World Bank 2002). Thus, it
is quite necessary to undertake a disaggregated analysis of economic growth and its
impact on poverty and inequality in the state and ask if the state’s economic policies
have promoted inclusive growth. It is even important to revisit the growth poverty
relationship in the framework of pro-poor growth, especially at the sub-national level.
Also, there is a need to examine the distribution of growth benefits among the poor
and non-poor, and how much growth is required to make it pro-poor.
This paper attempts decomposition of poverty into growth effect and inequality
effect. Further, it estimates the pro-poor growth index (PPGI) and poverty equivalent
growth rate (PEGR) to find the answer to the aforementioned questions. Although the
focus is the state of Uttar Pradesh, yet it is referred to in the context of India as a whole.
1 National Statistical Commission (NSC) in its 32nd Meeting held on 23–24 April, 2010, considered
the use of the 2009–10 NSSO quinquennial survey as the base year for both the price indices as
well as revision of the national income estimates and felt that, being a non-normal year, may pose
problems; hence, it was desirable to repeat the survey once again in respect of consumer expenditure
issues.
2 This is also mentioned in a study of World Bank (Uttar Pradesh: growth, poverty and inequality
2016).
The paper is organized into four sections. Section 2 provides us with the technical
framework, wherein the methodology of decomposition of change in poverty into
growth and inequality effect, PPGI and poverty equivalent growth rate are discussed.
While Sect. 3 examines the relationship between poverty and inequality, Sect. 4 exam-
ines the growth and poverty relationship in the state. Section 5 comprises conclusion
and policy suggestions.
2 Technical Framework
2.1 Decomposition of Change in Poverty
Datt and Ravallion (1992), Kakwani (1993) have shown that change in poverty can be
decomposed into a component due to change in mean income (constant inequality)
and a component due to change in inequality (mean income constant). However, they
argue that the change in poverty due to the change in mean income is known, but
the change in mean income due to the change in inequality is residual. The rise in
Monthly Per Capita Consumption Expenditure (MPCE) always helps in reducing
poverty but the rise in inequality can occur both ways. It can either help in reducing
poverty or may harm the poor people (Chen and Ravallion 2001; Kakwani and Pernia
2000). Mazumdar and Son (2001), Son (2003), Mishra (2015) have introduced a new
poverty decomposition method by including what they term as ‘population shift’
effect without any residual term. But the population shift effect is still a contested
idea and does not provide significant insight; therefore, we do not attempt it. We
followed Kakwani and Pernia (2000) method due to several reasons. First, it is an
exact decomposition analysis, having no residual term. Second, this decomposition
analysis is extended for the measure of pro-poor growth by an index which is called
PPGI. Therefore, this paper attempts to decompose the poverty change into growth
effect and inequality effect, which means understanding the contribution of growth
in poverty reduction when inequality is constant and contribution of inequality in
poverty reduction when growth is constant. If the inequality effect is negative, growth
would lead to a change in the distribution of income in favour of the poor, and if
inequality effect is positive it means change in the distribution of income in favour
of the rich.
Let the change in poverty between two periods j and k be Pjk and the incidence
of poverty be
P = P(z, μ, L( p))
where P is a poverty measure that is fully characterized by the poverty line income
(z), the mean income or expenditure (μ) and the Lorenz ratio (L(p)).
The change in poverty can be defined as
P jk = f (G jk , I jk )
where Gjk (growth effect) denotes the change in poverty due to the change in the
mean income when inequality does not change and I jk (inequality effect) denotes the
change in poverty due to the change in inequality when income does not change.
Kakwani and Pernia (2000) propose a method that takes care of the weaknesses
that are found in the previous ones where the inequality effect is a residual. They
propose a method and define the mean and inequality effect as
G jk =1/2[Ln[P(z, μk , L j ( p))] − Ln[P(z, μ j , L j ( p))] + Ln[P(z, μk , L k ( p))]

− Ln[P(z, μ j , L k ( p))]] (1)
and
I jk =1/2[Ln[θ (z, μ j , L k ( p))] − Ln[θ (z, μ j , L j ( p))] + Ln[θ (z, μk , L k ( p))]

− Ln[θ (z, μk , L j ( p))]] (2)
It is noted that the poverty line (z) will be the same in both periods. Hence, the
decomposition of poverty can be written as
P jk = G jk + I jk (3)
The sum of growth effect and redistribution effect is defined as the total change
in poverty during periods j and k in Eq. 3.
2.2 Pro-Poor Growth Index (PPGI)
The decomposition of poverty change, however, explains only the contribution of

growth and redistribution in poverty change; it is not able to explain which group
(whether poor or rich) is enjoying more of this growth benefit. Is that growth process
pro-poor or pro-rich? Before answering this question, one needs to estimate the
PPGI, which measures the degree of pro-poorness of growth (Kakwani and Pernia
2000). The PPGI shows the relationship between total poverty reduction and poverty
reduction which results from the distribution of natural growth.
Suppose there is a positive growth rate of gjk percent between periods j and k,
then poverty elasticity can be defined as
η = P jk /g jk
This is the proportional change in total poverty when there is a positive growth
rate. Likewise, we may define
ηg = G jk /g jk
η I = I jk /g jk
where ηg is the proportional change in poverty when the growth rate is positive and
relative inequality does not change. Similarly, ηI is the proportional change in poverty
when inequality changes without change in mean income. Thus, we can write,
η = ηg + η I (4)
The above Eq. (4) shows that the proportional change in poverty is summation
of the two factors, namely, ηg which is income effect of growth on poverty and ηI ,
which is inequality effect on poverty.
Then, we can write the index of pro-poor growth (ϕ) as,
ϕ = η/ηg
where ϕ will be greater than 1 if ηI < 0, which means that growth is strictly pro-poor.
If 0 < ϕ < 1, it means that ηI > 0 but poverty still declines due to growth. This situation
may be generally characterized as trickle-down. If, ϕ < 0, economic growth in fact
badly hurts the poor and it leads to an increase in poverty.
2.3 Poverty Equivalent Growth Rate (PEGR)
PPGI only indicates that growth is pro-poor or pro-rich, but if growth is pro-rich,
then it will be necessary to know how much more growth is required to make it
pro-poor. Thus, one estimates the poverty equivalent growth rate (PEGR) proposed
by Kakwani et al. (2004), which not only includes the magnitude of growth but
also the amount of benefits received by the poor from the growth. They argue that
proportional poverty reduction is monotonically increasing function of the PEGR
which implies that greater PEGR leads to a larger proportional reduction in poverty.
Thus, the maximization of PEGR means maximum poverty reduction.
η
PEGR = × gjk
ηg
where η = Pr opor tional change in total pover t y

ηg = gr owth elasticit y o f pover t y
gjk = gr owth rate o f mean income
or
Pr opor tional change in total pover t y

PEGR = × gr owth rate o f mean income
gr owth elasticit y o f pover t y
The PEGR is derived by multiplying PPGI by the growth rate of mean income.
Growth is pro-poor (anti-poor) if the PEGR is greater (less) than the mean income
growth rate. If the PEGR lies between 0 and the mean income growth rate, then
growth is accompanied by an increasing inequality wherein poverty still declines.
This situation may be characterized as a trickle-down process when the poor receive
proportionally lesser benefits of growth than the non-poor.
2.4 Data
The basic data used in this study is consumption expenditure survey (CES) of National
Sample Survey (NSS) unit record data for the years 1993–94 (50th round),3 2004–05
(61st round) and 2011–12 (68th round) on mixed recall period.4 NSSO CES data
report consumption expenditure of households in nominal terms. For this study, the
nominal expenditure has been converted into real expenditure at constant (2011–
12) prices. The price deflator used to convert the household expenditure at constant
prices is the implicit price deflator derived from the poverty line of India for rural
and urban areas separately. Poverty lines are Rs 816 (rural), Rs 1000 (urban), Rs
768 (rural U.P.) and Rs 941(urban U.P.) (GoI 2011a, b). This is estimated by the
methodology of the Tendulkar Committee through MPCE mix recall period. MPCE
is calculated by using the deflated MPCE data.
3 Poverty and Inequality in Uttar Pradesh
Uttar Pradesh was one of the better-performing states in terms of aggregate growth
until the 1970s. Thereafter, it has experienced a continuous decline in aggregate
growth. The state’s per capita income was 97% of the national per capita income in
1951. It gradually fell to 68% of this average in 1971–72 and hovered close to this
level till 1991–92 (67.5%). Thereafter, it again started falling gradually to 50.5% in
2001–02 and then to 40.5% in 2014–15 (Srivastava and Ranjan 2016). This loss in
growth momentum and failure to build on the foundations laid in the early years has
cost U.P. very dearly. It has continuously slipped down with its growth rate always
lagging the national growth rate (Refer Fig. 1). This loss in growth momentum has
been one of the major reasons behind the ‘not so impressive’ decline in poverty ratio
in U.P. unlike other states of India. It could be argued that many states took advantage
3 Inthis period, the geographical boundary of U.P. included Uttarakhand but for the comparability
of data, NSS region ‘Himalayan’ has been excluded from 50th round.
4 CES 1993–93 (50th round) reported every estimation on URP so verification of the MRP estimation
see; Himanshu (2007), Recent Trends in Poverty and Inequality: Some Preliminary Results.
12
10
8
6
4
2
0
-2
India U.P.
Fig. 1 Growth rate of Gross Domestic Product (India) and Gross State Domestic Product (U.P.)
(1993–94 to 2011–12) at a constant price (2004–05 base years). Source Directorate of Economics
& Statistics of, Uttar Pradesh and Central Statistics Office
of liberalization and succeeded in accelerating their growth rates and consequently

reducing their poverty ratio drastically. Uttar Pradesh failed to do so and that is why
it’s growth is continuously falling short of the national growth rate. This divergence
from the national average is also reflected in the MPCE, HCR and Gini Index.
It is evident from Fig. 2a and Table 2 (Appendix) that MPCE in rural U.P. has
always been lower than the national average and this difference is widening over
time. Rural MPCE of U.P. is only 83% of national rural MPCE in 2011–12. The
same story is repeated more glaringly in case of urban U.P. Here, it is only 78% of
national urban MPCE in 2011–12. This indicates that while growth in rural income
is slower than urban income in U.P., in either case, it is significantly lower than the
national level. According to Deaton and Drenze (2002), states with more poor people
reported slower growth in MPCE. It has to be so as the growth rate of U.P. GSDP
was 5.5% as compared to 6.5% growth of GDP for India in 2011–12 (Table 1).
HCR in rural India and rural U.P. is almost equal in 1993–94 and 2004–05.
However, the decline is much sharper at the national level after 2004–05 and raises
several questions. HCR of rural U.P. is significantly higher than rural India in 2011–
12. But, urban HCR in U.P. has been always higher than national urban HCR, right
from 1993–94 to 2011–12. During 1993–94 to 2011–12, this difference has further
widened; to the extent that poverty level in urban U.P. is twice that of urban India
(Fig. 2b). The period 2004–05 to 2011–12 appears to be significant as difference
in MPCE and HCR of U.P. (rural and urban) and India has further widened (Refer
Fig. 2a, b).
One may ask whether the change in inequality explains the observed changes
in MPCE and HCR? Gini index (consumption) is computed for the referred time
periods to understand the implication of change in inequality. While Gini has gone
up in rural India from 1993–94 to 2004–05 and has remained constant from 2004–05
to 2011–12, it has been almost same in rural U.P. right from 1993–94 to 2011–12
(Refer Fig. 2c and Table 2 in Appendix) and it is consistently lower than national Gini.
a
3000
2500 2477.02
1908.42 India (rural)
2000 1942.24
1567.09 1555.52 U.P. (rural)
1500
1311.48 1058.03 1287.17 India (urban)
930.17 1072.92
1000
863.43 951.78 U.P. (urban)
500
0
1993-94 2004-05 2011-12
b
60
51.03
50
50.31 42.71
40 41.83 India (rural)
38.38
30 34.05 30.39 U.P. (rural)
31.79 26.16 India (urban)
20 25.74 25.73
U.P. (urban)
13.68
10
0
1993-94 2004-05 2011-12
c
0.45
0.415
0.4
0.364 0.376
0.35 0.318 0.354
0.3 0.302 0.28
0.258 0.28 India (rural)
0.25 0.253
0.251 0.252 U.P. (rural)
0.2
India (urban)
0.15
U.P. (urban)
0.1
0.05
0
1993-94 2004-05 2011-12
Fig. 2 a MPCE of India and U.P. b HCR of India and U.P. c GINI index of India and U.P. Source
Author’s own computation based on unit record data of NSSO 50th, 61st and 68th rounds
This is a bit puzzling and suggestive that even if rural MPCE in U.P. is lower than the
national rural MPCE and the difference has widened over the years, inequality has
not risen in rural U.P. This is in stark contrast with urban U.P. While Gini had been
lower in urban U.P. as compared to the national Gini during 1993–94 to 2004–05,
the trend reversed during 2004–05 to 2011–12. This is suggestive that inequality is
much higher in urban U.P. than India and very high as compared to rural U.P. in
2011–12.
The overall picture depicts an acceleration in growth followed by a decline in
poverty and rise in inequality and in MPCE. Growth in MPCE (mean income) always
contributes to reducing poverty. But the latter may have been brought about by the
decline in inequality (Chen and Ravallion 2001; Kakwani and Pernia 2000). Thus,
the decline in poverty may have been caused by either positive growth or decline
in inequality. This has been a widely contested issue in literature which involves
questioning of methodology as well as empirical estimates. Economic growth began
to slow down sharply in South Korea during 1996–97 but the incidence of poverty
continued to fall significantly because the distribution of consumption became more
equal (Kakwani and Pernia 2000). Kapoor (2013) finds that states with a higher level
of initial inequality have a lower growth elasticity of poverty and suggests that the
more equal the initial income distribution, the more responsive to growth is poverty.
In spite of the observed methodological and empirical issues involved, it still makes
sense to investigate the growth–poverty relationship.
4 Growth–Poverty Relationship
Change in poverty can be decomposed into growth effect and inequality effect. Table
1 shows the total change in poverty and decomposition of poverty into growth effect
and inequality effect for India and Uttar Pradesh from 1993–94 to 2004–05 and 2004–
05 to 2011–12. The decomposition analysis is done to assess the impact of growth
and inequality on poverty reduction. The negative sign of growth effect explains the
Table 1 Decomposition of Poverty change (in %) of India and U.P. (1993–94 to 2004–05 and
2004–05 to 2011–12)
Period Total change in poverty Explained by
Growth Redistribution
India U.P. India U.P. India U.P.
Rural
1993–94 to −8.47 −8.32 −12.17 −9.63 3.69 1.31
2004–05
2004–05 to −16.10 −12.31 −16.85 −11.55 0.75 −0.75
2011–12
Urban
1993–94 to −6.05 −4.32 −13.00 −12.30 6.95 7.97
2004–05
2004–05 to −12.24 −7.88 −13.40 −16.75 1.15 8.87
2011–12
Source Author’s own computation based on unit record data of NSSO 50th, 61st and 68th rounds
negative relationship between growth and poverty reduction, whereas the positive
sign of redistribution effect signifies the rise in poverty with an increase in inequality.
Table 1 presents the decomposition of change in poverty into growth effect and
redistribution effect. It is seen that during 1993–94 to 2004–05 total change in rural
poverty has been similar for U.P. and India. But, a potential reduction in rural poverty
through growth effect is moderated by the redistribution effect. Growth would have
reduced poverty in rural India by 12.17%. But actual reduction turns out to be only
8.47% because of adverse redistribution, which has taken off 3.69% of potential
decline in poverty. This rise in inequality during 1993–94 to 2004–05 in rural India
is also shown by a rise in the Gini index during this period. Thus, the redistribution
effect has produced a counterforce in poverty reduction. Interestingly, redistribution
effect is able to do so only marginally (0.75%) in 2004–05 to 2011–12 in rural India,
where the total change in poverty (16.10%) is very close to growth effect (16.85%).
It is to be noted that Gini for rural India during this period has almost remained
constant. What happens in the case of rural U.P.? Potential impact on poverty reduc-
tion through growth effect (9.63%) is lessened by the redistribution effect (1.31%)
and actual change (8.32%) is slightly lower. But, a remarkable feature in case of rural
U.P. for 2004–05 to 2011–12 is the change in the role of redistribution effect. The
actual change in poverty (12.31%) is higher than the growth effect (11.55%). Here, the
redistribution effect (0.75%) is working in the same direction and helps in the reduc-
tion of poverty. Again, it is to be noted that the Gini index for rural U.P. has remained
constant during this period. Also, it is not necessary that the redistribution effect
always works in the opposite direction of growth effect. Generally, redistribution is
in favour of rich and against poor, but there can be a situation wherein redistribution is
in favour of poor as obtained in case of rural U.P. during 2004–05 to 2011–12.5 This
is a bit puzzling also as a change in MPCE in rural U.P. has been almost equal during
1993–45 to 2004–05 and 2004–05 to 2011–12. Possibly, households are clustered
around poverty line and interventions like Mahatma Gandhi National Rural Employ-
ment Guarantee Act (MGNREGA), National Rural Health Mission (NRHM), rise in
rural wages and revamping of the Public Distribution System (PDS) during 2004–05
to 2011–12 might have resulted in redistribution in favour of the poor in rural U.P.
during this period. It might have been due to the large size of rural poverty in U.P.
The redistribution effect has played a much stronger role in the urban area (Table
1). Growth effect (13%) is highly moderated by redistribution effect (6.95%) and
actual change in poverty turns out to be only 6% in urban India during 1993–94
to 2004–05. However, the redistribution effect is moderated in 2004–05 to 2011–
12. The corresponding Gini index for this period shows a dramatic rise in the first
period and only a marginal rise in the second period in urban India. Although the
change in total urban poverty in U.P. is lower than India, yet the redistribution effect
is stronger in U.P. Ironically, it is stronger during 2004–05 to 2011–12 than the
previous period. It means that urban poverty reduction in U.P. has been drastically
pulled down by redistribution against poor right from 1993–94 to 2011–12. It is
5 Kakwani and Pernia (2000) find negative impact of inequality on poverty for South Korea during
1990–98.
1.2
1.1
1
0.92
0.9
0.8
India (rural)
0.7
0.6 U.P. (rural)
0.52
0.4 0.46 India (urban)
0.33 U.P. (urban)

0.2
0
1993-94 to 2004-05 2004-05 to 2011-12
Fig. 3 Pro-poor Growth Index, India & U.P. (1993–94 to 2004–05 & 2004–05 to 2011–12). Source
Author’s own computation based on unit record data of NSSO 50th, 61st and 68th rounds
observed that urban Gini index has consistently gone up in U.P. during this period
indicating that recent growth has benefitted only a few people and led to increasing
disparities and inequalities (Dev and Ravi 2007).
So far, a mixed picture has emerged and it is not clear how much of the recent
high growth has been pro- or anti-poor. One possible tool to answer this question
is to estimate the pro-poor growth index. Figure 3 and Table 3 (Appendix) presents
the PPGI for the periods 1993–94 to 2004–05 and 2004–05 to 2011–12. Growth is
called pro-poor if PPGI is greater than one as discussed in the methodology section.
Figure 3 is quite revealing and partly supports the earlier contentions of
researchers. In general, there is a tendency towards having a pro-poor growth in
India beginning from 1993 to 1994. Of course, the degree varies across sectors.
PPGI in 2004–05 to 2011–12 is better than in 1993–94 to 2004–05 in all sectors.
However, it is not pro-poor in any sector except rural U.P., where it is greater than
one. It is only rural U.P. which has demonstrated a clear tendency during 2004–05
to 2011–12 towards pro-poor growth. Does it mean that recent growth has not bene-
fitted the poor at all and one needs to have a different growth than what one has had?
Poverty equivalent growth rate (PEGR) is estimated to answer this.
Figures 4 and 5 and Table 4 (Appendix) present the mean income growth rate
along with PEGR from 1993–94 to 2004–05 and 2004–05 to 2011–12. Growth is
pro-poor if PEGR is greater than the mean income growth rate or actual growth
rate (AGR). During the first period under study, the gap between AGR and PEGR
is wider in rural India but it has considerably narrowed down during the second
period (Fig. 4). While AGR of rural U.P. was very close to its PEGR in the first time
period, PEGR exceeded AGR in the second time period suggesting pro-poorness of
growth. Thus, during 1993–2004 AGR in the state was 10.23 while PEGR was 9.66;
during the second period, PEGR steadily kept rising and surpassed AGR which at
final count stood at 12.72 compared to 14.05 PEGR. Thus, rural U.P. has achieved
the pro-poor growth which is better than the corresponding trend for the country as
rural India is still approaching pro-poorness during 2004–05 to 2011–12. If the trend
Fig. 4 AGR & PEGR, rural AGR India AGR U.P.

India & U.P. Source Author’s
own, computation based on PEGR India PEGR U.P.
unit record data of NSSO 25
50th, 61st and 68th rounds
21.65
20 20.01
15 13.74 14.05
10.23 12.72
10
9.67 9.66
5
0
1993-94 to 2004-05 2004-05 to 2011-12
Fig. 5 AGR & PEGR, urban AGR India AGR U.P.

India & U.P. Source Author’s
own computation based on PEGR India PEGR U.P.
unit record data of NSSO 35
50th, 61st and 68th rounds 30 29.79
26.74
25 21.78 24.86
20
15 18.6
13.06
10 10.05
5
6.32
0
1993-94 to 2004-05 2004-05 to 2011-12
continues, rural India may achieve pro-poor growth, provided inequality does not
alter the situation. The urban scenario presents the opposite trends (Fig. 5). While
AGR for U.P. as well as India during both periods is more than PEGR, the gap
between the two is narrowing down. While PEGR is catching up with AGR sharply
in urban India lagging behind the latter by a few points (26.74 PEGR and 29.79
AGR), there has been only marginal narrowing down between the two in urban U.P.
wherein the gap is of nine points (PEGR 13.06; AGR 24.86).
Based on the above discussion and empirical evidence, it may be argued that the
distribution of MPCE is much better in the rural economy. In the case of rural U.P.,
growth has been pro-poor whereas rural India is lagging in pro-poor growth during
the second period (2004–05 to 2011–12). It indicates that the distribution of MPCE
has become more equal in rural U.P. as the Gini index is observed to be stagnant
in both time periods. Schemes like MGNREGA, which introduced at the beginning
of the second period, have resulted in pro-poor growth and an equitable and fair
distribution of MPCE in the rural areas. These type of schemes help in the reduction
of poverty in rural areas at a faster pace (Nayyar 2005). Impressive growth in real
wages of casual labourers may also have been a major factor behind pro-poor growth
and equitable distribution of income in rural U.P. According to Mamgain and Verick
(2017) annual growth rate of real wages of casual labourers has been 4.46% for rural
U.P. between 2004–05 and 2011–12, which is higher than urban U.P. (3.47%) for the
corresponding period. The rapid growth of economy and agricultural productivity
and a rise in the share of the non-agricultural sector in income and employment have
contributed to the rise in rural wage rates (Chand and Srivastava 2014; Gulati et al.
2013), while others see it as a correction after a long stagnation (Drèze and Sen
2013).
Yet, rural poverty is high in Uttar Pradesh. Part of the reason is that as the level of
MPCE is low despite being fairly distributed; suggesting that higher levels of MPCE
may be required to make a significant impact on the reduction of rural poverty. In
a state where 80% of the population lives in rural areas and 60% of it depends on
agriculture, levels of earnings in agriculture and rural non-agricultural sector hold
the key to reduction in rural poverty.
On the other hand, there has been a higher growth in MPCE and reduction in
poverty in urban U.P. but it is accompanied by increasing inequality.6 In urban U.P.,
MPCE is very high as compared to the rural area but higher inequality acts as a barrier
to poverty reduction and pro-poor growth. Distribution of MPCE being more unequal,
it is not able to make an impact as pro-poor or inclusive growth. One plausible reason
for unequal distribution of MPCE is the slower growth rate of real wages of causal
labourers in urban U.P. (3.47%) compared to 4.48% growth rate for rural U.P. during
2004–05 to 2011–12 (Mamgain and Verick 2017). Capital–skill complementarity
and increase in the skill bias of agglomeration economies in the context of rapid
skill-biased technical change have also played a major role in increasing inequality
in urban area (Baum-Snow et al. 2018). Besides the one-off effect on poverty from a
pure redistribution effect, the long-run impact of the improvements in the distribution
of income will reflect on the growth elasticity of poverty (Kapoor 2013). Moreover,
if attempts to reduce inequality fail, then it would become more difficult to address
the problem of poverty and inclusive growth and the poor will not be benefitted via
growth alone (Dang and Lanjouw 2018). Dealing with these inequalities would not
only raise social justice but it could also promote inequality-deadening inclusive
growth.
6 Many studies for other regions have shown that high growth rate is accompanied by increasing
inequality (see Weisskopf 2011; Chancel and Piketty 2017; Dang and Lanjouw 2018).
5 Conclusion
This paper has assessed the inclusiveness of economic growth between 1993–94 to
2004–05 and 2004–05 to 2011–12 in Uttar Pradesh. Change in poverty is decom-
posed into growth and redistribution effect, explaining the contribution of growth and
redistribution in poverty change. Further, PPGI for the measurement of inclusiveness
of economic growth is constructed and poverty equivalent growth rate is estimated. It
is found that the contribution of growth is dominant in poverty reduction in both, rural
and urban areas. Evidence shows that rural U.P. is lagging in pro-poor growth during
the first period whereas in the second-period growth has been pro-poor. It has been
possible because of the higher growth rate of real wages of causal labourers, equal
distribution of income and successful implementation of anti-poverty schemes like
MGNREGA. However, a whopping eighty percent of the state’s population is still
living in rural areas so promoting agriculture and non-agriculture sector and higher
expenditure on anti-poverty schemes are required to pull people out of poverty. On
the other hand, urban U.P. is lagging in pro-poor growth because of unequal distri-
bution of income and steadily increasing inequality. Capital–skill complementarity,
rapid skill-biased technical change and slower growth rate of real wages of causal
labourers are major reasons behind growing inequality and pro-rich growth in urban
U.P. Therefore, increasing the real wage of casual labourers, and equal distribution
of growth benefits eventually become imperative to achieve pro-poor growth and
reduce inequality.
This study highlights inadequacy of HCR-based poverty estimation and calls
for further research on these lines, especially in the case of Uttar Pradesh. Though
some explanations are offered, yet these are highly tentative and a more nuanced
investigation is required to understand the challenge of U.P. The researchers do not
have a complete explanation of the diametrically opposed picture of rural and urban
U.P. This study indicates possible threads of future research on U.P.
Appendix
See Tables 2, 3 and 4.

Table 2 Indicators of living standard of India and U.P. (1993–94, 2004–05 and 2011–12)
1993–94 2004–05 2011–12
India U.P. India U.P. India U.P.
Rural
MPCE 930.17 863.43 1058.03 951.78 1287.17 1072.92
HCR 50.31 51.03 41.83 42.71 25.73 30.39
Poverty gap 12.83 13.03 9.63 9.16 5.04 5.67
Severity of poverty 4.57 4.55 3.15 2.77 1.49 1.61
GINI 0.258 0.251 0.280 0.252 0.280 0.253
Urban
MPCE 1567.09 1311.48 1908.42 1555.52 2477.02 1942.24
HCR 31.79 38.38 25.74 34.05 13.68 26.16
Poverty gap 7.64 969 6.07 7.80 2.70 5.29
Severity of poverty 2.67 3.48 2.04 2.53 0.79 1.51
GINI 0.318 0.302 0.364 0.354 0.376 0.415
Table 3 Pro-poor growth index for India and U.P. (1993–94 to 2004–05 and 2004–05 to 2011–12)
Period Pro-Poor Growth Index (PPGI)
Rural Urban
India U.P. India U.P.
1993–94 to 2004–05 0.70 0.94 0.46 0.33
2004–05 to 2011–12 0.92 1.10 0.90 0.52
Table 4 Poverty equivalent growth rates for India and U.P. (1993–94 to 2004–05 and 2004–05 to
2011–12)
Period Actual Growth Rate Poverty Equivalent Growth Rate
(PEGR)
Rural Urban Rural Urban
India U.P India U.P India U.P India U.P
1993–94 to 13.74 10.23 21.78 18.60 9.67 9.66 10.05 6.32
2004–05
2004–05 to 21.65 12.72 29.79 24.86 20.01 14.05 26.74 13.06
2011–12
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Labor, Work, and Employment
Structural Change and Increasing
Precarity of Employment in India
Ravi Srivastava, Balakrushna Padhi, and Rahul Ranjan
Abstract This paper analyses the nature and increasing precarity of India’s employ-
ment in the last decade and a half. It examines the trends in informal employment
in India in 2004–05, 2011–12 and 2017–18. The analysis reveals that there has
been a significant degree of informalisation of employment in the formal sector
of the economy, and among regular/salaried workers, who form the predominant
section of the formal sector workforce. This has counteracted the potentially positive
effect of the economy-wide shift from agricultural to non-agricultural employment,
towards regular/salaried work and towards formal sector growth. This result reflects
on the long-standing debate in India on the impact of formal labour relations on the
formal sector employment. Formal employment is considered to be associated with
very rigid labour laws restricting hiring and firing of workers. However, the paper
shows that formal sector employment has expanded but with much greater infor-
mality of employment. This situation demands urgent attention in order to reverse
the increasing precariousness of employment and engage policy levers in reducing
the growing labour market inequalities in India.
1 Introduction
This paper analyses the nature and increasing precarity of India’s employment in the
last decade and a half. It examines how three interrelated processes have impacted
on the trends in employment precarity in a contradictory fashion. The first of these
R. Srivastava (B)
Centre of Employment Studies, Institute for Human Development, Delhi, India
e-mail: ravi.sriv@gmail.com
B. Padhi
Centre of Excellence in Fiscal Policy and Taxation, Bhubaneshwar, Odisha, India
e-mail: padhi.balakrushna5@gmail.com
R. Ranjan
Institute for Human Development, Delhi, India
e-mail: rkrahul555@gmail.com

https://doi.org/10.1007/978-981-15-8265-3_8
134 R. Srivastava et al.
is a series of changes that appear to have occurred in India’s employment structure.

These are the shift in employment from agriculture to industry and services, growth
of regular/salaried workers and the growth of formal sector employment. In prin-
ciple, these changes allow for improvement in employment quality. They have to be
understood, however, in the context of by the broader second set of changes demon-
strating negligible growth in total employment, drop in labour force employment and
in precarious agricultural employment, undertaken by women workers, combined
with slow growth in employment outside agriculture, which has sent unemployment
rates, particularly among the youth, surging to unprecedented levels. The final set of
changes relates to growing informalisation of the formal sector of the economy.
Precarious employment, which is broadly understood as temporary and inse-
cure employment,1 is interpreted in this paper as informal employment, defined in
the following section. Informality also comprises greater flexibility of employment
achieved by capital in relation to labour. We show how informality has increased in
the Indian economy and how it is driven by changes at the core of the economy, which
have undone the potential beneficial impact of the structural changes in employment
which we had referred to above.
2 Interpreting Informality
The debate on the informal sector took a different turn in the 1980s when it was
realised that the informal sector was not a transitional phenomenon, but indeed the
direction of global changes has increased the magnitude of informal sector employ-
ment. The International Labour Organization (ILO) took upon itself the task of
defining the parameters for characterising informal sector enterprises and for esti-
mating the size of informal sector employment across countries. The 15th ICLS
(1993) Conference of the International Conference of Labour Statisticians (ICLS)
outlined the characteristics of the informal sector. But it fell upon subsequent work
by the committee of statisticians under what came to be known as the “Delhi Group”
to fine-tune the definition of the informal sector and to give yardsticks by which
comparable estimates could be obtained across countries.
While it was more or less understood that informal sector employment would be
precarious, given the characteristics of this sector, it also was known that informal
sector employment did not subsume the entire universe of precarious employment.
In fact, there were forms of employment outside the informal sector, within the fold
of the formal sector which shared the same characteristics. The categorisation of
1 Kalleberg and Vallas (2018) define precarious work as “work that is uncertain, unstable, and
insecure and in which employees bear the risks of work (as opposed to businesses or the government)
and receive limited social benefits and statutory protections” (p. 1). ILO (2011) further adds that
precarious work is “usually defined by uncertainty as to the duration of employment, multiple
possible employers or a disguised or ambiguous employment relationship, a lack of access to social
protection and benefits usually associated with employment, low pay, and substantial legal and
practical obstacles to joining a trade union and bargaining collectively”.
Structural Change and Increasing Precarity of Employment in India 135
informal employment, whether within the informal sector or within the formal sector,
was taken up by the 17th ICLS in 1997. Broadly speaking, informal employment has
been defined as precarious employment, spanning all three sectors of the economy,
viz. formal sector, informal sector and private households. The ILO provides a matrix
which categorises informal/formal employment in these three sectors for different
types of employment/activity types (Hussmans 2004, ILO 2013, pp. 32–38).
However, the definition of informal employment was broad and somewhat
inconclusive. The ILO defines precariousness across two major dimensions, viz.
job security, which includes protection against arbitrary dismissal (without due
notice, etc.), and paid leave, and social security and leaves the precise definition
of “precariousness” to individual countries.2
The definition of the informal sector and informal employment was taken up the
National Commission for Enterprises in the Unorganised Sector (NCEUS), Govern-
ment of India. The Commission produced a definitive report estimating the informal
sector and informal economy and assessing the contribution of the informal sector
to the Indian economy (NCEUS 2007).
This is how the NCEUS defined the informal sector and informal employment
(NCEUS 2007, p. 3):
The unorganised sector consists of all unincorporated private enterprises owned by indi-
viduals or households engaged in the sale and production of goods and services operated on
a proprietary or partnership basis and with less than ten total workers.
Unorganised workers consist of those working in the unorganised sector or households,
excluding regular workers with social security benefits, and the workers in the formal sector
without any employment and social security benefits provided by the employers.
These concepts have also been accepted by the National Statistical Commission’s
Working Group on Unorganised Sector Statistics (NSC 2012). The detailed method-
ology of estimation of the informal sector and informal employment was elaborated
by the NCEUS in its Statistical Report (NCEUS 2008, Chap. 2). The report also
provides details of data adjustments which were required in order for estimations to
be made (ibid., Appendix 8). It may be mentioned that the NCEUS methodology,
as well as the methodology followed in this paper, is distinct from the concept and
methodology used by the NSO in its categorisation of unincorporated enterprises,
regardless of the size of the workforce, as informal sector enterprises.
2 See ILO (2013). According to paragraph 3(5) of the 17th ICLS guidelines, employees are consid-
ered to have informal jobs if their employment relationship is, in law or in practice, not subject to
national labour legislation, income taxation, social protection or entitlement to certain employment
benefits (advance notice of dismissal, severance pay, paid annual or sick leave, etc.) for reasons
such as: the jobs or the employees are not declared to the relevant authorities; the jobs are casual
or of a limited duration (e.g. through on-call arrangements); the hours of work or wages are below
a specified threshold (e.g. below that qualifying for social security contributions); the workers
are employed by unincorporated enterprises or by persons in households; the employee’s place of
work is outside the premises of the employer’s enterprise (e.g. outworkers without an employment
contract); or regulations are not applied, not enforced or not complied with for any reason (ibid.
p. 39).
As can be seen from the NCEUS definition, unorganised/informal work in the

formal sector was to be characterised both by employment security and social secu-
rity benefits. But in the empirical estimation, given that the 55th Round of the
NSS ‘Employment & Unemployment Survey’ (EUS) had only provided limited
data on social security benefits to workers, the NCEUS used the only provision of
social security benefits to characterise informal workers in the formal sector. Using
its methodology and comparing the growth of formal/informal employment in the
formal/informal sector between 1999–00 and 2004–05, the NCEUS came to the
startling conclusion that the entire increase in the workforce in the interim period
consisted of informal workers (NCEUS, Chap. 1). It also concluded that the share
of informal workers had increased both in the formal sector and in the economy as a
whole (ibid.). It may be mentioned that since 2004–05, however, the NSS Rounds on
EUS, as well as the Periodic Labour Force Survey (PLFS) carried out since 2017–
18, collect additional information on the nature of job contracts. This allows us to
measure “job precariousness” along both axes (job security and social security).
The report of the ILO mentioned earlier (ILO 2013), went into these dimensions of
informality and examined how different countries have operationalised the concept
of informal employment. Table 2.8 in ILO (2013) has compiled country-specific
definitions of informal employment. This shows that countries have used a combina-
tion of criteria (absence of job contracts, availability of paid leave or social security)
to define informal employment but several (most) countries cited have adopted the
absence of contracts as the intrinsic feature of informality.
Srivastava and Naik (2015) reviewed the ILO definitions and concepts along with
the NCEUS recommendations. They argued that in India social security benefits
in the organised sector had been extended to workers who were otherwise holding
very precarious jobs, as temporary, casual or contract workers. Both the two major
social security packages provided by the EPFO and the ESIC had made such provi-
sions. Although temporary and contract workers may not be able to access organised
sector social security in practice, the statutory framework provided for a disjunc-
ture between employment security and social security benefits. Srivastava and Naik
(ibid) therefore argued that employment security was a much more central feature of
formal employment, given also that the provision of social security was contingent
on employment. They also pointed out that ILO (2013) had shown that a number
of countries had taken employment security as a key feature of formal employment.
The paper also argued that capitalists/employers value labour flexibility even more
than workers availing of some social security. It, therefore, argued that informal
employment in India should be determined on the basis of job security, and not the
availability of social security.
Job security is also not easy to define. At the very minimum, the following criteria
could be used to define employment security: minimum tenure, notice procedure
and severance pay/benefits. Data on these criteria is currently not being collected.
But as pointed out earlier, the National Sample Survey (now the National Survey
Office) has, since 2004–05, been collecting information on whether employees in
designated industry groups have a written contract and the minimum period of such
contracts. Srivastava and Naik (2015) used the availability of a written contract to
designate an employee as a formal worker. Clearly, this is a very minimal criterion for
employment security. As Mezaddri and Srivastava (2015) have shown, we can also
consider degrees of formality and develop more stringent criteria to test the same.
This paper follows Srivastava and Naik (2015) in designating formal employees
as those employees who have a written contract. In addition, self-employed and own
account workers in the formal sector are also considered to be formal workers.
The operational criteria used to assign workers as belonging to the formal
sector/informal sector follows Appendix VIII of NCEUS (2008) with two differ-
ences with respect to cooperatives and workers in households which are detailed in
the explanatory note appended to Srivastava and Naik (2015).
This paper also makes new adjustments to the multipliers in the EUS and PLFS,
based on the population projections made by the Registrar General of India.3 These
estimates also affect the size of the labour force and the workforce and hence diverge
from earlier estimates made by the authors of this paper.
3 Structural Transformation of India’s Employment

Structure
3.1 The Shift from Agriculture to Industry and Services
The structural transformation of the economy and its implications for the employment
structure is perhaps the most significant aspect of the set of changes which could have
portended a beneficial impact for workers given the productivity differential between
different sectors.
Between 1983 and 2017–18, the share of agriculture in total employment declined
from over two-thirds (68.5%) to just over two-fifth (42%). Both industry and services
gained in the share of total employment each of these nearly doubling. The share of
industry in total employment increased from 13.7% in 1983 to 25.3% in 2017–18.
The share of the services sector in total employment increased from 17.8% in 1983
to 32.7% in 2017–18 (see Table 1).
Within industries, the transformation was led by the construction industry.
Employment in the construction industry increased from 6.8 million in 1983 (2.3% of
total employment) to 52.8 million (11.6% of total employment) in 2017–18. Although
manufacturing employment increased from 40 million to 58.2 million, its share in
total employment did not change much and has remained static in the last few decades.
Its share in total employment was 10.3% in 1983 and 10.8% in 1999–00. It increased
to 12.9% in 2011–12 and remained at 12.8% in 2017–18.
3 Forthe computation of census adjusted population figures, we have used the recent Census India
(2019) projected population estimates for the year 2011–12 and 2017–18. See for details, Census of
India 2011 Population Projections for India and States 2011–2036 Report of The Technical Group
on Population Projections November, 2019.
Table 1 Changing share of industry groups in total employment

1983 1993–94 1999–00 2004–05 2011–12 2017–18
Agriculture 68.5 63.7 60.5 56.3 47.8 42.0
Mining and quarrying 0.6 0.7 0.6 0.6 0.5 0.4
Manufacturing 10.6 11.5 10.8 12.3 12.9 12.8
Electricity, gas and water supply 0.3 0.4 0.3 0.3 0.3 0.5
Construction 2.3 3.2 4.4 5.7 10.6 11.6
Wholesale and retail trade 6.3 7.7 9.1 9.5 10.2 11.1
Hotels and restaurants 0.9 0.9 1.2 1.3 1.7 1.9
Transport, storage and 2.5 2.8 3.7 4.1 4.5 5.4
communications
Financial intermediation 0.4 0.6 0.6 0.7 0.9 1.1
Real estate, renting and business 0.2 0.4 0.7 1.0 1.8 3.0
activities
Public administration and 2.6 2.7 2.6 1.9 1.8 1.7
defence
Education 1.5 1.7 2.1 2.5 3.1 3.9
Health and social work 0.6 0.6 0.7 0.8 1.0 1.3
Others services (90–99) 2.8 3.1 2.9 2.9 2.9 3.2
Total industry 13.7 15.8 16.1 18.8 24.4 25.3
Total services 17.8 20.5 23.4 24.8 27.8 32.7
Non-agriculture 31.5 36.3 39.5 43.7 52.2 58.0
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source Authors own computation from NSS-EUS (1983 (38th), 1993–94 (50th), 1999–00 (55th),
2004–05 (61st), 2011–12 (68th)) and PLFS-I (2017–18)
Note Industry includes, the Mining, Manufacturing, Electricity and Construction, while the
Service sector includes, Wholesale and retail trade, Hotels and restaurants, Transport, storage
and communications, Financial intermediation, Real estate, renting and business activities, Public
administration and defence, Education, Health and social work and Others Services (90–99).
Industry Codes are concorded with National Industrial Classification (NIC) 2004
Within Services, the share of wholesale and retail trade in total employment
increased from 6.3% in 1983 to 11.1% in 2017–18, and that of hotels and restaurants
increased from 0.9 to 1.9% in the same period. The shares of Transport, storage
and communication; Financial intermediation; and Real Estate, renting and business
activities grew from 2.5% to 5.4%, 0.4% to 1.1%, 0.2% to 3%, respectively, between
1983 and 2017–18. The share of Education, and Health and Social Work grew from
1.5% to 3.9% and from 0.6% to 1.3%, respectively, between 1983 and 2017–18.
However, the share of public defence and defence went down from 2.6% to 1.7%
over the period and the share of Other Services has virtually stagnated.
Table 2 Increase in regular/salaried employment

Activity status 1983 1993–94 1999–2000 2004–05 2011–12 2017–18
Employment in million
Self-employed 172.7 203.9 208.2 257.7 245.5 235.0
Regular/salaried worker 41.0 51.1 58.5 69.8 86.7 109.7
Casual worker 87.8 118.9 131.1 128.1 137.6 110.3
Workforce 301.4 374.0 397.8 455.5 469.9 455.0
Percent to total
Self-employed 57 55 52 56 52 52
Regular/salaried worker 14 14 15 15 18 24
Casual worker 29 32 33 28 29 24
Workforce 100 100 100 100 100 100
Source Same as Table 1
3.2 Increase in Regular/Salaried Employment
A second change, linked to the first, is the significant shift in the activity status of
employed persons in India in favour of regular/salaried workers which have taken
place in recent decades. The activity-wise composition of the workforce shows small
changes between 1983 and 2004–05 but faster change thereafter. Between 1983
and 2004–05, the share of self-employed workers among total employed changed
marginally from 57% to 56% (see Table 2). The share of the casual workforce also
dropped marginally from 29 to 28% and the share of the regular/salaried workers
increased from 15 to 15%. These changes occurred at a more increased pace between
2004–05 and 2017–18. The share of self-employed workers in total employment
declined from 56% to 52%, while the share of casual workers declined from 28 to
24% over this period. On the other hand, the share of regular/salaried workers in
the total workforce increased from 15% in 2004–05 to 24% in 2017–18. Given the
stagnation in the size of the total workforce after 2004–05, the numbers of both self-
employed and casual workers were lower in 2017–18 than in 2004–05, whereas over
this period, the numbers of regular/salaried workers increased from 69.8 million to
109.7 million.
3.3 Increasing Formal Sector Share in Total Employment

and Shift from Informal to Formal Sector
Direct reliable estimates of the formal sector can be obtained from the EUS and the
PLFS. As discussed in Sect. 2, the definition and the empirical categorisation of the
formal sector here is drawn from the NCEUS with some modifications.
Table 3 Employment in the formal and informal sector

2004–05 2011–12 2017–18
Percentage to total employment in formal sector and informal sector
Formal sector 11.6 16.3 18.2
Informal sector 88.4 83.7 81.8
Total 100.0 100.0 100.0
Percentage change over 2004–05 2011–12 2017–18
Formal sector 44.8 56.5
Informal sector −2.4 −7.6
Source Authors own computation from NSS-EUS (2004–05 (61st), 2011–12 (68th)) and PLFS-I
(2017–18)
Note Formal and Informal Sectors are defined as in NCEUS (2008), with some empirical
modifications introduced in Srivastava and Naik (2015)
Estimates have been prepared for 2004–05, 2011–12 and 2017–18. These show
that the size of the formal sector increased from 52.9 million workers in 2004–
05 to 76.7 million in 2011–12 and further to 82.8 million in 2017–18. Over the
corresponding period, total employment in the informal sector declined from 402.8
million in 2004–05 to 393.3 million in 2011–12 and 372.2 million in 2017–18.
Compared to 2004–05, employment in the formal sector increased although on a
small base—by a significant 56.5%, while informal sector employment declined by
7.6%.
The result of these changes, presented in Table 3 shows that the share of the formal
sector in total employment increased from 11.6% in 2004–05 to 16.3% in 2011–12
and further to 18.2% in 2017–18, with a corresponding decline in the share of formal
sector employment. In absolute terms, formal sector employment increased 44.8%
during 2004–05 to 2011–12 and by another 56.5% during 2004–05 and 2017–18.
During the same period, absolute informal sector employment actually dipped by
2.4% during 2004–05 to 2011–12 and by 7.6% during 2004–05 to 2017–18.
The industry-wise details are given in Table 4. In the industries sector as a whole,
the share of formal sector employment increased from 27.17% in 2004–05 to 32.65%
in 2011–12 but dipped to 29.89% in 2017–18 still higher than the formal sector share
in 2004–05. The share of formal sector employment in services increased steadily
from 25.72% in 2004–05 to 29.48% in 2011–12 and further to 31.87% in 2017–18.
Outside agriculture, the share of formal sector employment increased from 26.35%
in 2004–05 to 31.01% in 2011–12.
Industry-wise, most industry groups show, and an increase in the share of the
formal sector in total employment. In manufacturing, the share of the formal sector
rose from 27.94% in 2004–05 to 35.47% in 2017–18. In wholesale and retail trade,
the share of the formal sector increased from a low 3.78% to 7.55% over this period.
The share of the formal sector in total employment increased between 2004–05
and 2017–18 in both Education and Health and Social work. The share of formal
sector employment increased from 28.61% to 52.15% in Financial intermediation,
Table 4 Percentage of total employment in the formal sector by industry groups

2004–05 2011–12 2017–18
Agriculture, hunting and forestry 0.25 0.33 0.53
Mining and quarrying 63.99 61.47 64.73
Manufacturing 27.94 33.32 35.47
Electricity, gas and water supply 92.03 90.85 81.16
Construction 18.49 28.47 20.47
Wholesale and retail trade 3.78 5.95 7.55
Hotels and restaurants 12.28 13.90 13.91
Transport, storage and communications 23.17 23.48 21.04
Financial intermediation 67.62 64.78 71.80
Real estate, renting and business activities 28.62 46.88 52.15
Public administration and defence 96.84 100.00 100.00
Education 67.72 74.04 75.52
Health-social work 52.65 59.13 63.80
Other services 4.19 8.11 9.17
Industry 27.17 32.65 29.89
Services 25.72 29.48 31.87
Non-agriculture 26.35 30.96 31.01
Total 11.62 16.31 18.20
from 28.61% to 52.15% in Real Estate and Business Activities. The industry groups
where the share of the formal sector in total employment did not increase have been
Transport, Storage and Communications; and Electricity, Gas and Water Supply.
Other things remaining the same, this increase should have laid the basis for higher
levels of formal employment in the economy.
4 Implications of the Stunted Growth in Employment

and Declining Labour Force Participation
The total employment and the annual growth rate in employment are given in Table 5.
Annual growth in total employment has been low throughout but has stagnated since
2004–05, turning negative between 2011–12 and 2017–18. Agricultural employment
growth has been negative in the two successive periods after 2004–05. While the rate
of non-agricultural employment has been higher than agricultural employment in
all periods, it has not been high enough to push aggregate employment growth to
reasonable levels, which as pointed out, declined between 2011–12 and 2017–18.
Table 5 Employment and annual growth rate

Year/Round
1983 1993–94 1999–00 2004–05 2011–12 2017–18
Employment (million)
Total 301.4 374.0 397.8 455.7 469.9 455.0
Agriculture 205.3 236.5 239.2 257.2 224.7 191.2
Non-agriculture 96.1 137.5 158.6 198.5 245.2 263.8
Annual growth rate in the preceding period
Total 2.18 1.03 2.76 0.44 −0.54
Agriculture 1.42 0.19 1.46 −1.91 −2.65
Non-agriculture 3.65 2.41 4.59 3.07 1.23
A major reason for reflection of the economy’s inability to create employment at a

rapid rate is its inability to increase the labour force participation rate (LFPR) which
has declined after 2004–05. As Table 6 shows, the total LFPR in the economy hovered
around 43% between 1983 and 2004–05. But between 2004–05 and 2011–12, the
LFPR dipped from 42.86% to 39.27% and then declined further to 36.84% in 2017–
18. A sex-wise disaggregation shows that male LFPR remained almost unchanged
but there was a significant decline in female LFPR by over 11% points between
2004–05 and 2017–18 from 28.85% in 2004–05 to 22.06% in 2011–12 and further
to 17.14% in 2017–18.
Table 6 Labour force participation rate (all ages)

Year/Round
1983 1999–2000 1999–2000 2004–05 2011–12 2017–18
Rural + Urban
Male 55.13 55.61 54.13 55.96 55.50 55.48
Female 29.82 28.76 25.89 28.85 22.06 17.14
Total 42.92 42.70 40.47 42.86 39.27 36.84
Rural
Male 55.49 56.08 54.05 55.51 55.14 54.79
Female 34.08 33.04 30.03 33.30 25.04 17.87
Person 45.07 44.95 42.36 44.72 40.48 36.76
Urban
Male 54.01 54.29 54.34 57.03 56.28 56.84
Female 15.77 16.50 14.73 17.82 15.48 15.68
Person 36.08 36.42 35.51 38.32 36.63 37.01
Table 7 Unemployment rate—all ages

1983 1999–2000 1999–2000 2004–05 2011–12 2017–18
Rural + Urban
Male 2.30 2.11 2.56 2.26 2.15 6.26
Female 1.21 1.60 1.77 2.69 2.46 5.91
Total 1.93 1.94 2.32 2.40 2.23 6.18
Rural
Male 1.40 1.43 1.77 1.60 1.73 5.84
Female 0.67 0.79 1.06 1.79 1.56 3.64
Person 1.13 1.20 1.52 1.67 1.68 5.32
Urban
Male 5.14 4.05 4.59 3.81 3.04 7.07
Female 5.03 6.23 5.69 6.88 5.64 11.14
Person 5.12 4.52 4.81 4.49 3.57 7.90
A sector-wise disaggregation shows that most of this decline took place in rural
areas and for women. This has been widely commented upon in the literature.4
Female LFPR almost halved between 2004–05 and 2017–18 from 33.3% in 2004–05
to 17.87% in 2017–18. Although urban female LFPR was slightly lower in 2011–
12 and 2017–18 compared to 2004–05, no long-term trend pattern is discernible
from the results. Although in earlier years, rural female LFPR was almost twice the
urban level, these two were almost convergent by 2017–18. Further analysis carried
out showed that this decline was mainly because precarious female employment in
agriculture (both paid and unpaid) went down in recent years. Thus, it needs to be
noted that at one end of the employment spectrum, precarious jobs held by women
in agriculture declined significantly, and this accounted for some of the shifts that
we analyse later in this paper.
4.1 Rising Unemployment Rate
However, results further show other significant changes. Although the LFPR declined
overall and for women, the availability of employment declined at an even faster rate
in recent years after 2011–12 resulting in an increase in unemployment rates.
Table 7 shows the unemployment rate (all ages), disaggregated by sex, across
sectors. The long-term trend in usual status unemployment rates which also happens
to measure the lowest unemployment rate among the four measures of unemployment
that the NSS data can generate (this is now down to three, with the PLFS), has been
4 See for details Srivastava and Srivastava (2010), Srivastava (2016c, 2019), Kannan and Raveendran
(2019), Rodgers (2020), Verick (2014).

Table 8 Unemployment rate among youth (15–29 years)

1983 1999–2000 1999–2000 2004–05 2011–12 2017–18
Rural + Urban
Male 5.09 5.11 6.19 5.41 6.01 17.85
Female 2.78 3.81 4.43 6.16 6.84 18.41
Total 4.32 4.69 5.66 5.65 6.23 17.96
Rural
Male 3.13 3.51 4.36 3.94 4.94 17.36
Female 1.52 1.90 2.73 4.19 4.45 13.16
Person 2.53 2.94 3.81 4.03 4.80 16.52
Urban
Male 10.80 9.64 10.93 8.77 8.25 18.79
Female 11.54 14.95 14.09 14.92 14.06 27.74
Person 10.94 10.76 11.52 10.09 9.49 20.70
remarkably stable over a quarter of a century between 2004–05 and 2004–05. But
between 2004–05 and 2017–18, unemployment rates increased for all groups—urban
or rural, male or female. Overall, male unemployment rates increased from 2.15%
to 6.26% and female unemployment rates went up from 2.46% to 5.91%. While in
rural areas, male unemployment rates exceeded those of women in 2017–18, it was
the other way around in urban areas where female unemployment rates were as high
as 11.14%, compared to an unemployment rate of 7.07% for men in 2017–18.
Further, the fragility of employment growth seems to have affected the young more
than other groups. Unlike the aggregate unemployment rate, youth unemployment
rates have shown a tendency to rise over the years—from 4.32% in 1983 to 5.65%
n 2004–05 and 6.23% in 2011–12. But this rate almost trebled between 2011–12
and 2017–18, rising to 17.96%. As Table 8 shows, this rise occurred both among
young men and among young women. Youth unemployment rates were higher in
urban areas than in rural areas, higher among rural males than rural females, but
in urban rates, unemployment rates were higher among young women than young
men. Further analysis, not shown here, that although unemployment rates among the
youth rise with increasing levels of education, the increase is significant across all
education levels, from the lowest to the highest.
Thus, the results discussed in the preceding section have to understand in the
context of the loss of precarious agricultural jobs, particularly for women; and the
inability of the economy to increase jobs at a fast enough rate to absorb the young
in recent years, among whom unemployment rates have increased at a phenomenal
rate in recent years.
5 Precarity and Informality of the Workforce
For the purposes of this paper, we abstract from the several other challenges on the
employment front briefly discussed in Sect. 4 and focus on the precarity of those who
are in employment. As pointed out in Sect. 3, the structural transformation that the
Indian economy has experienced in recent decades, with a shift of the employment
structure towards regular salaried jobs in larger formal non-agricultural enterprises
provides the preconditions for the creation of more stable and better quality employ-
ment. On the other hand, the push towards more flexible labour and non-standard jobs
is increasingly precarious jobs (temporary, part-time, non-standard, and informal) the
world over.
Between 2004–05 and 2017–18, the economy gained a paltry 4.6 million formal
jobs. Most of this gain occurred between 2004–05 and 2011–12 (4.1 million). While
informal jobs in the economy increased by 10.1 million between 2004–05 and 2011–
12, there was a loss of 15.4 million informal jobs between 2011–12 and 2017–18,
with the economy losing 5.3 million jobs in the aggregate in the entire period 2004–05
and 2017–18. As already pointed out, women in the rural sector of the economy have
been moving out of the labour force and there is a significant decline in precarious
agricultural work for women in the years since 2004–05 which has contributed to
the overall decline in jobs (see Table 9).
The slow growth in formal jobs combined with either a slower growth (in
percentage terms) in informal jobs has brought about a small increase in the share
of formal employment in the country from 6% in 2004–05 to 6.7% in 2011–12 and
7% in 2017–18.
Table 10 shows that the industry-wise share of formal employment. This share
has not improved between 2004–05 and 2017–18. Indeed, the reverse has happened.
In other words, the results in Table 9 above are principally a result of employment
moving away from agriculture but to sectors where informality has simultaneously
increased.
Taking the broad sectors first, in the aggregate industries sector, the share of
informal employment increased from 92.12% to 93.21% between 2004–05 and 2017–
18. In the service sector as a whole, the percentage share of the informal employment
increased from 81.87% to 83.86%.
Table 9 Formal and

2004–05 2011–12 2017–18
Informal Workers in the
Indian Economy Formal workers (million) 27.4 31.5 32.0
Informal workers (million) 428.3 438.4 423.0
Percent to total workers
Formal worker 6.0 6.7 7.0
Informal workers 94.0 93.3 93.0
Table 10 Industry-wise percentage share of formal and informal employment

Formal worker Informal worker
2004–05 2011–12 2017–18 2004–05 2011–12 2017–18
Agriculture, 0.06 0.09 0.10 99.94 99.91 99.90
hunting and
forestry
Mining and 29.05 27.85 23.69 70.95 72.15 76.31
quarrying
Manufacturing 8.30 7.89 8.24 91.70 92.11 91.76
Electricity, gas 69.58 59.15 46.74 30.42 40.85 53.26
and water supply
Construction 1.71 2.87 3.00 98.29 97.13 97.00
Wholesale and 1.80 1.98 2.03 98.20 98.02 97.97
retail trade
Hotels and 4.22 3.75 3.29 95.78 96.25 96.71
restaurants
Transport, 14.45 13.44 9.44 85.55 86.56 90.56
storage and
communications
Financial 52.04 42.33 39.38 47.96 57.67 60.62
intermediation
Real estate, 17.39 26.49 19.44 82.61 73.51 80.56
renting and
business
activities
Public 72.21 69.16 62.87 27.79 30.84 37.13
administration
and defence
Education 52.41 50.18 44.73 47.59 49.82 55.27
Health-social 37.62 36.62 32.78 62.38 63.38 67.22
work
Other services 3.46 4.55 6.09 96.54 95.45 93.91
Industry 7.88 6.87 6.79 92.12 93.13 93.21
Service 18.13 17.95 16.14 81.87 82.05 83.86
Total 13.72 12.77 12.06 86.28 87.23 87.94
non-agriculture
Total 6.01 6.71 7.03 93.99 93.29 92.97
The more detailed industry-wise results show that informality increased in Manu-
facturing; Hotels and Restaurants; Transport, Storage and Communication; Financial
Intermediation; Public administration and defence, Real Estate, Renting and Business
Activities, Education, Health and Social Work. But informality declined marginally
70
60
54.8
60
51.2
48.8
45.2
50
40
40
29.5
25.3
24.5
24.3
30
21.6
18.4
13.3
13.2
20
12.4
12.1
11
5.9
10
0
Agriculture, hunting Mining, Construction Total Industry Total Services Total Non-agriculture
and forestry Manufacturing,
Electricity
2004-05 2011-12 2017-18
Fig. 1 Percentage contribution to total informal employment. Source Same as Table 3
from very high levels in the construction industry, and Wholesale and Retail Trade;
and in Other Miscellaneous Services.
The shift in the employment structure away from agriculture almost entirely
informal to industry and services, led to very marginal changes in the formalisation
of employment, as these industries although less informal than agriculture, got more
informalised in the recent decades. The share of agriculture in total informal employ-
ment declined from 60% in 2004–05 to 45.2% in 2017–18, but the corresponding
contribution of the non-agricultural sector to informal employment increased from
40% to 54.8%. Both the industries and services sector contributed almost equally to
this increase. The share of the services sector in total informal employment increased
by 7.9%, from 21.6% in 2004–05 to 29.5% in 2017–18. Over the corresponding
period, the share of industries by 6.9%—from 18.4% to 25.3% largely the contribu-
tion of the construction industry which grew rapidly at a high level of informalisation
(see Fig. 1).
Since formalisation can principally occur through the category of regular/salaried
work, whose significance, as noted in Fig. 2 has increased between 2004–05 and
2017–18, Fig. 2 summarises the share of formal and informal workers among all
regular/salaried workers. Agriculture has a low share of regular/salaried workers,
but among them, the share of formal workers increased from 5.1% in 2004–05 to
8.1% in 2011–12 but declined to 6.5% in 2017–18. The share of formal workers in
manufacturing declined steadily from 26% in 2004–05 to 19.1% in 2017–18. Thus,
in manufacturing, every four out of five regular/salaried worker was an informal
worker in 2017–18. In industries as a whole, the share of formal workers among
regular salaried workers declined from 31.3% to 22% in 2017–18. The share of
formal workers declined across the board in services except for Other Services (NIC
Div. 90–99). Overall, 43.5% if regular/salaried workers were formal workers with
written contracts in 2004–05, but this percentage declined to only 31.2 in 2017–18.
Thus, the shift in the activity status of the Indian workforce towards regular/salaried
45
39.8
40 38.4
35.3 34.7
35
31.3
28.6 28.1
30
26 25.8
25 21.7 22
19.1
20
15
10 8.1
6.5
5.1
5
0
Agriculture Manufacturing Industry Non-Agriculture Total
2004-05 2011-12 2017-18
Fig. 2 Percentage of formal workers among regular/salaried workers across industry groups. Source
Same as Table 3
work did not result in higher formalisation of the workforce due to the hiring of
regular/salaried workers in informal settings and with formal contracts.
6 Formal and Informal Employment in the Formal Sector
As shown in Sect. 3, the formal sector of the economy has grown rapidly in recent
years. Although its direct share in total employment is still small, it is still the
leading sector of the economy, dominated by large capital and capital–labour relations
shaped by such capital, unlike the informal sector where the role of capital is either
fragmented or diffused and indirect. It is also in relation to the formal sector that
there have been intense debates on labour market rigidities leading to slow growth
of employment. On growth of formal sector employment, facts have already been
discussed in Sect. 3. Here, we discuss the evolution of formal capital–labour relations
in this sector since 2004–05.
The shares of formal and formal employment in the three periods/rounds and
across different industry groups are discussed in Table 11.
In the formal sector as a whole, the share of formal employment was less than
half (46.2%) in 2004–05. This fell to 37.4% in 2011–12 and further to 35.2% in
2017–18. The share of formal work in the minuscule formal agricultural sector was
understandably the lowest—19.4% in 2004–05 and 17.8% in 2017–18. In the indus-
tries sector, only a quarter of workers (25/2%) were formal workers in 2004–05 and
in 2017–18, this fell further, and only a fifth of the workers (20.5%) were formal
workers. While in this segment, the construction industry was the least formal, the
level of formalisation was low in manufacturing and declined further. The share of
formal employment in manufacturing was 25.3% in 2004–05 and declined steadily
to 21.6% in 2017–18. The level of formalisation was higher in services but declined
by a significant level from 63.5% in 2004–05 to 46.5% in 2017–18. As would be
Table 11 Industry-wise percentage of formal workers in the formal sector

2004–05 2011–12 2017–18
Agriculture, hunting and forestry 19.4 21.6 17.8
Education 70.4 61.9 55.1
Health-social work 66.9 58.1 48.1
Other services 39.1 42.8 42.1
Industry 25.1 18.8 20.5
Service 63.5 55.8 46.3
Total non-agriculture 46.5 37.6 35.5
Total 46.2 37.4 35.2
expected the share of formal employment was high in public administration. Educa-
tion, health and financial intermediation but declined in each of these sectors over
time. Formalisation within the formal sector was low in wholesale and retail trade,
and hotels and restaurants to begin with and declined over the years. By 2017–18,
less than one-fifth of the employment in each of these sectors was formal. Given that
these figures are for the formal sector and over a relatively short period of time of
13 years, the pace of informalisation is indeed remarkable.
Table 12 shows the share of formal workers across the government/public sector
and the private formal sector. The government/public sector is considered to be
a model employer, but the results in Table 12 show that due to outsourcing and
contract-based employment, the share of formal workers has declined quite rapidly. In
2004–05, 72.1% of all workers in the government sector were formal workers but by
2017–18, this had declined to 55.1%. In the private formal sector, the share of formal
workers was already low at 24.6% in 2004–05 and further declined to 20.8% in 2017–
18. The aggregate industry sector, which was already highly informalised in 2004–05,
with formal workers at 18.5%, showed an even lower percentage of formal workers—
16.7% in 2017–18. The Services sector less informalised in 2004–05 with about two-
fifth workers as formal. This declined to nearly one quarter (27%) in 2017–18. In the
formal non-agricultural sector, the percentage of formal workers declined from about
Table 12 Industry-wise percentage of informal workers in government/public sector

Government/Public sector Formal private sector
2004–05 2011–12 2017–18 2004–05 2011–12 2017–18
Agriculture, 52.4 29.0 37.9 5.1 10.6 3.8
hunting and
forestry
Mining and 81.3 82.5 70.2 20.9 19.1 18.6
quarrying
Manufacturing 73.8 75.2 40.6 21.9 18.9 20.3
Electricity, gas 76.8 70.6 61.5 62.2 41.3 36.6
and water supply
Construction 16.3 13.6 22.4 3.1 3.4 4.4
Wholesale and 49.4 50.3 28.1 20.4 21.4 18.2
retail trade
Hotels and 63.3 49.8 31.2 23.5 16.3 15.0
restaurants
Transport, 73.5 75.1 55.9 24.9 23.6 21.6
storage and
communications
Financial 70.2 70.2 58.1 66.3 53.0 45.6
intermediation
Real estate, 51.3 74.8 51.6 51.2 46.0 26.5
renting and
business
activities
Public 73.3 69.2 62.9 60.1
administration
and defence
Education 77.6 70.8 64.5 49.3 37.5 29.9
Health-social 78.6 74.2 61.1 45.1 36.2 27.4
work
Other services 64.9 58.3 54.7 29.8 31.3 31.6
Industry 61.1 30.2 35.3 18.5 15.1 16.7
Service 74.3 70.4 60.5 39.1 34.2 27.0
Total 72.3 58.9 55.3 24.9 21.9 21.0
non-agriculture
Total 72.1 58.5 55.1 24.6 21.8 20.8
* Only includes workers in the workers in the AGEGC sector (industry groups/divisions 012, 014,
015, 02 and 99) as per NIC 2004

a quarter (24.9%) in 2004–05, to about a fifth (21%) in 2017–18. Among industry

groups which showed a significant increase in informalisation between 2004–05
and 2017–18 in the formal private sector were Hotels and Restaurants; Financial
Intermediation; Real Estate and Business Activities; Education; Health and Social
Work.
The formal sector of the economy is largely dominated by a regular/salaried work-
force. The activity-wise composition of the formal sector workforce across industries
needs to be comprehended in order to further understand the drivers of informality in
the formal sector that has been observed above. Only two industry groups predomi-
nantly comprise of casual workers. The ACGEC subgroup in agriculture comprises
just around a third of regular/salaried workers, with the rest being casual or self-
employed workers. The formal sector in the construction industry mainly comprises
casual workers—about four-fifth of all workers. The share of casual workers was
quite high in mining and in manufacturing in 2004–05 but has declined since then. In
manufacturing, the share of casual workers has declined from 25.3% in 2004–05 to
only 13.9% in 2017–18. Self-employed and casual workers are also relatively more
significant in wholesale and retail trade, and in hotels and communication. On the
other hand, the share of regular employment has been very high in public adminis-
tration and defence, education, real estate, financial intermediation, electricity, water
and gas supply and health and social work. In each of these industries, the share of
regular workers exceeded 90% in 2017–18.
The industries sector has a lower share of regular workers. This share was 57.6% in
2004–05. It declined to 51.1% in 2011–12 due to the increased share of construction
industry employment and then increased to 60.5% in 2017–18. In the services sector,
the share of regular employment was already high at 92.5% in 2004–05 and increased
steadily to 96.5% in 2017–18. In the non-agricultural sector as a whole, the share
of regular workers was 77% in 2004–05. It declined to 73.2% in 2011–12, due to
the rapid growth in the casualised construction industry in this period, and then
increased to 81.4% in 2017–18. These percentages remain more or less the same
with the inclusion of the AGEGC sub-group (Table 13).
Since regular/salaried work comprises about four-fifth of workers in the formal
sector, it holds the key to trends in informality/precarity in the formal sector. Results
of the percentage of regular wage/salaried workers who were informally employed
are given in Table 14. Formal employment relations declined significantly in all
industry groups between 2004–05 and 2017–18. Among manufacturing workers,
only 35.8% regular/salaried workers were formal in 2004–05. This went down by
more than 8% points to 27.4 in 2011–12 and declined further to 26.3% in 2017–18.
There was a systematic decline in formal employment across the tertiary sector. This
decline could be seen even in public administration and defence (from 74.5% formal
workers in 2004–05 to 63.4% formal workers in 2017–18), education (from 71.6%
formal workers in 2004–05 to 55.4% in 2017–18) and health (from 69.9% formal
workers in 2004–05 to 38.8% in 2017–18). Regular/salaried workers remained the
most formalised in public administration and defence (63.4%), electricity, water and
gas supply (56.8%), education (55.4%) and financial intermediation (52.9%).
152
Table 13 Activity status of formal sector workers (industry-wise, percent to total)

2004–05 2011–12 2017–18
SE REG CAS SE REG CAS SE REG CAS
Agriculture, hunting and forestry* 19.1 34.2 46.7 7.0 30.4 62.6 16.0 35.9 48.1
Mining and quarrying 5.3 56.0 38.7 1.7 57.2 41.1 1.5 68.4 30.1
Manufacturing 6.1 68.6 25.3 4.1 75.9 20.0 4.9 81.2 13.9
Electricity, gas and water supply 0.9 94.6 4.5 0.1 95.3 4.6 0.7 96.6 2.7
Construction 8.5 12.9 78.6 4.6 10.6 84.8 6.3 14.4 79.2
Wholesale and retail trade 14.3 69.2 16.6 8.7 79.9 11.4 5.5 89.8 4.7
Hotels and restaurants 12.4 76.9 10.7 9.1 84.8 6.2 7.4 83.1 9.6
Transport, storage and communications 3.0 86.5 10.4 3.2 88.0 8.8 1.1 93.3 5.6
Financial intermediation 7.0 91.6 1.3 1.5 97.4 1.1 3.9 95.7 0.4
Real estate, renting and business activities 9.2 87.9 2.9 3.3 93.7 2.9 1.6 97.0 1.3
Public administration and defence 0.5 97.8 1.7 0.0 99.2 0.8 0.0 98.8 1.2
Education 1.1 98.1 0.8 0.6 99.1 0.3 0.5 99.4 0.1
Health-social work 1.8 95.0 3.2 1.4 96.0 2.6 0.7 98.7 0.7
Other services 17.3 73.2 9.4 6.6 85.9 7.5 3.4 90.9 5.7
Industry 6.3 57.6 36.2 4.0 51.1 44.9 5.0 60.5 34.5
Service 3.4 92.5 4.1 2.2 94.6 3.2 1.6 96.5 1.9
Total non-agriculture 4.7 77.0 18.3 3.1 73.2 23.7 3.0 81.4 15.6
Total 4.8 76.5 18.7 3.1 72.8 24.1 3.2 80.8 16.0
Refers only to the AGEGC subgroup within agriculture which excludes crop growing and includes industry groups/divisions 012, 014, 015, 02 and 99 as per
NIC 2004
Note SE, REG and CAS mean Self-employed, Regular/Salaried Workers and Casual Workers, respectively
R. Srivastava et al.
Table 14 Formal employment (percent) among regular salaried work in the formal sector
2004–05 2011–12 2017–18
Agriculture, hunting and forestry* 54.8 61.2 42.5
Education 71.6 62.5 55.4
Health-Social work 69.9 60.1 48.8
Other Services 50.5 48.9 45.6
Industry 42.5 32.4 30.4
Service 68.3 58.8 47.8
Total non-agriculture 59.7 49.7 42.4
Total 59.7 49.8 42.4
* Only includes workers in the workers in the AGEGC sector (industry groups/divisions 012, 014,
015, 02 and 99 as per NIC 2004

Note Total Formal–informal workers/sector has been computed based on NCEUS and Srivastava
and Naik (2015) study
In sectors as a whole, the share of formal workers among regular/salaried workers

declined from 54.8% in 2004–05 to 42.5% in 2017–18. In industries, this share
declined from 42.5% to 30.4% over the corresponding period. In the service sector
as a whole, the share of formal employment among regular/salaried workers remained
higher than in services but declined from 68.3% in 2004–05 to 47.8% in 2017–18.
This informalisation of regular/salaried workers has proceeded with a rapid pace.
While in 2004–05, two-fifth of regular workers were informal, by 2011–12, more than
half were informal. By 2017–18, just under three-fifth (57.6%) had reported informal
employment relations. It is the growing informality among the regular workers that
has driven the growing informalisation of formal sector employment in India between
2004–05 and 2017–18.
There is evidence that the rapid informalisation of regular workers, even among
those with relatively high levels of formal education, is a major determinant of
the gap between formal and informal workers. Srivastava (2016b) examined the
wage differences between these two groups of regular workers: regular workers
without any written contract (informal regular employees), and regular workers with
a written contract (formal employees). The mean log wage rate of the former is 0.886
higher than mean log wage rate of the latter. Using Blinder–Oaxaca decomposition,
the difference was divided between differences in characteristics and differences in
rewards to informal and formal labour markets (wage penalty). Approximately 54%
of the wage differential was accounted for by differences in characteristics, whereas
differences in rewards (wage penalty) accounted for approximately 46% of the wage
gap. Srivastava and Manchanda (2015) analysed the pattern of wage inequality in
India. They found increasing levels of inequality among regular workers in the formal
sector, reflecting rising differences between very highly skilled regular workers and
the rest, on the one hand, and the other regular workers. In a recent paper, Srivastava
and Padhi (2020) examined the trends in wage pattern between 2004–05 and 2017–
18. The relative wage gap between regular/salaried wage workers and casual workers
declined between 2004–05 and 2011–12, and further between 2011–12 and 2017–
18. In fact, real wages of regular workers declined between 2011–12 and 2017–18
and the decline was at a faster rate among formal sector workers, which as we have
shown has informalised at a rapid pace. Thus, informalisation of regular workers has
no doubt influenced wages and labour market dynamics in the formal sector of the
economy.
7 Conclusion
There is clear evidence that despite changes in the employment structure of the
Indian economy towards an increasing share of industry and services in total employ-
ment, growth in regular/salaried employment, higher growth and higher share of the
formal sector in total employment, and a faster rate of decline of precarious agri-
cultural work, the share of formal employment in total employment has remained
virtually unchanged. This paper analyses the trends in informal employment in India
in 2004–05, 2011–12 and 2017–18. It corroborates the findings of Srivastava (2012,
2016a, b, 2019), Srivastava and Naik (2015) which have shown that there has been
a significant degree of informalisation of employment in the formal sector of the
economy, and among regular/salaried workers who form the predominant section of
the formal sector workforce. This has counteracted the potentially positive effect of
the economy-wide shift towards regular/salaried work, and towards formal sector
growth.
This result reflects on the long-standing debate in India on the impact of formal
labour relations on the formal sector employment. Formal employment is considered
to be associated with very rigid labour laws restricting hiring and firing of workers.
Results examined by Srivastava (2016a, b), Srivastava (2019) have clearly shown
that formal employment has grown in India at a fairly rapid rate. These results are
again corroborated in this paper which shows that formal sector employment grew
by 44.8% between 2004–05 and 2011–12 and again by 56.5% between 2004–05
and 2017–18. Although formal employment grew in the formal sector, the growth
of informal employment within it was much faster, leading to an informalisation of
the formal sector, and arresting the formalisation of employment in the economy.
These trends reflect the push towards achieving higher labour market flexibility in
the formal sector, a trend which gets amplified if we also consider the predominance
of informal employment in the lower rungs of the value chain which has links with
the formal sector. It has resulted in a higher wage premium for highly skilled formal
workers and has steadily lowered the gap between regular/salaried workers and casual
workers. The increasing precariousness of employment in the non-agricultural and
formal sectors of the economy has created a large, vulnerable workforce, among
whom, as argued by Srivastava (2019), the circular labour migrants are a growing
chunk of workers.
This situation demands urgent attention in order to arrest increasing precarious-
ness of employment and engage policy levers in reducing the growing labour market
inequalities in India.
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Contemporary Capitalism
and Employment Challenges: Some
Reflections on India
Praveen Jha and Satadru Sikdar
Abstract The fact that India confronts massive challenges of employment and liveli-
hoods is clearly evident from the relevant literature on the subject. The progress on
these was hardly impressive during the first four decades after Independence from
the British colonial rule, but the overall situation appears to have gone from bad to
worse during approximately the last three decades of so-called economic reforms.
And indeed, the last quinquennium appears to be a disastrous phase as per all the
available data sources. The focus of this paper is on some of the critical issues, with
respect to the above-noted themes in contemporary India, while locating these, very
briefly, in the architecture of some of the major features of contemporary global
capitalism, and India’s own context of neo-liberalism.
1 Introduction
It is generally well acknowledged that both, the quantity and quality of employment,
have been among the most serious challenges confronting the Indian economy; in fact,
by most accounts, the gravity of the problem has increased during the period of so-
called economic reforms since the early 1990s. As per the report of the International
Labour Organization, World Employment and Social Outlook: Trends 2019, region-
wise distribution of unemployed persons, in 2018, was the highest in Eastern Asia
(39.3 million), followed by sub-Saharan Africa (25.3 million), Latin America (24.2
million) and Southern Asia (22.2 million). This report also suggests that South Asia
and sub-Saharan Africa are among the most challenged regions with respect to the
quality of work, with well over 70% of workers trapped in fragile and vulnerable
employment conditions. India’s count of the unemployed is likely to increase from
18.3 to 18.9 million between 2017 and 2019 (ILO 2019); furthermore, the share, as
P. Jha (B)
CESP. School of Social Sciences, Jawaharlal Nehru University, New Delhi, India
e-mail: praveenjha2005@gmail.com
S. Sikdar
National Institute of Public Finance and Policy, New Delhi, India

https://doi.org/10.1007/978-981-15-8265-3_9
158 P. Jha and S. Sikdar
well as the absolute numbers of those in vulnerable employment, are also likely to
increase. The portion of informal jobs, for all sectors and non-agricultural sectors, is
put at approximately 90% and 80%, respectively.
A recent World Bank report titled “Jobless Growth?” paints a similarly bleak
picture: “the demographic transition is swelling the ranks of the working-age popu-
lation across most of South Asia. In this context, keeping employment rates constant
would require massive job creation. But there is a widespread perception that
increases in the working-age population have been offset by declining employment
rates, and that women accounted for most of the decline” (World Bank 2018, p. 29).
Based on its estimate of the number of people aged 15 and above, the Report projects
that India will need to create at least 8 million jobs per year to even maintain current
employment rates till 2025. We may also note that India’s own official estimates of
the net new entrants in the job market at the current juncture have been put between
10 and 12 million every year. In other words, even if we focus only on the quantity
of jobs required, there is a huge challenge at hand. Further, given that India’s GDP
growth rate, for almost four decades now, has been quite respectable at more than
6% per annum, but employment elasticity has shown a secular decline for more than
three decades now, it is obviously pertinent to ask whether rapid growth of GDP alone
can address the challenges of livelihoods and additional employment generation.
Before we examine some of these issues in detail for India, it would be useful
to flag a couple of major features of contemporary capitalism which appear to have
impacted the world of work everywhere, in very profound ways; this is discussed
in Sect. 2. Section 3 provides a brief overview, of the trends and patterns associated
with some of the major indicators, with a focus on recent years, relating to work and
well-being of workers. Section4 concludes the paper highlighting its core argument.
2 Neoliberalism’s Challenges to the World of Work: Some

Pointers
Of course, to construct a sketch of contemporary global capitalism is a herculean

endeavour, if not an impossible one. Complexity and diversity of the underlying
features, processes, etc., across different regions of the world make any such task
hugely challenging. There is a large literature on the subject with which we cannot
engage here. Nonetheless, at a high level of abstraction, it is possible to flag a couple
of its most prominent markers, which have indeed shaped its dynamics in the recent
times and have huge implications for workers everywhere.
The first point worth highlighting here is that since the 1970s, the era of what
most observers in political economy tradition characterise as neo-liberalism, has
been ascendant, and by 1990s, this regime clearly succeeded in establishing its hege-
mony in the global economy. Sure enough, neo-liberalism does not come in any one
size or shape, temporally or across different countries, but its core philosophy has
been: ‘leave the economy to the market; market knows and does the best’, which
Contemporary Capitalism and Employment Challenges … 159
was captured quite well in the phrase ‘Washington Consensus’, coined and made
famous by John Williamson. Harvey (2005) offers a good working definition of neo-
liberalism as: “Neoliberalism is in the first instance a theory of political economic
practices that proposes that human well-being can best be advanced by liberating
individual entrepreneurial freedoms and skills within an institutional framework
characterized by strong private property rights, free markets, and free trade. The
role of the state is to create and preserve an institutional framework appropriate to
such practices.” As already hinted, here we do not intend to analyse varieties of neo-
liberalism across time and space, but essentially focus on a couple of key features
at the core of neo-liberal capitalism, which is what capitalism has been for close to
half a century.
Among the most important features which need to be underscored as being abso-
lutely central to the working of neo-liberalism is doing away with controls on Capital.
Gradually but surely, this has had profound implications for the reconstitution of
class power in the global economy and society in multiple ways, two of which
are worth highlighting: (a) enormous increase in the economic and political power
of capital, vis-a-vis other constituents such as labour, citizens, etc., everywhere;
and (b) within capital in general, phenomenal increase in power of finance capital.
As is well-documented, multinational and transnational corporations (MNCs/TNCs)
had already become very influential entities in the global economic system by the
first half of the twentieth century, (for early and very illuminating discussions of
this phenomenon, see Baran and Sweezy 1966; Galbraith 1967; Stephen Hymer
1969), and during the era of neo-liberalism their power has witnessed astronomical
increases. A simple indicator of this phenomenon is the fact that, as per the recent
estimates by the Transnational Institute (TNI), of the top hundred economic enti-
ties, in terms of revenue,69 were corporations and only 31 were countries. (Babic,
Fichtner and Heemskerk 2017). In this list, Walmart comes at the top among corpo-
rations, after countries of G-7, along with China and Brazil, and occupies the tenth
position. It is this dramatic increase in the economic heft of these corporations, and
their increasing stranglehold on the global economic system, which justifies late
Amin’s (2019) claim that “contemporary capitalism is a capitalism of generalised
monopolies”. Amin suggests that the global economic system has reached a new
stage in the centralisation of capital where leading corporations, mostly headquar-
tered in the North, are in the drivers’ seat and have established firm networks of
control through “monopolies upstream and downstream” across the economies of
the world (Amin 2019). One of its major implications has been strengthening of the
processes of primitive accumulation, (which in any case is a permanent feature of
capitalism), resulting in large-scale destruction of petty production and livelihoods
of the masses in the Global South.
Another significant development during the era of neo-liberalism, and organically
connected with doing away with regulations on capital, has been the reconstitution
of class power within ‘capital in general’ in favour of ‘finance capital’, which relies
primarily on accumulation through circulation and speculation; in its extreme and
vulgar form, it is nothing but unbridled ‘casino capitalism’. Paul Sweezy had pointed
to this ‘new finance’ in his The Triumph of Financial Capital, almost a quarter-century
ago: “the development in the last twenty years or so of a relatively independent—

financial superstructure sitting on top of the world economy and most of its national
units. It is made up of banks—central, regional and local—and a host of dealers
in a bewildering variety of financial assets and services, all inter connected by a
network of markets, some of which are structured and regulated, others informal and
unregulated”, (Sweezy 1994). As it happens, the growing power of this new finance
has dramatically altered the processes and dynamics of accumulation in the global
economy, and these have been analysed very carefully by several Marxist political
economists. To quote Sweezy again: “Traditionally financial expansion has gone
hand in hand with prosperity in the real economy. Is it really possible that this is no
longer true, that now in the late twentieth century the opposite is more nearly the
case; in other words, that financial expansion feeds not on a healthy real economy
but a stagnant one? The answer to this question, I think, is yes, it is possible, and
it has been happening. And I will add that I am quite convinced that the inverted
relation between the financial and the real is the key to understanding new trends in
the world economy (italics added)” (Sweezy 1994).
Another major marker of contemporary capitalism, which partly resembles,
analytically speaking, above-noted characterisation advanced by Samir Amin, that
“contemporary capitalism is a capitalism of generalised monopolies”, is trans-
nationalisation of capital from North to the South, both through direct investments in
economic activities (FDI) as well as through the incorporation of domestic economic
actors without making any direct investments locally, e.g. by making them ‘suppliers’.
These have resulted, as Patnaik (2005) puts it, in the loosening of “the traditionally
enforced pattern of international division of labour”. In other words, the traditional
segmentation of economic activities and associated division of labour have been
considerably diluted and a handful of countries in the Global South have become
major hubs in a whole range of ‘modern economic activities’. The case of East Asia,
led by China, as the ‘manufacturing workshop’, and that of India as the ‘office’ of
the world, have received considerable attention in the recent decades. These develop-
ments, relating to accelerated trans-nationalisation of economic activities have been
analysed under the broad rubric of global commodity chains/supply chains/value
chains/production networks (GCCs/GSCs/GVCs/GPNs), etc. We need not get into a
discussion of these analytical frameworks here and their respective merits and disad-
vantages, and would only like to stress that such developments have had profound
implications for contemporary capitalism and its various actors; further, in large
measure, above-noted dramatic restructuring of global accumulation dynamics is
organically connected with de-regulation of capital or, in other words, the ascendency
of neo-liberalism.
From the point of view of workers, the above-noted ‘de-centreing/de-
segmentation’, etc. have several important implications, the most obvious one being
that employment and wages in the Global North cannot be insulated anymore from
the exposure of huge labour reserves in the Global South, even though it may not lead
to any significant expansion in labour absorption in the latter, due to adoption of rela-
tively capital-intensive technology, destruction of petty production, etc., which are
also organically connected with the restructuring in the overall global accumulation
dynamics. Thus, trans-nationalisation of economic activities from the North to the

select destinations in the South, as has been experienced during the last few decades,
may lead to increases in the labour productivity in the latter without concomitant
increases in the wages, while putting considerable pressure on wages and working
conditions in the former. A major implication of such connected tendencies would
be an increase in the share of surplus, along with a decline in the share of wages, in
total output. All available evidences point exactly to such tendencies and outcomes
in the global economy during the era of neo-liberalism, (Basu 2016). In fact, even
in the most powerful economy in the World, viz. the USA, as noted by Stiglitz apart
from a decline in the wage share, even the real wages have been almost stagnant
since the late 1960s (Stiglitz 2018).
The third important feature associated with contemporary accumulation regimes,
with significant implications for the world of work, worth flagging here, is connected
with the profound technological changes often described as the fourth industrial
revolution, which constitutes a large and complex canvas. Although it is indeed
difficult to predict work and labour-related outcomes connected with the so-called
‘Industry Four’, due to several uncertainties including the economical–political–
social ones, it appears that the global economy has witnessed a major acceleration in
labour-saving technological changes in the recent decades, thus creating substantial
pressure on the world of work.
In sum: important markers which have profoundly structured contemporary global
capitalist dynamics and are organically connected with neo-liberalism, appear to
generate several adverse tendencies for workers across the globe; further, there are
no good news around the corner. Although, based on the major features of contempo-
rary capitalism, which we have very briefly mentioned in the foregoing, one cannot
jump to unequivocal conclusions regarding the prospect for employment, livelihoods,
working conditions, etc., either for India or elsewhere, certain tendencies need to
be taken seriously. First, growing financialisation of accumulation under the tute-
lage of neo-liberalism tends to put tremendous pressure on the real economy every-
where, privileging ‘casino capitalism’, which leads to increases in ‘labour reserves’.
Second, the other structural changes in contemporary capitalism, flagged in the fore-
going, have contributed to significant increases in the share of surplus and downward
pressures on the share of wages; these obviously exacerbate the problems of under-
consumption and labour demand. Third, given the hegemony of finance capital, nation
states are trapped into deflationary macroeconomic policies, resulting in compres-
sion of public investments and expenditure; these again have serious adverse conse-
quences for the world of work and workers. With these brief remarks on the larger
overall context of global capitalism, we now turn to the India story.
3 Persistent and Deepening Employment Deficits in India
Before highlighting some important characteristics of the contemporary world of

work in India, it would be useful to say a few words about the existing relevant data
sources. Though multiple official entities and institutions are involved in collection,
compilation and dissemination of labour statistics,1 most discussions on employment

in India generally rely on the surveys of the Employment and Unemployment Situa-
tion (EUS) which have been conducted since the early 1950s by the National Sample
Survey Organisation (NSSO), an organisation under the jurisdiction of Ministry of
Statistics and Programme Implementation (MoSPI). Of course, covering the entire
population, baseline statistics capturing quite a few important variables, are also
generated by the Registrar of Census and the Census Commissioner, every 10 years,
the last census being conducted in 2011. Apart from these major institutions, organi-
sations like the Labour Bureau and Directorate General of Employment and Training
(DGET), which are linked to the Ministry of Labour and Employment (MoLE), carry
out sporadic and targeted surveys. A recent internationally comparable database
constructed through a collaboration between the International Labour Organisation
and the Reserve Bank of India known as the Capital (K), Labour (L), Energy (E),
Material (M), Services (S) database or RBI-KLEMS database, maybe used to track
year-wise log changes in GDP, sectoral growth rates and growth rates of employment
between 1981–82 and 2016–17.
Apart from these sources, we also get useful labour statistics about the organ-
ised/formal sector from administrative sources such as Employees’ Provident Fund
Organisation (EPFO), the Employees State Insurance Scheme (ESIC) and National
Pension System (NPS). Government database monitoring implementation of employ-
ment generation schemes like Mahatma Gandhi National Rural Employment Guar-
antee Act (MGNREGA), ‘Support to Training and Employment Programme (STEP)’
and others also provide limited real-time data on particular segments and target
groups. Recent studies have also used data from private agencies like Centre
for Monitoring Indian Economy (CMIE) which does Consumer Pyramid Surveys
(CMIE-CPDX) in collaboration with Bombay Stock Exchange (BSE).
As mentioned earlier, the NSSO surveys have been considered most valuable
sources for the world of work in India. The first NSS-EUS was undertaken in the
Round 9 (May–September 1955); thereafter, there were experiments with survey
designs of EUS up to the early 1970s. Based on the Dantwala Committee’s recom-
mendations, a more ambitious and relatively more comprehensive survey, covering
several variables, including employment and unemployment was carried out in 1972–
73 (i.e. the 27th Round of NSS). As suggested by the Committee, it was decided
to carry these Surveys quinquennially; thus far, six such comprehensive surveys
have been conducted, and the last one was 68th Round (2011–12).2 With respect
to the labour domain, these surveys provide data on the labour force participation
rates (LFPR, i.e. the number of employed+the number of unemployed in the labour
force) and the worker population ratio (WPR, i.e. the proportion of actually working
or employed people with particular population segments) and unemployment rates
(UR). The significance of this data is that it provides important information on, both
organised/formal and unorganised/informal sector workers, through the collection of
1 We have provided a brief review of these elsewhere (Jha 2009), and here we limit our readers to a
bare minimum.
2 The details about the available information have been discussed in other paper by Jha (2015).
data on regular, self-employed and casual workers. However, a major limitation of

the quinquennial NSSO data was that it provided information with a gap of 5 years,
which had obvious constraints from the point of view of policy interventions. Hence,
it was decided, based on the Panagariya Committee recommendations, that annual
periodic labour force survey (PLFS) should replace the hitherto quinquennial EUS, to
collect important information on work related variables. It was proposed that data on
LFPR, WPR and UR for the usual status (UPSS) and current weekly status (CWS),3
for men and women in the rural and urban areas. It also recommended that rota-
tional sampling be done for urban areas over four quarters of the year. In line with
the recommendation of the said Committee, the first Annual PLFS was conducted
between June 2017 and July 2018, and its report was published in May 2019. Most
of the observations in this paper on the long term trends in the world of work are
based on estimates which are calculated on the basis of different rounds of the NSSO
(EUS) and PLFS data. Some references are also made to other data sources.
It comes out very powerfully from multiple data sources that the employment
situation has been under huge stress in recent years. The recent annual PLFS, 2017–
18 has shown that the unemployment rate has risen 2.77 times since the last EUS
of 2011–12 and is at a 45 years high of 6.1% as per UPSS measure. Similarly,
the decline in the growth rate of employment growth is also reported by the RBI-
KLEMS database which shows that 7.7 lakh people became jobless between 2014
and 2016; though some recovery was made in 2016–17 with an addition of 2.89
lakh jobs, there was a net loss of approximately 4.89 lakh jobs between 2014–15
and 2016–17. According to the RBI-KLEMS database, there have been negative
log changes in the rate of growth of employment in 12 sectors (out of a total of 27
sectors) in 3 years between 2014–15 and 2016–17. From a long-term perspective,
the exponential growth rate in employment was 1.92, 1.72 and 1.47% in the periods
between 1981–82 to 1989–90, 1990–91 to 1999–2000 and 2000–01 to 2009–10,
respectively. But these came down sharply to 0.58% between 2010–11 and 2016–17.4
The secular upward trend in unemployment is evident for all regions and segments
of the population through both the UPSS and CWS approaches as illustrated in
the data presented by the PLFS 2017–18. Through the CWS, we can see that the
unemployment rate in 2017–18 reached a high of 8.8% for rural and urban male
workers; it was 7.7% rural women and 12.8% for urban women workers (Table 1
in Appendix). The same trend is also illustrated through the UPSS approach, which
shows that unemployment rates for 2017–18 were 5.8 and 3.8 for rural males and
rural females, respectively; for urban male and urban female workers, they were 7.1
and 10.8%, respectively.5 The current PLFS shows that the LFPR for women in rural
India is at the lowest level since 1993–94; it is 18.2% if estimated by UPSS approach
and 16.1% by the CWS approach, the. Though there has been a miniscule increase in
3 Fordifferent measures of employment/unemployment see Jha (2009).

4 We have also calculated the average log change during these periods, as these were, 1.65, 1.48,
1.25% in between 1981–82 and 1989–90, 1990–91 and 1999–2000 and 2000–01 and 2009–10,
respectively, and it has reduced to 0.47% in between 2010–11 and 2016–17.
5 Based on Appendix Tables 18 and 36, Annual Report PLFS 2017–18.
urban LFPR for women (Table 2 of Appendix), this has not been enough to offset the
steep fall in rural LFPR. The result has been a historical low in participation rates.
The scenario described above is organically connected with neo-liberal economic
policies which have increased the divergence between growth rates and labour
absorption; rural India has borne the brunt of the growing employment crisis. Since
the mid-1990s, persisting and deepening agrarian distress has been accompanied by
the lack of gainful employment in the non-agricultural sectors. Even today, about
half the total population is dependent on agriculture and allied sectors for their liveli-
hood, even though the sector only contributes a sixth to the GDP. Further, state-led
efforts to induce the much talked about the process of diversification of employment
from the mid-1970s to the late 1980s have received a massive setback with cutbacks
in public spending, especially since the mid-1990s. Apart from this, there are also
many other reasons, among which one important cause is accelerating displacement
and dispossession, resulting in a huge expansion of labour reserves in rural India
without adequate creation of gainful employment in the non-agricultural sector. The
share of the manufacturing sector in the overall national income has been stagnant
around 15–16% since the early 1990s and most of the growth has taken place in the
service sector, a great deal of which is of a very vulnerable quality.
The growing dissonance between overall GDP growth rates and WPR is illustrated
in Fig. 1, which shows the moving average of GDP and WPR shares for both rural
and urban in different NSS and PLFS years. It clearly demonstrates that in spite of
42.3 42.0 41.2

42.0 42.0 43.0 40.0
39.7 39.5
39.2 38.6 36.9
34.7
8.2 8.1 7.4

6.0 5.8 6.3 6.7
4.7 4.9
WPR GDP Growth LFPR
Fig. 1 GDP growth rate (3 Years MA) and workforce & labour participation rate. Note GDP figures
from 1976–77 to 2012–13 are in 2004–05 constant prices, whereas GDP figures for 2016–17 to
2018–19 are in 2011–12 constant prices. Sources WPR compiled from Statement 10& LFPR from
Statement 8, PLFS Annual Report 2017–18 and GDP from CSO
100
Agriculture,
80
Forestry & Fishing
60 Parcipaon Share of Male in
40 37.3 Rural India
Parcipaon Share of Female
20 14.8 in Rural India
0 Parcipaon Share of Male in
Urban India
in Urban India
Fig. 2 Comparison of GDP and WPR shares in agriculture, forestry & fishing. Note GDP shares
are 3 years moving average and figures from 1976–77 to 2012–13 are in 2004–05 constant prices,
whereas figures for 2016–17 to 2018–19 are in 2011–12 constant prices and the share of GVA.
Source WPR are based on NSS Report No. 554: Employment and Unemployment Situation in
India, 2011–12, Statement 5.11 and Annual Report PLFS, 2017–18, Appendix Table 26 and GDP
shares are calculated from data available from CSO
increasing GDP growth rates, labour absorption rates were stagnant till 2004–05,
and have been falling subsequently.
The broad picture presented above can be nuanced through an analysis of the WPR
across the major sectors and industry groups during the last four decades as shown
in Table 3 of the Appendix. The results of Table 3 have been presented in Figs. 2,
3, 4, 5, 6, 7, and 8, which illustrate how the labour absorption of different sectors is
either stagnant or declining from the late 1970s onwards. Figure two shows that in
contrast to the overall trend, and most other major sectors, GDP share in agriculture
and its allied sectors have sharply fallen although it continues to be the single largest
employer in the economy. The WPR rates for rural men declined from 80.4 to 54.95%
and, for rural women, they have fallen from 86.8 to 73.19% between 1977–78 and
2017–18.
The results for agriculture and allied sectors (from Table 3 and Fig. 2) presented
above clearly point towards the significant fall in labour absorption. Ideally, such a
fall should have resulted in a transition from labour absorption in agriculture to other
non-agricultural sectors. However, the trends in the non-agricultural sectors (Table
4.0
Participation Share of Male in
3.5
Rural India
3.0 3.0
2.5 Participation Share of Female
2.4
2.0 in Rural India
2.1
1.5 Participation Share of Male in
1.0 Urban India
0.5
Participation Share of Female
0.0
in Urban India
GDP Share
Fig. 3 Comparison of GDP share and WPR share in mining & quarrying. Note and Source Same
as Fig. 2
35.0
30.0
25.0
Manufacturing
Parcipaon Share of Male in
20.0 18.1 Rural India
15.0 14.1 Parcipaon Share of Female
10.0 in Rural India
5.0
Urban India
0.0 Parcipaon Share of Female
in Urban India
GDP Share
Fig. 4 Comparison of GDP share and WPR share in manufacturing. Note & Source Same as Fig. 2
16.0
14.0
Construction
12.0
10.0 Parcipaon Share of Male in
8.0 7.5 8.1 Rural India
4.0 in Rural India
0.0 Urban India
in Urban India
GDP Share
Fig. 5 Comparison of GDP share and WPR share in construction. Note & Source Same as Fig. 2
35.0
30.0 Trade, Hotels
25.0 & Restaurant
15.0 Rural India
5.0 in Rural India
Urban India
in Urban India
Fig. 6 Comparison of GDP share and WPR share in trade, hotels & restaurant. Note & Source
Same as Fig. 2
3 and Figs. 3, 4, 5, 6, 7, 8) show that these sectors have largely followed the path
of jobless growth. For example, the GDP share in Mining and Quarrying (Fig. 3)
has experienced an upward turn between 2012 and 2018 (after it declined between
1993–94 and 2012), but the WPR has seen a continuous decline since 1994. Among
2.5
2.2
2.0
1.5 1.4 Parcipaon Share of Male in
Rural India
in Rural India
0.0 Urban India
in Urban India
GDP Share
Fig. 7 Comparison of GDP share and WPR share in electricity, gas & water supply. Note & Source
Same as Fig. 2
60.0
50.0
40.0
30.0 Rural India
in Rural India
0.0 Urban India
in Urban India
GDP Share
Fig. 8 Comparison of GDP and WPR Share in Other Services. Note & Source Same as Fig. 2
other factors, the privatisation of mines and incentives to reduce human intervention
may be the source of its reduced capacity to absorb labour.
In contrast to this, the Manufacturing Sector has seen a relatively more stable
trend where its GDP share has increased from 14% in 1977–78 to 18.1% in 2017–18
(Table 3 and Fig. 4); even during the 1990s, the sector seems to have shown stable
growth, but without any expansion in its share in GDP. The WPR in this sector has
remained between 22 and 25% for all segments of the population, thus showing
no new creation of promising jobs for those who are actually losing employment
in other sectors. As per the All India Manufacturers’ Organisation (AIMO) survey,
across 3 lakh industries, about 35 lakhs jobs were lost across different segments of
manufacturing from 2014 to 2018. Also, the recent turmoil in the automobile sector
has resulted in job losses to the tune of approximately 3.5 lakh. This slowdown is
also having a negative impact on ancillary industries like combing automakers, spare
part manufacturers and franchised dealers and garages (Reuters 2019).
Construction is another sector which has been seen as having good prospects for
the creation of new jobs, in large measure, due to government incentives to private
construction businesses in the last few decades. This sector has seen a slight growth
since the middle of the 1990s (Table 3 and Fig. 5). Long-term trends in Fig. 5 also
show that WPR of both male and female workers have been to the tune of 21–25%
in overall terms. It is significant that female WPR showed a marginally rising trend
till 2012, but in the recent period, there has been a slight downturn, highlighting the
contraction of employment between 2012 and 2018. Even schemes like MGNREGS
and other government projects like PMGSY have failed to have a significant impact
on employment generation.
Further, it is to be noted that most of the opportunities generated in this sector
are largely in the nature of casual and irregular wage labour without any modicum
of social protection. Hence, expanding opportunities in the construction sector only
reflect the expansion of low-wage informal work, which, as the PLFS shows, has
also contracted in the last 6 years.
The lack of labour absorption in these four producing sectors, which account
for approximately 44% of the current GDP and about two-thirds of WPR in rural
areas, is apparent from the data presented above. These trends of jobless/job-loss
growth have been structured by uneven development where the emphasis has been
on the service sectors. Data from RBI-KLEMS further illustrates that the overall
GDP growth rate has largely been driven by the service sector, in which there is a
preponderance of both vulnerable casual and self-employment (Table 4 of Appendix).
The relationship between the GDP shares of different sub-sectors within services and
the WPR is shown in Figs. 6, 7 and 8 (data for the same is in Table 3 of Appendix).
There was an incremental improvement in WPR in transport, storage, trade (Fig. 6)
and electricity, water sectors (Fig. 7). This is especially true of urban India which
has seen an increasing WPR, especially in the category of ‘other services’ (Fig. 8).
As PLFS report shows, 49.9% of female workers in urban India are engaged in
‘other services’, and of which, almost 15.1% engaged in the education sector, and
9.56% are engaged in ‘activities of households as employers’ as domestic workers
and almost 6% are working in ‘human health and social work activities’. Relatively
high presence of these workers in these segments represents persistence of informal
sector as they largely work without any job security and social protection.
The lack of labour absorption across different sectors is accompanied by the
high presence of low-wage and insecure employment. Though there has been an
increasing trend of ‘real’ wages since the 1980s, it is also accompanied by wage
inequality, especially in the urban/organised sector, and also between regular and
casual workers during the same period (Jha 2015). Recent data presented by the PLFS
2017–18 shows the average daily wage rates for regular wage/salaried employees,
self-employed persons (with 30 days recall periods), and for casual labour (with each
day of the reference week) as illustrated in Fig. 9.
Table 3 of the Appendix and Fig. 9 clearly show that the average wages are higher
for regular salaried employees in comparison with self-employed and casual workers.
The PLFS 2017–18 also shows that the self-employed and casual workers in rural
India are earning less than half of regular waged workers, which is already much
less, i.e. about two-thirds of the accepted minimum standard (Varma 2019). The
average earnings of self-employed workers are better than those of casual workers
but lower than that of regular salaried workers. Gender and sectoral differences in
wages are clearly visible from Fig. 9. There are substantial disparities in average
600
574
536
493
485
600
451
421
324
304
299
298
281
400
268
247
233
192
173
154
151
147
145
142
137
135
200
0
Rural Urban
Regulr wage/ salaried employees Self-employment work

Casual labour engaged in works other than public works In MGNREG public works
Fig. 9 Comparison of average daily wages among broad status of employment. Source Calculation
based on Annual Report PLFS, 2017–18
wages6 calculated for self-employed workers; for average, monthly wages for male
workers are Rs. 16,067 and Rs. 8955 in urban and rural India, respectively whereas,
for urban and rural women, they are Rs. 6993.75 and Rs. 4122, respectively. Further,
for self-employed women workers in rural India, the average daily wage (i.e. average
monthly wage divided by 30 days) is significantly less than the average daily wage
for casual workers in non-public work and MGNREGS. The inequalities of wages
across different types of jobs in diverse sectors show that a large share of workers
are working for wages which are much lower than the declared minimum wages (Jha
2015; Papola and Kannan 2017) (Table 5).7
The unregulated low-wage employment scenario described above is reflective
of the persistence and deepening of informality. Casual workers and own-account
enterprises, 85% of whom work with only one or two hired workers, form the bulk of
the working population and structure low-wage and insecure work. Even though the
world of work has been characterised by a high ratio of informal workers in the pre-
reform period, this has been exacerbated by a relentless informalisation of work in the
formal sector. In 1999–2000, the share of informal workers in the so-called organised
sector was 37.8% and it had increased to 54.4% in 2011–12, according to the 68th
round of NSSO. As per the same round of the NSSO, 97% of the self-employed in
the rural and 98% in the urban areas are in the informal sector; 78% of the rural
casual labourers and 81% of the urban casual labourers are in the informal sector.
6 The PLFS report has presented quarterly average wage for these broad categories, and we have
calculated the average wage of these quarterly figures.
7 According to the NCEUS report (2009), 85% of all casual workers in rural areas and 57% of them
in urban areas get wages below the minimum wages in 2004–05. The difference in the proportion of
workers below the minimum wage norm in rural areas and urban areas is more marked for the non-
agricultural workers, with urban workers being considerably worse-off. Among industry groups,
the proportion of men below the minimum wage is higher in trade, whereas among women it is
highest in manufacturing in rural and urban areas. Thus, an overwhelming majority of workers both
in the rural as well as urban areas get wages which are well below the stipulated minimum wage in
the country.
Usual Status (ps+ss)

Casual labour, 24.9 Own account worker,
employer, 38.6
Regular wage/salary, 22.8

Helper in household
enterprise, 13.6
CWS Own account worker,

Casual labour, 24.0 employer, 38.4
Regular wage/salary, 24.1
Helper in household
enterprise, 12.1
Fig. 10 Percentage distribution of persons working by broad status in employment. Source Based
on PLFS Annual Report, 2017–18
As per the NSSO estimates of 2011–12, count of informal labour was a whopping
453.4 million out of a total of 473.8 million8 or 93% of the total employed people.
This went up to 466.48 million out of a total of 471.3 million or approximately 99%
of the working people in 2017–2018.9
Workers in informal employment are generally represented by a high presence
of self-employed and casual workers. This is also reflected in the 2017–18, which
shows that 52.2% of the All India workforce (UPSS) is self-employed; 25% are
casual, and 22.8% are regular salaried workers. In rural India (Table 6 and Fig. 10),
the share of self-employed workers is as high as 57.8% of which 41% are own-
account workers. Only 29.1 are casual workers, whereas only 13.1% are working as
regular salaried workers (Table 6 and Fig. 10). The same pattern also can be seen
with respect enumeration of types of workers by the CWS approach as shown in
Table 7 and Fig. 10.
Further evidence of informality, among regular/salaried employees, is captured
in the PLFS, 2017–18, which shows that 71.1% of the workers in non-agricultural
regular wage/salaried (PS+SS) do not have any written job contract. About 54.2%
of them are not eligible for paid leave and 49.6% are without any social security
8 The calculation of the workforce is done on the basis of the projected population calculated on
the basis of Census 2011 and growth rates provided in NSSO EUS report 2012. The formula is
seen as: A = A1 (census population) *(1 + R (rate of growth of specific segments/100)ˆ82/100
for 2017–18. The projected population for 2012 was provided in the EUS report. The population
of rural male and female; urban male and female were calculated separately to project the total
population. Multiplier was used from respective NSSO reports to work out the LFPR and WPR
(NSSO 2012).
9 The calculation of workers in informal employment = self-employed workers + casual workers
+ regular workers without a written contract.

benefit. One of the major indicators of such rising informality is that people in
regular employment are willing to work for longer hours. Under the Factory Act,
1948 the length of a normal working day was 8 hours a day, with one hour of
overtime, for 6 days a week. By these standards, a worker should be working between
48 and 54 hours a week. However, the PLFS shows that, on an average, a regular
worker is working 58.1 hours a week, largely because of the flexibility that has
been introduced within the system under the banner of labour reforms. What is even
more worrisome, as per the same report, between 7 and 9% of regular workers are
available for additional work for 12–14 hours a week. At the same time, 9–12% of
the employers of own-account enterprises are also available for additional work for
an average of 12–15 h a week. Approximately 10% of the casual workers are willing
to do additional work for 14–15 h a week. Thus, at the current juncture, workers are
both overworked and underpaid. Despite relatively high economic growth rates of
GDP in the reforms era, withdrawal of the Indian state from several key areas in the
social sector has only aggravated the vulnerability of the masses. In fact, many of
these workers do not have adequate recognition as a ‘worker’ and are outside the
scope of any labour legislation which sets out the parameters of workers’ rights.
4 Concluding Remarks
Apart from long-term structural changes, organically connected with the so-called
economic reforms since the early 1990s, it would appear that the last quinquennium
has been particularly stressful on the employment front, as is evident from all the
major data sources. Much of it is on account of the two major disruptions by the Union
Government, namely, demonetisation in November 2015 and the rolling out of the
ill-conceived Goods and Services Tax (GST), within 7 months of the demonetisation.
As pointed out by the last Economic Survey (by the Government of India), there are
serious negative fallouts of these measures including on employment generation. As
per the CMIE-CPHS data, about 1.5 million jobs were lost during the first 4 months of
2017, which was attributed to demonetisation. The same data source pointed out that
in 2018, the Indian economy lost a whooping 11 million jobs. There were reports of
large-scale retrenchment of workers, substantial instances of return migration (from
urban to rural areas) and an increase in the employment demand under MGNREGA,
etc.
In passing, we may note that a major basis for rosy claims on the employment front,
advanced by the current government spokespersons, is on account of the presumed
success of the so-called the Pradhan Mantri Mudra Yojana (PMMY). However, as
a recent study notes, under this programme, the share of substantial loans (above
Rs. 5 lakhs), which have the potential to create jobs, was as little as 1.3% of total
disbursement in 2017–18. The average loan size of Rs. 52,700 appears to be far too
small to have any employment generation potential. But if one goes by the total
disbursement under the Mudra Yojana, which was worth Rs. 2,53,677.10 crores and
distributed to 4.81 crores beneficiaries in 2017–18 (without examining the issues of
viable business model, employability, etc.) and simply counting each beneficiary a net
addition to employment, clearly one can arrive at fantabulous figures of employment
increases!
Finally, with respect to schemes and programmes, we would like to stress here
that the performance of any government with respect to relevant indicators must
include how it deals with the vulnerable sections of the population. In this context,
the performance of the government in recent years with respect to MGNREGA
ought to be considered an appropriate benchmark. By now, there are quite a few
studies (e.g. Rajendran Narayanan et al. 2018), which show that this job guarantee
scheme—which is a kind of lifeline to those at the bottom of India’s economic and
social hierarchy—has been continuously hammered by the current government. For
instance, the budget allocation during the current union government regime has not
only been insufficient but going down in real terms. In fact, adjusting for inflation,
the allocation for 2018–19 is substantially lower than what it was in 2010–11. Two,
the functioning of the scheme has been persistently plagued during the last few
years by a problem of “pending wages”; for the year 2016–17, the total amount of
pending wages (i.e. the amount the to be paid by the union government to the state
governments for works already performed) for the country as a whole was around Rs.
11,000 crores. This obviously becomes a major disincentive for the state government
to run the scheme in a demand-driven sense. Third, by delinking the MGNREGA
wage rates from the Minimum Wages Act, 1948 and choosing not to increase the
former in real terms has dealt yet another blow to the functioning of the scheme and
consequently large segments of the most vulnerable segments of India’s workers. In
our judgment, the way MGNREGA has been dealt with is possibly the most damning
indictment of the current NDA government at the Centre.
To conclude: to make sense of the multiple dimensions of the world of work in
India, including the quantity and quality of jobs, both in the organised and unorgan-
ised sector, it is obvious that there are serious structural and persistent employment
problems that the country is confronted with. The basic question, with respect to
labour and employment, has to do with the strategies of appropriate economic trans-
formation that is inclusive and can generate decent work. The period since the early
1990s has been anything but what can be considered a move towards an appropriate
strategy. Based on whatever evidence we have, the policies adopted by the NDA
government since 2014 have made it even worse.
Appendix
See Tables 1, 2, 3, 4, 5, 6 and 7.

Table 1 Unemployment rates (in %) according to usual status (ps+ss) and current weekly status
(CWS) from 1972–73 to 2017–18 (PLFS)
Round (year) Rural Urban
Male Female Male Female
Usual CWS Usual CWS Usual CWS Usual CWS
status status status status
(ps+ss) (ps+ss) (ps+ss) (ps+ss)
(1) (2) (3) (4) (5) (6) (7) (8) (9)
PLFS 5.8 8.8 3.8 7.7 7.1 8.8 10.8 12.8
(2017–18)
68th 1.7 3.3 1.7 3.5 3.0 3.8 5.2 6.7
(2011–12)
66th 1.6 3.2 1.6 3.7 2.8 3.6 5.7 7.2
(2009–10)
61st 1.6 3.8 1.8 4.2 3.8 5.2 6.9 9.0
(2004–05)
55th 1.7 3.9 1.0 3.7 4.5 5.6 5.7 7.3
(1999–2000)
50th 1.4 3.1 0.9 2.9 4.1 5.2 6.1 7.9
(1993–94)
43rd 1.8 4.2 2.4 4.4 5.2 6.6 6.2 9.2
(1987–88)
38th (1983) 1.4 3.7 0.7 4.3 5.1 6.7 4.9 7.5
32nd 1.3 3.6 2.0 4.1 5.4 7.1 12.4 10.9
(1977–78)
27th 1.2 3.0 0.5 5.5 4.8 6.0 6.0 9.2
(1972–73)
Source PLFS Annual Report 2017–18, Statement 31, Page 83
Note The figures are to be read along with the explanatory note given in the PLFS Annual Report
2017–18 for comparability
Table 2 LFPR (in %)

LFPR (in %) Rural Urban
Usual (ps+ss) CWS Usual (ps+ss) CWS
Male 1993–1994 56.1 54.7 54.3 53.8
1999–2000 54 53.1 54.2 53.9
2004–05 55.5 54.5 57 56.6
2009–10 55.6 54.8 55.9 55.6
2011–12 55.3 54.5 56.3 56.1
2017–18 54.9 54.4 57 56.7
(continued)
Table 2 (continued)
LFPR (in %) Rural Urban
Usual (ps+ss) CWS Usual (ps+ss) CWS
Female 1993–1994 33 27.6 16.5 15.2
1999–2000 30.2 26.3 14.7 13.8
2004–05 33.3 28.7 17.8 16.8
2009–10 26.5 23.1 14.6 14.1
2011–12 25.3 21.5 15.5 14.8
2017–18 18.2 16.1 15.9 15.3
Source PLFS Annual Report 2017–18, Statement 7, Page 51
Note The figures are to be read along with the explanatory note given in the PLFS Annual Report
2017–18 for comparability
Table 3 GDP share and percentage distribution of usually working persons (ps+ss) by industry of
work, 1977–78 to 2017–18
Broad industry NSS round Rural Urban GDP Share
division Male Female Male Female
Agriculture PLFS (2017–18) 54.95 73.19 5.38 9.07 14.8
68th (2011–12) 59.2 74.5 5.6 8.7 14.3
66th (2009–10) 62.5 78.9 5.9 11.8 15.0
61st (2004–05) 66.2 81.4 6 14.7 19.2
55th (1999–2000) 71.2 84.1 6.5 14.6 23.3
50th (1993–94) 73.7 84.7 8.7 19.3 28.3
43rd (1987–88) 73.9 82.5 8.5 21.8 30.9
38th (1983) 77.2 86.2 9.7 25.5 34.5
32nd (1977–78) 80.4 86.8 10.2 25.1 37.3
Mining & quarrying PLFS (2017–18) 0.46 0.17 0.56 0.15 3.0
68th (2011–12) 0.6 0.4 0.9 0.3 2.1
66th (2009–10) 0.8 0.3 0.7 0.3 2.3
61st (2004–05) 0.6 0.4 0.9 0.2 2.8
55th (1999–2000) 0.6 0.4 0.9 0.4 3.0
50th (1993–94) 0.7 0.5 1.3 0.7 3.3
43rd (1987–88) 0.7 0.5 1.3 0.9 3.2
38th (1983) 0.6 0.4 1.2 0.8 2.9
32nd (1977–78) 0.5 0.3 0.9 0.6 2.4
(continued)
Table 3 (continued)
Manufacturing PLFS (2017–18) 7.66 8.14 22.39 25.22 18.1
68th (2011–12) 8.2 9.6 22.4 26.6 16.1
66th (2009–10) 7.1 7.6 21.9 25.8 16.0
61st (2004–05) 8 8.7 23.6 25.4 15.3
55th (1999–2000) 7.3 7.7 22.5 23.2 15.3
50th (1993–94) 7 7.5 23.6 23.6 14.7
43rd (1987–88) 7.6 7.5 26 26.9 14.8
38th (1983) 7.1 6.5 27 26 14.6
32nd (1977–78) 6.5 6.1 27.6 29.4 14.1
Electricity, water, etc PLFS (2017–18) 0.47 0.03 1.3 0.63 2.2
68th (2011–12) 0.3 0.1 1.4 1.1 1.9
66th (2009–10) 0.2 0 0.7 0.4 1.9
61st (2004–05) 0.2 0 0.8 0.2 2.1
55th (1999–2000) 0.2 – 0.8 0.2 2.3
50th (1993–94) 0.3 – 1.2 0.3 2.2
43rd (1987–88) 0.3 – 1.2 0.3 1.9
38th (1983) 0.2 – 1.1 0.2 1.6
32nd (1977–78) 0.2 – 1.1 0.1 1.4
Construction PLFS (2017–18) 14.5 5.34 11.73 4.12 8.1
68th (2011–12) 13.1 5.1 10.7 4.3 7.7
66th (2009–10) 11.4 4.2 11.5 5.1 7.8
61st (2004–05) 6.9 1.7 9.3 4.5 7.6
55th (1999–00) 4.5 1.2 8.8 5.5 6.5
50th (1993–94) 3.3 1.1 7 4.9 6.7
43rd (1987–88) 2.7 3.2 5.8 4.3 6.7
38th (1983) 2.3 0.9 5.1 3.7 6.7
32nd (1977–78) 1.7 0.7 4.2 2.6 7.5
Trade, hotel & PLFS (2017–18) 7.85 3.05 20.8 10.12
restaurant 68th (2011–12) 8 3.6 26 13.1 16.4
(continued)
Table 3 (continued)
66th (2009–10) 8.2 3.1 27 12.4 16.7
61st (2004–05) 8.3 2.8 28.1 13.1 16.2
55th (1999–2000) 6.8 2.3 29.3 16.4 14.6
50th (1993–94) 5.5 2.2 21.9 10.7 12.7
43rd (1987–88) 5.2 2.4 21.5 10.9 12.5
38th (1983) 4.4 2.2 20.2 9.9 12.0
32nd (1977–78) 4 2.3 21.6 9.8 11.5
Transport, storage & PLFS (2017–18) 4.9 0.17 9.71 0.8
communications 68th (2011–12) 4.3 0.2 11.8 3.2 10.6
66th (2009–10) 4.2 0.3 10.5 1.5 9.9
61st (2004–05) 3.9 0.2 10.7 1.6 8.3
55th (1999–00) 3.2 0.1 10.4 2 6.5
50th (1993–94) 2.2 0.1 9.8 1.5 5.5
43rd (1987–88) 2.1 0.1 9.8 1.2 5.3
38th (1983) 1.7 0.1 10.1 1.7 5.0
32nd (1977–78) 1.3 0.1 9.8 1.2 4.5
Other services PLFS (2017–18) 9.21 9.91 28.12 49.88 34.8
68th (2011–12) 6.4 6.7 21.4 42.7 30.9
66th (2009–10) 5.6 5.7 21.8 42.7 30.2
61st (2004–05) 5.9 4.6 20.7 40.2 28.6
55th (1999–00) 6.1 4.3 20.9 37.8 28.5
50th (1993–94) 7.1 4 26.4 38.8 26.3
43rd (1987–88) 6.4 3.7 25.3 33.6 24.2
38th (1983) 6.2 3.4 24.8 31.4 21.8
32nd (1977–78) 5.4 3.7 24.5 31.1 19.8
All x 100 100 100 100
Note GDP shares are 3 years moving average and figures from 1976–77 to 2012–13 are in 2004–05
constant prices, whereas figures for 2016–17 to 2018–19 are in 2011–12 constant prices and the
share of GVA
Source LFPR are based on NSS Report No. 554: Employment and Unemployment Situation in
India, 2011–12, Statement 5.11 and Annual Report PLFS, 2017–18, Appendix Table 26 and GDP
shares are calculated from data available at sectoral from CSO
Table 4 Sector-wise growth rate of employment, 1980–2016 (as percentage of total employment)
KLEMS industry description 1981–82 1989–90 1999–00 2009–10 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17
Agriculture, hunting, forestry and 1.80 2.17 0.04 −1.99 −1.96 −1.92 −3.47 −0.21 −3.50 −3.62 −3.62
fishing
Mining and quarrying 6.54 1.88 0.12 −0.26 −0.22 −0.17 −1.69 1.58 −1.69 −1.80 −1.76
Food products,beverages and 3.10 3.80 2.01 1.48 1.51 1.53 −0.02 3.23 −0.07 −0.20 −0.13
tobacco
Textiles, Textile Products, Leather 3.04 −1.90 0.53 −3.18 1.17 −1.76 −2.79 0.82 −2.54 −2.31 −3.11
and Footwear
Wood and products of wood 3.32 1.52 5.42 −4.37 −4.34 −4.30 −5.92 −2.66 −5.94 −6.06 −6.19
Pulp, paper,paperproducts,printing 2.81 0.20 4.72 −0.89 −0.83 −0.77 −2.27 1.02 −2.23 −2.31 −2.29
and publishing
Coke, refined petroleum products 3.15 2.01 −2.12 7.59 −7.09 −4.12 −1.51 1.72 −1.60 −1.76 −1.70
and nuclear fuel
Chemicals and chemical products 2.92 4.66 1.08 −0.04 0.32 0.66 −0.60 2.91 −0.15 −0.08 −0.12
Rubber and plastic products 2.95 8.98 2.13 5.33 5.41 5.49 3.85 7.16 3.92 3.85 3.81
Contemporary Capitalism and Employment Challenges …
Other non-metallic mineral 3.26 1.02 1.11 1.63 1.73 1.82 0.32 3.63 0.38 0.29 0.33
products
Basic metals and fabricated metal 3.11 0.87 4.06 2.84 2.93 3.03 1.52 4.87 1.69 1.69 1.67
products
Machinery, nec 3.24 6.26 7.77 4.61 4.73 4.85 3.29 6.64 3.46 3.46 3.40
Electrical and optical equipment 3.05 4.29 2.23 24.61 −7.01 15.83 10.27 12.23 10.06 9.14 9.90
Transport equipment 0.39 −7.26 −0.47 14.90 14.68 9.66 −3.73 2.88 −0.45 −0.61 −0.53
Manufacturing, nec; recycling 3.15 2.26 0.56 3.89 3.92 3.94 2.33 5.58 2.28 2.15 2.19
Electricity, gas and water supply 4.28 1.98 0.70 5.90 0.11 0.00 1.69 4.97 1.72 1.63 1.66
(continued)
177
Table 4 (continued)
178
KLEMS industry description 1981–82 1989–90 1999–00 2009–10 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17
Construction 6.96 2.16 3.65 9.42 9.59 9.76 7.91 11.31 8.15 8.17 7.85
Trade 5.04 3.72 4.09 1.32 1.34 1.35 −0.21 3.04 −0.27 −0.41 −0.34
Hotels and restaurants 4.99 1.44 5.36 4.02 4.06 4.09 2.47 5.73 2.43 2.30 2.34
Transport and storage 9.30 3.21 4.89 2.44 2.44 2.44 0.85 4.08 0.76 0.60 0.68
Post and telecommunication 9.91 6.04 8.35 −1.62 −1.52 −1.43 −2.92 0.39 −2.86 −2.95 −2.95
Financial services 9.29 6.95 0.19 5.40 5.41 5.42 3.72 6.95 3.64 3.49 3.50
Business service 9.13 6.72 10.80 9.05 9.08 9.11 7.19 10.45 7.16 7.03 6.85
Public administration and defense; 0.07 2.03 0.70 0.06 1.39 2.27 −2.54 0.69 −2.63 −2.79 −2.75
compulsory social security
Education 1.14 4.79 4.11 3.13 3.13 3.13 1.52 4.74 1.42 1.27 1.33
Health and social work 0.64 2.32 5.10 3.40 3.45 3.49 1.91 5.18 1.90 1.79 1.83
Other services 1.16 7.18 1.99 3.15 3.32 3.49 2.03 5.43 2.28 2.30 2.26
Total economy 2.42 2.40 1.28 0.61 0.81 1.02 −0.51 2.94 −0.16 −0.08 0.06
Source RBI-ILO Key Labour and Employment Market Indicators, 2018
P. Jha and S. Sikdar
Table 5 Average wage/salary earnings (in Rs.)

Rural Urban
survey period 2017-18 Male Female Person Male Female Person
(1) (2) (3) (4) (5) (6) (7)
Per month
Regular wage/ salaried employees in current weekly status
July-September 2017 12659 8777 11878 17314 13895 16538
October-December 2017 13005 8534 12133 18014 15078 17359
January–March 2018 14445 8549 13351 18277 14779 17483
April-June 2018 14024 9895 13207 18353 14487 17473
Average 13533 8939 12642 17990 14560 17213
Self-employment work in current weekly status
July-September 2017 8493 4342 8111 15935 7488 14824
January–March 2018 8864 4121 8340 15958 6453 14591
April-June 2018 9657 3921 8963 16265 6556 14878
Average 8955 4122 8430 16067 6994 14792
Per day
Casual labour engaged in works other than public works
July-September 2017 253 166 232 314 192 294
January–March 2018 270 175 249 328 189 307
April-June 2018 282 179 262 335 201 316
Average 268 173 247 324 192 304
In MGNREG public works
July-September 2017 141 135 136
October-December 2017 161 138 147
January–March 2018 171 165 168
April-June 2018 142 131 136
Average 154 142 147
In public works other than MGNREG
public works
July-September 2017 158 142 154
October-December 2017 157 144 153
January–March 2018 152 134 143
April-June 2018 138 119 129
Average 151 135 145
Source Compiled from PLFS Annual Report 2017–18, Statement 22, 23, 24 and 25
Table 6 Percentage distribution of workers in usual status (ps+ss) by broad status in employment
All India Self-employed Regular Casual All
Own-account Helper in All wage/salary labour
worker, household self-employed
employer enterprise
(1) (2) (3) (4) (5) (6) (7)
Male (Rural) 48.0 9.8 57.8 14.0 28.2 100.0
Female (Rural) 19.0 38.7 57.7 10.5 31.8 100.0
Person (Rural) 41.0 16.9 57.8 13.1 29.1 100.0
Male (Urban) 34.9 4.3 39.2 45.7 15.1 100.0
Female (Urban) 23.7 11.0 34.7 52.1 13.1 100.0
Person (Urban) 32.6 5.7 38.3 47.0 14.7 100.0
Male 44.1 8.2 52.3 23.4 24.3 100.0
(Rural+Urban)
Female 20.2 31.7 51.9 21.0 27.0 100.0
(Rural+Urban)
Person 38.6 13.6 52.2 22.8 24.9 100.0
(Rural+Urban)
Source Annual Report PLFS, 2017, Appendix Table 19
Table 7 Percentage distribution of persons working according to CWS by broad status in

employment
All India Self-employed Regular Casual All
Own-account Helper in All wage/salary labour
worker, household self-employed
employer enterprise
(1) (2) (3) (4) (5) (6) (7)
Male (Rural) 47.3 9.2 57.9 14.5 27.6 100
Female (Rural) 20.0 34.7 56.3 12.3 31.4 100
Person (Rural) 41.3 14.9 57.6 14.0 28.4 100
Male (Urban) 34.0 4.2 39.6 46.5 14.0 100
Female (Urban) 22.1 10.0 34.0 54.9 11.1 100
Person (Urban) 31.7 5.3 38.5 48.1 13.4 100
Male 43.3 7.7 52.4 24.1 23.5 100
(Rural+Urban)
Female 20.6 28.0 50.2 23.9 25.8 100
(Rural+Urban)
Person 38.4 12.1 51.9 24.1 24.0 100
(Rural+Urban)
Source Annual Report PLFS, 2017, Appendix Table 38
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Structural Change and Rural
Households in India: An Analysis
of the Nature of Transformation in Their
Economic Activities
Vinoj Abraham
Abstract The rural economy in India has been witnessing a transformation in terms
of a shift in the economic activities undertaken by members of the household. This
paper looks into this transformation during the period 1993–94 to 2011–12. In order
to look at the transformation within households, we take households as the unit of
analysis and analyse the changes that occur within households. We use the NSS unit-
level data of Employment–Unemployment rounds for the analysis. There is a shift
from agriculture sector to non-agriculture sector employment in case of males. For
females too, the share in agricultural employment declined but the corresponding
rise was in two activities, education and domestic activities. The near stagnancy of
employment in manufacturing, transport, storage and communication and financial
and other services, both for males and females, point to the lack of diversification of
output growth in the rural areas, which in turn signals the lack of interlinkage with
the urban sector. It can be seen that the rural households, from being agricultural
households with a rudimentary division of labour and limited specialization within
the households, there is increasing division of labour both within the household and
in the production site. Within the household, the functions of caregiving and social
reproduction is increasingly becoming a specialized activity of the women in the
household, while male members engage in economic activity. The typical male HoH
is now moving away from agriculture to non-agricultural sources of livelihood, and
the sons in these households are moving towards acquiring better levels of education,
which probably by the next generation would accentuate the process of shift to non-
agricultural employment among males. Meanwhile, the concentration of women in
the domestic sector may get further enhanced.
V. Abraham (B)
Centre for Development Studies, Prasanth Nagar, Thiruvananthapuram, Kerala, India
e-mail: vinoj@cds.edu

https://doi.org/10.1007/978-981-15-8265-3_10
184 V. Abraham
1 Introduction
The agricultural sector in India after a decade of productivity stagnation during the
mid-1990s to mid-2000s has improved its growth to reach about 3.75% per annum
since mid-2000s (Chand and Parappurathu 2012). The rural economy has been under-
going gradual changes, with rural markets, both for output and inputs deepening, rural
infrastructure becoming thicker, with increasing electrification, deeper penetration
of mobile telephony and enhanced road networks (Fan, Gulati, and Thorat 2008). A
key outcome of the ongoing changes in the rural sector had been the shift in the popu-
lation dependent on agriculture. Studies have noted that the employment structure
in rural India has started showing signs of diversification towards non-agricultural
sector (Binswanger 2013). Studies have also looked into the factors that trigger a
shift from the agriculture sector. From a household perspective, the shift from agri-
culture is a very crucial break away from the past. Agriculture is not only a livelihood
source but a way of life. Most rural households had agriculture as their livelihood
source for many generations. The rural agrarian society is structured around agri-
cultural production, distribution and consumption. The shift from agriculture sector
entails manifold changes to the economic activities of the household. The conven-
tional division of labour in terms of gender, skill and age would be replaced by new
arrangements. However, this aspect of the household in the context of shift to the
non-agriculture sector in India is not explored much.
Indian economy is undergoing a structural transformation with the contribution
of agriculture sector in Gross Domestic Product (GDP) consistently declining for
the last three decades, while that of service sector, rising (Papola 2012). The shift
from agriculture as the primary source of livelihood to other sources can occur under
different conditions. An economy undergoing structural transformation experiences
a rise in agricultural productivity, a fall in agricultural employment and a shift of
surplus labour from agriculture to other sectors (Lewis, 1954). This kind of a trans-
formation also entails that within rural households the activities that are undertaken
by their members would change. Inter-generational occupational mobility may take
the form of the older males who are less educated but more experienced remain
attached to agriculture while the younger ones who are more educated but less expe-
rienced shift to the non-agricultural sector. With shift in male employment to the
more productive non-agricultural sector and rising incomes the gendered division of
labour may become sharply defined. Females may either remain attached to agri-
culture or withdraw from paid labour market for care services. With rising incomes
from non-agricultural sector, the younger ones may now spend more years in school
to enhance future expectations in the labour market. If the shift to non-agricultural
sector is not the outcome of a structural transformation, but that of worsening agri-
cultural conditions then the rural household may change differently. If the absolute
production and living conditions in the agriculture sector is worsening relative to that
of the non-agricultural sector, then the entire households may shift from agriculture
to non-agriculture sector. Inter-generational occupational mobility may be limited,
Structural Change and Rural Households in India … 185
though spatial mobility may take place. Women’s work may accentuate with double
burden of both care work and paid work.
This paper looks into such changes that rural households have undergone during
the period 1993–94 to 2011–12. The analysis would be done keeping the above
context of structural transformation versus distress induced shift to non-agricultural
sector. The key questions that I seek answers are; Who moves from agriculture? And
to what activity? Who stays put? These questions are analysed keeping the household
as the unit of analysis. In analysing the questions posed above, it is hoped that some
of the key dimensions of changes that are occurring within rural households may
come to the fore.
We use the NSS unit-level data of Employment–Unemployment rounds for the
analysis. The choice of period broadly fits into the period that saw a rise in non-
agricultural employment in rural areas. The choice of the latter year is constrained
by the availability of data. We keep relationship status as a primary variable in under-
standing economic activity diversification. We consider the following relationship
statuses, Head of Household (HoH), spouse of Head of Household, Son of Head of
Household and spouse of the son of Head, all co-residing. Given the structure of the
data, it is not possible to analyse such relations who are not co-residing. We are not
able to analyse the data for daughters as most daughters move to the male spouses’
household or establish new household units along with the male spouses. In either
case, women in their status as daughters may be difficult to capture. This may not
pose a problem as the data does capture spouses, and this is the familial role entrusted
on women by society. Similarly, though there are women-headed households, we are
not able to discuss this as the samples would be too thin from the surveys to have a
meaningful discussion.
The paper is divided into six sections. Following the introduction, the major shifts
in economic activities in rural areas are explored in Sect. 2. The shift in economic
activities is subjected to further scrutiny on the basis of household relationship status
in Sect. 3. Section 4 provides broad directions to the causes of the structural trans-
formation. Section 5 looks into the patterns in inter-generational mobility in activity
and Sect. 6 gives the conclusions.
2 Shift in Economic Activities
The rural household in India has been witnessing a transformation. The transforma-
tion is in terms of a shift in the economic activities undertaken by members of the
rural household. Tracing the change between 1993–94 and 2011–12 the key economic
transformation we note is the gradual shift in focus of employment from agriculture
sector to other sectors. The share of the total population working in agriculture
sector in rural areas was 30% in 1993–94 (Table 1). While about 22% was in other
activities, about 19% were undergoing education and another 19% were engaged in
domestic activities. The share of population engaged in agriculture declined to 23%
by 2011–12, a drop of nearly 7% points, while the share of population engaged in
186
Table 1 Activity status by gender

Period Sex Activity
Agriculture Non-Agriculture Unemployed Education Domestic activities Others Total
1993–94 Male 39.64 14.15 1.07 23.24 0.49 21.42 100
Female 19.79 3.55 0.33 15.05 38.17 23.11 100
Total 29.99 9 0.71 19.26 18.8 22.24 100
2011–12 Male 31.94 21.56 1.15 30.44 0.42 14.49 100
Female 13.16 4.42 0.53 25.11 42.17 14.61 100
Total 22.76 13.18 0.85 27.83 20.83 14.55 100
Source NSSO unit level records of the Employment–Unemployment Surveys for the years 1993–94 and 2011–12
V. Abraham
non-agriculture sector employment increased from 9 to 13%. The population engaged

in education increased to 28% and that in domestic activities increased from 19 to
21%.
The share of total working population (agriculture + non-agriculture) remained
more or less constant for males at about 54% during the period 1993–94 to 2011–12.
However, there was a shift to non-agriculture sector employment for males, which
increased from 14 to 22%, correspondingly, the share of agricultural employment
declined from 40 to 32%. While for females, though the agricultural employment
declined from 20 to 13%, the corresponding rise was in two activities, education and
domestic activities.
It can be noted that though there is a shift away from agricultural sector both
for males and females, the entry to non-agricultural employment in the rural areas
is gender-specific, with the employment in non-agricultural sector limited to males
and females moving away from the labour market and entering to either education
or domestic activities.
Table 2 shows the distribution of the working population according to industrial
classification. Among the male working population, there was a decline in employ-
ment in the agricultural sector from 74% in 1993–94 to 59% in 2011–12 (Table 2).
This decline in agricultural employment was associated with a dramatic increase in
employment in the construction sector, which increased from 3.2 to 13%. In trade,
hotels and restaurant, there was a marginal increase from 6 to 8% during the period.
In all other sectors, the share of employment remained more or less stagnant. Among
females, the share of working population declined from 23 to 18%. Within the reduced
women labour force now, there was a decline in agricultural employment from 85 to
74%. Among females also there was a rise in construction employment from 1 to 5%,
and a marginal rise in both manufacturing and community and personal services, by
about 2% point each.
Table 2 Employment of persons categorized by Gender and industries

1993–94 2011–12
Industry Male Female Male Female
Agriculture, hunting, forestry and fishing 73.7 84.78 59.16 74.48
Mining and Quarrying 0.75 0.48 0.55 0.38
Manufacturing 7.06 7.47 8.2 9.55
Electricity, gas and water 0.3 0.04 0.31 0.09
Construction 3.22 0.96 13.07 5.07
Wholesale and retail trade & restaurants and hotels 5.56 2.18 8.03 3.59
Transport, storage and communication services 2.24 0.07 4.1 0.11
Financial, insurance, real estate and business services 0.43 0.09 1.21 0.32
Community, social and personal services 6.75 3.91 5.38 6.42
Total 100 100 100 100
188 V. Abraham
It can be seen from above that the share of employment in agriculture had declined
in the rural areas, both for males and females and the main sector for non-agricultural
employment was construction. Almost 70% of the shift in employment for males and
nearly 50% of the non-agricultural employment was in the construction sector. In
short, the shift to non-agricultural employment in rural areas, is a replacement to
construction, without much diversification to other non-agricultural employment in
rural areas.
The near stagnancy of employment in manufacturing, transport, storage and
communication and financial and other services, both for males and females, point to
the lack of diversification of output growth in the rural areas, which in turn signals the
lack of inter-linkage with the urban sector. Binswanger-Mkhize (2013) also argues
that the growth of rural non-agricultural employment is partly due to poor inter-
linkage between the rural and urban sectors. Given the high rate of output growth of
the economy during the period, especially in the services sector, the poor penetration
of growth to the rural areas point to the fault lines that are developing between the
rural economy and the urban.
3 Shift in Economic Activities by Household Relation

Status
From the household’s perspective what kind of a shift has been taking place in
employment? Is it that some members of the households are leaving agriculture
while some remain within agriculture? Looking at the data, in 1993–94 about 68%
of the households were agricultural households, where all working members of the
household were in agriculture sector (Table 3). More than 21% of the households
were such households where all working members worked in non-agricultural activ-
ities. And nearly 11% of the households had mixed households, where working
members were engaged in both agriculture and non-agriculture activities. Looking
at the shift, between 1993–94 and 2011–12 the pure agricultural households declined
from 68 to 54%, a decline of 14% points, and the pure non-agricultural households
share increased from 21 to 35%. While that of the mixed households remained at
11% throughout the period. From the above, it can be inferred that households are
converting themselves from agriculture to non-agriculture households fully, while
Table 3 Distribution of households according to Agriculture, Non-agriculture and Mixed Activities

Share of Households 1993–94 2011–12
Share of HH with all working members in agriculture 67.92 53.97
Share of HH with all working members in non-agriculture 21.45 35.22
Share of mixed households 10.63 10.81
Total 100 100
there is no intermediate transition of having mixed households. Why is this so? Why
does households shift completely to non-agricultural activities rather than a more
risk-averse strategy of having mixed activities? There are two possible arguments
that can be made. One plausible answer is this. The contours of the labour market
are getting more stringently defined. As a household shift from agriculture to non-
agriculture sector the number of members in the labour market from each household
is declining. For instance, a household with many members working in agriculture
now shifts to non-agriculture sector. A few members may migrate to newer locations
for short periods. The remaining members may withdraw from agriculture and may
engage in care work, or undergo education. Another plausible explanation may be
that the households who find agriculture unviable anymore, move to new sectors. But
since such mobility is due to poor agricultural outcomes the household and market
work may remain similar.
Who moves within household and to what activity? For this, we look into the rela-
tionship status of the members of the household and associated changes in economic
activities. The most prominent economic activity in 2011–12 continues to be agri-
culture, but this is limited to the male head of the household. Nearly 57% of all heads
of households (HoH) in rural areas were engaged in agricultural activities (Table 4).
Only 21% of the Spouses of HoH were engaged in agriculture, among sons only
18% were engaged in agricultural activities, and among spouses of sons, only 15%
Table 4 Share of Population in Economic Activity and Relationship Status: Rural India (in percent)
Activities
Relation 50th Round (1993–94)
status
Agriculture Non-Agriculture Unemployed Education Domestic Others
activities
Male 68.91 25.18 0.14 0.6 0.27 4.9
HoH
Spouse of 32.36 5 0.13 0.08 60.96 1.47
HoH
Son 24.37 8.48 1.72 37.91 0.46 27.06
Spouse of 25.45 2.79 0.56 0.36 70.34 0.51
Son
68th Round (2011–12)
Male 56.8 36 0.11 0.81 0.27 6.01
HoH
Spouse of 21.92 6.09 0.26 0.04 70.13 1.57
HoH
Son 17.56 13.76 2.04 51.34 0.44 14.86
Spouse of 14.54 4.14 0.93 1.25 78.96 0.18
Son
190 V. Abraham
were in agriculture. Among Male HoH about 25% were engaged in non-agricultural
activities in the rural areas, but among spouses of both head of the household and
sons, the largest share of activities was in domestic activities, 70 and 79%, respec-
tively. Among sons, the participation in non-agricultural activities was also low at
13.7%, while the largest share was participation in education, about 51%. So it can
be noticed that for the male HoH agriculture is the primary economic activity, while
for spouses it is domestic activities and for the sons, it is undergoing education.
Between 1993–94 and 2011–12, there is a substantial shift towards non-
agricultural employment for HoH, from 25 to 36% of the HoH population and
correspondingly a decline in agricultural employment. Similar fall in agriculture
is noted among all relation status. But the decline in agriculture employment is not
compensated to non-agricultural employment, as noticed in the male HoH popu-
lation. Though there is a marginal rise in non-agricultural employment among all
other relations considered, the substantial rise in case of women is towards domestic
activities, for the spouse of HoH increasing from 60 to 70% and for the spouse of
sons increasing from 70 to 79% share. For sons themselves, the substantial shift was
from agricultural employment to education, which increased from 39 to 51%.
Thus the emerging long-term picture from the rural households is that head of
households are moving away from agriculture to non-agriculture employment and
sons are increasingly going to schools, and women, be it spouses of HoH or of sons,
are withdrawing from the labour market.
However, among the working women in rural areas, a much larger share of women
are engaged in agriculture. Even when the total share of HoHs in agriculture is 61%,
nearly 78% of spouses of HoH are engaged in agriculture (Table 5). And for nearly
56% of the sons engaged in agriculture, 78% of their spouses were engaged in
agriculture. In other words, an overwhelmingly large share of women were engaged
in agriculture work, compared to males, be it spouses to HoH or sons. Comparing
between the two periods, there is a marginal shift for women towards non-agricultural
activities. But the consistent and largest increase for women is in domestic activity.
In short, the rural households from being agrarian in nature, where all members
of the households were engaged in agriculture, be it heads of households, children
or spouses a gradual but definite transition is underway. The channel of transition
is in the following manner. The typical heads of households are moving away from
agricultural activities to non-agricultural sources of employment, the typical sons
Table 5 Share of Workers by Industry and Relationship Status: Rural India (in percent)
Industry Male head of Spouse of Head Son Spouse of Son
Household
1993–94 Agriculture 73.23 86.61 74.18 90.13
Non-Agriculture 26.77 13.39 25.82 9.87
2011–12 Agriculture 61.21 78.26 56.06 77.84
Non-Agriculture 38.79 21.74 43.94 22.16
are moving away from agriculture to education mostly, with some non-agricultural
employment. The spouses of both the HoHs and sons are moving away from agri-
culture to domestic activity, with some very marginal presence in non-agricultural
employment.
From the above analysis, it can be argued that within the rural households there
is increasing division of labour both within the household and in the production
site. Within the household, the functions of caregiving and social reproduction are
increasingly becoming a specialized activity of the women in the household, while
male members engage in economic activity. The typical male HoH is now moving
away from agriculture to non-agricultural sources of livelihood, and the sons are
moving towards acquiring better levels of education, which probably by the next
generation would accentuate the process of shift to non-agricultural employment
among males. Meanwhile, the concentration of women in the domestic sector may
get further enhanced.
4 Male HoH: Does Age Matter? Or Period Matters?
We had noted that the share of male HoHs in agriculture had declined from 69% to
57%, correspondingly the share in non-agricultural employment increased from 25
to 36% during the period 1993–94 to 2011–12. This distribution is for the population
of all age groups.
A shift in employment from agriculture to non-agricultural activities during the
period may occur due to two accounting factors. One possibility is that the share
of HoHs in agriculture sector belonging to different age groups may have different
propensities to be in the agriculture sector. For instance, with better education and
skills than their previous generation, the younger HoH population may prefer to be
out of agriculture, while the older HoH population remain put in agriculture. Another
possibility is that, the propensities to be in agriculture do not differ across age groups,
but across all age groups, there is a shift from agriculture to other activities. In
other words, it is the period that this population lived in, that encouraged a shift
from agriculture to non-agriculture rather than the changes in preferences across age
groups.
From Table 6 below it can be seen that there is a much stronger period effect. There
is a decline in agricultural employment during the period 1993–94 to 2011–12. But
this decline is not much different across age groups. All age groups experienced
a decline in agricultural employment share by about 10% points. The change in
agricultural employment across different age groups compared across years show
that the difference between age groups for the same occupations are not very large,
except for the III–II between 1993–94 and 2011–12. In this group, we see that the
older group(60–70) in 2011–12 had seen a larger fall in non-agricultural employment
as well compared to their younger cohort (50–60), but this is because of a shift in
economic activity from being employed to ‘others’ probably being pensioners or rent
dependent.
192
Table 6 Share of Economic Activities of Male HoH by Age Cohort and Year
Survey year Birth Year Cohort Age Agriculture Non-Agriculture Unemployed Education Domestic activities Others
1993–94 1963–73 40–50(I) 71.74 26.56 0.08 0.01 0.15 1.46
1953–63 50–60 (II) 74.26 19.33 0.04 0.02 0.47 5.88
1943–53 60–70 (III) 64.87 11.78 0.02 0.07 0.75 22.51
2011–12 1981–91 40–50 (I) 61.14 37.75 0.09 0 0.15 0.88
1971–81 50–60 (II) 62.49 30.89 0.1 0 0.41 6.11
1961–71 60–70 (III) 56.09 15.62 0.04 0.03 0.79 27.43
Period effect
2011 minus 1993 40–50 −10.6 11.19 0.01 −0.01 0 −0.58
50–60 −11.77 11.56 0.06 −0.02 −0.06 0.23
60–70 −8.78 3.84 0.02 −0.04 0.04 4.92
Age Effect
II–I (1993–94) 2.52 −7.23 −0.04 0.01 0.32 4.42
II–I (2011–12) 1.35 −6.86 0.01 0 0.26 5.23
III–II (1993–94) −9.39 −7.55 −0.02 0.05 0.28 16.63
III–II (2011–12) −6.4 −15.27 −0.06 0.03 0.38 21.32
V. Abraham
Thus, from the Table given below, what comes out is that a key feature of the
transformation in the rural areas is that it is not dependent on individual features
such as age or factors that are associated with age, such as education, health or age
composition of population. Rather, what seems to be important in the shift are the
social and economic conditions that encourage the rural population towards non-
agricultural activities.
Comparing the key changes across the age cohorts of the Head of the Households,
the following observations may be made from Table 7 with regard to the structure of
economic activity among Indian rural households.
For the Male HoH of age 40–50: There is a compensated shift for the male
HoH from agricultural employment to non-agricultural employment during 1993–
94 to 2011–12(a fall of-10.6% in agriculture and a gain of 11.2% in non-agriculture
sector). But for the spouse of HoH, a similar reduction in agricultural employment
by −11.1%, there is no compensated employment in the non-agricultural sector.
The compensated rise is in domestic activities. For the son of HoH for a decline in
agricultural employment and ‘others’ (probably young children who did not attend
Table 7 Net Change in Activity Status between 1993–94 and 2011–12 by age cohorts of Male
HoH
Agriculture Non-Agriculture Unemployed Education Domestic Others
activities
Member Male HoH age group 40–50
Male HoH −10.6 11.2 0.0 0.0 0.0 −0.6
Spouse of −11.1 1.5 0.1 0.0 9.6 −0.1
HoH
Son −9.9 2.2 0.7 18.5 −0.2 −11.4
Spouse of −9.8 −0.2 0.1 1.9 8.7 −0.6
Son
Male HoH age group 50–60
Male HoH −11.8 11.6 0.1 0.0 −0.1 0.2
Spouse of −9.4 1.6 0.1 0.0 8.0 −0.3
HoH
Son −11.6 12.0 0.5 2.1 0.4 −3.3
Spouse of −12.9 1.2 0.3 1.0 10.8 −0.4
Son
Male HoH age group 60–70
Male HoH −8.8 3.8 0.0 0.0 0.0 4.9
Spouse of −7.2 1.7 0.1 0.0 4.9 0.5
HoH
Son −10.3 14.1 −1.3 −0.5 0.0 −2.1
Spouse of −11.4 0.6 0.3 0.4 10.1 0.0
Son
194 V. Abraham
schools in the 1990s), the compensated rise is in education. And for the spouse of
the son for a decline in agriculture employment the compensated rise is, as in the
case of her mother-in-law, to domestic activities.
For the Male HoH of age 50–60: As the Male HoH is in this age group, the shift
in employment from agriculture continues across all members of the household, but
a key change from the younger HoH is that now along with the HoH, the sons are
also fully compensating to non-agricultural sector, while women move completely
into domestic activities.
For the Male HoH of age 60–70: All the trends mentioned above continues, except
that the male HoH now, instead of moving from agriculture to non-agriculture, moves
into the ‘others’ category, probably as not working and retired, while the largest
increase in non-agriculture employment is noted for the son now. Women, continue
to move out of agriculture to domestic activities.
5 Intergenerational Changes in Activity Status
Though we had noted that there was a change in the activity status across relation
status, this does not imply that this happens within the same household. Ideally,
the question of who moves within the household, the analysis should look into the
households that saw a shift in employment to newer sectors. But such an analysis
cannot be taken up for want of panel data on household mobility for the same period
of analysis.1 The next best proxy is to look into what happens to the rest of the
members when the HoH remains in agriculture, and contrast with his mobility to
another sector. This would help us to see if the mobility from one sector occurs
within households, or do the entire households move to newer sectors.
Table 8 shows the share of sons engaged in an activity corresponding to their
father’s activity. In 1993–94, among the fathers who were engaged in agriculture
only, 29% of their sons were in agriculture (Table 8). Their sons were mostly out of
labour force, 66% of them were in ‘others’, undergoing education. In 2011–12, the
share of such sons who followed their father in agriculture declined to 24%. But this
decline saw a small increase in non-agriculture employment, along with a similar
increase in others as well. Sons following father’s occupation in the non-agricultural
sector were much smaller, only 15%, but this increased to 18% in 2011–12. The most
important component of increase is in case of fathers not in labour force, probably
as pensioners, rent dependent or indisposed. About 49% of sons whose fathers in
‘others’, were in agriculture in 1993–94. But in 2011–12, this declined to 36% and in
turn, their share increased in non-agriculture activity from 25 to 41%. This implies
that when fathers were not in the labour market, the mobility of sons is highest,
towards non-agricultural employment.
1 India Human Development Surveys (IHDS) does provide a panel data, but the period available for
meaningful inter-generational comparison is too short.

Table 8 Son’s Activity Status matched to father’s Activity Status (in percent)
1993–94 2011–12
Activity of HoH Activity of_Son Activity of_Son
Agri Non-Agri Other Total Agri Non-Agri Other Total
Agriculture 29.34 4.65 66.01 100 24.3 7.22 68.47 100
non agriculture 6.14 15.16 78.7 100 2.98 18.4 78.62 100
Others 49.06 24.55 26.4 100 36.26 41.53 22.21 100
Total 24.37 8.23 67.4 100 17 13.08 69.92 100
age of HoH = 40n50
Activity of HoH Activity of_Son Activity of_Son
Agri Non-Agri other Total Agri Non-Agri other Total
Agriculture 34.66 4.59 60.75 100 25.09 5.95 68.96 100
non agriculture 8.38 19.31 72.31 100 3.59 20.56 75.85 100
Others 30.22 21.18 48.6 100 17.01 25.05 57.94 100
Total 27.69 8.73 63.58 100 16.61 11.86 71.53 100
age of HoH = 50n60
Activity of_Son Activity of_Son Activity of_Son
Agriculture 56.56 9.8 33.64 100 49.49 16.23 34.29 100
non agriculture 15.08 38.34 46.58 100 8.32 50.68 41.01 100
Others 40.79 29.66 29.55 100 32.79 44.58 22.63 100
Total 47.44 16.59 35.96 100 35.44 28.77 35.79 100
age of HoH = 60n70
Activity of_Son Activity of_Son Activity of_Son
Agriculture 64.59 14.54 20.87 100 62.29 21.4 16.31 100
non agriculture 16.96 57.85 25.19 100 9.31 71.41 19.28 100
Others 56.26 26.01 17.73 100 36.47 46.5 17.03 100
Total 56.79 22.58 20.63 100 46.06 36.94 17 100
When we classify the father–son pairs according to the age of fathers, for the
young father (40–50 age group) the father’s presence in non-agriculture occupation
led to about three-fourth of all such father’s sons (72.31%) to participation in others,
mainly into education in 1993–94. The same trend is seen in 2011–12 as well. For
the fathers in the age group 50–60 who are engaged in agriculture, about 56% of their
sons were in the same industry. While in 2011–12, the share of sons declined to less
than 50%. On the other hand, while 38% of their sons follow their father’s industry
in non-agriculture sector, during 93–94, this share increased to more than 50% by
2011. For the fathers’ age group 50–60, about 65% of sons followed their father’s
196 V. Abraham
industry in agriculture and about 57% of sons followed their father in non-agriculture
sector. However, in 2011–12, the father–son pair in agriculture declined in 62% such
pairs in non-agriculture sector increase to 71.41%.
In summary, among the older parents, those who were engaged in non-agricultural
sector, a large share of such sons are in the non-agricultural sector and over time such
preferences seem to be accentuating. While among older parents, those who were
engaged in agricultural sector, though a large share of their sons were also engaged
in agriculture, over time such preferences were declining. Among younger parents,
there is a shift away from agriculture for their sons, but the shift is towards ‘others’
mostly into education.
Drawing from Appendix Tables 11 and 12, Table 9 above summarizes the change
in father and son’s industry during the period 1993–94 to 2011–12. The highest
presence of sons in father’s industry is within agriculture. In 1993–94, 86% of sons
followed their father in agriculture. In Manufacturing and Trade sector (wholesale
and retail trade), also about 60% of the sons followed their father’s industry in 1993–
94. In mining and quarrying and construction sector, about half the sons followed
their father’s industry. In the rest of the sectors, only 40% (or less) of the sons worked
in the same industry as their father.
Between 1993–94 and 2011–12, there have not been large changes in the son’s
presence in the father’s employment sector. The sectors namely agriculture, elec-
tricity, gas, water, trade restaurant and hotels show a marginal decline in the share of
sons joining the father’s industry. In all the other sectors, there is a marginal increase.
Correlation coefficient between 2 years is at 0.79 which supports the argument that
there has been very little change in the way inter-generational industrial shifts in
employment occurred between the two periods.
The primary capital for agricultural sector is land. The nature of shift from agri-
culture to non-agriculture sector may be governed by the access to land. We now look
Table 9 Comparing Father and Son in the same industry

Occupation of HoH 1993–94 2011–12 Difference
Agriculture, hunting, forestry and fishing 86.32 77.08 −9.24
Mining and Quarrying 52.87 87.61 34.74
Electricity, gas and water 26.66 17.76 −8.9
Wholesale and retail trade & restaurants and hotels 58.05 53.06 −4.99
Transport, storage and communication services 22.63 30.65 8.02
Financial, insurance, real estate and business services 39.12 39.48 0.36
Community, social and personal services 37.36 44.3 6.94
R 0.7983
Table 10 Son’s employment share according to land size, and fathers’ employment (per cent)
1. HoH in Agriculture 2. HoH in Non-Agriculture
1993–94 2011–12 1993–94 2011–12
Agri Non-agri Agri Non-agri Agri Non-agri Agri Non-agri
Landless 90.0 10.0 100.0 0.0 39.5 60.5 12.4 87.6
<1 hectare 83.3 16.7 74.1 25.9 12.6 87.4 25.3 74.7
1 to 2 hectare 86.2 13.8 80.9 19.1 29.3 70.7 50.8 49.2
2 to 5 hectare 89.3 10.7 83.8 16.2 40.6 59.4 52.4 47.6
>5 hectare 90.0 10.0 87.1 12.9 32.1 67.9 58.3 41.7
at the role of land in the inter-generational mobility in economic activity from agri-
culture to non-agriculture sector. Table 10 shows two panels, one with HoH engaged
in agriculture and the other with HoH in non-agriculture sector. The table shows the
share of sons of HoHs in agriculture and non-agriculture sector classified according
to the land size owned by the household. As can be seen from panel 1, in 1993–94
if the household was landless and the father worked in the agriculture sector, then
90% of the sons also worked in the sector as agricultural worker. In 2011–12, 100%
of such sons were agricultural workers. If the household was landless and father
worked in a non-agricultural sector, then about 65% of sons followed their father in
1993–94, which increased to 88% by 2011–12. In other words, if the households did
not own this crucial asset, land, then sons typically followed what fathers did. There
was no possible option for any inter-sectoral mobility.
However, if the households owned land, then as the land size increased, then there
is a greater probability of sons of fathers in agricultural sector joining the agricultural
sector. For instance, in 1993–94 when the land owned was less than a hectare, 83%
of the sons joined father in agriculture, while the land size was above 5 hectares,
90% of the sons joined father in agriculture.
Yet, between 1993–94 and 2011–12, more of such sons whose fathers were in
agriculture and owned land of some size, left agriculture. Moreover, smaller the land
size larger was the propensity for sons to leave agriculture, despite fathers being in
agriculture. This is in contrast with the landless agricultural workers. When one was
landless, there was greater propensity to be in agriculture, but when one holds land,
then land size matters inversely for sons to remain in agriculture.
Looking at the panel 2, it is interesting to note that if the households owned
land and even if the fathers worked in non-agriculture sector as the size of the land
increased, there was an increasing tendency for sons to shift to agricultural activity.
For instance, only 13% of the sons whose fathers were in non-agricultural sector
and owned land less than one hectare were in agriculture. But for such fathers,
who owned more than 5 hectares of land 32% of their sons engaged in agricultural
activities. Surprisingly, we find that this propensity of sons of non-agricultural fathers
to join agricultural increased across size classes by some measure between 1993–94
and 2011–12. This implies that the shift from agriculture to non-agriculture sector
198 V. Abraham
for sons whose fathers were in non-agricultural employment was governed largely by
land ownership. In short, it can be seen that landless households had to depend on the
father’s occupational choice to decide on son’s occupation, while landed households
seem to choose between agriculture and non-agricultural employment depending on
land size, and father’s occupation had a less prominent role to play in such cases.
6 Conclusion
After a long period of stagnancy, the period 1993–94 to 2011–12 had witnessed
a marked reduction in the population dependent on agriculture and a rise in non-
agricultural employment. This paper looked into the changes taking place in the
economic activities of rural households in the above context of structural transfor-
mation. The change, though in its initial stages, reorganizes the division of labour
within the household. Moreover, the skill demands of the non-agricultural sector and
the prospects of higher earnings in the non-agricultural sector revamps the nature of
social reproduction envisaged by the agrarian societies. Such emerging prospects in
the non-agricultural sector change the conventional role played by the members of
rural households.
The analysis in this paper shows that there is a marked shift of households from
agriculture to non-agricultural employment. However, this shift is gender-specific,
with the males moving to non-agricultural employment and the females moving
mostly from agricultural activities to unpaid domestic activities, reducing their partic-
ipation in the active labour market. However, the inter-sectoral mobility of males was
limited to a narrow set of rural non-farm sectors such as construction. Though the
female labour participation is declining, among those who are in the labour market
there is a movement towards non-agricultural sectors, mostly to construction activ-
ities. The lack of diversification of employment to other rural non-farm activities
point to the weak inter-linkages with the urban productive sector.
The shift to non-agricultural sector is marked by the conversion of entire house-
holds from agriculture to non-agriculture sector. Very few households explored a
more risk-averse strategy of diversification instead of conversion. Apparently, this
sort of inter-sectoral mobility may appear to be distress driven. But what seems to
be at work is that as males move to non-farm sector, females in the household with-
draw from the labour market. Thus, such households, whose labour participation has
dwindled get accounted as non-agricultural households.
Looking at members within the households, for the head of the household the most
prominent activity was agricultural employment, but this had declined during the
study period. In its place, rural non-agriculture employment was gradually becoming
prominent. For the spouses of the male HoH, along with the shift of males to non-
agricultural sector, they withdrew from agricultural activities to unpaid domestic
activities, probably now engaged in care services for the household. The children,
both males and females, had shifted their primary economic activity from agricul-
tural employment to attending educational institutions, probably responding to the
demand for higher skills in the non-agricultural sector. It seems to show that the activ-
ities within the rural household are getting increasingly specialized with a clearly
demarcated division of labour in terms of who participated in the market, and who
did care services. The shift of male head of households to non-agriculture sector
also seems to invigorate aspirations about their young ones, now attending schools
instead of being part of the agricultural workforce.
Though the change in rural employment pattern during this period had impli-
cations on the members of the household, the transformation was not triggered by
individual- or household-level factors. As Persons seem to shift out of agricultural
activities, whatever be their age or gender. But joining the non-agriculture sector was
age- and gender-specific. The change was probably caused by the socio-economic
conditions that encouraged rural families to shift to non-agricultural activities.
In terms of inter-generational mobility, firstly, there was very limited inter-
generational mobility across industries. The highest presence of sons in father’s
industry is within agriculture throughout the period. In terms of change, when fathers
were engaged in non-agricultural sector their adult sons also joined the same sector,
but if fathers were in agriculture sector there is an increasing preference for their adult
sons to shift to non-agriculture sector. The shift from agriculture to non-agriculture
sector for sons whose fathers were in non-agricultural employment, was governed
largely by land ownership. Landless households had to depend on the father’s occu-
pational choice to decide on son’s occupation, while landed households seem to
provide greater choices to sons while father’s occupation lost prominence.
Acknowledgements I acknowledge the excellent research assistance provided by Mr. Chacko Babu
for this work. I also thank discussants and participants of the international seminar on “Develop-
mental Challenges of India after Twenty Five Years of Economic Reforms” 16–18 March, 2018, by
the Department of Economics, Banaras Hindu University, Varanasi, Uttar Pradesh for comments
on the paper. All errors are mine.
Appendix Tables
Inter-generational mobility in Industry 1993–94 (Tables 11, 12)

200 V. Abraham
Table 11 Distribution of sons’ occupation by father’s occupation in 1993–94

1993–94
Occupation of Occupation of Male Child
HoH 1 2 3 4 5 6 7 8 9 Total
1 86.32 0.31 3.57 0.11 2.11 2.53 1.45 0.35 3.25 100
2 27.51 52.87 6.14 0 6.56 1.94 3.85 0 1.13 100
3 20.33 0.16 61.93 0.19 4.39 3.97 2.11 0.58 6.35 100
4 48.99 0 8.82 26.66 1.42 1.47 4.87 1.9 5.87 100
5 26.45 1.09 7.13 0.25 55.82 1.51 1.74 0 6.01 100
6 23.47 0.34 7.23 0.24 1.42 58.05 2.1 0.73 6.41 100
7 38.2 0.38 9.75 0 6.34 11.4 22.63 0.41 10.88 100
8 25.77 0 5.66 0.69 1.38 12.34 12.16 39.12 2.88 100
9 42.75 0.15 4.73 0.22 2.65 7.86 2.98 1.3 37.36 100
Total 75.7 0.56 7.1 0.18 3.32 5.52 1.86 0.53 5.23 100
Source NSSO unit level records of the Employment–Unemployment Surveys for the years 1993–94
and 2011–12
Table 12 Distribution of sons’ occupation by father’s occupation in 2011–12

2011–12
Occupation of Occupation of Male Child
HoH 1 2 3 4 5 6 7 8 9 Total
1 77.08 0.25 3.8 0.12 7.73 4.64 2.87 0.87 2.64 100
2 5.93 87.61 1.22 0 2.51 2.24 0.5 0 0 100
3 10.5 0.7 65.16 0.63 9.67 6.3 4.16 0.64 2.23 100
4 14.2 0 6.21 17.76 15.96 10.17 4.32 16.03 15.34 100
5 10.6 0.1 5.14 0.03 73.88 4.68 3.02 0.4 2.16 100
6 15.33 0.18 9.76 0.03 10.56 53.06 5.89 1.91 3.28 100
7 20.03 0.34 10.64 0 18.54 14.04 30.65 1.24 4.53 100
8 14.27 0 4.78 1.09 4.21 13.33 8.58 39.48 14.25 100
9 22.49 0.14 6.37 0.72 7.16 9.93 6.37 2.51 44.3 100
Total 57.99 0.62 8.6 0.22 14.5 8.41 4.02 1.29 4.35 100
Source NSSO unit level records of the Employment–Unemployment Surveys for the years 1993–94
and 2011–12
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Working Paper No. 2012/02, Institute for Studies in Industrial Development, New Delhi, June.
Wage Employment, Informality,
and Social Networks in Indian Labor
Market
Rajendra P. Mamgain
Abstract This chapter shows how a majority of available regular employment—

generally considered better over other forms of employment, is devoid of any social
security and largely contributed by informal enterprises. Among regular salaried
workers, the situation of contractual workers on social security entitlements is worri-
some. The degree of such informality of employment is comparatively high in low-
end occupations. More so, access to regular salaried employment is significantly
influenced by the social background of workers. SCs, STs, and Muslims are largely
concentrated in informal sector wage employment. The chapter argues how informa-
tional asymmetries in urban labor market create unequal labor outcomes in terms of
access to employment and income and demonstrates that despite a notable progress in
the penetration of information technology in India, social networks still remain crit-
ical in providing job information to regular wage employment. Even a large propor-
tion of employers in formal private sector frequently use social networks for job
postings. The new forms of job search such as web job portals are largely being used
by educated job seekers looking for jobs in the private formal sector. The likelihood
of using social networks in job search is comparatively high among low-educated
and male job seekers. The chapter concludes that apart from the lack of employment
opportunities in general, the quality of employment is a major casualty in the current
dispensation of liberal economic policies of last two-and-half decades or so. The
share of precarious employment is widespread and tended to increase over the years.
This dismal situation on the front of employment though attracted attention of polit-
ical class in recent times but yet to be translated into reality with a comprehensive
time-bound agenda of creation of employment that ensures tenurial security, social
security, dignity, and decent earnings to workers.
R. P. Mamgain (B)
S. R. Sankaran Chair (Rural Labour), National Institute of Rural Development and Panchayati
Raj, Hyderabad, India
e-mail: mamgain.rp@gmail.com

https://doi.org/10.1007/978-981-15-8265-3_11
204 R. P. Mamgain
1 Introduction
Decent employment is instrumental in achieving economic and social development

all over the world (ILO 2014; World Bank 2012). However, access to such employ-
ment opportunities to a growing labor force remains a big challenge across the globe,
more so in developing countries like India. The experience of a consistently high
economic growth rate of over 5% in India since the onset of 1980s and its acceler-
ated pace after the economic reforms of 1990s has had limited impact on creating
employment opportunities for its growing labor force outside the farm sector (Papola
and Sahu 2012). So dismal was the pace of employment creation during the decade
of 1990s that it was dubbed as a period of ‘jobless growth.’ But for a brief period
of reasonable growth in employment between 2004–05 and 2011–12, the scenario
has been grim and in the recent years, there are apprehensions of declining job
opportunities, particularly amid the persistence of economic recession and increasing
automation across the world (OECD 2017; ILO 2014; IHD 2016; Abraham 2017).
About 6.18 million jobs, mainly that of women, were lost in India during the
period between 2011–12 and 2017–18, as per the estimates based on the latest data
of the Periodic Labor Force Survey (PLFS) of National Statistical Office (NSO) of
Government of India by Kannan and Raveendran (2019). The survey also reported a
fast decline in the female labor force participation rates particularly in the rural areas
of the country, mainly driven by ‘discouraged withdrawal’ from the labor market.
Unlike the faster structural changes in gross domestic product (GDP), the structure
of employment in the post-liberalization period, has changed at an abysmally slow
pace in India. About half of the country’s workforce is tasked in occupations related to
agriculture and allied activities at abysmally low-income levels, contributing a mere
14% to the national GDP (IHD-ISLE 2014, p. 26). The decline in the proportion of
such occupations has been rather slow. Wage employment constitutes about 46% of
total employment comprising almost equal shares of regular salaried jobs and casual
wage jobs.
The job market in the post-liberalization era has witnessed a sea change in virtually
every aspect of employment be it job information, hiring practices, or the nature
of employment itself, which is getting increasingly casual and contractual, with
little or no social and tenurial security at all. Although the share of regular salaried
employment in total employment has witnessed a sizeable improvement, most of
it has been led by contractual jobs without any social security, both in public and
private enterprises. Moreover, access to regular salaried employment is significantly
influenced by the social background of workers with notable underrepresentation of
scheduled castes (SCs), scheduled tribes (STs), other backward classes (OBCs), and
Muslims in private corporate sector employment where most jobs are on the offer
(Mamgain and Tiwari 2017). Thus, informal mode of employment, with low earnings
and limited or no social protection still accounts for about 84% of total employment
in India (ISLE-IHD 2014; Srivastava and Naik 2017).
Associated with the increasing informality in wage employment is the role of job
information in labor market (Stigler 1961, 1962; Spence 1973). It is argued that equal
Wage Employment, Informality, and Social Networks … 205
access to job information improves labor market outcomes from the perspective of job
seekers and employers alike. However, such free flow of information is hampered for
job seekers in segmented labor markets, resulting in inequality in productivity, wage
earnings, and upward mobility (Kannapan 1977; Papola 1981). Information asym-
metries in the labor market were expected to disappear with the rapid penetration
of Information Technology (IT) in recent years. However, contrary to such expec-
tations, a fairly high proportion of job seekers still depend on their social networks
for job information, thereby dwarfing the potential of IT in the labor market. The
use of social networks is comparatively more important for those searching contrac-
tual/casual jobs in the middle and low-rung occupational hierarchies in both formal
and informal sector enterprises.
In brief, the faster economic growth witnessed during the late 1990s till recently
has hardly been able to ameliorate the persistent deficit of quality employment; thus,
resulting in the rise in under-employment and educated unemployment in India.
Against this backdrop, the author seeks to analyze the nature and magnitude of
informal employment both in formal and informal sector enterprises based on empir-
ical data and examines the changing nature of job information and hiring practices in
the ICT (Information–communications technology) age that is bypassing the socially
marginalized sections rather than integrating them in the mainstream. Primary data
from four metropolitan cities has been gathered for this purpose.
The paper comprises five sections. The following Sect. 2 dwells on the nature and
magnitude of informal employment based on NSSO (National Sample Survey Orga-
nization) data on employment and unemployment, particularly for the years 2004–05
and 2011–12. Since NSSO data do not provide information on contractual workers
(who are generally counted under the category of regular employment) and sources
of job search information, we have used primary data collected from the cities of
Lucknow, Delhi NCR, Pune, and Coimbatore (Mamgain 2019) to understand infor-
mality and related importance of social networks in access to paid wage employment
in the urban labor market in Sects. 3 and 4, respectively. The purpose is to examine
how sources of job information help in getting jobs in the labor market. Section 4
also examines how the source of information determines the access to quality of job
in terms of its nature and income. Equally important would be to analyze the nature
and access of job information to the job seekers belonging to various socio-economic
groups. It is generally believed that information about job opportunities is relatively
weak in case of migrants to cities, women, marginalized communities, and those with
low educational attainments. The concluding section summarizes the main features
of informality and the role of social networks in the urban labor market.
206 R. P. Mamgain
2 Wage Employment and Informality
A little less than half of the Indian workforce is absorbed in wage employment,
which includes regular salaried jobs and casual wage works (Table 1). Regular wage
employment has long been associated with jobs in the formal or organized sector
of the economy, whereas casual wage employment is largely, if not only, associated
with work in the informal or unorganized sector. Moreover, opportunities for regular
salaried jobs are largely concentrated in urban areas, while casual wage works are
mainly located in rural areas thus, indicating unequal access to employment opportu-
nities. Although wage employment witnessed a sizeable annual growth since 2004–
05 mainly led by a growth of regular employment, yet most of the jobs created in
the period, particularly in private sector, do not ‘fit’ into ILO’s broad framework
of ‘decent’ work ensuring tenurial and social security to workers. The quality of
regular employment has seriously eroded after the economic reforms of early 1990s
as regular workers even in the formal sector are increasingly facing informal work
conditions indicated in several reports and studies (NCEUS 2007, 2009; Kannan
2014).
The author first looks at the composition of regular employment—the most sought
after form of employment, i.e., which type of enterprises are major employers
of regular salaried workers. For understanding this, he has categorized the enter-
prises/employers into three types: (a) public sector enterprises consisting of all kinds
of government departments, autonomous/subordinate organizations supported by
Table 1 Nature of employment in India (in percent)

1993–94 2004–05 2011–12 2017–18
Rural
Self-employed 58.2 60.2 55.9 57.8
Regular 6.4 7.6 8.7 13.1
Casual 35.4 32.8 35.4 29.1
Total 100 100 100 100
Urban
Self-employed 42.7 45.4 41.9 38.3
Regular 38.9 39.5 43.3 47.0
Casual 18.4 15.1 14.8 14.7
Total 100 100 100 100
All India
Self-employed 55.01 56.9 52.2 52.2
Regular 13.05 14.3 17.9 22.8
Casual 31.95 28.9 29.9 24.9
Total 100 100 100 100
Source NSSO data on employment and unemployment, various rounds; and PLFS data for 2017–18
government finances, etc.; (b) private sector enterprises consisting of public and
private limited companies/organizations, voluntary and other firms/organizations
(broadly matching the features of private organized sector; and (c) informal sector
enterprises including proprietary/partnership firms, and individual employers house-
holds employing domestic help, security guards, etc. The data thus grouped are
comparable for the years 2004–05 and 2011–12, whereas the same is not strictly
comparable for the earlier period 1999–2000.
Based on the above criteria, around 30% of regular salaried workers were
employed in public sector, another 22.6% in private sector, and the remaining 47.5%
in informal sector, including about 1.4% with employer households in 2011–12
(Fig. 1). There is a significant change in the share of regular employment over the
years across different types of enterprises—a sizeable decline in the share of public
enterprises with a corresponding increase in the share of private corporate sector.
However, the share of informal enterprises in creating regular employment was high,
hovering around 48% (Mamgain and Tiwari 2017).
Indian workforce suffers from huge informality in employment—about 93% of
workers are characterized as informal workers without any social security bene-
fits. By using the criteria of social security and tenurial security to wage workers,
Srivastava and Naik (2017) have estimated the magnitude of informality in wage
employment in India. According to their estimates, over 61.4% of wage employ-
ment in the formal sector was of informal nature in 2011–12. Further, about half
of employees among regular workers were in informal jobs. The share of informal
workers significantly increased by over ten percentage points between 2004–05 and
2011–12, including that in case of regular employment (Table 2). The intensity of
informal employment in formal sector wage employment varied significantly across
different industry divisions. Manufacturing, construction, trade, and hotels suffer
120
100
80 47.69 49.54 47.46
60
16.69 16.93 22.56
40
35.62 33.54 29.98
20
0
1999-2000 2004-05 2011-12
Public enterprises Private enterprises Informal enterprises*
Fig. 1 Regular salaried employment by type of enterprises. Source Calculated from NSSO data
208 R. P. Mamgain
Table 2 Percentage of informal employment among wage workers in the formal sector
Regular wage workers All wage workers
Formal sector 2004–05 2009–10 2011–12 2004–05 2009–10 2011–12
Public sector 23.3 31.7 28.2 27.1 39.3 41.5
Private sector 61.4 66.4 68.8 73.4 75.2 76.9
Public and 40.3 48.7 50.2 51.6 58.1 61.4
private sector
Source Srivastava and Naik’s (2017) calculations based on NSSO unit-level data on employment
and unemployment, various rounds
with high degree of informality as around three-fourths of regular workers working

therein are categorized as informal workers. More importantly, the rise in the share of
informal employment in wage employment was widespread across different industry
segments in the formal sector during 2004–05 and 2011–12 (Ibid). Even in the public
sector, the proportion of informal employment among regular employees increased
by five percentage points from over 23% in 2004–05 to over 28% in 2011–12. By
including casual wage workers, the share of informal employment in total wage
employment in public sector jumped sharply from 27% to over 41% during the
period. Industry divisions such as hotels, education, and administration witnessed
a significant rise in the share of informal workers among regular workers in public
sector (Ibid).
2.1 Representation of Various Social Groups in Regular

Salaried Jobs
As is well known, the share of socially marginalized groups such as STs and SCs in
casual wage employment is disproportionately high as compared to their share in total
population. In 2011–12, among the total number of casual wage labor the share of
STs, SCs, OBCs, and Others stood at 12.8%, 30.9%, 42.0%, and 14.4%, respectively.
The opposite is true particularly in regular employment in the private corporate sector.
The representation of SC/ST in public sector regular employment has been fairly
proportionate to their respective shares in all India population. This has been largely
possible due to the reservation of employment for these two groups in public sector
employment. It has improved since the 1990s after the active involvement of judiciary
in the implementation of job reservation in the public sector. However, opportunities
for regular employment in public sector significantly reduced in the aftermath of
economic reforms of the early 1990s, wherein the share of contractual and informal
employment increased but without any provisions of reservation for the deprived
sections in such jobs. Muslims too are grossly under-represented in public sector
employment and their relative share in such jobs has not improved much over the
years. The reasons for their under-representation in such jobs and need for affirmative
measures to promote their share have been well outlined in the recommendations of
the Sachar Commission (2006), and recently by Kundu Committee (2014).
In case of regular employment in the private sector, the share of SCs, STs, and
Muslims is still low in proportion to their share in population, but more so in case
of STs and Muslims. OBCs also remain under-represented in private sector employ-
ment but their representation tended to improve due to faster growth in their employ-
ment during 2004–05 to 2011–12. In the informal sector regular wage employment,
however, SCs and Muslims are fairly represented (Table 3).
The case of OBCs is worth mentioning in the context of their representation in
regular employment opportunities in the country. They experienced a rapid improve-
ment in their share in regular wage employment in public sector as well as private
sector, but yet remain underrepresented in proportion to their share in total population.
The rise in the share of OBCs in public sector could be directly due to reservation.
Table 3 Representation of different socio-religious groups in regular salaried employment by type

of enterprise (in percent)
Socio-religious Public Private Informal Total % workers
group enterprises enterprises enterprises
1999–2000
ST 7.06 3.33 3.92 4.95 11.1
SC 16.15 11.46 13.56 14.16 20.3
Muslim 5.82 7.27 13.26 9.66 9.9
OBCs 23.26 24.83 29.5 26.53 33.1
OCs 47.71 53.12 39.77 44.7 25.8
All 100 100 100 100 100
2004–05
ST 6.47 2.29 3.16 4.12 9.8
SC 18.22 12.38 17.73 16.99 19.9
Muslim 6.48 5.31 12.45 9.24 10.3
OBCs 28.08 30.62 34.84 31.86 37.5
OCs 40.75 49.4 31.82 37.79 22.5
All 100 100 100 100 100
2011–12
ST 8.52 2.55 3.53 4.8 10.2
SC 17.75 12.08 17.45 16.33 19.1
Muslim 5.91 7.53 15.01 10.59 11.7
OBCs 30.63 31.2 35.44 33.04 37.6
OCs 37.19 46.64 28.56 35.23 21.4
All 100 100 100 100 100
Source Mamgain and Tiwari’s (2017) calculation based on NSS unit record data on employment
and unemployment
210 R. P. Mamgain
But the rise in their share in private and informal sector is worthwhile to mention
(Table 3). This has been associated with significant improvement in their educational
levels in recent years and faster withdrawals from farm-related jobs. Other Classes
(upper caste) are represented in proportionately larger share than their population
share in regular employment in public as well as private sector. The higher growth
in employment for SCs, STs, and OBCs has been gradually bridging the gap with
their relative share in such employment (Table 3). This is definitely a positive trend
which can be associated with higher economic growth that created regular employ-
ment opportunities in private as well as informal sector particularly after 1999–2000,
benefitting the marginalized groups.
2.2 Informality in Regular Salaried Jobs by Type

of Enterprises
Given the relatively higher growth rate in private sector regular jobs between 2004–
05 and 2011–12, it is necessary to know the quality of regular employment gener-
ated. By following the framework of formal/informal employment on the basis of
written job contracts (as a measure of tenurial security) and social security benefits to
workers (see NCEUS 2007; Srivastava and Naik 2017), it is expected that all regular
employees working in public as well as private organized sector should have at least
written job contracts and social security. Surprisingly, a significant 38% of regular
workers working in public sector do not have any written job contract and social
security indicating the precarious nature of employment. This has been true for all
regular employees in public sector belonging to various social groups but more so
for Muslims, SCs, and STs (Table 4).
In case of the private sector, the proportion of regular workers having some form of
job contract along with social security is expectedly very less (30.5%) as compared to
public sector (61.73%), thereby indicating the vulnerability of almost 70% of regular
employees in private sector. Similar to public sector, the extent of such vulnerability is
more so in the case of Muslims, STs, and SC regular workers as compared to OBCs
and OCs in private sector. As obvious, almost all regular workers in the informal
sector are most vulnerable from the perspective of their job contract and social
security (Table 4). In brief, an overwhelming majority of regular salaried employees
in India do not have any form of written job contract and social security, implying
the magnitude of precariousness or uncertainty of such employment opportunities.
Muslim and SC regular workers suffer maximum with such vulnerability.
Has such vulnerability of workers has reduced over the years? In fact, it has
significantly increased during the period 2004–05/2011–12, as the proportion of
workers without job contract and social security increased by almost ten percentage
points both in public and private sectors. In the most recent period (2011–12 to 2017–
18), the proportion of regular workers without any written job contract increased from
64.7% to over 71%, and that of those without any social security benefits (such as
Table 4 Share of regular salaried employees having written job contract and social security (in %)
Socio-religious group Public Enterprises Private Enterprises Informal Enterprises Total
2004–05
ST 64.66 24.49 4.50 38.05
SC 66.27 29.42 2.94 28.98
Muslims 63.95 30.81 3.61 20.45
OBC 68.61 37.52 5.74 29.49
OCs 72.50 48.88 8.88 40.73
Total 69.21 41.47 5.94 33.17
2011–12
ST 59.98 20.25 5.71 36.30
SC 58.63 24.04 3.20 24.74
Muslims 52.55 17.91 1.57 12.71
OBC 57.19 30.44 4.34 24.59
OCs 68.81 34.85 7.83 35.20
Total 61.73 30.52 4.77 27.66
Source Mamgain and Tiwari’s (2017) estimates based on NSS unit record data on employment and
unemployment
public provident fund, pension, gratuity, health and maternity benefits) declined from
55.4 per to 49.6% (PLFS-NSO 2019). This general deterioration in the quality of
regular employment has been witnessed by workers from all social groups but more
so by Muslims (Table 4).
3 City-Level Features of Employment and Informality
Having examined the macrofeatures of wage employment and extent of informality

therein at the macrolevel, this section analyzes wage employment and informality in
urban areas based on a sample survey of 3000 households in four cities during 2014–
15 (Mamgain 2019). However, before the analysis, it would be useful to understand
the broad features of the sample urban households. Over 60% of the population
among sample households belongs to the 18–45 years age group—the focus age
group of the study. Since the focus population groups are SC and ST, a substantive
proportion of the sample constituted SC and ST households. About 12% of the sample
population was Muslim. Migrants constituted around 8% of the sample population,
though the ratio was very high (14.8%) in Pune, and between 5 and 7% in other
cities. On considering a much broader aspect of migrant population, i.e., those not
born in the city of enumeration, the proportion of such population jumps to over
40% in Delhi and least 10.5% in Coimbatore (Table 5). Over 70% of the sample
population had high school and above education including one-third with graduate
212 R. P. Mamgain
Table 5 Broad features of sample population

Characteristics Lucknow Delhi/NCR Pune Coimbatore All
Sample HHs 700 1100 700 500 3000
Sample population 3338 4755 2656 1798 12,547
Population in age group 18–45 yrs (in %) 60.90 62.20 63.80 62.20 62.20
Social background (%)
SC and ST 50.80 38.20 32.40 41.80 40.80
OBC 28.60 22.10 30.10 53.10 30.00
Others 20.60 39.80 37.50 5.10 29.20
Place of birth (%)
City of enumeration 78.22 59.45 61.67 89.49 69.22
Other city/town 7.88 13.94 14.78 5.01 11.22
Village 13.90 26.60 23.56 5.51 19.56
Migrant@ (%) 6.60 6.00 14.80 5.20 7.90
Not born in the city (%) 21.78 40.55 38.33 10.51 30.78
Literacy rate (%) 89.32 91.2 92.21 93.55 91.24
Educated persons (high school and above) 69.18 74.74 69.12 63.30 70.45
(%)
Note Following the Census definition, we have treated migrant population to the city as those persons
whose last place of residence was different than the current one in the city and residing there for
less than 10 years
Source Mamgain (2019)
and above educational levels. It merits mention here that such demographic features
of the sample households should not be generalized as these are necessarily not
representative of the city’s population universe due to its different purpose. However,
it adds important information on the nature of employment and job search in the urban
labor market in recent years.
3.1 Characteristics of Employment
Since the survey aimed at understanding the job search practices among salaried
workers in the age group 18–45 years, most of the workers in the sample house-
holds were working in regular salaried jobs in all cities, ranging from nearly 44% in
Lucknow to over 59% in Pune (Table 6). Contractual employment has emerged as
a new form of employment where workers are not directly employed by a principal
employer but employed through a contractor for specific jobs (third party hires). In
Delhi and Lucknow, the proportion of contractual workers was high—32.0% and
26.7%, respectively, whereas the proportion of such workers was least at 14.97%
in Pune. This form of recruitment is being increasingly used by employers to not
Table 6 Distribution of workers (18–45 yrs) by their job/work status (in percent)
Job/work status Lucknow Delhi/NCR Pune Coimbatore Total
Self-employed 22.90 12.30 20.20 10.90 17.00
Regular salaried 43.60 51.70 59.20 58.37 53.32
Contractual 26.70 32.00 14.90 21.97 24.14
Casual 5.90 3.20 5.20 8.80 5.20
Apprenticeship trainee 0.80 0.90 0.40 0.50
Total 606 1047 1339 478 3470
only reduce labor costs but to also control labor. The share of such workers both
in public and private sectors has increased substantially over the years, particularly
after the economic reforms of the early 1990s. For example, the share of contractual
workers in the organized manufacturing sector in India increased sharply from 13.9%
in 1995–96 to 34.0% in 2011–12 (Goldar and Suresh 2017). Nearly one-fifth workers
were self-employed in Lucknow and Pune sample and over one-tenth in Delhi and
Coimbatore, respectively. Apprenticeship trainees strictly are not workers but their
services are growingly being used by the employers for the production of goods and
services. The proportion of such apprenticeship trainees, however, is less than 1%
among the sample workers.
Gender-wise there is not much difference in the work status of men and women.
But it differs significantly among workers belonging to various social groups. The
proportion of contractual and casual workers was higher among ST and SC workers
as compared to those belonging to OBCs and OC social groups (Fig. 2). On the
other hand, the proportion of regular salaried workers was higher by about six
percentage points for OBCs and OCs than ST/SCs. In other words, workers belonging
9.40% 7.70% 3.40% 4.10%

100% 18.60% 18.40%
99% 23.90%
26.00%
98% 59.50% 58.00%
97% 53.20%
96% 52.10%
95%
94%
17.9 19.0
93% 14.5
92% 12.5
91%
90%
ST SC OBC OC
Self-employed Regular Contractual Casual
Fig. 2 Job/Work Status of Workers by Their Social Group. Source Mamgain (2019)
214 R. P. Mamgain
100% 5.30% 4.80% 4.80%

90%
20.80% 21.10% 16.50%
80%
70%
60%
50%
56.30% 53.80% 65.40%
40%
30%
20%
10% 17.10% 19.40%
13.00%
0%
Hindu Muslim Other religion
Self-employed Regular Contractual Casual
Fig. 3 Job/Work Status of Workers by Their Religious Group. Source Mamgain (2019)
to SC/ST communities have relatively poor quality employment. This pattern has
been observed at the national level as well (ISLE-IHD 2014; Mamgain and Tiwari
2017). Religion-wise, work status of workers belonging to Hindu and Muslim reli-
gions is almost similar to a marginally higher proportion of self-employed workers
among Muslims. However, workers belonging to other religions were proportionately
more in regular salaried jobs (Fig. 3).
3.2 Coverage of Social Security Benefits
Wage workers have been classified into three categories based on the nature of their
contract and coverage of social security benefits, viz. fully covered by social security
benefits, partially covered by social security benefits, and no social security benefits.
Among regular workers in public sector, over half of them were fully protected by
social security benefits. A sizeable proportion was partially covered by social security
benefits. In this way, the general notion of full social security coverage in public sector
employment has gradually diluted with the faster pace of contractual employment
in public sector in recent decades. In private sector enterprises, a large majority of
regular employees was not covered fully by social security benefits. Nearly half of
regular workers in private sector were partially covered by social security benefits
(Table 7). About one-third of regular workers in private sector were not getting
any social security benefits from their employers. Understandably, a majority of
those working in private unincorporated enterprises or informal enterprises were not
receiving any social security benefits. These patterns at city level broadly follow the
macro patterns as observed earlier (Tables 2, 3 and 4).
Table 7 Percentage share of employed persons covered by social security benefits@

Type of work/Enterprise Without social security Partially covered Fully covered
Regular
Public 20.4 27.4 52.2
Private/MNCs 32.5 47.1 20.4
Others 60.9 34.8 4.3
Total 30.7 43.7 25.6
Observations 662 940 551
Contractual
Public 39.6 47.8 12.6
Private/MNCs 47.6 42.6 9.8
Others 51.9 40.7 7.4
Total 46.0 43.7 10.3
Observations 325 309 73
Note @If an employed person gets earned leave, medical leave in case of sickness and contributory
provident fund from her/his employer, she/he is termed as ‘fully covered’ by social security benefits.
In case she/he gets any of the above mentioned social security benefits, she/he is categorized as
‘partially’ covered. Those who do not get any of the above mentioned social security benefits are
categorized as ‘without social security’
The situation of contractual workers on social security entitlements is worrisome

as an overwhelming majority among them is not fully covered by social security
benefits. As high as 40% of contractual workers in public sector and nearly half in
private sector were not receiving any social security benefits (Table 8).
How the degree of such informality of employment varies for persons working
in different occupations in our sample cities? Let us first look at regular workers.
Lack of informality is widespread across various occupational groups of workers.
However, the degree of informality is very high in the occupational groups such as
sales and service works, crafts and related works, and plant and machinery operators.
At the top ladder of occupational hierarchies, comparatively a higher proportion of
workers are protected by social security benefits, indicating the criticality of such
workers to employers. Contractual workers, though few in top-end occupations, also
enjoy relatively better social security benefits than those working in bottom end
occupations. Almost 80% of contractual workers working in machine operating and
elementary occupations were not getting any social security benefits (Table 8).
In brief, apart from the lack of employment opportunities in general, the quality of
employment is a major casualty in the current dispensation of liberal economic poli-
cies of the last two decades or so. The share of precarious employment is widespread
tended to increase over the years. Socially marginalized groups and those working in
lower end occupational hierarchies do suffer more with such informality in the labor
market and thus has serious implications for their income earnings and well-being.
216 R. P. Mamgain
Table 8 Percentage share of employed persons covered by social security benefits$

NCO Without social security At least one Fully covered Obs
Regular
Legislators, Senior Officials, 9.6 44.9 45.5 198
and Managers
Professionals 13.9 48.5 37.6 431
Technicians and Associate 29.7 43.6 26.7 610
Professionals
Clerks 37.6 38.6 23.8 189
Service and Sales Workers 44.0 43.8 12.3 350
Skilled Agri. and Fishery 25.0 25 50.0 4
Works
Craft and Related Works 49.6 38.9 11.6 224
Plant and Machine Operators 47.7 44.9 7.5 107
and Assemblers
Elementary occupations 35.0 35 30.0 40
Total 30.7 43.7 25.6 2153
Contractual
Legislators, Senior Officials, 32.2 52.6 15.3 59
and Managers
Professionals 41.5 40.6 17.9 123
Technicians and Associate 41.1 50.3 8.6 209
Professionals
Clerks 53.8 35.9 10.4 106
Service and Sales Workers 49.2 45.9 5.0 120
Skilled Agri. and Fishery 82.6 15.2 2.2 46
Works
Craft and Related Works 62.0 31.7 6.3 79
Plant and Machine Operators 76.0 20.2 3.8 104
and Assemblers
Elementary occupations 81.0 17.5 1.6 189
Total 46.0 43.6 10.4 711
Note $ Same as @ in Table 7
4 Social Networks and Access to Employment
How informality in employment is inked with access to job information in labor

market is examined in this section. Economic theories have clearly recognized the
role of information in labor markets by bringing together employers and job seekers
in a competitive economy to maximize their earnings/productivity (Stigler 1961, 62;
Spence 1973). However, the lack of access to such free and timely information, both
to employers and job seekers creates rigidities and imperfect competition in the labor
market. It is argued that free flow of information is hampered in segmented labor
markets, resulting in inequality in productivity, wage earnings and upward mobility
(Kannapan 1977; Papola 1981). More recent literature shows how the success rate of
getting job and negotiation for wages depends on access to information, its source,
and quality (O’Connor 2013). In this section, an attempt is made to understand the
sources of job information used by the employed persons for finding their current
employment in select cities. It also examines how the source of information deter-
mines the access to better quality jobs. Equally important is analyzing the nature
and access of job information to job seekers belonging to various socio-economic
groups. It is generally believed that information on job opportunities is relatively
weak in the case of migrant workers, women, socially marginalized communities,
and those with low educational attainments.
The most prominent source of job information is informal social networks, which
include friends, relatives, family members, caste networks, etc. The importance of
social networks in providing access to labor market information is well documented in
earlier studies as well (Papola 1981; Harriss et al. 1990). Newspaper advertisements
along with web portals were the source of information for nearly 22% persons. For
about 4.63% of workers, employee referral was the source of job information. About
5% said they had directly approached the employers. Unlike in the past, employment
exchanges are no longer a major source of job information. Interestingly, social
contacts/networks emerged as the most important source of job information for a
majority of employed persons (Table 9). These included family members, friends,
relatives, caste/community networks, co-villagers, migrants, employee referrals, etc.
This pattern in the use of different sources of job information is similar among
different cities. For instance, family connection as a source of job information was
relatively stronger in Lucknow and Coimbatore as compared to Delhi and Pune. In
Coimbatore, caste/community network seems to be more effective in getting a job as
compared to the other three cities in the survey. Newspaper advertisements have been
cited by a sizeable number of persons in all cities except Coimbatore. Web portals
have emerged an important source of job information with the highest proportion
(13.3%) of employed persons in the Delhi sample using this source for finding their
current job.
Do sources of job information vary for men and women workers in the labor
market? Broadly speaking, social networks are the main source of job informa-
tion for both men and women. However, friends/acquaintances as the main source
of job information were of lesser importance for women workers as compared to
218 R. P. Mamgain
Table 9 Source of information for current employment, city-wise (in percent)

Source of Job Information Lucknow Delhi/NCR Pune Coimbatore Total
Family connections 22.92 13.61 20.50 24.45 19.36
Friends/acquaintances 44.31 43.05 41.61 60.92 45.12
Employee referral 4.92 5.15 5.54 0.44 4.63
Newspaper advertisements 13.92 14.38 19.06 8.52 15.33
Electronic web portals 3.40 13.31 5.77 0.87 6.98
Placement agencies/Staffing companies 0.51 0.78 0.46 0.22 0.53
School/college 0.51 0.78 0.08 0.66 0.44
Campus placement 0.17 1.85 0.91 0.22 0.97
Directly approaching employers 8.32 6.12 4.40 2.84 5.39
Contractor/middleman 0.68 0.19 1.59 0.44 0.85
Employment exchanges 0.00 0.10 0.08 0.22 0.09
Others 0.34 0.68 0.00 0.22 0.29
Total 100 100 100 100 100
No. of persons 589 1029 1317 458 3393
their male counterparts. For over 18% women newspapers were the main source of
their job information, whereas about 14% men used this source of information. The
proportion of women (8.1%) directly approaching the employer for job was almost
double than men (4.2%) (Table 10). Such behavior of job search information has
also been reported in earlier studies. City-wise, there is a significant difference in the
sources of job information both for employed men and women (see Mamgain 2019).
For example, only one-third of women respondents got job information from their
friends/acquaintances social network in Lucknow and Delhi as compared to 57.4% in
Coimbatore, and 43% in Pune. Also, the proportion of women directly approaching
employers for job information was higher in Lucknow and Delhi as compared to
Pune and Coimbatore.
The predominance of social networks as sources of job information is true for
workers belonging to various social groups albeit with relatively lesser dependence
on such sources among OCs. There is a significant variation in friend/acquaintance
as a source of job information among workers belonging to various social groups.
Proportionately more OC workers used newspaper advertisements and web portals
as compared to SC and OBC. Campus placement cells were the main source of
job information for about 2% of OC workers as compared to about 0.6% for SCs
and OBCs. It merits mention here that although job information through college
placement cells may be accessible to all, the cut-off marks for such placements are
generally high wherein SCs and OBCs often remain at a disadvantageous position
due to their (non-English) educational background (Chakravarty and Somanathan
2008).
Table 10 Source of information for current employment by gender and social groups
Source of job information Gender Social group
Male Female STs SCs OBCs OCs
Family connections 19.34 19.41 8.42 20.91 19.82 18.33
Friends/acquaintances 46.83 41.17 30.53 46.40 47.57 42.92
Employee referral 4.90 4.00 16.84 3.87 5.35 3.74
Newspaper advertisement 14.02 18.34 34.74 14.59 12.88 16.59
Electronic web portal 7.73 5.27 5.26 5.10 6.64 9.30
Placement agencies/Staffing 0.55 0.49 0.00 0.26 0.59 0.78
companies
School/college 0.34 0.68 0.00 0.53 0.50 0.35
Campus placement 1.06 0.78 1.05 0.62 0.59 1.65
Directly approaching 4.22 8.10 1.05 6.15 5.15 5.21
employers
Contractor/middleman 0.72 1.17 2.11 0.97 0.59 0.87
Employment exchanges 0.13 0.00 0.00 0.18 0.10 0.00
Others 0.17 0.59 0.00 0.44 0.20 0.26
Total 100 100 100 100 100 100
No. of persons 2368 1025 95 1138 1009 1151
Thus, it is seen that dependence on social networks for job information is compar-
atively more among SCs and OBCs as compared to OCs. This is in contrast to earlier
studies which showed how due to weak social networks SC job seekers in the urban
labor market suffer higher unemployment incidence (Banerjee 1983; Harriss et al.
1990). However, this has been observed here in case of STs who are largely dependent
on other sources of job information rather than social networks.
The popularity of social networks in providing job information to job seekers
across different types of enterprises is more than evident although in varying degrees.
Understandably, they are most important media for dissemination of information on
job opportunities in informal private enterprises, followed by private enterprises and
least important in case of public enterprises (Table 11). Electronic job portals and
newspaper advertisements are important sources of job information for public sector
employment as about 40% of respondents employed in such enterprises received job
information from these two sources. This holds true for those working as regular as
well as contractual workers in public sector enterprises. In case of those working in
private sector enterprises, over one-fourth among them received job information from
electronic job portals and newspaper advertisements. For those working in informal
enterprises on contractual basis, much less than one-fifth received job information
through electronic job portals and newspaper advertisements. For a sizeable number
of employees, employee referrals were the main source of job information particu-
larly for contractual jobs and that too in private sector and informal sector enterprises.
220 R. P. Mamgain
Table 11 Job search information by type of enterprise (in percent)

Job search information Public Private/MNCs Others@ Total
Regular
Social networks 54.4 63.5 96.0 62.4
Employee referrals 1.3 5.5 0.0 4.8
Electronic job portals 28.8 14.6 4.0 16.8
Newspapers 12.7 13.2 0.0 13.0
Placement agencies/HR firms 1.1 0.6 0.0 0.7
Campus placement 0.0 1.3 0.0 1.1
Others 1.8 1.2 0.0 1.3
Total 100.0 100.0 100.0 100.0
Contractual
Social networks 46.9 52.2 72.4 51.8
Employee referrals 6.2 8.7 10.3 8.2
Electronic job portals 21.0 22.0 10.3 21.3
Newspapers 19.1 13.6 6.9 14.5
Placement agencies/HR firms 1.2 0.9 0.0 0.9
Campus placement 0.6 1.6 0.0 1.3
Others 4.9 1.0 0.0 1.8
Total 100.0 100.0 100.0 100.0
Note Others include private-sector small enterprises which are not categorized as limited companies
Thus, social networks were dominant source of job information in private as well as
informal enterprises in the urban labor market (Table 11).
4.1 Determinants of Using Social Network for Job Search
While recognizing the importance of social networks, it is important to understand

the factors influencing the use of such networks for job search in the urban labor
market. There are various factors, viz. age, gender, social group, migration, education,
occupation, income, and location that may affect a job seeker’s decision to use social
network to look for jobs in the urban labor market. For this logistic regression was
applied to estimate the effect of these variables on the decision of a job seeker to use
social network as job search method.
Table 12 depicts the results of logistic regression. It has captured the effect of
age, gender, social groups, education, income, migration, and occupation on the
chances of using social network as job search method. Some interesting features
that emerged are as follows. The probability of using social networks for job search
Table 12 Decision to use social network as job search method by workers

Social network Coefficient Odds ratio Standard error Z P > |Z|
Constant 1.310162 3.706772 0.4155845 3.15 0.002
Education −0.1084206 0.8972501 0.014536 −7.46 0.000
Income −0.000024 0.999976 0.000004 −6.2 0.000
Age 0.0051559 1.005169 0.0064026 0.81 0.421
Gender 0.2327063 1.262011 0.0893738 2.6 0.009
Migrant −0.1867969 0.8296122 0.0846618 −2.21 0.027
SC 0.9419804 2.565056 0.2419145 3.89 0.000
OBC 1.014645 2.758384 0.2434637 4.17 0.000
General 1.134315 3.109042 0.240744 4.71 0.000
Occupation I −0.5597004 0.5713802 0.2096146 −2.67 0.008
Occupation II 0.1057418 1.111535 0.2096475 0.5 0.614
Occupation III 0.2147643 1.23957 0.2197797 0.98 0.328
Delhi −0.0115424 0.988524 0.1194289 −0.1 0.923
Pune −0.1327892 0.8756496 0.1235746 −1.07 0.283
Coimbatore 1.065867 2.903354 0.1684976 6.33 0.000
Total Observations 3232
LR chi2 (14) 517.05
Pseudo R2 0.1222
Note Education is measured as number of years of education; income reflects per capita monthly
income of workers; age in number of years. Except for these three variables, other variables are
categorical. For gender, social group and occupation dummies are used as females, STs, and
Occupation IV (elementary occupations), respectively. Lucknow is used for city dummy. For details,
see Mamgain (2019)
tends to reduce with every increase in the numbers of years of education. This is
statistically significant as its odds ratio shows that one year increase in education
reduces the odds in favor of using social network as job search method by around
11%. In other words, job seekers with the high level of education do not employ social
network as job search method as intensively as compared to those with the low level
of education. Similarly, as the income levels of workers increase, the odds in favor of
using social networks decline significantly. The level variable ‘age,’ however, does
not have any significant impact upon the likelihood of using social network for job
search in the urban labor market, and thus is in conformity with the earlier studies
(Banerjee 1983).
It is seen that the coefficient of sex dummy is significantly different from zero at
1% level of significance and the odd ratio for male dummy indicates that male job
seekers shift the odds in favor of using social network by about 26.2% as compared
to their female counterparts. Next, the dummy variable capturing migration shows
that if the job seeker is a migrant it reduces the odds in favor of using social network
222 R. P. Mamgain
as job search method. This implies that migrants have less social fabric to explore
jobs in the urban labor market.
The social belonging of job seekers has a significant bearing on using social
networks for job search. The three-social group dummies are statistically significant
from zero and they increase the odds which favor the choice of employing social
network as job search method by job seekers compared to the omitted category, ST.
To note that the job seekers from higher caste groups employ social network as a job
search method to a greater extent compared to the lower caste group (say, ST and
SC).
The chances of using social network for job search significantly differ with the
type of occupational group of workers. The declining values of odds ratios with
rising occupational hierarchies reconfirms that the chances of workers using social
networks in top-end occupations for jobs are significantly lower than those in lower
occupational hierarchies in the urban labor market in India.
Finally, the effect of location or city on the decision to use social network as job
search method is measured through the usage of location dummies. The coefficients
on dummies—Delhi and Pune—are not found to be different from zero. However,
Coimbatore is significantly different from zero which indicates that compared to
Lucknow, social network is used to a greater degree to search for a job in Coimbatore.
In other words, the use of social networks in Delhi, Pune, and Lucknow is almost
identical, whereas the same is significantly different and higher in Coimbatore.
In brief, social networks are significant in providing job information and access
to jobs in the urban labor market, particularly for low-end informal employ-
ment/occupations fetching low income to job seekers.
5 Conclusion
The 1990s economic reforms induced high growth development trajectory in India
has been rather sluggish in bringing the desired rate of growth in employment oppor-
tunities and related structural changes therein. An overwhelmingly large majority of
employment is informal in nature without any social security to workers. Due to a
variety of reasons, there has been an increasing pace of informalization in employ-
ment in the organized segment of the Indian economy, which was once considered
a major source of stable job with reasonable social security. Such kind of infor-
malization is widely spread across different industry segments in the formal sector
including both public and private enterprises. More recent evidences emerging from
various studies have also indicated a high pace of contractualization and casualization
of employment opportunities both in public and private formal sectors. Moreover,
the access to ‘decent jobs,’ particularly in private formal sector, is a proportionately
unequal among populations belonging to different socio-religious groups. Socially
backward groups like SCs, STs, and OBCs have proportionately lower share in
private sector jobs as compared to other or upper caste groups in proportion to their
shares in the overall population. OBCs albeit remain under-represented in private
formal sector jobs, but their representation has improved in the recent years due to
faster growth in their employment. However, SCs, STs, and Muslims remain largely
concentrated in informal sector wage employment.
Associated with the high prevalence of informal wage employment, sources of
job information have become highly informal in nature for a large majority of wage
workers despite great strides in the penetration of information technology in India.
Social networks comprising close family members, friends, relatives, co-villagers,
etc., are still critical in providing job information to wage workers, especially in
informal enterprises and private formal sector enterprises for jobs pertaining to low-
end occupational hierarchies. The new forms of job search such as web job portals
are largely being used by educated job seekers looking for jobs in formal sector. This
pattern in sources of job information in the urban labor market among job seekers only
reiterates the limited access to job information in labor markets remains segmented,
thus hampering the free flow of job information to job seekers, and resultant efficiency
and productivity of enterprises.
Apart from the lack of employment opportunities in general, the quality of employ-
ment has been a major casualty in the current dispensation of liberal economic poli-
cies during the last two-and-half decades. The share of precarious employment is
widespread and has tended to increase over the years. This dismal situation on the
employment front has attracted the attention of political class in recent times but it
has yet to be translated into effective policy measures with a time-bound agenda for
the creation of employment that ensures tenurial stability and social security as also
dignity and decent earnings to workers. This indeed is a daunting challenge, which
if left entirely to the market forces would create another set of economic and social
upheavals that could become very difficult to contain.
Acknowledgments The earlier version of this paper was presented in the 59th Annual Conference
of the Indian Society of Labor Economics at Indira Gandhi Institute of Development Research,
Mumbai. I am thankful to Professors S. Mahendra Dev, Alakh N. Sharma, Amitabh Kundu,
Arup Mitra, and S. Madheswaran and participants of the Conference for providing their valuable
comments.
This paper is based on a larger study on Job Search, Hiring Practices and Discrimination in
Urban Labor Market, undertaken by the author for the Indian Council of Social Science Research,
New Delhi. However, the views expressed are the author’s own.
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Entrepreneurial Avenues for Scheduled
Tribe Communities in Nonfarm
Enterprise Sector: Prospects
and Challenges
Partha Pratim Sahu and Manik Kumar
Abstract This paper explores the role of social group identity on private enterprise
ownership in India. Drawing data from NSSO-Unincorporated Non-Agricultural
Enterprises Survey: 2010–11 and 2015–16, the paper seeks to analyse how caste
discrimination continues to exist and hinder economic participation for specific
groups. The disadvantageous castes, especially Scheduled Tribes (STs) not only own
a disproportionately low share in the private business economy but also operate at
low-end activities with low levels of productivity and earnings and there is hardly any
improvement in their participation during the period under study 2011–16. However,
there are significant variations in enterprise ownership among marginalized groups
across type and location of enterprise, scale of operation and a host of other char-
acteristics. This paper obtains some interesting results which have important policy
implications. The analysis also opens up a rich research agenda, including further
investigation of various issues regarding tribal entrepreneurship in India.
1 Introduction
With shrinking livelihood opportunities especially in rural areas, agricultural workers

being pushed out of agriculture and severe distress-driven out-migration, there is an
urgent need to generate employment and/or entrepreneurial avenues in the place of
residence, which will ensure higher productivity, secured and sustainable livelihood.
In the recent past, we have noticed that there has been an unprecedented employment
This paper liberally draws from first author’s earlier works on this theme, Sahu 2017. The usual
disclaimer applies for any errors, inaccuracy or omission.
P. P. Sahu (B) · M. Kumar

Centre for Entrepreneurship Development (CED), NIRDPR, Hyderabad, India
e-mail: ppsahu@gmail.com
M. Kumar
e-mail: maniktiwary@gmail.com

https://doi.org/10.1007/978-981-15-8265-3_12
226 P. P. Sahu and M. Kumar
setback across the broad sectors of the economy. Although various segments of non-
farm sector have shown some positive employment growth, its size, type and quality
of employment generated raise doubt. The employment generated in this sector is
inadequate not only to accommodate workers moving out of agriculture but also to
the new entrants to the labour market. During the last two decades or so, we have also
observed a sharp decline in the rural female labour force participation rate and rise in
the share of youth population. In view of these changes, entrepreneurship develop-
ment alone can ensure sustainable livelihoods and create employment opportunities
at the local level.
Of late enterprises in the manufacturing and services sector have shown encour-
aging potential to generate employment. However, these sectors are suffering from a
low level of technology, limited access to inputs and credits and an unfavourable
market environment. To ensure local employment generation at rising levels of
productivity, skill development of both aspiring and existing entrepreneurs and
workers engaged therein will be crucial. Linking these enterprises with the market,
formal institutions and large enterprises will also enhance their capability to scale
up their production and expand employment. But in spite of numerous skill and
entrepreneurship development programmes, we have not witnessed any significant
change in the entrepreneurship scenario. Not only new and aspiring entrepreneurs
are struggling but also the existing entrepreneurs are finding it difficult to run and
scale-up. Most of the policies to promote entrepreneurship are not based on system-
atic and scientific thinking. Therefore, we have seen that a vast bulk of entrepreneurs
are neither innovative nor significant job creators.
We argue that there exists a strong caste dimension to the issues of discrimi-
nation and exclusion in ownership of non-farm enterprises and livelihood avenues.
Prior works have attempted to understand the processes and factors that block or
resist business participation by specific communities such as Scheduled Tribes (STs)
and Scheduled Castes (SCs). These groups are often constrained to start any new
livelihood avenue in non-farm segment business due to limited access of resources,
inadequate entrepreneurial abilities and lack of social networks and most of them
end up in activities similar to their family/parental business. Marketing obstacles
further restrict the possibility to start up a new venture and/or scale up the existing
ones. Lack of access to formal institutions relating to credit, market, skill and training
also obstructs the possibilities of upward mobility. There are a plethora of schemes
and policies under various government ministries but there is no evidence of any
visible improvement and no systematic evaluation of these policies and provisions
has also been undertaken. During last 5–6 years, a series of policy initiatives such as
Goods and Service Tax (GST), demonetization, reforms in banking transactions, the
ease of doing business, direct benefit transfers (DBT) and ICT/digitization have been
rolled out in an attempt to transcend small and informal enterprises to a formal set-up
and improve their accessibility to formal institutions and improve their livelihood
status. But these initiatives have not only created opportunities but also thrown up
challenges, threat and distrust.
The SCs and STs together account for a quarter of India’s population. While
between 1991 and 2001, there was no change in their share, the latest available census
Entrepreneurial Avenues for Scheduled Tribe Communities … 227
estimate, however, indicates a marginal rise. The share of SCs and STs population,
taken together, marginally increased from 24.6 in 1991 to 25.2 (STs = 8.60 and SCs
= 16.60) in 2011. Although there are several strands of protective and affirmative
policies in place to alleviate and moderate discrimination against specific groups,
negative discrimination against disadvantageous caste continues to exist and some of
them even have aggravated. There is a voluminous literature on social and economic
discrimination and/or social exclusion contributing to the understanding of these
facets. But the role of caste-based differences in ownership of non-farm enterprises
has remained as one of the most under-studied areas in the context of contemporary
policy changes.
Drawing unit-level data from NSSO-Unincorporated Non-Agricultural Enter-
prises Survey: 2010–11 and 2015–16,1 the present paper seeks to analyse how social
group identity2 continues to play a crucial role in the participation of for specific
groups, i.e. STs in non-farm livelihood avenues. These groups not only own a dispro-
portionately low share (with respect to their population weight) but also operate in
low-end activities with low levels of productivity and earnings. However, there are
considerable variations among these groups across type and location of enterprise,
scale of operation and a host of other characteristics of a non-farm enterprise and its
owner. To mainstream, these disadvantaged groups into the growth process and thus
making it more inclusive has been the key challenge for policymakers. Given the
increasingly shrinking livelihood space for the STs, this paper attempts to unfold the
possibility of expanding livelihood opportunities for ST communities in the non-farm
enterprise sector. The paper also discusses how to mainstream livelihood strategies
for these groups in the existing rural institutions, tools and instruments through a
convergence approach.
The paper has been organized into six sections. While Sect. 1 introduces the broad
issues of discussion, Sect. 2 takes a broad look at the existing studies and discusses
the issues and policies related to the participation of SCs and STs in the private
business economy. Section 3 describes the ownership pattern by social groups across
broad activity categories such as manufacturing, trading and other services activities.
Section 4 analyses the industry-wise pattern of participation of STs in non-farm
enterprise sector, based on two rounds of NSS data sets. Section 5 briefly ponders
over the performance difference among enterprises owned by various social groups.
Section 6 concludes the paper while presenting its key findings along with a series of
issues which need further probe. It also highlights how rural entrepreneurship for STs
Communities can be mainstreamed in the existing rural development institutions.
1 Non-agricultural enterprises which are not incorporated (i.e. registered under Companies Act,
1956) were covered in the survey. Further, the domain of ‘unincorporated enterprises’ excluded
(a) enterprises registered under Sections 2m(i) and 2 m(ii) of the Factories Act, 1948 or bidi and
cigar manufacturing enterprises registered under bidi and cigar workers (condition of employment)
Act, 1966, (b) government/public sector enterprises and (c) cooperatives. Thus, the coverage was
restricted primarily to all household proprietary and partnership enterprises. In addition, Self Help
groups (SHGs), Private Non-Profit Institutions (NPIs) including Non-Profit Institutions Serving
Households (NPISH) and Trusts were also covered (NSSO 2012).
2 This paper focusses only on Scheduled Tribe (ST) communities.
2 Review of Issues, Policies and Prior Works
In addition to constitutional provisions, there are policies, initiatives, preferential

treatments to overcome institutionalized caste-based deprivations. These policies
include reservation in jobs and access to higher education, exclusive or subsidized
allocation of resources and benefits. One may argue that over the years, some sections
of the tribal population might have been benefited from various policies and witnessed
some improvements in their situation, but various forms of discrimination and relative
deprivation continue to remain in our society. Moreover, we could have new disad-
vantageous castes emerging as dominant in several pockets of rural India. Recent
studies extensively document various dimensions of discrimination and exclusion
in access to land, job, credit, health, education, housing, basic amenities and other
public services (World Bank 2011; Harriss-White and Prakash 2010; Thorat 2002;
Desai and Dubey 2011; Papola 2012; Pal 2016; Kumar 2013).
Several researchers have attempted to understand the process and factors that
promote and block business participation by specific communities (Harriss-White,
Vidyarthee and Dixit 2014; Deshpande and Sharma 2013, 2015; Vidyarthee 2011,
2015; Iyer et al. 2013; Kapur et al. 2014; Thorat and Sadana 2009). Urbanization,
education, assets (landholdings), social networks, access to information, etc., have
been used as explanatory variables to explain Dalit participation in private business
economy (Murphy, 20063 as cited in Harriss-White and Vidyarthee 2010). The SCs
and STs are often constrained to start any new business due to limited resources, inad-
equate entrepreneurial abilities and lack of social networks and most of them end
up in activities similar to their family/parental business (Jodhka 2010).4 Marketing
obstacles further restrict the possibility to start up a new venture and/or scale up the
existing ones. Limited participation in business activities also obstructs the possi-
bilities of skill formation and upward mobility. All these factors offer a substantive
basis for policy recommendations.
India has an elaborate and systematic institutional framework to support enterprise
development. These policies include fiscal and tax incentives, credit and financial
incentives such as the priority sector lending, grants and subsidies and infrastruc-
ture assistance in the form of industrial estates and promotion of industrial clus-
ters. The Government of India also has schemes for entrepreneurial and manage-
rial development, marketing support, export promotion, skill development and tech-
nology up-gradation programme.5 Specifically, to promote entrepreneurship there
3 Murphy, C. (2006) The Power of Caste Identity in Private Enterprise Ownership, M. Sc. thesis in
Economics and Development, Oxford University.
4 The study further pointed out that 41% of the surveyed respondents started their business with the
initial investment of less than Rs. 25,000/-, raising funds mainly from own savings; these enterprises
were also found to be operating at a very low scale; a significant proportion of them reported annual
turnover below Rs. 1 lakh.
5 For detailed discussion see various issues of SIDBI Report on Micro, Small and Medium Enter-
prises Sector; Annual Reports of the Ministry of Micro, Small and Medium Enterprises, Government
of India.
is an elaborate institutional set up with various programmes towards skill develop-

ment, vocational education and training. For instance, an entrepreneurship devel-
opment scheme is currently being developed by the Ministry of Skill Development
and Entrepreneurship to educate and equip potential and early stage entrepreneurs
across India, to connect entrepreneurs to peers, mentors, incubators, to support
entrepreneurs through Entrepreneurship Hubs, to catalyse a culture shift to encourage
entrepreneurship, to encourage entrepreneurship among under-represented groups, to
promote Entrepreneurship amongst women and to foster social entrepreneurship and
grassroots innovations (Govt. of India 2015). Wide networks of Indian Institutes of
Entrepreneurships (IIEs), Entrepreneurship Development Institutes (EDIs), MSMEs
Development Institutes; MSME Tool Rooms have been in place, but we have not
yet witnessed any significant improvement in entrepreneurship nor there has been
any marked improvement in the participation of backward social groups, particularly
SCs and STs. There are other interventions such as Start-up Village Entrepreneur-
ship Program (SVEP) under National Rural Livelihood Mission (NRLM), Rural Self
Employment Training Institute (RSETI), MUDRA loan to promote entrepreneurship
and livelihood opportunities, with special focus on youth, women and backward
region. Few of these entrepreneurship development and training programmes are
exclusively targeted to SCs and STs. These programmes are also specially conducted
in rural/less developed areas and no fees are charged from SCs and STs. There
are multiple agencies, including banks, training institutes and industry associations,
playing a crucial role in providing continuous and long-term hand-holding, mentoring
and advisory services to both potential and existing entrepreneurs.
In addition, there are several employment generations and anti-poverty
programmes initiated by the State and Central Government to promote self-
employment and entrepreneurship through provisioning of assets, skills and other
support to the unemployed and the poor. In many of these programmes, a specific
share of the total target (number of beneficiaries) is exclusively earmarked for SCs
and STs. At the state level as well, many initiatives are undertaken, such as providing
free plots, loans at subsidized interest rates, relaxations in lending norms for term
loans, providing training programmes, etc., to empower the entrepreneurs of the SCs
and STs communities. The large private corporate sector, as a part of Corporate
Social Responsibility (CSR), has envisaged steps for the creation of entrepreneurs
from SCs and STs (FICCI 2006; CII-ASSOCHAM 2007).6 These include main-
taining a database of entrepreneurs belonging to SCs and STs, providing mentoring
in quality control, productivity and cost standards, ensuring greater access to capital,
facilitating a business partnership with enterprises owned and promoted by SCs and
STs, collaborating with SIDBI, NABARD7 for creation of entrepreneurs from SCs
and STs and so on. Thus, various government ministries and industry associations
have been endeavouring to improve their participation in business, but there is no
6 The Federation of Indian Chambers of Commerce and Industry (FICCI); The Confederation of
Indian Industry (CII); The Associated Chambers of Commerce of India (ASSOCHAM).
7 Small Industry Development Bank of India (SIDBI) and National Bank for Agriculture and Rural
Development (NABARD).
evidence of any visible improvement. However, no systematic evaluation of these

policies and provisions has been undertaken.
3 Ownership Pattern by Type of Enterprise: Aggregate

Analysis
This paper is based on the two rounds of enterprise survey on un-incorporated non-
agricultural enterprises, i.e. 2010–11 and 2015–16,8 which provides information on
manufacturing, trading activities and service sector enterprises. The paper covers only
proprietary and partnership enterprises9 operating in 25 branches of manufacturing
activities, 5 under trading activities and 15 under the services sector10 (For a detailed
description of activity category, see Appendix 1). During the period under study, the
absolute number of enterprises increased significantly in all the activity categories.
The total number of enterprises grew from 559.6 lakhs in 2010–11 to 616.1 lakhs in
2015–16. Within the non-farm enterprises sector, manufacturing witnessed a growth
of 2.7%; trading 2.1% and services enterprises 1.1% during 2011–16. This period
also saw a significant shift of enterprises from rural to urban locations and growth
in urban enterprises was significantly faster than that in rural located enterprises.
This holds true for all the three broad sectors, manufacturing, trading and services
activities.
In rural manufacturing-OAEs segment, STs and SCs owned 6.9 and 16.8%, respec-
tively, of total enterprises during 2015–16. So far, as the rural establishments are
concerned, STs and SCs owned 4.5 and 9.2% of enterprises, respectively. As we
move to urban areas, the share of enterprises owned by SCs and STs are lower as
compared to rural areas (Table 1).
The proportion of enterprises owned by STs remained more or less stable while
those owned by SCs declined during 2011–16. In rural OAEs segment, the STs-owned
enterprises declined in manufacturing, while their share increased in case of trading
and service sector activities. In rural areas, we could see a shift from manufacturing to
trading and service sector enterprises both in OAEs and establishment. In urban areas,
8 OAEs and establishments are two types of enterprises covered in this survey. Own-account Enter-
prise: An enterprise, which is run without any hired worker employed on a fairly regular basis1,
is termed as an own account enterprise. Establishment: An enterprise which is employing at least
one hired worker on a fairly regular basis is termed as establishment. Paid or unpaid apprentices,
paid household member/servant/resident worker in an enterprise are considered as hired workers
(NSSO 2012).
9 Classification of enterprises based on ownership includes proprietary, partnership, Govt./public
sector, private limited company, public limited company, co-operative society, trust, non-profit
institutions. More than 95% of enterprises are in the category of proprietary (i.e. enterprises wholly
owned by a single individual).
10 While the mapping exercise (Sect. 4) is based on all segments of un-incorporated non-agricultural
enterprises, the performance analysis (Sect. 5) is based only on manufacturing segment.

Table 1 Proportion of enterprises owned by various social groups (%)
Location/Type of Enterprises 2010–11 2015–16
No. of Units (in Lakhs) % of enterprises owned by No. of Units (in Lakhs) % of enterprises owned by
STs SCs OBCs Others STs SCs OBCs Others
1 2 3 4 5 6 7 8 9 10 11
Rural_OAEs
Manufacturing 90.9 (33.7) 7.4 17.2 47.7 27.7 104.2 (36.6) 6.9 16.8 52.6 23.7
Trading activities 98.8 (36.6) 7.3 15.0 46.6 31.1 101.1 (35.5) 8.4 14.0 51.0 26.6
Other services 80.4 (29.7) 4.8 17.6 47.3 30.3 79.4 (27.9) 5.0 17.8 53.0 24.1
All 270.1 (100) 6.5 16.5 47.2 29.8 284.7 (100) 7.0 16.1 52.1 24.8
Rural_Ests.
Manufacturing 9.7 (37.5) 3.9 8.6 47.5 40.0 9.1 (33.4) 4.5 9.2 52.0 34.3
Other services 10.0 (39.0) 4.9 8.5 46.6 40.0 11.4 (41.9) 5.9 10.7 50.7 32.7
All 25.7 (100) 4.2 8.2 46.0 41.6 27.3 (100) 4.8 8.8 50.4 36.0
Urban_OAEs
Entrepreneurial Avenues for Scheduled Tribe Communities …
Manufacturing 52.6 (25.9) 1.6 11.0 52.0 35.5 62.7 (26.9) 1.4 10.7 57.4 30.5
Other services 72.1 (35.5) 1.6 15.8 42.3 40.2 78.6 (33.7) 1.7 13.0 49.2 36.1
All 203.0 (100) 1.6 12.7 44.2 41.5 233.3 (100) 1.6 11.1 49.8 37.5
Urban_Ests.
Manufacturing 17.8 (29.3) 0.9 5.5 43.8 49.8 19.2 (27.0) 0.9 5.5 47.6 45.9
Other services 20.1 (33.0) 0.9 5.7 37.1 56.4 23.2 (32.8) 1.3 5.0 45.5 48.2
(continued)
231
Table 1 (continued)
232
Location/Type of Enterprises 2010–11 2015–16

No. of Units (in Lakhs) % of enterprises owned by No. of Units (in Lakhs) % of enterprises owned by
STs SCs OBCs Others STs SCs OBCs Others
All 60.8 (100) 0.8 4.7 36.8 57.7 70.8 (100) 0.9 4.3 42.9 51.9
Note (i) OAEs = Own account enterprises; Ests. = Establishments; (ii) The ‘not recorded cases’ have been excluded from the analysis
(iii) Figures in the parentheses are percentage distribution of enterprises across the type of enterprise
Source Authors’ own estimates based on unit-level data on un-incorporated non-agricultural enterprises, 2010–11 and 2015–16
P. P. Sahu and M. Kumar
the share STs-owned enterprises are lower as compared to their rural counterparts
even in the same activity.
4 Disaggregated Scenario
In this section, we have identified six branches of activity, where the share of STs-
owned enterprises is high. The share of ST-owned enterprises varies significantly
across industry groups. An analysis at disaggregated level of industrial classification
suggests that in Rural_OAEs segment in beverages, transport equipment, wood prod-
ucts, pharmaceutical, water transport and accommodation, the share of SCs-owned
enterprises was high during 2010–11. But during 2015–16, among these industry
groups only three continue to appear in the top six categories. In a few new activities,
such as basic metal, warehousing, machinery and financial services, etc., the share
of ST-owned was high (Table 2). Thus, during this 5-year period, ST entrepreneurs
lost their share in few activities but managed to start a business in new manufacturing
activity as well as in services sector. Similarly, for rural_establishments, urban OAEs
and establishments segment we saw significant reshuffling. But it is interesting to
note that the share of ST-owned enterprises declined during 2011–16, operating in the
same industry groups. So it may be corroborated that their existing enterprises were
becoming less remunerative and they were pushed to explore in other sectors. A more
disaggregated analysis is called for whether the entry of ST entrepreneurs to new
activities is productivity-driven or distress-driven. During 2015–16, we observed a
large number service sector enterprises were started by ST, as it is understood that
the capital/investment needed to start a new enterprise in services sector is less as
compared to that in manufacturing and trading activities. We also noticed that even in
same industry group as we move on a scale ladder, i.e. from OAEs to establishment
(and move from rural to urban locations), the share of ST-owned enterprises declined.
Thus, both locational and scale factors are at work and affect the participation of ST
in business activities.
The ST-owned enterprises were limited to very few select activities in the un-
incorporated manufacturing sector. Moreover, those enterprises were largely in tradi-
tional industry groups with the highly labour-intensive production process. In other
words, their presence in capital-intensive/non-agro-based industry groups is very
negligible. To start or run enterprises in these sectors seems to require a high degree
of skill and training and also a large amount of investment. There are also significant
rural–urban variations. Even within the same product line, the ST-owned enterprises
were higher in rural areas as compared to urban areas. Over the years, the urban areas
seem to pose greater degree of entry barriers for the ST entrepreneurs. Both scale
and locational attributes thus operate adversely for these groups to participate in the
private business economy.
We also analysed the sector-wise distribution of enterprises within ST-owned
enterprises. We found that in the un-incorporated enterprise sector the industry-wise
distribution of STs-owned enterprises were highly skewed and unevenly distributed
Table 2 Top Six Industry Groups in terms of Share of ST-Owned Enterprises

Location/Type of 2010–11 2015–16
enterprises Code Description % age Code Description % age
1 2 3 4 5 6 7
R_OAEs M3 Mfg. of beverages 72.7 M3 Mfg. of beverages 73.8
M22 Mfg. of other 36.4 M16 Mfg. of basic 51.9
transport metals*
equipment
M13 Mfg. of 32.8 S1 Accommodation 30.7
pharmaceuticals,
medicinal
chemical and
botanical
M8 Mfg. of wood and 18.2 S5 Warehousing and 24.7
products of wood storage*
and cork, except
furniture
S4 Water transport 17.3 M20 Mfg. of machinery 18.5
and equipment*
S1 Accommodation 16.3 S8 Financial service 16.9
activities except
insurance and
pension funding*
R_Ests. M3 Mfg. of beverages 35.8 S5 Warehousing and 20.9
storage*
M16 Mfg. of basic 31.8 M3 Mfg. of beverages 12.3
metals
S3 Land transport 8.2 S3 Land transport 10.2
S4 Water transport 7.8 S1 Accommodation* 9.4
M23 Mfg. of furniture 6.5 M23 Mfg. of furniture 8.7
M22 Mfg. of other 5.7 M15 Mfg. of other 8.4
transport non-metallic
equipment mineral products*
U_OAEs M16 Mfg. of basic 42.2 M3 Mfg. of beverages 22.7
metals
M3 Mfg. of beverages 24.2 M8 Mfg. of wood and 8.4
products of wood
and cork, except
furniture
M8 Mfg. of wood and 7.4 M19 Mfg. of electrical 3.2
products of wood equipment*
and cork, except
furniture
T3 Other wholesale 4.3 S2 Food service 3.1
trade activities*
(continued)
Table 2 (continued)
M10 Printing and 3.6 S3 Land transport* 2.6
reproduction of
recorded media
M14 Mfg. of rubber and 2.9 M16 Mfg. basic metals* 2.2
plastics products
U_Ests. S4 Water transport 67.0 M7 Mfg. of leather and 2.5
related products
M9 Mfg. of paper and 7.3 S1 Accommodation* 2.4
paper products
S10 Printing and 3.5 S3 Land transport 2.2
reproduction of
recorded media
M7 Mfg. of leather and 3.1 S2 Food services 2.0
related products activities*
S3 Land transport 2.5 S5 Warehousing and 1.8
storage*
M12 Mfg. of chemicals 2.5 M21 Mfg. of motor 1.6
and chemical vehicles, trailers
products and semi-trailers*
Note (i) OAEs = Own account enterprises; Ests. = Establishments; R = Rural; U = Urban; (ii) The
‘not recorded cases’ have been excluded from the analysis. (iii) * denotes new industry groups
appearing in top six category during 2015–16. (iv) M = Manufacturing activities; T = Trading
activities; S = Other services
Source Authors’ own estimates based on unit-level data on un-incorporated non-agricultural
enterprises, 2010–11 and 2015–16
across industry groups (Table 3). Six industry groups such as retail trade, land trans-
port, wearing apparels, wood and wood products, beverages, tobacco products, etc.,
accounted for more than 75% total enterprises in rural_OAEs segment in 2015–16.
This pattern holds true not only in OAEs and establishments segments but also both
in rural and urban locations. But the concentration of ST-owned enterprises was
more skewed in OAEs than that in establishment, and in rural than that in urban
areas. Of the top six industry groups (in terms of incidence as well as the weight
of tribal entrepreneurship), about four or five continued to appear in 2015–16. To
explain such pattern, besides castes there are other factors at work such as educa-
tion, household net income, access to formal institutions, parental entrepreneurship
and inter-generational business links. These are issues which require more detailed
analysis.
Table 3 Industry-wise distribution of STs-Owned enterprises (%): Top Six

1 2 3 4 5 6 7
R_OAEs T4 Other retail trade 39.0 T5 Other retail trade 41.7
M8 Mfg. of wood and 12.0 S3 Land transport 9.6
products of wood
and cork, except
furniture
S3 Land transport 8.3 M6 Mfg. of wearing 6.6
apparel
M3 Mfg. of beverages 7.0 M8 Mfg. of wood and 6.3
products of wood
and cork, except
furniture
S15 Other community, 5.0 M4 Mfg. of tobacco 5.4
social and personal products*
service activities
M6 Mfg. of wearing 4.7 M3 Mfg. of beverages 5.3
apparel
Total of top six 76.0 Total of top six 74.8
All Total 100.0 All Total 100.0
R_Ests. S3 Land transport 27.8 S3 Land transport 27.4
T4 Other retail trade 12.9 T5 Other retail trade 11.4
S2 Food service 9.1 S2 Food service 7.6
activities activities
M2 Mfg. of food 8.5 M2 Mfg. of food 7.4
products products
M3 Mfg. of beverages 5.0 M23 Mfg. of furniture 7.3
M23 Mfg. of furniture 4.4 M15 Mfg. of other 6.1
non-metallic
mineral products*
U_OAEs T4 Other retail trade 31.8 T5 Other retail trade 34.7
S3 Land transport 13.5 S3 Land transport 14.8
S15 Other community, 10.3 M6 Mfg. of wearing 11.4
social and personal apparel*
service activities
(continued)
Table 3 (continued)
T3 Other wholesale 6.1 S15 Other community, 6.2
trade social and personal
service activities
M8 Mfg. of wood and 5.9 M8 Mfg. of wood and 2.9
products of wood products of wood
and cork, except and cork, except
furniture furniture
U_Ests. T4 Other retail trade 18.4 T5 Other retail trade 20.6
S3 Land transport 7.7 S15 Other community, 8.5
social and personal
service activities*
M17 Mfg. of fabricated 6.6 S3 Land transport 5.4
metal products,
except machinery
T1 Trade and repair of 6.0 M17 Mfg. of fabricated 5.3
motor vehicles and metal products,
motorcycles except machinery
M9 Mfg. of paper and 5.1 M6 Mfg. of wearing 5.1
paper products apparel*
Note (i) OAEs = Own account enterprises; Ests. = Establishments; R = Rural; U = Urban; (ii) The
‘not recorded cases’ have been excluded from the analysis. (iii) * denotes new industry groups
appearing in top six category during 2015–16. (iv) M = Manufacturing activities; T = Trading
activities; S = Other services
enterprises, 2010–11 and 2015–16
5 Performance Differences
The social group identity not only plays a crucial role in participation but also in
the economic performance of these enterprises. Several key structural ratios must be
considered to explain the performance differences between the ST-owned enterprises
and those by other social groups. Standard structural coefficients such as per worker
productivity, capital–labour ratio provide considerable insights about the relative
efficiency of enterprises. The share of ST-owned enterprises is not only low but also
the economic returns to their enterprises are lower as compared to those owned by
Table 4 Share of Principal Characteristics by Social Group/Caste of the Owner: 2015–16

(Manufacturing Sector)
Location Type of % share of enterprises % share of Workers
Enterprises STs SCs OBCs Other All STs SCs OBCs Other All
1 2 3 4 5 6 7 8 9 10 11 12
Rural OAE 6.9 16.8 52.6 23.7 100 8.1 17.0 53.0 21.9 100
Establishment 4.6 9.1 52.0 34.3 100 3.0 7.7 47.7 41.7 100
All 6.7 16.2 52.5 24.5 100 6.9 14.7 51.7 26.7 100
Urban OAE 1.4 10.6 57.4 30.5 100 1.4 11.1 58.7 28.8 100
Establishment 0.9 5.5 47.6 45.9 100 0.7 4.6 43.4 51.3 100
All 1.3 9.4 55.1 34.1 100 1.1 7.8 50.9 40.3 100
% share of Gross Value added % share of Fixed Asset (Owned)
STs SCs OBCs Other All STs SCs OBCs Other All
Rural OAE 5.6 13.9 59.3 21.2 100 4.7 14.1 59.1 22.1 100
Establishment 2.1 6.5 49.3 42.1 100 1.5 4.9 48.5 45.2 100
All 4.1 10.7 55.0 30.2 100 3.6 10.9 55.5 30.0 100
Urban OAE 1.1 8.5 57.8 32.6 100 1.2 9.3 53.0 36.6 100
Establishment 0.6 3.6 39.8 56.0 100 0.4 1.9 30.0 67.7 100
All 0.7 5.1 45.2 49.0 100 0.6 4.3 37.3 57.8 100
enterprises, 2015–16
other social groups. In this section, we used the unit-level data on un-incorporated
enterprise sector, 2010–11 and 2015–16,11 and estimated the share of enterprises,
workers, gross value added (GVA) and fixed assets across social groups and also
estimated the productivity gaps between these groups, focussing only on manufac-
turing activities. Manufacturing sector has often been recognized as the engine of
growth, but its contribution to total Gross Domestic Product has remained stagnant
during the last four decades. To boost manufacturing growth, a series of policies such
as National Manufacturing Policy, SEZs, FDI, industrial corridors and so on has been
initiated. As discussed in Sect. 4, the participation of ST communities in manufac-
turing activities seems to be more difficult due to the requirement of relatively higher
investment and relevant skill. In addition, most of the state’s schemes and policies
are focussed more towards manufacturing activities, rather than on trading and other
services activities. In view of these, it is pertinent to analyse not only the participa-
tion but also their economic performance of SC communities vis-à-vis other social
groups, focusing on the manufacturing sector.
In rural OAEs segment, STs owned and managed 6.9% enterprises which
accounted for 8.1% of employment, 4.7% of fixed capital and 5.6% of share in
GVA (Table 4). There has been a marginal decline in the share of fixed assets, GVA,
11 Due to space limitation, we have presented estimates for the period 2015–16 only.
Table 5 Select Performance Differences across Social Group/Caste of the Owner: 2015–16
Benchmark-OTHERs Type of Enterprises Per Enterprises GVA Per Worker GVA
STs SCs OBCs STs SCs OBCs
1 2 3 4 5 6 7 8
Rural OAE 0.91 0.93 1.26 0.84 0.89 1.20
Establishment 0.37 0.58 0.77 0.78 0.87 1.03
All 0.49 0.54 0.85 0.77 0.81 1.12
Urban OAE 0.72 0.75 0.94 0.77 0.70 0.89
Establishment 0.51 0.53 0.68 0.80 0.74 0.87
All 0.39 0.37 0.57 0.69 0.62 0.81
number of employment and number of enterprises in ST-owned enterprises during

the past 5 years. In terms of all variables, even within ST-owned enterprises, the share
significantly varies as we move from OAEs to establishments and also from rural to
urban areas. In establishments segments, the share ST-owned enterprises are lower as
compared to OAEs. Similarly, STs owned and managed a higher share of enterprises
in rural areas as compared to their urban counterparts. This pattern also holds true for
fixed capital and GVA as well. In both OAEs and establishments segments, a huge
gap between the share in enterprises and that in other principal characteristics was
observed and within each segment also there are significant gaps among different
social groups. It follows from the above discussion that the ownership of enterprises
by different social groups (along with the host of other factors) is associated with the
performance indicators of an enterprise.
Tables 5 and 6 provide estimates of the ratio of per worker and per enterprise
GVA across social groups both for OAEs and establishments operating in rural and
urban areas. It shows that per enterprise (and per worker) gross value added for the
ST-owned enterprises are lower as compared to those owned by higher castes (other
social groups). This pattern holds true both in OAEs and establishments and also
in rural and urban areas (Table 5). The ratio of labour productivity in rural OAEs
between higher caste (others)-owned enterprises and the ST-owned was 1:0.91, while
it is 1:0.37 in establishment. Similarly, the ratio of per enterprise gross value added
between high caste-owned and that of ST-owned enterprises was 1: 0.84 and 1: 0.78
in rural OAEs and establishment segments, respectively.
The STs-owned enterprises also fared worse, in terms of per worker and per enter-
prise productivity, as compared to those owned by other backward social groups such
as SCs and OBCs (Table 6). Thus, in terms of relative efficiency, ST-owned does not
perform better than those owned and managed by SCs, OBCs and other castes. A
more detailed industry-wise analysis is essential to arrive at a better understanding of
the implications of social group identity on the economic performance of these enter-
prises. It would also be interesting to identify situations under which the conditions
Table 6 Select Performance Differences across Social Group/Caste of the Owner: 2015–16
Benchmark-STs Type of enterprises Per Enterprises GVA Per Worker GVA
SCs OBCs Others SCs OBCs Others
1 2 3 4 5 6 7 8
Rural OAE 1.02 1.39 1.10 1.06 1.43 1.19
Establishment 1.54 2.06 2.67 1.13 1.33 1.29
All 1.09 1.72 2.02 1.06 1.46 1.30
Urban OAE 1.03 1.30 1.38 0.91 1.16 1.30
Establishment 1.04 1.33 1.95 0.93 1.09 1.25
All 0.96 1.46 2.56 0.89 1.17 1.45
of these enterprises will improve. Success in reducing the performance gap between
the ST-owned and higher caste-owned enterprises will depend to a large extent on
providing an enabling environment that nurtures businesses run by ST community.
6 Conclusion
In recent years, Government has embraced the promotion of entrepreneurship and

small businesses with ever greater enthusiasm, but the overall outcome has been
far from satisfactory and bulk of entrepreneurial ventures are solo and microen-
trepreneur, which are neither innovative nor significant job creators. We have also
observed that most of these enterprises continue to operate at a low scale without any
scale-up planning and vision. The concept of entrepreneurial abilities, role of insti-
tutions, financial and non-financial incentives, overall development strategies are all
important while designing a sustainable entrepreneurship development strategy. It is
even more challenging in a country like India when there are a strong gender and
social group dimensions to this strategy.
Notwithstanding, the lack of systematic, comprehensive data and limited prior
works, it is apparent that the proportion of enterprises owned and managed by STs
is low as compared to other social groups and disproportionally low as compared
to their share in total population. It is also disheartening to see that, over time, their
shares declined, even if the absolute number of total enterprises has grown. From
our analysis, we found that participation of STs in private business economy is of
low order and is limited to very few product lines, such as leather, beverages, textile
and wearing apparels, wood and wood products and so on. The phenomenon of
under-representation is amply visible from our data set. Further, we did not find
any significant improvement in their participation, although there are a series of
government policies and schemes, especially during the period under study, i.e. 2011–
16. Further, in terms of select performance indicators (based on partial productivity
ratios), the enterprises owned by STs operate less efficiently than that owned by
other social groups. Besides, social group identity, there must be a host of constraints
such as institutional, technological and marketing that hold back these enterprises to
operate at the very bottom of the productivity hierarchy and to grow faster at rising
levels of productivity. Undoubtedly, a more systematic and detailed probe is called
for.
Our findings call into question any perception that ST entrepreneurs are innately
less entrepreneurial than that of other social groups. There are a number of empirical
studies that have tested whether expanding access to capital would help microen-
trepreneurs grow their businesses. But these have consistently found that SCs and
STs find it difficult to access finance from formal financial institutions. Common
explanations are that ST-owned enterprises have low returns to capital, or that STs
are less able to make sound or timely enterprise investments. The existing data sets,
however, cannot address these and several other aspects that need to be probed for
a well-informed and fact-based policy for promotion of enterprises among SCs and
STs communities. Therefore, it is imperative to include new variables in the existing
surveys and/or exclusive surveys need to be undertaken both for aspiring and existing
ST entrepreneurs.
To conclude, caste has been a systemic barrier for certain disadvantageous groups
to participate in private business activities. To overcome these barriers, one important
step would be to develop a comprehensive and policy-sensitive database focusing
on disadvantageous and discriminated groups, which could be placed in the public
domain, making identification and intervention more effective. Moreover, in order
to supplement secondary data sources, field survey, case studies are also needed to
be undertaken. Subject to these limitations, the results of this paper calls for more
relevant data and detailed study for better understanding of the continued incidence
of under-representation, exclusion and discrimination of STs in India, who remain
in the marginal spaces of the formal and informal business economy. In addition,
the differences between the processes and relationship among enterprises owned by
various social groups as well as between rural and urban need further probe.
For setting up new enterprises and/or scaling up of the existing ones owned by
ST communities, especially in rural areas, it is essential to assess the magnitude of
the constraints and challenges faced by them and mainstream it in the overall rural
development strategy. The Gram Panchayat Development Plan (GPDP) can play a
direct role in identifying sectors, sub-sectors and activities by their respective busi-
ness potential and devise a mechanism to prioritise resource allocation and help in
the overall direction of policy towards the achievement of holistic rural development,
entrepreneurship and livelihood avenues could be one of them. While undertaking
monitoring and evaluation of various livelihood and entrepreneurship development
programmes under rural development ministry and its departments, a checklist of
questions could be addressed to different authorities, agencies and ministries in
respect of the intervention area. To illustrate a few: whether entrepreneurship promo-
tion for ST community a central objective of the programme; what is the nature and
extent of entrepreneurship and livelihood generation envisaged in the programme;

what are the major constraints in creating the envisaged entrepreneurship devel-
opment; is it sustainable; and so on. Thus, Gram Panchayat Development Plan
(GPDP) could be truly an effective tool to mainstream entrepreneurship and liveli-
hood challenges for STs in the rural development strategies and overall economic
policies.
At least from a policy perspective, it is important to tailor entrepreneurship poli-
cies, keeping in mind, the need, abilities and market outreach of aspiring and existing
ST entrepreneurs. It is also important, while designing entrepreneurship support
programs, to include initiatives to help entrepreneurs cope with the psychosocial
aspects, stresses and conflicts inherent in risk-taking. The overall enabling envi-
ronment relating to policy, incentive structures and improvements in vital physical
and institutional infrastructure (power, transport and information network), access to
better credit, training and skill and effective regulatory mechanism will be crucial to
improve the participation by marginalized social groups in private business economy
and also scale up their existing business.
Appendix 1
Coverage of the survey in terms of National Industrial Classification—2008

codes
Description of activity category Notations used in tables/report

Cotton ginning, cleaning and bailing M1
Manufacture of food products M2
Manufacture of beverages M3
Manufacture of tobacco products M4
Manufacture of textiles M5
Manufacture of wearing apparel M6
Manufacture of leather and related products M7
Manufacture of wood and products of wood and cork, except M8
furniture; mfg of articles of straw and plaiting materials
Manufacture of paper and paper products M9
Printing and reproduction of recorded media M10
Manufacture of coke and refined petroleum products M11
Manufacture of chemicals and chemical products M12
Manufacture of pharmaceuticals, medicinal chemical and M13
botanical products
(continued)
(continued)
Manufacture of rubber and plastics products M14
Manufacture of other non-metallic mineral products M15
Manufacture of basic metals M16
Manufacture of fabricated metal products, except machinery M17
and equipment
Manufacture of computer, electronic and optical products M18
Manufacture of electrical equipment M19
Manufacture of machinery and equipment n.e.c M20
Manufacture of motor vehicles, trailers and semi-trailers M21
Manufacture of other transport equipment M22
Manufacture of furniture M23
Other manufacturing M24
Repair and installation of machinery and equipment M25
Manufacturing activities M
Non-Captive Electricity Generation and Transmission E*
Wholesale and Retail Trade of motor vehicles and motorcycles T1
Repair and maintenance of motor vehicles and motorcycles T2*
Activities of commission agents T3
Other wholesale trade T4
Other retail trade T5
Trading activities T
Accommodation S1
Food service activities S2
Land transport S3
Water transport S4
Warehousing and storage S5
Support activities for transportation, postal and courier S6
activities
Information and Communication S7
Financial service activities except insurance and pension S8
funding
Other financial activities S9
Real estate activities S10
Professional, Scientific and Technical activities S11
Administrative and support service activities S12
(continued)
(continued)
Education S13
Human Health and Social work S14
Other community, social and personal service activities S15
Other services S
All M + E+T + S
Note*New activities covered in 2015–16
SourceNSSO 2018
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MGNREGS and Rural Labour Market
in India
Ashok Pankaj and Mondira Bhattacharya
Abstract With a minimum guarantee of 100 days of employment to every rural

household whose adult members volunteer to do unskilled manual work at a
prescribed minimum wage rate, and about one-fourth of the total rural house-
holds actually availing of this guaranteed employment every year since 2008, the
MGNREGS has created unmistakable impacts on India’s labour market, espe-
cially rural, through employment creation in public works programme, provision of
minimum wage, and multiplier effects. For example, there has been a rise in wages
in nominal and real terms. Male–female and rural–urban wage disparities have come
down. There has been a dent in the largely monopsonic rural labour market and
empowerment of the casual labour through their increased bargaining position. This
paper examines some of the labour market impacts of the MGNREGS.
1 I
The Mahatma Gandhi National Rural Employment Guarantee Scheme

(MGNREGS), originated from the Mahatma Gandhi National Rural Employ-
ment Guarantee Act (2005), (MGNREGA) is a massive public works programme
to provide guaranteed employment to rural households. The scheme is universal
within rural areas. Any adult members of a rural household can avail up to 100 days
of demand-based wage employment in public works programme at a guaranteed
minimum wage rate. The legal guarantee includes unemployment allowance equal
to the total wages to be earned in case of inability of the state to provide employment
on demand, minimum wages, compensation for delay in wage payment and worksite
facilities.
A. Pankaj (B) · M. Bhattacharya

Council for Social Development, New Delhi, India
e-mail: ashokkpankaj@gmail.com
M. Bhattacharya
e-mail: mbhatta234@gmail.com

https://doi.org/10.1007/978-981-15-8265-3_13
248 A. Pankaj and M. Bhattacharya
Since the extension of the programme to all the rural Districts in 2008, the
programme was implemented initially in 200 Districts, extended to another 130
Districts in 2007, about one-fourth of the total rural households have been availing
about 50 days of employment per household every year. About 50% of the employ-
ment days have been earned by women, about one-fifth by the Scheduled Castes
(SCs) and slightly less than one-fifth by the Scheduled Tribes (STs).1 A significant
proportion of the employment days have been provided in the lean season, with a
view to preventing distress migration of casual labour. In some of the dry regions,
with limited agricultural and non-agricultural activities, the programme has been of
great help to casual labour in general but to others as well.
As on 14 February 2020, a total of 3019.67 crore person days have been gener-
ated with a total expenditure of 573,073.73 crores. More than 60% of the above
expenditure has been spent on wages that have been earned by rural households. A
large number of assets pertaining to water conservation and harvesting, land devel-
opment, flood control and drought proofing, rural connectivity and agriculture and
allied activities have been created since the commencement of the programme. Most
of these assets are community-owned, but a large number of them since 2014–
15 have been created on individual land for the uplift of individual beneficiaries,
which have created significant impacts on their income and livelihood conditions
(Pankaj and Bhattacharya 2018). These assets, apart from serving the purpose of
direct job creation, have triggered economic activities in the local area with income,
employment and multiplier effects (Pankaj 2012).
Apart from distinct features, the sheer size of implementation of the programme
in terms of job and assets creation across rural India has been mammoth. It has
created unmistakable impacts, especially on the rural labour market that has been
largely monopsonic. Other characteristics of India’s rural labour market are seasonal
unemployment, massive under-employment and male–female employment and wage
disparities. Evidences suggest that the implementation of the programme for more
than a decade has created various kinds of impacts on rural labour market. Some
of them pertain to the rise in rural wages in nominal and real terms, decrease in
male–female wage disparity, reduction in seasonal migration and empowerment of
rural labour. This paper examines impacts of the MGNREGS on India’s rural labour
market, with reference to (a) rise in wages, including male–female and rural–urban
wage disparities and (b) empowerment of labour through their increased bargaining
position.
1 Authors calculation from MGNREGA website www.nrega.nic.in.

MGNREGS and Rural Labour Market in India 249
2 II
2.1 Impacts on Wages
There have been two major aspects of the impacts of MGNREGS on wages. One is
awareness of the provision of minimum wages and another is upward push to wages,
especially of rural casual labour.
2.1.1 Minimum Wages in Social Imagination
Section 6 of the MGNREGA, 2005, made a provision for applying the minimum wage
of agricultural labourer, as per the minimum wages act, 1948, for MGNREGS work
until the Central Government has decided to notify a separate wage rate. Section 6
(1) of the Act says: “Notwithstanding anything contained in the Minimum Wages
Act, 1948, the Central Government may, by notification, specify the wage rate for
the purposes of this Act… Provided further that the wage rate specified from time to
time under any such notification shall not be at a rate less than sixty rupees per day”.
Clause (2) of Section 6, however, states: “Until such time as a wage rate is fixed by
the Central Government in respect of any area in a State, the minimum wage fixed
by the State Government under Section 3 of the Minimum Wages Act, 1948, for
agricultural labourers, shall be considered as the wage rate applicable to that area”
(p. 11).
The Minimum Wages Act has been in existence in India since 1948. However,
this Act has been flagrantly violated. Also, there has been an abysmally low level
of awareness about it, especially in rural areas. In urban areas and industrial sectors,
there has been some adherence to the provisions of the Minimum Wages Act, partly
because of greater monitoring and enforcement mechanisms and partly because of
a greater level of awareness. An important contribution of the MGNREGA lies in
making the concept of minimum wages popular in rural areas, so much so that the
minimum wages under MGNREGA became the reference wage rate for negotiating
other rural wages. Studies have shown a high level of awareness about the minimum
wages under MGNREGA (Pankaj 2008, 2012). Prior to the MGNREGS, in rural
areas, the provision of minimum wages act was largely unheard of.
Until MGNREGS, the wage rate in agriculture was determined apparently by
demand and supply factors, but there were various kinds of distortions in the labour
market, which were also an influence on rural wages. The free play of demand and
supply factors in the determination of wages has been obstructed by the excess supply
of unskilled labour, seasonality of demand largely because of the seasonal character
of agriculture, male–female disparity in employment and wages and erstwhile socio-
economic practices like payment of wages in kind, bonded and attached labour and
begar and jajmani system. The limited mobility of rural labour was also a factor
that was the reason for suppressed wages in agriculture and rural areas. Because of
a variety of such factors, the wage rate was often suppressed at a low rate. It was
determined by a pluarality of economic and non-economic, including social factors.
An important contribution of the MGNREGS lies in making the notion of
minimum wages a part of the social conscience of casual rural labour. While the
Act has made a provision for the payment of minimum wages, as a part of guarantee,
very soon the notion of minimum wages caught the imagination of rural labour,
so much so that the MGNREGS wage rate became a reference point for negotia-
tion between workers and their employers. Although even under the MGNREGS,
the payment of minimum wages remained unfulfilled, workers were aware of the
provision of the legal guarantee of minimum wages and used to raise this issue in
their discussion with the implementing agencies. Studies on MGNREGS show that
a large number of workers were aware of the provision of minimum wages and
asserted their rights for the same. Often, workers clash with the officials over the
issue. There is such a high level of awareness about the provision of minimum wages
that if officials insist for productivity linked wage payment, as per the provision of
the guidelines of MGNREGS, they retort back asking whether you get your wages
based on productivity of your work.
Another important consequence of the awareness of the minimum wages under
MGNREGS is the frequent use of the MGNREGS wage rate for negotiating other
rural wage rates. It has been observed that while negotiating wage rates for other
casual work including various agriculture works, rural workers often cite MGNREGS
wages as a benchmark and refuse to accept lower than the MGNREGS wage rate.
This has implications for the rural labour market as a whole. Under the provision of
the minimum wages act, states notify wage rate under agriculture. But this has never
been enforced. People do not know about the notified wage rate. Also, because of
the entrenched unequal power relations between landlord and labourers, minimum
wages are not enforced in agriculture. Moreover, the state is weak in enforcing wage
rate because of the local political economy and existing power relations between
landlords and agricultural workers. Since in the case of MGNERGS, the employer
is state, it is feasible to enforce minimum wages.
In the initial years of implementation of the MGNREGS, there was a high level
of activism around the programme. A large number of civil society organizations,
media and other socially conscientious individuals were not only helping in gener-
ating awareness about the programme but they also became a watchdog of workers’
rights. There was unprecedented enthusiasm about the prospects of the programme,
as this was the first rights-based employment guarantee scheme at all India level.
Prior to MGNREGS, there was a state-level employment guarantee programme in
Maharashtra. Moreover, it was an assertion of rights-based approach to development.
The protagonists of the programme took it as a cause of rights-based development
and demonstrated extra vigilance for the protection of the rights of workers. As a
result of the above, there was a high level of awareness about workers’ rights under
the programme. This included awareness about the minimum wages. For the first
time in rural India, people started talking of minimum wages.
2.1.2 Impacts of MGNREGS on Wages
Gulati et al. (2013) have contested the impacts of MGNREGS on the growth of
wages of casual labour. They have argued that a significant rise in the wages of rural
labour between 2004–05 and 2011–12 has been due to heavy demand for labour
in construction activities, which generated a huge amount of wage employment
for casual labour. While construction and other activities might have played a role
in this regard, it is argued in this paper that the impacts of MGNREGS cannot
be missed out, although one can contest the share of contribution of MGNREGS
to the rise in casual labour wages. There has been an upward push of wages due
to MGNREGS for a number of reasons, which can be explained as (a) additional
employment effects, (b) increased bargaining position and (c) reduced vulnerability
through assured employment.
2.1.3 Additional Employment Effects
Firstly, MGNREGS has created a huge amount of additional employment in the

economy which has benefitted about one-fourth of the total rural households since
2008. The numbers of households who have benefitted out of the programme are
more than the total numbers of landless rural households. These are the households
who are dependent on casual labour for their livelihood. To illustrate the point, as per
the socio-economic caste census 2011 data, 537,013,83 landless manual labour rural
households earn their livelihood through wage employment. In 2010–11, 549,542,25
rural households (about 102.33% of the landless manual labour households) were
provided employment under MGNREGS on an average of 47 days per household at
the average wage rate of 101.93 rupees per day. In the same year, a total of 257.15 crore
person days of additional employment were generated in the rural economy. A sum
of rupees 25,686.53 crores was earned by these households as wages. The number of
households provided employment varied from year to year that has stabilized around
5 crore every year since 2009–10, except 2014–15 in which it fell down to less than
four crore.
This additional employment created some kind of supply-side pressure on casual
labour, particularly in the rural economy. In other words, it contracted the supply of
that many number of person days in the rural economy. Had MGNREGS not been
there, these many labourers would have remained available in the local economy.
Since it is a vulnerable group and given the condition of supply exceeding demand
of such workers, with limited buyers, these factors have a tendency to suppress the
wage rate.
One can argue that MGNREGS merged two programmes, viz. Sampporna Gramin
Rozgar Yojana (SGRY) and National Food for Work Programme (NFFWP). So
in a sense, it substituted the existing employment programmes, with no additional
employment benefits. However, the total person days generated under these two
programmes were much lower than the total person days generated in MGNREGS.
Also, SGRY and NFFWP were implemented in a limited number of Districts. They
were not universal. The number of households who actually benefitted out of these
two programmes was much lower than the number of households who get benefitted
under MGNREGS. Even when we account for employment days generated under
SGRY and NFFWP, the additional employment generated under MGNREGS exceeds
by a huge number. One can, further, argue that in rural India, there are surplus labour
and huge numbers of underemployed workers. So MGNREGS, even though created
huge amount of employment days, might not have been able to negate the effects of
surplus labour and underemployed rural workforce. Also, most of these additional
days of employment were created during the lean season when there was hardly
any competitive demand for wage labour from other sectors of the rural economy.
Moreover, about 50% of these employment days were earned by women who in any
case did not have alternative employment avenues and hence were unutilized labour.
Their joining of workforce could hardly create any pressure. Therefore, additional
employment days generated under MGNREGS might not have created supply-side
scarcity. Therefore, there could not be a significant impact on the upward push of
wages due to MGNREGS.
It is argued here that MGNREGS has contributed to the upward push of rural
wages precisely by pulling women out from low-wage employment under agriculture,
providing employment to the vulnerable poor households during the lean period and
by providing them cushion to bargain better wages and look for better employment
opportunities.
2.2 Increased Bargaining Position
Even though it is assumed that there have been no substitution effects of MGNREGS
employment days, these additional days of employment provided them cushion not
to sell their labour at an absolutely cheap rate. In monopsonic rural labour market
of casual labour with abundant supply and limited demand, the wage rate is also
determined by other than demand and supply factors. These factors include their
economic vulnerabilities, seasonal character of employment and lean season drought
of employment.
On an average a household earns about 50 days of employment that varies
from state to state. In some states, they have generally been earning an average
of 60–70 days. With 60–70 days of assured employment on a guaranteed minimum
wage, there is an increase in their bargaining position. Moreover, a large number of
women, who were generally offered abysmally low wages, joined the programme
and refused to accept any employment at a much lower wage rate. Huge numbers of
unskilled women workers with limited paid employment opportunities have resulted
in suppressed wages. Also, since many of the agricultural activities like paddy plan-
tation, weeding, plucking, etc., are performed majorly by women, the withdrawal of
women even temporarily from these activities, as they get alternative employment
opportunities created a shortage of supply for those agricultural activities.
In conditions of workers earning only limited days of employment in agriculture,

which continues to be largely seasonal in rainfed areas, and their migration for job,
the pressure of MGNREGS on rural wages could be limited. For example, during our
field survey in Dungarpur District of southern Rajasthan, it was observed that there
was a demand for not more than 25–30 days of employment in agriculture. In non-
agriculture, the main source of employment was public works including MGNREGS.
After exhausting the above, casual rural labour used to migrate to Udaipur, Ahmed-
abad in search of wage employment. Now, in such a condition, it is unlikely that
MGNREGS was able to create much upward pressure on the wages of casual labour.
But these are extreme conditions, prevalent in only limited number of Districts.
But in the conditions of relatively greater agricultural and other allied activities
and availability of a good number of employment in non-agricultural sectors, the
MGNREGS employment competed with agriculture and other activities, thereby
creating supply shortage and generating upward push to casual rural labour wages.
An indication of the pressure of MGNREGS on agriculture and other wages is a
clamour for stopping MGNREGS work during agriculture season. In many states,
farmers demanded to stop MGNREGS work during agriculture season, as they were
facing a shortage of labour due to competition with MGNREGS work. The clamour
was so vociferous that many a state formulated a calendar, of course unofficially, for
MGNREGS work to avoid competition between MGNREGS and agriculture work,
especially during the peak season. Also, there were lobbying by the farmers’ groups
to restrict MGNREGS work to the lean season.
MGNREGS wage rate has also served as a benchmark wage rate for rural labour.
The MGNREGS wage rate has been continuously revised upward. In nominal terms,
MGNREGS wage rate has risen almost three times since its inception. Initially, the
state agriculture wage rate was MGNREGS wage rate, except that it was not to be less
than 60 rupees from 2006–07 to 2008–09 that was revised to a minimum of rupees
100 for 2009–10 and 2010–11. Since 2011–12, it has been linked to the consumer
price index. A look at the MGNREGS wage rate since 2006–07 shows significant
rise across all states. Table 1 shows the state-wise compound annual growth rates
(CAGR) of MGNREGS wages.
It shows that between 2005–06 and 2013–14, there was an increase of 12.15% per
annum in MGNREGS wage rate. This was the period of relatively high employment
growth and also higher growth in casual labour wages. The high employment growth
during this period increased demand for workers and MGNREGS work competed
with other work. In other words, there was a competitive demand for casual labour
that created upward pressure on casual labour wages. In contrast to that, during the
period between 2014–15 and 2018–19, the MGNREGS wage rate grew by merely
4.68%. During this period there was a net loss of job and there was also a slow growth
in the wage rate of casual labour. Again this can be interpreted as less competitive
demand for casual labour that slumped their wages.
Table 1 Increase in
States CAGR (2005–2013) CAGR (2014–2018)
MGNREGS wage rate in
nominal terms (2005–06 to Assam 13.67 3.14
2018–19) Andhra Pradesh 9.29 4.95
Bihar 10.64 1.55
Gujarat 16.66 3.82
Haryana 12.30 4.46
Himachal Pradesh 11.97 1.48
Jammu & Kashmir 18.19 4.33
Karnataka 15.62 6.85
Kerala 5.35 6.33
Madhya Pradesh 13.82 2.60
Maharashtra 19.34 4.84
Manipur 12.76 4.54
Meghalaya 10.96 4.29
Orissa 14.63 2.64
Punjab 8.95 4.66
Rajasthan 10.73 4.18
Tamil Nadu 9.19 7.62
Tripura 12.28 3.37
Uttar Pradesh 13.65 2.91
West Bengal 12.31 3.11
India 12.15 4.68
Source Calculated by the authors using MGNREGS notified wage
rates obtained from www.nrega.nic.in
2.2.1 Reduced Vulnerability Through Assured Employment
Most of the casual labourers in rural India are extremely vulnerable because of their
low income and assets base, compounded by the seasonal character of employment
in agriculture. In lean season, a large number of them either migrate to urban areas
in search of wage employment or borrow money from landlords or moneylenders.
This is to survive them, as they do not have savings to last for long and in the absence
of employment during the lean season, they can not afford to sit for long. If they
migrate, they are able to escape the clutches of landlords/moneylenders, but if they
stay there, they often borrow from them and get indebted. In many of the cases, they
repay the loan by working on their fields (of landlords). In such a condition, their
wage rate is not determined at the market wage rate. They often agree to work at a
wage rate lower than even the prevailing market wage rate.
Now, because of the assured employment under MGNREGS, many of such
workers stay at their places instead of migrating. There are evidences to suggest that
there has been a reduction in distress migration of casual rural labour. More impor-
tantly, they do not borrow money from the moneylenders, as they get employment
under MGNREGS during the lean season. In fact, a large proportion of MGNREGS
employment is created during the lean season. This has also helped in their increased
bargaining position.
Women have taken great advantage of the provision of assured employment.
Unskilled rural women prior to MGNREGS had limited opportunities for paid
employment. They would agree to any wage rate, which was offered to them. Because
of poverty, all adult members of the poor households work to ensure a minimum
income. Women often join workforce to supplement family abysmally low income.
The MGNREGS gave them an opportunity to paid employment at a guaranteed wage
rate, which was at least in the initial years of the programme was higher than the
market wage rate of a female labour. As a consequence of this alternative opportunity
of higher earnings with limited number of employment days, many of them withdrew
from the extremely low-paid agriculture work. Consequently, farmers have to offer
higher wages to employ women in agriculture.
2.2.2 Increase in Wages
An examination of the trend in agriculture male–female labour and MGNREGS

wage rate shows a zigzag path. In the initial year of implementation, the rural male
wage rate was slightly higher than that of the MGNREGS wage rate, but that of rural
female was slightly lower. While rural male labour wage rate remained above the
MGNREGS wage rate throughout the period, the female wage rate exceeded that of
MGNREGS in 2009–10 and has been higher than that since 2009–10. It is to be noted
that the proportion of female workforce in agriculture has increased and that of male
worker has reduced which has been described as “feminization of agriculture”. Now,
because of MGNREGS, in which women have earned about 50% of employment
days, many of them have pulled out of agriculture labour in which they were working
at a suppressed wage rate. The withdrawal of women labour from agriculture, as they
got alternative employment, created a shortage of female labour for agriculture. It
is worthwhile noting that certain activities of agriculture like plantation of paddy,
weeding, cotton plucking, etc. are mainly performed by women. In a sense, women
have a monopoly position over the supply of labour for certain agricultural activities.
Now with MGNREGS, they got alternative employment with a more conducive
working environment. They withdrew from low wage rate employment. Since a
number of agricultural activities are performed only or majorly by women, their
withdrawal led to a push of agricultural wages to attract them for such activities.
Thus, MGNREGS worked as alternative employment provider to women thereby
created supply-side shortage which pushed women wage rate, as it can be seen in
Fig. 1. It shows, in the initial years of implementation of MGNREGS, the wage rate
of agricultural female labour was lower than that of MGNREGS. In the initial years,
women had started joining MGNREGS and their share kept increasing. With their
increased participation in MGNREGS, there was a pressure of their withdrawal from
Fig. 1 Male and female agricultural labour and MGNREGS wage rates: a comparison. Sources
Prepared by the authors. MGNREGS wages obtained from www.nrega.nic.in, and agricultural male
and female wage rates obtained from the Agricultural Wages in India, Ministry of Agriculture and
Farmers Welfare, Government of India
agricultural activities. That to a certain extent created supply shortage for agriculture,
thereby pushing upward female agricultural labour wage rate.
Table 2 shows compound annual growth rates in agricultural wages and it is seen
that during the initial years of MGNREGS (2005–2013) the growth rates in agricul-
tural wages for both males and females were approximately 15% which declined to
nearly 5% in the recent years (2014–2016).
An examination of the trend in the growth of real wages since 2004–05 shows that
the wage rate of casual labour (all India) has grown by 7.75%, between 2004–05 and
2011–12 much higher than 3.91% of regular worker (Kannan and Raveendran 2019)
The growth was significant across most of the states, but remarkably higher in some of
the states which were leading in terms of employment generation under MGNREGS.
For example, during the same period, the growth of in real wages of Tamil Nadu,
Andhra Pradesh, Kerala, Jharkhand, M.P. was higher than some other states with
relatively low employment generation. The growth in real wages during 2011–12
to 2017–18 declined compared to 2004–05 to 2011–12 (Srivastava and Padhi 2020)
but this was also because of slackening of implementation of the MGNREGS and
various other changes. The additional employment generation under MGNREGS
was weak as there was a decline in other employment opportunities that weakened
the additional employment effects of MGNREGS.
Table 2 Trends in growth rates of male and female agricultural casual labour wage rates
States 2005–05 to 2013–14 2014–15 to 2016–17
Males Females Males Females
Andhra Pradesh 18.74 19.17 7.65 7.18
Assam 15.50 16.78 6.60 9.30
Bihar 15.57 17.52 7.07 5.52
Gujarat 9.84 11.11 4.02 7.77
Haryana 14.98 15.75 2.39 1.93
Himachal Pradesh 11.90 10.76 6.09 8.01
Karnataka 16.07 16.39 8.10 9.16
Kerala 14.63 16.84 4.30 5.88
Madhya Pradesh 15.57 16.11 10.90 10.83
Maharashtra 10.50 11.27 −6.81 −5.13
Orissa 17.21 13.23 10.15 12.84
Punjab 15.05 15.78 8.10 8.76
Rajasthan 15.69 16.67 6.86 9.67
Tamil Nadu 16.22 15.44 3.88 8.49
Uttar Pradesh 14.24 14.72 1.54 5.35
West Bengal 16.75 16.87 7.51 9.99
India 14.93 15.38 5.25 5.09
Source Calculated by the authors using data on male and female agricultural wage rates from
Agricultural Wages in India, Ministry of Agriculture and Farmers Welfare, Government of India
2.2.3 Reduced Male–female and Rural–Urban Wage Disparity
There has been male–female and rural–urban wage disparities in India’s labour
market. There are multiple reasons for that. However, post MGNREGS, there has
been some reduction in both male–female and rural–urban wage disparity. This could
be partly attributed to MGNREGS.
In 2004–05, the all-India average daily wage of a casual rural male and female
worker was 55.03 and 34.94 rupees respectively. There was a difference of about 20
rupees (Karan and Selviraj 2008: 43). At all India level, the average daily wage of a
female casual worker was 63% of that of a male worker. The difference was much
higher in some states. For example, there was a difference of 69.11 rupees in Kerala,
the highest among all the states. The practice of discriminatory wages in case of
casual workers is found both in rural and urban areas. Realization of equal wages for
male and female workers under MGNREGS has significant implications for the rural
labour market. If women are able to earn higher wages under MGNREGS, there is
a likelihood that in most cases, they would not be willing/available to work for less
than what they are getting under MGNREGS. The reduction in the supply of women
workforce, because of their joining of MGNREGS, create supply-side pressure on

the labour market, so much so that there is an upward revision of female wages.
3 III
3.1 Conclusion
The MGNREGS is the largest public works programme with a view to creating
employment for providing minimum income guarantee to rural households. In fact,
the programme has created a huge amount of additional employment in rural areas
that has been largely availed by the most vulnerable households like landless, and
marginalized workers like SC, STs and women. Over more than 10 years of its
implementation, it has created various kinds of impacts. An important impact of
the programme has been on India’s labour market, particularly rural that has been
characterized by various kinds of distortions for a number of economic and non-
economic factors. The depressed wages of rural casual labour is one such distortion.
Some of them are related to entrenched social practices.
An important impact of MGNREGS has been a rise in wages of casual labour
in agriculture and non-agriculture as well, although for some, the rise in wages of
casual labour in this phase has been due to high demand of labour in construc-
tion activities. This, however, does not rule out the impacts of MGNREGS. Firstly,
the huge amount of additional employment generated under MGNREGS competed
with other such demand for casual labour. The net result was a contraction in the
supply of labour amidst the expansion of demand for labour. Consequently, there
was an upward push to casual labour wages. Apart from creating effects of additional
employment, MGNREGS also pushed casual labour wages because of the processes
of job creation that provided guaranteed employment at minimum wages and that
through self-selection targeted the most vulnerable and deserving households. The
landless households, SC, ST and women workers have been its greatest beneficiaries.
By reducing their vulnerability and increasing their bargaining position, MGNREGS
has empowered them to negotiate higher wages. In a sense, apart from direct push to
rural wages, it has also made an indirect push. A major contribution of MGNREGS
lies in correcting some of the distortions in India’s labour market.
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Subcontracting Linkages in the Informal
Manufacturing Sector in Uttar Pradesh
Udai Bhan Singh
Abstract The study examines the subcontracting dynamics of informal manufac-

turing enterprises in Uttar Pradesh using nationally representative NSSO data of
non-agricultural enterprises between 2010 and 2016. The results show that the inci-
dence of subcontracting has decreased in rural areas among own-account enter-
prises and establishment (2–5 worker) category but it has increased in urban areas
among these enterprises during the study period. There is negligible evidence to show
that workers are much more efficient and productive in firms involved in subcon-
tracting as compared to non-subcontracted enterprises. Rather, the study found that
subcontracted enterprises created more jobs than non-subcontracting ones. It also
found that the gross value addition (GVA) per worker in more than three-fourth
subcontracted enterprises is below notional income, which indicates that a majority
of labour-intensive enterprises come into the subcontracting system only as means
for survival.
1 Introduction
The Indian economy has witnessed high economic growth in the post-reform period
in which the role of the informal sector has been commendable. The informal sector
in India is large and persistent, accounting for about 90% of employment and 40% of
value addition in the manufacturing sector in 2005–06 (Moreno-Monroy et al. 2012).
It is often argued that if the informal firms can become more dynamic and productive,
it would not only lead to further accumulation and expansion of the informal firms but
also generate higher incomes for the majority of the workforce in the sector. Given the
centrality of the informal sector in developing countries to employment, enhancing
poverty-level incomes prevalent in this sector is a major policy concern. In this regard,
the linkages of modern sectors with informal enterprises are believed to be achieving
the goal (Meagher 2013). One kind of linkage that has been of long-standing concern
U. B. Singh (B)
Yunus Social Business Centre, Amity Business School, Amity University Rajasthan, Jaipur, India
e-mail: udaieco@gmail.com

https://doi.org/10.1007/978-981-15-8265-3_14
262 U. B. Singh
for both policymakers and scholars in India is subcontracting or the outsourcing of a

part of the production process by a larger firm to a smaller or tiny enterprise (Nagraj
1984; Basole et al. 2015). Subcontracting is generally defined as a situation where the
firm offering the subcontract requests another independent enterprise to undertake
production or carry out the processing of a material, component, part or subassembly
for it according to specifications or plans provided by (Holmes 1986; Taymaz 2005).
Due to the paucity of resources and limited market access of informal enterprises,
subcontracting can play an important role in employment generation and inclusive
growth. There exist two distinct views regarding the subcontracting relationship
between formal and informal enterprises and their impact on the informal sector.
First, the ‘dualistic view’ contends that large firms take to subcontracting labour-
intensive production activities to traditional informal enterprises to minimize labour
costs. Due to intense pressure of cost competition exerted on informal enterprises,
the linkages between formal and informal enterprises results in a downward spiral
of wage, worsening labour conditions, as also the creation of survivalist character-
istics of informal enterprises (Portes 1994; Tokman 1978). Nonetheless, subcon-
tracting arrangements keep the activities of informal enterprises going; eventually
contributing to the stagnation of the informal sector (Moreno-Monroy et al. 2012).
The second is the ‘development view’ which harbours a positive perspective
of subcontracting between large and small enterprises. It argues that the linkages
between tiny and micro-enterprises and large enterprises lead to employment gener-
ation to a greater extent and it makes small firms more efficient, productive and
specialized. Formal enterprises encourage technological up-gradation, productivity,
growth and accumulation of capital in subcontracted firms, and also ease demand
and credit constraints for small units (House 1984; Ranis and Stewart 1999; Arimah
2001). The adherents of this approach believe that the subcontracting arrangement not
only reduces the labour costs of formal firms, but it even increases the productivity
of informal enterprises. According to them, firms in subcontracting relationships
should be more productive than their non-subcontracted counterparts. Several more
studies have highlighted the importance of networking and clustering for the growth
of informal firms (Pyke 1992; UNCTAD 1994). Although a majority of informal
firms have a few common problems, these firms are in the best position to help each
other build a good network in the horizontal integration and can also achieve special-
ization enabling vertical integration. Networking is beneficial, especially for small
enterprises. Moreover, patterns of subcontracting as a specific form of networking
are associated with specific types of industrial clusters (Rama et al. 2003; Berger and
Piore 1984; Holmes 1986; Ceglie and Dini 1999).
In India, subcontracting literature is consistent with both views. Marjit (2003)
argues that formal sector enterprises subcontract to the capital-intensive segment of
the informal sector, purchasing intermediate inputs from the latter. It observed that
expansion of the export-oriented formal sector due to trade liberalization significantly
contributed to the growth of a particular segment of the informal sector which supplies
intermediate inputs to the export sector. Similar evidence has been found by Kar and
Marjit (2009) in the case of Indian firms during 1984–85 to 2000–01. Contrary to
this, based on NSS data, Sahu (2010) and Bhattacharya et al. (2013) have found that
Subcontracting Linkages in the Informal Manufacturing Sector … 263
productivity per worker and asset base is higher for non-subcontracted enterprises as
compared to subcontracted firms. This finding is consistent with the stagnation view
that describes subcontracting as a medium of exploitation of informal enterprises.
According to this view, a formal firm subcontracts the labour-intensive segment of its
production process to informal firms to cut down its cost. Intense competition among
informal sector enterprises for securing linkages with the formal sector units leads
to further cost-cutting among the informal units, thus strengthening survivalism over
accumulation (Basole et al. 2015).
It has been observed that subcontracting in India is predominantly of the traditional
putting out type wherein the subcontracting firm is often being a home-based enter-
prise. Almost 50% of the nine million women in the informal manufacturing work-
force are home-based workers. They continue to work for the same enterprise mainly
due to their weak bargaining power, debt bondage, deferred payments, competition
with other suppliers and so on (NCEUS 2007). A similar result has been reported
by Chen et al. (1999) and Mehrotra and Biggeri (2007), which indicate that subcon-
tracting, lead to an expansion of the traditional component of the informal sector, even
when it is linked to the dynamic formal sector. However, in case of capital-intensive
industries such as machinery, transport equipment and vehicles, evidence shows
that subcontracting between multinational enterprises and local suppliers involves
several layers of subcontracting and the informal sector firms can only associate
themselves among the lowest tiers due to their huge technological deficiency even
though such contractual relations carry the possibility of technological spillovers
(Uchikawa 2011).
The states of India are varied in terms of socio-economic development, expansion
of industries in rural and urban areas and their impact on local economy, climate
conditions, etc. Thus, an aggregate level study of India cannot capture the dynamics
of subcontracting arrangements among informal manufacturing enterprises. Uttar
Pradesh (U.P.) is a classic case wherein the regions of the state are highly heteroge-
neous. For instance, the western and eastern regions are at two extremes of the spec-
trum in terms of per capita income, which at Rs. 20,846 is almost double in the western
region than Rs. 11,392 in the eastern region. Almost 70% of the Net State Domestic
Product (NSDP) comes from non-farm sector (GoUP 2012–13). Trade, transport,
communications and public and private services together contribute more than one-
third of NSDP. Although the regions have largely retained their share of NSDP
since 1980, yet, in per capita NSDP, there is a large difference between the western
and eastern regions, while the central and southern regions appear at par (Srivastva
and Ranjan 2016). According to the sixth Economic Census (2012–13) of U.P.,
Amroha, Bulandshahar, Meerut, Aligarh, Bareli, Badaun, Kanshiram Nagar, Etawah
and Moradabad districts (western U.P.) reported the maximum number of enterprises
per thousand population; however, Gonda, Sonbhadra, Shravasti, Balrampur districts
(eastern U.P.), Chitrakoot and Hamirpur (southern U.P. or Bundelkhan) and Unnao
and Kheri (central U.P.) recorded the lowest growth in enterprises. This shows the
level of disparity in industrialization and the spread of enterprises across various
regions of U.P.
264 U. B. Singh
Rural non-farm sector is the key to employment and output growth in rural U.P. as
the employment share of this sector rose from 17.8% in 1987–88 to 27.2% in 2004–
05 (Ranjan 2009). The percentage of households engaged as self-employed in the
non-farm sector is highest in the western and eastern regions as compared to the other
regions. Besides, only 10.79% of workers in the state have regular jobs as against
18.45% in the country. The informal sector is quite large in U.P. as about 91.5% of
workers are employed in the informal sector. Srivastva and Ranjan (2016) show that
the state economy is not generating enough good jobs, which is reflected in a high
level of unemployment among the youth with a tertiary level of education. This is also
a big reason for a large number of seasonal and temporary migrations, especially in
eastern and southern regions of the state. Singh and Mishra (2016) presenting findings
from the survey of 889 households and 145 household enterprises of four economic
regions (Akbarpur from eastern region, Saharanpur from western region, Hamirpur
from southern region and Kannauj from central region), point that remittances are
the main source of the start-up of small enterprises in eastern and southern regions.
Thus, linkages of tiny and micro-enterprises with modern formal manufacturing
enterprises can be created possibilities of employment generation, market access, and
technological advancement for the informal sector in U.P. Although several studies
have been done so far on subcontracting in India, there is hardly any state-specific
study available on subcontracting issues. The present study attempts to bridge this
gap in the literature.
The rest of the paper is categorized into the following sections: Section two
discusses data and analytical framework. Section three examines the pattern and
magnitude of subcontracting by the scale of enterprises, regions and broad industry
categories. The fourth section describes the nature of operations in subcontracting
and non-subcontracting enterprises. Section five describes the relationship between
subcontracting and productivity. It also discusses the employment generating poten-
tial of different manufacturing groups. The sixth section tries to understand the poten-
tial of subcontracting enterprises by comparing the GVA per worker with notional
income. Section seven discusses the major problems faced by the subcontracted
enterprises, while the last section sums up the discussion with respect to U.P.
2 Data and Analytical Framework
The study has used the NSS 67th round (2010–11) and 73rd round (2015–16) unit
record data. Some necessary adjustments have been made to make both rounds
comparable. This study aims to comprehend the dynamics of subcontracting arrange-
ments in informal manufacturing enterprises across the scale of enterprises and indus-
tries. Only those non-agricultural enterprises which have less than ten workers have
been taken up in the study. They have been referred to as informal enterprises in this
study. While NSS 67th round and 73rd round use National Industrial Classification
(NIC) 2008, some new industries have been added in the 73rd round. Therefore,
the author has constructed a concordance table to make sub-industries comparable.
Following Singh and Mishra (2016), the sub-industry categories of manufacturing

are as follows:
M1: Food products, beverages and tobacco products.
M2: Cotton ginning, cleaning and baling, textiles, wearing apparel, leather and leather
products.
M3: Wood and wood products, paper and paper products, printing, etc.
M4: Petroleum products, chemicals, pharmaceuticals, rubber, plastics, metals, metal
products, machinery and equipment, etc.
M5: Remaining manufacturing activities.
To understand the dynamics of informal enterprises, the same are generally cate-
gorized as own-account enterprises (OAEs) and establishments. But this is too broad a
category. However, the constraints faced by enterprises are often co-related with their
size. The present study considers the following categories among informal manufac-
turing enterprises: OAEs, the establishments with 2–5 workers, establishments with
6–9 workers and total establishment.
3 Subcontracting Intensity in Informal Manufacturing

Enterprises
Traditionally, the linkages between the informal and formal manufacturing sector
have generally been weak and subtle (Sahu 2010). A very large number of informal
manufacturing activities have been operating independently from formal manufac-
turing sector; the informal manufacturing sector has been producing a final product
for the consumer market rather than intermediate products for formal sector (Papola
1991). But globalization and liberalization have opened up opportunities for tiny
and micro-informal enterprises to associate themselves with formal enterprises and
increase their profit. Of late, a substantial number of informal manufacturing enter-
prises have been expanding their scale of operations in the global production chain
through technological linkages, market linkages, financial and raw material support
by formal manufacturing enterprises. Notwithstanding the disparities in the inci-
dence of subcontracting across, the scale of enterprises and sub-industries groups in
various regions of the state.
Considering Uttar Pradesh as a case for the study, in 2015–16 almost 34.92%
of urban enterprises and 15.69% of rural enterprises are working under the subcon-
tracting arrangement. The incidence of subcontracting is higher in urban enterprises
compared to those in rural areas across all enterprise categories. In urban areas,
a much larger proportion of subcontracted enterprises belong to the establishment
2–5 worker category followed by OAEs in 2015–16. However, the incidence of
subcontracting is almost same in establishment 2–5 worker category and OAEs in
rural areas. Overall, the incidence of subcontracting has been declining significantly
266 U. B. Singh
Table 1 Intensity of subcontracting in informal manufacturing enterprises

Scale of Enterprise 2010–11 2015–16
Rural Urban Total Rural Urban Total
OAEs 29.86 30.35 30.03 16.25 37.47 23.86
Est. 2–5 workers 6.04 10.74 8.90 8.99 23.21 17.79
Est. 6–9 workers 20.42 25.42 23.71 16.79 41.89 37.43
Total Est. 7.88 12.98 11.03 9.48 26.24 20.29
Total 28.06 26.63 27.52 15.69 34.92 23.36
Region
Western 38.41 25.77 32.75 30.47 41.74 36.32
Central 29.57 11.81 22.21 12.02 17.05 14.29
Eastern 20.96 39.68 26.46 8.39 43.21 17.00
Southern 0.00 0.76 0.26 2.55 0.92 2.00
Total 28.06 26.63 27.52 15.69 34.92 23.36
Broad NIC Group
M1 23.67 27.83 24.91 19.92 12.37 17.95
M2 36.69 36.40 36.57 17.01 38.25 26.03
M3 26.97 14.65 22.62 5.86 41.36 20.54
M4 8.27 11.86 9.98 14.15 36.52 24.79
M5 0 0 0 0.00 12.81 12.69
Total 28.06 26.63 27.52 15.69 34.92 23.36
Source NSS 67th and 73rd rounds unit record data
between 2010–11 and 2015–16. Table 1 depicts an interesting trend; that the inci-
dence of subcontracting has decreased among OAEs and establishment 2–5 worker
categories in rural areas between 2010–11 and 2015–16, however it has increased
among OAES and establishment 2–5 worker enterprise categories in urban areas
during the same period. The decrease in subcontracting incidence in rural areas can
be attributed to less expansion of rural markets due to poor outreach of government
policies and industrial growth.
Region-wise also the incidence of subcontracting in manufacturing enterprises
across the state is quite diverse. In the urban areas, nearly 41.74% of enterprises in
the western regions and 43.21% of enterprises in the eastern region are working under
the subcontracting arrangement in 2015–16. However, in southern region enterprises,
the incidence of subcontracting is minimal (0.92%). It is surprising to see that the
proportion of subcontracting declined rapidly in rural areas between 2010–11 and
2015–16 for all three regions, i.e. western, central and eastern wherein it was higher
than the urban areas of these regions. There is no evidence of subcontracting arrange-
ment in the southern region in 2010–11 probably due to lack of appropriate amenities,
market linkages and technological transfers by formal enterprises. However, in 2015–

16, the share of subcontracting in case of urban areas of all these regions reveals a
significant increase.
There is a visible difference in intensities of subcontracting in different manufac-
turing sub-industries over the period of 5–6 years in both rural and urban areas. The
data (Table 1) show the overall growth of subcontracting in the informal manufac-
turing industries categorized into five major groups. In rural areas, subcontracting
incidence has declined drastically between 2010–11 and 2015–16 in informal manu-
facturing enterprises along with all the major sub-industry groups, viz. food prod-
ucts, beverages and tobacco products, cotton ginning, cleaning and baling, textiles,
wearing apparel, leather and leather products and wood and wood products, paper and
paper products, printing, etc. However, in the urban areas, subcontracting has declined
only in the M1 category that is food products, beverages and tobacco products. In
contrast, cotton ginning, cleaning and baling, textiles, wearing apparel, leather and
leather products and wood and wood products, paper and paper products, printing,
etc., in urban U.P. have witnessed a significant increase in subcontracting over the
5–6 years study period. While subcontracting has declined in M1, M2 and M3 cate-
gories in rural areas, M4 presents quite a different picture in which subcontracting
incidence has increased by almost six%. Further, there was no evidence of subcon-
tracting in M5 category in 2010–11 but a bit of it is seen in urban areas in 2015–16.
The overall growth of subcontracting intensities in manufacturing industries, espe-
cially in the case of urban areas may be attributed to technological up-gradation,
better access to market and other uplifting factors.
Table 2 represents the proportion of subcontracting intensities by scale of enter-
prises and broad NIC groups. The pattern of subcontracting is seen differently in all
the five manufacturing groups concerning the scale of enterprises. It is clear that M2
Table 2 Proportion of subcontracting by scale of enterprises and broad NIC group

Broad NIC Group OAEs Est. 2–5 workers Est. 6–9 workers Total Est. Total
2010–11
M1 27.22 1.80 0.00 1.60 24.91
M2 39.57 13.22 34.60 17.20 36.57
M3 25.13 6.03 8.13 6.22 22.62
M4 9.63 9.95 19.24 11.27 9.98
M5 0 0 0 0 0
Total 30.03 8.90 23.71 11.03 27.52
2015–16
M1 20.15 1.54 10.94 2.19 17.95
M2 25.98 25.04 38.49 26.52 26.03
M3 20.83 17.42 34.99 19.35 20.54
M4 24.67 20.70 43.45 25.15 24.79
M5 6.55 10.52 44.61 16.95 12.69
Total 23.86 17.79 37.43 20.29 23.36
268 U. B. Singh
and M4 categories have witnessed higher incidence of subcontracting in 2015–16.

However, a drastic decline has been observed in M3 category over the 5–6 years’
study span. In 2010–11, the major share of subcontracting (39.57%) in OAEs is
in manufacturing of Cotton ginning, cleaning and baling, textiles, wearing apparel,
leather and leather products followed by food products, beverages and tobacco prod-
ucts which are 27%. Both these categories have witnessed a decline in 2015–16
among OAEs. The subcontracting in establishments where 2–5 workers are engaged
in different manufacturing industries was low in 2010–11 compared to 2015–16.
Only in M2 category of manufacturing, subcontracting in the establishment 2–5
workers category was 13.22% which almost doubled to 25.04% in 2015–16 which
is a case of growth of subcontracting in establishments. Also, the establishment
6–9 worker category has shown a significant rise in subcontracting, especially in
the M3 (wood and wood products, paper and paper products, printing, etc.); and
M4 (petroleum products, chemicals, pharmaceuticals, rubber, plastics, metals, metal
products, machinery and equipment, etc.), and remaining manufacturing activities
between 2010–11 and 2015–16. In all the four manufacturing groups, the proportion
of subcontracting has declined overall for different scale of enterprises except the
M4 category in which the share of subcontracting has increased in 2015–16.
4 The Nature of Operations
The nature of operations of subcontracted and non-subcontracted enterprises may be

perennial, seasonal or casual. Enterprises which are perennial in nature run more or
less throughout the year. The second type is seasonal which runs occasionally, that
is, for a particular season or during fixed months of a year, and casual enterprises
are the ones which run for a total of at least 30 days in the preceding (of the NSS
survey) 365 days. One can expect that the return of perennial enterprises is always
better than the other two. But it depends on other factors also such as the scale of
operations, demand for products, availability of working capital, etc. Table 3 depicts
whether the nature of operations is the same in different types of enterprises and sub-
industry categories in subcontracting arrangement or they are significantly different.
In general, subcontracted enterprises are more perennial in nature as compared to
non-subcontracted enterprises. About 98% of OAEs in the subcontracting system
are perennial compared to 93.74% in non-subcontracted enterprises. A significant
number of non-subcontracted enterprises are seasonal, which is minimal among
subcontracted enterprises. A minuscule number of enterprises operations are casual
in both subcontracted and non-subcontracted systems.
Considering the broad NIC categories, manufacturing enterprises that are 100%
perennial in nature in subcontracting are M4 and M5. The manufacturing industry
of Cotton ginning, cleaning and baling, textiles, wearing apparel, leather and
leather products (M2 category) also operates throughout the year for about 98%
of subcontracting units and 94% of non-subcontracting units.
Table 3 Nature of Operations in Subcontracting Arrangement, 2015–16

SC NSC
Perennial Seasonal Casual Perennial Seasonal Casual
Scale of Enterprise
OAEs 97.98 0.81 1.20 93.74 3.18 3.08
Est. 2–5 workers 98.61 0.24 1.14 97.51 1.98 0.51
Est. 6–9 workers 100.00 0.00 0.00 95.25 4.72 0.03
Total Est. 98.94 0.19 0.88 97.29 2.25 0.46
Total 98.10 0.74 1.16 94.26 3.04 2.70
Broad NIC Group
M1 95.75 0.37 3.88 93.57 5.94 0.49
M2 98.68 0.28 1.04 94.34 0.74 4.92
M3 95.98 4.02 0 96.5 2.79 0.71
M4 100 0 0 92.72 6.11 1.17
M5 100 0 0 100 0 0
Total 98.1 0.74 1.16 94.26 3.04 2.7
Note SC shows subcontracted and NSC shows non-subcontracted
Source NSS 73rd round unit record data
5 Subcontracting and Productivity
There is a general belief that enterprises working under a subcontracting system are
more productive than those that are not. In order to check its veracity, we use struc-
tural coefficients such as gross value addition (GVA) per worker (labour productivity),
capital–labour ratio1 and worker per enterprise. There is negligible evidence to show
that workers are much more efficient and productive in subcontracted firms than non-
subcontracted firms. At the aggregate level, labour productivity was less in subcon-
tracted enterprises as compared to non-subcontracted enterprises, but the difference
of estimated labour productivity between subcontracted and non-subcontracted enter-
prises has decreased significantly during 2010–11 to 2015–16. It is indicative of a
substantial improvement in labour productivity in subcontracted enterprises. The
trend is similar for all types of subcontracted enterprises. Within the subcontracting
system, labour productivity is higher in establishment than OAEs both in 2010–11
and 2015–16. OAEs reported a significant growth in labour productivity compared
to all categories of establishment over the 5-year study period.
1 Gross value added per worker and fixed capital per worker was estimated at constant 2004–05
prices.
270 U. B. Singh
Table 4 Labour productivity, capital–labour ratio and employment potential by scale of enterprises
Enterprise Type 2010–11 2015–16
SC NSC SC NSC
GVA per worker (Rs.)
OAE 11785.9 25663.36 23383.11 30934.56
Est. 2–5 workers 32837.85 46546.92 49556.23 51134.27
Est. 6–9 workers 37407.76 47249.27 50087.49 63401.9
Total Est. 34245.64 46633.11 49962.75 52360.32
Total 12976.97 29077.68 26643.89 34073.13
Capital–labour ratio (Rs.)
OAE 23940.84 69037.06 41816.56 55611.12
Est. 2–5 workers 63910.7 126352.6 83051.21 78247.9
Est. 6–9 workers 52516.07 129422.8 78172.43 74136.29
Total Est. 60400.52 126729.7 81907.02 77837.85
Total 25870.62 78412.59 46715.69 58862.85
Worker per enterprise
OAE 1.7 1.5 1.9 1.5
Est. 2–5 workers 3.5 2.9 3.6 2.9
Est. 6–9 workers 7.1 6.9 7.2 6.8
Total Est. 4.6 3.4 4.5 3.3
Total 1.9 1.8 2.3 1.8
Also, it is important to understand which sub-industry categories have had higher

labour productivity in the subcontracting system. From Table 4, it is clear that
GVA per worker is low in all sub-industry categories involved in subcontracting as
compared to those that are not. There are some manufacturing industries such as wood
and wood products, paper and paper products, printing, etc., in which, a small differ-
ence appeared in labour productivity between subcontracted and non-subcontracted
units in 2015–16. However, M1 enterprises such as food products, beverages and
tobacco products show quite the opposite picture with high difference in labour
productivity between subcontracted and non-subcontracted units. Within subcon-
tracted enterprises, wood and wood products, paper and paper products, printing, etc.,
have witnessed highest labour productivity followed by M4 category sub-industries
involved in petroleum products, chemicals, pharmaceuticals, rubber, plastics, metals,
metal products, machinery and equipment, etc., while labour productivity in M1 has
been less than one-third of M3. The relatively low productivity in subcontracted
enterprises compared to non-subcontracted enterprises may be attributed to labour-
intensive nature of work, utilization of outdated technologies, inadequate access to
both input and output markets and proliferation of middleman (Sahu 2010). Besides
these factors, the exploitative nature of large enterprises is also because of low produc-
tivity in subcontracted tiny enterprises as very often they pay less than the market
prices to small enterprises (Papola and Mathur 1983).
Capital–labour Ratio, however, is observed to be lower in subcontracted enter-
prises compared to non-subcontracted ones in both years, viz. 2010–11 and 2015–16.
A similar pattern was observed for OAEs and both categories of establishments (with
2–5 workers and 6–9 workers), and across the sub-industry categories (Table 4). The
subcontracted units have the potential to generate employment with the lower capital
requirement if there is a growing demand for their products. Overall, it is visible that
the subcontracting system has a positive impact on job creation as enterprises working
under linkages with larger units have created more jobs compared to those who are
not. This difference has widened between subcontracted and non-subcontracted firms
during 2010–11 to 2015–16, especially in establishment 6–9 workers units involved
in petroleum products, chemicals, pharmaceuticals, rubber, plastics, metals, metal
products, machinery and equipment (M4 category) which have created more jobs
compared to other sub-industry categories (Table 5).
6 Choice or Survival
It is not clear from the discussion thus far whether GVA per worker generated by enter-
prises under the subcontracting system is adequate to protect the livelihood needs
of workers or not. This requires obtaining some indicator of adequacy. Following
National Commission for Enterprises in the Unorganised Sector NCEUS (2007), we
have computed notional income2 (minimum floor income) of a worker from Employ-
ment and Unemployment Survey of NSS and used it as a benchmark to judge the
adequacy of GVA per worker of enterprises. While NCEUS (2007) used this for
OAEs only, this study has extended it to establishments also, even though it is not as
accurate in case of establishments as is in case of OAEs.
Table 6 confirms that in almost 88.56% of subcontracted enterprises GVA
per worker is below the notional income, while it is much less in case of non-
subcontracted enterprises (78.21%) in 2015–16. This pattern is almost common in
across all scales of enterprises and broad NIC groups. However, the proportion of
enterprises having linkages with master units, and GVA per worker below notional
income has declined significantly between 2010–11 and 2015–16. Nonetheless,
OAEs are still in a worse situation as compared to the establishment as in about
92.72% OAEs GVA per worker is below than notional income under the subcon-
tracting arrangement which is quite higher than 50.22% in the establishment 6–9
workers category in 2015–16. On the other hand manufacturing enterprises in wood
2 Notionalminimum income = minimum floor level wage x working days per year x earning units
per family.
Two notional income for the years 2010–11 and 2015–16 were computed to compare GVA per
worker during two rounds of NSS. The notional income was Rs. 36702 and Rs. 50260 in 2010–11
and 2015–16, respectively.
272 U. B. Singh
Table 5 Labour productivity, capital–labour ratio and employment potential by broad NIC groups
NIC 2010–11 2015–16
SC NSC SC NSC
GVA per worker (Rs.)
M1 9730.607 28812.57 13379.96 35802.72
M2 13849.07 24052.13 23936.43 28357.1
M3 11340.29 33639.38 42138.6 43274.85
M4 25797.73 34673.36 34886.15 39128.42
M5 0 50180.65 96457.86 91252.93
Total 12976.97 29077.68 26643.89 34073.13
Capital–labour ratio (Rs.)
M1 14570.58 80225.3 25891.41 66689.33
M2 26815.59 70995.9 42830.83 59545.46
M3 30687.46 80209.54 61089.16 49328.03
M4 52340.84 90325.89 66504.73 55124.27
M5 *** 174107.6 61058.34 129027.7
Total 25870.62 78412.59 46715.69 58862.85
Worker per enterprise
M1 1.6 1.8 2.1 1.9
M2 2.1 1.8 2.1 1.6
M3 1.3 1.9 2.4 1.8
M4 2.9 2.0 2.7 2.2
M5 *** 2.6 4.6 2.8
Total 1.9 1.8 2.2 1.8
and wood products, paper and paper products, printing, etc., petroleum products,
chemicals, pharmaceuticals, rubber, plastics, metals, metal products, machinery and
equipment, etc., activities have reported more growth in GVA per worker between
2010–11 and 2015–16. In almost one-fourth of these enterprises GVA per worker is
more than notional income. It is clear that enterprises involved in making food prod-
ucts, beverages and tobacco products; cotton ginning, cleaning and baling, textiles,
wearing apparel, leather and leather products came into the subcontracting system
for survival rather than choice as in more than 90% of these enterprises GVA per
worker is below the notional income. Significantly, the proportion of similar non-
subcontracted enterprises with GVA per worker less than the notional income is fairly
less as compared to subcontracted enterprises (Table 7).
Table 6 Percentage of enterprises having GVA per worker below notional income
Enterprise type 2010–11 2015–16
SC NSC SC NSC
Scale of enterprise
OAE 97.16 77.24 92.72 81.83
Est. 2–5 workers 64.69 44.01 61.34 58.42
Est. 6–9 workers 50.94 48.26 50.22 45.90
Total Est. 60.46 44.54 58.73 57.17
Total 95.22 71.94 88.56 78.21
Broad NIC Group
M1 99.38 70.80 97.99 75.65
M2 95.74 80.87 92.71 82.73
M3 92.27 61.84 79.68 71.59
M4 79.13 68.35 74.15 75.37
M5 0.00 26.98 36.66 9.55
Total 95.22 71.94 88.56 78.21
Table 7 Severe problems faced by subcontracted enterprises (in %)

2010–11 2015–16
SC NSC Total SC NSC Total
Erratic power supply 16.59 20.94 19.9 18.85 17.34 17.73
Shortage of raw materials 11.08 10.66 10.76 9.29 4.97 6.1
Shrinkage of demand 24.29 30.84 29.27 37.11 42.35 40.99
High cost of credit 11.94 12.77 12.57 11.27 15.3 14.25
Non-recovery of financial dues 12.36 12.13 12.18 10.14 12.99 12.25
Non-availability of labour 1.11 1.56 1.45 0.29 0.64 0.55
Non-availability of skilled labour *** *** *** 0.28 1.08 0.88
Labour dispute 0.51 0.38 0.42 0.04 0.01 0.02
Others 22.12 10.72 13.45 12.73 5.31 7.24
Total 100 100 100 100 100 100
Note *** shows this option was not available in the 67th round
7 Major Problems in Subcontracting Linkage
Do subcontracted and non-subcontracted informal enterprises face similar problems

in their operations or, linkages with larger units help subcontracted enterprises to
minimise their problems? The study finds that shrinkage of demand for products
274 U. B. Singh
is a major problem faced by both subcontracted and non-subcontracted enterprises,

although its magnitude is relatively less in subcontracted enterprises. Almost 37.11%
of enterprises acknowledge shrinkage of demand as their major problem. Thus, tiny
and small enterprises come into subcontracting practices to avail better opportu-
nities for market access even though the nature of exploitation by master units is
well known. So, subcontracted enterprises face the challenge of being exploited at
two levels: less payment at the hands of subcontracting master units, and inade-
quate recognition in the local market. Besides, erratic power supply and high-cost
credit are other major problems for both subcontracted and non-subcontracted enter-
prises. It appears that subcontracted enterprises have no hardly any advantages while
coping with operational problems. Most subcontracting arrangements are skewed
in favour of the contractors thereby enabling the master units to dictate their terms.
They often engage in arm twisting practices such as delayed payments, undue price-
cutting, strict quality control, sudden slash in orders and lack of continuity in placing
orders. Further, their own low resource base and inadequate managerial capacity of
subcontractors put the subcontracted units in a more disadvantageous position (Sahu
2010).
8 Conclusion
Subcontracting arrangements between formal and informal firms can be used to

modernize small and tiny informal enterprises in several ways such as technological
up-gradation, employment and income generation, market access, capital accumu-
lation and so on. But there is evidence that these linkages have led the informal
enterprises towards stagnation as larger firms have exploited this linkage as a cost-
cutting measure. In recent years, however, there has been decentralized production
through subcontracting and ‘putting-out’ arrangements in India. The present study
has used enterprise-level data from the informal manufacturing sector in the country
to understand the dynamics of linkages of formal sector enterprises with informal
enterprises. Based on evidence from 67th round (2010–11) and 73rd round (2015–16)
of NSS unit-level data, it has been found that informal enterprises in urban areas are
more into subcontracting arrangements compared to their rural counterparts, and the
intensity of subcontracting is greater among relatively large enterprises. The extent
of subcontracting significantly varies among the sub-industry categories. The study
shows that subcontracted works are prevalent in both labour-intensive and capital-
intensive enterprise. In 2015–16, almost one-fourth enterprises in M2 and M4 NIC
categories, viz. cotton ginning, cleaning and bailing, textiles, wearing apparel, leather
and leather products; petroleum products, chemicals, pharmaceuticals, rubber, plas-
tics, metals, metal products, machinery and equipment, etc., were working on subcon-
tracting arrangements. There has been a reshuffling in the pattern of subcontracting by
sub-industry categories during 2010–11 to 2015–16. The extent of subcontracting
has increased more than two times among relatively capital-intensive enterprises
(M4); however, it has declined significantly among labour-intensive enterprises (M2).
Also, the manufacturing sector in Uttar Pradesh appears to be supporting both views
stagnation and development with respect to subcontracting. Furthermore, subcon-
tracting linkages between formal and informal enterprises have developed mainly
in the western region which is also the most industrialized part of the state, lending
credence to the development view.
The study shows that enterprises that are working in subcontracting arrangements
have created more employment in comparison to non-subcontracted enterprises in
U.P., which is in line with the view that subcontracting linkages create more employ-
ment. A similar pattern is found across the scale of enterprises and sub-industry
categories. But productivity is lower among subcontracted enterprises than in non-
subcontracted enterprises, which means that the terms of trade are worse for subcon-
tracted enterprises. While trying to understand whether GVA per worker generated by
subcontracted enterprises is adequate to protect the livelihood needs of workers or it’s
just a survival strategy of informal enterprises. The study found that in almost 89% of
subcontracted enterprises GVA per worker is below the notional income in 2015–16.
This percentage is relatively higher in labour-intensive enterprises, i.e. mostly OAEs,
and in M1 and M2 sub-industry categories (food products, beverages and tobacco
products, cotton ginning, cleaning and baling textiles, wearing apparel, and leather
products, etc.), which implies that large firms exploit informal manufacturing firms
and use them for cost-cutting. Shrinkage of demand for products is the main problem
reported by subcontracted enterprises. Ideally, the purpose of informal enterprises,
who work on subcontracting linkage, is to use the network of formal firms for market
access. Erratic power cuts and shortage of raw materials are other problems, which
affect the productivity of informal subcontracted enterprises. Similarly, Sahu (2010)
observes that the nature of the extent of assistance received by subcontracted firms
from the master or contracting units in the form of technical assistance, financial
support, supply of raw material and provision of training is relatively less prevalent
in rural areas, which supports the stagnation view of the subcontracting linkage.
There is a huge opportunity for informal enterprises in subcontracting. Master
units or subcontracting firms will have to show greater involvement with informal
enterprises in the form of technological guidance, timely supply of raw material,
timely payments, transport and market access, etc., rather than use subcontracted
firms as cost-cutting measures. On the other hand, informal firms those which are
large and employ workers should be provided credit support and market independent.
These would make relatively large informal enterprises more efficient and stable to
lead the growth path of informal sector independent of subcontracting linkages with
formal firms.
276 U. B. Singh
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Skill Inequality Among Social Groups
in India: Regional Analysis in Uttar
Pradesh
Ishwar Chandra Awasthi and Puneet Kumar Shrivastav
Abstract Even though the overall social group inequality in general education has
reduced, yet inequality in technical education and vocational training has increased
over the last decade in all regions in the state of Uttar Pradesh. There is evidence of
increasing inequalities in skill attainment across various regions and among social
groups in the state. This paper attempts to explore the regional imbalances of growth
in formal and non-formal skill formation through technical and vocational education
and training (TVET) along with general education and its distribution across social
groups in India’s most populous state. Secondary data from the National Sample
Survey Organization’s (NSSO) quinquennial surveys for 2004–05 and 2011–12 have
been used to explore skill formation as a whole in the state and among various
social groups across different regions to investigate the disparities in skill attainment.
Thereafter, the authors have conducted a primary survey in four districts in two
economic regions of the state that validates their findings. Atkinson and Thiel indices
have been used to decompose the inequality in skill attainment, showing the share
of within-group and between-group inequalities for all the four economic regions of
the state using NSSO data.
1 Introduction
Social inequalities among various groups have been deeply ingrained in India’s age-
old caste system that has exacerbated various forms of discrimination in both the
society and the labor market (Deshpande and Newman 2007; Jodhka and Newman
2007; Jodhka and Shah 2010; Thorat and Newman 2007). Discrimination has resulted
in inequality in accessing resources like education, skill, health, jobs, and so on. Labor
I. C. Awasthi (B)
Institute for Human Development, Delhi, India
e-mail: icawasthi@gmail.com
P. K. Shrivastav
Giri Institute of Development Studies (GIDS), Lucknow, India
e-mail: puneetshrivastav1@gmail.com

https://doi.org/10.1007/978-981-15-8265-3_15
280 I. C. Awasthi and P. K. Shrivastav
market disparities are evident in securing jobs even with the same level of education
and skill sets primarily because of social discrimination and prejudices (Awasthi
and Shrivastav 2017). There are evidences of growing inequalities and disparities
across regions, sectors, gender, and social groups (Saxena and Kumar 2017). The
studies also suggest that inequalities among social groups have increased in the
post-reform period (Pal and Ghosh 2007; Prasad 2013). Further, some have reported
that inequalities among the social groups have declined in terms of social indicators
(Desai and Kulkarni 2008) but increased in respect of economic indicators (Basole
2014; Kapoor2013).
The available research clearly demonstrates that poverty is directly correlated with
the level of human capabilities and entitlements. Knowledge, skills, and competen-
cies have become the basic premise for employability, enterprise competitiveness,
and economic and social sustainability (ILO 1997). The role of skill and education
has had an encouraging impact on raising productivity, employability, and human
capital formation and has a profound positive influence in reducing the level of
poverty and destitution. Skill development is central to improving productivity and
is one of the important sources of growth and improved living standards (Christoph
and Berg 2009; DFID 2008; ILO 2008; OECD 2013; Sanghi and Srija 2015). The
role of skills in improving productivity, incomes, and equitable access to employment
opportunities seems particularly clear and robust (Bennell 1999).
India is in transition to a knowledge-based economy and its competitive edge
will be largely determined by the abilities of its people to create, share, and use
knowledge more effectively (Dahlman and Utz 2005; Goel 2009). This transition
requires India to transform its workers into knowledge workers who would be flex-
ible, analytical, adaptable, and multi-skilled. Therefore, a better education and skill
formation facility is a need of the hour. A greater amount of educational ability
is a sign of more skilled and productive workers who in turn are responsible for
the increase in the economy’s output of goods and services. This huge requirement
of skilled and educated persons cannot be met unless the large chunk of deprived
and marginalized sections of the society is transformed into knowledge and skilled
workers. The composition of economically disadvantaged social groups, popularly
referred to as lower castes, accounts for about 72% of Indian population of which
18.9% are scheduled castes (SCs), 8.7% are scheduled tribes (STs) and 44% are
other backward castes (OBCs) (GoI 2015). The corresponding percentage share of
disadvantaged social groups in Uttar Pradesh (U.P.) is 78% of which SCs comprise
23.8%, STs 1.1%, and 53.8% are OBCs (ibid).
Uttar Pradesh, the country’s most populous state, ranks 13 out of the country’s 15
major states ahead of only Assam and Bihar in terms of human development index
(Government of Uttar Pradesh 2008). The proportion of population below poverty
line (BPL) in U.P. was estimated to be 29.4% (30.45% in rural and 26.0% in urban
areas) in 2011–2012 as against 21.9% BPL at the all India level. Uttar Pradesh ranked
tenth among states having the highest proportion of people living in poverty (Awasthi
and Shrivastav 2017).
Huge inequalities in terms of critical socio-economic indicators such as land-
holdings, higher education, wealth distribution, and multidimensional poverty are
Skill Inequality Among Social Groups in India … 281
persisting in Uttar Pradesh (Awasthi and Shrivastav 2017; Goli et al. 2015). Using
Theil and Atkinson indices for decomposition analysis, it was found that ‘between’
group or inter-group inequalities contribute more to the total inequality in land-
holding, whereas ‘within’ or intra-group inequalities contribute maximum to total
inequality in education and wealth status of different castes in rural Uttar Pradesh
(Awasthi and Shrivastav 2017). The Theil and Atkinson indices of education
inequality show that more than 90% of the contribution is made by within-group
inequalities in the state. However, inequalities within group are much lower among
general castes compared to SCs/OBCs (Goli et al. 2015). The probability of getting
into services (jobs) or well-paid jobs is higher among the general or upper castes
than the lower castes (Awasthi and Shrivastav 2017).
Spanning a large part of the Indo-Gangetic plains in northern India, Uttar Pradesh
is divided into four regions having huge social, economic, cultural, and geographical
diversity. Based on the regional dynamics of the state, it is expected that skill develop-
ment status would have variations across social groups among different regions. Thus,
this paper focuses on the regional imbalance of growth in formal and non-formal skill
formation through technical and vocational education and training (TVET) across
social groups in U.P. The main objective of the paper is to decompose inequality
within groups and between groups in educational and skill attainment in all the four
regions in the state. In addition, it also cross-validates the status of disparity through
a primary survey carried out in two economic regions in U.P.
The paper comprises six sections including a brief background in this introduc-
tory section. The second section deals with the data and methodology, followed
by the status of skills in U.P. across regions and social groups utilizing NSSO data
presented in the third section. The fourth section discusses the inequality and decom-
position across the social groups and regions in educational and skill attainment in
U.P. The fifth section focuses on evidence from the primary survey about the skill
differentials among individuals across four districts in two regions namely Western
U.P. and Bundelkhand. The last section summarizes the findings and suggests policy
imperatives.
2 Data and Methodology
The paper is based on the NSSO employment and unemployment survey unit-level
data for two rounds, i.e., 61st and 68th for the years 2004–05 and 2011–12. General
education, technical education, and vocational training are used as indicators repre-
senting the skills. The levels of general education have been grouped in eight estab-
lished categories. Similarly, technical education and vocational training have been
grouped into five and three categories, respectively. To show the variation in the
status of skill development, the aforementioned indicators at national level (India),
state level (U.P.), and regional level (Eastern, Western, Central, and Bundelkhand)
have been considered. The authors have included all age groups in their analysis
in general and also made some projections for the young (15–29 years) age group
population.
Bivariate tables have been used to show different indicators such as general
education, technical education, vocational training, region, source of training, social
group, etc. Also, Thiel and Atkinson models have been used to measure inequalities
while different indices have been utilized to decompose the inequality into education
and other indicators of skill in the selected regions (Goli et al. 2015; Awasthi and
Shrivastav 2017).
The primary data have also been used in order to supplement the current scenario
information on variations in skill attainment. Based on the analysis of stock of skill
(educational and skill attainment level) from unit-level NSSO data, evidences from
the primary survey data have been collected from 500 individuals in four districts
from two economic regions: Western Uttar Pradesh, a relatively developed region,
and the not so developed Bundelkhand region or Southern Uttar Pradesh. Further,
two districts have been selected from each region—one relatively developed district
and another not so developed on the basis of the score of a district-wise composite
index computed for each district. To compute the district-wise composite index,
seven indicators have been taken into consideration as per the availability of data.
Three indicators of demand side of skills, viz. number of small-scale industries per
hundred thousand population, number of registered working factories per hundred
thousand population and average number of workers per registered working factory,
and three indicators of the supply side, viz. literacy rate, number of ITIs (industrial
training institutes) per hundred thousand population, and number of polytechnics per
hundred thousand population have been taken along with the per capita income. The
methodology of calculating the index is similar to that of the Human Development
Index (HDI).On the basis of the composite index, Jhansi district (relatively developed
district) and the Banda district (relatively not so developed district) in Bundelkhand
region and Gautam Buddha Nagar district (relatively developed district) and Etah
district (not so developed district) in the western region have been selected for primary
investigation. The primary survey has been conducted in 2017. The data have been
collected from a total of 500 individuals—125 from each of the four selected districts.
3 Status and Growth of Education and Skill in Uttar

Pradesh
3.1 Educational Attainments in Uttar Pradesh
The data analysis shows that overall literacy has improved perceptibly over the years
both at the all India level as well as in U.P. state. But illiteracy is still a huge problem
in the state. In 2005–05, nearly half of the state’s population (49.1%) was illiterate,
which declined to about 40.4% in 2011–12 (Table 1). The corresponding figures for
All India were 40.3 and 31.75%, in 2004–05 and 2011–12, respectively.
Table 1 Level of educational attainment in 2004–05 and 2011–12 for all age groups (in %)
General education 2004–05 2011–12
U.P. India U.P. India
Not literate 49.13 40.28 40.37 31.7
Below primary 18.06 18.18 18.61 18.03
Primary 11.18 13.81 12.27 13.9
Middle 9.68 12.46 11.43 13.74
Secondary 4.96 6.8 7.04 9.85
Higher secondary 3.64 3.87 5.18 6.2
Diploma/Certificate course 0.23 0.83 0.25 0.88
Graduate 2.27 2.92 3.36 4.32
Postgraduate and above 0.85 0.84 1.48 1.39
Source NSS unit-level data for 61st and 68th rounds
In spite of the large number of illiterates, there has been significant progress in the
literacy rates in the state over the years due to expansion of educational institutions
and increasing awareness about the value of education in improving the human life.
Below primary-stage education comprises about 18% at both state and national
level which is a major chunk at the lowest pyramid of the education system. There
is a minuscule variation in this category at All India and the state level; however,
as we move up the ladder, the variations appear to be sharper between the state and
national levels.
The percentage of population educated up to primary level is nearly 14% in both
the periods at the national level, while in U.P., the share is low at 12.3% in 2011–12—
slight improvement (one percentage point) over 2004–05. U.P. has made substantial
improvement in the middle level, and secondary and higher secondary levels of
education yet when compared to All India level its percentage share is lower for all
the levels of education. The percentage share of technical education (diploma and
certificate courses) is abysmally low in U.P. with the share during 2004–05 to 2011–
12 improving marginally (0.23–0.25%). While efforts at the promotion of technical
education bore some fruit in other states as reflected by the All India share (nearly
1%), U.P. has failed miserably in improving its technical education base during this
period resulting in a woefully low level of human capital base. There has been a
massive expansion of higher education (graduate and postgraduate levels), but the
pace of expansion for postgraduate education, in particular, has been higher in U.P.
as compared to All India. Educational expansion (both general and technical) has
grown at a sluggish pace in U.P. in comparison to that of All India.
3.2 Educational Attainments Across Social Groups
There has been a consistent improvement in educational attainment across all social
groups in U.P. The weaker section has shown improvement in terms of achieving
literacy as compared to the upper section in 2011–12 over 2004–05. The highest
achievement in literacy is among ST category (16%) followed by SCs (11.7%),
OBCs (8.9%), and ‘general’ (7.3%) in 2011–12 over 2004–05 (Table 2).
STs appear to have gained in terms of percentage share at all educational levels
with about 7.5% increase in tertiary education followed by about 5.5% gain in
secondary education and rest in primary education in 2011–12 over 2004–05,
primarily because their share in the total population is minuscule (Table 2). Among
the SC, the major growth is seen in up to middle-level education wherein there is
an increase of around 8% (from 2.5% in 2004–05 to 12% in 2011–12) followed
by secondary education (about 3.5% gain) and tertiary education (only 0.5% gain
during the period under study). In OBCs, the major gain in literacy is concentrated
at the secondary education level as out of 9% more than 6% concentration is found
Table 2 Educational attainment by social groups in U.P. for all age groups (in %)
ST SC OBC General U.P.
2004–05
Not literate 59.1 58.0 52.0 34.0 49.1
Below primary 16.4 18.1 18.7 16.6 18.1
Primary 10.8 10.1 11.1 12.5 11.2
Middle 8.1 8.6 9.2 11.8 9.7
Secondary 1.8 2.5 4.4 8.8 5.0
Higher secondary 1.6 1.7 2.8 7.5 3.6
Diploma/Certificate course 0.0 0.1 0.2 0.5 0.2
Graduate 1.9 0.8 1.3 6.1 2.3
Postgraduate and above 0.4 0.3 0.4 2.4 0.9
2011–12
Not literate 43.1 46.3 43.1 26.7 40.4
Below primary 18.2 19.6 18.8 16.9 18.6
Primary 9.4 12.4 12.3 12.2 12.3
Middle 9.6 11.7 11.3 11.7 11.4
Secondary 5.2 5.2 6.9 9.6 7.0
Higher secondary 3.6 3.1 4.4 9.5 5.2
Diploma/Certificate course 1.2 0.2 0.2 0.5 0.3
Graduate 8.6 1.2 2.3 8.3 3.4
Postgraduate and above 1.1 0.3 0.8 4.5 1.5
Source Computed by authors using NSS Unit-level data for 61st and 68th rounds
18
Tertiary Secondary Up to 8th Class
16
14
12 7.4
0.4
10
4.2
8 1.4
6
6.6 4 4.3
4 6.9
2 3.4
1.9 2.8
0 -0.1
-2 ST SC OBC Others
Fig. 1 Distribution of total achievement in literacy in 2012 over 2004–05 across the social groups
(in %). Source Table 2
between 8 and 12th standards. In the ‘general’ category, clustering is noted at the
tertiary level of education, as out of a total gain of 7% during the period 2004–05 to
2011–12, the major achievement (more than 4%) is seen in tertiary education (Table
2, Fig. 1).
The above data show that the pyramid of educational achievement still corresponds
with that of the social hierarchy with both the upper caste and tertiary and higher
education being at the tip of the pyramids. Major improvement in tertiary education
is mostly concentrated among upper caste, followed by OBCs toward secondary
education, while the SCs are still moving toward primary education from illiteracy
despite the fact that there has been a huge upsurge in efforts toward literacy programs
for the lower sections of the society (Fig. 1).
However, notwithstanding the noteworthy improvement in the educational levels
in the state, there are still variations across regions and across social groups. For
instance, in the Western region, the overall illiteracy has declined by more than 7%
and the highest gain in terms of percentage share of increment in literacy has been
noted among the STs (19%), followed by the SCs (10.63%), ‘general’ (7.71%), and
OBCs (7.29%) in 2011–12 over 2004–05.
3.3 Status of Technical Education
Although India is one of the fastest growing economies in the world, yet its share
of technical manpower in the labor force is abysmally low. This has been one of the
major reasons for huge unemployment and low wage premiums associated with jobs.
An overwhelmingly large majority of population (98%) does not have any technical
education in India; this proportion is even higher in U.P. (99%) (Table 3). Thus,
less than two percent of the country’s labor force is trained in technical education.
A minuscule proportion of the labor force received technical education during the
periods 2004–05 and 2011–12 and their pace of growth has been tardy and slow.
Table 3 Status of technical education in U.P. and India for all age groups (in %)
2004–05 2011–12
No technical education 99.38 98.47 99.17 98.3
Technical degree 0.08 0.19 0.12 0.28
Diploma or Certificate (below graduate level) 0.33 0.93 0.39 1.0
Diploma or Certificate (graduate and above level) 0.21 0.41 0.33 0.43
Total 100 100 100 100
Source From NSSO unit-level data for 61st and 68th rounds
The percentage of its young-age population (15–29 years) having received skill and
training is just about 3.3% in 2011–12 (GoI 2011–12).
An overwhelmingly large majority of population (as high as 98%) are without
technical education at all India level and this proportion is even higher in the State of
U.P. (99%). Undergraduate diplomas or certificate-level education have a relatively
larger share in technical education as compared to postgraduate technical degrees
or diplomas. The share of undergraduate diplomas is around one percent at the all
India level and in U.P. it is even lower at 0.3%. At the postgraduate level, diplomas
are scarce at less than half a percent of the total sample population in 2004–05, and
it is almost status quo in 2011–12 at the all India level. In U.P. the situation is still
worse—this proportion being miserably low at 0.21% in 2004–05 with a minuscule
improvement to 0.33% in 2011–12—making it unlikely that there would be any
dramatic change in the situation in the near future in view of its population size.
Technical degree-level education is still lesser among people—not even a quarter
of 1%, which is disturbing and indicative of the sorry state of affairs. Virtually, all the
efforts at providing skills through technical education appear to be made practically
no impact on the ground. One of the significant reasons for the low level of technical
education is due to a lack of quality and low value attached to such education, which
has little or no connection with the labor market demand.
3.4 Status of Vocational Training
The level of skill training also is dismally low in the country as compared to other
developed and industrialized countries. This has seriously hampered the realization
of demographic dividend among the young-age population. Although skilling efforts
have been continuing as a part of skill development initiatives taken at the national
and state levels, yet the pace of skill development is a slow-moving exercise. At the all
India level, the proportion of skill training, both formal and non-formal put together,
is 11.3% in 2004–05 with a marginal increase (11.6%) in 2011–12. This speaks of
the tardy pace of skill training initiatives despite the fact that there are numerous
skill-imparting programs initiated by various ministries and line departments. The
Table 4 Levels of skills training in India and U.P. for all age groups (in %)
2004–05 2011–12
Formal training 1.62 3.68 1.1 3.02
Non-formal training 6.65 7.75 6.8 8.6
Did not receive any vocational training 91.73 88.57 92.1 88.38
proportion of formal training has been appallingly low at 3.7% in 2004–05, and it
further declined to 3.0% in 2011–12 (Table 4).
It speaks of the very low institutional and training capacity available for the
burgeoning new entrants in the labor force. About 80% of the new entrants in the
workforce have had no opportunity for skill training. The proportion of non-formal
training has been double than that of formal training in 2004–05 and it increased
almost three times in 2011–12. In U.P., the level of skill training, both formal and
non-formal, has been much lower than the all India level. Formal training in the
state also has been alarmingly low at 1.6percent in 2004–05 and it further shrunk
to 1.0% in 2011–12 showing the lackadaisical approach of the state government
toward skill initiatives (Table 4). Even non-formal training has remained stagnant
(6.7–6.8%) during 2004–05 to 2011–12. A vast majority of the population (90%)
in the most populous state lacks skill training that eventually results in an army of
the low productive population with serious ramifications on productivity and severe
socio-economic implications. Such a low share in skill training of population is a
matter of serious concern for the polity of the state. Although the Government of U.P.
has created U.P. Skill Development Mission in 2011 to promote skill development
initiatives in the state, yet the progress has remained awfully unsatisfactory due to
limited institutional capacity of skilling in the face of required skill training needs.
This is clearly a policy challenge for the state (Government of Uttar Pradesh 2013).
3.5 Status of Vocational Training and Technical Education

in the Young Age Group
In the area of vocational training among the young-age group (15–29 years) the state
fares poorly with respect to the national average. The status of vocational training in
the state is very low with only 8.2% of the youth in this age group having received
vocational training as against the national average of 11.3% in 2004–05 (Table 5).
Formal training accounts for just about 1.28%, while non-formal training for about
six percent in 2011–12 and surprisingly the proportion of both types of vocational
training declined in 2011–12 over 2004–05. Region-wise, the performance of the
eastern region and Bundelkhand is much poor as compared to the western and central
regions, which show a relatively better performance in the non-formal training sphere.
Table 5 Status of vocational training for the age group (15–29 years)
Vocational training Western Central Eastern Bundelkhand U.P. India
2004–05
Formal 2.24 2.27 0.76 0.73 1.62 3.68
Non-Formal 7.9 14.98 2.02 0.94 6.65 7.75
DNR 89.86 82.75 97.22 98.33 91.73 88.57
Total 100 100 100 100 100 100
2011–12
Formal 1.39 1.74 0.92 1.52 1.28 3.79
Non-Formal 7.88 10.66 2.05 0.44 5.87 7.34
DNR 90.73 87.6 97.03 98.04 92.85 88.87
Total 100 100 100 100 100 100
Note DNR—Did not receive
Bundelkhand and eastern regions present a typical case of severe underdevelopment

as compared to other economic regions in the state. Majority of districts in the eastern
region and Bundelkhand are most backward and least developed, while the situation
is distinct in the districts in the central and western region. While the central region
is ahead of other regions in terms of vocational training, the western region follows
at the second position with respect to the provision of vocational training through
non-formal sources.
Similarly, the status of technical education for the young age group in the state has
been horribly low at just about 1.5% in 2011–12. This is lower by 1.69 percentage
points as compared to the all India figure of 3.2% (Table 6). The pace of progress in
the status of technical education in the state during the period has been very slow.
At the regional level, the relative position of eastern and Bundelkhand regions are
worse than the other two regions under study, although Bundelkhand region has
shown improvement in the latter period i.e. 2011–12. The status and progress of
vocational and technical education clearly show that the progress in the state has
been very low in the young age population and it has serious policy implications on
the labor market if the trend is not arrested by scaling up the vocational and technical
education under the skill mission policy of the state.
4 Decomposition of Educational and Skill Inequality in U.P.
The Theil and Atkinson decomposition analyses are performed to estimate within-
and between-group inequalities among the social groups in general education, tech-
nical education, and vocational training attainment. The results of the study using
the two indices reveal that overall caste group inequality in general education has
reduced, but in the case of technical education and vocational training, it has increased
Table 6 Status of technical education for the age group (15–29 years)
Year No technical Technical Diploma or Diploma or
education degree certificate certificate
(below graduate (graduate and
level) above level)
India 2004–05 97.41 0.28 1.62 0.69
2011–12 96.79 0.48 2.03 0.71
U.P. 2004–05 99.07 0.12 0.46 0.36
2011–12 98.46 0.20 0.80 0.53
Western 2004–05 99.07 0.1 0.45 0.38
2011–12 98.42 0.11 0.93 0.54
Central 2004–05 98.44 0.34 0.64 0.58
2011–12 97.37 0.17 1.27 1.20
Eastern 2004–05 99.3 0.04 0.4 0.26
2011–12 99.08 0.26 0.40 0.26
Bundelkhand 2004–05 99.72 0 0.26 0.02
2011–12 97.85 0.71 1.07 0.37
in 2011–12 over 2004–05 in all the four regions of the state (Table 7). Both the indices
have produced almost similar results.
There is clear evidence of regional imbalance of inequality in the state. The anal-
ysis shows that, in terms of general education attainment, the eastern region of U.P.
has the highest score of inequality (0.416) followed by central (0.402) and western
(0.392) regions, while Bundelkhand region has the lowest score (0.386) in 2004–05.
The analysis also shows that over the period of time total inequalities have declined
in the case of general education for all the regions in the state in 2011–12. The rate
of reducing inequalities is slow in western (5%) and eastern (10%) regions, while
it is highest for Bundelkhand (24%) followed by central (11%) region during the
period. This is because the rate of growth of literacy rate among the weaker sections
is highest in Bundelkhand region as compared to the total literacy rate between the
last two censuses (Government of Uttar Pradesh 2015). The Bundelkhand economic
package also has had a significant impact in reducing the inequalities in the region at
a faster rate. Various government policies such as Universal Elementary Education
(UEE) and the Right of Children to Free and Compulsory Education Act 2009 at
the national level and, in 2011, at the state level have made a major contribution in
bridging the inequality gap in the state.
The results also reveal that out of the total caste inequalities more than 90%
is due to within-group inequalities, while the remaining are due to between-group
inequalities in all the four regions of the state. Bundelkhand region has the highest
share (96%) of within-group inequality followed by western (94%), eastern (93%),
and central (90%) regions for the year 2004–05. In the case of general education
Table 7 Region-wise skill inequality decomposition and its transformation during 2004–05 and 2011–12
290
Skill indicators Region Measures of inequality 2004–2005 2011–12 Change

Name of indices Within Group Between Group Total Within Group Between Group Total
General education Western Thiel 0.370 0.022 0.392 0.351 0.020 0.371 Declined
Atkinson 0.335 0.018 0.353 0.323 0.026 0.349 Declined
Central Thiel 0.364 0.037 0.402 0.336 0.023 0.359 Declined
Eastern Thiel 0.388 0.027 0.416 0.358 0.017 0.375 Declined
Bundelkhand Thiel 0.373 0.012 0.386 0.275 0.017 0.292 Declined
Technical education Western Thiel 0.027 0.000 0.028 0.037 0.001 0.038 Increased
Atkinson 0.015 0.000 0.015 0.021 0.000 0.021 Increased
Central Thiel 0.025 0.000 0.026 0.062 0.001 0.063 Increased
Eastern Thiel 0.021 0.000 0.021 0.021 0.000 0.021 Constant
Atkinson 0.012 0.000 0.012 0.012 0.000 0.012 Constant
Bundelkhand Thiel 0.007 0.000 0.007 0.032 0.000 0.032 Increased
Vocational training Western Thiel 0.017 0.000 0.018 0.026 0.000 0.027 Increased
Central Thiel 0.023 0.000 0.024 0.032 0.000 0.032 Increased
(continued)
I. C. Awasthi and P. K. Shrivastav
Table 7 (continued)
Skill indicators Region Measures of inequality 2004–2005 2011–12 Change
Name of indices Within Group Between Group Total Within Group Between Group Total
Eastern Thiel 0.006 0.000 0.006 0.010 0.000 0.010 Increased
Bundelkhand Thiel 0.004 0.000 0.004 0.006 0.000 0.006 Increased
Source Computed by authors using NSSO unit-level data for 61st and 68th rounds
Skill Inequality Among Social Groups in India …
291
attainment, the share of within-group inequality in total caste inequality has increased
in all the regions except Bundelkhand region in 2011–12 over 2004–05.
The score of indices shows that the total caste group inequalities in technical
education attainment have increased in 2011–12 over 2004–05 for western, central,
and Bundelkhand regions, while the score of the eastern region has remained constant.
Across the regions, western region (0.028) has the highest score of total inequality
followed by central (0.026), eastern (0.021), and Bundelkhand regions (0.007) in
2004–05. The results show that the total inequalities have increased in the case of
technical education in the three regions: Bundelkhand, western, and central, respec-
tively, in 2011–12 over 2004–05. The ratio of inequalities has gone up by more than
3.5 times in Bundelkhand region, followed by central region (1.5 times) and western
region (0.3 times), while the eastern region has shown status quo on the total caste
inequality score. These results sufficiently validate inter-regional disparity in the
access and distribution of technical education in the state.
The analysis further reveals that in the case of technical education, out of the total
caste inequalities, more than 95% contribution is due to within-group inequalities
and remaining due to between-group inequalities in all the four regions of the state
for both the time periods. In eastern and Bundelkhand regions, it is about 100%
for both the time periods. The share of within-group inequality has increased in the
central region to 98.4% in 2011–12 from 96.2% in 2004–05.
In the case of vocational training attainment, the total inequality has gone up in
2011–12 over 2004–05 for all the economic regions of U.P. Maximum inequality
has been found in the central region, followed by western, eastern and Bundelk-
hand regions for the year 2004–05. In 2011–12, the inequality has increased in the
western region taking it to number one position from number two position in 2004–05,
followed by central, eastern, and Bundelkhand regions. The results of within-group
and between-group inequalities show that social group inequalities not only persist
in all the four regions but have increased over the period under study.
The overall inter-regional disparity is due to differences in the required level of
infrastructure in terms of availability of Technical Education and Vocational Training
(TEVT) institutions per hundred thousand population. It was highest in Bundelkhand
region, followed by central, eastern, and western regions in 2000–01. Again in 2014,
Bundelkhand region has the highest level of infrastructure followed by western,
central, and eastern regions in terms of availability of TVET institutions per hundred
thousand population (Government of Uttar Pradesh 2014). Still, there is a lack of
the number of institutions and infrastructure facilities and availability of seats per
hundred thousand population in Industrial Training Institutes (ITIs) and Industrial
Training Centers (ITCs). Availability of these institutions for per hundred thousand
population is only 74 in the state, as compared to the national average of 110. A
similar scenario exists in the case of diploma institutions (Government of Uttar
Pradesh 2013).
There may be two possible reasons for increasing inequality at a faster rate in
western and central regions. First, these regions are relatively developed, urbanized,
and have a better economic status. People in these regions have access to information,
and the economic and social infrastructure is in a position to take advantage of
opportunities as compared to other regions. This is eventually leading to an increasing

total caste inequality in these regions.
The other reason for rising social inequality is inaccessibility of vocational training
which requires a certain level of pre-educational qualification. Among the lower (SC,
ST) sections and OBCs, the dropout rate being high at the primary and middle levels,
they are unable to acquire vocational training.
4.1 Region-Wise Intra-Social Group Skill Inequality

Decomposition and Its Transformation
The results of Theil and Atkinson index have also revealed caste-specific within-
group inequalities in education (Table 8). It is found that inequality in general educa-
tion within the disadvantaged group is higher as compared to the ‘general’ category
or higher castes for all the regions in both the time periods. While in the case of
TEVT, the situation is just reverse—lower inequality prevailed within the weaker
sections (SC, ST, and OBCs) and higher inequality was found within the upper caste
group (general) in all the regions.
Table 8 Transformation in caste-specific inequalities in general education, technical education and

vocational training in different regions of U.P.
Region Measures Social group 2004–05 2011–12 Change
General education
Western Thiel Index General 0.336 0.306 Declined
OBC 0.391 0.377 Declined
SC 0.386 0.362 Declined
ST 0.439 0.343 Declined
Atkinson Index General 0.344 0.332 Declined
OBC 0.335 0.341 Increased
SC 0.317 0.329 Increased
Central Thiel Index General 0.327 0.277 Declined
ST 0.413 0.424 Increased
(continued)
Table 8 (continued)
Eastern Thiel Index General 0.332 0.302 Declined
Bundelkhand Thiel Index General 0.324 0.206 Decline
OBC 0.390 0.318 Decline
SC 0.399 0.285 Decline
Technical education
Western Thiel Index General 0.070 0.113 Increased
Atkinson Index General 0.038 0.062 Increased
SC 0.007 0.007 No change
Central Thiel Index General 0.062 0.120 Increased
Eastern Thiel Index General 0.045 0.055 Increased
(continued)
Table 8 (continued)
ST 0.000 0.000 No change
Bundelkhand Thiel Index General 0.014 0.065 Increased
SC 0.001 0.001 No change
Vocational training
Western Thiel Index General 0.026 0.034 Increased
Central Thiel Index General 0.035 0.032 Declined
Eastern Thiel Index General 0.006 0.010 Increased
(continued)
Table 8 (continued)
Bundelkhand Thiel Index General 0.007 0.007 Increased
Source Computed by authors using NSSO unit-level data for 61st and 68th rounds
In the case of general education, western U.P. has the highest inequalities within
upper caste (0.336), followed by eastern (0.332), central (0.327), and Bundelkhand
regions (0.324) for the year 2004–05. A similar trend has been found in 2011–12.
Again, western U.P. has the highest inequalities within the upper caste in tech-
nical education attainment (0.070), followed by central (0.062), eastern (0.045), and
Bundelkhand regions (0.014), respectively, for the year 2004–05. In 2011–12, the
trend has changed with the central region being at the top (0.120), followed by
western (0.113), Bundelkhand (0.065), and eastern (0.055) regions with respect to
within-upper caste inequalities.
In the case of vocational training, central U.P. has the highest within-upper caste
inequalities (0.035), followed by western (0.026), Bundelkhand (0.007), and eastern
(0.006) regions for the year 2004–05. In 2011–12, the trend has changed with the
western region being at the top (0.034), followed by central (0.032), eastern (0.010),
and Bundelkhand (0.007) regions with respect to within-upper caste inequalities.
In the case of general education attainment, within-caste group inequalities have
declined for all the castes in all the regions in 2011–12 over 2004–05. A singular
exception according to results from Theil’s index is the ST group wherein the intra-
group inequality has increased in all regions except in the western region in 2011–12
over 2004–05.
In case of technical education attainment, within-caste group inequalities have
declined for OBCs in all the regions (except Bundelkhand), while for SCs it declined
in central and eastern regions in 2011–12 over 2004–05. Rest of the caste groups
have shown an incremental change in within-group inequality for all regions in
2011–12 over 2004–05 (as per results of Thiel Index). In case of vocational training
attainment, within-caste group inequalities have increased for all the social groups
in all the regions in 2011–12 over 2004–05. However, it has declined for ‘general’
and ST categories in the central region and for SCs in Bundelkhand region.
5 Evidences from the Primary Survey
5.1 Educational and Skill Attainments Across Regions
Nearly one-third (32%) of the surveyed population possesses general education while
nearly half of them (49%) have received vocational training, and the remaining about
one-fifth (19%) have received technical education. Thus, two-thirds of the sample
population has received some kind of skill training in different trades for varying
durations. The higher proportion of skill training in the sample population is also due
to higher reflection of sample from the vocational and technical education providers.
Across regions, Bundelkhand region has a higher sample in general education (36%)
as compared to the western region (29%). The proportion of skilled (vocational
and technical taken together) sample is higher in the western region (71%) than in
Bundelkhand region (65%). However, the share of technical education is higher in
Bundelkhand region and a fraction of vocational education is higher in the western
region (Table 9).
It is found from the field that the share of ‘others’ social group in vocational
education is highest across the social group in Bundelkhand region.
The reason for a higher share in technical and vocational education in the
western region is primarily being a relatively developed region with higher industrial
entrepreneurship that has generated better demand for such education and training.
Bundelkhand, being a relatively less developed region, has relatively more programs
focusing on general education and training that has spurred such activities.
Looking at the skill spectrum within districts, it is noted that Gautam Budh Nagar
which is a relatively developed district in the western region has a huge proportion
of skilled persons in the sample (89%), while Etah district which is relatively less
developed has about 65% of those who have received a vocational and technical
education, and rightly so. However, the trend appears to be opposite in the case of
the districts in Bundelkhand region. The relatively developed Jhansi district in the
region has a lower share of sample having vocational and technical education (50%)
while the less developed Banda district has a larger proportion of people with skill
education.
Vocational education has a larger share than that of technical education in the
surveyed sample. It is palpably clear that skilling has a positive impact on accessing
Table 9 Region-wise
Type of Bundelkhand Western Total
distribution of individuals
education/Region
surveyed by types of
education General 89 (35.6) 72 (28.8) 161 (32.2)
Vocational 107 (42.8) 138 (55.2) 245 (49.0)
Technical 54 (21.6) 40 (16.0) 94 (18.8)
Total 250 (100) 250 (100) 500 (100)
Source Field Survey, 2016–17
employment than general education. The analysis clearly shows that regional differ-
entiation is pronounced with larger share and preference for vocational and technical
education in the western region as compared to Bundelkhand region and there is a
fairly good share of such education among all the categories of the labor force (Table
10).
The data presented in Table 11 reveals that out of total 500 respondents, OBCs
have performed well in terms of overall education in both the regions. However,
comparing across regions, OBCs in the western region have performed better in
terms of overall education compared to Bundelkhand region.
It is clearly evident from the secondary data analysis that disparities have reduced
during 2004–05 to 2011–12 across each social category in general education across
the regions of the state but have increased in technical and vocational education
and training (TVET) which are closer indicators of skill development. However, the
primary survey has revealed that the participation of disadvantaged social groups has
increased in general, vocational and technical education. Evidently, this suggests that
government policy initiative has had a positive impact on enhancing human capital
base in the state.
6 Conclusion
The paper shows that despite significant improvements in the literacy levels and
educational achievements, illiteracy is still a huge challenge in Uttar Pradesh, partic-
ularly among the disadvantaged sections. The level of technical skill attainment is
dismally low in the state. Although there has been an improvement during the two
quinquennial periods, yet its extent is minuscule. Surprisingly, OBCs have witnessed
a decline in this respect. SCs have the highest proportion in ‘not literate’ category
and they are concentrated in the lowest rung of educational structure, while ‘Others’
or upper castes are highly represented in the higher education stratum.
The proportion of technical education that includes technical degree, diploma and
certificate (below degree and degree and above) in the state is appallingly low, less
than 1% in 2011–12. The level of skill training, both formal and non-formal, has
been much lower in U.P. than the all India level. Formal training in the state was
alarmingly low at 1.6% in 2004–05 and it further shrunk to 1.0% in 2011–12. One
of the main reasons for low level of vocational and technical education is the lack of
quality and low value attached to such education which has little or no connection
to the labor market demand.
The overall social group inequality in general education has reduced but in the
case of technical education and vocational training, it has increased in 2011–12
over 2004–05 in all the four regions of Uttar Pradesh. Out of the total social (caste)
inequalities, more than 90% contribution is due to within-group inequalities and
remaining due to between-group inequalities in all the four regions of the state.
The central region has the highest percentage share in technical and higher educa-
tional levels of education in 2004–05, but in 2011–12, the western region picked up
Table 10 District-wise distribution of individuals surveyed by types of education
Type of education Bundelkhand region Western region Total
Banda Jhansi Etah Gautam Budh Nagar
Male Female Male Female Male Female Male Female
Skill Inequality Among Social Groups in India …
General 12 15 35 27 33 25 13 1 161
Vocational 43 29 18 17 54 5 72 7 245
Technical 24 2 23 5 8 0 32 0 94
Total 79 46 76 49 95 30 117 8 500
299
Table 11 Region-wise distribution of individuals by type of education across social groups (in %)
Type of education Bundelkhand Western
SC ST OBC Other SC ST OBC Other
General 6.0 0.2 8.2 3.4 3.2 0.0 7.8 3.4
Vocational 6.0 0.2 9.2 6.0 6.0 0.6 13.2 7.8
Technical 3.2 0.0 5.8 1.8 1.4 0.0 5.2 1.4
Total 15.2 0.4 23.2 11.2 10.6 0.6 26.2 12.6
and reported the highest proportion in TVET. The maximum inequality has been
found in central region, followed by western, eastern and Bundelkhand regions for
the year 2004–05. In 2011–12, the inequality has vastly increased in the western
region and it has shifted to number one position in the latter period followed by
central, eastern, and Bundelkhand regions.
In the case of vocational training attainment, the total inequality has gone up in
2011–12 over 2004–05 for all the economic regions of Uttar Pradesh. The inequality
scores of vocational training present more or less similar trend as in the case of
technical education.
One of the main factors responsible for the central region to be advance in technical
and higher educational attainment could be its proximity to state capital that has
numerous developmental activities and provides better opportunities. Similarly, the
western region being agriculturally prosperous helps in establishing stronger linkages
to industrial activities that fuel the demand for higher education as well as technical
vocational training. Another reason is the fact that some part of it falls under the
National Capital Region (NCR), which too spurs growth in the education and skilling
spheres.
Though inequalities still persist in terms of access across regions and among
social groups yet recent evidence, based on primary investigation, clearly indicates
that disparities have reduced across social groups and their participation has increased
in vocational and technical education.
From a policy point of view, there is a need for more focused interventions for the
disadvantaged social groups in order to improve their education and skill attainment
and ensure better access to the labor market for a genuinely inclusive growth process.
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Agrarian Question
Structural Transformation
and the Agrarian Question in the Indian
Economy
Some Disturbing Concerns from a Labourist
Perspective
K. P. Kannan
Abstract Structural transformation is profoundly linked to several political, socio-

economic and technological factors. From a labourist perspective the transfer of
surplus labour from agriculture to industry, for example, is a function of higher wages
and productivity in industry. This paper is essentially attempting to interrogate the
structural transformation in the Indian economy from the point of shifts in employ-
ment away from agriculture in terms of its content. While this transition would be
of great interest and consequence to both capital and labour, there is the third actor,
i.e. the state. The renewed debate has brought in the role of the state and rightly so.
The state in a country like India promised national economic development through a
political process of universal franchise in a multi-party electoral system. This factor
is important to note to understand the role of the state in addressing the question of
agrarian transition. By deploying a measure of ‘Rurality of Employment’ to include
non-agricultural rural employment activities that push the agrarian transition in the
wider context of rural transition, this paper finds that this structural transformation
away from agriculture is not accompanied by a structural transformation away from
rural employment and the rural nature of urban employment. Second, we look at
the regional spread and find a four-fold pattern where only a few states qualify for
a meaningful structural transformation even in the limited sense of moving away
from the agricultural sector for majority employment. Third, we look at the social
dimension of this structural transformation and find its partial character because it is
limited to three out of five broad social groups. From our analysis of the partial nature
of India’s structural transformation with weak foundations, an important lesson from
a developmental point of view is the need for a concerted strategy of employment-led
development of the rural economy.
K. P. Kannan (B)
Honorary Fellow, Centre for Development Studies, Trivandrum 695011, India
e-mail: kannankp123@gmail.com
Laurie Baker Centre for Habitat Studies, COSTFORD, Trivandrum, Thrissur 695573, Kerala,
India

https://doi.org/10.1007/978-981-15-8265-3_16
306 K. P. Kannan
1 Introduction
Ever since economic development literature accepted the three divisions of the
economy into (a) primary sector consisting of agricultural and related activities,
(b) secondary sector consisting of industry and construction and (c) tertiary sector
consisting of all service-oriented activities, scholars were looking at the pace and
timing of the process of structural transformation that is understood as a movement
away from a dependence on the primary sector—often referred to as agricultural
sector—in terms of both income and employment. If a major share of income as
well as employment in an economy is generated from secondary and tertiary sectors,
then the economy is characterized by a structural transformation. Since Lewis (1954)
and (1955) conceived of the possibility of economic development for poor labour
surplus economies by transferring the surplus labour from agriculture with zero
marginal productivity to the higher productivity sectors in non-agriculture, espe-
cially industry, the process of structural transformation became a task of the newly
independent states in poorer countries. India’s national economic development vision
and plan, no doubt, fits into this idea of sectoral shift away from agriculture. However,
it took more than six decades since independence for the Indian economy to mark
its structural transformation in 2011–2012 defined in the above sense.
Although this question of structural transformation might look like a technical
issue, it is well known that it is profoundly linked to several political, socio-economic
and technological factors. From a labourist perspective the transfer of surplus labour
from agriculture to industry, for example, is a function of higher wages and produc-
tivity in industry. As the process goes on it raises wages in agriculture to an inflexion
point where wages in agriculture equals that of the high productivity sector, i.e.
industry. This implies a point where the zero marginal productivity of labour ceases
to exist. This could also be accelerated by a process where the productivity in agricul-
ture is also raised through technological and/or organizational changes. Scholars who
adopt a Marxian methodology to understand this question has posed it as a process of
development of capitalism in poor economies. Their focus on developing countries
such as India has posed the issue as one of understanding the agrarian question (see
Thorner 1982; Patnaik 1990; Byres 1991; Akram-Lodhi 2010). The renewed debate
on the agrarian question in developing countries has indeed provided greater clarity
on the role of agriculture in economic and social transformation with particular focus
on the role of peasantry. Terry Byres provided clarity by formulating specific ques-
tions in the debate on agrarian question as one of agrarian transition. These may be
summarized in terms of three issues: (1) the internal dynamic in agriculture and the
possibility of the development of capitalism within it; (2) the possibility of accumu-
lation of surplus in agriculture that could finance industrialization and (3) the nature
and type of exploitative agrarian relations (as between peasants and landlords) and
the possibility of political alliance between peasants and industrial workers. The net
result of a successful agrarian transition would be the development of capitalism not
only in agriculture but also in all sectors of the economy.
Structural Transformation and the Agrarian Question … 307
In the context of these issues, there has been a renewed interest in debating the
agrarian question with specific reference to India. The outcome of one such attempt
has been documented in the volume on Critical Perspectives on Agrarian Transi-
tion: India in the Global Debate edited by Mohanty (2016). The contributions in
the volume explicitly recognize that the agrarian transition question goes beyond
agriculture,1 that colonialism and its historical impact has a bearing on the current
context, that the independent national state has made several interventions in agri-
culture and that the current phase is also marked by the emergence of a neoliberal
economic order characterized by globalization. It is in this background that Mohanty
contextualizes the Indian situation with the following questions: (1) What are the
significant changes emerging in India’s agrarian economy and society under the
impact of neoliberal reforms and global capitalism? (2) Are these changes indi-
cating the transition from rural/semi-feudal economy to urban-industrial capitalist
economy? (3) Is this transition conforming to, or deviating from, the classical model
of transition from feudalism to capitalism? (4) How have different regions and states
in India, being at different stages of development, experienced and responded to
this agrarian transition? (5) How are various agrarian classes and interest groups
responding to this transition’? (Mohanty 2016: 2).
It would be a tall order to claim that all these important questions are sought to
be answered in this paper. What we are essentially attempting is to interrogate the
structural transformation in the Indian economy from the point of shifts in employ-
ment away from agriculture in terms of its content, by keeping these questions in
mind.
While this transition would be of great interest and consequence to both capital
and labour, there is the third actor, i.e. the state. Here the state in a developing country
like India has been attempting a structural transformation in a context where there is
a large segment of peasantry often referred to as small and marginal farmers located
in between a small segment of rich/large farmers and a sizeable segment of landless
agricultural labourers. In that sense, the process of structural transformation of the
economy marked by a shift away from agriculture for a majority of the people for
income and employment in India since 2011–2012 assumes importance.
For labour, the situation is more complex than one would expect. Wage labour
is not the majority in the universe of working people even for the whole economy.
Even in 2011–2012 when the Indian economy marked its structural transformation,
the share of wage labour was only 48% while the remaining 52% were classified as
self-employed (see Table 1). Within wage labour, a majority of them are called casual
workers underlining their insecure work status. The main category of self-employed
includes peasants in agriculture who are categorized as marginal and small farmers
but who are also compelled, more often than not, to send members of their families
for wage labour to supplement the family income. The self-employed or peasant-
like category in non-agriculture is also significant. Given the high incidence of
poverty and vulnerability, the quality of employment and the corresponding income
earning capacity has emerged as a major issue of concern. For capital, especially
1 See Foreword by T. J. Byres.

308 K. P. Kannan
Table 1 The compositional picture of labour shifting away from agriculture

Category Employment (million) Real Wages (Rs./day at
2004–2005 prices)
1993–1994 % 2011–2012 % 1993–1994 2011–2012
Total workers in 236.23 100.0 225.39 100.0
agriculture
(1) Regular 3.28 1.4 1.89 0.8 46.04 107.81
workers
(2) Casual workers 90.07 38.1 75.49 33.5 39.01 79.77
(3) Self-employed 142.88 60.5 148.01 65.7
Total workers in 132.60 100.0 245.95 100.0
Non-agriculture
(1) Regular 47.13 35.5 85.08 34.6 135.50 227.16
workers
(2) Casual workers 26.23 19.8 62.60 25.5 54.10 93.84
(3) Self-employed 59.24 44.7 98.27 39.9
Source Computed from unit level data from the 50 and 68th Rounds of NSS
non-agricultural capital, there is the concern on supply of wage goods to workers

in non-agriculture. Although the question of extracting a surplus from agriculture
(through taxation and/or other means) for financing industrialization has been flagged
as an important question, it has not been an effective one so far. However, capital
may be said to be concerned about agriculture and the rural economy especially in
large developing economies like India as a potential market for its goods.
The renewed debate has brought in the role of the state and rightly so. The state
in a country like India promised national economic development through a political
process of universal franchise in a multi-party electoral system. This factor is impor-
tant to note to understand the role of the state in addressing the question of agrarian
transition. The state can be said to be concerned with the third issue mentioned
earlier, i.e. the nature and type of exploitative agrarian relations in so far as it wants
to discourage pre-capitalist agrarian relations to increase agricultural output. It is
concerned about supply of wage goods for industrialisation (especially food and raw
materials) and hence started a process of public investment in agricultural infras-
tructure. It also knows that agriculture is the largest sector of employment and as
such there is an employment concern although it consciously tries, limited by overall
political economy, to increase employment outside agriculture. The state is also
concerned to develop the agricultural rural economy as a market for non-agricultural
goods and services.
The larger context in which national economic development was conceived and
executed by the state in India has undergone profound changes in 1991 when it
formally adopted neoliberal economic reforms within a global context of liberaliza-
tion, privatization and globalization that was summed up as Washington Consensus.
An earlier debate in India on the ‘mode of production in Indian agriculture’ could
not arrive at a consensus on the development of capitalism in Indian agriculture (see,

e.g. Thorner 1982). But it is quite evident that Indian agriculture is a complex mix
of the influence of pre-capitalist institutions as well as increasing market-related
transactions in land, labour, credit and product with significant state interventions.
Beginning with the initiation of neoliberal economic reforms the Indian economy
has been witnessing a higher growth trajectory with increasing sectoral inequality,
among other inequalities, as between agriculture and non-agriculture. Right from
the mid-1950s, the contribution of agriculture to the national income has been less
than half and it steadily declined to around 15% by 2013. However, a majority of the
population was dependent on the primary sector of agriculture and allied activities,
from 64% in 1993–1994 to 48% in 2011–2012, thus marking a formal threshold of
achieving structural transformation. But the question we ask is to what extent this
structural transformation a substantive one. First, we look at the nature of dependence
on employment. By deploying a measure of ‘Rurality of Employment’ to include
non-agricultural rural employment activities that push the agrarian transition in the
wider context of rural transition, we find that this structural transformation away
from agriculture is not accompanied by a structural transformation away from rural
employment and the rural nature of urban employment (i.e. agricultural activities in
urban areas). Second, we look at the regional spread and find a four-fold pattern where
only a few states qualify for a meaningful structural transformation even in the limited
sense of moving away from the agricultural sector for majority employment. Third,
we look at the social dimension of this structural transformation and find its partial
character because it is limited to three out of five broad social groups. Of the three
groups, one is a socially and economically advantaged group (called Others) with
a higher incidence of non-poor, better quality of employment and higher education.
The second group is a socially and economically less advantaged group (Muslims)
with a tradition of higher incidence of non-agricultural occupations. The third group
is a socially disadvantaged group (SC) whose move away from agriculture seems to
be driven more by distress and indignity than a case of vertical labour mobility. In
that sense, the structural transformation is a partial one from a social point of view
as well. These results are then discussed in the light of the studies that have flagged
the preponderance of informal—i.e. insecure—employment in the Indian economy.
2 Overall Structural Transformation in the Indian

Economy
There is no doubt that since the launching of neoliberal economic reform policies
there has occurred a slow but steady structural transformation of the Indian economy
away from agriculture both in terms of income and employment. However, such struc-
tural transformation has not been accompanied by a significant increase in agricul-
tural productivity and consequent surplus generation for industrialization. It would
appear that it is the result of the expansion of the non-agricultural sector through
310 K. P. Kannan
greater investment especially infrastructure, easier access to capital by the private

sector, liberalization of bank credit for consumption including housing and a flex-
ible approach to implementing labour legislation in favour of capital. The result has
been a boom in construction that attracted a significant share of labour away from
agriculture to work as casual workers mostly, if not only, in urban areas. Industrial
expansion in the formal sector witnessed very little of new job creation but allowed
for more employment and output expansion in the informal sector. Service sector
grew at a faster rate than industry and agriculture, although its ability to absorb new
labour has been limited. The net result is an increase in intersectoral inequality in
product per worker (a broad measure of labour productivity). The inequality ratio
of 4.25 in 1993–1994 increased to 5.16 in 2011–2012, i.e. the value of output per
worker in non-agriculture is 5.16 times higher than that in agriculture. This is contrary
to the expectations of the Lewisian process of the transfer of surplus labour from
agriculture to non-agriculture.
During this phase (1993–2012) agricultural sector has also witnessed significant
changes. Agricultural activity came to be dominated by market transactions whether
it is in land, labour, credit and output. That does not mean pre-capitalist agrarian
institutions have undergone significant changes. Earlier forms of unfree labour may
have been morphed into new forms of unfree labour (see, e.g. Breman et al. 2009)
with continuing low wages as well as job and wage discrimination based on social
identity and gender (see Papola and Kannan 2017 for an analysis of the wages across
sectors, rural-urban, gender and social identity). Development of capitalistic labour
relations and exploitative framework has not erased the category of peasants but in
fact increased their presence in absolute and relative terms (see the category of self-
employed in agriculture in Table 1). In fact, there is a significant category of peasantry
both small and marginal although close to half the land is under large landholders.2
Regionally varied growth in productivity, the large presence of peasantry of small
and marginal farmers as well as landless agricultural labourers along with a small
segment of rich capitalist agriculturists characterize the current scenario in Indian
agriculture.
These seemingly contradictory processes of change in agriculture have been such
that the agricultural sector continues to experience the highest incidence of poverty,
low wages, insecure employment and poor conditions of work. As we shall see later,
there is a social dimension to this scenario where the dependence of the socially disad-
vantaged sections on agriculture for their employment and income is considerably
higher (for a detailed documentation and analysis of the situation see, e.g. NCEUS
2008). Although the political alliance between the peasantry and wage workers is
much talked about, very little of sustained organizational and/or mobilizational action
has taken place despite such objective conditions as the persistence of a large mass of
labouring poor in both agriculture and non-agriculture as peasants (self-employed)
and insecure wage workers, i.e. casual status workers.
Yet, without a full resolution of the agrarian question or questions, agriculture
has ceased to be the largest provider of employment in India. At the same time,
2 84% of cultivators are marginal and small farmers with one and two hectares of land, respectively.
90
78.5
80
70 64.1 64.5
60
47.8
50
1993-94
40
2011-12
30
20 12.3
10 6.7
0
All India Rural Urban
Fig. 1 Percentage share of workers in agriculture. Source Computed from unit level data from the
50 and 68th Rounds of the National Sample Survey
industry has not been able to absorb a higher share; instead employment is equally
divided between the secondary and services sectors. In effect, the non-agricultural
sector has emerged as the biggest employment and income-generating sector. In
1993–94 agriculture accounted for 64% of employment and 30% of national income
that got reduced to 48 and 15%, respectively, by 2011–2012 (see Fig. 1 for the
shift in share of employment in agriculture, including rural and urban areas, during
this period). Such a drastic reduction in the share of income has also increased
the intersectoral income inequality enormously as between agriculture and non-
agriculture as mentioned earlier.
Not only the share of workers in agriculture reached less than half by 2011–2012,
the absolute number of workers in agriculture also came down as compared to 1993–
1994, from 236.24 to 225.39 million. It meant that the incremental workforce of 91.6
million during this period has wholly been absorbed by the non-agricultural sector
along with 10.9 million of those already engaged in agriculture. This has meant a
4.6% decline in employment in agriculture. This overall absorption of additional
labour is no doubt massive although not adequate to match the increase in labour
force.
However, a close examination of the shift in employment in terms of the compo-
sition of the workers by labour status (i.e. regular, casual or self-employed) suggests
that those who left agriculture seem to be mostly casual wage labour. The peasants
as a group officially classified as self-employed in agriculture have in fact registered
an increase both in absolute terms as well as in their share in the total agricul-
tural workforce (see Table 1). This is not a sign of increasing proletarianization but
increasing peasantization of Indian agriculture that is not in tune with the spread of
capitalist market relations and transactions in Indian rural economy. The share of the
self-employed in Indian agriculture increased from 61% to 66% during 1993–2012.
312 K. P. Kannan
300
250
200
150
100
50
0
A B C D E F
1993-94 2011-12
Legend: A = Wages of Rural Regular workers in NAG as % of wages in AG.

B = Wages of Rural Casual workers in NAG as % of wages in AG.
C = Wages of Urban Regular workers in NAG as % of wages in AG.
D = Wages of Urban Casual workers in NAG as % of wages in AG.
E = Wages of Urban Casual NAG workers as % of Rural AG casual workers.
F = Wages of Urban Casual NAG workers as % of Rural casual NAG workers.
Fig. 2 Wage relativity for segments of workers. Source Computed from unit level data from the 50
and 68th Rounds of the National Sample Survey
The situation in the non-agricultural sector points to an increasing, albeit slow,

trend in proletarianization going by the increase in the share of wage labour from
55 to 60% during this period (see Table 1). Wages in the non-agricultural sector are
expectedly higher than in agriculture for both casual and regular workers but the
smaller margins (see Fig. 2) camouflage the interstate differences that have acceler-
ated the migration of casual labour to the southern and western states from the rest
of the country (Fig. 3).
Does this mean that the rural economy in India has ceased to be the main provider
of employment and income to the majority of the people? For this, we need to go
beyond the agricultural sector and examine employment in the rural economy, or
what we call, rurality of employment.
3 The Continuing Predominance of Rurality

of Employment
From this aggregate picture, it is tempting to conclude that a structural transforma-

tion has finally come about despite continuing issues of low wages, inadequacy of
employment and consequent persistence of poverty. A closer examination reveals that
the direct dependence of the workers on agriculture may have declined but not their
overwhelming dependence on the rural economy for employment and, consequently,
on income. This is because while much of the movement of labour was away from
90
80
70
60
50
Rurality
40
Urban NAG
30
20
10
0
1993-4 2011-2
Fig. 3 Rurality of Employment in India (Rural AG + Urban AG + Rural NAG). Source Computed
from unit level data from the 50 and 68th Rounds of the National Sample Survey
agriculture to non-agriculture, it was less so from rural to the urban economy. There-
fore, we measure employment that is based on rurality. This ‘rurality of employment’
consists of workers in agriculture in rural and urban areas as well as those working
in non-agriculture in the rural areas.
The rurality of employment declined from close to 81% of total workforce in
1993–1994 to 73% in 2011–2012. Therefore, the labour transition away from agri-
culture has been divided between rural and urban non-agricultural sectors. While
the agricultural sector witnessed a decline of 10.85 million workers the rurality
of employment increased by about 46.6 million. The urban non-agricultural sector
absorbed another 56.56 million (see Table 2).
Table 2 Rurality of Employment in India (Percentage distribution of employment Rural AG +

Urban AG + Rural NAG)
Category 1993–1994 2011–2012
Million workers % Million workers %
Rurality of employment 298.28 80.9 344.22 73.0
Urban NAG 70.56 19.1 127.12 27.0
Total 368.84 100.00 471.34 100.00
Wage workers and Self-employed in Rurality of Employment
1. Regular workers 18.87 6.3 28.76 8.3
2. Casual workers 105.45 35.4 120.38 35.0
3. Wage workers (1 + 2) 124.32 41.7 149.14 43.3
4. Self-employed 173.95 58.3 195.08 56.7
5. Rurality 298.28 100.0 344.22 100.0
Note AG means agriculture and NAG means Non-agriculture
314 K. P. Kannan
But this movement away from agriculture has not significantly benefitted the
labouring poor to lead a life of dignity and security. Although wages in non-
agriculture is higher than agriculture, a majority continues to be poor and vulnerable.
Such a phenomenon was examined from the point of employment and social secu-
rity. Those who continue to have employment and social security arising out of their
employment are classified as ‘formal workers’ and the others as ‘informal workers’.3
Given the pro-capital orientation and policies of the state, employment with secu-
rity has been given the go-by and in its place labour-cheapening policies have been
encouraged resulting in an increased share of ‘insecure’ or ‘informal workers’ even
in the organized sector of the economy. Of the total workforce in India 92% are
such informal workers, a figure that has refused to change during the entire period
of economic reforms.
Despite a continuing but slow decline in poverty and vulnerability notwithstanding
since the early 1990s, a majority of India’s population continues to be poor and
vulnerable. By taking the international poverty line of 2 Purchasing Power Parity
Dollars per capita per day in 1993–1994, our calculations show that 85% of Indian
population was poor and vulnerable that has now declined to 64% as of 2011–2012.4
Therefore the movement away from agriculture to non-agricultural has not addressed
the larger question of employment security, its quality and income arising out of
wages. However, we need to ask here as to the significance of the movement away
from agricultural employment.
While the share of agricultural employment declined from 64 to 48%, the share
of rural employment declined from 81% to only 73%. What this signifies is that
the share of rural non-agricultural employment increased from 17 to 25%. There is
no estimation of national income by rural and urban economies but we reckon that
rural GDP is around 50%.5 This points to the sharp increase in rural-urban income
inequality although it is considerably less than the intersectoral inequality as between
agriculture and non-agriculture.
While agriculture has ceased to be the major provider of employment to the
workers, the rural economy has not and that shows the limitations of the structural
transformation in the Indian economy. The agrarian transition question may be said
to be replaced by a rural transition question in so far as employment and livelihood
of an overwhelming share of Indian workers and their families are concerned. The
3 For a detailed analysis of the link between informality of employment and poverty and vulnerability
see, NCEUS (2008).

4 The 2 PPP$ in the 1990 s was revised to 3.2PPP$ in 2010 to reflect the depreciation in the value
of the dollar.
5 We indirectly estimate the GDP originating from the rural economy by multiplying the number
of agricultural workers with product per worker in agriculture and adding it to the number of non-
agricultural workers in rural areas with the economy-wide product per worker in non-agriculture.
This gives us a 55% of GDP originating from the rural economy. Since the product per worker in
non-agricultural sector in rural areas is likely to be less than that in urban non-agricultural sector, it
is quite possible that this gives a higher GDP in rural non-agricultural sector than what we presume
to be. Hence, it is safe to reckon the share of GDP originating from the rural economy at around
50%.
need to focus on the rural economy from a developmental perspective that provides
employment to more than 70% of Indian workforce becomes an imperative. The
steady neglect of the rural economy, more so since the economic reforms than earlier,
will not only manifest in terms of a highly unequal India but also a source of social
and economic crisis from time to time as already manifested in farmers’ suicides (see
Reddy and Mishra 2009) and the largely distress induced migration of rural labour
to urban as well as more prosperous rural areas.
From the perspective of labour, what such a scenario raises is a developmental
question anchored in decent employment. This transformation of the agrarian
question into a rural question warrants urgent social and political attention.
Given the continental size of the country and the unequal pace of socio-economic
transformation and the consequent developmental outcomes, there are two employ-
ment dimensions that we need to examine from an agrarian transition point of view.
These are (a) regional, and (b) social.
4 Regional Dimension of Structural Transformation

and Rurality of Employment
Given the sub-continental nature of India’s geography and economy, the regional
dimension of any economic characteristic assumes importance while interpreting
the national aggregate economy. Since structural transformation is understood as
an important marker of a turning point in any given economy, this assumes all the
more important from a regional perspective. Our regional analysis of these issues
has revealed a limited or partial nature of this transformation. Broadly speaking it
consists of four groups of states, i.e. (i) states attaining structural transformation with
a high per capita income, (ii) states attaining structural transformation with a low
per capita income, (iii) states with no structural transformation so far but registering
high per capita income and (iv) states with no structural transformation so far and
continuing to be in the group of low per capita income. High and low per capita
income here is used in relation to the national average.
What do we make of this differentiated scenario presented in Table 3? States
in Group 1 no doubt present a desirable outcome because, on the face of it, it is
accompanied by relatively higher per capita income. There are nine states in this
group accounting for one third of the country’s population in 2011. Most of them
also report higher ranks in agricultural product per worker except Maharashtra and
Tamil Nadu although these two states have front-run status in industrialisation and
urbanization. However, our test of Rurality of Employment suggests that except the
small state of Goa there is no state in this group (or any other) which has reported a
structural transformation in the sense of a movement away from rural employment for
majority of the workers. The State of Kerala comes closest with 56% of employment
in terms of ‘rurality’ followed by Tamil Nadu with 61%.
316 K. P. Kannan
Table 3 States ranked according to characteristics of structural transformation, 2011–2012

State AG-GDP AG-E Rurality Rank in
(%) (%) of Per cap Agr Non-Agr HDI
Emp (%) Income product product per
per worker
worker
1 2 3 4 5 6 7 8
1. Structural transformation with high per capita income
Goa 3.7 3.7 41.4 1 1 1 3
Haryana 16.8 40.9 68.8 3 4 4 8
Maharashtra 8.3 49.1 63.0 4 24 3 6
Gujarat 13.1 46.9 62.2 5 9 7 10
Tamil Nadu 8.5 33.5 61.1 6 17 11 7
Uttarakhand 10.8 46.7 75.0 7 13 5 13
Punjab 22.8 35.8 66.7 10 3 16 4
Kerala 9.9 20.4 56.0 9 5 12 1
Karnataka 15.3 48.5 67.9 13 16 13 11
2. Structural transformation with low per capita income
Tripura 23.8 24.4 77.7 14 2 24 5
West Bengal 17.6 36.8 68.5 18 10 23 12
J&K 21.7 40.2 77.6 19 8 25 9
Rajasthan 21.3 49.9 81.1 20 15 20 16
Jharkhand 16.9 49.5 81.1 23 22 19 18
Manipur 19.8 38.0 77.0 25 11 28 5
3. No structural transformation but high income
Sikkim 10.4 55.7 77.0 2 19 2 5
Himachal 16.9 58.4 92.6 8 18 8 2
Nagaland 26.6 63.2 81.5 11 6 6 5
AP(Undivided) 18.9 52.5 75.1 12 14 14 14
4. No structural transformation and low income
Mizoram 20.9 53.8 67.1 15 12 15 5
Arunachal 30.7 65.9 83.7 16 7 9 5
Meghalaya 15.6 56.3 84.6 17 25 17 5
Chhattisgarh 19.2 71.8 83.9 21 28 10 22
Odisha 17.2 54.8 86.9 22 26 18 21
MP 23.5 57.7 79.0 24 21 22 19
Assam 21.8 54.3 86.9 26 20 21 15
Uttar Pradesh 23.0 51.9 80.6 27 23 27 17
Bihar 23.5 61.6 90.7 28 27 26 20
(continued)
Table 3 (continued)
State AG-GDP AG-E Rurality Rank in
(%) (%) of Per cap Agr Non-Agr HDI
Emp (%) Income product product per
per worker
worker
1 2 3 4 5 6 7 8
All India 15.1 47.8 73.0
Note AG-GDP (%) means share of agriculture in total GDP; AG-E(%) means share of agriculture
in total employment. HDI values are for 2007-08 and taken from India Human Development Report
prepared by the Institute for Applied Manpower Research (renamed as National Institute for Labour
and Employment), New Delhi. Source: GDP data from Economic Survey 2013 and HDI ranking
based on HDI values from IAMR (2011). All other calculations are based on unit level data from
the 68th Round of NSS
Group 2 states are those attaining structural transformation but continue to be in

the league of poorer states, if not the poorest, by per capita income. They account
for 18% of the total population. At the same time, their product per worker in non-
agriculture is also considerably below the national average. What kind of a structural
transformation is this? This could be a case of movement of workers away from
agriculture because of very low capacity for labour absorption in a gainful sense
but ending up in low wage employment outside agriculture whether in rural or urban
areas. This is reflected in a much higher dependence on rural non-agricultural employ-
ment. Therefore, the rurality of employment is much higher than in Group 1 states.
There are six states in this group with West Bengal reporting the lowest rurality at
68.5% of total employment and the highest in Rajasthan and Jharkhand with 81%.
Group 3 states belong to a set where one cannot mark a full structural transfor-
mation because the share of employment in agriculture continues to be well above
50% despite a much lower share of income. But these are not poorer states with
low per capita income; in fact, they are to be counted as those with high per capita
income with a relatively higher product per worker in non-agriculture. There are
four states here accounting for a mere eight percent of the country’s population. In
terms of rurality of employment, these states report a high share ranging from 75% in
Andhra Pradesh (undivided) to as high as 93% in Himachal Pradesh. It would appear
that their high per capita income arises largely from a high product per worker in
non-agriculture except for the State of Nagaland.
Group 4 perhaps represents the most difficult part of the structural transforma-
tion story because it is a combination of no structural transformation, low per capita
income accompanied by low product per worker (indicating low labour produc-
tivity) in both agricultural and non-agricultural sectors. The only exception is the
State of Arunachal Pradesh where the per capita income and product per worker
are relatively higher than the others in the group. There are nine states in this group
including the most populous states of Uttar Pradesh and Bihar. This group accounts
for close to 38% of the total population, the highest share among the four groups.
318 K. P. Kannan
The rurality of employment is quite high in all but Mizoram. Except for the smaller
states of Mizoram, Arunachal Pradesh and Meghalaya, all the remaining six states
also belong to a category where the achievement in basic development indicators—
as for example represented by the Human Development Index—is the least among
other Indian states. The broad association between relatively high human develop-
ment and structural transformation is something that also needs to be noted in this
regional picture. Investment in human development creates favourable conditions in
the form of increasing labour productivity as well as ability to seek out employment
opportunities outside agriculture.
The overall picture, therefore, is one of partial structural transformation covering
15 states accounting for half the total population. Even here the six states in Group 2
continue to be low per capita income states that dim their transformative performance.
However, the nine states reporting structural transformation with better economic
performance give a partial picture of the nature of economic transformation under
way in India. Three out of the four states in Group 3 without structural transformation
but with relatively better economic performance are likely to join the Group 1 given
their relatively lower dependence on agricultural sector for employment ranging from
52% for Andhra Pradesh (undivided), 56% for Sikkim and 58 for Himachal Pradesh.
All these states also belong to a group of better performance in human development
compared to the Group 4 states. However, it will take a much longer period of time
to talk about a rural transformation as indicated by the rurality of employment.
There is nothing inherently wrong in depending on rural non-agricultural employ-
ment but the challenge here is one of generating adequate decent employment with
higher labour productivity that will assure a decent standard of living to a majority of
the people. That calls for a greater focus on the rural economy with a transformative
developmental agenda.
5 The Social Dimension of Structural Transformation
In the discussion on the agrarian question in the Indian context, largely held within
the Marxian framework, there is hardly any serious incorporation or factoring of the
social dimension in terms of the entrenched ideology of social hierarchy. While this
is often referred to as the ‘caste factor’, it transcends all religions in India and needs
to be viewed as an ideology of ‘social hierarchy’ which is closely, if not perfectly,
linked to economic inequality. In our earlier work, we have followed a five-fold
classification to reflect the broad social hierarchy in the Indian society. The social
groups are ST, SC, Muslim, Hindu-OBC and Others. In an overwhelming number
of economic and development indicators, the last group is found to be on the top,
followed by OBC, Muslim, SC and ST in a descending order (see Kannan 2019).
First the question of dependence on agriculture. In 1993–1994, only one social
group, i.e. Muslim, had a major share of their workforce in non-agriculture. This
could be due to the historical and traditional factors wherein Muslim communities
were found to be in the artisanal and crafts and trading occupations with a significant
Table 4 Percentage share of workers in Agriculture and Non-Agriculture Sectors

1993–1994 2011–2012
AG NAG AG NAG
Rural + Urban
ST 82.4 17.6 70.0 30.0
SC 71.1 28.9 48.0 52.0
Muslim 45.0 55.0 30.3 69.7
OBC 52.9 47.1
Others 38.1 61.9
OBC + Others 61.5 38.5 47.5 52.5
Rural
ST 86.8 13.2 76.3 23.7
SC 80.4 19.6 59.6 40.4
Muslim 64.7 35.3 47.2 52.8
OBC 67.7 32.3
Others 64.7 35.3
OBC + Others 77.8 22.2 66.9 33.1
Urban
ST 21.4 78.6 12.8 87.2
SC 18.4 81.6 7.3 96.7
Muslim 8.3 91.7 4.0 96.0
OBC 10.0 90.0
Others 3.9 96.1
OBC + Others 11.7 92.3 6.5 93.5
Source Computed from unit level data from 50th and 68th Rounds of NSS
presence in urban areas. By 2011–2012, we find that three social groups—Muslims,

Others and SC—are no longer dependent on agriculture for majority employment.
Therefore, there is a clear social dimension to the structural transformation (or lack
of it in many states). It would, therefore, be interesting to examine the distribution of
the incremental workforce during 1993–1994 and 2011–2012. The relevant findings
are presented in Tables 4 and 5. The largest movement away from agriculture has
been reported by SC, followed by Muslim and then by the combined group of Others
and OBC.6
The movement of SC or Dalits away from agriculture is significant. Historically,
they were the landless or land-poor and hence had to work mostly as attached labour
in agriculture and related activities. The lack of gainful and regular employment
opportunities in a fast-changing labour relations regime in agriculture could be one
6 This combining is due to the non-availability of separate data for Hindu-OBC group in 1993–1994.
Going by the separate data for these groups in 2011–2012, it would appear that it is the group of
Others that has moved away from agriculture in a decisive sense.
320 K. P. Kannan
Table 5 Distribution of additional workforce between 199–1934 and 2011–2012

Social group AG % NAG % Total %
OBC + Others −7.68 −15.1 58.57 +115.1 50.89 100
Muslim +2.13 +9.2 21.00 +90.8 23.11 100
SC −6.82 −34.8 26.43 +134.8 19.61 100
ST +1.52 +17.1 7.37 +82.9 8.89 100
Total −10.85 −10.6 113.37 +110.6 102.52 100
reason for this faster movement. Another reason could be the new consciousness
about their dignity coupled with the fact that agricultural work often begets very low
wages as well as conditions of work that bear a mark of earlier subordinate status.
The higher aspirations of the better educated younger generation could have also
added to this movement.
The next group is that of the Muslim who have traditionally been largely, if not
wholly, engaged in non-agricultural activities. They now have the lowest share of
workers in agriculture at 30%.
The third is the combined group of Others and OBC with 48% of employment
in agriculture. Separate data available for 2011–2012 show that the share of the
socially advantaged group of Others is now only 38, mostly as the landed class,
in agriculture, whereas a majority of 53% of OBC continue to be in agriculture.
For the Others, the movement away from agriculture could be induced by better
opportunities for employment with higher wages and security although it is by now
politically recognized that there is a layer of economically poor among the socially
advantaged grouped here as Others. To a lesser extent, this could also be the case
for those belonging to OBC although it has a higher share of land-poor and hence
labouring poor than the social group of Others.
Majority of OBCs continues to be in agriculture although that share is only
marginally higher than 50%. It is the group of ST that is still largely dependent
on agriculture with 70% of employment.
Therefore, the structural transformation in terms of the overall economy’s major
share of employment and income has a social dimension is mainly applicable to three
social groups, i.e. the socially advantaged group of Others, Muslims and SCs. Of
these, the first group has the lowest incidence of poverty while the other two have
the second and third highest incidence of poverty (see Kannan 2019).
But this agrarian transition is only technical if we shift the focus from agriculture
to the Rurality of Employment (see Table 6). While the three social groups of SC,
Muslims and Others have moved out of agriculture their dependence on the rural
economy is considerable. What it means is that their employment is mostly depen-
dent on agriculture (located in rural or urban areas) and in rural non-agricultural
employment. While there is a reduction in Rurality of Employment since 1993–94,
its importance cannot be ignored. Here again the social group with the lowest depen-
dence is that of Others (consisting of Upper caste Hindus, Jains, Sikhs, Christians
Table 6 Distribution of workers (%) in terms of rurality of employment

Soc group Year All AG Rural NAG Rurality
Others+OBC 1993–1994 61.55 16.73 78.27
2011–2012 47.54 22.48 70.01
Difference −14.01 5.75 −8.26
Muslim 1993–1994 45.03 22.93 67.95
2011–2012 30.26 32.15 62.41
Difference −14.76 9.22 −5.54
SC 1993–1994 71.11 16.70 87.81
2011–2012 48.00 31.38 79.37
Difference −23.11 14.67 −8.44
ST 1993–1994 82.41 12.29 94.70
2011–2012 70.09 21.35 91.44
Difference −12.33 9.06 −3.27
Total 1993–1994 64.05 16.82 80.87
2011–2012 47.82 25.21 73.03
Difference −16.23 8.39 −7.84
OBC 2011–2012 52.91 23.99 76.89
Others 2011–2012 38.10 19.82 57.92
Source Computed from unit level data from the 50th and 68th Rounds of NSS
and all others except Muslim) with 58% of their employment. They are followed by
Muslims (62%), OBC (77%), SC (79%) and ST (91%).
A mere shift of labour from agriculture to non-agriculture need not necessarily
be a transition from low quality (including low wage) employment to good quality
employment. At the higher level of the social hierarchy, the transition is backed
by better initial conditions including assets, higher education and stronger social
network. At the lower end, it could be a horizontal movement from one type of low
quality work to another type. Table 7 is illustrative of this broad transition. There is
a clear hierarchy in terms of educational attainment, employment status and wage
earnings. The socially advantaged have the highest incidence of higher education
resulting in a higher employment status (as Regular workers) and the highest wage
income. The next is the OBC group followed by Muslim, SC and then the ST.
6 Structural Transformation and Agrarian Transition
These findings of the spatial and socio-economic characteristics of the structural

transformation in the Indian economy need to be placed and understood in the larger
322
Table 7 Educational attainment, labour status and wage income by social group
Soc Group Secondary level of education or Labour Status among all wage workers Wage income per household (in
above (% to total wage workers) % of Regular Workers % of Casual Workers Rs)
1993–1994 2011–2012 1993–1994 2011–2012 1993–1994 2011–2012 1993–1994 2011–2012
Others + OBC 24.7 39.4 40.0 47.2 60.0 52.8 22079 139261
SAG NA 57.3 NA 69.0 NA 31.0 199440
OBC NA 29.9 NA 35.6 NA 64.4 103148
Muslim 11.2 19.6 30.3 36.4 69.7 63.6 15363 87622
SC 6.2 18.8 14.5 24.2 85.5 75.8 13634 86759
ST 5.4 15.1 12.3 18.4 87.7 81.6 13620 83106
All Popn 16.4 29.6 29.2 37.4 70.8 62.6 18707 96113
Source Computed from unit level data from the 50th and68th Rounds of NSS
K. P. Kannan
context of the process of economic change in general and the discussions on the
agrarian question in particular.
Indian agriculture during the colonial period faced intense stagnation as a result
of the colonial policy of rack-renting and absence of any land reforms in favour of
poor peasants and agricultural labourers. Therefore, agriculture at the dawn of inde-
pendence warranted special attention by way of land reforms and public investment
to create the necessary infrastructure such as irrigation and related collective goods.
Independence came with the launching of a national economic development plan
and a process of state-directed development path. While agriculture received some
attention in terms of public investment, price support, subsidies, greater access to
institutional credit and so on, land reforms were mainly confined to the ending of
big landlordism with very little redistribution of land. Agricultural labourers, by and
large landless, received very little attention except in the form of fixation of minimum
wages that was observed more in its breach than implementation.
At the sub-national level, agriculture received some attention from the state
governments given the fact that it was a state (provincial) subject under the Constitu-
tion. Here again the focus was on farmers—small and big cultivators—and not much
on agricultural labourers with some rare exceptions like Kerala. Incidence of abso-
lute poverty was highest among agricultural labourers followed by small peasants
often referred to as marginal and small farmers.
While land distribution continued to be skewed, the proportion of medium and
large farmers was small. But they stood to benefit from the Green Revolution that
was launched in the mid-1960s in several parts of the country, if not all. Farmers’
movements also received political attention and this resulted in minimum support
prices for food grains as well as several input subsidies as in fertilizers and electricity.
Farm mechanization took place but was uneven.
The third phase is the emergence of a neoliberal economic policy regime and the
concomitant emergence of a neoliberal state. However, the compulsions of electoral
politics demanded concessions and compromises from the state to continue to pay
some attention to basic developmental challenges such as education and health and
selected forms of poverty alleviation measures. At the regional level some state
governments, dictated by regional political factors, paid relatively more attention
to welfarist policies that eased the poverty situation. Later, this was also followed
by the national governments dictated by electoral political compulsions and hence
remained inadequate and often lagging in implementation.
The emergence of the neoliberal policy regime witnessed a steady erosion of the
importance given to the agricultural sector in general and rural economy in partic-
ular. The long term developmental objectives suffered a setback. Public investment
in agriculture declined and rural development was mostly welfarist (limited provi-
sioning for manual employment known as MG-NREGS, extremely limited, almost
miniscule, financial subsidies for housing for the poor, etc.). Despite some form of
minimum support prices, many agricultural raw materials and commodities were
allowed to be imported under the guise of trade liberalization, and access to bank
credit was diluted in the name of agriculture. More and more dependence on the
market created a situation whereby land under food grains was diverted to more
324 K. P. Kannan
remunerative cash crops and industrial raw material crops such as cotton. The entry
of big corporations, both national and multinational, in the market for seed, pesti-
cides and other agricultural inputs increased the risks of farmers. Farmers distress
got manifested in the extreme measure of suicides that took place in several states
(see, e.g. Reddy and Mishra 2009). For a while, farmers’ movements of the earlier
kind got weakened but of late new movements started emerging demanding more
positive state intervention.
All these and more in an emerging and essentially neoliberal state was of course
taking place in the larger global context of the failure of the socialist experiment
and the steady push for neoliberal economic regimes on a global scale. Neoliberal
policies were consciously promoted and pushed into the developing countries by the
IMF, World Bank and the WTO controlled largely and decisively by the rich Western
capitalist democracies.
From the point of the agrarian question of development of capitalism in the Indian
economy, there was very little differentiation within the peasantry although regional
variations are significant. If we take a long-run period of more than six decades,
what we observe is the continuing inequality in land distribution, an increase in the
share of small and marginal farmers as a result of further fragmentation of land and a
decline in the share of agricultural labourers. Given the slow pace of transformation
of agriculture, employment opportunities declined leading to a shift of wage labour
from agriculture to non-agriculture and the absorption of additional labour into the
non-agricultural economies in rural and urban areas, more rural than urban.7
The shift of wage labour from agriculture to non-agriculture is largely a hori-
zontal shift from low-paid insecure work (informal employment) in agriculture to
low-paid (but higher than agriculture) insecure work in non-agriculture. Given the
increasing educational levels and some expansion in urban services, there has been
some increase in regular work—some employment security—but they also tended
to be of informal kind with no guarantee of employment.
From the point of the agrarian question, the emergence of a strong capitalist
global framework with neoliberal economic policies is a significant development.
The ascendancy of finance capital was a new development in such a scenario. In devel-
oping countries like India, it benefitted a small segment consisting of big capitalists,
the middle class with educational capabilities and the political and bureaucratic class
that saw the emergence of new opportunities for rent seeking on an unprecedented
scale. This also led to a system of crony capitalism.
Therefore, it is not the internal development of capitalism within agriculture that
was unfolding. It is the power of the new emergent capitalism globally and its national
variation that all those dependent on agriculture as well as the rural economy faced.
The balance of forces tilted in favour of the urban in general and big capitalists,
educated middle class, those engaged in speculative activities as in land and stock
market and those in the financial sector in particular.
7 Between 1993–94 and 2011–2012 rural employment in non-agriculture increased from 62 to 113
million (82%) and the urban non-agriculture from 71 to 127 million (79%).
Small scale producers and small traders including those who are nothing but
disguised wage workers as in the case of at least one-third of those classified as self-
employed in India also suffered in varying degrees along with farmers and rural and
urban labourers. It is this phenomenon that has led to the stubborn figure of 92% of
India’s workers as informal, in the sense of insecure and largely casually employed,
workers.
Therefore, the agrarian question in India from the point of its working people—
farmers and labourers—is a subset of a larger employment question in a fast-growing
large economy manifested as jobless growth and informalization of even existing
employment resulting in the persistence of poverty and vulnerability despite a
measure of progress due to welfarist programmes. The question of informality of
employment, its social correlates, and high incidence of poverty and vulnerability
have been documented and discussed in detail in NCEUS (2008). Strategies, policies
and measures to transform such a scenario have been discussed in NCEUS (2009).
However, the adoption of such a strategy of levelling up was highly constrained by
the political economy of power that dominated the neoliberal economic reforms in
India. Surveying the persistence and dynamic of this vast mass of small producers
referred to as petty commodity production (PCP), Harriss-White (2012) concludes
that PCP in India survives by multiplication and does not lead to more advanced
forms of accumulation. It is worth quoting her diagnosis here.
“Relations of exchange, of reproduction, the behaviour of social institutions in which PCP
is embedded and contradictory relations with the state all contrive to prevent accumulation
trajectories from PCP from being anything but a rare event. PCP may sometimes be the
unintended outcome of development projects, but it is more commonly the outcome of
capitalist development, here to stay, as modern a kind of capitalism as the corporation, but
with an incoherent set of economic projects imposed on it and developed from it, and with a
plurality of political expressions which serve to disenfranchise it. One next step for scholars
would be to make a detailed mapping of the economic sectors, ecological-political regions,
technologies, exchange relations and trajectories of multiplication associated with PCP.
Agriculture is leaking labour as never before, while capital-biased plans are laid for the
hitherto most labour-absorptive sectors of the non-farm economy. What is to be done, what
can be done, for the common man and woman who are petty producers in India today are
most important development questions with different kinds of politics: whether and how to
release constraints through a new wave of politically engineered collective activity, through
the destruction of obstacles to accumulation, through the destruction of PCP itself, through
ignoring work but expanding social protection to lower the risks of reproduction or by other
means that are at present uncelebrated in the literature that has been reviewed here. It would
seem that the stakes are high” (2012: 144–5).
7 Conclusions
After a long drawn-out process of economic change the Indian economy is techni-
cally on a trajectory of structural transformation. However, it is far from the expected
process of transformation through an expansion of income and employment in manu-
facturing but from a combination of activities under the rubric of non-agricultural
326 K. P. Kannan
activities. Increasing domination of market transactions has not led to any clear cut
trajectory of development of capitalism in agriculture per se but there is agreement
in the overall process of capitalist economic relations in the economy as a whole.
The increasing migration of labour from agriculture to non-agriculture and the rural-
urban continuum associated with it (Reddy 2017) that was earlier subsumed under
‘footloose labour’ (Breman 1996) makes any analysis of changes within agriculture
quite challenging. Given the dependence of labour on the rurality of employment,
the force of structural transformation looks quite weak. From a development point
of view such a process has been noted for countries in South Asia in sharp contrast
to countries in East and Southeast Asia (Islam 2017). From a policy perspective, this
ought to form the basis for a more focused approach to rural economic development
to lift it from its lower level equilibrium to a higher level equilibrium.
The second agrarian question of accumulation in agriculture, though not part
of our enquiry, has also not been supported by empirical studies in the sense of
the availability of a surplus for industrialization. The source of accumulation for
rich farmers seems to have diversified with both agricultural and non-agricultural
production as well as combining with trading and money lending (see, e.g. Harriss-
White 2012; Lerche 2013). But the neoliberal globalization has also laid out the
ground for accumulation in agriculture by corporate capital through dispossession
of land of the peasantry (in the name of Special Economic Zones, mining and so on),
increasing commercialisation of inputs like seeds and fertilizer and often engaging
in marketing of agricultural produce through corporate-owned retail stores. On the
other hand, the low level of income of marginal and small farmers and the low level of
wages for agricultural labourers drive them also to diversify their sources of income.
This has raised some to conclude whether the agrarian transition has bypassed the
Indian farmers (Lerche 2013) as formulated by its classical question. This was in
response to an investigation of the thesis of Henry Bernstein, an early participant in
the debate on agrarian transition, who took the position that the agrarian question
in the Global South is no longer relevant given the neoliberal globalization and its
ability to find non-agricultural sources for accumulation/industrialization (Bernstein
1996 and 2006).8 But broadly agreeing with Bernstein, Lerche has in fact argued
for a ‘formulation that allows for a continued investigation into the actual processes
of agrarian change that clearly are taking place in India’ (2013: 400). However,
contributors to the volume edited by Mohanty (2016) are more cautious and have
8 In his ‘Revisiting Agrarian Transition’, Bernstein elaborates his thesis by recognizing the complex-
ities in the current process of globalization and its impact on agrarian countries and concludes as
follows: ‘The challenges to analysis that the diversity and complexity of current agrarian change
present cannot be grasped adequately by regarding inherited notions of transition as simply false
‘predictions’, hence discarding what they offer to inform investigation of current realities, above
all concerning class formation, class struggle and how, and how much, accumulation (and what
kinds of accumulation) proceeds. In short, much of their approach to framing the central questions
of agrarian political economy remains valid, even if some of the answers provided might be found
wanting as historical interpretation or applications to contemporary realities or both. Indeed, this
is simply to recognize the demand of grasping how capitalism changes across all its spaces from
global divisions of labour and flows of capital and commodities, through vastly different national
economies to similarly diverse countrysides and agrarian structures’ (2016: 85).
argued that the terms of reference of the agrarian question are still relevant although
they recognize the change in the larger external and the internal situation. Surveying
some of the recent studies relating to the agrarian question in India, Reddy (2016)
concludes that the process of capitalist development in Indian agriculture as part of
a larger process of capitalist development has great relevance for the understanding
of agrarian transition although the question of agriculture as a source of capital for
industrialization may have lost its significance.
Given the interlinking of agriculture and non-agriculture for employment and the
persistence of small producers on the one hand and the overall strategy of neolib-
eral globalization for cheapening the cost of labour on the other, the importance of
an alliance between peasantry (including the agricultural labourers) and the wage
labour and self-employed in the vast informalized segment in non-agriculture (what
Harriss-White refers to as PCP) has become all the more crucial. This perhaps is a
powerful question among the three agrarian questions (referred to in the beginning)
that continues to have a great relevance. It will have to address the basic questions
of right to work, education, health and housing, and social security along with work-
based rights of minimum wages and decent conditions of work. However, such a
process of sustained alliance building is also not quite evident in the Indian political
landscape.
From our analysis of the partial nature of India’s structural transformation with
weak foundations, an important lesson from a developmental point of view is the need
for a concerted strategy of employment-led development of the rural economy. This
in our view calls for a structural transformation agenda in both agriculture and non-
agriculture in the rural economy with decent employment and higher productivity
and income. Under what conditions such a transformation becomes feasible would be
an interesting question to ask from the standpoint of the debate on agrarian transition.
Appendix
See Table 8.
328 K. P. Kannan
Table 8 The compositional picture of labour shifting away from agriculture in rural and urban
areas in India
Category Employment (million) Real wages (Rs./day at
2004-2005 prices)
Rural
1993–1994 % 2011–2012 % 1993–1994 2011–2012
A. Agriculture 226.31 100.0 216.21 100.0
1. Regular workers 2.96 1.3 1.53 0.7 41.14 84.86
2. Casual workers 86.37 38.2 72.74 33.6 33.64 67.80
3. Wage labour (1 + 2) 89.33 39.5 74.27 34.3
4. Self-employed 136.98 60.5 141.94 65.7
B. Non-agriculture 62.04 100.0 118.83 100.0
1. Regular workers 15.59 25.1 26.87 22.6 104.84 170.04
2. Casual workers 15.38 24.8 44.89 37.8 48.90 91.59
3. Wage labour (1 + 2) 30.97 49.9 71.76 60.4
4. Self-employed 31.07 50.1 47.07 39.6
Urban
A. Agriculture 9.92 100.0 9.18 100.0
1. Regular workers 0.32 3.2 0.36 3.9 93.92 213.92
2. Casual workers 3.70 37.3 2.75 30.0 45.00 78.88
3. Wage labour (1 + 2) 4.02 40.5 3.11 33.9
4. Self-employed 5.90 59.5 6.07 66.1
B. Non-agriculture 70.56 100.0 127.12 100.0
1. Regular workers 31.54 44.7 58.21 45.8 151.50 257.19
2. Casual workers 10.85 15.4 17.71 13.9 61.55 99.80
3. Wage labour (1 + 2) 42.39 60.1 75.92 59.7
4. Self-employed 28.17 39.9 51.20 40.3
Source Computed from the 50th and 68th Rounds of NSS
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Failing Agriculture and Frazzled
Farmers: The Inside Story of India’s
Most Populous States—UP
and Maharashtra
Rakesh Raman and Khursheed Ahmad Khan
Abstract Distress of agriculture and disquietude of farmers remain a matter of

grave concern for the Indian economy. The deceleration in growth of production and
productivity, increase in unviability of agriculture, decimal rate of growth of farmers’
income, steep rise in their indebtedness, surge in risk and uncertainty caused by
frequent crop failures, etc. have acquired all India character and brought the sector to
the brink and made life tough for those dependent on it. The popular debate whether
it is crisis of the sector or that of the peasantry seems futile and infructuous as
the present crisis engulfs both and its conceptualization and interventions required
to negotiate it warrants integrating them. The present write up captures crisis of
agriculture by developing an index incorporating indicators that reflect situation of
agriculture and the agriculturists in an effort to establish that condition is really
alarming, and the crisis of agriculture is slowly engulfing the whole nation. The
paper uses secondary data collected from Directorate of Economics and Statistics,
Department of Agriculture and Cooperation, Ministry of Agriculture, Government
of India and different States and chooses and normalizes indicators using UNDP
methodology, to first compute state-level crisis of agriculture for fourteen major
states of India and then at the regional and district level for two most populous
states of India Uttar Pradesh and Maharashtra. It ranks the geographical units in
terms of the index to establish that though crisis is more acute in states like Tamil
Nadu, Kerala, Karnataka, Maharashtra, etc. but low-intensity crisis exists also in
states like UP, Bihar, MP where things are normally stated to be in order. Further,
based on primary survey conducted of over one thousand farming households of
different farm size and social categories in three worst affected districts each for UP
and Maharashtra, the crisis of agriculture is captured at the farmers level for more
comprehensive set of indicators using principal component analysis. A simple linear
regression has been used to determine the respective weights of individual indicators
R. Raman (B)
Department of Economics, Banaras Hindu University, Varanasi 221005, India
e-mail: rraman88@gmail.com
K. A. Khan
Department of Economics, Samastipur College, Samastipur, Bihar, India
e-mail: khursheedak86@gmail.com

https://doi.org/10.1007/978-981-15-8265-3_17
332 R. Raman and K. A. Khan
in construction of the composite index. The work concludes that agriculture and
farmers face high- and low-intensity crisis, respectively, in states of Maharashtra and
Uttar Pradesh, however, the intensity within a particular state varies across regions
with acute problem in some regions and relatively relaxed status in some other.
It explores the inter-connectedness between level of development of a region and
position of farmers and agriculture there and finds no perceptible flow. A deeper
investigation of the problem at the farmers’ level helps the authors to conclude
that the problem of crisis has social orientation, i.e. it varies across farmer caste
groups (with high intensity of crisis among farmers belonging to the lower caste)
and landholding size (with graver problem for small and marginal farmers). The
paper calls for decentralised policy interventions to tackle region-specific issues and
adoption of farmer centric policy to resurrect the sagging spirit of frazzled farmers
and rekindle a hope in them that agriculture is not failing and has a distinct future as
a profession.
1 Introduction
Among a vast majority of factors that are threatening to derail the onward march
of the Indian economy and draw red in its report card of inclusiveness, precarious
position of agriculture and deep affliction of farming community are significant.
The deceleration in growth of production and productivity in agriculture, increase
in its unviability, decimal rate of growth of farmers’ income and steep rise in their
indebtedness, surge in risk and uncertainty caused by frequent crop failures, troubles
for the peasantry, etc. are no longer characteristic features of a handful of states
like Maharashtra, Kerala, etc. but are engulfing even the northern Indian states of
Punjab, Haryana and Uttar Pradesh—traditionally viewed as epitomes of prosperous
agriculture. The failing agriculture and frazzled farmers facing a deluge of problems
have together created an environment of gloom and desolation in rural India raising
serious doubts over the sustainability of the growth momentum.
The troubles of the agricultural sector and tribulations of farmers, have, of late,
attracted the attention of academia as well as government, and agriculture that had
lost charm in the neo-liberal wave has suddenly become the cynosure of public
debate. There are, however, three very crucial aspects that are either missing or have
been overlooked by those actively engaged in the field: First, the debate relating to
‘sector’ versus ‘farmers’ as the focal point of policymaking still remains unsettled.
This has resulted in great theoretical confusion as to the nature of present crisis
being ‘agrarian’ or ‘agricultural’ and has prevented us from understanding whether
the solution lies in measures to increase production and productivity in agriculture,
or in efforts to raise farmers’ income and improve their well-being. This confusion
has reduced the efficacy of policy interventions immensely. Second, there has been a
tendency to pay attention only to the troubled regions where the problem has reached
alarming proportions and neglect regions where on the surface things look ‘okay.’
Hence, while there exists a plethora of work pertaining to problems of farmers and
Failing Agriculture and Frazzled Farmers … 333
agriculture for states such as Maharashtra (Vidharbha), Kerala and Andhra Pradesh,
the issues of typically agricultural states like Uttar Pradesh (U.P.), Bihar, etc. have
barely drawn attention of both policymakers and researchers. This has led to the
popular perception that agriculture and farmers in these states are better off and
prima facie face no threat. Thirdly, there has been a tendency to go in for sweeping
generalizations based on macro data as well as fascination for meta-analysis without
seeking access to the inside story of farmers. Conclusions have been drawn on the
basis of statistics that are not so appropriate and indicators that capture only limited
dimensions. This has tended to seriously undermine the validity of findings as also
the success of policies based on such studies.
Such serious omissions and commission make it imperative to have a compre-
hensive study on the problems of both farmers and the agricultural sector, based on
primary first-hand interactions with the farmers, for states in which the problem is
reaching a crescendo as well as those where it is at a nascent stage. It is precisely
this that the present paper attempts to do. The paper is structured into four sections:
Section-I introduces the conceptual ‘farmer’ versus ‘agriculture’ question and based
on extant literature attempts to establish whether the problem should be branded as
‘agrarian’ or an ‘agricultural’ crisis. The section also briefly mentions the method-
ology adopted in the present study. Section-II provides a macro perspective of the
crisis scenario by capturing the scenario at the state level for fourteen major states of
India and at the regional and district levels for two chosen states viz. Uttar Pradesh
and Maharashtra. Section-III is based on a primary survey conducted in over one
thousand farming households in the two states in an attempt to capture, measure and
analyze the extent of problems faced by agriculture as well as farmers. The final
section sums up the discussion and stresses the need to have a farmer centric and
region-based approach to alleviate the problem.
2 Concept and Methods
Contemporary literature is though aghast mourning the failure of agriculture and

grieving the plight of farmers in India (Gulati et al. 2003; Rao 2009; Siddiqui 2015;
Ghosh 2016; Raman and Khan 2018), yet is divided on the nature of the crisis
and causes of its origin. Assadi (2006) has made an excellent job of classifying
the debate. He finds four distinct strands of thought of which two appear dominant
and appealing. The first of these treats the present problem as a problem of the
agricultural sector and calls it ‘agricultural crisis.’ It puts emphasis on the problems
of the ‘sector’ and not so much on farmers, and supports sector-specific strategy.
The second view treats the present crisis as an ‘agrarian crisis,’ i.e. as a problem of
the farming community/peasantry (which might as a supplementary effect affect the
agricultural sector). This is the Marxist critique, spearheaded by Patnaik (2003) and
others, which locates the crisis in the larger context of ambiguous path of capitalist
development in India manifested in the neo-liberal policy or imperialist globalization
that has linked the poor unprotected peasantry with the global market. This approach
calls for steps to handle the problem of marginal and small farmers. We briefly discuss
the debate as under.
Agricultural Crisis—The first approach puts emphasis on the ‘sector’ and the faulty
way in which it has evolved. It traces the root of crisis to the 1980s when the terms
of trade started going against agriculture (Bose 1981; Rudra 1982; Balagopal 1988)
and policies with urban bias began to dominate the state policies with farming grad-
ually appearing as a losing proposition; a phenomenon that intensified after the
launch of the economic reforms. It highlights factors ailing the agricultural sector
picking up four for exclusive emphasis viz. deceleration in growth of production and
productivity in agriculture, decline in the capacity of agriculture to absorb labour,
fall in profitability of cultivation and increase in the indebtedness and vulnerability
of farmers that have discouraged investment in agriculture. These, the view claims,
are sector-specific issues and affect all farming groups simultaneously.
Deceleration in the growth of agriculture started from mid-1990s and increase
in input use efficiency have been highlighted as the chief worry for agriculture by
many such as Sidhu (2002), Chand et al. (2007), Chand and Parappurathu (2011), etc.
Pillai (2007), Bhalla and Singh (2009), Reddy and Mishra (2009), Barah and Sirohi
(2011), etc. support this view. Deshpande (2002), Galab et al. (2006) examined how
the growth rate of production of important food crops drastically slowed down over
the years, particularly after the 2000s calling it a crisis situation. The deceleration
of agricultural growth in the 1990s complicated the employment issue in rural India
resulting in livelihood crisis. Agriculture that provided a safe refuge to people in rural
areas, has failed miserably in this endeavour in recent times. Bhalla and Hazell (2003),
Sharma (2005), Pillai (2007) and others have seen falling employment elasticity of
agricultural output as a symbol of crisis.
Falling profitability of agriculture has been highlighted as a major crisis factor
that is leading to the deceleration of agricultural growth. Sen and Bhatia (2004)
argue that there have been significant changes in the structure of costs of production
for more than two decades, reflecting the changes in the technology, and relative
prices of inputs that have made it difficult for the farmers to recover the cost from
sale of produce. Mishra (2007) and Ramasamy and Kumar (2007) have highlighted
low or negative profitability of cotton growers in different Indian states. There are
a number of other studies that have attempted a detailed analysis of profitability of
different crops in relation to the cost of cultivation over a period of time (Kamlakar
and Narayanamoorthy 2003; Deshpande and Arora 2010; Sainath 2010). Falling
profitability and unviability of agriculture coupled with increasing uncertainty has
increased the indebtedness of farmers and reduced their capacity to invest and bring
about improvement in agriculture (Deshpande 2002; Reddy and Mishra 2009; Desh-
pande and Arora 2010). The combined effect of the two has resulted in reduced
private investment in agriculture, promoted reverse tenancy and made agricultural
technology inaccessible to the bulk of farmers thereby reinforcing deceleration of
agriculture.
The ‘agricultural crisis’ argument thus calls for specific policies to resurrect the
sector such as raising production and productivity, developing the non-farm sector
to provide subsidiary livelihood opportunity to farmers, price support and marketing

system to give to the farmers their due and, of late, waiving loans of farmers. Specific
issues concerning specific groups of farmers are not given much credence and it is
hoped that through macro-economic intervention at the top, things could be made to
improve for the sector and everybody associated with it.
Agrarian Crisis—The second view associates crisis with the agrarian structure
of the economy and calls it ‘agrarian crisis.’ It looks at the crisis as a crisis of
certain agrarian classes, arising out of the relationship of these classes to other
classes. The view claims that neo-liberal policies have surreptitiously but consciously
promoted monopoly capitalism making the state withdraw and focus on protecting
the interest of capitalists leaving the deprived sections including peasantry at the
mercy of capitalists who have exploited them. It has forced the government to follow
a policy of deliberate price deflation in agriculture causing terms of trade to move
against the peasantry and giving undue advantages to the capitalists (Patnaik 2006).
Theoretically speaking, as monopoly capitalism develops peasantry gradually with-
draws acreage from the subsistence requirement and shifts to production for the
metropolitan market. As they move to commercial/cash/hybrid crops they incur heavy
losses due to uncertainty and the high costs involved.
The Green Revolution initiated the evolution of capitalist mode of production in
India, a trend that was reinforced by neo-liberal policy (Assadi 1998; Ramachandran
2010; Basole and Basu 2011). The agrarian structure created by the capitalist mode
of production has affected agriculture in many ways. It has opposed institutional
reforms (Sharma 2005) and resulted in intermediaries monopolizing land ownership
and extracting rent from both recorded and unrecorded tenants. It has also resulted
in increasing the pace of marginalization. As marginalization has taken place, it has
complicated the fortune of agriculture and agriculturists in more ways than one.
Just to point a few—First, resource-constrained small and marginal farmers have
become unable to invest in modern inputs resulting in lower productivity and income.
Second, the non-viability of the size of holdings has compelled peasants to undertake
commercial crops characterized by market-led instability and uncertainty. Third, the
land market has gone in favour of large owners. The socially deprived and marginal
farmers are being forced to sell their uneconomical size of land at throwaway prices
to landlords. Fourth, the small farmer group has faced some constraints in the access
to institutional credit, subsidies, and because of illiteracy, ignorance and poverty it is
not able to reap the benefit of government schemes that are actually meant for them.
The ‘agrarian crisis’ view thus highlights the problem from the side of the
majority small and marginal farmers brandishing the capitalist mode of produc-
tion and monopoly capitalism as the chief factor making the farmers frazzled and
pushing them to the brink. It calls for reversal of neo-liberalism, a more active and
pro-peasant role of the government rather than steps to boost the agricultural sector
per se.
Summing up—A cursory look at the agriculture versus agriculturist debate tells us
that the real debate is related to the primacy of class relations and peasant concern in
the leftist approach and critical importance being attached to the agriculture sector
in the first approach. While the leftist approach claims that so long as agriculture
is unviable, increasing output won’t be possible and if possible, won’t solve the
problem of farmers. Therefore, it won’t be sustainable. The other approach advocates
a comprehensive long-term growth strategy for agriculture which, it hopes, would
ultimately trickle down to benefit the farmers. Though there is no denial of the fact
that the agricultural policies in the nation over the years have created a conflict
between agriculture and farmers, especially the small and marginal ones, and made
agriculture an unviable occupation for the bulk of them, yet it would be wrong to say
that just by addressing the concern of small and marginal farmers the present crisis
can be effectively handled and that the agricultural sector can be put back on track
and vice versa. Economic reforms are irreversible in nature and there is no question
of completely going back on neo-liberalism. International experience shows that
agriculture has witnessed a robust growth and the farming community has prospered
even when nations have adopted ‘neo-liberal’ policies. Working blindly in favour of
peasantry would compel us to adopt steps that might go against the interest of poor and
the vulnerable urban population. The present crisis is not just a crisis of peasantry or
agrarian crisis; it is part of a broader crisis that engulfs the entire agricultural sector.
We prefer to call it the Crisis of Agriculture. We end this section by concluding
that the present crisis is the crisis of the agriculture that has two facets—crisis of the
agricultural sector, and crisis of the peasants who are dependent on it; it is neither
the first nor the second but a combination of the two.
3 Methodology and Tools
The study measures the crisis of agriculture at the macro level for fourteen major
states of India and regions and districts of two chosen states UP and Maharashtra.
Based on the primary survey of 1080 farmers of these states, it also explores the
ground reality. Availability of suitable indicators and their comparability across states
worked as a major hindrance in the choice of appropriate indicators for capturing
the crisis of agriculture at the macro level. It forced the study to take only four
indicators (shown in Table 1). The indicators though do not give very reliable quan-
titative estimate of the crisis, yet are able to supply the general trend and ranking of
states, regions and districts. The primary data analysis, however, does not cause such
problem and comprehensive and suitable indicators have been easily generated and
used.
The state-level data for the indicators have been taken from the Directorate of
Economics and Statistics, Department of Agriculture and Cooperation, Ministry of
Agriculture, Government of India, while district-level data have been taken from the
Ministry of Agriculture of the respective states. In order to neutralize the effect of
year to year fluctuations in agriculture the study has taken data for the triennium. For
the state-level index data for the triennium ending TE 2011 has been taken, while for
district-level crisis index of two triennium years—triennium ending in the year 2004
(TE04) and triennium ending in the year 2015 TE2015 have been included. Figures
Table 1 List of indicators used to capture the crisis of agriculture

S.N. Used at both macro and micro-level S.N. Used only at micro-level
1 Land condition of farmers-cropping 5 Access and quality of modern
intensity technology used
2 Yield of major crops 6 Dwindling livelihood opportunities
3 Indebtedness of farmers 7 Unviability of agriculture
3.1 Per hectare outstanding loan 7.1 Profitability of Cultivation
3.2 Debt asset ratio 7.2 Percentage of Expenditure Covered by
3.3 Debt income ratio Income from Agricultural Activities
4 Net per capita availability of food
grains
Source Primary survey
for the new millennium only have been included as the situation of agriculture has
worsened at a fast pace during about this time only. For the computation of crisis
index at macro level, HDI methodology has been used.
For primary survey, data for the chosen indicators have been generated through the
survey of farming households. Multi-stage stratified random sampling method has
been used. Resource constraint forced the study to omit some regions and choose three
regions each from the two states. The omission, however, does not cause much worry
as the omitted ‘Central Region’ of U.P. does not have distinguishing agricultural
feature, and ‘Greater Mumbai’ and ‘Konkan’ in Maharashtra are hardly agricultural.
The first stage was choice of districts. For this all the districts of U.P. and Maharashtra
were ranked separately in terms of crisis index for the two trienniums 2004 and
2015 and from each region the district with maximum deterioration (in terms of
crisis indicated by its rank) was chosen. In the second stage, from each district
three blocks were chosen by ranking blocks on the basis of block level agricultural
development index (developed for the purpose). This has been done to capture the
impact of agricultural development on crisis of agriculture. Hence, from each district
agriculturally the most advanced block, the most backward block and the one in the
middle were chosen. In the third stage, from each block on random basis one village
was chosen. Thus, from each state three districts, nine blocks and nine villages were
chosen. Table 2 shows the list of districts, blocks and villages chosen for the study.
The final stage was selection of farming households. This was based on proportional
stratified random sampling: farming households belonging to each class of farmers—
marginal, small, medium, etc. were chosen so as to have an idea about the relationship
between size of land holding and crisis of agriculture. Sample size was a major worry
and resources forced the researchers to make a compromise here so it was decided
to take 60 samples from every village. Thus, altogether 1080 samples (three villages
from each district x sixty samples x three districts = 540 samples each from the two
states).
Table 2 List of chosen regions, districts, blocks and villages

Uttar Pradesh Maharashtra
Region District Block Village Region District Block Village
Mawana Mawana Wadange
Kalan Khurd Karvir
Western Meerut Rajpura Masuri Western Kolhapur Kagal Bidri
Sarurpur Dabathuwa Gargoti
Khurd Bhudargarh
Jalaun Bhitara Parbhani Shingnapur
Bundelkhand Jalaun Dakore Aet Marathwada Parbhani Gangakhed SuppaTunda
Kadaura Atta Jintur Bori
Hata Tharuadih Arni Jawala
Tamkuhi Gauri Dahegaoan
Eastern Kushi Abrahim Vidharbha Yavatmal Wani
Rakwa Zari Zamni Wadange
Dudahi Dulma Patti
Source Field study
4 Failing Agriculture and Frazzled Farmers: A Macro

Perspective
The growth process of Indian economy has seen progressive worsening of the agri-
cultural sector with time. The crisis of agriculture that started from southern states has
taken a pan India character with only the intensity varying. Based on the indicators
mentioned in Table 1 and the method mentioned above, crisis of agriculture index
has been computed for major states. Table 3 mentions the result. Different states have
been ranked in terms of crisis and have been divided into different categories viz.
very high, high, moderate, low and very low based on the index score. Higher index
value in the table reflects higher level of crisis.
Table 3 clearly reflects that perilous form of the crisis exists in Tamil Nadu,
Kerala, Karnataka, Andhra Pradesh and Maharashtra where the intensity is very high
(0.650 and above). However, preliminary signs of lingering crisis of low intensity
are noticeable in the northern states, i.e. Punjab, Haryana and Uttar Pradesh. We can
Table 3 Crisis index across fourteen major Indian states

Category State Crisis Rank Category State Crisis Rank
index index
Group-‘A’ Tamil Nadu 0.746 1 Group ‘C’ Bihar 0.475 10
Very High Kerala 0.717 2 Moderate
> 0.650 0.448−
Karnataka 0.673 3 0.548
Andhra 0.672 4 West 0.468 11
Pradesh Bengal
Maharashtra 0.668 5 Group ‘D’ Uttar 0.439 12
Group ‘B’ Rajasthan 0.575 6 Low Pradesh
High 0.347−
0.549− 0.447
0.649 Orissa 0.556 7 Group ‘E’ Haryana 0.341 13
Madhya 0.556 8 Very Low Punjab 0.232 14
Pradesh 0.346 &
Below
Gujarat 0.549 9
Source Authors’ computation from secondary data
broadly draw three very important conclusions here—First, crisis of agriculture is

an all India phenomenon, only its intensity varies across states. Second, the crisis is
more intense in southern India than the northern states which have low index scores
on this count. Third, though the factors initiating and intensifying the crisis might
vary among states, most of them suffer from some common ailments like high cost,
problem in realizing remunerative prices and indebtedness.
The study has chosen India’s two most populous states Maharashtra and Uttar
Pradesh for a detailed analysis. While Maharashtra represents in some loose manner
western and southern India where the intensity of the crisis is high and farmer suicide
common, Uttar Pradesh showcases the broader image of eastern and northern India.
The two states are very big in size and by no means homogeneous entities. Maha-
rashtra is divided into five regions: Greater Mumbai, Western, Marathwada, Konkan
and Vidharbha, which are widely different from each other in terms of natural endow-
ments, level of infrastructure development, and are undergoing differential long-term
structural changes. Since Greater Mumbai is not typically agricultural and Konkan
is completely different in terms of topography, crops grown and ownership patterns
these have been left out in the study (Khan and Raman, 2016). Uttar Pradesh has
four economic regions Western, Eastern, Central and Bundelkhand. The Western
and Central regions of the state are comparatively in better position in terms of
access to agricultural resources, whereas the Eastern and Bundelkhand region are
suffering from marginalization and poor utilization of resources. Since, basic features
of Central region are covered by inclusion of Western region, for cost and time consid-
eration, we have left out this region in our analysis. Table 4 shows crisis of agriculture
index for the chosen regions of the two states.
Table 4 Region-wise crisis index in Uttar Pradesh and Maharashtra

Regions Crisis index % Growth rate of crisis Index
TE04 TE11 TE15 TE04 to TE11 TE11 to TE15 TE04 to TE15
Uttar Pradesh
Western 0.296 0.301 0.335 1.69 11.3 13.18
Bundelkhand 0.428 0.432 0.474 0.93 9.72 10.75
Eastern 0.378 0.400 0.428 5.82 7.00 13.23
All 0.352 0.363 0.395 3.21 8.68 12.17
Maharashtra
Western 0.594 0.533 0.55 −10.27 3.189 −7.407
Marathwada 0.514 0.493 0.543 −4.086 10.141 5.642
Vidharbha 0.578 0.575 0.59 −0.519 2.608 2.0761
All 0.565 0.537 0.563 −5.060 4.80 −0.501
Source Computed by authors based on secondary data
Table 5 (Maharashtra) and Table 6 (Uttar Pradesh) present the results of crisis
of agriculture at the district level using the indicators and methodology already
discussed. As district-wise absolute figure of crisis would not have revealed much,
we have classified districts into five categories very high, high, moderate, low and
very low (as done earlier with respect to states) for two time periods: the triennium
ending 2004 (TE04) and 2015 (TE15). Clearly, as the classification is based on the
spread of score within a particular state the values are not comparable between states.
In other words, since Maharashtra has high crisis index value in very high crisis index
we have put those districts which have an index score of > 0.723, the corresponding
category district for U.P. has score of > 0.391.
Tables 5 and 6 show movement of districts in the intervening time period and give
some very interesting results—First, there exists crisis of agriculture in the two states.
Since Maharashtra has overall higher intensity of crisis so naturally, the crisis across
regions here is higher than in U.P. Secondly, within a particular state the intensity
of crisis varies significantly across regions. Hence, while Vidharbha and Western
regions suffer the most in Maharashtra, Marathwada is relatively better off. Table-5
shows that of the eight districts of Marathwada, none fell in the very high or high
category in 2004 and only one was so in 2015, while for Western and Vidharbha
more districts lay in the very high or high category. In U.P., Bundelkhand is the
worst performer (all seven districts of the region lie in very high and high category in
both time periods) while the situation is far better in the Western and Eastern regions
(Table 6).
Poor performance of Bundelkhand is often attributed to poor infrastructure, a
contention that is not supported by facts. Prakash and Raman (2015) through infras-
tructural utilization index have shown that in the stressed region of Bundelkhand
there is no dearth of infrastructure. In fact, poor return on agriculture, uncertainty
Table 5 Categorisation of districts in terms of crisis index (Maharashtra)

Category and index Crisis index (TE04) Crisis index (TE15)
Score Region Districts Region Districts
Very high W = 1, T = 1 Solapur T=0 –
> 0.723
High W = 4, M = 0 Nagpur, W = 1, M = 1 Solapur, Wardha,
0.722–0.645 V = 3, T = 7 Gadchiroli, Sangli, V = 3, T = 5 Yavatmal, Nanded,
Wardha, Nagpur
Ahmednagar,
Nasik, Pune
Moderate W = 2, M = 3 Beed, Chandrapur, W = 5, M = 3 Chandrapur, Pune,
0.645–0.566 V = 2, T = 7 Satara, Yavatmal, V = 3, T = 11 Gadchiroli, Satara,
Nanded, Jalna, Latur, Beed,
Osmanabad, Nasik, Sangli,
Nandurbar Amravati,
Ahmednagar
Low W = 1, M = 3 Dhule, Latur, W = 1, M = 2 Washim,
0.565–0.487 V = 4, T = 8 Amravati, Akola, V = 3, T = 6 Buldhana,
Buldhana, Nandurbar,
Bhandara, Osmanabad,
Aurangabad, Jalna Akola, Parbhani
Very low W = 2, M = 2 Washim, Hingoli, W = 3, M = 2 Aurangabad,
< 0.486 V = 1, T = 5 Jalgaon, Kolhapur, V = 1, T = 6 Kolhapur, Dhule,
Parbhani Hingoli, Jalgaon,
Bhandara
Note W = Western, M = Marathwada, V = Vidharbha, T = Total
Source Computed by authors
and poverty among farmers have resulted in poor utilization of available infrastruc-
ture. Eastern region is also going along the same path of development. Contrary to
this, the Western region not only has good infrastructure but also has higher utilization
of infrastructure as well leading to better performance.
Third, a very interesting point here is the relatively low difference in crisis intensity
across the regions in the worst crisis state Maharashtra. For the low crisis state
U.P., however, if we compare the high performing Western region with the worst
affected Bundelkhand region, the average score of latter was found to be 1.45 times
higher in TE04 and 1.41 times in TE15. It also shows that within U.P. we have
the troubled Bundelkhand region which is worse than Western Maharashtra. This
justifies the contention that within crisis infested states/regions there could be
some comfortable zones while within the so-called less troubled states/regions
there could be some difficult zones. Fourth, within a particular state the relative
position of different regions is changing. Thus, for Maharashtra the Western and
Vidharbha regions have swapped their ranks in terms of crisis intensity between
TE04 and TE15. Vidharbha which was lying at second spot in TE04 has moved to
number one in TE 15. Table 6 shows that while index score of Western Maharashtra
has declined by 7.41% that of Vidharbha has increased by 2.08%. Table 6 also
Table 6 Categorisation of districts in terms of crisis index (Uttar Pradesh)

Very high W = 1, Lucknow, Lalitpur, W = 6, Sonebhadra, Mirzapur,
> 0.391 C=3 Sonebhadra, C=5 G. B. Nagar, Lucknow,
B = 6, E = 10 Chitrakoot, B = 7, Lalitpur, Chitrakoot,
T = 20 Allahabad, Mirzapur, E = 17 Allahabad, Mahoba,
Pratapgarh, T = 35 Kanpur, Varanasi,
Kaushambi, Mahoba, Pratapgarh,
Varanasi, S. R. Nagar, Kaushambi, Ballia,
Jhansi, Banda, Bahraich, Jalaun,
Kanpur, Balrampur, Hamirpur, S. R. Nagar,
G. B. Nagar, Balrampur, Jhansi,
Hamirpur, Raebareli, Deoria, Kushinagar,
Gorakhpur, Ballia Faizabad, Shravasti,
Ghaziabad, Raebareli,
Ghazipur, Bijnor,
Fatehpur, Saharanpur,
Banda, Muzaffar
Nagar, Gonda, J. P.
Nagar, Ambedkar
Nagar, Hardoi
High W = 3, C = 3 Faizabad, Sultanpur, W = 6, Farrukhabad, Jaunpur,
0.390–0.353 B = 1, Jaunpur, Fatehpur, C=2 Basti, Gorakhpur,
E = 10 Unnao, Bijnor, Agra, E=7 Mau, S. K. Nagar,
T = 17 Farrukhabad, Basti, T = 15 Sitapur, Sultanpur,
Azamgarh, Sitapur, Kannauj, Meerut,
Mau, Gonda, Moradabad, Agra,
Siddharth Nagar, Unnao, Bareily,
Jalaun, Deoria, Azamgarh
Ghazipur
Moderate W = 7, C = 2 Firozabad, Shravasti, W = 2, Lakhimpur Kheri,
0.352–0.316 E=4 Kannauj, Kushinagar, C=2 Chandauli, Mathura,
T = 13 JP Nagar, Hardoi, E=1 Barabanki, Etawah
Bahraich, Lakhimpur T=5
Kheri, Etah, S. K.
Nagar, Ghaziabad,
Saharanpur,
Muzaffarnagar
Low W = 8, Meerut, Barabanki, W = 4, Firozabad, Siddharth
0.315–0.275 C=1 Ambedkar Nagar, E=1 Nagar, Baghpat,
E=2 Bareily, Chandauli, T = 05 Rampur, Badaun
T = 11 Auraiya, Etawah,
Mainpuri, Budaun,
Baghpat, Mahamaya
Nagar
(continued)
Table 6 (continued)
Very low W=7 Moradabad, Mathura, W = 8, Etah, Maharajganj,
< 0.274 E=1 Aligarh, Maharajganj, E = 1 Pilibhit, Mahamaya
T=8 Buland Shahar, T=9 Nagar, Shahjahanpur,
Shahjahanpur, Aligarh, Buland
Rampur, Pilibhit Shahar, Auraiya,
Mainpuri
Note W = Western, C = Central, B = Bundelkhand, E = Eastern, T = Total
shows that Solapur district of Western Maharashtra that was lying in very high
crisis category in TE04 has improved its position and moved to high category in
TE15. Similarly, two districts of the region that were in high category in TE04
have moved to moderate category in TE15. This shows that within the same region
while some districts witness improvement, some other undergo deterioration over a
period of time. Further, the underlying factors vary across regions. It calls for a more
disaggregated study and initiative. In U.P., the relative position of regions has not
changed over a period of time. A heartening finding is that for Maharashtra the crisis
index as a whole has declined by 0.501% (though it has worsened between TE11
and TE15). The index score for different regions has by and large not increased
much. In fact, it has gone down in Western Maharashtra but marginally increased
in Marathwada (5.65%) and Vidharbha (2.07%). During the last decade, irrigation
facilities and market conditions have improved in Western Maharashtra, which as a
result has seen a change in the cropping pattern in favour of farmers. A large number
of farmers have minimized their risk by shifting to horticulture and floriculture which
are highly profitable. The farming community of Marathwada and Vidharbha, on the
other hand, are still producing cotton and soyabean which have relatively high cost of
are costly for cultivation (Mishra 2006). The high cost of production and poor return
due to market imperfections have resulted in fall in profitability, thereby intensifying
the crisis in this region (Deshmukh 2010).
A point of concern for U.P. is that although it is a low crisis state yet over the
period of time under study deterioration has taken place there (Raman and Khan
2017). Table 4 shows that for all the regions of U.P., the crisis score has increased
between TE04 and TE15. The index for U.P. as a whole has witnessed an increase
of 12.17% between TE04 and TE15. What is worse is that the deterioration is more
pronounced in case of Eastern region (13.28%) and Western region (13.18%). Seven
districts from the Eastern region (Faizabad, Ambedkar Nagar, Shravasti, Bahraich,
Deoria, Kushinagar, Ghazipur) and five from Western region (Bijnor, Saharanpur,
Muzaffarnagar, J. P. Nagar (Amroha), Ghaziabad) which were earlier lying in the high
and moderate crisis categories, respectively, have moved to the very high category
in TE15. This has two very important implications for the state economy—first,
deterioration has taken place in Western and Eastern regions that have been traditional
agriculture strongholds of the state. This has serious long-term implications for the
state. Second, crumbing agriculture in the face of no manufacturing and almost non-
existent rural non-farm sector in Eastern region is going to be catastrophic for this
region.
5 The Agricultural Fiasco: Inside Story
The macro level analysis though gives a general trend of the crisis situation, yet it
has its own limitations appearing primarily from the use of limited number of indi-
cators for which data is available, and absence of direct interaction with the ultimate
sufferers, i.e. farmers. We present findings of primary survey of over 1080 farmers
collected in the sample districts of U.P. and Maharashtra using all the indicators
mentioned in Table 1, and assigning weights based on principal component analysis.
For keeping things short, the paper does not mention factor loading and provides only
the final crisis index. Table 7 presents some important results pertaining to crisis of
agriculture—first, it shows that agriculture is not in a comfortable position in the two
states; there exists crisis of low intensity in almost all parts of these states. It also
shows that crisis score is considerably high for blocks of Maharashtra as compared
to the same in Uttar Pradesh. Secondly, it reflects that there exists wide inter-region
variation in crisis even within these states. It is evident that there is relatively high
crisis in Jalaun (Bundelkhand) and low crisis in Meerut (Western) in U.P. Similarly,
Yavatmal (Vidharbha) has very high crisis as compared to Kolhapur (Western) in
Maharashtra.
Table 7 Crisis Index at the block/village/farmer level

Category of Uttar Pradesh Maharashtra
blocks
Advanced Meerut Mawana 0.375 Kolhapur 0.536 Karvir 0.517
block 0.379 Kalana
Rajpura 0.395 Kagal 0.556
Sarurpur 0.367 Bhudargad 0.535
Khurd
Block lying in Kushinagar Hata 0.434 Parbhani 0.546 Parbhani 0.537
middle 0.424 Tamkuhi 0.432 Gangakhed 0.593
Dudahi 0.407 Jintur 0.509
Backward Jalaun 0.497 Jalaun 0.468 Yavatmal 0.563 Arni 0.555
block Dakore 0.499 Wani 0.546
Kadaura 0.525 Zari Jamni 0.59
a Forevery district the blocks have been arranged in order of the level of their agricultural
development
Source Computed by authors based on primary survey
The secondary data-based study has shown that Bundelkhand region of Uttar
Pradesh and Vidharbha of Maharashtra are the worst affected regions. Vidharbha is
one of the most vulnerable regions of Maharashtra. It has low ‘adaptive capacity’
to climate change, including adjustments in resources and technologies. The region
faces a number of problems such as low rainfall, lack of irrigation, low micro-
nutrients in soil, poor government support and procurement mechanism. The region
grows two main crops soyabean and Bt cotton. The adoption of Bt cotton, which
is more sensitive to shortage of water in the region without assured irrigation and
irregular rainfall, has made cotton cultivation a high risk–high cost cultivation system.
Failure of monsoon has resulted in farmers’ sufferings and loosing all that they had, at
times forcing them to commit suicide. Similarly, Bundelkhand is the most backward
region of U.P. The quality of land here is not very suitable for agriculture; rainfall is
erratic, and irrigation facilities sparse. The region hardly has any industry so there is
excessive dependence on agriculture. Farmers in the region are very poor and most
of them do not have sufficient resources to carry out cultivation using even modest
technology. They face high cost of cultivation and frequent crop failure and most of
them for want of resources are forced to sow the land only once in a year or even
leave a significant portion of the land fallow.
The crisis index scores prima facie show that there is a negative relationship
between the level of development of a region and crisis of agriculture as advanced
districts (Meerut and Kolhapur) have low crisis and backward districts (Jalaun and
Yavatmal) have high crisis. In order to get a deeper picture of this relationship and
examine it at the block level, the blocks were classified into three categories on the
basis of crisis index and we did a cross tab with their rank in agricultural development.
Table 8 Cross tab of crisis index and level of agricultural development of blocks
UTTAR PRADESH MAHARASHTRA
Advanced Medium Backward Advanced Medium Backward
Block Block Block Block Block Block
High Crisis Hata, Jalaun Dakore Kadaura Arni Gangakhed, ZariJamni
Kagal
Medium Mawana Rajpura, Dudahi Parbhani Wani Bhudargarh
Crisis Kalan Tamkuhi
Low Crisis --- --- Sarurpur Karvir - Jintur
Khurd

The results are tabulated in Table 8. The table shows that the relationship between
level of agricultural development and intensity of crisis is completely hazy at the
block level. For U.P., of the nine blocks taken up four blocks that fall in high crisis
zone are of three types (advanced-2, medium-1 and backward-1) in terms of agricul-
tural development. Further, Sarurpur Khurd block that is backward in agricultural
development is a low crisis block. In the medium crisis level also all three kinds of
blocks fall. In U.P., moderate crisis district Kushinagar has one block (surprisingly its
agriculturally advanced block Hata) in high crisis zone and other blocks in medium
zone. The picture is more or less the same for Maharashtra. Here also backward
blocks Bhudargarh and Jintur fall in low crisis category while advanced blocks Parb-
hani and Arni lie in the middle crisis category. Hence, just creating infrastructure at
the block level does not improve the position of farmers.
Third, block-wise comparison of the two states reveals that while in UP all the
blocks of less crisis infested district (Meerut) have lower crisis index as compared
to blocks of high crisis infected district (Jalaun), the relationship is not so obvious
in Maharashtra. In Maharashtra, some block (Kagal) of less crisis infested district
Kolhapur have higher crisis score as compared to some blocks (Arni and Wani) of
crisis-ridden district Yavatmal. Thus, even in the better performing districts, there
are acute problems related to agriculture. This clearly shows two things—one, that
crisis is deep rooted in Maharashtra and even in those districts where things look
not as bad at the macro level, at the ground level deterioration is severe. Two, as the
crisis intensifies in a region its impact spreads in less troubled areas as well.
Fourth, crisis of agriculture is a result of multiple issues: development, economic
condition of farmers and social condition, each interlinked with the other. Agri-
cultural development covers only one aspect of crisis and does not make any rigid
statement about the crisis situation of different farmers and social groups. An attempt
to relate crisis of agriculture with farm size and farmers’ caste yielded very inter-
esting results (Table 9). The Table clearly shows that for both the states crisis intensity
is related to the type of farmers. Marginal and small farmers have higher crisis
index as compared to the semi-medium and medium farmers. For measuring the
extent to which crisis depends on the size of land, we clubbed the farmer group into
two groups: marginal and small, and semi-medium, medium and large) and did the
‘t’ test to find whether means of these land groups differ or not, the difference was
found statistically significant at 5%.
A clear and emphatic relationship was found between crisis of agriculture and
caste of farmers. Table 9 shows that in both the states crisis index was low for upper
caste farmers and high for OBC and SC farmers (ST farmers were not found in the
survey area). An attempt to see whether difference is statistically significant revealed
that while the difference between upper caste and OBC farmers was not significant,
a clear difference (five per cent level) was noticeable if we compare the SC farmers
with upper caste and OBC farmers clubbed together. This means that the crisis of
agriculture has caste orientation and crisis is high in lower caste farmers.
A deeper investigation of the issue reveals that in UP land ownership has caste
orientation as bulk of SC farmers (89.8%) is marginal and small. Only 10.1% SC
farmers fell in semi-medium or above category. On the contrary, only 52.8% of the
Table 9 Crisis of agriculture and farm size and farmers’ caste group
Crisis of agriculture based on Crisis of agriculture based on
farmer categories caste of farmers
Farmer Uttar Maharashtra Caste Uttar Maharashtra
Categories Pradesh Group Pradesh
Marginal 0.46 0.562 Upper
Caste 0.406 0.526
Small 0.419 0.569 OBC 0.416 0.563
Semi-medium 0.411 0.536 SC 0.503 0.571
Medium 0.382 0.505
Large 0.395 0.491
upper caste farmers surveyed were in small and marginal farmer category. Hence,
saying that marginal and small farmers have high crisis intensity automatically means
that SC farmers have high crisis intensity. The situation is, however, different in
Maharashtra where out of the 540 farmers surveyed, 75% belonged to the upper
caste category while small and marginal for OBC and SC was 51.3 and 42.38%,
respectively. Thus, even after falling in relatively higher land size category SC farmers
in Maharashtra have higher crisis of agriculture intensity. Hence, for Maharashtra,
crisis definitely is severe among SC caste group.
The relationship between size class and productivity and profitability of agri-
culture has been explored by Chandra (2001), Sidhu (2002), Sukhpal et al. (2008),
Gaurav and Mishra (2011) and a host of others. The literature identifies few factors
that go against marginal and small farmers such as inability to use latest technology
resulting in low productivity, high cost of production, higher level of indebtedness
and reliance on non-institutional finance. The present study investigated these issues
and endorsed some of these and rejected others. It was found that the cropping inten-
sity and productivity per hectare in rupees for marginal and small farmers in both the
states were higher than that of medium and large farmers. For example, per hectare
productivity was Rs 72635.66 and 45084.25, respectively, for U.P. and Maharashtra,
respectively, for marginal farmers while for medium farmers the figure stood at Rs.
65475.06 and 27573.81 in U.P. and Maharashtra, respectively. High productivity was
on account of better and more intensive utilization of available land. However, very
high cost of production, adherence to old technology, high dependency of popu-

lation (large family size dependent on land), greater reliance on non-institutional
credit, inability to get remunerative price for their product all combined together
to turn the tide against marginal and small farmers. High dependence of popula-
tion results in very low per capita food grain availability among marginal farmers
and severely reduces the capacity of these farmers to face crop failure. High cost of
production significantly depresses the profitability per hectare. Hence, despite having
high productivity in Rs/per hectare the marginal farmers have very low profitability
per hectare. The marginal and small farmers in the survey area could meet a rela-
tively small percentage of their total expenditure through income from agriculture;
for the rest, they have to depend on casual income from other sources. Very often
when casual employment is not available they borrow money to meet the expenses.
They thus fall into a debt trap. The primary survey revealed that on an average a
marginal farmer in U.P. had an outstanding loan of Rs. 76446.52 (Rs. 71429.43 in
Maharashtra). They had very high debt to gross value added (GVO). A significant
portion of the loan was taken to meet current consumption expenditure in the event of
insufficient income from agriculture. Not surprisingly, it came from non-institutional
sources.
6 Determinants of Crisis of Agriculture at Micro-Level
Identifying determinants of the crisis is a very tricky and difficult issue. This is
because there is an overlap between the indicators of crisis and causes of crisis.
For example, farmers’ indebtedness is a very important indicator of crisis, which
at the same time is an important cause of crisis. Hence, if we run a regression
farmers’ indebtedness would appear both on the left- and right-hand side of regression
equation thereby creating the problem of identity. To establish any cause–effect
relation between crisis index and its variable, a normal regression has been run. In
this process, we have insured that those variables that appear in the computation
of crisis index do not appear as a predictor or explanatory variable on the right-
hand side. But, if we drop the variables that have been used in the computation of
crisis from the list of regressors, the explanatory power of the model nose-dives. The
condition of running a predictor regression, however, forces us to do this. Thus, as
the regression result shows the value of R2 obtained is very low. Table 10 gives the
list of regressors, their units of measurement and the expected sign of the coefficient
(theoretically conceivable).
We used ANOVA model that reflected a statistically significant overall regression
model with a p-value of (0.000) which is less than 0.05 (95% confidence interval).
This implies that the model is a good fit. Therefore, we can go ahead and examine
the coefficient of indicators to determine which economic indicators contribute more
weight in the economic distress (Table 11).
Table 10 List of variables for regression analysis

SN Variables Explanation Unit Expected sign
1 Farmer groups/land Crisis is expected to be Binary (0 = Negative
size related to size of holding Marginal and
Small, 1 = Others)
2 Social groups/caste Crisis has a social Binary (0 = SC, 1 Negative
context = Others)
3 Irrigation Can be used as proxy for Binary (1 = Negative
resources of farmers Adequate., 0 =
Not- Adequate)
4 Sources of loan Has direct bearing on Binary (0 = Positive
cost of production Institutional 1 =
Non-Institutional)
5 Problem of availability Affects wage component Binary (0 = No, 1 Positive
of labour of cost = Yes)
6 TFP (Total Factor Proxy for technology Normalized Negative
Productivity) used
7 Availability of Supplementary income Normalized Negative
alternative livelihood source
Table 11 Model summary

Model A β1 β2 β3 β4 β5 β6 β7 *
Value of unstandardized 0.455 −0.027 −0.059 −0.034 0.021 0.022 −0.029 −0.013
coefficients
Standardized −0.091 −0.212 −0.145 0.044 0.092 −0.2 −0.109
coefficients
t Value 42.696 −2.555 −4.988 −3.657 2.133 2.135 −6.222 −2.403
R Square (0.479)
Crisis Index = α + β1 Farmer Groups + β2 Social Group + β3 Irrigation

+ β4 Sources of loan + β5 Problems of Labour + β6 TFP
+ β7 livelihood opportunity + u t
The table clearly indicates that status of social group (0.212) is the main deter-
mining factor of crisis followed by total factor productivity (0.200), irrigation facil-
ities (0.145), alternative livelihood opportunity (0.109) and land holdings (0.091),
whereas the source of loan and labour problem has low explanatory power. Those
variables that have high explanatory and influencing power are highly influenced
by long-term growth process which has been prevailing since the 1970s (Era of
Green Revolution). Over time, institutional changes, market processes and demo-
graphic pressure have brought two remarkable changes in the rural structure. First,
the proportion of small and marginal holdings has increased and second, the capi-
talist mode of production has prospered. In the capitalist mode of production, a
three-tiered pyramid of the farming communities exists in the rural economy. At the
wide base are located the poverty-stricken and socially marginalized farmers who
fly around the poverty line and live in distress condition. The middle tier is formed
by the upwardly mobile farmers who come from the creamy layer of OBC engaged
in a prolonged and, often, frustrating battle to rise above the poverty line and join
the mainstream. Small but politically powerful farm lobbies occupy the peak of the
pyramid. It is important to note that this pyramid is an outcome of policy regimes
that have prevailed so far in the agrarian economy.
7 Conclusion
From the afore-mentioned explanation it is sufficient to establish three very pertinent

points—First, the sector vs farmer debate relating to agriculture is futile as there has
been overall deterioration in agriculture. There are issues both at the sector and
farmers’ level, thus adoption of a balanced perspective is required. Second, the crisis
of agriculture is now an all-India phenomenon and different states and regions vary
only in terms of intensity of the same. So, we cannot talk about crisis infested
region(s) and crisis-free region(s). Different states and regions differ in terms of
nature and intensity of crisis. Although there can be some common problems, yet
the underlying causes of crisis, and chief factors responsible for its initiation and
perpetuation might differ across states/regions/districts demanding the adoption of
region-specific policies. Third, formulation of macro-level policies to resurrect the
agricultural sector and troubled farmers would have limited success. The primary
survey has clearly established that the left perspective is correct and that the crisis
definitely has a social orientation. It is more severe for the small and marginal farmers
and the weaker or lower caste groups. Since these sections or castes face specific
kinds of problems, a specific set of policies is required to handle their issues. Policies
adopted to give a boost to the agricultural sector in general would, in all likelihood,
have only temporary and superficial effect on the severely affected farmer categories.
It is imperative to take specific measures for these social sections.
Thus, in order to resurrect the agricultural sector and rejuvenate farmers, the
government should adopt region-specific and farmer centric policies. Region-specific
policies should be based on a detailed district and block-level study that could identify
the main problem areas and specific issues faced by agriculture and farmers of the
particular region. Farmer centric policies should address the specific issues faced by
the troubled farmers. Brief suggestions on region-centric and farmer centric policies
are discussed as under.
Adoption of Farmer centric policies—The principal component of farmer centric

policies should be to ensure sufficient return to farmers from farming activity. Two
important interventions are required from this angle: (i) Provision of remunerative
prices and checking price deflation: This calls for developing an efficient agro-
marketing network with very effective involvement of government agencies and
fixation of prices that are farmer friendly. The state should intervene to resolve the
problem of sale of agricultural products. Minimum support prices (MSPs) for key
crops are not regularly revised and upward revisions are generally not adequate
enough. A system of determination of MSP at district level may be developed and
revision of MSP be based on rate of inflation in the economy and cost of produc-
tion with inputs from farmer groups. The poor farmers should be protected from
vagaries of the international market. Hence, during years of shortages of agricultural
commodities farmers should be allowed to reap reasonable benefits and prices should
not be deliberately depressed by pushing up imports. The decision is definitely going
to be tough as it results into a clash of interest of farmers and consumers (who prefer
cheap imports) but government should attempt to strike a balance.
(ii) Reducing the cost of production: it in turn depends on provision of extension
of services, increasing public investment in rural development and mitigating risks
associated with farming by offering dependable crop insurance. For minimizing input
costs, high-quality agricultural inputs should be made available at the appropriate
time and at affordable prices. This can be done through member-based farmers’ coop-
eratives free from bureaucratic intervention and controls. The government should
provide subsidies especially for marginal farmers by the cash transfer scheme.
Region-specific policies Though there are some common issues and measures
that are to be adopted in an effective manner everywhere, yet special issues of
different regions must be dealt with by adopting region centric approach. The anal-
ysis of regional dimension of crisis of agriculture clearly shows that because of
their peculiarities the policies that are relevant for Jalaun (Bundelkhand region) and
Yavatmal (Vidharbha region) are not going to be appropriate for Meerut and Kolhapur
(Western regions of U.P. and Maharashtra). For example, irrigation is the major
cause of concern in Bundelkhand and Vidarbha. To handle this issue the govern-
ment should enhance irrigation facilities and improve irrigation systems. There is
a need to replenish groundwater through water harvesting. Measures like arrange-
ment of underground pipelines for water could be promoted so as to reduce water
loss in transportation. The government should also lay emphasis on micro-irrigation
systems and precision farming. Another important intervention required is in the area
of crop insurance in the district. This is more crucial in these districts as frequent
monsoon failure results in pauperization of farmers. The problem is more severe in
Yavatmal (Vidharbha) where farmers have shifted to Bt Cotton farming and crop
failure is very frequent. Similarly, the specific issues of Meerut and Kolhapur need
to be studied and appropriate steps need to be undertaken. The objective of this paper
is not to come up with specific suggestions rather to emphasize emphasize the need
for farmer centric and region centric policies based on findings of the primary survey.
We can conclude by saying that agricultural sector is failing and farmers are
frazzled and under severe duress. The problem has acquired an all India proportion
and on the economic front is taking its toll on the sector that still supports more than
half of the nation’s workforce and supplies food to the population. On the social front,
the distress has hit the small and marginal farmers the hardest widening the gulf in the
society. To add to it, severe livelihood crisis in the rural areas is further complicating
the crisis in agriculture. If the government moves in a planned manner and gives
proper emphasis on non-farm sector especially rural manufacturing, it would, on the
one hand, reduce dependence on agriculture and reverse the trend of sub-division of
land holdings and on the other provide surplus income that can be pooled back and
invested in agriculture. The need of the hour is comprehensive district and region
level planning as piecemeal efforts are not going to achieve the desired results. It’s
high time that serious consideration is given to the problem of farmers else the crisis
of agriculture would intensify in states and would have very serious repercussions
for not just the agriculture sector and farmers but the bulk of population.
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Labor Mobility
Labour Mobility in Historical
Perspective from East U.P, South U.P
and North Bihar: Contours of Changes
and Continuity
Tulika Tripathi
Abstract Mobility is a fundamental trait of human beings, from the memory

immemorial. However, its duration and location and the characteristics of mover
keeps on changing. In this paper, we have tried to understand the present nature of
mobility over two decades, i.e. 1996–2016 for two regions of Bihar and Uttar Pradesh,
which remained to be a poverty concentrated zone in India. In this paper, we have
contextualised current pattern of mobility in context to the past patterns of mobility,
since mobility is very closely related with the resources and social capital of an indi-
vidual to which she/he belongs and the source and destination locations. The short
run mobility and circular migration has increased among men and new and richer
locations to move have been opened during this time period. People from this region
have started to migrate to Gulf countries which was earlier only limited to migrating
to domestic destinations, that too particularly to Mumbai, Delhi, Gujarat, etc. While
long run circular migration has seen new destinations, short run local migration to
the same district have increased many folds. Survey observation suggests that the
expansion of real estate and service sector have created low skills job catering to
flexible job requirements of low skill agriculture workers and small farmers of the
same district. However, having stated the change in the pattern of mobility, not every-
thing has changed. The mobility pattern across the socio-economic group remains
the same. To be more clear, poor, less educated moving to nearer destinations and
better off moving to far off destinations is evident. And returns of those moving to
far off places are higher than those moving to nearer destinations. Similarly, those
moving to far off place do so for longer durations and those moving to nearer destina-
tions are moving for shorter durations. Further, this paper has looked at the change in
road and transportation and banking and financial services as an enabler of frequent
mobility and mobility to far off places. Survey results suggest large improvement in
terms of road quality and reach of road to the villages. Due to better road networks
mostly private transportation like taxi and auto have reached to these villages taking
many workers every day/week or month to their respective work locations. These
villages now have taxi and auto stand, banking facilities such as ATM, internet and
T. Tripathi (B)
CSEP, SSS Central University of Gujarat, Gandhinagar, India
e-mail: hello.tulika@gmail.com

https://doi.org/10.1007/978-981-15-8265-3_18
358 T. Tripathi
post offices, enabling frequent mobility at one end, and enabling mobility to far off
places for longer duration at the other. Since it has eased to reach homes quickly
in case of any emergency or to send money as and when needed. So in nutshell,
far off destination to move is opened, short run circular migration has increased.
However, the characteristics of those migrating to various places for different loca-
tions remains the same. Road, transportation, ICT and financial services have played
a very important role in changing the nature of mobility from this region of India.
1 Introduction
Mobility has always been an intrinsic part of human civilization. People need a
certain minimum of social and economic resources in order to be able to mobile. It
is, therefore, no coincidence that wealthy people and societies tend to be generally
more mobile than relatively poor people and societies (Haas 2009). A fundamental
paradox is that while constraints are likely to motivate people to move, but at the same
time they need resources to do so. Thus, mobility is both a cause (among many) and
a consequence (among many) of processes of social transformation, which underpin
living standard and livelihood expansion. Mobility begets access to resources and
better access to resources facilitates mobility. Therefore, historically, people from
wealthy regions have been more mobile than poor regions and/or mobility have made
those regions richer. People from south and west regions of India, especially from
the coastal belt, i.e. Kerala, Gujarat and Tamil Nadu, have been migrating for trade
and services and not just as labourers. Therefore, we find a very strong Gujarati and
Tamil/Telegu domestic and international diaspora (Tumbe 2018). Further, the migra-
tion literature suggest the crucial role played by social networks in helping people at
both the places; origin and destination (Mani and Riley 2019; Bertoli and Ruyssen
2018; Bashi 2007). These social networks in form of linguistic and regional dias-
pora help people from their background to enter the new destination. Helps include
information, job offers, accommodation, economic support, social relations, etc. Of
all these access to information is so important that it restricts mobility within the
same group of people and/or area flowing through these diaspora. Conversely, rela-
tively lower long term spatial mobility and smaller information sets have reduced
the chances of acquiring capital among many social groups, including the Dalits
and Adivasis, and also stunted the development of their diasporas (Tumbe 2018).
The links established by the Punjabis, Gujaratis, Malayalis and Tamilians during
the colonial period were critical in extension of their internal and international dias-
poras. They were followed globally by the Telegus and Kannadigas, while erstwhile
dominant UP and Bihari lagged behind in relative terms. Because, migration from
UP and Bihar was in form of indentured labourers and recruiters in British Army had
no agency to create a strong social network. Therefore, we still find the historical
streams and pattern of migration and more mobile regions are wealthiest ones and
Labour Mobility in Historical Perspective … 359
vice versa. Here, two things are important; pattern and type of activity of migra-
tion/migrants. In light of historical facts, one can observe the following pattern of
continuity in the mobility of people.
• Strong Diaspora
Trade & Services • High skilled labour migration
• Migration for highger education
•Weak diaspora
Indentured labour, soldiers •low skilled labour migration
A case of East and South UP and North Bihar: If we believe in eastward migration
hypothesis into Indo-Gangetic valley it received inward migration between 2000
BCE and 300 BCE and even after that (Tumbe 2018). Bihar and Uttar Pradesh are
located on the great filed of Ganga Yamuna doab of Indo-Gangetic valley. These
two states have most fertile lands, excellent environment for cattle rearing, full of
natural resources and traditionally well-fed people. Therefore, it naturally led to a
dense settlement of population in this region and less mobility of the people from
this area. Measures like passport, taxes on using roads and crossing border during
the Mauryan period might have further prevented in/outmigration. Also, this region
in the north is blocked by great Himalayan range where the passes are snow blocked,
therefore, no going towards East Asia and no trade, social and culture exchange was
possible. On the other side, Ganga Yamuna doab had rivers, dividing it from Delhi
and northern India. That is why we find limited domestic circular migration from this
belt to other parts of country for religion and trade, etc.; Ashoka and Mahavira are two
great religious migrants of Bihar. However, in modern times, i.e. pre-independence
period, the majority of migration remains limited to indentured labour for plantation
and recruitment of soldiers in British Army during World War II from this region.
These two groups; one working as slave and other as soldiers would have little
agency and capacity to establish a strong network with the people of the place of
origin and destination. That is why there is no singular diaspora emerged from this
side. Bhojpuri diaspora is identified very late which might loosely cover this area.
This diaspora particularly emerged in Africa and East Asia (Trinidad, Fiji, etc.), with
no connection whatsoever with the people of Uttar Pradesh and Bihar. Nationally,
during Independence movement and after that there was migration from this region
to northern India and especially Delhi. Many political leaders like Rajendra Prasad,
Pandit Nehru, Shastri, Lohiya and so on so forth migrated from UP and Bihar to Delhi.
Thus from this region in near history, we see mostly domestic and circular migration
towards northern India particularly Delhi. This migration then was not remained
limited to political leaders, and since then the spur of migration ever increasing for
services and labour. Uttar Pradesh harbours nearly one-fifth of India’s population
and it experienced net outflow of 2.7 million people during 1991–2001. Similarly,
Bihar also registered the same phenomenon where the net outmigration is around 1.7
million people during the same time period. Rural to urban migration, which from
360 T. Tripathi
18 to 38% of intra-state and inter-state migrants, respectively, is predominantly a

phenomenon among males (Bhagat and Mohanty 2009).
2 Data
The present study is based on LSMS-I (Living Standard Measurement Survey-I) and
its repeat survey (henceforth LSMS-II). LSMS-I was carried out in 1997 by the World
Bank and LSMS-II is carried out by us in 2017. The survey was focused on migration
and poverty belt of India, which is Eastern and Southern Uttar Pradesh and Northern
Bihar. LSMS-2 selected 21 villages out of the original 124 villages of LSMS-1 and
revisited same households to construct a panel of households and members. Thus,
we have cross section data of around 900 households for two points of time, which
is 1997 and 2017. Remarkably, 1990s are the time when road, transportation and
communication started expanding in India. Globalisation and capitalist expansion
ensured that infrastructure and market expansion took over which have led to increase
in labour mobility. The present work uses this household data from two time periods
by forming a panel of households to look at labour mobility characterised by the
endowment and social characteristics of household. Against this backdrop the present
paper is focussed on these two backward states of India, Uttar Pradesh (U.P) and
Bihar which have very low level of urbanisation and are considered to be poverty
and outmigration belt of India. The migrants from these regions are often more
disdainfully referred as ‘Bhaiyas’.
The paper is an attempt to understand the mobility and its pattern in this belt. The
key to understanding migration in India is by looking at the two Ds, i.e. duration
and destination of migration. The paper is organised as following: Sect. 3 examines
changes in two decades in duration of mobility using LSMS data of Uttar Pradesh
and Bihar. Section 4 analyses the change in destination of migration. This entire
analyse is done in the three districts of Uttar Pradesh and four districts of Bihar,
which is part of East U.P, South U.P and West Bihar. Section 5 shows the availability
of road and transport and its role played in migration. Further, Sect. 6 looks at the
availability of banking and communication, and its role played in recent change in
migration. Further, Sect. 7 uses the household endowment of vehicle and its impact
on pattern of migration.
3 Duration; Short Run and Long Run Mobility
In case of UP and Bihar, the structural transformation led to decline in agriculture

profitability but didn’t lead to the growth of secondary sector. The growth of tertiary
sector and real state have mostly created low level work (ILO 2017, Jha, undated,
FICCI 2015). Due to which employment elasticity and agricultural wages fell in
both the states (Chavan and Bedamatta 2006, Jha undated). As a result, we see lots
of labour force moving out of agriculture and joining the casual labour force in
construction and services.
Continues: There could be various forms of mobility, often distinguished on the
basis of duration and destination. It is true that there has been faster mobility of
labour in recent times. Its quantum has increased significantly, be it to nearby or
far off places. Mobility of labour to adjacent town or city accompanied by better
connectivity has changed the earlier form of mobility which was of longer duration.
The shortest duration migrations of less than a day or week are called commuting
and affect over 10 million people around the major urban centres. Slightly longer
duration migrations, in spells of a few months each, with no spell lasting more than
six months is known as seasonal migrations/short run migration. Short run migration
has increased from 1996–1997 to 2016–2017. A larger part of labour is resorting to
short run migration in our survey data as compared to earlier round. By default, short
run migration is mostly possible in case of places nearer to residence. It is shown that
short run migration is mainly observed in the same district and long term mobility is
to far off places. We distinguish these two forms of mobility based on duration. Short
run migration are those who report to be at home for nine or more months and long
term mobility means who are reported to be at home for less than nine months. Means
short run migrants are circular migrants they go for shorter duration often for 2–3
months or lesser, while the long run migrants visit home annually or biannually and
therefore remains absent for entire year. Increasing urbanisation, expansion of city
boundaries, higher demand for labour in nearby towns, expansion of construction and
transport industry, better rail and road connectivity, lowering down of transportation
cost and declining family size have promoted short run migration. Construction sector
is the most favourable destination for short run migrants as it provides necessary
flexibility to match up with seasonality of agriculture. Moreover, labour absorption
in agriculture is also going down. Transport sector has also contributed in short run
migration. Works like rickshaw pulling, taxi/auto/bus/truck driving provide flexible
working period and thus could be combined with farming activities. Therefore, it
is most convenient for rural labour to seek job in these sectors and, therefore, we
observe an expansion in activity status of individuals as daily wage labours. When
we compare short run mobility (Tables 1 and 2) and long term mobility in LSMS-1
and LSMS-2, we find that people moving to far off places have increased. Interstate
mobility was quite low in LSMS-1, but it has registered substantial presence in
LSMS-2. International mobility is also observed in LSMS-2, particularly to middle
east. In the past decade, the locus of emigration to the Gulf shifted from south India
to north India, and the Bhojpuri speaking tracts of eastern Uttar Pradesh and western
Bihar dominate the unskilled labour flow outside India, much like a century and a
half ago. The billions of dollars of remittances from the Gulf that once touched the
west coast of India have finally made its way to Ganga.
Further, males are larger in numbers in mobility as compared to women (Table 3),
another historically established pattern, remains the same. For instance, between
1838 and 1917 over 2,00,000 Indian labourers migrated to British Guiana and less
than a third returned to India. Almost all the migrants traced their roots to the
362
Table 1 Short run mobility for economic activity: 9 months or more at home
LSMS-1 LSMS-2
District Same district Other districts-same state Other districts-different Same district Other districts-same state Other districts-different Total
states states
Jehanabad 67.24 23.84 8.92 88.17 12 0 100
Saharsa 1.45 29.5 69.05 73.5 3.03 23.47 100
Vaishali 37.93 37.93 24.15 90.52 9 0 100
Bandaa 69.09 22.14 8.77 96.13 4 0 100
Allahabad 73.05 5.25 21.7 95.59 4.41 0 100
Gorakhpur 83.94 8.03 8.03 96.31 2.88 0.82 100
Total 56.74 17.59 25.67 90.45 5.63 3.92 100
a Now known as Chitrakoot
Source LSMS-1 and Field Survey
T. Tripathi
Table 2 Long term mobility: less than 9 months at home
LSMS-1 LSMS-2
District Same district Other districts-same Other districts- Outside India Same district Other districts Other states Outside India Total
state different states
Jehanabad 76.45 10.08 13.47 0 0 13.68 86.32 0 100
Labour Mobility in Historical Perspective …
Saharsa 0 12.41 87.59 0 1.03 4.09 94.87 0 100

Vaishali 31.99 36.02 31.99 0 0 8.02 90.69 1.3 100
Bandaa 47.22 5.56 47.22 0 3.98 6.68 89.34 0 100
Allahabad 0 50 50 0 4.32 11.45 80.19 4.04 100
Gorakhpur 0 24.15 51.7 24.15 0 1.09 76.23 22.68 100
Total 21.94 21.35 52.14 4.56 1.57 5.95 85.3 7.19 100
a Now known as Chitrakoot
363
364 T. Tripathi
Table 3 Economic activity by sex- LSMS-2

Short run mobility Long run mobility
Sex Same Other Other Same Other Other Outside Total
District districts-same districts- District districts-same districts- India
state different state different
states states
Male 89.69 5.26 5.05 1.39 5.48 85.82 7.31 100
Female 91.27 6.03 2.7 3.07 4.21 87 5.73 100
Total 90.45 5.63 3.92 1.5 5.4 85.89 7.22 100
Source Field Survey
Bhojpuri-speaking tracts of the Gangetic plains, a core area of the Great Indian
Migration wave. Only a sixth were upper castes, rest of all were from low caste
or outcaste and middling artisan and agricultural castes and mostly men (Tumbe
2018). Further, if we solely look at the change in duration of migration, pattern
almost continues for the long run migration over the two-decade time period. There
is almost no change in individuals migrating for 9 or more months in one spell. And
the short duration of migration 4–6 months and 7–9 months shows slight increase
followed by almost similar decrease in migration for shorter duration, i.e. 1–3 months
(Fig. 1).
Our analysis of over two decades time period suggests that not much has changed
in the duration of migration besides a small increase in migration for 6–9 and 4–
6 months in one spell (Tables 3 and 4).
Changes: Further, our survey from the two rounds over two decades time suggest
the change occurred between SES communities in duration of migration. In fact,
individuals from the well-off communities, i.e. upper caste, higher MPCE class and
land class are migrating for longer duration; they are absent for the entire year. The
gendered pattern of migration remains the same; a one of flow for men and fixity
12 months absent
>9 months
7 to 9 months
4 to 6 months
1 to 3 months
12 months absent
>9 months
7 to 9 months
4 to 6 months
1 to 3 months
100 80 60 40 20 0 20 40 60 80 100
Fig. 1 Change in duration of migration from 1997 to 2016 Source LSMS-1 and Field Survey
Table 4 Duration of migration (East UP & West Bihar)
1997 2016
1–3 months 4–6 months 7–9 months >9 months 12 months absent 1–3 months 4–6 months 7–9 months >9 months 12 months absent
Male 2.56 2.73 5.8 6.66 82.25 2.85 6.2 7.39 8.84 74.71
Female 1.95 0.88 0.78 3.41 92.98 0.82 0.29 1.35 1.31 96.22
Upper caste 2.92 0.97 2.19 13.63 80.29 0.47 1.17 2.1 8.41 87.85
OBC 1.99 2.19 2.98 2.78 90.06 1.52 3.79 3.46 5.1 86.13
SC/ST 2.22 2.05 2.73 1.54 91.47 2.64 3.44 5.91 2.64 85.37
Muslim 2.58 1.55 10.82 10.31 74.74 0.9 1.49 4.48 12.54 80.6
Poorest 1.76 3.27 5.29 1.51 88.16 4.23 5.71 6.98 5.71 77.35
Poorer 1.94 1.94 3.87 2.66 89.59 0.8 2.59 3.69 5.78 87.14
Poor 1.19 1.9 2.14 2.38 92.38 1.07 1.95 3.31 2.63 91.03
Rich 2.99 2.35 3.84 6.18 84.65 2.03 3.55 3.95 5.17 85.31
Richest 3.21 0.2 2.41 11.45 82.73 0.87 2.73 3.6 6 86.8
0−0.5 2.74 1.92 4.25 5.62 85.46 2.26 3.72 4.17 3.92 85.94
0.5−1 1.31 3.49 4.37 1.75 89.08 0.28 2.92 4.18 5.71 86.91
1–3 1.57 1.39 2.61 6.96 87.48 1.26 2.09 5.13 7.54 83.98
3–5 0.49 2.43 3.4 1.94 91.75 4.6 5.17 4.6 5.75 79.89
5+ 3.71 1.31 2.84 5.24 86.9 0 1.99 1.32 5.96 90.73
365
366 T. Tripathi
for women. Men leave their wife at home to take care of the surviving parents and
entire family mostly moves if the parents have passed away (Tumbe 2018). The long
duration migration for men has reduced by 10% while it has increased by 8% for the
women. If we analyse these numbers with the change in duration of mobility across
land class and MPCE quintiles, we find that there is rise in the long run migration for
well-off individuals, individuals from large landholding and higher MPCE quintiles.
The result also suggests that in cases of long term migration men travel frequently to
the native place, to run farming on inherited land, while women doesn’t need to do
the same. Long term migration has increased for upper caste individuals from 80 to
87% over two decades while other categories of short run migration have declined.
Short duration migration increased for OBC and SC/ST and long duration migration
declined. Interestingly there is a rise in Muslims migrating for longer duration. It is
backed by the historical waves of migration of weavers, especially Momin Muslim
communities migrated towards the textile towns of Bombay in the nineteenth century.
It has contributed to the emergence of a new corridor being established towards
Maharashtra (Tumbe 2018) followed by Surat in the twentieth century (Field survey
of weavers of Varanasi 2012). Within the MPCE quintile poorer individuals are
doing short duration migration. Short duration migration of 1–2 months and seasonal
migration of 4–9 months have increased over two decades time period. While the
richest individuals are moving for longer duration, the biggest contributor to this
group is women relatively to men (Figs. 1 and 2). If we look at the land class category
it reinstates the same argument of increasing absentee landlords, where the long run
migration have increased while individuals from the smaller landholding groups are
either short run or are seasonal migrants. This also shows the reduced profitability
and lucrativeness of agriculture as an employment opportunity.
Therefore, while the pattern of migration between male and female and SES
category remains the same, i.e. better off moving out first either permanently or
for longer duration, poorer communities are short run and seasonal migrants, mostly
migrating for shorter duration. But the pattern of duration of migration has changed in
two decades time period, frequent commuting and seasonal migration are replaced
by long duration migration by better off individuals. It also shows that Lewisian
turning point never occurred in this part of India, as individuals still rely on income
from agriculture back at home. This result also indicates the lack of well-paid and
secure, permanent jobs for individuals in the cities, along with higher cost of living.
Thus today, male migration from East UP and West Bihar extends in all directions
within the Indian subcontinent, especially westwards and southwards, with a new
line opening to the Gulf countries particularly for semiskilled and unskilled workers.
While Gujaratis and Punjabis dominated the earlier waves of migration, the later
phase was dominated by South Indians, especially Telegus and Tamilians, current
wave of migration is dominated by UP and Bihar. However, the migration from UP
and Bihar in comparison to South Indians, Gujarati and Punjabis restricts to domestic
migration and of low skilled labours.
Total
Richest
MPCE class
Rich
Middle
Poor
V Poor
Total
Richest
Rich
Middle
Poor
V Poor
100 80 60 40 20 0 20 40 60 80 100
Same dis-U Same dis-R Oth dis-U
Oth dis-R Oth State -U
Fig. 2 Change in destination of migration in East UP and West Bihar—Income class Source
LSMS-1 and Field Survey
4 Destination of Short Run and Long Run Mobility:

Changes
Urban centres are always preferred destination, be it now or two decades ago, as
Lewis theorise in his dual sector model. The migration destination to same district
and other districts in the same state was mostly used by poor MPCE quintiles and land
class, however, the rich and upper caste also migrated to urban centres of other states
(Table 5 and Figs. 2, 3, 4). Over two decades the class-caste pattern of migration
remains the same, the change, however, occurred in terms of tremendous increase
in migration within the same district and sharp decline in migration to other states.
Further, the decline in migration to other states happened among upper caste, higher
MPCE quintile and higher land class. From our field survey, we understand that
the rising service and construction sector in the small towns and cities have gener-
ated some job opportunities there, which not only made the cities like Allahabad,
Gorakhpur, Patna more employable but increased the short run migration and, there-
fore, frequent commuting by the poorer communities. It has also increased the migra-
tion to the nearby urban centres. Thereby also increasing frequent commuting and
seasonal migration.
368 T. Tripathi
Table 5 In 1997, only about 4% of the population was working outside, which rose to 10% by
2017
There is a bare increase in women working outside the village in comparison to men
LSMS-1 1997 LSMS-2 2017
Sex Same village Outside village Total Same village Outside village Total
Male 94.3 5.7 66.7 79.7 20.3 45.5
Female 99.3 0.7 33.3 98.7 1.3 54.5
Total 96.0 4.0 100.0 90.1 9.9 100.0
Total
5+
Land class
3 to 5
1 to 3
0.5 - 1
0 - 0.5
Total
5+
3 to 5
1 to 3
0.5 - 1
0 - 0.5
100 80 60 40 20 0 20 40 60 80 100
Same dis-U Same dis-R Oth dis-U

Oth dis-R Oth State -U
Fig. 3 Change in destination of migration in East UP and West Bihar—Land class. Source LSMS-1
and Field Survey
5 Availability of Transport and Communication
Apart from sustained labour demand in an increasingly multi-polar world of multiple

migration destinations, mobility seems to have been further spurred by reduction of
travel costs and the revolution of communication technology, connecting people over
increasingly distant places (cf. Castells 1996). Expansion of transport and communi-
cation has also contributed in labour mobility. Therefore, it makes sense to examine
Total
Muslim
Caste
SC/ST
OBC
Upper Cas
Total
Muslim
SC/ST
OBC
Upper Cas
-150 -100 -50 0 50 100 150
Same dis-U Same dis-R Oth dis-U Oth dis-R Oth State -U
Fig. 4 Change in destination of migration in East UP and West Bihar—Caste. Source LSMS-1 and
Field Survey
this. In this section, we have analysed village level availability of road, mode of trans-
port and communication. We also include financial facilities as it might have a role
in reducing frequent commuting and promoting long term mobility. Our field data
shows that almost all villages have road connectivity, mostly metalled road (pacca
road). Out of 21 villages of our sample, 6 villages have paved roads and only 1 village
has trail road. Retail trade has witnessed phenomenal expansion in India and there
has been diversification of consumption basket of rural population, away from food
to non-food consumption. Consumer goods have entered into consumption basket.
A barter-based village economy has been converted into cash transaction. Selling of
surplus to market and filling deficit by buying from market is a growing practice in
rural India. Thus, market has reached rural India in a big way in post globalisation
era. This has been facilitated by better transport, communication and banking system.
Thus, private means of transport like taxi/auto have emerged as the main mode of
transport to cities from these villages. Public transport like availability of bus stops
is still limited. These privately run shared vehicles though cater to the need of the
most villagers but their frequency could depend upon the availability of number
of passengers and sometimes could be very infrequent. It has surely improved the
connectivity of the villages to the cities. Yet it is still a constraint for women, women
with children, older and disabled. Particularly the running time of these taxi/auto
matches to the mobility requirement of labourers, i.e. early morning and evening
and, therefore, limiting the mobility for rest of population. Therefore, our results
of migration pattern between male and female shows still relatively migration from
this belt is male dominated. The increase in volume of migration is also because of
improvement in road and connectivity. However, transport facilities and their stops
are generally at the prime location of villages, which also require substantial distance
to cover particularly for the labourer class as they often live in the farthest corner of
village. This distance has to be covered by foot, further limiting the mobility of most
needy with already burdens/sufferings, women and young mothers. This is one of
370 T. Tripathi
the reasons for women staying in the villages and demanding work near their homes
and limiting the mobility of women for economic activities (Table 6).
6 Availability of Communication and Banking
Apart from road transport, better communication and banking system has also influ-
enced labour mobility. It has also impacted on type of labour mobility. Faster commu-
nication has removed the compulsion of staying near to family and, therefore, might
have worked as incentive for long term mobility. But, this also means more frequent
visit to the village, thereby reducing duration of migration and converting erst-
while long term mobility into short run mobility and frequent commuting. Moreover,
changes in banking system have ensured that workers do not need to visit village to
hand over earnings. Rather, this is done through banking system or through various
apps. Nevertheless, it cannot be said with certainty in what direction this impact
has been. But it is sure that labour mobility has been impacted by these changes.
Mobile phone has reached every household. In our focus group discussion, villagers
reported that in 1996–1997 only ‘big people’ (Bdaka ghare) have telephones, but
now every individual in household has mobile as reported in the asset section of our
survey. Once upon a time what was done by money order facilities in post offices,
with further improving to the money order delivered at doors, making it easier for
homebound women to receive money. And easier for males to go far off places (Table
7).
We have further looked at the availability of banking system and internet in the
villages. Various researches have suggested that banking system has eased the fund
transfer and thereby reduced the limitation to work closer to home (IFAD 2009;
Madianou and Miller 2011; Mashayekhi and Branch 2015; Orozco 2016; UNCTAD
2015). Similarly, the internet has played a huge role in terms of sending and receiving
information through mobile phones, internet, and many apps (Horst 2006). Our FGD
in these villages suggest that people remain connected with their employers through
phones and WhatsApp. The young and educated also use it to search and fill online job
vacancies. Many researchers have found similar results. None of our study villages
have these facilities, though they are available in the nearby towns and it takes on
average 15 min to an hour to reach these facilities. Cheaper mobile data have also
eased the access to internet through mobile phones. After foot, bicycle and followed
by motorcycle is the most frequent used transport to reach to these facilities. We
looked at ownership of these vehicles by the distance covered by the villagers. The
bicycle is the most common mode of transport and ownership of motorised vehicle
remains very low. Therefore, no wonder we see most people covering these distances
on foot. This indicates communication has favoured the rich, youth and male and,
therefore, higher mobility of this group.
Table 6 Road and transport 2016–2017
District Village Road type Bus stop Distance to Transport to Time taken Taxi/Auto Distance to Transport to Time taken
(no) facility (in reach to to reach in stand (no.) facility in reach to to reach in
Km) facility mnt. Km facility mnt
Jahanabad Ismailupr Pakka road 2 3 Foot 0.45 2 1 Foot 15.00
Dahuha Pakka road 2 2 Foot 0.30 yes 0 Foot 0.05
Sakrauhrah Pakka road 2 3 Foot 0.30 2 3 Foot 0.30
Saharsa Modhara Pakka road 2 7 Foot/vehicle 0.40 2 2 Foot/vehicle 0.10
Gamraho Kutcha road yes 0.5 Foot 0.05 yes 0.5 Foot 0.05
Manikpur Paved road yes 0.5 Foot 0.05 yes 0.5 Foot 0.05
Vaishali Jamalpur Paved road 2 2 Foot 0.20 2 1 Foot 0.15
Kutubpur Pakka road 2 0.5 Foot 0.10 yes 0 Foot 0.05
Mohanpur Paved road 2 4 Foot/vehicle 0.30 2 4 Foot/vehicle 0.30

Banda Madain Pakka road 2 20 Foot/vehicle 0.50 2 3 Foot 0.50
Karaundh Pakka road 2 15 Motor 0.30 yes 0 Foot 0.05
vehicle
Pathara Pakka road 2 6 Motor 0.20 yes 0 0 0.05
vehicle
Audha Paved road 2 13 Motor 0.35 yes 0 Foot 0.10
vehicle
Allahabad Tarav Pakka road yes 0.5 Foot 0.10 yes 0.5 Foot 0.10
Hathigan Pakka road 2 6 Motor 0.20 yes 0.3 Foot 0.05
vehicle
Beeker Pakka road 2 2 Cycle 0.15 2 2 Cycle 0.15
(continued)
371
Table 6 (continued)
372
District Village Road type Bus stop Distance to Transport to Time taken Taxi/Auto Distance to Transport to Time taken
(no) facility (in reach to to reach in stand (no.) facility in reach to to reach in
Km) facility mnt. Km facility mnt
Sandwa Trail only 2 Foot 0.25 2 Foot 0.25
Khurd
Gorakhpur Parsawna Paved road 2 3 Motorcycle 0.20 yes 0 Foot 0.05
Ghoradeor Paved road 2 7 Cycle 0.35 2 7 Cycle 0.35
Dihwa Pakka road 2 6 Cycle 0.30 2 6 Cycle 0.30
Bujurg
Kurwa Pakka road 2 12 Foot/vehicle 0.40 2 2 Foot 0.35
Source Field Survey
T. Tripathi
Table 7 Financial system and internet 2016–2017
District Village Bank Distance Transport to Time ATM Distance Transport Time Cyber Distance Transport to Time
to facility reach to taken to facility to reach to taken café to facility Reach to taken
facility to facility to facility to
reach reach reach
Jahanabad Ismailupr 2 2.5 Cycle 0.20 2 1 1 0.20 2 1 Foot 0.20
Dahuha 2 2 Cycle 0.20 2 2 3 0.20 2 7 Foot/vehicle 1.30
Sakrauhrah 2 4 Cycle 0.25 2 4 3 0.25 2 4 Cycle 0.25
Saharsa Modhara 2 4 Foot/vehicle 0.20 2 7 7 0.20 2 2 Foot/vehicle 0.10
Gamraho 2 3.5 Motorcycle 0.20 2 3.5 4 0.20 yes 0.5 Foot 0.50
Manikpur 2 4 Motorcycle 0.15 2 3 4 0.15 2 3 Motorcycle 0.15
Vaishali Jamalpur 2 2 Foot/vehicle 0.20 2 6 4 0.25 2 6 Motorcycle 0.25
Kutubpur 2 0.5 Foot 0.10 2 0.5 1 0.10 2 0.5 Foot 0.10

Mohanpur 2 4 Foot/vehicle 0.30 2 1.5 6 0.15 2 1.5 Foot/vehicle 0.15
Banda Madain 2 29 Cycle 2.30 2 20 6 0.40 2 20 Foot/vehicle 0.35
Karaundh 2 2 Motorcycle 0.15 2 15 4 0.30 2 15 Motorcycle 0.30
Pathara 2 6 Cycle 0.46 2 6 4 0.20 2 6 Cycle 0.40
Audha yes 1 Foot 0.70 2 28 4 1.00 2 13 Motorcycle 0.35
Allahabad Tarav 2 2 Cycle 0.15 2 2 3 0.15 2 2 Cycle 0.15
Hathigan 2 3 Cycle 0.20 2 3 3 0.20 2 3 Cycle 0.20
Beeker 2 2.5 Cycle 0.15 2 2 3 0.15 2 2 Cycle 0.15
Sandwa 2 Motorcycle 0.35 2 4 0.00 2 Foot/vehicle 1.00
Khurd
Gorakhpur Parsawna 2 3 Motorcycle 0.20 2 3 3 0.20 2 3 Cycle 0.20
(continued)
373
Table 7 (continued)
374
District Village Bank Distance Transport to Time ATM Distance Transport Time Cyber Distance Transport to Time
to facility reach to taken to facility to reach to taken café to facility Reach to taken
facility to facility to facility to
reach reach reach
Ghoradeor 2 3 Cycle 0.15 2 7 3 0.35 2 3 Foot 0.30
Dihwa 2 6 Cycle 0.30 2 6 4 0.00 2 6 Cycle 0.30
Bujurg
Kurwa 2 3 Cycle 0.30 2 3 3 0.30 2 3 Cycle 0.30
T. Tripathi
Table 8 Worked outside village and had vehicle

Cycle Bike Car Total
yes 84.0 15.7 0.4 89.8
Location of work and availability of vehicle
cycle bike car Total
Same District 84.3 15.0 0.8 94.1
Other Districts 60.0 40.0 0.0 3.7
Other states 100.0 0.0 0.0 2.2
Total 83.7 15.6 0.7 100.0
Source Field Survey
7 Household Endowments of Transportation and Level

of Mobility
What post offices have done to the remittances, that is done by motorised two wheelers
vehicles for mobility. From the analysis of household asset ownership, it is clear that
there is a sharp rise in ownership of mobiles and motorcycles. While mobile has
increased the connectivity, motorcycle has increased the short D-D (duration and
destination) migration easy and frequent as suggested in Sects. 3 and 4. Whether
working in village or outside, around 89% have any vehicle. Around 15% of the
household have motorcycle/scooter. Those who are working in other districts owns
more motorcycle/scooter than those working in the same district. The construction
of roads under MGNREGA and Pradhan Mantri Gram Vikas Yojana has played
a significant role in improving connectivity of village and road quality. It, in turn,
increases the ownership of motorcycle, because still most of the village either doesn’t
have bus/taxi stand or if has the frequency of bus and taxi is low or inconvenient.
Therefore, motorcycles in the villages and on the roads of UP and Bihar are the most
obviously found and seen vehicle. And a fun fact, it became an important demand in
dowry for a graduate with job from poor SES community or without job from higher
SES community, shows a social premium in must having a object, i.e. motorcycle
for boys (Table 8).
8 Conclusion
Therefore, as discussed in the introduction, while other parts of India benefited from
their wealthy and educated diaspora in and outside the country, migration from UP
and Bihar mostly remains inter-state or intra-state, of low skilled and less educated
labours. Primarily because this area was agriculture belt. As much as 68% of workers
was working in agriculture and contributing 39% to state GDP in 1993 in UP and
65% was working in agriculture and contributing 50% to state GDP of Bihar in
376 T. Tripathi
1993. As a result when agriculture gradually became unprofitable, its contribution

to GSDP in UP & Bihar declined to 20 and 18%, respectively, in 2018–10 (EPWRF,
accessed on 12 Feb 2020). Only a very small percentage of population of upper
caste who were traditionally educated actually moved out at higher positions and
became absentee landlords. But the majority being agricultural labour found job
in construction sector as unskilled labour as suggested by our analysis. Further, the
coastal belts of India also received immigrants from outside such as Parses, Muslims,
Portuguese which not only encouraged trade but also improved the social relations
from other continents. But this belt only faced extortion in agriculture through various
land and agricultural tax regime, no social or trade exchange which kept this region
mostly orthodox, backward and illiterate. So a regional pattern in temporary labour
migration is evident in the low income central and north Indian states mostly circular
and seasonal migration dominated by young male (Keshri and Bagat 2013), whose
remittances are sustaining the loss-making agriculture. Historically, economy of the
states based on trade and business flourish, because whenever the regime became
difficult for traders and business people, they moved to other countries or regions
and thereby creating a strong network between the places of their migration (Sindhis,
Baniya). Since UP and Bihar are dependent on agriculture with a fixity of land, this
movement is not possible whatever is the regime. As a result, neither they benefited
from agriculture activities nor could develop strong network of exchanges through
migration.
In our analysis, we have looked at differential in short run and long run labour
mobility across household income levels and land endowments. Our result suggests
that long term migration to far off places by rich and upper caste and higher land-
holding group and short term migration is to the nearer places by poorer communities.
The big story about work-related migration in this belt lies between two poles of short
and long run migrations which were earlier seasonal and permanent migration. This
is the world of semi-permanent migration, where migrants seem to have discov-
ered ‘secret of perpetual migration’ (Tumbe 2018). However, as hypothesised that
household endowment affects one’s capability to mobility, we find that the better off
workers are migrating to far off places and generally for longer duration. Workers in
lowest income quintile are confined to same district with short run migration; only
some of them are going to other state and doing long run migration. International
migration is reported only in household from the highest income group (LSMS 2016).
Road transportation and banking and connectivity have played a major role in
change of duration and volume of migration. Data shows an improvement in reach
of roads particularly metaled road. However, there is substantial variation in terms
of quality of roads; they are better at the entrance but gets poorer as one enters to
the corners of the villages which are generally occupied by the poor and low caste
people. Further, taxi and auto have reached to the villages but again the access to
them is very selective, and, therefore, one has to travel long to reach them. We don’t
have data on the frequency of taxi/auto availability, which can be another constraint.
Only one village has a bus stop, which also requires travel of 5 Kms. Therefore,
household ownership of motorized vehicle seems to have revolutionised frequent
commuting. However, still large number of frequent commuters seems to use cycle,
of course, from mostly poorer income groups. Car remains a much luxury. We don’t
have data on the difficulty faced by this group of people in frequent commuting
while mostly doing short run migration, but these are the people who are investors
to the village economy; travelling in acute lack of personal/public transport can
hint at their struggle and constraint. Further, the migration of young and male and
better educated to far off places and better work shows the constraint played by
unavailability of transportation in villages particular for women, which is a great
constraint for employment opportunity for women. At the end, we can’t deny the
improvement in basic infrastructure road and transport, banking and information
communication and its role played in increasing migration: circular or short run,
however, its quantity and quality remains a concern.
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Migrating to the Roads in the Cities
in Uttar Pradesh: Some Reflections
Bhaskar Majumder and V. Narayan
Abstract The members, mostly male, from the distressed households in the rural
regions migrate to the cities in India in search of jobs and stand on the public roads
each morning. These street labourers are hired by employers for engagement at
the bottom of the labour market understood by the work profile. These labourers
are supposedly free to offer their labour power to any buyer at perceived labour-
equivalent wage rate and refrain from questioning the working conditions that often
remain adverse as much as the adverse initial conditions at their outmigration zone;
these adverse conditions incapacitate them to bargain. This paper examines if migra-
tion of the street labourers in all the six million-plus populated cities of Uttar Pradesh
reflects migration under distress and if labour is forced in nature. The paper also
addresses the institutional questions by legal provisions and suggests at the end what
are to be done.
1 Introduction
In any million-plus populated city in India, one observes an assembly of mostly

male persons standing on the crossing of roads ready to offer their labour power.
Most of them migrate from near and far, intra-state and inter-state. These migrated
labourers do not have any idea where they will be absorbed and for what tenure.
These labourers are free hand and ready to work manually. Supply of labour finds
its market in the urban economy through a brief negotiation between the labourers
and the employers. While some are absorbed, others stay behind as residue. The next
morning some more labourers may join the residue assembly that hides the temporary
exit of cross-sections of reserve labourers from the crossings of roads. The short-
term production relation between the employer and the labourers often does not
go beyond the working hours of a day. The labourers are not tied to any particular
employer. Each one is free to untie the work relation. The engagement is oral; there
B. Majumder (B) · V. Narayan

G B Pant Social Science Institute, Allahabad 211019, India
e-mail: majumderb@rediffmail.com

https://doi.org/10.1007/978-981-15-8265-3_19
380 B. Majumder and V. Narayan
is no legal/written contract. The works done by the labourers include earthworks,

head-load works, construction works or any manual work that the employers offer
and the worker agrees to execute. The tenure of job depends on the quantum of work
and the ability-cum-willingness of the labourer to work in exchange of wages. The
tenure of job, thus, varies from very short-term like for a day, to medium-term like a
few months. The location of the worksite is limited to the city itself or to the urban
fringes.
The crossing of roads where the labourers wait for job is called labour chauraha
in Uttar Pradesh. Labour chaurahas are not worksites; they are crossings of roads of
different directions, which are assembly points for the job-seeking migrant labourers.
These labour chaurahas generally get formed adjacent to bus depots, railway stations
and markets as the labourers come by train/bus to the city depending on distance and
travel cost, which they bear on their own. All of them move out from their native
villages in search of jobs. The assembled labourers on the street crossings can also
be called street labourers, not in the sense that they have no residential address, but
in the sense that public roads become their living spaces by compulsion in absence
of better alternatives to live and to search jobs in the cities. The local administration
does not obstruct them from occupying space on the public road since it is for short
periods per day, generally from 6:00 a.m. to 10:00 a.m. There is no display board
to show geographic existence of labour chaurahas. These chaurahas have evolved
from its embryonic stage since unrecorded past. These labourers generally are not
accompanied by their family members. The labourers are not paid any advance
wage when they are offered employment. This implies apparent freedom of the
street labourers to offer labour power to any buyer. They do not have any long-term
employment guarantee or attachment with any particular employer and they remain
in circulation over several employers and cities.
The city where the labourers assemble has to be large by size of population,
infrastructure, trade and business, and industries. The workers usually migrate from
poverty-zone to search for jobs. Most of the labourers come from landless house-
holds generally during off-agricultural seasons each year in the absence of scope
to work as agricultural labourers or as tenants in their native villages. Cultivation
remaining seasonal in most parts of India, the landless wage-labourers and marginal
farmers migrate to other places during off-agriculture seasons (Oberai and Singh
1983: 30; Sahu and Das 2010: 103; Korra 2011: 68). Inter-state migration shows
mostly migration from poorer region to less poor region (Nceus 2008: 96). Most of
the migrant labourers belong to castes at the bottom of the Hindu social hierarchy
(SCs and OBCs) but labourers from high castes may also migrate to cities to get
engaged in manual jobs since the sociocultural scenario in India’s rural areas do not
allow people from high caste households to get engaged in manual-menial works.
These migrant households earn income below subsistence level at the root and so
they are forced to migrate elsewhere for survival. Being mostly illiterate and poor,
they remain as manual labourers at the bottom of the labour market in the unorga-
nized segment of the economy. The rural to urban migration is not determined by the
actual or expected wage-differential because there is no wage rate in rural areas in
absence of any job opportunities during off-agricultural season. The non-farm rural
Migrating to the Roads in the Cities in Uttar Pradesh: Some Reflections 381
activities and restricted access to shrinking common resources cannot retain them
for long in the rural areas; hence, they migrate to cities for any job at any wage rate
for survival.
The population of cities accelerates due to rural-urban migration and natural
increase of population (UN-HABITAT 2003). Urbanization shows increasing
carrying capacity of the city to attract population from outside through expanding
economic opportunities. The material standard of living has distanced gradually from
dependence on land-cum-agriculture to urban living for an increasing number and
percentage of the population. The literature on urbanization focused on unnumbered
indicators that included rural territorial annexation and its transformation into a city
(Ramachandran 1992; Kundu 1994; Bhagat 2011; Bhagat and Mohanty 2009; Saxena
2014). It took half a century for UP to register urban population as a percentage of
rising total population from 12.9 in 1961 to 22.3 in 2011 parallel to 31.2% for all-
India in 2011. In 2001 as well as in 2011 there were six million-plus populated cities
in UP, namely, Lucknow, Allahabad, Agra, Kanpur, Varanasi and Meerut.
The paper addresses the following questions: Does migration of the street
labourers reflect migration under distress? Does the unity of street labourers and
local labourers by similar initial conditions lead to rising bargaining power of these
labourers? Do the street labourers know the legal provisions for them? The final
question is, what is to be done?
In order to address the first question we take three basic indicators at the household
level: (i) land owned, (ii) income earned, (iii) indebtedness; all at the root rural areas
from where the labourers migrate. We call it migration under distress if the livelihood
security of these people remains endangered in the rural areas in the absence of regular
job-cum-income opportunities in combination with debt bondage. The juxtaposition
is, if distress remains at the destination also by the adopted indicators of (iv) processes
of labour engagement and consequences by wage payment and (v) work environment
at the city destination. The Bonded Labour System (Abolition) Act 1976, enacted
by the Government of India, declared the practice of bonded labour as illegal. If the
same or similar initial conditions exist, then we call it forced labour, one degree less
than being bonded labour, since they are not physically confined to the creditor as
is the case with bonded labourers. The ILO Forced Labour Convention, 1930 (No.
29) considered forced labour as ‘all work or service extracted from any person under
the menace of any penalty and for which that person has not offered himself (or
herself) voluntarily’ (ILO 2007: 19; UNDP 2015: 41). Forced labour is ‘not defined
by the nature of the work being performed (which can be either legal or illegal
under national law) but rather by the nature of the relationship between the person
performing the work and the person exacting the work’ (ILO 2012: 19). We expand
the connotation of forced labour to include labour that is offered by the labourers in
adverse environments over which they have no control. In order to address the second
question, we examine the tenure of jobs of the migrant labourers, their working hours
and work environment, and wage rate in the city labour market. While it is difficult
to examine wage-differential, if any, between the migrant and non-migrant labourers
intra-city and inter-city because of the differences in work profile, the point of time
and job tenure, we may examine if any conflict arose because of the migrant street
labourers waiting on the crossing of public roads for jobs. In order to address the
third question, we examine the Acts formulated by the state that pledged to protect
these street labourers and if the migrant labourers are aware of these Acts.
The rest of the paper is structured as follows. Section 2 presents the methodology,
sample and study zone. Section 3 examines the causes and consequences of migration
of labourers to wait on public roads in the cities. The nature of state intervention by the
Acts is discussed in Sect. 4. Finally, Sect. 5 offers conclusions and recommendations.
2 Methodology, Sample, and Study Zone
All six million-plus populated cities in UP from Census, 2011 are selected. Pilot
visits were made in each city to find out the locations/road crossings where labourers
wait early in the morning. There were a total of 80 identified labour chaurahas in
these six cities in UP in 2012. A total of 24 were selected, four from each city based
on geographic dispersal and the number of visible labourers early in the morning
prior to their getting jobs (Box 1).
Box 1 Study zone
Selected zone and labour Chaurahas Number Names

State 1 UP
City* 6 Allahabad, Kanpur, Lucknow, Agra, Meerut,
Varanasi
Name of selected labour chaurahas 24 Rambag, Rajapur, Allahpur, Jhusi
(Allahabad); Lalbangla, Mulganj, KDA,
Govindpur (Kanpur); Engineering College,
Udayganj, Nishant, Goyel Chauraha
(Lucknow); Kamal Nagar, Loha Mandi,
Shadra, Sikandra (Agra); Begum Bridge, Jail
Chungi, Bagpat Adda, Sagasa (Meerut);
Chetganj, Gurudham, Maidagini, Durgakund
(Varanasi)
Note *Each one is the Head Quarter of the respective district
We took the help of catalysts who constitute the sub-sample in selecting labour
chaurahas. These included 24 contractors, one each from the selected labour chau-
rahas, as well as 24 labour mates who facilitated in the supply of labourers.
We had informal conversations with 12 representatives of labour unions and 10
representatives of NGOs (Box 2).
Box 2 Core sample and sub-sample
Core sample Number

Labourers 240
Sub-sample –
Contractors 24
Labour Mates 24
Representatives of labour unions 12
Representatives of NGOs 10
Note Core Sample and Sub-Sample are non-additive
We did not find any register maintained by the city administration to find the total
number of street labourers, and we could not enumerate the total number of these
labourers on the chaurahas. Based on pilot visits we selected 40 migrant labourers
from each of the six cities that varied intra-state and inter-state. We selected a total of
ten (10) male labourers from each labour chauraha. The intra-state migrant labourers
constituted 80.8% and the rest were inter-state (Table 1).
Of all the migrant labourers, 90.0% were males. Of the male labourers, 80.8%
were intra-state. Of the female migrant labourers, 54.2% were intra-state. Of all
the labourers, 29.6% were SCs, 45.0% OBCs, 7.9% Minority (Muslims), 2.5%
STs and 15.0% from General Castes. Further, 93.3% of the labourers were in the
working age group of 18–60 years. Illiterate constituted 41.7% of the labourers. Of
the literate labourers, 41.2% had education up to primary level (Field Survey 2012).
The labourers migrated intra-state (UP) and inter-state, the latter from the adjoining
states of Bihar, Jharkhand, Madhya Pradesh and Chhattisgarh (Box 3).
Table 1 Distribution of migrant labourers in selected cities of UP

Destination cities Migrant labourers Total
Intra-state Inter-state
Number % Number % Number
Agra 29 14.9 11 23.9 40
Allahabad 33 17.0 7 15.2 40
Kanpur 40 20.6 0 0.0 40
Lucknow 26 13.4 14 30.4 40
Meerut 35 18.0 5 10.9 40
Varanasi 31 16.0 9 19.5 40
Total Labourers 194 (80.8) 46 (19.2) 240 (100.0)
Source Field Survey, 2012
Box 3 Inter-state and intra-state migrant labourers to the selected cities in UP
Destination cities Intra-state migrants (By Districts in UP) Inter-state migrants

Allahabad Mirzapur, Azamgarh, Pratapgarh, Allahabad, Madhya Pradesh,
Ballia, Bhadohi, Bahraich, Jaunpur Chhattisgarh
Kanpur Sultanpur, Faizabad, Allahabad, Unnao, Fatehpur, –
Raebareli, Basti, Lucknow, Kanpur, Kanpur Dehat,
Mahoba, Ballia, Kaushambi
Lucknow Raebareli, Unnao, Sultanpur, Hardoi, Barabanki, Bihar, Chhattisgarh
Gonda, Bahraich, Lakhimpur Kheri
Agra Agra, Jhansi, Mathura, Farrukhabad, Aligarh, Madhya Pradesh
Auraiya, Mahoba
Meerut Meerut, Agra, Moradabad, Muzaffarnagar, Hapur, Bihar, Madhya Pradesh,
Baghpat, Shahjahanpur, Bareilly, Sitapur Jharkhand
Varanasi Varanasi, Sonebhadra, Mirzapur, Ghazipur, Mau, Madhya Pradesh, Bihar
Chandauli, Sultanpur, Azamgarh, Pratapgrah,
Bhadohi
3 Causes and Consequences of Migration of Labourers

to the City Roads
The major reason for migration to the city roads was landlessness or inadequate land-
holding that failed to fulfil the subsistence needs of the households at the migration
zone. 54.6% of the migrant labourers were landless. Of those having land, 67.8% had
land less than 2.0 acres. Thus, the landholders had marginal landholding (Table 2).
Purchase-cum-investment on land was beyond the capacity of the landless house-
holds; marginal landholding was inadequate to sustain the households by subsistence
Table 2 Size of landholding of migrant labourers at root

Landholding Intra-state Inter-state Total
(Acres) Number % Number % Number %
Landless 112 57.3 19 41.3 131 54.6
Up to 1.0 26 13.4 12 26.1 38 15.8
1.0–2.0 28 14.4 8 17.4 36 15.0
2 .0–4.0 19 9.79 4 8.7 23 9.6
4.0–6.0 3 1.5 1 2.2 4 1.7
Above 6.0 6 3.1 2 4.3 8 3.3
Total 194 (80.8) 46 (19.2) 240 100.0
Table 3 Employment and wage rtes in MGNREGA by gender in rural areas, 2011
Labourers migrated Job card owners (As % of Total) Man days Wage rate (Rs.)
created per day
Male Female Male Female
Intra-state (UP) 33.8 25 11 93.00 100.00
Inter-State 7.9 19 17 92.00 87.00
Total Labourers 41.6 24 14 93.00 93.00
guarantee. Non-farm rural activities like animal husbandry and forestry could not be
relied upon due to shrinking common resources. Rural public works like MGNREGA
also could not absorb the labourers (Table 3).
41.3% of the migrant labourers were employed for a period of less than three
months per year, and 79.7% were employed for a period less than six months in the
rural economy implying compulsion for the most to migrate (Table 4).
The derivative reason got reflected in income below subsistence requirements.
Almost 95% of the migrant households earned income less than Rs. 2,500.00 per
month including households earning no income (Table 5).
Landlessness, short-duration employment and low income led to indebtedness.
24.2% of the migrant labourers were indebted, which was 24.7% of all intra-state
labourers, and 21.7% of all inter-state labourers. 89.7% of the households borrowed
from non-institutional sources, namely, mahajans, relatives and friends. 75.9% of all
the households borrowed from mahajans (informal money lenders). The institutional
sources were banks. Indebtedness was because of expenditure on health, rituals and
food (Table 6).
Informal information, and not formal advertisement through print or electronic
media, helped the labourers to migrate to stand on the roads of cities. The local admin-
istration was indifferent about the assembly on the road crossings. Physical visibility
of these street labourers helped them get jobs. 78.8% of the migrant labourers got
works for a tenure of more than six months per year at the destination. This was
Table 4 Employment tenure of the migrant labourers per year at root

Employment tenure Intra-state Inter-state Total
(Months) Number % Number % Number %
Less than 3 79 40.7 20 43.5 99 41.3
3–6 72 37.1 18 39.1 90 37.5
6–9 42 21.6 5 10.9 47 19.6
Above 9 1 0.5 3 6.5 4 1.7
Total labourers 194 (80.8) 46 (19.2) 240 100.0
Table 5 Income of the households of migrant labourers per month at root

Income per month (Rs.) Intra-state Inter-state Total
Number % of total Number % of total Number % of total
No income 25 12.9 7 15.2 32 13.3
Below 500 49 25.2 11 23.9 60 25.0
501–1,000 55 28.3 16 34.8 71 29.6
1,001–1,500 28 14.4 6 13.0 34 14.2
1,501–2,500 28 14.4 5 10.9 33 13.7
Above 2,500 9 0.5 1 2.2 10 4.2
Total Labourers 194 (80.8) 46 (19.2) 240 100.0
Note The unemployed section in the working age and unpaid home workers reported no income
Table 6 Borrowing by migrant labourers by sources at root

Borrowing (Rs.) Workers Sources of borrowing Total
Institutional Non-institutional
Banks Mahajans Relatives Friends
Less than 10,000 No. 1 23 5 1 30
% of Total 1.7 39.7 8.6 1.7 51.7
10,001–25,000 No. 2 12 1 1 16
% of Total 3.4 20.7 1.7 1.7 27.6
25,001–50,000 No. 2 7 0 0 9
% of Total 3.4 12.1 0.0 0.0 15.5
Above 50,000 No. 1 2 0 0 3
% of Total 1.7 3.4 0.0 0.0 5.2
Total labourers No. 6 44 6 2 58
% of Total 10.3 75.9 10.3 3.4 100.0
similar for both intra-state and inter-state migrants. 65.9% of the labourers earned
between Rs. 2,001 and Rs. 5,000 per month in the cities (Tables 7 and 8).
The street labourers negotiated with the employers and the contractors to fix the
wage rate. 59.6% of the labourers got wages at time rate. The major labour absorption
sector was construction works. The average wage rate per day for migrant labourers
was Rs. 177.00; with Rs. 176.00 for intra-state and Rs. 180.00 for inter-state. The
average working days per month were 18 and the average working hours per day was
9.0. Both varied between cities. 72.1% of the migrant labourers used to carry cash
savings to their rural root, while 12.1% used to remit through co-workers, friends
and relatives. 7.9% of the labourers could not save anything. The inter-state migrant
labourers used to visit their native places once in six months while the intra-state
Table 7 Job tenure for the migrant labourers per year at destination
Job tenure (Months) Intra-state Inter-state Total
Number % Number % Number %
Less than 3 1 0.5 3 6.5 4 1.7
3–6 42 21.6 5 10.9 47 19.6
6–9 72 37.1 18 39.1 90 37.5
Above 9 79 40.7 20 43.5 99 41.3
Total Labourers 194 (80.8) 46 (19.2) 240 100.0
Table 8 Income of migrant labourers per month at destination

Income brackets (Rs.) Intra-state Inter-state Total
Number % Number % Number %
Up to 1,500 7 3.6 2 4.3 9 3.8
1,501 to 2,000 20 10.3 8 17.4 28 11.7
2,001 to 3,000 38 19.6 7 15.2 45 18.8
3,001 to 4,000 55 28.3 11 23.9 66 27.5
4,001 to 5,000 41 21.1 6 13.0 47 19.6
Above 5,000 33 17.0 12 26.1 45 18.7
Total Labourers 194 (80.8) 46 (19.2) 240 100.0
migrant labourers once in three months, implying non-confinement of labourers de

jure and confinement de facto (Field Survey 2012).
80.8% of the migrant labourers reported non-availability of first aid and safety
kit on the worksite; 80.4% reported absence of toilet; 79.2% reported absence of
restroom/shed; 97.5% reported availability of drinking water at worksites (Field
Survey 2012). Thus, the work environment was adverse for the migrant labourers
(Box 4).
Box 4 Work environment for migrant labourers
Work environment
Insecurity, drudgery, abusive behaviour of employer, wage-cut, pressurized to work more hours
for same wage, no protection against injury, no leave, no night shelter and no provision of food.
In terms of living conditions, 50.8% of the migrant labourers were homeless in

the city; 15.0% lived in Jhopris, while 10.8% were commuters on daily basis (Field
Survey 2012). Living homeless at the destination is a major reflection of migration
to the road—for temporary jobs as well as for spending nights.
Table 9 Average wages per month of migrant labourers at root and destination
Locations Migrant labourers Average wages (Rs.) Number of workers % of labourers
Root Intra-state 877.5 194 80.8
Inter-state 724.3 46 19.2
Grand average 848.2 240 100.0
Destination Intra-state 3253.2 194 80.8
Inter-state 3366.3 46 19.2
Grand average 3274.9 240 100.0
Note Income data in the rural outmigration zone was based on income per month reported by 54.6
per cent of the labourers who were landless and worked as wage-labourers in agriculture and related
rural activities
The rural average wage per month (of root) was an estimation based on approxi-
mately 15 days work per month that the migrant labourers might have worked there
mostly as agricultural labourers. For intra-state labourers, it was Rs. 877.5 per month
and for inter-state labourers it was Rs. 724.3. The city workday per month on average
was 18 for both intra-state and inter-state migrant labourers. The average wages per
month at the destination for the migrant labourers was around four times what they
used to earn at the root for both intra-state and inter-state. This higher urban wage
rate was because of the nature of urban works catering to urban market by commodi-
tization of resources many of which had often been shared cost-free in rural areas.
The agricultural wage rate had no impact on the urban wage rate (Table 9).
4 Did Street Labourers Reflect Forced Labour?
Force is physical-psychological-institutional—all or a combination of these may go

together. Even in absence of physical coercion one may feel forced to leave the root
because of inter-generational poverty and indebtedness. ‘Labour may be forced not
only owing to physical force….but also owing to hunger and poverty which compels
(a worker) him to accept employment for remuneration which is less than the statutory
minimum wage’ (ILO 2001:9). ‘Migration to cities may not necessarily emancipate
them for they move from one disadvantaged condition to another adverse inclusion’
(Roy 2013: 41).
In a situation of work at piece rate and in a non-comparable frame of labour-hours,
the condition of paying less than the minimum wage rate does not reflect much, apart
from the fact that the minimum wage rate as announced by the State Government
remains far from being implemented for the workers in circulation in the unorganized
segment in India. The migrant labourers waiting on the crossings of public roads in
the cities in India as a gateway to enter into the labour market did not come within
the scrutiny of the ILO so far (ILO 2001: 2).
‘The ultimate purpose of forced labor—into which workers enter through failed
systems of recruitment—is almost always economic exploitation through payments
to workers below the level that appeared to have been mutually agreed upon and
negotiated’ (Andrees and Belser 2009: 4). We observed violation of wage negotia-
tions by wage-cut and imposition of long working hours since the negotiation was
oral and unequal. The excess supply of labourers on the labour chaurahas in the cities
in UP on a daily basis lessened their bargaining power. Extremely unequal relations
between the city-based employers and migrant labourers posed doubt on the possi-
bility of a wage rate ‘mutually agreed upon and negotiated’. The labourers negotiated
the wage but any bargaining for fixation of wage rate by the street labourers made
such negotiation fractured, mainly because of the adverse conditions of the labourers
which forced them to enter into the city labour market. Since these labourers were
mostly migrants from rural areas, who were illiterate and poor and indebted, their
voices were suppressed. They had no exchangeable assets and no elastic time for job
search, since not getting job in one day would mean starving for most of them. Being
migrants, they could not expect to hire productive assets from any asset owner for
providing services in the city. In the absence of secure space, they could not shoulder
the risk of buying any productive assets in the city, even if they acquired the economic
capacity, as they would not be able to protect those. The chauraha-specific labour
contractors did not have much role to play in wage negotiations. The labour unions
were apathetic towards these workers, which reinforced the disempowerment of the
labourers.
The positive rural-urban wage-differential was not the determinant of migration
for these labourers. The very fact that most of them had no job for tenure more than
six months in the rural areas parallel to their landlessness forced them to migrate
to the cities. Historically, the urban nature of work for wages at piece rate or time
rate offers a wage rate higher than the rural one. But since jobs were not available at
the outmigration zone for most of the year, any comparison of wage rates between
rural and urban to explain migration is meaningless. That the labourers used to get
jobs on an average of 18 days per month and over six to nine months per year at the
destination implied the positive probability of getting jobs in the selected cities in
UP. This also implied that these cities had the capacity to carry these labourers who
waited for jobs. These jobs were manual, low-quality and delinked from education
and skill.
The job contract was oral, delinked from any commitment on job security. The
job itself was not regular. The employers went on changing within a short time-span.
Once the employer-specific work was over, the labourers would come back to their
chaurahas to search for another job and another employer, or move to another city.
They had no effective power to influence the wage rate. It was determined from
the demand side because of the unlimited supply of labourers on the crossing of
roads. Employment of one fraction of the labourers did not create any vacuum in
the chaurahas. These labourers reflected free entry into, and free exit from, the city
labour market. This is not to be seen as ‘free wage-labour’ for it was not webbed in
the macro market mechanism and it operates locally in fragments in a rudimentary
form. The rural economy in parallel reflected the inertia of landlords to invest on
land to retain labourers. The practice of money lending made the dependent landless
labourers indebted to the money lenders. This indebtedness forced the labourers to
migrate in a condition of never-ending outstanding debt repayment.
More than half of the migrant labourers were homeless in their destinations.
City-housing was a remotely attainable good for them as they were not permanent
migrants and were unable to maintain two residential houses. The work environment
showed their adverse inclusion at the bottom of the labour market in the city. The
migrant labourers had no preference for any particular city and were ready to move
to any city in India. The poverty of the adjoining states, namely, Bihar, Jharkhand,
Madhya Pradesh and Chhattisgarh, was the cause of outmigration from these states.
The intra-state migrants came from many districts of Uttar Pradesh (Box 3). The
implication is that the survival instinct of the labourers forced them to migrate from
their native places to reach the occupation space even if that meant being homeless
at the destination. They migrated on their own delinked from any networking. There
was no thekedar (contractor) to take them to a specific employer for work. There was
no system of advance wages for them. They waited on the crossing of roads in the
expectation of getting engaged as wage-labourer through an employer/contractor.
They had no ex-ante information about the worksites or the nature of work and
they often did not come in contact with the employer when he operated through his
agents. The labour chaurahas were the assembly points of available labourers who
were ready to work on demand. The demand side was revealed when the contractors
reached the chaurahas, generally on a motorcycle with a pillion rider, to select
the required number of labourers based on the fulfilment of the skill required and
the wage rate agreed upon. The labourers encircled the man on the motorcycle to
negotiate and offer themselves for work. The negotiation would be usually settled,
the contractor would go back after telling the labourers to join the job. The labourers
would decide their mode of transport and reach the worksite by the specified time.
The labourer was free not to accept the offered wage rate in which case he would
search for another employer or starve or go back to the village; the last option would
be unwelcome except for daily commuters. Hence, the labourer preferred any wage
rate to the absence of job or to a prolonged wait on the road since early morning.
The migrant labourers went back to their native places once they completed their
works at the city destination. There were a number of reasons for going back like
rural living preferred to urban living by kinship-rituals-culture-tradition, work in
agriculture sector and repayment of outstanding debt. As most of them opined, had
they got assured job opportunities at their native places on a regular basis even at
a wage rate much lower than that of the urban wage rate they would have been
less inclined to migrate to urban areas. We call it forced labour since the labourers
had to migrate in an initial condition of landlessness, indebtedness and absence of
subsistence guarantee at the root. The labourers migrated to large cities to wait on
public road being unaware of the nature of works they will be asked to perform in
an unknown location. This is irrespective of the length of time the labourers spent at
the destination (ILO 2012). The adverse inclusion of the street labourers in terms of
absence of any security card, job card, registration, insurance and derivative indicators
at the city destination was the result of the adverse conditions at the migration zone.
It is often argued that migrant labourers changes matrix of local labour market,
often inviting intra-labour conflict and thus two sections of workers are confronted
with each other. Based on the wage rates by types of works the migrant labourers were
engaged in and juxtaposing those vis-a-vis the wage rates that the local labourers used
to earn in the same city, it was difficult to compare if the migrant labourers subsidized
the local labour market or occupied a space not totally engaged by the local labourers.
There are multiple sub-segments within the unorganized city-based labour market
reflected in different work profiles and different wage rates at piece and time. The
work profile like street hawking, vegetable vending, rickshaw pulling, auto-rickshaw
pulling, card-load working were observed for the local labourers while the migrant
labourers were on-wait to get engaged mostly in construction works without any
ownership over work tools and head-load workers at night linked with loading and
unloading of goods in the surface transport system linked with trade and commerce.
We observed normal co-existence between labourers engaged in different sub-
segments of the city-based labour market. The street labourers were from the same
or similar states; this was conducive to their harmonious co-existence at the bottom of
the labour market. The migrant street labourers did not crowd out the local labourers.
The street labourers, most of whom were intra-state migrants, lived in the same
culture zone as the local labourers. Most of the labourers were in multiple distress-
driven occupations, so that a ‘bhai chaara’ (fraternity) developed among the migrant
and local labourers. One conjecture is that the labourers, both local and migrants,
were brought up under similar sociocultural conditions that bond them in a low-level
equilibrium. Occupying public road by the migrant labourers was not a concern for
the local labourers, not because that public road was non-excludable by use but for
the simple reason that all accepted public road as their own. Nor it was a matter of
concern for the city administration because of the blurred distinction between private
space and public space, apart from annexation of public space for private use in the
selected cities in UP. Economic distress united the labourers—local and migrants.
This was, however, delinked from any labour union and so the unity could not get
crystallized as a powerful platform for the labourers to effectively bargain for wage
rate, working hours and job security. The street labourers were incapacitated to enter
into the organized labour market because of their irrelevance for urban industrial
jobs, obstructing them from being organized as an industrial working class. Supply
of labour by the street labourers created demand for labour in the city economy that
made the urban wage rate flexible downward but still remaining much above the
wage rate in the rural agricultural job. The wage-differential, however, was not the
determinant of rural-urban migration.
Since the street labourers migrated on their own, it was their responsibility to
find living space, which most of them failed to do. The work-cum-living of the street
labourers in the cities did not confer them a city identity. They used to go back to their
native places each year not because they were mostly homeless in the destination
cities but because of the initial conditions that centred on land-agriculture, house,
environment, social relations, family attraction and debt repayment.
5 State Intervention: Acts
India is a signatory to the Forced Labour Convention, 1930 and to the Abolition of
Forced Labour Convention, 1957, with ratifications dated 30 November 1954 and 18
May 2000, respectively (ILO 2007: 128–129; Mishra 2001: 8). The ILO Declaration
on Fundamental Principles and Rights at Work adopted in 1998 pledged to eliminate
all forms of forced or compulsory labour (ILO 2007: 1). It remains indecisive which
Acts enacted by the Government of India encompass the migrant street labourers in
the cities (GoI 2011:4-6).
The Inter-State Migrant Workmen (Regulation of Employment and Conditions
of Service) Act, 1979, of the Government of India applies to every ‘establish-
ment’ employing ‘five or more inter-State migrant workmen’ recruited through a
‘contractor’ that includes a sub-contractor by whatever name called, ‘with or without
the knowledge of the principal employer in relation to such establishment’. The Act
provides that ‘No principal employer of an establishment to which this Act applies
shall employ inter-state migrant workmen in the establishment unless a certificate of
registration in respect of such establishment issued under this Act is in force’. The
contractor must have a license to recruit workmen with prior information provided
on ‘the terms and conditions of the agreement or other arrangement under which
the workmen will be recruited, the remuneration payable, hours of work, fixation of
wages….’ (GoI 1979).
The migrants to the cities in UP were from ‘similar states’ by language-culture so
that assimilation at the bottom of the labour market was natural from the supply side.
From the demand side, the employers in the cities in UP were neutral between intra-
state or inter-state migrant labourers so long as their skill requirement was fulfilled.
We did not find any gap between the inter-state and intra-state migrant labourers
geo-culturally because of the geographic vastness of UP that virtually internalized
labourers at the bottom from the Hindi-speaking adjoining states. The 1979 Act
pledged ‘to ensure suitable conditions of work to such workmen having regard to the
fact that they are required to work in a State different from their own State’ (GoI 1979:
8). Neither the contractors nor the labourers had any idea about the provisions of the
1979 Act. The obscure employer–employee relation made fixing the responsibility
of security of the labourers on the employer difficult. The local administration was
conspicuous by its absence from shouldering any protective role for the labourers
waiting on labour chaurahas in the selected cities in UP.
The Minimum Wages Act, 1948 of the Government of India, had provisions to
‘fix the number of hours of work which shall constitute a normal working day’
and ‘minimum time rate wages for piece work’ in tune with the provisions of the
Payment of Wages Act, 1936 (GoI 1948: 8). The rural wage rate (Rs. 848.2 per month
or Rs. 56.5 per day if the labourer worked for 15 days per month) was far below the
minimum wage rate declared by the Government of UP. The urban wage rate for
labourers on labour chaurahas per day was Rs. 181.94 that was also far below the
minimum wage rate announced by the Government of UP. The minimum wage rate
per day as declared by the Government of UP through Order dated 26 January 2014
was Rs. 284.63 for unskilled, Rs. 313.10 for semi-skilled and Rs. 350.72 for skilled
labourers (GoUP, Order No. 194/36-3-2014-07/04 dated 26.01.2014).
The 1948 Act made it mandatory for every employer to maintain ‘registers and
records giving such particulars of employees employed by him, the work performed
by them, the wages paid to them, the receipts given by them….’ (GoI 1948:10). We
did not find any such registers maintained by the employers/contractors since the
jobs were based on hire and fire often outside public scrutiny. The labourers had
no idea about the existence of any such Act. The Labour Union representatives in
the organized sector were indifferent about the street labourers. The modus operandi
of labour employment through labour chaurahas in the cities of UP reflected its
own dynamics that was outside the orbit of the state. The migrant labourers had no
information about any such Acts. It remains a hypothetical question what they could
have done had they had the information.
6 Conclusions and Recommendations
The street labourers waiting on road crossings of the selected cities reflected a case of
forced labour. The labourers migrated unobstructed; first destination was city roads
to stand for physical visibility and probable second destination was workspace in and
around the city. The outmigration was from ‘similar states’ by language and culture
to nip in the bud any possibility of conflict between the in-migrant labourers and the
local labourers. Also the big cities provided economic opportunities that retained the
labourers for the major period of the year. To sum up,
• The major reason for migration to cities was distress at the root characterized by
landlessness or inadequate landholding that failed to fulfil the subsistence needs
of the households.
• Physical visibility of the migrant street labourers on city roads helped them get
jobs for tenure of more than six months per year at the destination.
• The average wages per month at the destination for the migrant labourers, both
intra-state and inter-state, was around four times what they used to earn at the
root. The agricultural wage rate had no impact on the urban wage rate.
• The positive rural–urban wage-differential was not the determinant of migration
for these labourers. The joblessness of most of them for more than six months in
the rural areas parallel to their landlessness forced them to migrate to the cities.
• The assembly of street labourers did not show any sign of solidarity or conflict.
• The migrant street labourers did not crowd out the local labourers, the work profile
remaining different.
• Economic distress of the households of the labourers as the initial condition was
the plank of unity among the labourers in the city. This was delinked from any
labour union. Hence, the local unity did not get crystallized as a platform for the
labourers to bargain.
The supply of labour by migrant labourers waiting on public roads was their
adverse inclusion at the bottom of the city-based labour market and an example of
forced labour for the following reasons:
1. The labourers had to migrate from the rural region to the cities in adverse
economic conditions characterized by landlessness and indebtedness (initial
condition).
2. The labourers had to wait unauthorized on the public roads in the cities
(processes).
3. The labourers had no control over their work relations in the city economy
(consequences).
4. The labourers were confined de facto for they had no right to leave while on job
(consequences).
We recommend a dual strategy to stop forced labour. The long-term strategy
is to ensure regular wage-employment at the root rural areas through rural public
works, and the short-term strategy is to ensure social security of the labourers at the
destination.
We propose introducing an Act by the Government of India to address the
minimum needs of street labourers. Pending this, we propose that the city adminis-
tration
• recognizes the existence of the street labourers and provide roofed labour colonies
with sanitation facility for accommodating the assembled migrant labourers;
• provides the labourers identity cards;
• identifies the private contractors/employers and makes them accountable by
registering the labourers encompassing both inter-state and intra-state migrant
labourers engaged by them, and ensuring their security at the worksite;
• provides night shelter for the in-migrant labourers with basic utilities like drinking
water, first aid kit, toilet and blanket for the migrant labourers;
• makes sure that the employer provides safe drinking water, sanitation, cost-free
medical care for all the labourers encompassing both inter-state and intra-state
migrant labourers;
• assists the street labourers in distress with a toll-free Help Line number.
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Slums. Earthscan Publications Ltd.
Mobility and Threshold Social Security
Pushpendra and Dipak Kumar Singh
Abstract Migrants predominantly work in the unorganised sector which employs

over 90% of the workforce and is characterised by low earnings, informal contracts,
insecure jobs, fluctuations in employment, poor working conditions and low level
of social security, resulting in extremely poor living standards and precarity for its
workers. The social policy in India too has followed the dichotomy of organised and
unorganised sector by developing a dual system of social security—a comprehen-
sive, portable social security for organised sector employees who usually have regular
salaried jobs and a minimalist social security for unorganised sector workers who
are the most vulnerable groups—socially as well as economically. Building upon
the ILO Social Protection Floor recommendation, the paper argues for reimagining
social security as an intervention to make drastic improvements in the living stan-
dard of the entire workforce of India. It highlights three weaknesses in the existing
social security system—one, they are based on a reductionist package of social insur-
ance and social assistance; two, they lack a threshold push to make a real change in
the lives of beneficiaries and three, the prevailing policy environment seeks to keep
workers in abominable conditions in the name of expanding employment oppor-
tunities. However, both high as well as some low-income countries have shown
that social security can be successfully used to uplift the living standard of vast
majority of masses. Rather than treating growth and social security as binaries, a
developing country like India, the paper argues, needs to make departure from the
growth objectives it has hitherto followed and invest massively into people’s lives.
To overcome the historic weaknesses of social security programmes in India, the
gap between formal and informal sector must be minimised. The paper strongly
argues for making Employees Provident Fund (EPF) and Employees State Insurance
(ESI)—the two flagship programmes designed for the organised sector—universal
social security programmes in India. This would require work at several levels—right
Pushpendra (B)
Tata Institute of Social Sciences (TISS), Patna, India
e-mail: pushpendra1962@gmail.com
D. K. Singh
Department of Environment, Forest and Climate Change, Government of Bihar, Patna, India
e-mail: dksingh1992@yahoo.in

https://doi.org/10.1007/978-981-15-8265-3_20
398 Pushpendra and D. K. Singh
from working out technical details, registration of a very unstable workforce, finding
resources and bringing similar initiatives by a host of public actors under a common
‘threshold’ framework. The paper also recognises the need for other securities that
can be derived from schemes and programmes related to food and nutrition security;
work security in rural and urban areas; cash support; and improvement in housing,
surrounding settlement and workplace; and call for combining these with universal
EPF and ESI, is termed by the authors as ‘threshold security’. For migrants, all social
security programmes and schemes must have an inbuilt portability clause. This would
require investing into technology platforms, overcoming exclusions created by the
requirements of domicile, adhering to the principle of non-discrimination and equal
citizenship, recognising the contributions made by migrants in the growth and devel-
opment of the country, and amending the basic design of some crucial funds for
inter-state portability of resources so that they finally reach the workers.
1 Introduction
This chapter is being written in a particular background. The novel coronavirus

pandemic, known as COVID-19, has caused the severest global health crisis since
the Spanish Flu of 1918–1920. Till the time of writing this paper, globally it has
infected more than ten million persons and has claimed over half a million lives.
India though like other Asian and African countries has witnessed less virulence of
the disease, has lost more than 15,000 lives while more than half a million persons
have got infected. Taking cue from experiences of some countries in containing the
spread of the virus by breaking the human to human contact chain, India imposed
a curfew-like lockdown from 25 March 2020 which was in phases extended up to
31 May 2020. However, the lockdown triggered a massive exodus of intra-state and
inter-state migrants from towns and cities, particularly industrial growth centres. For
more than eight weeks, the optics of desperate attempts by the migrants to return to
their native places unfolded a spectre of human misery in India, unprecedented since
the Partition.
Amidst all these, optics apart, what was perplexing to know through newspaper
reports and some quick surveys by universities and civil society groups1 that more
than the fear factor of corona virus, the main reasons behind the exodus of migrants
were the loss of sources of income, low savings, lack of access to food, loss of
accommodation at worksites or inability to pay rent, unbearable conditions of living
in the context of forced indoor life in the slums and labour colonies, inability to
1 (Survey reports, all accessed on 2 June 2020. Azim Premji University: https://cse.azimpremj
iuniversity.edu.in/covid19-analysis-of-impact-and-relief-measures/, Stranded Workers Action
Network (SWAN): https://covid19socialsecurity.wordpress.com/, Ideas for India: https://www.ide
asforindia.in/topics/poverty-inequality/how-has-covid-19-crisis-affected-the-urban-poor-findings-
from-a-phone-survey.html, National Council of Applied Economic Research: http://www.ncaer.
org/data_details.php?dID=28, Jan Sahas: https://9f10ca96-9d6f-4573-8373-ed4c52ef9c6a.filesusr.
com/ugd/d70f23_f18accd3b4404f789889b53fa27d99c8.pdf.
Mobility and Threshold Social Security 399
maintain social distancing, hygiene and so on. As the lockdown kept extending, the
migrants were further gripped with the fear that they would exhaust savings which
were precious for their families back home. In several cases, they were forced to
seek reverse remittance from their families to meet their daily expenses and to meet
the cost of their return. According to the Centre for Monitoring Indian Economy,
COVID’s immediate impact on employment was the loss of over 100 million jobs.2
These reports and visuals helped bring the plight of migrants at the centre-stage of
the pandemic as well as development discourse. The vulnerabilities of migrants were
too exposed to be ignored. The fact that India’s workers, particularly the migrants,
are impoverished and have minimal capacity to withstand joblessness and income
shock has been proved beyond doubt in this crisis.
In this backdrop, the paper attempts to build a strong case for revisiting India’s
social security architecture. As various studies (Jhabvala and Subrahmanya 2000;
Dev 2002; Agrawal and Anupama 2013; Majumdar and Borboa 2013) have high-
lighted, the existing social security provisions are grossly inadequate to meet the
requirements of the migrants when in need, particularly in the condition of en mass
loss of jobs and livelihoods. In this chapter, we briefly assess the policy and legal
framework of social security in India and argue for reconceptualising social security
as a redistribution strategy that creates comprehensive entitlements for migrants and
other workers. Drawing from some successful experiences from India and abroad,
we suggest ways to make social security system relevant for unorganised workers
and portable for migrants.
The paper is divided into three sections. The introduction sets the context of
COVID-19 pandemic which has prompted us to search for new ways of strengthening
social security of migrants and other workers. In the second section, we discuss how
precarity is embedded in the nature of informal sector employment and how that
makes migrants and other workers extremely vulnerable and severely deprived. The
third section examines the weaknesses of existing social security edifice for adequacy
and threshold through which we try to answer: why social security programmes
have not succeeded in transforming the quality of life of migrants and workers?
We propose a transformative framework of social security for unorganised workers
including migrants that put particular emphasis on narrowing the gap between social
security available for organised sector and that for unorganised sector workers. We
also discuss the issue of portability of migrant rights.
2 Poverty, Vulnerability and Precarity
Intercensal data establish that migration has accelerated between 2001 and 2011
(Economic Survey 2016–2017). However, owing to several complexities and prob-
lems with both Census and NSSO in the estimation of migrants (Srivastava 2011;
2 https://www.cmie.com/kommon/bin/sr.php?kall=warticle&dt=2020-06-02%2011:43:41&mse
c=800. Retrieved on 05 June 2020.

Dandekar and Ghai 2020), it is not possible to arrive at a precise estimate of the
number of migrants and its disaggregation in terms of intra-state, inter-state, long-
term, and short-term circular and seasonal migrants. Moreover, both the sources are
quite old. Definitional problems have particularly led to under-estimation of circular
and seasonal migration as well as female migration. However, it can be assumed that
the number of migrants would be over 100 million (Economic Survey 2016–2017)
of which 55 million might be inter-state migrants. Both long-term and short-term
circular and seasonal migrants are by and large constituted by those employed in
the informal sector as casual or low-paid regular wage workers, and also those who
work as self-employed in low-earning occupations.
While writing on migration, one faces two-fold difficulties—first, methodological
and definitional issues that do not allow estimating precise number or proportion of
circular and seasonal migrants. And second, the paucity of data regarding the charac-
teristics of migration and migrants which does not allow assessing the nature of their
employment, the magnitude of unemployment and under-employment, earnings and
access to social security benefits. Hence, we will be using data related to the unor-
ganised sector to get a sense of the economic vulnerabilities faced by migrants since
they overwhelmingly work in the unorganised sector.
The overall percentage of workers in informal employment has been hanging
around 92% of total employed workers (see Table 1). The chief characteristics of
this massive informal sector are unregulated terms and conditions of employment,
Table 1 Distribution of workers by category of sector

Sector of employment Organised Unorganised Total
(%) (No.) (%) (No.) (%) (No.)
2004–2005
Formal 53.44 33.4 0.35 1.4 7.61 34.8
Informal 46.56 29.1 99.65 393.5 92.39 422.6
Total 14 62.5 86.34 394.9 100.00 457.4
2011–2012
Formal 45.35 37.1 0.41 1.6 8.18 38.7
Informal 54.65 44.7 99.59 389.5 91.82 434.2
Total 17.30 81.8 82.70 391.1 100.00 472.9
2017–2018
Formal 48.95 44.3 0.74 2.8 10.00 47.1
Informal 51.05 46.2 99.26 377.9 90.00 424.1
Total 19.21 90.5 80.79 380.7 100.00 471.2
Source NSSO 61st Round, 68th Round and Periodic Labour Force Survey (PLFS)a 2017–2018
(Numbers are in millions)
a The figures of PLFS are not strictly comparable with NSSO Rounds due to the difference in
the sampling method. The proportion of organised sector/formal employment is likely to be slightly
higher in PLFS because of sampling bias in favour of households with better educational attainments.
unwritten contract, small scale operations, ease of entry but also hire and fire of
workers at will, labour-intensive work, low productivity of labour and lack of social
security for workers (Agrawal and Anupama 2013). 64.9% of regular wage/salaried
workers, 67.8% of contract workers and 95.3% of casual workers do not have a
written job contract (Bureau 2015–2016). The number of workers without written
contract went up from 74% in 2004–2005 to 79% (85% in rural areas and 73% in
urban areas) in 2011–2012 (NSSO, 68th Round 2011–2012). Only 20.6% of workers
(other than self-employed) had availed paid leave. Only 21.6% of them had availed
at least one or more of the three social security benefits in the form of pension,
gratuity or health care and maternity. In fact, 71.2% of workers were not eligible for
these social security benefits. Another 7% had no idea about such provisions. Self-
employed workers (primarily own account workers), contract workers and casual
labour, who are likely to be devoid of any social security, constituted 83% of all
workers (see Table 2).
Unemployment has steadily risen in the recent decade (see Fig. 1). The Periodic
Labour Force Survey (PLFS 2017–2018) shows an actual decline in the number of
employed people. The projection of unemployment varies as experts differ on the
projection of labour force, new entry and exit from the labour market. For example,
while the Bureau (2015–2016) projected the unemployment rate at 5%, the Centre
for Monitoring Indian Economy projected it at 8.2%. Moreover, under-employment
Table 2 Structure of employment in India (percentages)

Year Self-employed Regular/Salaried Casual All
1993–1994 54.8 13.2 32.0 100.0
1999–2000 52.9 13.9 33.2 100.0
2004–2005 55.9 14.8 29.3 100.0
2011–2012 51.9 18.7 29.4 100.0
2015–2016 50.0 17.0 33.0 100.0
Source Various rounds of NSSO and Labour Bureau
Fig. 1 Unemployment Source NSS, EUS and Labour Bureau

Table 3 Average monthly earnings by employment status, 2015–2016

Income categories Self Regular Contract Casual Total
employed wage/Salaried workers (%) labour (%) workers
(%) (%) (%)
Up to |5000 19.2 (41.3) 3.2 (18.7) 1.4 (38.5) 19.5 (59.3) 43.3
|5001–|7500 12.2 (26.2) 3.3 (19.5) 1.0 (27.9) 8.2 (25.0) 24.7
|7501–|10,000 8.1 (17.4) 3.2 (19.0) 0.8 (20.3) 3.9 (12.0) 16.0
|10,001–|20,000 5.2 (11.1) 4.0 (23.6) 0.4 (11.0) 1.1 (3.5) 10.7
|20,001–|50,000 1.6 (3.5) 3.0 (17.7) 0.1 (2.1) 0.1 (0.3) 4.8
|50,001–|1,00,000 0.2 (0.4) 0.2 (1.4) 0.0 (0.1) 0.0 (0.0) 0.4
Above |1,00,000 0.0 (0.1) 0.0 (0.2) 0.0 (0.0) 0.0 (0.0) 0.1
All income groups 46.6 17.0 (100.0) 3.7 (100.0) 32.8 (100.0) 100.0
(100.0)
Source Labour Bureau, Employment and Unemployment Survey, 2015–2016
is rampant. Bureau (2015–2016) data show that of all workers, up to 35.5% worked
for less than 12 months in a year.
As Table 3 clearly shows, low wages is the foremost challenge of the workforce in
India. Two-thirds of self-employed as well as contract workers and more than 84%
of casual workers earn just up to 7500 per month. These classes of workers constitute
83% of the workforce. Even among regular wage or salaried workers, close to 40%
earn up to 7,500 per month and 57% earn up to 10,000 per month only. Similarly
of all workers, 84% earn up to 10,000 per month only and less than 5.5% earn Rs.
20,000 a month or more.
We are well aware of the serious implications of such low wages such as persis-
tence of poverty, the inability of the workers to deal with even minor economic
shocks, predominantly single male or female migration, and compromises made on
living conditions and meeting food and health needs in order to send remittances. We
will desist from further getting into it and, instead, discuss several non-wage issues
that too make migrants vulnerable. The short-duration and seasonal out-migrants
are much more likely to be from SC/ST, from land-poor households and bottom
quintiles. More than two-fifth of the seasonal migrants belong to SC or ST commu-
nities (Srivastava 2019). Lower social profile exposes them to social discrimination
in the labour market. Migrants generally come with low educational background
and skills which to a great extent compromise their attempt towards upward class
mobility (NSSO 2010). A considerable proportion of migrants are recruited through
labour contractors who control their terms and conditions of recruitment. They also
have a weak social network at the destination, thus they are often left on their own
when faced with violence, monetary needs and other situations such as the need for
a caregiver in case of illness.
It is this vulnerability and precarity that forced inter-state migrants to flee the cities
during the lockdown. An analysis of occupation-related data of those migrants who
registered with the Government of Bihar for their return to the state from different
inter-state destinations by Shramik Special trains not only confirm that they were
employed in the unorganised sector but also throw further light on their social compo-
sition (for the occupational profile of return migrants in Bihar, see Table 4). 95% of
them were males and the same percentage was in the working age group of 15–
59 years. Over 80% belonged to Scheduled Castes, Scheduled Tribes, Other Back-
ward Classes and Extremely Backward Classes. They engaged in a wide range of
activities at the destination, with a whopping 65% of them engaged in construction
work.
In a nutshell, informal nature of employment, lack of social security, growing
unemployment and under-employment and low wages make the condition of informal
sectors workers precarious. Within them, migrants find themselves in a more precar-
ious situation due to additional constraints imposed by lack of portability of enti-
tlements, lower social profile, lack of opportunity of upward mobility, weak social
network, etc. All these make it imperative to adopt a social policy that emphasises on
addressing these issues through appropriate and adequate social security measures
and designing a strong implementation apparatus so that the vicious cycle of poverty
and precarity of workers and migrants can be ruptured.
Table 4 Occupational profile of migrants who returned to Bihar by Shramik special

Broad occupational profile of return migrants Number Percentage
Agriculturea 14,557 1.2
Banking and Financial services 3,607 0.3
Computer and IT 13,964 1.1
Construction 809,753 65.6
Electronic and Electricals 20,572 1.7
Food processing 5,823 0.5
General services 219,499 17.8
Health services 14,696 1.2
Automobile and Generator mechanic 49,836 4.0
Textiles and Handloom 21,556 1.7
Others 79,563 6.4
All occupations 12,35,262 100.0
a Low figure for agriculture-related activities may be due to lean agricultural season when the
lockdown was imposed
Source https://covidportal.bihar.gov.in, Government of Bihar
3 Reimagining Social Security
3.1 Current Edifice of Social Security
Social security of migrants, mainly circular and seasonal migrants, should be

approached from three perspectives—from the perspective of their mobility which
involves a change of place (migration); their poor economic, social and educational
background (poverty and deprivation); and they are being part of the unorganised
workforce (value of labour). These are not mutually exclusive; instead they bring
out different dimensions of social security requirements of both, migrants and non-
migrants. They have a great degree of overlap, except that migrants face restrictions
on accessing schemes because of issues related to portability and also face more
problems concerning housing than local workers.
None of the above is addressed by the Interstate Migrant Workmen Act, 1970.
The Act does not apply on informal ways of recruitment which is, in practice, the
rule rather than the exception. Moreover, the benefits accruing to the worker under
the Act, if all norms are followed, are actually minimal limited to wages, leaves,
suitable accommodation, etc. The maximum liability of a registered contractor for
a registered Migrant worker during any crisis, such as the present one, would have
been to provide return fare to his/her place of residence. Similarly, The Unorgan-
ised Workers’ Social Security Act, 2008 is a classic example of a highly reduc-
tionist approach to social security. It limits its ambit to life and disability, health and
maternity, and old age protection and leaves other social security needs up to the
state governments. It excludes a large number of informal workers like agricultural
workers, construction workers and informal workers in the formal sector, and ignores
the working conditions of the informal workers and the particular problems of the
women workers (Majumdar and Borbora 2013). It did not give any new benefit to
workers instead notified pre-existing 10 schemes in its schedule3 some of which are
rather defunct. The Government of India in 2019 introduced a new bill, called The
Code on Social Security, 2019 in the parliament which is under the pre-legislative
consultation process.4 The Bill is almost a reproduction of the 2008 Act and is limited
to life and disability cover; health and maternity benefits; and old age protection.5
3 The Act was promulgated following the Report of the National Commission for Enterprises in
the Unorganised Sector (NCEUS 2006). The NCEUS had recommended a National Social Security
Scheme with additional components of health insurance not only for self but for spouse and children,
sickness allowance and maternity benefits for women workers or spouse of men workers; Provident
Fund-cum-unemployment relief for workers below the age of 60 years and a National Social Security
Fund for unorganised workers. These recommendations did not find a place in the final Act.
4 Bill No. 374 of 2019. https://labour.gov.in/sites/default/files/375_2019_LS_Eng_0.pdf. Retrieved
on 28 May 2020.
5 For a brief commentary on the Code, see https://scroll.in/article/964108/how-india-can-streng
then-its-social-security-code-to-include-the-422-million-workers-left-behind. Retrieved on 12 June

2020.
The social security edifice of India chiefly consists of schemes that can be
divided into two categories. The first category includes contributory schemes of
old age pension; contributory schemes of life, accidental and disability insurance;
and schemes related to medical assurance/insurance. These three types of schemes
are either contingency oriented or for future security. However, except the scheme
related to medical insurance, provisions under pension or insurance schemes are quite
less, their coverage is low and they are meant to support the beneficiaries only in case
of contingencies and old age. The second category of schemes is related to food and
nutrition; rural employment and cash support. While under the National Food Secu-
rity Act 2013, public distribution system, mid-day meal and supplementary feeding
through anganwadi centres provide crucial survival food and nutrition security to a
large majority of the country, rural employment programme under Mahatma Gandhi
National Rural Employment Guarantee Act is a source of cash during unemployment
period. It has the potential of providing a rural household up to approximately 20,000
per annum provided the household gets 100 days of employment. In reality, during
2019–2020, the scheme provided an average of just 48.39 days of employment to a
household at the average wage rate of Rs.182.09, thus providing a beneficiary house-
hold Rs. 734 a month. [For details of social security schemes in India, see the note
provided at the end of the chapter].
The exiguous entitlements under these schemes have provided some relief in times
of exigencies such as death, accidents, disability, medical emergencies requiring
hospitalisation or during old age and also given crucial survival support to unorgan-
ised sector workers. However, they have been proved grossly inadequate in making a
visible impact on the living standards of workers which we have discussed in Sect. 2.
3.2 Minimalist Versus Threshold Social Security
For a very long time, the ILO Social Security (Minimum Standards) Convention,
1952 (No. 102) has influenced the understanding of social security in terms of preven-
tive measures which emphasised on measures that help workers in contingent times.6
Further, the ILO Social Protection Floors Recommendation 2012 (No. 202)7 elevated
the right to social security as a human right, moving beyond treating social security
as a protection against certain life risks and social needs, and called for reconceptu-
alising social security as an essential tool to prevent and reduce poverty, inequality,
social exclusion and social insecurity; to reduce differences within and among the
region, to promote equal opportunity and gender and racial equality, and to support
the transition from informal to formal employment. Social security, it argued, would
6 The ILO Convention identified nine branches of social security which are (i) medical care; (ii)
sickness benefit; (iii) unemployment benefit; (iv) old-age benefit; (v) employment injury benefit;
(vi) family benefit; (vii) maternity benefit; (viii) invalidity benefit and (ix) survivors’ benefit.
The Convention also defined minimum standards for each of them. In India, social security in
the organised sector more or less follows these components.
7 It was adopted in the 101st Session of the International Labour Conference in 2012.
help stimulate aggregate demand in times of crisis and beyond, and help support a
transition to a more sustainable economy.
The principles laid down in the Social Protection Floor open possibilities
of income support, regulation of wages and other measures to narrow the gap
between formal and informal employment and ensure decent work conditions. It
also conceptualises inclusive urbanisation that ensures a basic level of decent living
including housing, water supply, sanitation and environmental hygiene and capa-
bility enhancing measures such as quality education and acquisition/upgradation of
skills.
Does such conceptualisation of social security encroach upon the general
economic functions, particularly market-based economic functions? We argue that
social security and general economic functions should not be seen in binary. The
purpose of economic growth should be the same—end deprivations among masses
and achieve everyone’s well-being. Experiences of several countries have also shown
the success of economic growth in improving living standards but those have been
the direct result of social intervention rather than of simple economic growth (Dreze
and Sen 1991). We, therefore, argue that a multi-dimensional, inclusive and equity-
oriented conceptualisation of social security sets a social policy agenda for the state,
markets, industry associations, trade unions, civil society organisations and other
actors and would require them to re-orient their goals accordingly.8
From this perspective, existing migration and social security related legislations
and schemes in India suffer from three major problems: a) reductionism; b) inad-
equacy to cross the threshold and c) incoherence. Reductionism limits the choices
to a minimalist package in the name of effectiveness, constraints of resources and
manageability. A threshold is the level at which something starts to happen or have
an effect. When a scheme is designed to be minimalist in terms of scale, it fails to
effect a change. If a minimum level of decent living in old age requires x amount,
a support which is one-fourth of x amount will not help attain decency instead will
only allow living a wretched life in old age. Incoherence arises because of adverse
policy climate where the State considers labour protection antithetical to labour
market flexibility, perceived as one of the essential conditions for attracting invest-
ments. Coherence would require the market, government and all others to commit
to comprehensive social security to address deprivations and other issues mentioned
earlier.
The threshold approach to social security contrasts with the minimalist approach
hitherto pursued in India. If social security has to perform a greater transforma-
tive role, then the emphasis has to be on promotional aspects of social security.
Dreze and Sen (1991) differentiate between two aspects of social security—protec-
tion and promotion. While the former is concerned with preventing a decline in
living standard in general and in the basic conditions of living in particular; the
latter is concerned with achieving higher incomes and living standards. In devel-
oped countries where living standard is high and the size of poor is relatively small,
8 On the debate why governments should involve themselves in social security, see Burgess and
Stern (1991), Dreze and Sen (1991).
contingency-based social security system works reasonably well, whereas in India

a social security system will have to adopt promotion strategies that can raise living
standards. In the following pages, we have tried to present an outline of a social
security system for India which is based on four guiding principles: i) narrowing
the gap between organised and unorganised sector social security; ii) reducing social
insecurities in everyday life in the present by ensuring a minimum decent living
standard; iii) creating mechanisms to take care of old age and contingency needs
and iv) ensuring delivery of social security in a way that it does not disincentivise
spatial mobility. Setting threshold-level security as the goal, these principles combine
aspects of protection and promotion with a strong emphasis on the latter. Regarding
migration, the approach is not to prevent it but remove any disadvantages associated
with spatial mobility.
3.3 Narrowing the Gap Between Organised and Unorganised

Sector
At present, there is a clear distinction between the nature of social security cover
available to the organised sector workers in the form of Employees Provident Fund
(EPF) and Employees State Insurance (ESI), as compared to the benefits available
for the unorganised workers provided under the 2008 Act or otherwise. The EPF,
managed by Employees Provident Fund Organisation (EPFO), has three compo-
nents—a) a provident fund created for every employee based on equal contributions
by the employee and employer which is fully availed by the employee after retirement
or even earlier, and fully or partly, in case of unemployment; b) a pension fund in
the form of superannuation pension, retiring pension or permanent total disablement
pension to the employees with the benefit of widow or widower’s pension, children
pension or orphan pension payable to the beneficiaries of such employees and c)
employee deposit-linked life insurance where the employee is insured for up to Rs.
6 lakh.
The ESI, managed by Employees State Insurance Corporation (ESIC), offers
extensive benefits to its subscribers9 that take care of various conditions from sick-
ness; maternity; disablement and death due to employment injury or occupational
9 Benefits under ESI include (a) medical benefit for the insured person and his/her family that include
in-patient treatment, domiciliary treatment, specialist consultation, imaging services, artificial limbs
and aids, etc. through a vast network of ESI hospitals as well as its empanelled hospitals; (b) sickness
benefit with full or part payment of wages extendable up to 2 years; (c) maternity benefit usually
for 26 weeks with full wage; (d) disablement benefit in the form of 90% of wages; (e) dependants’
benefits in the form of 90% of wage every month if death occurs due to employment injury or
occupational hazards; (f) other benefits in the form of funeral expenses, vocational rehabilitation,
physical rehabilitation, old age medical care, unemployment allowance at 50% wage up to 2 years
due to closure of factory/establishment, retrenchment or permanent invalidity, and medical care
for self and family during the period of unemployment allowance, and also provision for skill
upgradation at the expenses of the ESIC.
hazard; to unemployment allowances and skill upgradation. An interesting feature

of the ESI Scheme is that the contributions are related to the paying capacity as a
fixed percentage of the workers’ wages, whereas they are provided social security
benefits according to individual needs without distinction.
For organised sector, therefore, the social security creates an appreciable level of
capacity to take care of short-term exigencies and periodical needs, like sickness,
injury, education and marriage of children, short-term unemployment, etc. From the
perspective of migrants, both EPFO and ESI benefits are portable. EPFO has launched
a unified portal and (portable) Universal Account Number (UAN). In most of the
schemes of the unorganised sector, benefits accrue at a future date—in the event of old
age, death or disablement. This explains the reluctance of workers to subscribe to
them. This can be understood as the effect of ‘time inconsistency’ (Banerjee and
Duflo 2011).10 This psychological factor combined with the core financial sense of
the Net Present Value (NPV) of the future benefits vis-à-vis the current investments
makes most of these schemes at least appear to be unattractive for the intended
beneficiaries.
Hence, we argue that membership of the EPF and ESI should be made compulsory
for the entire workforce—organised as well as unorganised sector workers in India.11
EPFO and ESIC can be entrusted to manage the services for unorganised workers
also. The government should create a separate welfare fund under them to meet the
cost of employer’s contribution if the worker is a self-employed or casual worker
or wherever the employer or employee or both are not in the position to pay their
contribution.
Undeniably, such a proposition is not easily implementable. On the contrary, it
is far more complicated than it might appear. For example, what wage floor will
be used to calculate the contribution of employees and employer/government, given
the diversity of occupation, income, payment system, job fluctuations and period
of unemployment of unorganised workers? How to ensure that the contribution is
not too low to make the threshold impact? Universalising EPF and ESI would also
require registration of all workers in the country and providing them with a unique
identification number as envisaged in the Unorganised Workers Social Security Act,
2008 and a system of regular updating of their data. Both EPF and ESI would require
dismantling restrictions on their subscription such as the size of the enterprise and
cap on salary up to Rs. 15,000 per month to include all workers since due to these
restrictions the schemes cover less than half of organised sector workers. Though
Massive expansion of ESI hospital and domiciliary facilities may be required, the
state and central governments will have to agree to gradually bring ESIC facilities
10 According to Banerjee and Duflo, ‘Research in psychology has now been applied to a range of
economic phenomena to show that we think about the present very differently from the way we
think about the future (a notion referred to as “time inconsistency”)’.
11 Report of the Working Group on Migration (2017: 34), in the context of health security, recom-
mends ‘covering contract and even unorganised workers under ESI’. However, there is no further
discussion on this in the Report. Duggal (2006) argues for restructuring ESI to accommodate the
entire workforce by removing all restrictions for coverage under the Act like wage limits, numbers
employed, etc.
and general health services under a common governance mechanism so that access
to universal primary health care is not compromised. On top of it, bringing social
security of organised and unorganised sector workers on the par would require re-
orienting the economic and social policies towards formalisation of economy. This
will clearly be an epoch-making departure from the economic dispensation that has
become the hallmark of developing countries’ economy. The government should form
a Commission to suggest a roadmap to roll out the new social security programme
which aims at ensuring up to par benefits for unorganised workers.
We have successful examples of functioning of some welfare funds at the state
level, for example in Kerala, that demonstrate the feasibility of delivering provident
fund, gratuity, unemployment relief, social assistance and insurance cover to life,
disability and accidents, and several other benefits, similar to those offered by the EPF
and ESI, to a range of unorganised workers with diverse occupations and differential
earnings and risks associated with each of them (NCEUS 2006). The functioning
of the Mathadi Workers’ Welfare Board in Maharashtra is another example which
has been successfully working since 1969 and has gradually expanded workers’
welfare by starting its own hospitals on the line of ESI and providing provident fund,
insurance and other assistance.
The sceptics would raise the issue of feasibility of such massive social security
through public provisioning in a developing country like India where resources are
limited, the economy has taken a hit in recent years, the unemployment rate is high,
and seasonal and low quality employment are rampant. Our estimates put the cost
of ESI at slightly less than 1% of the GDP.12 Regarding the EPF, the entire cost
of employer and employee contributions come to 5.6% of the GDP, whereas the
actual cost is likely to be around 4.5% of the GDP if employees share a portion of
the cost.13 As Dreze and Sen (1991) have shown from the example of China, Sri
Lanka, Cuba, Costa Rica, Chile and Jamaica, countries with low per capita GNP,
such scepticism is often exaggerated and, to some extent, misleading. Moreover,
taking a giant leap towards formalisation would have extraordinary spin-off effects
on the economy in the form of massive investments in water, sanitation, housing, and
other urban and rural infrastructure, correcting demand-side weaknesses by infusing
purchasing power in half a billion workforce, and constant skill upgradation to deal
with the problem of redundancy and unemployment. This would also save resources
that are spent on treating preventable diseases, and avoid frequent disruptions in
work. This will, in the medium to the longer run, substantially reduce the need for
state subsidy in social security programmes by improving market wages, work and
living conditions and purchasing power of workers.
12 The calculation is based on the assumption that the average earning of 84% of 47 crore workforce
is Rs. 10,000 per month, and in their case, the employer contribution will be met by the government.
The total premium to be borne by the government will be 183,300 crores.
13 Considering 24% contribution of employer and employees for 84% of 47 crore workforce whose
average monthly income is Rs. 10,000 per month, the total contribution will be 11.37 lakh crore.
However, if the employees can pay Rs. 6,000 per annum, then the cost will come down to 9 lakh
crore.
Meeting the cost of EPF and ESI for unorganised sector workers does not require
all new resources. Five important existing sources can be tapped. First, existing
sectoral schemes targeted at different segments of the unorganised workforce, for
example, construction workers, beedi workers, handloom weavers, handicraft arti-
sans, mines workers, etc. These schemes are supported by specific welfare funds.
Second, various state governments have also established welfare funds for unor-
ganised workers including those who are either self-employed or casual labourers.
Some of these have been working efficiently. Hence, all targeted funds at central and
state levels can be brought under the broad umbrella of the EPFO and ESIC through
negotiation with states. Third, the universalisation of the EPF and ESI will result in
redundancy of several existing schemes that are, a la Kabeer (2010), piecemeal and
fragmented, resulting in savings from them. Fourth, the central and state govern-
ments should consider levying a new cess in sectors wherever possible on the line
of Building and Other Construction Workers Welfare Cess Act (1996). And fifth,
the employer of regularly employed informal workers in organised and unorganised
sectors should be directed to pay employers’ contribution. There can be creative ways
of bringing in accountability of the employer, for example, asking their contribution
for the total number of workers employed in a year. This will also require making
written contracts mandatory which will be a step towards formalisation of labour
markets.
The measures as mentioned above will still leave some gaps in the financing of a
universal EPF and ESI which the central and state governments should jointly finance.
Additionally, we have some successful social security programmes and micro initia-
tives managed and/or promoted by NGOs, trade unions, workers’ collectives and
employers. Ways can be found to bring such initiatives under a common broad
framework while maintaining their autonomy. For example, these agencies as well
as state governments should have the autonomy to add provisions over and above
the threshold level decided under the EPF and ESI.
More than the financial feasibility of implementing comprehensive schemes like
ESI and EPF, the bigger challenge is government’s push to greater participation
of private sector in the health insurance market and investment of pension funds
in the capital market, thereby weakening low cost and low-risk social insurance
schemes. In the case of the EPF, employees are given the choice of opting for the
EPF or the New Pension Scheme (NPS) which is given tax incentives. However,
investing the pension fund in the capital market exposes it to the volatility of capital
market while the employee is lured by the attraction of higher return (Kannan 2015).
Similar is the case of ESI where members have been given an option to exit by
choosing a health insurance product from the market, and giving substantial tax
rebates on payment of medical insurance premium (Duggal 2015). Both ‘reforms’
are accompanied by the recent relaxation of labour laws, including the abolition of
inspections of enterprises employing up to 40 persons.
3.4 Other Essential Social Security Measures
The Public Distribution System (PDS) as envisaged in the National Food Security
Act, 2013 should be converted into a universal programme. This will eliminate wilful
or inadvertent errors in beneficiary selection and costs incurred on targeting, and
promote self-selection process, besides other benefits such as plugging leakages in
the system, reducing wastage due to under-utilisation of grains and cost incurred on
storage. The cost of expansion of the programme is likely to be marginal. Similarly,
other schemes under the Act—ICDS, MDM and Matritva Sahyog—should not only
continue but entitlements under the programmes must be progressively reviewed as
the working-class households overwhelmingly stand to benefit from these schemes.
Food grain distribution and cooked meal programmes must not be converted into
cash transfer as a cash transfer will cause fluctuations in entitlements depending on
fluctuations in the market prices. It may also allow diversion of money to meet other
requirements at the cost of food security, for example, in a patriarchal society an
alcohol-addicted male may get away with money to spend on his addiction.
The demand-based rural public works programme, MGNREGA, should not only
continue but family entitlements should be expanded from 100 days to 200 days in
a year, with fair wages. An urban public works programme should also be launched
which can be utilised to massively improve the urban infrastructure particularly in
housing, water supply, sanitation, hygiene, drainage, solid waste management and
condition of work units, particularly in dominated by the working class. The urban
works programme may be used as a wage subsidy programme in case of micro and
small enterprises, if required.
For migrants, the central and state governments should pay particular attention to
improving urban settlements and housing. This is a multi-dimensional complicated
issue and requires a separate detailed discussion. The basic elements of a good
housing security for circular and seasonal migrants would depend on how they are
provided affordable rental accommodations, how standards of accommodation at
worksites are codified to make them livable; and, for long-term migrants and other
low-income organised and unorganised sector workers, how slums are strategically
put under redevelopment for affordable, safe, livable, one and two-bedroom (with
kitchen and toilet) accommodations with hygienic surroundings. These require going
beyond individual owner-based approach to planning for housing security to city,
locality and group-based planning. In rural areas, apart from the individual owner-
based subsidy, access to homestead land must be part of housing security, particularly
for the landless labourers.
Pradhan Mantri Kisan Samman Yojana (PM-KISAN) provides income support
to even those who own a few decimals of land. Several small landowners-cum-
wage labourers-cum tenants are its beneficiaries who also migrate to work. This
cash support through direct benefit transfer is particularly useful for purchasing
agricultural inputs and paying wages for agricultural operations before harvesting.
Similarly, public provisioning of education and skill development has helped make
the workforce, including migrants, educated and appropriately skilled, and it remains
a crucial social security measure. Any emergency causing massive disruptions such
as the COVID-19 pandemic, drought and floods require special social assistance
not only in the form of relief but rehabilitation, income support, enterprise revival
support, etc. Mitigation of such contingency should be incorporated in the social
security architecture.
3.5 Portability of Entitlements for Migrants
The next important issue is ensuring the intra- and inter-state portability of schemes.
Under this category, five schemes/programmes are important from the perspective
of migrants. They are (i) PDS scheme; (ii) Integrated Child Development Scheme
(ICDS); (iii) Mid-day Meal and other non-teaching incentives; (iv) school educa-
tion and (v) benefits under Building and Other Construction Workers Welfare Board
(BOCWWB). Portability of PDS entitlements is possible by delinking individuals
from the household. In this regard, the ‘One Nation One Card’ will be a big move
though it may take some time to make PDS universally portable. Portability of ICDS,
schooling of children and mid-day meal are complicated and require more than
technological fix. Right from the admission of new children on a seasonal basis in
anganwadi centres/schools to getting an additional quota of ration for them, porta-
bility of school enrolment and attendance certificate on a seasonal basis, getting any
non-teaching incentives for seasonal migrant children and removing other barriers
in learning such as language, caste/community and cultural barriers are all difficult
questions. They require flexibility in the administrative procedures, quick respon-
siveness, studying the usual pattern of migration and making planning in advance,
cooperation at source and destination between state and civil society organisations,
administrative divisions in case of intra-state migration and state governments in case
of inter-state migration. There are some successful examples of inter-state coordina-
tion such as cooperation between Odisha and Andhra governments for the education
of children of seasonal migrant families working in brick kilns.
Portability of benefits under BOCWWB has been facing technical and bureau-
cratic hurdles. Under the Act, the worker is registered with the district authority in
his home state. If the worker has worked in a different state where cess is deducted
from the employer, the cess remains with the state government at the destination.
However, the worker is denied any welfare under the Board for not having worked
in the home state and not contributing to the cess pool of the home state. At present,
there is no portability of cess pool based on the domicile of the worker making worker
the ultimate sufferer. This is likely to be the case with some other welfare funds too.
4 Conclusion
In India, COVID-19 pandemic has exposed all dimensions of the fragility of unor-
ganised sector workers in general and migrants in particular. How to deal with
that fragility has been the binding thread throughout this chapter. We began with
the current socio-economic context in which migration takes place in India. While
the high regional disparity in terms of agricultural, industrial and urban growth creates
the condition for intra- and inter-state migration, the outcome of migration (and
labour in general) is determined by the most crucial characteristics of economic
growth in India, that is, overwhelming predominance of unorganised sector. It is this
sector that continuously churns out abysmal living standards and precarity for its
workers.
The social policy in India too has followed the dichotomy of the organised and
unorganised sector by developing a dual system of social security—a comprehensive,
portable social security for the organised sector employees who usually have regular
salaried jobs and minimalist social security for unorganised sector workers who
are the most vulnerable groups—socially as well as economically and constitute
over 90% of the workforce. We briefly analysed the weaknesses and limitations of
the existing legislative framework and schemes that are meant for the unorganised
sector workers including migrants and concluded that they are inherently incapable
of lifting the living standard of workers to a dignified human existence. At best, they
can support them to survive barely and deal with contingencies in a minimalist sense
and at worst fail to support at all when caught up in bureaucratic technicalities of
selection errors and lack of portability.
Building upon the ILO Social Protection Floor recommendation, we then argued
for reimagining social security as an intervention to make drastic improvements in the
lives of the entire workforce of India. We analysed three weaknesses in the existing
social security system—first they are based on a reductionist package of social insur-
ance and social assistance; second, they lack a threshold push to make a real change
in the lives of beneficiaries and third, the prevailing policy environment seeks to keep
workers in abominable conditions in the name of expanding employment opportuni-
ties. However, both high as well as some low-income countries have shown that social
security can be successfully used to uplift the living standard of the vast majority
of masses. Rather than treating growth and social security as binaries, a developing
country like India needs to invest massively into people’s lives.
The gap between the formal and informal sector must be minimised to overcome
the historical weaknesses of social security programmes in India. In this regard, we
proposed making Employees Provident Fund (EPF) and Employees State Insurance
(ESI)—the two flagship programmes designed for the organised sector—universal
social security programmes in India. This would require work at several levels—right
from working out technical details, registration of a very unstable workforce, finding
resources and bringing similar initiatives by a host of public actors under a common
‘threshold’ framework.
A combination of universal EPF and ESI and some other useful securities derived
from existing schemes and programmes related to food and nutrition security;
work security in rural and urban areas; cash support; and improvement in housing,
surrounding settlement and workplace will prove, what we call ‘threshold security’
removing the ‘time inconsistencies’ where the present is compromised in lieu of a
promise of somewhat better (distant) future.
For migrants, all social security should have an inbuilt portability clause. This
would require investing into technology platforms, overcoming exclusions created
by the requirements of domicile, at least for social security purposes, adhering to the
principle of non-discrimination and equal citizenship, recognising the contributions
made by migrants in the growth and development of the country, and amending the
basic design of some crucial funds for inter-state transfer of resources so that they
finally reach the workers.
The COVID-19 crisis has shaken up lives and livelihoods of tens of millions but
is also knocking us to re-imagine our collective future where migrants and other
workers can live with a sense of dignity and security.
Note
A brief note on prominent social security schemes in India.
1. Pension: Pradhan Mantri Shram Yogi Maan-dhan (PMSYM) is for workers in
the unorganised sector with a maximum income of Rs. 15,000 per month. The
worker will get Rs. 3000 per month with the benefit of family pension in case
of her/his death. Atal Pension Yojana (APY) is open to all, without any income
criteria. The subscriber can opt for monthly pension ranging from Rs. 1000 to
Rs. 5000 by payment of the stipulated contribution regularly. In case of both the
schemes, the age limit at entry level is 18–40 years and the pension starts after
attaining the age of 60 years.
2. Insurance: Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) is available to
people between 18 and 50 years of age with an annual premium of Rs. 330. It
provides coverage of Rs. 0.2 million in case of death of the subscriber. Pradhan
Mantri Suraksha Bima Yojana (PMSBY) is an accident insurance scheme avail-
able to people between 18 and 70 years of age with an annual premium of Rs. 12
only. In case of accidental death or full disability, the payment is Rs. 0.2 million
while in case of partial permanent disability, the payment is Rs. 0.1 million. Both
the schemes are open to all.
3. Medical: Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY)
provides for cashless treatment up to Rs. 500,000 a year in case of secondary
and tertiary care hospitalisation with inbuilt portability through an e-card to any
empanelled public or private hospital in India. The selection of beneficiaries is
made on the basis of deprivation and occupational criteria of the Socio-Economic
Caste Census (SECC) 2011. Given the selection criteria, in all likelihood the over-
whelming majority of the beneficiaries are labouring classes including migrants
and its easy portability is highly suitable to migrants. The scheme is far below
the level of benefits of ESIC. It neither covers wage loss nor out-patient expenses
if hospitalisation is not required. Moreover, those households not enlisted in the

SECC 2011, either by omission or commission, are excluded from the scheme.
4. Food and Nutrition: All schemes related to food security come under integrated
umbrella of the National Food Security Act, 2013. Under the Targeted Public
Distribution System (TPDS), Antyodaya Anna Yojana (AAY) beneficiary house-
holds get 35 kg of highly subsidised foodgrains. New beneficiaries, called Priority
Households (PHH), get five kg of foodgrains per person per month at the same
subsidised price. Besides, every pregnant woman and lactating mother is enti-
tled to free of charge meal during pregnancy and six months after the child-
birth, through local anganwadi (under Integrated Child Development Services
Scheme), and maternity benefit (under Indira Gandhi Matritva Sahyog) of no less
than Rs. 6000. As regards food security of children, the Act provides for free of
charge meal to children in the age group of six months to six years through local
anganwadi, and in the case of children in the age group of six years to fourteen
years (or up to class VIII), free of charge one mid-day meal every day except
on school holidays to be provided through government and government-aided
schools and schools run by local bodies (under Mid-day Meal Scheme). The
majority of beneficiaries of ICDS and MDM schemes come from the poor and
labouring classes including migrants. However, selection errors and issues related
to linking with Aadhaar and biometric identification have left a considerable
section of deserving poor out of its purview. Portability of food security-related
schemes has been a long-pending demand. So far, there are pilot programmes
regarding portability of PDS rations in some states. During the COVID-19 lock-
down, the Central government announced its decision to implement ‘One Nation
One Ration Card’ from 1 July 2021. However, all states have still not joined the
scheme. A major destination state Delhi is yet to join the scheme, thus limiting
its usefulness. Further, portability of ICDS benefits and MDM is also an issue
that is yet to be resolved.
5. Housing: Pradhan Mantri Awas Yojana (Urban) and Pradhan Mantri Gramin
Awas Yojana are two housing-related schemes where the beneficiary gets either
interest subsidy or central assistance. In rural areas, SCs, STs, Economically
Weaker Sections (EWS) and women can take advantage of interest subsidy up to
3% or up to 2 lakh. In urban areas, central assistance of 1–1.5 lakh is available
for in situ slum redevelopment with private participation, or construction of
a house by those belonging to EWS or for affordable housing by private or
public sector builders where they reserve at least 35% houses for EWS. Interest
subsidy of different slabs amounting not more than up to 2.67 lakh for different
socio-economic groups is available under a credit-linked subsidy scheme. These
schemes are primarily meant for EWS which includes unorganised sector workers
and migrants. However, urban housing is highly complicated and it is doubtful
to what extent the scheme can improve access to minimum decent housing for
migrants and other unorganised workers.
6. Employment: Mahatma Gandhi National Rural Employment Guarantee Act
(MGNREGA) is a demand-based rural employment programme under which the
government is obliged to provide up to 100 days of employment to a rural house-

hold. All MGNREGA workers are unorganised workers and an overwhelming
number of them are likely to be circular and seasonal migrants too.
7. Cash Support: Family Benefit Scheme provides onetime cash support to a family
who has lost its bread earner. The Pradhan Mantri Kisan Samman Nidhi Yojana
provides cash support of Rs. 6,000 in four instalments to all farmers (with
certain exclusion criteria). Since a considerable number of unorganised workers
and migrants come from very small farmers, they too benefit from the scheme.
However, the landless wage earners as well as tenants are outside the purview of
the scheme. At present, there is no regular cash support scheme for unorganised
workers and migrants. Workers’ welfare boards in some sectors have the mandate
to provide cash support to its members in specific conditions.
8. Social Security during Disasters: The current disaster management act and relief
code provide for state action in case of a disaster in the form of various types
of relief and rehabilitation measures to be announced by the government. Such
relief includes food support, treatment, compensation in case of death, etc.
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Mapping of Migrants Based on Caste,
Origin, and Destination: An Insight
into the Sugarcane Cutter Migrants
in Maharashtra
Anurag Asawa
Abstract Temporary migration is often used interchangeably with circular,

seasonal, short-term, and spontaneous migration. The data (NSSO and Census)
reveals that there is an upward trend in migration because of employment oppor-
tunities. Seasonal migration is a routine phenomenon for people in the five districts
of the arid Marathwada region of the Maharashtra—Beed, Jalgaon, Ahmednagar,
Nasik, and Jalna. Analysis of more than 95000 respondents reveals that more than
75% of migrants belong to five castes—Vanjari (28.49%), Maratha (20.34%), Banjara
(13.0%), Bhill (8.55%), and Dhangar (6.92%). This paper attempts to map the migra-
tion process in the state and seeks to throw light on the preferred destination of the
migrants originating from a particular district belonging to a specific caste.
1 Introduction
Humans have been on the move since time immemorial. While early human beings
moved in search of food, shelter, and mates, not much has changed down the ages
as people continue to relocate out of choice or necessity in search of better work
opportunities and living conditions. Nowadays people are found to be moving away
from the place of their origin not only in search of work, or to study but also to
escape conflicts, terrorism, and in response to the adverse impact of climate change,
or natural disasters and even large-scale development projects. The UN Migration
Agency (IOM) defines a migrant ‘as any person who is moving or has moved across
an international border or within a country away from his/her habitual place of
residence, regardless of (1) the person’s legal status; (2) whether the movement is
voluntary or involuntary; (3) what the causes for the movement are; or (4) what the
length of the stay is’. This paper is confined to internal migration, or movement within
a country, in India, and more specifically within the western state of Maharashtra.
More people in India leave their homes for greener pastures within the country in a
A. Asawa (B)
Gokhale Institute of Politics and Economics, Pune, India
e-mail: anurag@gipe.ac.in

https://doi.org/10.1007/978-981-15-8265-3_21
420 A. Asawa
year than those crossing international borders globally. According to the 2001 Census
of India, the total number of migrants in the country was 315 million, which is more
than the United Nations’ global estimate of 272 million international migrants in
2019 (UN 2019). Migration takes place because households diversify their economic
activities outside the traditional agricultural sphere by sending out members to work
in urban areas in the lean period (Keshri and Bhagat 2012). Migration may acquire
many forms, and there is significant diversity in migratory patterns (Smita 2008).
Depending upon their duration, migration cycles range from a few weeks to some
months (7–9 months) and may occur once or several times in a year. Migration
for agricultural work, for example, is often of short duration and may take place
several times each year, with families making trips of four to eight weeks for sowing,
harvest, or transplantation activities. This type of migration commonly features small
family groups traveling over short distances and working in highly scattered areas,
making them difficult to trace. Migration can result in the permanent relocation of
an individual or household, which may be termed as a permanent migration. But
if individuals migrate, leaving their families and land and property in the area of
origin or residence, they may do so with the intention of coming back. This short-
term migration is more likely to happen if the individuals have precarious jobs in
the destination areas, or if the cost of permanent relocation is high as compared to
its benefits. In such a case, although individuals or groups may find a toehold in the
destination areas, such migration may be termed as semi-permanent or long-term
circular. Many studies have found that migration is not a choice instead it is a part of
the normal livelihood strategy of the poor, (Mc Dowell and Haan 1997) and it occurs
all the time and is triggered not just by emergency, or distress.
Migration within India is predominantly short-distance with around 60% of
migrants changing their residences within their district of birth and 20% within their
state (province), while the rest move across state boundaries. Estimates of short-term
migrants vary from 15 million (NSSO 2007–2008) to 100 million (Deshingkar and
Akter 2009). Migration in India is primarily of two types: (a) Long-term migra-
tion, resulting in the relocation of an individual or household and (b) Short-term or
seasonal/circular migration, involving back and forth movement between a source
and destination. If the duration of stay away from home is between thirty days to
six months, it is termed temporary or short-term migration. Temporary migration
is often used interchangeably with circular, seasonal, short-term, and spontaneous
migration. If individuals, or groups of individuals, migrate for temporary periods,
either moving from place to place or to a fixed destination, such migrants are seasonal,
temporary, or circular migrants (Srivastava 2011). These migrants belong to the
poorest and deprived sections of society typically comprising the Scheduled Castes
(SCs), Scheduled Tribes (STs), and Other Backward Castes (OBCs) (Srivastava and
Desgupta 2010).
As per the Census 2001, Maharashtra witnessed the largest in-migration of the
population over ten years (1991–2001) from different states. The total number of
in-migrants into the state was 3.2 million. The number of out-migrants from the
state during the decade was 0.89 million. Thus, the total net migrants, including
those who came from abroad, were 2.3 million. In comparison, the number of net
Mapping of Migrants Based on Caste … 421
migrants in 1991 was only 0.87 million showing significant growth of net migrants
into Maharashtra during these ten years. Out of 3.2 million in-migrants from other
states during the said decade, 2.6 million (or 79.6%) moved into urban areas. The
source states of in-migration into Maharashtra were Uttar Pradesh (0.9 million),
Karnataka (0.4 million), Madhya Pradesh (0.27 million), Gujarat (0.24 million),
Bihar (0.22 million), and Andhra Pradesh (0.19 million). Among distant inter-state
male migrants, work/employment has been cited as the primary reason for migration
(Uttar Pradesh—73.0%; Bihar—79.1%). From the adjoining states, ‘marriage’ and
‘moved with households’ were cited as important reasons for migration (Census of
India 2011). Marriage is the most prominent reason for migration among females.
Table 1 presents data on the percentage distribution of migrants according to reasons
for migration in Maharashtra as per the 2001 census and the National Sample Survey
Organization’s (NSSO) 64th round of survey conducted in 2007–08. The major
reasons for migration are considered to be ‘employment’, ‘business’, ‘education’,
‘marriage’, and ‘others’. Reasons such as natural disasters, social/political problems,
housing problems, migration of parents are clubbed in ‘others’. The data shows an
upward trend in migration because of employment. Almost half the number of male
migrants have stated employment as the reason for relocation in 2007–08 as against
37.18% in 2001. Thus, one of the main reasons for migration can be attributed
to employment seeking behavior. However, for females, the single most important
reason for migration can be traced to marriage.
Table 2 shows that 92.2% of rural and 94.4% of urban temporary migrants were
not employed. Table 3 shows that besides agriculture (61.8%), construction activity
(15.9%) in rural areas is seen to be generating sizeable employment for tempo-
rary migrants. However, in urban areas, it is other services (34.0%) followed by
construction (19.3%) that emerged as job generators.
Table 1 Percentage distribution of migrants by reason for migration: comparison of Census data
and NSS 64th round data, Maharashtra
Reason for Census 1991 Census 2001 NSS 64th round
Migration Male Female Person Male Female Person Male Female Person
Employment 24.16 1.61 10.05 37.18 2.70 16.55 50.28 1.31 14.22
Business 11.43 1.43 5.17 1.00 0.10 0.46 4.91 0.05 1.33
Education 5.34 1.28 2.80 2.63 0.65 1.45 5.72 1.46 2.58
Marriage 1.24 62.43 39.50 0.68 59.13 35.64 2.70 78.87 58.79
Others 57.84 33.26 42.47 58.52 37.42 45.90 36.39 18.31 23.08
Source A report on Migration Particulars’ based on data collected in state sample of 64th round
of National Sample Survey (July, 2007–June, 2008), Vol. I, Table no.1, page no 4, Directorate of
Economics and Statistics, Planning Department, Government of Maharashtra
422 A. Asawa
Table 2 Broad activity status

Broad activity status Rural Urban
Agriculture 50.9 71.2 57.4 14.7 15.9 15
Non-agriculture 1.9 0 1.3 2.7 0 2
Mining and quarrying 12.3 7 10.7 11.8 4.3 9.9
Manufacturing 0 0 0 0 0 0
Construction 17.1 9.9 14.8 17.6 17 17.5
Trade, hotel and restaurant 5 2.1 4.1 11.9 16.8 13.1
Other services 2.1 0.8 1.7 3 0 2.2
All Employed (a) 2.8 3.2 3 26.1 44.7 30.7
Not Employed (a) 92.2 94.4 92.9 87.7 98.8 90.5
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source A report on Migration Particulars’ based on data collected in state sample of 64th round of
National Sample Survey (July, 2007–June, 2008), Vol. I, Table no. 10, page no 10, Directorate of
Table 3 Percentage distribution of temporary migrants by employment activity

Broad activity status Rural Urban
Agriculture 55.3 75.5 61.8 16.7 16.1 16.6
Non-agriculture 44.7 24.5 38.2 83.3 83.9 83.4
Mining and quarrying 2.1 0 1.4 3.1 0 2.2
Manufacturing 13.4 7.5 11.5 13.4 4.4 10.9
Construction 18.5 10.5 15.9 20.1 17.2 19.3
Trade, hotel, and restaurant 5.4 2.2 4.4 13.6 17 14.5
Transport 2.3 0.9 1.8 3.4 0 2.4
Other services 3.1 3.4 3.2 29.7 45.3 34.0
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source A report on Migration Particulars’ based on data collected in state sample of 64th round of
National Sample Survey (July, 2007–June, 2008), Vol. I, Table no. 11, page no 10, Directorate of
2 Present Study
For the first time, the NSSO 55th round had separately estimated the number of short
duration out-migrants. The NSSO 64th round has taken the extra effort to cover
seasonal/temporary migration. The census, which is the other important source of
migration data, is mainly concerned with current and permanent migration and does
not attempt to capture seasonal or short-term flows of labor (Keshri and Bhagat
Table 4 Total Coverage of field survey

Years No. of migrants No of migrants No. of castes No. of factories No. of districts
from outside covered where migrants from where
state worked laborers
migrated
2004–05 7483 39 46 25 25
2005–06 16670 203 55 36 23
2006–07 13916 218 43 30 25
2007–08 17452 177 53 33 29
2008–09 16874 289 55 38 30
2009–10 9740 266 66 24 24
2010–11 7784 35 50 18 26
2011–12 3649 3 42 34 22
2012–13 1742 0 33 20 15
Source Field survey
2012). The two main secondary sources of data on population mobility in India
do not adequately capture seasonal and circular migration due to differences over
the definitions of migrants, reasons for migration, and stock versus flow concept
of migration. These limitations necessitate collecting primary data exclusively on
seasonal migration, especially for sugarcane cutter migrants. This has been done
over a period of nine years from 2004–05 to 2012–13 through a structured ques-
tionnaire with the help of purposive sample methods.1 Sugarcane cutter migrants
of Maharashtra are essentially temporary or seasonal migrants where movement is
from a rural origin to a rural destination. Workers from rural areas of Beed, Jalgaon,
Ahmednagar, Nashik, and Jalna districts migrate to the sugar belt of Maharashtra,
comprising seven districts—Nashik, Ahmednagar, Pune, Satara, Sangli, Kolhapur,
and Sholapur, every year during the sugarcane harvest period which generally starts
in the month of October and lasts up till March.
This paper is confined to tracing the flow of sugarcane cutter migrants based on
their caste, origin, and destination so as to understand patterns of migration by social
groups.
The head of the household was contacted at the workplace. Information about the
number of male and female members in the family, caste, age, and education level,
and current as well as last three years working destination, the number of children
accompanying the migrant family, their education level and age group, etc. have been
gathered. The total number of respondents is 95310. Table 4 shows that respondents
belong to on an average 49 different castes and every year almost 30 factories were
visited by enumerators which spread over almost 28 districts of the state.
1 Thisdaunting exercise was performed by workers of an NGO ‘Janarth’ located in Aurangabad.

Janarth ran schools for the sugar cutter migrant children at the site itself until the Right to Education
Act came into force in the year 2013.
424 A. Asawa
Table 5 Distribution of male

Age Group Male Female Total
and female migrant laborers
by age group Up to 35 59347 (62.28) 73768 (77.88) 133115 (70.1)
36 to 59 33431 (35.1) 20385 (21.53) 53816 (28.3)
60 & above 2485 (2.6) 574 (0.6) 3059 (1.6)
Total 189990 (100)
Note Figures in parentheses shows percentage
Source Field Survey
3 Profile of Migrants
3.1 Age
The ability to earn income mostly depends on the capability and/or productivity of
the person which is mainly affected by the age of laborers. The same is true for the
migrants who work as sugarcane cutters. As per Table 5, the highest percentage (70.1)
of migrant male and female laborers belongs to the age group of ‘up to 35 years’
that is the most appropriate age group to do strenuous physical work. Surprisingly,
the number of females is relatively more than that of males in this age group. The
reverse can be seen in the 36–59 years age group wherein almost 35% are males and
only 22% are female migrant workers.
3.2 Education
The overall education level of migrant labor is very poor (Table 6), although that
of males is slightly better than females. Of the total, almost 85% female migrants
are illiterate, as compared to their male counterparts (64.6%). Middle-level educa-
tion (between 5th and 8th standards) is the most common level among both males
(13.15%) and female (7.36%) migrants. Less than 2% of the migrant has studied
after matriculation.
3.3 Social Groups
Respondents in the study belong to 85 different castes (see Table 7). Every second
migrant belongs to the Other Backward Caste (OBC) category and out of them almost
every third migrant belongs to Vanjari caste. The general category, which is primarily
of Marathas, contributes around 21% of the migrants. Five castes from Schedule Caste
(SC), namely Matang, Mahar, Buddha, Chambhar, and Harijan constitute the third
highest group among the respondent migrants. Though the share of Schedule Tribe
Table 6 Distribution of male and female by the general educational level

Education Level Male Female Total
Illiterate 61536 (64.6) 80589 (85.08) 142125 (74.8)
Up to primary 10102 (10.6) 5193 (5.48) 15295 (8.1)
5th to 8th standards 12524 (13.15) 6966 (7.36) 19490 (10.3)
9th to 10th standards 8024 (8.42) 1686 (1.78) 9710 (5.1)
Above 10th standards 3077 (3.23) 293 (0.31) 3370 (1.8)
Total 189990 (100)
Note Figures in parenthesis shows percentage
Source Field Survey
Table 7 Distribution of migrants by social group/sub-caste

Sr No Caste Migrant Sr No Caste Migrant
1 Vanjari 27157 (28.49) 44 Kandali 34 (0.04)
2 Maratha 19387 (20.34) 45 Tirmali 33 (0.03)
3 Banjara 12389 (13.) 46 Gavali 31 (0.03)
4 Bhill 8145 (8.55) 47 Dhobi/parit 29 (0.03)
5 Dhangar 6597 (6.92) 48 Vakar 29 (0.03)
6 Mahar 3950 (4.14) 49 Holar 28 (0.03)
7 Matang/Mang 2742 (2.88) 50 Pujari 27 (0.03)
8 Buddha 2257 (2.37) 51 Joshi 26 (0.03)
9 Muslim 1639 (1.72) 52 Ghisadi 25 (0.03)
10 Lamani 1129 (1.18) 53 Gurav 20 (0.02)
11 Matang 916 (0.96) 54 Sonar 18 (0.02)
12 Lonar 895 (0.94) 55 Jogi 17 (0.02)
13 Naik 747 (0.78) 56 Nandiwale/jondhali 17 (0.02)
14 Harijan 641 (0.67) 57 Pathan 17 (0.02)
15 Chambhar 634 (0.67) 58 Christian 16 (0.02)
16 Koli 616 (0.65) 59 Nandiwale/jondh 14 (0.01)
17 Kokani 524 (0.55) 60 Dhakar 13 (0.01)
18 Ramoshi 507 (0.53) 61 Pardeshi 13 (0.01)
19 Mali 483 (0.51) 62 Pawara 11 (0.01)
20 Hatgar 378 (0.4) 63 Kadhodi 9 (0.01)
21 Gosawi 315 (0.33) 64 Patil 9 (0.01)
22 Wadari 276 (0.29) 65 Kunbi 8 (0.01)
23 Gujar 273 (0.29) 66 Panchal 8 (0.01)
24 Mang 236 (0.25) 67 Dhobi 7 (0.01)
(continued)
426 A. Asawa
Table 7 (continued)
Sr No Caste Migrant Sr No Caste Migrant
25 Thakar 202 (0.21) 68 Garudi 7 (0.01)
26 Lohar 165 (0.17) 69 Nandiwale/gondhali 7 (0.01)
27 Kumbhar 151 (0.16) 70 Vasava 7 (0.01)
28 Sutar 143 (0.15) 71 Brahmin 5 (0.01)
29 Nhavi 134 (0.14) 72 Shimpi 5 (0.01)
30 Gopal 125 (0.13) 73 Katkari 4 (0)
31 Kaikadi 105 (0.11) 74 Tambat 4 (0)
32 Pardhi 102 (0.11) 75 Wari 4 (0)
33 Valhar 93 (0.1) 76 Khatik 3 (0)
34 Rajput 76 (0.08) 77 Padavi 3 (0)
35 Teli 61 (0.06) 78 Lakhan 2 (0)
36 Mavachi 59 (0.06) 79 Bhai 1 (0)
37 Kolhar 53 (0.06) 80 Birad 1 (0)
38 Adivasi 51 (0.05) 81 Dhor 1 (0)
39 Wani 45 (0.05) 82 Gamit 1 (0)
40 Lingayat 42 (0.04) 83 Kahar 1 (0)
41 Bhoi 41 (0.04) 84 Parit 1 (0)
42 Gola 40 (0.04) 85 Vaidya 1 (0)
43 Beldar 39 (0.04) 86 Caste not given 206 (0.25)
Grand Total 95313 (100)
Note Figures in parenthesis shows percentage
(ST) in the sample is only 9.75%, Bhill alone comprises 8.5% of migrants under
study. Although, the respondents belong to more than eighty castes, yet more than
75% of migrants belong to only five castes—Vanjari (28.49%), Maratha (20.34%),
Banjara (13%), Bhill (8.55%), and Dhangar (6.92%). Every fifth migrant belongs to
Maratha caste and almost every third migrant is Vanjari by caste. Therefore, further
analysis is done only for the migrants belonging to these top five castes.
Beed, Ahmednagar, Jalgaon, Aurangabad, and Nashik are districts of origin for
almost 80% migrants. Ahmednagar, Pune, Nashik, Kolhapur, and Satara are the top
five districts of destination for almost 77% of migrants. The highest percentage
(41.44) of migrants belongs to Beed district. The number of migrants from Nashik
and Aurangabad districts is almost equal. Ahmednagar district is the most preferred
destination district one out of every fourth migrant headed there during 2004–05 to
2012–13. Pune district is the next favorite destination for migrant labor with 22.6%
of them working in the factories located there. A good number (7.45%) of migrants
also went to Belgaon district, which is part of adjoining state Karnataka.
Table 8 Districts of origin, destination, and corresponding caste of the migrant’s Respondents
migrated from (origin) top five districts
Respondents working Respondents belongs to top
(destination) in the top 5 5 Caste
districts
Beed 39493 (41.44) Ahmednagar 23132 (24.27) Vanjari 27157 (28.49)
Ahmednagar 14424 (15.13) Pune 21541 (22.6) Maratha 19387 (20.34)
Jalgaon 9001 (9.44) Nashik 13368 (14.03) Banjara 12389 (13.0)
Aurangabad 6379 (6.69) Kolhapur 8702 (9.13) Bhill 8145 (8.55)
Nashik 6350 (6.66) Belgaon 7105 (7.45) Dhangar 6597 (6.92)
Total of 5 75647 (79.37) Total of 5 73848 (77.48) Total of 5 73675 (77.3)
districts districts caste
(Origin) (Destination)
Total 95313 (100)
Respondents
Note Values shown in the parentheses of the second last row are the percentage of the top five
districts of the origin, destination and caste to the total number of the respondents in the respective
categories
Source Field Survey
4 Mapping of Migration
It is observed that there is a definite pattern in the migration of sugarcane cutter

laborers in terms of caste and choice of migration destination. There is a need to study
the combination of the district of origin and destinations of the migrants belonging
to different castes. Table 9 traces the flow of migration from origin to destination.
Top five districts from which migrants moved outside in decreasing order are Beed,
Ahmednagar, Jalgaon, Aurangabad, and Nashik. Out of the top five districts of origin,
only two districts viz. Ahmednagar and Nashik could find a place in the list of top
five preferred destinations also.
Ahmednagar is the most preferred workplace followed by Pune, Nashik, Belgaon,
and Kolhapur. Of the total migrants who moved to Ahmednagar in search of work,
88% belong to five districts, namely Beed, Ahmednagar, Jalgaon, Aurangabad,
and Nashik. Among them, almost 30% belong to Ahmednagar itself and every
fourth migrant comes from Beed. Although very few migrants from Nashik work in
the Ahmednagar, Belgaon, Kolhapur, and Pune district, yet the highest percentage
(38.36%) of workers from Nashik work in Nashik only. Sugarcane cutter migrant
hailing from the Beed and Ahmednagar go out of the state and work in Belgaon.
Kolhapur is preferred by the migrants who belong to Beed. Out of almost 91%
workers of Pune, the majority of them have migrated from Beed (71.25%) followed
428 A. Asawa
Table 9 Flow of migration from origin to destination

Districts Districts Origin Total of 5
Destination/Workplace Beed Ahm‘gar Jalgaon Aur’bad Nashik districts*
Ahmednagar 5922 6736 2874 3960 843 20335

(25.6) (29.12) (12.42) (17.12) (3.64) (87.9)
Belgaon 5502 797 1 2 NA 6302
(77.44) (11.22) (0.01) (0.03) (88.7)
Kolhapur 3501 171 69 (0.79) 29 2 3772
(40.23) (1.97) (0.33) (0.02) (43.34)
Nashik 298 1806 4267 669 5128 12168
(2.23) (13.51) (31.92) (5.0) (38.36) (91.02)
Pune 15349 3380 479 291 111 19610
(71.25) (15.69) (2.22) (1.35) (0.52) (91.03)
*In the last column, for example, 20335 is the number of migrants belonging to the top five districts
from where they have migrated, which constitutes 88% of the total migrants who migrated to
Ahmednagar. Please read other values in the same column accordingly
Source Field Survey
by Ahmednagar (15.69%), Jalgaon (2.22%), Aurangabad (1.35%), and Nashik

(0.52%).2
4.1 Caste and District of Origin
After understanding the flow of migration between and among the districts, the flow
of migration based on caste and district of origin is discussed in this section. The first
row and first column of Table 10 show the name of the district of origin and caste of
migrants, respectively.
The highest number of migrants belongs to Beed. Interestingly, the total number of
migrants from Beed (39493) is more than the total number of migrants belonging to
the other four districts (36154). It is discernable from Table 10 that almost 80% of the
migrants from the top five districts belong to five castes except for migrants hailing
from Aurangabad district where only 68% of migrants belong to the aforementioned
five castes (see the first column under the heading—Total of 5 castes).
Of the migrants from Beed, 42.15% of migrant belongs to Vanjari caste followed
by Maratha (33.63%), Dhangar (6.54%), and Banjara (2.42%) caste. The same is
true for migrants from Ahmednagar except for Bhill caste as in Beed they are at
the bottom (0.5%) but here they are in second last (1.34%). Bhill (39.29%) tops the
ladder for migrants from Nashik district. In Jalgaon, the highest position is occupied
2 Notethat row total is addable but not the column as it quite possible that migrants who belong to
one district let’s say, Nashik may not be working in any one of the districts listed in the table (in
column). That’s why total of five districts opposite of Kolhapur is summing up to 43.34% only.
Table 10 Distribution of migrants migrated from top five districts-(origin) caste-wise

Caste\District Beed Ahmednagar Jalgaon Aurangabad Nashik
Banjara 956 (2.42) 263 (1.82) 4604 (51.15) 2438 (38.22) 1871 (29.46)
Bhill 198 (0.5) 193 (1.34) 1338 (14.87) 610 (9.56) 2495 (39.29)
Dhangar 2582 (6.54) 1309 (9.08) 80 (0.89) 84 (1.32) 28 (0.44)
Maratha 13283 (33.63) 3364 (23.32) 152 (1.69) 507 (7.95) 136 (2.14)
Vanjari 16646 (42.15) 6797 (47.12) 1395 (15.5) 692 (10.85) 528 (8.31)
Total of 5 castes 33665 (85.24) 11926 (82.68) 7569 (84.09) 4331 (67.89) 5058 (79.65)
Total number of 39493 (100) 14424 (100) 9001 (100) 6379 (100) 6350 (100)
migrants
Source Field survey
Note Figures in parentheses are percentage values
Caste wise distribuon of families Migrated from top 5 districts

BANJARA BHILL DHANGAR MARATHA VANJARI
10.85 8.31
15.5
1.69 0.44
7.95 2.14
42.15 0.89
47.12 1.32
14.87
9.56 39.29
33.63 23.32 51.15 38.22

29.46
6.54 9.08
2.420.5 1.821.34
Beed Ahmednagar Jalgaon Aurnagabad Nashik
Fig. 1 Distribution of migrants migrated from top five districts—caste-wise. Source Field survey
by migrants of Banjara caste (51.15%). Banjaras are also at the top (38.22%) in
Aurangabad district but with a lower percentage in comparison to Jalgaon (Fig. 1).
4.2 Caste and District of Destination
One also needs to understand the relation between caste and most preferred destina-
tion or workplace. Table 11 and Fig. 2 show the preferred workplace of the migrants
belonging to different castes. Ahmednagar and Pune stand at first and second place,
respectively, in consideration of the preferred workplace or destination. Belgaon is
the least preferred.
Out of total migrants working in the five mentioned districts, more than 75%
belong to the top five castes except for Kolhapur where only half of the migrants are
430 A. Asawa
Table 11 Caste-wise distribution of families working in the top five (destination) districts
Caste Ahmednagar Kolhapur Nashik Pune Belgaon
Banjara 4852 (20.98) 305 (3.5) 3764 (28.16) 654 (3.04) 70 (0.99)
Bhill 1120 (4.84) 87 (1.0) 3482 (26.05) 320 (1.49) 6 (0.08)
Dhangar 823 (3.56) 1739 (19.98) 354 (2.65) 1560 (7.24) 1006 (14.16)
Maratha 3463 (14.97) 1192 (13.7) 450 (3.37) 9424 (43.75) 1994 (28.06)
Vanjari 7434 (32.14) 1212 (13.93) 2385 (17.84) 5720 (26.55) 3372 (47.46)
Total of 5 caste 17692 (76.48) 4535 (52.11) 10435 (78.06) 17678 (82.07) 6448 (90.75)
Total families 23132 (100) 8702 (100) 13368 (100) 21541 (100) 7105 (100)
(working districts)
Source Field Survey
Caste wise distribuon of families working in the top 5 districts

Ahmednagr Kolhapur Nashik Pune Belgaon
0.99 0.08
3.04 1.49
14.16 28.06 90.75
47.46
28.16 82.07
7.24
26.05 26.55
2.65 43.75
78.06
3.5 17.84
19.98 3.37 13.93 52.11
20.98 13.7
1
32.14 76.48
4.84 3.56 14.97
BANJARA BHILL DHANGAR MARATHA VANJARI Total of 5 caste
Fig. 2 Caste-wise distribution of families working in top five districts (destination). Source Field
survey
from these five caste groups. Among those migrants who had migrated to Ahmed-
nagar, percentage of Vanjari is the highest (32.17). Migrants belonging to the Dhangar
caste top the list of migrants who worked in Kolhapur. Around every second and
fourth migrants belonging to Vanjari and Maratha castes, respectively, prefer to work
at Belgaon. Migrants belonging to Maratha caste are the largest in Pune (43.75%).
4.3 Caste and District of Origin: Microanalysis

of the Movement of the Migrants
In this section, an attempt has been made to trace the movement of migrants from
the origin by distributing them as per the working place vis-à-vis their caste. This
exercise throws light about the preferred destination choice of a migrant of specific
caste, originating from a particular district.
The related data is presented in Table 12, which is disaggregated into five parts;
each pertaining to a specific caste. The names of the districts in the first row corre-
spond to the district of origin, while the destination districts are represented column-
wise. To understand the caste-wise movement of migrants an example has been
presented as follows—In the top five districts of origin and destination, there are
21135 migrants belonging to Vanjari caste, which is almost 78% of the total 27157
Vanjari migrants in the sample (refer Table 7). Out of them, i.e., 21135, 6250 (29.57%)
hail from Ahmednagar district. However, 3768 of them, or, 51.2% of 6250 migrate
Table 12 Distribution of destination, origin, and caste of the migrants

Vanjari1
Working Origin of migration Grand
place Ahm’gar Auran’ad Beed Jalgaon Nashik total*
Ahm’gar 3768 (51.2) 167 (2.27) 3024 363 (4.93) 37 (0.5) 7359
(41.09) (34.82)
Pune 944 (16.91) 34 (0.61) 4511 85 (1.52) 9 (0.16) 5583
(80.8) (26.42)
Belgaon 37 (1.16) NA 3156 1 (0.03) NA 3194
(98.81) (15.11)
Satara 410 (15.26) 8 (0.3) 2259 8 (0.3) 1 (0.04) 2686
(84.1) (12.71)
Nashik 1091 (47.17) 44 (1.9) 143 (6.18) 574 (24.82) 461 2313
(19.93) (10.94)
Total 6250 (29.57) 253 (1.2) 13093 1031 (4.88) 508 (2.4) 21135
(61.95) (100)
Maratha2
Pune 1443 (16.25) 25 (0.28) 7393 13 (0.15) 5 (0.06) 8879
(83.26) (55.68)
Ahm’gar 1084 (34.12) 374 (11.77) 1666 44 (1.38) 9 (0.28) 3177
(52.44) (19.92)
Belgaon 374 (20.55) 1 (0.05) 1445 NA NA 1820
(79.4) (11.42)
Satara 182 (14.63) 2 (0.16) 1059 1 (0.08) NA 1244 (7.8)
(85.13)
Kolhapur 71 (8.6) 1 (0.12) 743 11 (1.33) NA 826 (5.18)
(89.95)
Total 3154 (19.78) 403 (2.53) 12306 69 (0.43) 14 (0.09) 15946
(77.17) (100)
Banjara3
(continued)
432 A. Asawa
Table 12 (continued)
Vanjari1
Working Origin of migration Grand
place Ahm’gar Auran’ad Beed Jalgaon Nashik total*
Ahm’gar 131 (3.14) 1674 (40.08) 238 (5.7) 1822 312 (7.47) 4177
(43.62) (45.32)
Nashik 70 (2.05) 138 (4.04) 17 (0.5) 1761 1434 3420
(51.49) (41.93) (37.11)
Auran’ad 2 (0.26) 334 (43.89) 26 (3.42) 357 (46.91) 42 (5.52) 76 (8.26))
Pune 19 (3.36) 108 (19.08) 97 (17.14) 265 (46.82) 77 (13.6) 566 (6.14)
Gujrat NA 122 (41.78) 1 (0.34) 168 (57.53) 1 (0.34) 292 (3.17)
Total 222 (2.41) 2376 (25.78) 379 (4.11) 4373 1866 9216 (100)
(47.45) (20.25)
Bhill4
Nashik 37 (1.18) 171 (5.45) 10 (0.32) 815 (25.99) 2103 3136
(67.06) (66.89)
Ahm’gar 96 (10.14) 274 (28.93) 40 (4.22) 277 (29.25) 260 947 (20.2)
(27.46)
Gujrat NA 33 (13.81) NA 121 (50.63) 85 (35.56) 239 (5.1)
Pune 45 (21.03) 46 (21.5) 83 (38.79) 34 (15.89) 6 (2.8) 214 (4.56)
Auran’ad 6 (3.95) 77 (50.66) NA 33 (21.71) 36 (23.68) 152 (3.24)
Total 184 (3.92) 601 (12.82) 133 (2.84) 1280 (27.3) 2490 4688 (100)
(53.11)
Dhangar5
Pune 290 (22.82) 10 (0.79) 965 5 (0.39) 1 (0.08) 1271
(75.92) (35.61)
Ahm’gar 368 (48.94) 49 (6.52) 320 3 (0.4) 12 (1.6) 752
(42.55) (21.07)
Belgaon 291 (40.3) (0.0) 431 (59.7) NA NA 722
(20.23)
Kolhapur 40 (9.52) 2 (0.48) 377 1 (0.24) NA 420
(89.76) (11.77)
Satara 69 (17.08) 3 (0.74) 332 NA NA 404
(82.18) (11.32)
Total 1058 (29.64) 64 (1.79) 2425 9 (0.25) 13 (0.36) 3569 (100)
(67.95)
Percentage of migrants belonging to (1) Vanjari (2) Maratha (3) Banjara (4) Bhill, and (5) Dhangar
caste working in and migrated from the discussed top five districts are 77.83, 82.25, 74.39, 57.56,
54.1 of their castes in the entire sample
Source Field study
within the district itself. But they constitute only around one-third (34.82%) of the
migrant labor working in Ahmednagar district.
The last column of the table gives the caste-wise grand total of migrants working in
each district. Hence out of 21135 Vanjari migrants working in the top five destination
districts, 7359 (34.82%) are working in Ahmednagar, followed by 5583 (26.42%) in
Pune, then 3194 (15.11%) in Belgaon, 2686 or 12.71% in Satara, and 2313 (10.94%)
are working in Nashik district. Thus, the entire table can be interpreted in the same
manner. It may be noted that the grand total in each column is total of values in
the respective column, but the same is not the case for percentage which is given in
parentheses; but for the row values, grand total in the last column is the outcome of
the addition of each cell of that particular row and value in the parentheses is the
percentage of the migrant of the particular cell to the grand total of the respective
row. The migration patterns of the top five castes are thus discussed in the following
paragraphs.
4.3.1 Vanjari Migrants
Of the total Vanjari migrants, almost 78% have migrated from the given top five
districts and out of them, maximum have migrated from Beed (61.95%) district,
followed by Ahmednagar (29.57%). The two most preferred destinations for this
caste are Ahmednagar (34.82%) and Pune (26.42%). In Belagaon, almost 98.1% of
Vanjari migrants and 80% of Vanjari migrants in Pune hailed from Beed district. In
Nashik, almost every second Vanjari migrant came from Ahmednagar while one-fifth
of them had moved within Nashik district itself.
4.3.2 Maratha Migrants
As per the survey, every fifth (20.34%) respondent belongs to the Maratha Caste
(Table 7) and almost 97% of them belong to only two districts: Beed (77.17%)
and Ahmednagar (19.78%). Pune is the most preferred migration destination of
Marathas as they constitute more than half (55.68%) of its working migrant popula-
tion. Around 20% prefer to work in Ahmednagar, and 34% of the Maratha migrant
labor in Ahmednagar has migrated within Ahmednagar itself. Belgaon comes in third
place as a preferred working place for Maratha migrants comprising 11.42% of its
migrant population.
4.3.3 Banjara Migrants
Out of the total 9216 (74.39% of total Banjara respondents in the study), almost
every second, fourth, and fifth migrant belonged to Jalgaon (47.45%), Aurangabad
(25.78%), and Nashik (20.25%) districts, respectively. Around 45 and 37% of the
Banjara migrants headed for Ahmednagar and Nashik, respectively, as their chosen
434 A. Asawa
destinations. Out of the 4177 Banjara migrants working in Ahmednagar, 43% belong
to Jalgaon while 40% to Aurangabad. However, a good 42% of Banjara migrant popu-
lation in Nashik district has moved for work within the district only. Comparatively,
less number of Banjara migrants prefer to work in Aurangabad (8.26%) and out of
them, the maximum (44%) are from within the district itself.
4.3.4 Bhill Migrants
Taking into account migration from the top five districts to top five destinations, Bhills
constitute 57.56% of the total Bhills migrants in the sample (Table 12). However, if
two more districts of origin–Nashik and Jalgaon–are added then the percentage for
the community leaps to 93.71% (Table 13). It means these two districts contribute
almost 39% of Bhills migrants in the study. The highest number of Bhill migrants
hails from Nashik (32.62%), followed by Dhule district with 28.52 migrants and
Beed occupies the last position (1.74%). Among all the Bhill migrants, the maximum
preferred to work in Nashik (45.2%) and Gujarat (35.82%), and among 60% of the
Bhills working in Nashik had moved within the district itself. Almost the same is
the case of Bhill migrants working in Aurangabad where out of 159 migrants, every
second migrant belonged to Aurangabad.
4.3.5 Dhangar Migrants
Of all the major castes in the study, the Dhangars have been found to have migrated in
the most scattered way. On considering the top five districts of origin, it would cover
only 54.15% of the total Dhangar migrants in the sample. More interestingly, after
the inclusion of two more districts like Sangali (12.46%) and Osmanabad (8.96%),
it would cover only about 68.85% of the total Dhangar migrant respondents (Refer
Table 13). Almost every second migrant belongs to Beed district while every fourth
is from Ahmednagar district. It seems that their working districts are more or less
the same, which means they do not relocate great distances. Almost every second
migrant who worked in Kolhapur belonged to Sangli.
5 Conclusion
Migration within India is predominantly short-distance with around 60% of migrants

changing their residences within their district of birth and 20% within their state
(province), while the rest move across state boundaries. Estimates of short-term
migrants vary from 15 million (NSSO 2007–2008) to 100 million. These migrants
belong to the poorest and deprived sections of society typically comprising the
Scheduled Castes, Scheduled Tribes (STs), and Other Backward Castes (OBCs).
Table 13 Distribution of destination, origin, and caste of the migrants (after adding two more
districts)
Bhill
Working Districts of origin Grand
place Ahm’nagar Aur’bad Beed Jalgaon Nashik Dhule Nandurbar Total
Nashik 37 (1.07) 171 10 815 2103 310 (8.99) 4 (0.12) 3450
(4.96) (0.29) (23.62) (60.96) (45.2)
Gujrat NA 33 NA 121 85 1743 752 2734
(1.21) (4.43) (3.11) (63.75) (27.51) (35.82)
Ahmednagar 96 (9.09) 274 40 277 260 98 (9.28) 11 (1.04) 1056
(25.95) (3.79) (26.23) (24.62) (13.83)
Pune 45 (19.23) 46 83 34 6 19 (8.12) 1 (0.43) 234
(19.66) (35.47) (14.53) (2.56) (3.07)
Aurangabad 6 (3.77) 77 NA 33 36 7 (4.4) NA 159
(48.43) (20.75) (22.64) (2.08)
Grand Total 184 (2.41) 601 133 1280 2490 2177 768 7633
(7.87) (1.74) (16.77) (32.62) (28.52) (10.06)
Working Dhangar
place Ahm’dnagar Aur’bad Beed Jalgaon Nashik Osmanabad Sangli Grand
Total
Pune 290 (20.71) 10 965 5 1 129 (9.21) NA 1400
(0.71) (68.93) (0.36) (0.07) (30.82)
Belgaon 291 (29.82) NA 431 NA NA 254 (26.02) NA 976
(44.16) (21.49)
Kolhapur 40 (4.46) 2 (0.22) 377 1 NA 1 (0.11) 476 897
(42.03) (0.11) (53.07) (19.75)
Ahmednagar 368 (48.94) 49 320 3 (0.4) 12 NA NA 752
(6.52) (42.55) (1.6) (16.56)
Satara 69 (13.35) 3 (0.58) 332 NA NA 23 (4.45) 90 (17.41) 517
(64.22) (11.38)
Grand Total 1058 64 2425 9 (0.2) 13 407 (8.96) 566 4542
(23.29) (1.41) (53.39) (0.29) (12.46)
Source Field Study
As per the Census 2001, Maharashtra witnessed the largest in-migration of the
population during ten years (1991–2001) from different states. The total number of
in-migrants into the state was 3.2 million. Major contributing states toward this move-
ment were Uttar Pradesh (0.9 million), Karnataka (0.4 million), Madhya Pradesh
(0.27 million), Gujarat (0.24 million), Bihar (0.22 million), and Andhra Pradesh
(0.19 million). Among distant inter-state male migrants, work/employment has been
cited as the primary reason for migration (Uttar Pradesh—73.0%; Bihar—79.1%).
From the adjoining states, ‘marriage’ and ‘moved with households’ were cited as
important reasons for migration (Census of India 2011).
For the first time, the NSSO 55th round separately estimated the number of short
duration out-migrants. Thereafter, NSSO 64th round took the extra effort to cover
436 A. Asawa
seasonal/temporary migration. The census, which is the other important source of

migration data, is mainly concerned with current and permanent migration and does
not attempt to capture seasonal or short-term flows of labor. However, these two
main secondary sources of data on population do not adequately capture seasonal
and circular migration due to differences over the definitions of migrants, reasons of
migration, and stock versus flow concept of migration. These limitations necessitate
collecting primary data exclusively on seasonal migration.
This paper is confined to tracing the flow of sugarcane cutter migrants in Maha-
rashtra based on their caste, origin, and destination so as to understand patterns of
migration by social groups. They are essentially temporary or seasonal migrants
wherein movement is from a rural origin to a rural destination. Workers from the
rural areas of Beed, Jalgaon, Ahmednagar, Nashik, and Jalna districts in the arid
Marathawada region migrate to the sugar belt of Maharashtra, comprising seven
districts—Nashik, Ahmednagar, Pune, Satara, Sangli, Kolhapur, and Sholapur, every
year during the sugarcane harvest period which generally starts in the month of
October and lasts up till March. The information has been collected over a period of
nine years with the help of an NGO working among the migrant workers. The field
survey covering 95310 respondents, who belonged to more than 85 different caste
groups, in 30 sugar factories across 28 districts in Maharashtra.
The study found the highest percentage (70.1) of migrant male and female laborers
belonging to the age group of ‘up to 35 years’ that is the most appropriate age group
to do physical work. Surprisingly, the number of females is relatively more than that
of males in this age group. The overall education level of migrant labor is very poor,
although that of males is slightly better than females. Almost 85% female migrants
are illiterate, as compared to their male counterparts (64.6%). Middle-level education
is the most common level among both male (13.15%) and female (7.36%) migrants
and less than 2% of them have studied beyond class ten.
Respondents in the study belong to 85 different castes. Every second migrant
hails from the Other Backward Caste (OBC) category. General category, which is
primarily of Marathas, contributes around 21% of the respondent migrants. Five
castes from Schedule Caste (SC), namely Matang, Mahar, Buddha, Chambhar, and
Harijan constitute the third highest group among the respondents. Though the share
of Schedule Tribe (ST) in the sample is only 9.75%, Bhill alone comprises 8.5% of
migrants under study. Although, the respondents belong to more than eighty castes,
yet more than 75% migrants belong to only five castes—Vanjari (28.49%), Maratha
(20.34%), Banjara (13%), Bhill (8.55%), and Dhangar (6.92%). Therefore, further
analysis is done only for the migrants belonging to these top five castes.
It is observed that there is a definite pattern in the migration of the migrant labor
in terms of caste and choice of migration destination. Beed, Ahmednagar, Jalgaon,
Aurangabad, and Nashik are districts of origin for almost 8% of migrants. Almost
80% of the migrants from the top five districts belong to the five aforementioned
castes except for migrants hailing from Aurangabad district where only 68% of
migrants belong to these caste groups. Ahmednagar, Pune, Nashik, Kolhapur, and
Satara are the top five districts of destination for almost 77% of migrants. Out of the
top five districts of origin, only two districts viz. Ahmednagar and Nashik also made
it to the list of top five preferred destinations. Ahmednagar is the most preferred
workplace followed by Pune, Nashik, Belgaon, and Kolhapur.
The highest number of migrants (41.44%) belongs to Beed. Interestingly, the
total number of migrants from Beed (39493) is more than the total number of
migrants belonging to the other four districts (36154). Among them, the highest
numbers are from Vanjari and Maratha castes, and they prefer Ahmedabad and Pune
districts as their work destinations. Jalgaon, Nashik, and Beed are the districts where
the maximum percentage of the migrants belongs to Banjara, Bhill, Dhangar caste
migrants and their preferred workplaces are Ahmednagar, Nashik, and Pune, respec-
tively. Of all the major castes in the study, the Dhangars have been found to have
migrated in the most scattered way.
The flow of migrants is from less developed areas to more developed areas, and the
caste of migrants also indicates that they belong to the poor strata of the population.
Marathas, from the general or upper-caste category, are a ‘surprise’ inclusion as they
are seen as a very influential community in some parts of the state. The majority
of families belonging to this community live in the rural area which is why their
numbers seem to be high in seasonal migration.
Acknowledgements This paper is part of a study supported by Janarth (an Aurangabad-based

NGO). I am thankful to Janarth for their support in collecting primary data.
Appendix 1: Total Coverage: Distribution of Working Place
Sr District No. of factories No. of talukas No. of Migrants Crushing capacity

No *
1 Ahmednagar 15 11 22113 40954
2 Aurangabad 5 3 1738 11458
3 Belgaon 4 6387 11416
4 Gujrat 4 3297 11416
5 Hingoli 2 2 565 5000
6 Jalgaon 1 1 1 2500
7 Jalna 1 1 20 2500
8 Kolhapur 10 6 7221 37700
9 Nanded 2 1 2254 5000
10 Nashik 5 4 12968 9750
11 Pune 11 4 27392 36104
12 Sangli 5 3 2748 11750
13 Satara 4 3 6431 10800
14 Solapur 3 1 2063 9500
(continued)
438 A. Asawa
(continued)
Sr District No. of factories No. of talukas No. of Migrants Crushing capacity
No *
15 Yavatmal 1 1 112 2500
Total 73 41 95310 204348
(Average-13890)
Source Field Survey
Appendix 2: Details of All Factories, Location, Number

of Migrants Working and Crushing Capacities
Sr Name of the factory District Tehsil No of Crushing

No Migrants Capacity
(Mt/year)
1 Ashok S S K Ahmednagar Shrirampur 58 2600
2 Agasti SS K Ahmednagar Akole 1794 2500
3 Annasaheb mane gurale S S K Aurangabad Gangapur 41 2854
4 Bhima S S K Pune Daund 2312 2500
5 Bhima shankarS S K Pune Ambegaon 7 2500
6 BardoliS S K Gujrat 505 2854
7 Barashiv hanuman S S K Hingoli Aundh 122 2500
8 Dr. Baburaobapujitanpure S S K Ahmednagar Rahuri 241 4250
9 Baramati agro Ltd. Sugar division Pune Baramati 687 3500
10 Bhauraochavan—unit I S S K Nanded Ardhapur 1694 2500
11 Bhauraochavan—unit II S S K Nanded Ardhapur 560 2500
12 Chhatrapati S S K Pune Indapur 4684 3500
13 Chatrapati Rajaram S S K Kolhapur Karvir 1600 2200
14 ChhatrapatiShahu S S K Kolhapur Kagal 460 2500
15 Dnyaneshwar S S K Ahmednagar Newasa 5897 5000
16 Dattashetkari S S K Kolhapur Shirol 1465 7000
17 Daulatshetkari S S K Kolhapur Chandgad 260 3500
18 Dudhgandha-vedganga S S K Kolhapur Kagal 54 3500
19 Dudhgangakrishna S S K Belgaon Chikodi 2717 2854
20 Daund sugar S S K Pune Daund 66 3500
21 DeshbhaktaRatnappannaKumbhar Kolhapur Hatkangale 147 5000
SSK
22 Gangamai sugar industries S S K Aurangabad Sillod 21 2500
(continued)
(continued)
(Mt/year)
23 Gurudatta sugars, takalwadi S S K Kolhapur Shirol 560 3500
24 Gangapur S S K Aurangabad Gangapur 1344 2000
25 Ganesh S S K Ahmednagar Kopargaon 2732 1750
26 Halasidhanath S S K Belgaon Chikkodi 1203 2854
27 Hiranyakeshi S S K Belgaon Hukeri 2344 2854
28 HutatmaKisanvirAhir S S K Sangli Walwa 13 1250
29 Indapur S S K Pune Indapur 2733 5000
30 Jarandeshwer S S K Satara Koregoan 514 2500
31 Kadwa S S K Nasik Dindori 2388 1250
32 K.k.wagh S S K Nashik Niphad 338 1250
33 KarmayogiShankarraoPatil S S K Pune Indapur 2291 5000
34 Kranti S S K Sangli Palus 857 2500
35 Krishna S S K Satara Karad 4979 5000
36 Kopargaon S S K Ahemednagar Kopargoan 131 2500
37 Kumbhikasari S S K Kolhapur Karvir 169 3000
38 Madhuka S S K Jalgaon Yawal 1 2500
39 MulaSS K Ahemednagar Newasa 6651 2500
40 Mahua S S K Gujrat 377 2854
41 Madhi S S K Gujrat 2279 2854
42 Malegaon S S K Pune Baramati 29 4000
43 Mukteshwar sugar mills ltd Aurangabad Gangapur 136 2854
44 NiphadSS K Nashik Niphad 6553 3500
45 Nasik S S K Nashik Nasik 1548 1250
46 New Phaltan Sugar Works Ltd. S S Satara Phaltan 542 1300
K
47 Nirabhima S S K Pune Indapur 8543 1250
48 Padmashri Dr. Ahmednagar Rahata 366 4000
VitthalraoVikhePatil S S K
49 Parner taluka S S K Ahmednagar Parner 411 1250
50 Purna S S K Hingoli Vasmatnagar 443 2500
51 Prasad Sugars & Allied Products Ahmednagar Rahuri 62 2854
Ltd.
52 Pandurang S S K Solapur Malshiras 121 2500
53 Rameshwar S S K Jalna Bhokardan 20 2500
54 Rajaram BapuPatilS S K Sangli Walwa 56 1250
55 Renuka S S K Belgaon 123 2854
(continued)
440 A. Asawa
(continued)
(Mt/year)
56 Sangamnerbhag S S K Ahmednagar Sangamner 1768 3500
57 Someshwar S S K Pune Baramati 5099 2500
58 Shriram S S K Satara Phaltan 396 2000
59 Shrinathmhaskoba S S K Pune Daund 941 2854
60 Sanjivani (takli) S S K Ahmednagar Kopargaon 1701 2500
61 SaswadMali Sugar Factory Ltd. S Solapur Malshiras 1898 2500
SK
62 Sharad S S K Kolhapur Hatkanangale 1185 2500
63 Sant eknath S S K Aurangabad Paithan 196 1250
64 Shankar S S K Yavatmal Yavatmal 112 2500
65 Saikripa S S K Ahmednagar Shrigonda 21 1250
66 Shrigonda S S K Ahmednagar Shrigonda 45 2000
67 Sahakar Maharshi Shankarao Solapur Malshiras 44 4500
Mohite Patil S S K.
68 Tasgaon S S K Sangli Palus 1421 1750
69 Tatyasaheb Kore Warana S S K Kolhapur Panhala 1321 5000
70 VasantraoDadaPatil S S K Nashik Deola 2141 2500
71 VasantdadaShetkari S S K Sangli Miraj 401 5000
72 Virudeshwar S S K Ahmednagar Pathardi 235 2500
73 Vyara S S K Gujrat 136 2854
Source Field Survey
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Internal Migration and Inclusive
Development: Insights from the Field
Jhilam Ray, Farhat Naaz, Poulomi Khasnobis, and Rajarshi Majumder
Abstract Migration is a universal phenomenon. From time immemorial, women

and men have travelled in search of better living. There are two separate streams
of migration. The first one is at the upper end of human capital hierarchy, to fill in
existing surplus demand in the labour market of destination regions. Consequently,
this process is highly selective in nature—in terms of skills and training, age and
gender. The second stream emerges due to ‘Push factors’ or distress conditions in
the source regions (relative to the destination)—economic hardships in the form of
low wages, high unemployment, heavy population pressure, etc. in the native places
and the lure of better earning opportunities in the economically vibrant destination
region. This process is a coping mechanism of poor families and helps them come
out of poverty. Thus, migration can be both discriminatory and egalitarian. Another
issue is the emerging pattern of identity and conflict between natives and migrants
in several parts of the country. Social inclusion of migrants is sometimes at jeop-
ardy and goes against the ethos and economics of one nation–one labour market
principle. Using field data from three districts of Bengal in India, this paper seeks to
understand issues like who migrates—what are the social, economic and institutional
factors that determine migration decisions; what are the socio-economic disparities
between migrants/natives and various socio-religious groups regarding education,
employment and earnings; whether migration is a successful route out of poverty;
perception of natives in receiving regions about migrant workers and how migrants
assimilate. It also explores the humanitarian issues related to migration through case
studies to help us understand vulnerability of migrants.
J. Ray · F. Naaz · P. Khasnobis · R. Majumder (B)

Department of Economics, University of Burdwan, Burdwan 713104, West Bengal, India
e-mail: rmajumder@eco.buruniv.ac.in
J. Ray
e-mail: jhilam@rediffmail.com

https://doi.org/10.1007/978-981-15-8265-3_22
444 J. Ray et al.
1 Background
Oscillating between considering people as a favourable factor for economic growth

and viewing them as a drag to the growth process, the debate on looking at people and
population growth from the human capital context or the human development context
has caught the imagination of many economists for ages. While the former treats
people as active economic agents and inputs to the production process, the latter looks
at human beings as the benefactor of the process of growth. The mercantilist view,
which dominated economic thought during the sixteenth and eighteenth centuries,
considered increase in population as a blessing. Higher population meant higher
number of soldiers and increase in the number of productive workers. On the other
hand, the physiocrats were suspicious about the advantages of population growth and
some of them insisted that shortage of food was a possibility that ought to be taken
into account by a nation if population increased continuously. Now, population of
any region can change through the natural processes of birth and death, and through
movements of population or migration. Over the last three hundred years or so,
the natural process has stabilised across the globe. With advances in science and
technology, preventive and curative medical facilities have improved tremendously
leading to convergence of death rates. Socio-economic progress at the macro level
and changes in micro decision-making at the household level have led to a fall in
birth rates as well. As a result, migration has emerged as an important factor behind
population changes—both temporary and permanent. Migration has also become
a part of worldwide process of urbanisation and industrialisation. It signals social
and economic change, and can be regarded as a human adjustment to economic,
environmental and social situation.
What is the size of migrant population in the globe and in India? Today every
seventh individual on earth is a migrant, that is, away from their place of origin or
usual residence. According to a conservative estimate of the United Nations Depart-
ment of Economic and Social Affairs (UNDESA), more than a billion people in the
world are migrants (2013). Of these, more than three fourths are internal migrants:
footloose people within their own country. The same institution estimates that close
to 46 million people in India are migrants—staying at places outside their home state.
However, these estimates depend on how we define migration in the first place.
Defining migration (especially internal migration) is a controversial issue. At one
end of the spectrum, migration is defined as movement of people over some distance
(or at least from one ‘migration-defining area’ to another) and from one ‘usual place
of residence’ to another. At the other end of the spectrum, the definition of migration
discards the requirements that migration must involve a change of residence and a
move across some distance (Kok 1999). Standing (1984) suggested that one should
rather use a change in ‘activity space’ as a criterion to define migration. However,
it is virtually impossible to determine whether there has been a change in ‘activity
space’ or not unless research or census questionnaire specifically makes provision
for the appropriate information to be obtained. Shryock et al. (1976) defined migrants
as those persons who are moving relative to labour market areas. The most accepted
Internal Migration and Inclusive Development … 445
and widely used approach to define migration is—a change in usual place of resi-
dence and a move from one migration-defining area to another. The UN estimate
earlier mentioned is based on the administrative unit of provinces/regions/states as
a migration-defining area in the large countries like China and India. Some of these
areas are larger in area and population than some mid-European countries. If smaller
administrative units like districts are used, then the number would jump signifi-
cantly. Also, people are constantly on the move—migrating and then also coming
back to their place of origin—and getting estimate of that stock is quite a difficult
task. Considering these issues, India is said to have close to 450 million migrants—
taking both intrastate and interstate migrants together—implying that one third of
Indians stay outside their place of birth/usual residence [Census of India 2011; NSSO
2007–08]. This is more than the population of USA, and close to the population of
USA, UK and Germany combined. A large part of them move due to marriage, birth
and with family, but more than a fifth or about 90 million are temporary economic
migrants or footloose workers—a size higher than the entire population of Germany,
and three times that of Canada. Thus, the issue of migration in India is humongous
and necessitates considerable attention from researchers and policy makers. That the
issue has not been analysed with due importance so far came to focus when the global
pandemic of early 2020 uprooted the migrants overnight and threw them to the road
- many dying in an effort to reach home - and the adminstrators were clueless about
what to do!
2 Review of Literature
Ravenstein (1885) was the foremost proponent who claimed that migration is an
economic decision. Neoclassical theorists took this forward, and the basic models
(Lewis 1954; Ranis and Fei 1961) portray how modern sector grows through capital
accumulation and movement of labour from traditional to modern sector in lure of
higher wages. Todaro (1969) [also Harris and Todaro (1970)] evolved this further to
note that migration occurs in response to expected income differentials to account
for rural–urban migration even in presence of urban unemployment in less developed
countries. However, contrary to the neoclassical view, historical experience suggests
that migration does not lead to equalisation of wages across space and sector as several
factors not only perpetuate the old socio-economic differences between source and
destination regions, but new differences are also created by the migration process
itself leading to systematic and recurring migration between regions. This is espe-
cially true when people with low skills, without economic opportunities at home,
travel each year to regions where some work is available in particular seasons (for
example, agricultural workers during harvesting season, brick kiln workers in dry
season, etc.).1 Thus, the process of migration, especially within a particular devel-
oping country, seems to follow the trail suggested first by Lee (1966) who fragmented
the force behind migration into push and pull factors. Push factors like poverty,
political instability, unemployment, etc. pushes potential migrants to move out of a
446 J. Ray et al.
region, whereas pull factors like vibrant economy, better job opportunities, etc. attract
migrants to move in. Migration decision is influenced by factors that are determined
at an individual level, household level, community level and regional level, and in
turn affects those factors. Net migration in a region is thus determined by the relative
strength of both pushes and pulls there. Thus, as long as such pull-s and push-es
exist, migration would continue. Piore (1979) contradicted this theory and held that
migration is not caused by push factors like low wages and high unemployment in
the sending countries but by the pull factors in the receiving country. These and
other issues that link migration with development and poverty and the existing liter-
ature have been comprehensively discussed by de Haan (2006). Empirical studies, in
general, echo the Todaro–Lee–Piore concept that migration is in response to the gap
between actual economic position in source region and expected situation in desti-
nation region. These include Deshingkar and Grimm (2005) and Banga and Pritish
(2010) who discuss internal migration and role of remittances in global perspec-
tive across countries and continents. At the national level, studies by Rele (1969),
Srivastava and Sasikumar (2003), Srivastava (2005), Rafique et al. (2006), Mitra
and Murayama (2008), Wouters (2008), Kundu (2007), Roy and Debnath (2011),
Taralekar et al. (2012), Naaz and Majumder (2016), Mahapatro (2012), Coffey et al.
(2015), Abbas (2014) refer to uneven regional development, search for better jobs
and diversification of livelihood as main reasons for (male) migration in India. Area-
or sector-specific studies on migration in India such as Mukherjee (2004), Sundari
(2005), Deshingkar and Akhter (2009), Rodgers and Rodgers (2011), Majumder and
Mukherjee (2012), Bora (2014) also confirm this notion. Naaz and Majumder (2016)
takes a more nuanced approach and differentiates between two different streams of
migrants—one which includes people with high levels of human capital moving
mostly from urban to urban centres, and two, those with low human capital moving
in search of low-end jobs mainly from rural to urban areas. This supports the views of
Kundu and Sarangi (2007) who pointed out that though both poor and rich households
migrate, poor households send few members out to create a diversified and external
support system for livelihood, while the better off households mostly migrate en
masse, relocating the entire family for enjoying better amenities and status at urban
metropole.
A large part of such migrants are females, moving after marriage, or family
members moving with rest of the household. The individuals in these cases have
no say in the decision to move, but they bear the consequent impacts—both positive
and negative. At the same time, the condition of the household and its members across
dimensions of assets, physical and human capital, gender and age composition, etc.
do exert an influence on the household’s decision on whether to migrate, when to
migrate and who would migrate. Similarly, the duration of migration also varies
from a few months in a year to long-term migrants who migrated two generations
back and have settled down in a new place. The reasons, impetus and also the socio-
economic import of long-run migration would differ substantially from short-term
migration. Surprisingly, while the literature on migration is voluminous, there is not
much work that looks at both these type of migrants at the micro level—focussing
on the processes and results of short-term and long-term migration on households.
This paper is an attempt to address this research gap by using case studies from three
districts of Bengal state in the eastern part of India.
3 Database and Methodology
Since independence, India has maintained a clear agenda towards potent fiscal feder-
alism aimed at balanced statewise economic progress. Despite this effort, the issue of
disparities in regional economic output has persisted over many years (Mathur 1983,
1987, 1992; Majumder 2005; Stewart and Moslares 2014). States, and districts within
states, vary in terms of infrastructure, economic conditions, employment opportu-
nities and aggregate development. Thus, there is considerable out-migration from
relatively backward districts and in-migration into relatively advanced districts. Two
backward districts of the state of Bengal—Malda and Purulia—which have a long
history of repetitive or temporary migration have been selected to study the condition
of such out-migrants at micro level. Also, as a contrast, a developed district of the
same state—Bardhaman—which too has a long history of attracting migrants from
not only surrounding districts but neighbouring states as well into its myriad mines
and factories has been selected for the study. Those in Asansol are mostly long-term
migrants from the backward districts of not only Bengal but also of Bihar and Jhark-
hand, and have settled down with their families in urban areas of west Bardhaman.
Here, the urban centre of Asansol which is home to a large proportion of long-term
migrants was especially selected. Municipal wards from Asansol city and villages
from Malda and Purulia districts were selected through purposive sampling to repre-
sent locations that had a mix of both migrants and natives/non-migrants. Thereafter,
random sampling was used to select households from the two groups—migrants and
non-migrants, in proportion to their share in population. In total, the survey covered
245 households in Malda, 281 in Purulia, and 210 in Bardhaman district. Of these,
498 were migrant households.
4 Temporary Migration: Driving Factors
People migrate from the place where push factors outweigh the pull factors and move
to a place where pull factors outweigh the push factors. These factors may be of two
kinds—economic and non-economic. Movement in search of employment or better
income may be termed economic factors, whereas marriage, education, family move-
ment and so on may be designated as non-economic factors. At the macroeconomic
level, it has been observed that male migration in India is mostly economic, whereas
female migration is predominantly for non-economic reasons (Naaz and Majumder
2015). While rural male migrants are observed to be better educated compared to
non-migrants, female migrants in both rural and urban areas have less education
compared to the non-migrant females (Naaz and Majumder 2016). It is also argued
448 J. Ray et al.
that rural–urban temporary migration is age and gender selective, and peaks for
the young adult males whose physical productivity is relatively higher than the rest
(Esipova et al. 2013; IOM 2015). There is also a recurring argument that it is the poor
asset-less rural people who migrate in search of job (though this has been questioned
in recent times by researchers; see Kundu and Sarangi 2007; Kundu 2007). Another
observation is that people from large families migrate more as there are surplus hands
and not enough food at home (Kothari 2002; Gurung 2012). It is also argued that
temporary seasonal migrants from rural areas are more likely to be single males
rather than married males (Singh 1986). This has been now challenged by recent
data which supports the view that men migrate more after marriage when the family
responsibility rests upon them and that migration is a family strategy (Gordon 1981;
de Haan 1997).
This paper therefore tries to examine if field data could throw some light on
the aforementioned issues and bring out the correlates of the process of temporary
migration from rural areas. For the purpose, a Binary Logistic Regression Function
is used where the dependent variable is whether an individual is temporary migrant
or not (=1 if migrant, =0 otherwise). The causal variables identified for the study are
age, gender, education represented by completed years of formal schooling, marital
status, social class, family size and land owned (in Kathas2 ) as a proxy of asset. Also
included in the regression are age squared and land owned squared to account for
non-linearity of the impact of these two variables.
Given the above discussion, status (Yij ) of the i-th member of the j-th household
may be either of the two—temporary migrant (Yij = 1) or non-migrant (Yij = 0). This
status would depend on the household-specific characteristics (X) and individual-
specific characteristics (Z). Thus,
eα + β X j +π Z i
P Yij = 1| Xj, Zi = , (1)
1 + eαj + β X j +π Z i
or the Log Odds Ratio would be given by
LORij = α + βXj + π Zi , (2)
where X and Z are vectors of variables as mentioned earlier. Estimated coefficients

β and π provide the impact of explanatory variables on the Log Odds Ratio of being
a temporary migrant vis-a-vis being a non-migrant. The impacts of changes in the
explanatory variables on the probability are obtained as marginal effects or eβ and eπ .
To exclude child migration who move mostly with their family and are not decision
makers, the analysis includes only those who are 14+years of age in the sample.
Descriptives of the sample data are reproduced in Table 1. The regression results are
discussed as follows.
Table 1 Determinants of migration—sample descriptives

Characteristics/Variables Pooled Malda Purulia
Mean Low High Mean Low High Mean Low High
% Migrant 20.1 23.0 17.2
Age (years) 35 15 90 30 15 85 36 15 90
Years of Schooling 4 0 21 6 0 21 4 0 15
Family Size 5 1 10 5 2 9 5 1 10
Land Possessed (in kathas) 35 0 200 21 0 200 45 0 180
% Males 52.8 54.4 51.5
% Married 72.0 68.9 74.7
% Hindu ST 43.9 17.7 66.7
% Hindu SC 24.0 34.3 15.0
% Muslims 12.4 26.7 –
Number of Observations 1779 827 952
Source Authors’ calculation based on Field Survey (2017–18)
4.1 Pooled Regression—All
From the results shown in Table 2, we observe that seasonal/temporary out-migration

from the two selected districts of Bengal (Purulia and Malda) is indeed age and
gender specific. Probability of migration increases with age initially but comes down
eventually as shown by positive coefficient of age and negative coefficient of age
squared. Males are twenty times more likely to migrate than females. Marital status
is also significant and there is evidence that married males are three times more likely
to migrate than unmarried males. Family size is an important determinant too, but
contrary to popular perception, members of large families are less likely to migrate
as shown by the significantly negative coefficient. Migration is also driven by asset
poverty as probability of migration decreases as quantity of land possessed increases.
Probability of migration is significantly higher for Hindu Scheduled Tribes (STs) and
Muslims compared to Hindu Others (or Hindu upper castes). Education as indicated
by completed years of formal education seems to increase probability of migration,
though the impact is statistically insignificant.
These results are also brought out by Figs. 1 and 2 which show a hump in proba-
bility of migration around age 25–45 years, a secular decline in migration probability
as land size increases and the higher migration propensity of males.
4.2 Split Regression—All
If we segregate across the two districts, the results provide interesting insights into
the heterogeneity of migration process. While the results remain almost identical for
450 J. Ray et al.
Table 2 Determinants of migration—logit regression (14 + population)

Dependent Whether Temporary Migrant (or not)
Variable
Causal Variables Pooled Malda Purulia
Beta Marginal Beta Marginal Beta Marginal
Impact Impact Impact
Age (years) 0.053** 1.05 0.066 1.07 0.047 1.05
(0.07) (0.14) (0.25)
Age Squared −0.01** 1.00 −0.001** 1.00 −0.001* 1.00
(0.02) (0.04) (0.13)
Years of 0.014 1.01 −0.009 0.99 0.022 1.02
Schooling (0.31) (0.68) (0.35)
Gender Dummy 3.045** 21.02 3.814** 45.35 2.500** 12.18
Males (0.01) (0.01) (0.01)
(control group:
females)
Marital Status 1.124** 3.08 1.329** 3.78 −0.130** 0.88
Dummy (0.01) (0.01) (0.03)
(Married)
(control group:
unmarried)
Family Size −0.162** 0.85 −0.187** 0.83 1.023** 2.78
(0.01) (0.01) (0.01)
Land Possessed -0.008* 0.99 −0.002 0.99 −0.010* 0.99
(in kathas) (0.12) (0.85) (0.16)
Land Possessed – – −0.001 0.97 0.001 1.00
squared (0.21) (0.97)
Social Group 0.218* 1.24 – – 0.592** 1.81
Dummy (Hindu (0.20) (0.04)
ST)
(control group:
Hindu Gen)
Social Group −0.013 0.99 −0.185 0.83 0.183 1.20
Dummy (Hindu (0.91) (0.50) (0.61)
SC)
(control group:
Hindu Gen)
Social Group 0.169 1.18 0.154 1.28 – –
Dummy (0.49) (0.60)
(Muslim)
(control group:
Hindu Gen)
Nagelkerke 0.339 0.424 0.268
R-squared
Log-likelihood 1346 ** 620.2** 707.8**
Ratio
Correct 82.9 81.5 83.4
Classification
(%)
(continued)
Table 2 (continued)
Variable
Causal Variables Pooled Malda Purulia
Beta Marginal Beta Marginal Beta Marginal
Number of 1779 827 952
Observations
Note: * and ** denote significance at 20% and 10% levels, respectively. Figures in parentheses are p-values
Fig. 1 Model-based predicted probability of migration across age by gender. Source Authors’
calculation based on Table 2 & Field Survey (2017–18)
age, gender and land possessed, for the rest of the causal factors, the two districts
provide a contrasting picture. In Malda, education seems to decrease the probability
of migration. In Purulia, being married decreases the probability of migration and
larger family size increases such probability. Also, the social class effects are now
more pronounced with STs in Purulia and Muslims in Malda showing remarkably
higher propensity to migrate compared to the reference category. The gender division
is also starker in Malda with males almost fifty times more likely to migrate than
females, while in Purulia males are twelve times more likely to migrate than females.
Thus, in Purulia, it is the single educated male from larger tribal families who are
more prone to migrate compared to Malda where married males with less education
452 J. Ray et al.
Fig. 2 Model-based predicted probability of migration across land possessed. Source Authors’
calculation based on Table 2 & Field Survey (2017–18)
from smaller Muslim families are more likely to migrate. This contrasting picture
underlines the diversity in the process of migration decision-making as well as the
profile of migrants across space and social dimensions.
4.3 Pooled Regression—Males
It is a reality that temporary/seasonal internal migration in India is dominated by

males. The survey results discussed above also support this fact as males are signif-
icantly more likely to migrate than females. Hence, the researchers further decided
to focus more on male population and explore whether results discussed above hold
true when only males are considered. It is observed from Table 3 that the impacts
are almost similar. Age still has a positive but non-linear impact on probability of
migration. Married men are about four times more likely to migrate than unmarried
men. Higher amount of land possessed brings down propensity to migrate. STs and
Muslims are more likely to migrate than the reference category of Hindu upper caste
men. The only difference now is that education has a negative coefficient, indicating
that men with relatively less years of formal education are more likely to migrate
than the educated ones.
Table 3 Determinants of male migration—logit regression (14 + males)

Variable
Causal Pooled Malda Purulia
Variables Beta Marginal Beta Marginal Beta Marginal
Age (years) 0.039 1.04 0.065* 1.07 0.001 1.00
(0.23) (0.16) (0.99)
Age Squared −0.001** 1.00 −0.001** 1.00 0.001 1.00
(0.04) (0.05) (0.48)
Years of −0.003 0.99 −0.008 0.99 −0.013 0.99
Schooling (0.88) (0.73) (0.63)
Marital Status 1.350** 3.86 1.401** 4.06 1.412** 4.11
Dummy (0.01) (0.01) (0.01)
(Married)
(control group:
unmarried)
Family Size −0.185** 0.83 −0.198** 0.82 −0.156** 0.86
(0.01) (0.01) (0.02)
Land Possessed −0.007* 0.99 −0.002 0.99 −0.006 0.99
(in kathas) (0.17) (0.80) (0.45)
Land Possessed 0.001 1.00 0.001 1.00 0.000 1.00
squared (0.60) (0.21) (0.80)
Social Group 0.101 1.11 – – 0.348 1.42
Dummy (Hindu (0.63) (0.26)
ST)
(control group:
Hindu Gen)
Social Group −0.029 0.97 −0.084 0.92 −0.179 0.84
Dummy (Hindu (0.90) (0.77) (0.65)
SC)
(control group:
Hindu Gen)
Social Group 0.024 1.02 0.314 1.35 – –
Dummy (0.93) (0.31)
(Muslim)
(control group:
Hindu Gen)
Nagelkerke 0.166 0.200 0.142
R-squared
Log-likelihood 1091.2* 534.3* 541.9*
Ratio
Correct 70.1 68.9 72.7
Classification
(%)
(continued)
454 J. Ray et al.
Table 3 (continued)
Variable
Causal Pooled Malda Purulia
Variables Beta Marginal Beta Marginal Beta Marginal
Number of 940 450 490
Observations
Note * and ** denote significance at 20% and 10% levels, respectively. Figures in parenthesis are
p-values
4.4 Split Regression—Males
When we segregate across districts, we find that there are some subtle differences.
The age selection process is more pronounced in Malda than in Purulia. Also, as
before, the selection across social classes follows the demographic pattern of the two
districts—STs in Purulia and Muslims in Malda are more prone to migration.
4.5 Summary
The survey results show that temporary seasonal migration is mostly a distress
phenomenon. People without adequate (farm) land in rural areas, mostly married
males with little formal education and belonging to the socially disadvantaged groups
(STs and Muslims) are more likely to migrate. Also calculated is the predicted prob-
ability of the average person, as well as several counterfactuals for the pooled data
and district-level data (Table 4).
The average unmarried male from Hindu upper caste household is 35 years of
age, has just four years of formal schooling and comes from a household of five
members with 35 kathas of land. For this person, predicted probability of migration
is just 19%. As a contrast, if we consider the median person who is married, thirty
years old, from an ST or Muslim landless family of four persons, without any formal
schooling, the predicted probability multiplies three times to become 62%.
Looking at the district-level data separately, the average person in Malda is
younger, with more formal schooling, and less amount of land under possession. For
this person, the predicted probability of migration stands at around 30%. Predicted
probability of migration for the contrasting person in this district with characteristic
variables as mentioned before is more than double at 70%.
For Purulia, the average person is older: 36 years of age, with just four years of
formal schooling, comes from a household of five persons with 45 kathas of land
in possession. The average person has substantially lower predicted probability of
migration (than Malda)—just about 12%. The contrasting person in this case is five
Table 4 Expected probability of migration—average and contrasts

Characteristics/Variables Pooled Malda Purulia
Sample Contrast Sample Contrast Sample Contrast
Average Average Average
Age (years) 35 30 30 30 36 30
Years of Schooling 4 0 6 0 4 0
Family Size 5 4 5 4 5 4
Land Possessed (in 35 0 21 0 45 0
kathas)
Is Male YES YES YES YES YES YES
Is Married NO YES NO YES NO YES
Is Hindu ST/Muslim NO YES NO YES NO YES
Predicted Probability of 0.19 0.62 0.30 0.70 0.12 0.60
Migration
Source Authors’ calculation based on Tables 1, 2 and Field Survey (2017–18)
times more likely to migrate than the average person, with predicted probability of
migration at 60%.
The results, therefore, support the opinion that migration decisions depend on
individual as well as household factors, especially in developing countries, where
temporary and seasonal migration is a strategy to diversify sources of income and
improve total income through remittances (similar to views expressed by Stark and
Bloom 1985; Yang 2008; Antman 2012). Whether such a strategy bears fruit at the
ground level is a matter of enquiry that has been attempted in the next section.
5 Impact of Migration on Participating Households
It is already inferred that temporary migration is a risk-minimising poverty-mitigating

strategy of rural households from disadvantaged social backgrounds. But does migra-
tion act as an inclusive process wherein the migrant families improve their economic
condition? There are several such questions that beg answer. What is the educational,
employment and occupational condition of the migrant households? Do migrant
households enjoy better income/consumption levels compared to non-migrants? Are
their activities and occupational structures better than the non-migrants? Do they
have better housing and household amenities than non-migrants, and enjoy financial
inclusion? Such issues have been explored in this section.
As mentioned earlier, the study compared households that send members as
temporary/seasonal migrants and those that do not send out migrants. Further, in
order to examine whether there is a difference between long-term permanent/semi-
permanent migration and seasonal migration in terms of socio-economic outcome of
456 J. Ray et al.
Table 5 Human Capital position—education of the 18 + sample household members

Education Distribution
Status Illiterate Below Primary Middle School Graduate+
Primary Passed Passed Passed
Purulia Temp 41.6 20.8 11.6 12.3 12.0 1.6
Migrants
Non-migrants 41.8 18.0 13.5 12.0 12.7 1.9
Malda Temp 23.7 22.2 19.6 15.6 16.4 2.5
Migrants
Non-migrants 27.0 18.3 12.4 16.6 18.7 7.1
Bardhaman Settled 7.5 20.7 12.8 33.1 9.9 16.0
Migrants
Non-migrants 9.7 15.8 14.7 40.5 7.3 12.0
migration, the researchers used a control group of settled migrants from Bardhaman
district. The results are discussed as follows (refer Table 5).
5.1 Human Capital Position
The study focused on the human capital position of the 18 + population in the
sample. A comparison is drawn between the seasonal migrants (from Purulia and
Malda districts), and settled migrants (in Bardhaman district) and non-migrants. It is
observed that human capital situation in both Purulia and Malda districts is inadequate
with temporary migrant households having relatively poorer human capital situation
than the non-migrant households of the same district (Table 5). They have more
illiterate and below primary school educated persons, and lesser share of graduates
and high school pass outs. The settled migrants in Bardhaman on the other hand
have a human capital position that is close to the natives of the district, indicating
that after settling down they have been able to improve their educational attainment
substantially.
5.2 Participation in Labour Market
Since temporary migration is a strategy to get meaningful employment and raise

income level, it is no surprise that Labour Force Participation Rate (LFPR) and
Work Participation Rate (WPR) are higher among temporary migrants in both Malda
and Purulia as compared to the non-migrant households (Table 6). However, settled
migrants in Bardhaman have a lower LFPR and WPR than not only the temporary
Table 6 Labour market statistics

District Status Too School Domestic Out of LFPR Unemployed WPR
Young/Too Going Duties Labour
Old Force
Purulia Temp 3.4 21.6 14.1 39.1 60.9 4.2 56.7
Migrants
Non-migrants 2.6 23.3 22.1 48.0 52.0 8.2 43.8
Malda Temp 3.3 36.0 15.9 55.2 44.8 2.9 41.9
Migrants
Non-migrants 13.6 35.8 13.1 62.5 37.5 4.0 33.5
Bardhaman Settled 13.6 24.9 18.9 57.4 42.6 3.9 38.7
Migrants
Non-migrants 12.4 27.0 22.2 63.6 36.4 3.9 34.5
migrants of Purulia and Malda districts but also from the natives of Bardhaman
district. Migrant households in Purulia had the highest LFPR and WPR—perhaps
reflecting the overall economic stagnancy of the region. Unemployment is highest
among non-migrants in Purulia and lowest among migrants in Malda, which is
expected as the raison d’être of migration is getting jobs.
5.3 Work Activity Status
It is true that the poor can ill-afford to remain unemployed. Hence, LFPR and WPR
are generally perverse indicators of economic vibrancy of a region/group, and it is
better to look at the type of work/activity to understand the real condition of workers.
Workers have been segregated into three broad types. In order of hierarchy and
economic benefits, these are regular salaried employment, casual employment and
self-employment. It is observed that almost the entire employment among temporary
migrants comes from casual work, indicating the precarious nature of the working
conditions for them (Table 7). Only a handful of non-migrants in Malda and Purulia
are in regular salaried jobs. In contrast, settled migrants in Bardhaman have a more
equitable spread over the three types of employment, though there too casual work
is marginally dominating. The highest share of regular/salaried job is found among
non-migrants in Bardhaman district, indicating that this group is perhaps in the best
economic condition.
458 J. Ray et al.
Table 7 Proportion of workers in different types of employment/activity status

District Status Self-Employment Casual Employment Regular/Salaried
Employment
Purulia Temp Migrants 0.5 98.8 0.7
Non-migrants 3.0 85.8 11.2
Malda Temp Migrants 0.2 99.5 0.2
Bardhaman Settled Migrants 35.4 35.9 28.7
5.4 Occupational Distribution
Another major indicator of labour market conditions is the occupational distribution

of workers. It is observed that seasonal migrants are predominantly into construction
work and unspecified manual work in both Purulia and Malda (Table 8). The non-
migrants in these two districts, as expected, are mostly in farming occupation as
cultivators and agricultural labourers. Presence of migrant workers in clerical and
managerial jobs is negligible. This indicates that migrants are mostly engaged in
lower rung occupations. The settled migrants in Bardhaman, in contrast, are more
in sales, clerical and managerial jobs—occupations that are physically less exerting
and more paying.
5.5 Housing and Amenities
The living condition is best reflected in the condition of housing/dwelling and ameni-
ties therein. It is observed that in Malda migrant households have relatively poor
housing conditions compared to non-migrants (Table 9). In Purulia, migrant house-
holds have better houses and electricity but not sanitation or clean cooking fuel. In
Bardhaman, however, the settled migrants enjoy better housing conditions, though
they have relatively less share of pucca houses.
5.6 Consumption, Poverty and Inequality
In India, economic condition and living standards of people are usually measured
by their consumption levels. Though fraught with measurement errors, recall bias
and myriad other methodological issues, MPCE (Monthly Per Capita Consumption
Expenditure) is still considered as benchmark in determining the economic status
Table 8 Occupational distribution of workers (in %)
Activity Purulia Malda Bardhaman
Migrant Non-migrant All Migrant Non-migrant All Migrant Non-migrant All
Cultivator 21.5 38.1 26.8 45.6 35.9 41.3 1.0 0.1 1.0
Agricultural Labourer 12.3 13.8 12.8 6.6 10.2 7.4 0.5 0.2 0.3
Industrial Labourer 7.4 7.4 7.4 2.3 1.7 2.2 9.2 6.0 8.0
Internal Migration and Inclusive Development …
Construction Labourer 2.0 4.2 2.7 31.4 20.0 31.1 1.3 1.6 1.4
Unspecified Manual Labourer 49.3 11.6 25.0 0.1 0.0 0.0 27.0 45.0 31.6
Handicrafts 2.5 1.1 2.0 2.3 3.4 2.5 16.0 7.0 14.0
Clerical and Managerial 0.3 4.2 1.7 0.0 1.7 0.4 15.0 12.0 15.0
Sales and Others 4.7 19.6 21.6 11.7 27.1 15.1 30.0 28.1 28.7
All 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
459
460 J. Ray et al.
Table 9 Conditions of housing and amenities (percentage of households)

District Status Pucca Pucca Safe Clean Electricity
Houses Toilet Drinking Cooking
Water Fuel
Purulia Temp Migrants 22.7 6.8 84.6 9.9 73.0
Non-migrants 12.7 10.2 85.6 21.2 57.6
Malda Temp Migrants 41.2 20.9 73.3 28.9 73.3
Non-migrants 62.1 29.3 81.0 29.3 77.6
Bardhaman Settled Migrants 58.3 77.0 93.1 90.5 100.0
Non-migrants 65.4 62.1 89.7 90.3 96.6
Table 10 Household consumption expenditure (Rs per capita per month at current prices 2016–17)
District Status Mean MPCE Median MPCE % Below State Poverty Line
Purulia Temp Migrants 791 570 44.5
Non-migrants 813 825 74.5
Malda Temp Migrants 1527 1218 35.2
Bardhaman Settled Migrants 2580 2030 23.2
of a household. The survey also attempted to collect information on consumption

expenses and constructed the MPCE figures. It is observed that average MPCE of
surveyed households is lowest in Purulia and highest in Bardhaman—in line with
the general economic condition of the three districts as exhibited by secondary data
too (Table 10).3 On comparing migrants and non-migrants, it is found that seasonal
migrant households in Malda and Purulia have marginally lower average MPCE than
the non-migrant families. Since in the earlier section it is noted that migrants mostly
come from asset-less poor families, the results here indicate that migration does help
them to come up to an economic level closer to that of non-migrants. In Bardhaman,
however, the settled migrants have average MPCE that is marginally higher than the
natives, indicating that permanent migration is more effective as a coping strategy
than temporary migration.
Incidence of Head Count Poverty across districts and family types on the basis
of computed MPCE levels was also measured. For it, the state-specific poverty line
provided by NITI Aayog/Planning Commission for West Bengal (GoI 2014) has
been used. For the year 2011–12, this was Rs 783 for rural areas and Rs 981 for
urban areas. It was updated to 2016–17 figures using the Consumer Price Index
for Agricultural Labourers (CPIAL) for rural areas and Consumer Price Index for
Industrial Workers (CPI-IW) for urban areas. It is observed that, as expected, HCR or
Head Count Ratio is highest among the surveyed households in Purulia, followed by
Malda and least in Bardhaman (Table 10). What is more interesting is that while the
incidence of consumption poverty is almost similar across migrant and non-migrant
families in Malda, in Purulia households with migrant members have remarkably
lower incidence of consumption poverty as compared to non-migrant families. In
Bardhaman too, settled migrants show lower HCR compared to the natives. Thus,
in Purulia, migration as poverty alleviation strategy of the households is remarkably
successful. This is also true, but with a lesser degree, for the migrant families settling
in Bardhaman.
The study also tried to examine the relative inequality in consumption levels across
households. For this, the sample households are pooled together and divided into five
quintiles based on their MPCE levels, separately for each of the three districts. Q5 is
the highest MPCE bracket and Q1 is the lowest one. Thereafter, the proportion of each
household type in each district is examined in the five quintile groups. It is observed
that migrant households are more equally spread across the five quintile groups, while
the non-migrant households are more polarised near the two ends (Table 11). Thus,
inequality seems to be lower within migrant households compared to those within
non-migrant households in all the three districts. This becomes clear in Fig. 3 which
Table 11 Distribution of persons across MPCE quintiles for migrants and non-migrants
Status Q1 Q2 Q3 Q4 Q5
Purulia Migrants 14.1 28.9 22.5 17.5 16.9
Non-migrants 28.7 9.9 19.9 23.3 18.2
Malda Migrants 22.3 19.4 23.3 18.9 16.1
Non-migrants 21.6 23.6 13.2 22.8 18.8
Bardhaman Migrants 20.0 19.0 21.0 21.0 18.0
Non-migrants 16.0 20.0 12.0 15.0 37.0
Puruliya Malda Bardhaman

40
30 30
30
20 20
20
10 10
10
0 0 0
0 2 4 6 0 2 4 6 0 2 4 6
Distribution for Migrants: Distribution for Non-Migrants:
Fig. 3 MPCE distribution across quintiles for migrants and non-migrants. Source Author’s
calculation based on Field Survey (2017–18)
462 J. Ray et al.
shows that the distribution across MPCE classes is unipolar for migrant households
and bipolar for the non-migrant households.
It therefore appears that migration indeed acts as a way out of poverty for rural
households. They have improved consumption levels, lower incidence of head count
poverty and lower ‘within group’ inequality. In this, migration seems to be working
as an inclusive process, with permanent migration reaping better dividends than
seasonal migration.
5.7 Financial Inclusion
Another way to look at the impact of migration is to examine the aspect of financial
inclusion. In recent years, there has been an emphasis in policy as well as imple-
mentation level towards financial inclusion—making banking and institutional credit
services accessible to all. The situation among the surveyed households in this dimen-
sion was explored. It appears that making people come to the bank and have bank
account has been successful in Bardhaman and Purulia where most households have
bank accounts (Table 12). However, this has not been that much successful in Malda.
Also, bank accounts are more frequent among migrant households than non-migrants
in the two districts mentioned—perhaps because of the remittance factor as sending
and receiving money is facilitated when the family has a bank account. In Malda,
fewer migrant households have bank accounts compared to non-migrants—perhaps
because the monetary transactions there are more through personal channel rather
than institutional.
Indebtedness is also higher in Malda compared to Purulia and Bardhaman. Indebt-
edness is higher among non-migrants in these two districts, while in Malda, indebt-
edness is more frequent among migrant households. What is alarming is the fact
that only a fraction of such loans are from institutional sources, especially in Purulia
where it is almost negligible. However, the brighter side is that institutional credit
is marginally more frequent among migrant households than non-migrants in all the
three districts.
5.8 Summary
The study finds that the success of migration as a coping and poverty alleviation
strategy is somewhat mixed. While they do seem to enjoy higher consumption levels,
lower poverty and within-group inequality, the nature of employment and earning
is questionable. Most of them are in unskilled manual jobs outside the state and
the jobs are casual in nature. Housing and amenities are not remarkably better and
indebtedness is high, especially in Malda. Also, the situation of the settled migrants
is somewhat better than the seasonal/temporary migrants.
Table 12 Penetration of financial instruments among sample households
Purulia Malda Bardhaman
Activity Migrant Non-migrant All Migrant Non-migrant All Migrant Non-migrant All
Internal Migration and Inclusive Development …
% with Bank Account 82.2 78.0 80.4 9.6 13.8 10.6 94.6 91.7 93.7
% Indebted 45.4 34.7 40.9 41.2 48.3 42.9 22.5 25.0 23.3
% Loan from Institutions 4.3 2.5 3.6 10.7 10.3 10.6 19.4 13.3 17.6
463
464 J. Ray et al.
6 Migration Process and the Human Angle
The analysis thus far has revealed the macroeconomic processes underlying tempo-
rary or seasonal migration. It appears that migration does indeed act as a risk miti-
gating and income augmenting decision for the impoverished. It, however, misses out,
an important aspect—the story of the human beings—migrants as we know them—
some hard facts of their lives so as to better understand the nuances of migration and
the associated pitfalls.
Forced to move in search of livelihoods and better income, migrants often end
up paying high costs for doing so. There are increasing instances of sociopolitical
identities being aroused across the country as migrant workers often face contempt in
destination cities, as they compete for space and civic amenities. Confined to shanties
and ghettos in subhuman conditions, their shanties are looked upon as an ‘eyesore’
on cityscapes. They also become soft targets of local and organised crime and very
often fall victim to human trafficking.4
Lacking proper documentation and faced with political exclusion (not registered
voters in the destination region, and absentees in source areas during elections),
migrants are a non-existent constituency lacking a ‘lobbying’ voice to ensure their
basic rights.5 In addition, the process of migration itself gives rise to further risks
and heartbreaks.
Most migration is based on social networks—through family, relatives, friends
or the ‘neighbourhood uncle’, who also doubles as labour contractor or agent. The
survey results also come up with the same pattern—seasonal or temporary migra-
tion is facilitated mostly by labour contractors (especially in Malda) followed by
family/relatives, while long-term settled migration is facilitated more by family
members or relatives (Table 13). The dominating pattern of out-migration through
labour contractors is through the age-old process known as Dadon. In the colonial
era, it involved taking loan from the local money lender (who most often was also
the local zamindar or landlord) as advance payment for agricultural activities before
the agricultural season. The repayment was through unpaid labour at the landlord’s
farm. That precolonial practice seems to have returned in a modified form: nowadays,
the local labour contractor provides loan to poor rural households at the start of the
agricultural season. The debtors repay the amount by joining the contractor’s labour
force at construction sites across the country during the lean agricultural season. The
wages of migrant labour, thus formed, partly constitute the repayment and partly
Table 13 Channels of
Channel Purulia Malda Bardhaman
migration—percentage shares
Family/Relatives 23.8 41.9 60.9
Friends 36.2 – 18.2
Middlemen/Labour Contractors 40.0 58.1 20.9
100 100 100
Source Field Survey (2017–18)
remittances sent back home. They are mostly asset-less, poorly educated and with
no vocational or skill training. The plight of Qurban, a migrant from Halna village
of Malda district, epitomises the life of most domestic migrants in the region.6
In Qurban’s Halna village, Rintu is the main contractor. Out of 700 households in
Halna, at least 300 are on his payroll, working outside the state. Qurban had taken
a loan of Rs 60,000 for his ailing father from a local labour contractor. It was to
be repaid by working 300 days at a construction site near Hyderabad. On a cold
January Sunday, when the temperature in the district was plunging, the contractor’s
men collected 30 men like Qurban and put them on a train. All of them had taken
advances from Rintu. The running wage receivable by the workers for construction
work in Telangana, Karnataka and Kerala is Rs 200 per day for a 10–12 h job.
There are no leaves or other allowances. The labour contractor arranges for food
and accommodation, and deducts Rs 45 each day for it. All medical expenses are
deducted from wages receivable. Incidentally, the actual wages at construction sites
in these states are not less than Rs 450 per day, leaving a handsome profit for the
contractor. You can call it exploitation if you like but that does not change the ground
reality. Men like Qurban spend on an average 8–10 months on site, returning home
for 2–3 months in a year. Once the work gets over at a given site, the contractor
shifts the labourers to a new site in a new state perhaps. They earn about Rs 60,000
or Rs 5000 per month when averaged over the year. This amount is attractive one
when compared to Malda’s current per capita District Domestic Product or DDP of
Rs 4245 per month and average MPCE of Rs 1550 for the sample households in
Malda district. Thus, there is no dearth of able-bodied males willing to join Rintu’s
workforce. Little wonder, the contractor always has a queue outside his shanty office
in the local haat-tola (local market).
The lure of this road out of squalor and poverty is so strong that peculiar transfor-
mations are taking place at the countryside. The average years of education among
boys is gradually coming down as school drop out rate is going up due to assured
income from migratory work. With a stagnant local economy, there is no incentive
to continue general education and wait for local earning opportunities to materi-
alise. Interestingly, the frequency and duration of girls going to formal schools is
improving as family income is stabilising through such assured incomes. A grim
fall out of migration is the rise in alcoholism, substance abuse and spread of infec-
tious diseases like HIV as trans-state movements have increased and more and more
unsupervised adolescents are going out to work. Absence of a male member in the
household for a major part of the year creates insecurity among the women and infirm
who stay back—there have been increasing instances of land grabbing, diversion of
rightful benefits and a general rise of the henchmen. But workers like Qurban, who
was dreaming of his daughter’s marriage, have little choice than to remain oblivious
of such impending dangers.
Unfortunately, for Qurban, one day the building under construction where he was
engaged collapsed due to poor material and Qurban was one of the two workers who
died under the rubble.7 After much bargaining, the construction company agreed
to pay Rs 200000 as compensation. By that time, Qurban’s father had expired and
his wife did not have a bank account in her name. A facilitator took Rs 20000 for
466 J. Ray et al.
arranging things, and Qurban’s body finally arrived in his village after ten days in
an ambulance for the last rites. Qurban’s is not an isolated case in these hinterlands.
One of his friends was even less fortunate. He died in a road mishap in Raipur.
Since the death occurred outside working hours and off-site, the company did not
give any compensation. The cost of bringing the body home was Rs 70000, which is
conventionally borne by the labour contractor. The family agreed to perform the last
rites in Raipur and Rintu paid for the travel. He handed over the remaining Rs 60000
saved in the process to the family who clutched at it as a last straw to tide over the
next few months of hunger staring it. Last heard, Qurban’s 15-year-old son dropped
school and joined the growing river of migrant workers flowing into the country!
7 Conclusion: Not by Any Chance
The authors have nothing further to add—no grand policy suggestion or cleverly
thought out-of-the-box solution to such events of human tragedy. Nonetheless, the
magnitude of the problems is too big to be brushed under the carpet, given that every
third Indian is a person who has forsaken their place of birth or residence to earn
livelihood. The need of the hour is to acknowledge the problems, to pay adequate
attention to these issues, to debate and discuss at all levels so that the complexities
and human stories behind a country on the move are brought to the fore.
Notes
1. See Majumder and Mukherjee (2012) for case study
2. A traditional unit of land measure; one Katha is equal to 720 sq feet in Bengal
3. Bardhaman ranks fourth among the districts of Bengal in terms of per capita
DDP, and Purulia ranks second from bottom, whereas Malda ranks fourth from
bottom (GoWB 2015)
4. Lynching and mob fury against migrant workers are common; see The Deccan
Chronicle, Jan 17, 2018. In addition, the pandemic that struck the world and India
in early 2020 came to fore the sufferings and vulnerabilities of migrants and the
sheer size of them like never before.
5. According to a report in The Times of India on January 30, 2019, in the 2014
elections, there were 834 million registered voters out of which 280 million
people did not vote… a large number of these could be temporary migrants,
given that there are 450 million internal migrants in the country. ‘If NRIs get a
right, why not domestic migrants’, https://epaper.timesgroup.com/olive/apa/tim
esofindia/#panel=document
6. Names have been changed to maintain confidentiality
7. The Hindu, Hyderabad, July 24, 2016
Acknowledgments Parts of this study have been separately funded by ICSSR and UGC-SAP.
Comments received during a national seminar organised by the Department of Economics, Banaras
Hindu University during March, 2018 have been most helpful.
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Available online http://www.academicjournals.org/IJSA
ISSN 2006-988x ©2011 Academic Journals
Review
Globalisation and social transformation in India:

Theorising the transition
Manisha Tripathy Pandey
Department of Sociology, Jamia Millia Islamia, New Delhi-25, India. E-mail: manisha_pandey14@yahoo.com.
Accepted 16 March, 2011
Globalisation came to India through the economic reforms and is gradually transforming our culture
and self image. This paper proposes to theorise the transition of the Indian economy and situate the
process of economic liberalisation in India in its wider context. The distinction between globalisation as
a process and globalisation as a project is made. While the economic reforms of the 1990s stimulated
growth, the direct beneficiaries were more affluent urban dwellers. Social reform has lagged behind
economic reform. The paradigm shift in the Indian planning from growth with stability and social justice
to neo-liberal development is traced. This is linked to the theoretical discourses on globalisation and
their applicability in the Indian context.
Key words: Globalisation, liberalisation, social transformation, India.
INTRODUCTION
When Marx and Engels (1848) wrote the political slogan: the main process causing change and crisis. The most
“Workers of the world, unite”, they gave a vision of unified important issue which dominates our socio-political,
world capitalism and were very close to the theme of cultural and economic horizon is that of globalisation.
today‟s theorists on globalisation. They were among the Economic globalization has a long history, but in its
first writers to treat the international economy as a commercial age it was nation-based, produce was
dynamic category, in which both states and regions were generally according to the needs and benefits trickled
affected by international trends. Thus globalisation as a down to the masses. With the advent of capitalism, its
process has a long history but globalisation as a project character changed. Production became unplanned.
of the North to capture the markets of the South is When it accumulated in excess, markets slid down into
comparatively a new developmental strategy. When the depression in cyclical fashion every 25 to 30 years.
World Bank in 1996 had to justify the introduction of the Economic globalization can be best seen as the more
market into the countries of the former Communist bloc, it advanced form of capitalism.
is ironical that it chose a passage from the same Liberalisation and globalisation came to India through
Communist Manifesto in which the young radical Marx the economic reform and is gradually transforming our
and Engels recognized the radicalism of the new culture and self image. Capital worked hard at promotion
capitalist order: of neoliberal policies and finally succeeded. This paper
proposes to theorise the transition of the Indian economy
“…. The need of a constantly expanding market for its and situate the process of economic liberalisation in India
products chases the bourgeoisie over the whole surface in its wider context and in a long-term perspective. The
of the globe. It must nestle everywhere, settle structural shifts within the World economy had
everywhere, establish connections everywhere”. implications on the process and the nature of India‟s
integration to this global system. Contemporary
This was the time, as early as 1848, when the globe had globalisation became a neo-liberal project. It is a political
become a part of discourse on society and culture. It project characterized by the dominance of neo-liberal
implied a generic transformation of the world. Today capitalism, by which the speed and intensity of global
when we talk of historical transformation, globalisation, flows have increased.
through liberalisation and economic reforms, comes as The theories and discourses on social change and
254 Int. J. Sociol. Anthropol.
transformation till 1970s and 1980s were largely democratic planning and mixed economy model of
associated with industrialisation and the gaps between development. Nehru went with a planned economy
the rich and poor nations. Marx and many other scientists because soon after the epic independence struggle
discussed the Industrial and French Revolutions and their people would have not accepted another form of
social ramifications. Some influential global paradigms in colonization. The term „permit-license quota‟ Raj was
sociology on social transformation were: Modernisation used to describe the system of State-directed economic
theory which propagated an urban, industrial milieu for development planning instituted under Nehru. India took
modernity; Dependency theory postulated that to the middle path of „growth with equity‟ which was
underdevelopment in the periphery was the direct result sought to be achieved through a growing and dominant
of the historically evolving structures of capitalism, the public sector covering the basic strategic and core
World System Theory viewed nations in relation to their industries. The State‟s catalytic, participatory and
placement within a global division of labour between regulatory roles in bringing about planned socio-
core, periphery and semi periphery. The new literature on economic development of the country matched the
globalisation moves beyond the poor versus the rich blossoming and growth of the public sector into the
nations and lays emphasis on how interconnected and pivotal sector of the Indian economy.
integrated the world has become. The early 1970s The move toward liberalisation of the Indian economy
breakdown of the Bretton Woods system of fixed and dismantling of Nehruvian State-directed planning
exchange rates and national controls of capital flows took place under Indira Gandhi with some relaxation of
marked a major watershed in the globalisation of trade, price controls, import restrictions, and creation and
finance and investment. expansion of industries and industrial capacity. Rajiv
Gandhi seemed much more favourably inclined to free
market principles and began a process of liberalisation of
Birth of a global society the system of import controls and „licensing regulations‟
and limitations on the expansion of existing industrial
The recent history of liberalisation in India can be located enterprises. There was a sudden spurt in industrial
within the longer history of global capitalism. The Great production in the sphere of consumer durables and a
Depression of the 1930s and the destruction during corresponding „consumer boom‟. For a while, it appeared
Second World War were followed by a new phase of that the Indian economy was on a new growth path, but it
capitalism. The Depression marked the end of British was short-lived. India had to turn to the World Bank and
economic power. America defined the terms of post-war the IMF for help. India managed to do without this help
reconstruction. By the 1970s the post-war boom was very soon and then embarked on a course of cautious
over, the American economy faced a crisis. The United liberalisation.
States had sustained its military expenditure and What was started under Indira Gandhi in the early
international commitments through monetary expansion, 1980s was taken further by Rajiv Gandhi in the second
and which led to inflationary pressures. Subsequent half of the decade. It was christened as India‟s „New
efforts at monetary regulation, that is, increasing of Economic Policy‟ (NEP) to take the country into twenty-
interest rates and restriction of money supply to curb first century. The NEP was intended to revive Indian
inflation slowed economic activity. While the recession of industrial growth which after the impressive performance
the 1930s destroyed British hegemony over the world in the fifties and early sixties, had virtually stagnated. The
economy, politico-economic developments during the liberalisation of the 1980s had resulted in jobless growth,
1970s and early 1980s questioned the basis of American declining employment and a huge debt. This was a
power. The 1980s became a period of re-negotiation of period of intermittent incremental liberalisation.
international economic order. The external debt crisis, which surfaced in early 1991,
These shifts in the structure of world economy and the brought India close to default in meeting its international
trends towards globalisation crucially affected the third payments obligations. The balance of payments situation
world. International finance, an important mechanism of was almost unmanageable and the rate of inflation was
global integration, came to define the cycles and rhythms high. The underlying fiscal crisis was acute. It was the
of the new international order. The multinational outcome of persistent mistakes in economic policy that
corporations and the financial institutions, like the IMF accumulated through the 1980s. Fiscal deficits met by
and the World Bank, started playing a major role in borrowing at home, mounted steadily. Also the receipts
defining the shape of the global order and the internal from foreigners, in hard currencies like the US dollar,
economy of the debtor countries like India. were less than payments to foreigners leading to current
account deficits in the balance of payments. It led to
borrowing abroad which grew larger steadily. The internal
Developmental path of Indian economy imbalance in public finance led to a rapid accumulation of
internal debt that the government owed to its people.
The people of India, after independence, voted for Besides the economic factors, there were some
Pandey 255
political factors also according to Jalan (1991) which had represent a radical departure from the development
a bearing on the economic crisis that surfaced in June strategy of the past four decades. The reform process,
1991, the breakdown in law and order following the which began in early 1990s, was not India‟s first
announcement of implementation of the Mandal experiment with economic liberalisation. The first attempt
Commission report, the Ram Janambhoomi-Babri Masjid was a short-lived episode of hesitant liberalisation in the
conflict in Ayodhya, and the fall of the V.P. Singh mid 1960s, which coincided with substantial devaluation
Government in November 1990. of the rupee. The second endeavour was in late 1970s
with a focus on trade liberalisation in a comfortable
balance of payments situation. The third step was the
Economic reforms since 1991 package of economic policies introduced in the mid-
1980s when liberalisation of trade regime gathered
The Government of India adopted policies of momentum and the process of industrial deregulation
globalisation, liberalisation and market economy in the were set in motion. These liberalisation episodes were
awake of the serious economic crisis that enveloped the perceived as correctives for an industrializing economy in
country by the middle of 1991. The crisis situation led the transition but did not contemplate any fundamental
government in June 1991 to pursue the New Economic changes in the objectives or the strategy of development.
Policy (NEP), based on stabalisation and Structural However, the changes in 1991 were significant enough to
Adjustment Programmes (SAP) in which, in return for be characterized as a shift of paradigm.
loans, the Government of India undertook to reduce its It is worth highlighting three dimensions of the contrast
role in the economy through a policy of liberalisation, between the past and the present. First, focus on
deregulation, privatisation and globalisation. efficiency and growth in the economy rather than on
There are two distinct analytical steps to these reforms: growth with social justice as in the past. Secondly,
(1) A macro-economic stabalisation programme (IMF reducing the role of the State in the economy as it had
inspired) essentially focusing on reducing the twin deficits led to inefficiencies, and placing a great reliance on
on balance of payments and on the State budget in the market forces in the process of economic growth and
short run, and (2) Structural Adjustment Programme development. Thirdly, integrating the Indian economy into
(World Bank inspired) in the fields of trade, industry, the world economy, as this would bring in competitive
foreign investments, public sector and financial sector. pressures to force Indian firms to modernise and upgrade
their technologies, lead to the benefits of specialization
“Structural adjustment and reform seeks to shift based on the international division of labour, and make
resources: the latest products available to the Indian consumer who
had till date put up with shoddy local goods, and in due
From the non-traded goods sector to the traded goods course, the difference between Indian and world prices
sector and within the latter from import-competing would disappear as India became completely integrated
activities to export activities, and into the world system of production.
from the government sector to the private sector. Apart The paradigm shift in the Indian planning from „growth
from such resource allocation, structural reform seeks to with stability‟ to „growth with social justice‟ to
improve resource utilisation by: „empowerment with development‟ and finally to „neo-
liberal development‟ is clearly perceptible. The core of the
(i) Increasing the degree of openness of the economy; new paradigm of neo-liberal development is that
and economic activity should not be guided by physical
(ii) Changing the structure of incentives and institutions in controls or State intervention. Instead, decisions about
favour of private initiative and against state intervention. investment, production and consumption should be
The general economic philosophy is to rely more on based on relative prices and the market mechanism,
market forces, dismantle controls as far as possible by what is more, is that world prices should be the basic
relying more on prices and wing down the public sector in determinant of resource allocation. The consequent
the hope that the vaccum will be filled by the private restructuring of the economy, it is presumed, would
sector” (Bhaduri and Nayyar 1996: 33). impart both efficiency and dynamism to the growth
process. Rapid economic growth, it is hoped, would lead
In conformity with the „Washington Consensus‟, the to an eradication of absolute poverty.
Government of India embarked on a wide-ranging reform In sum, the salient features of the new economic
of the policy regime beginning in July 1991. Structural reforms are:
policy changes that came about as a result were in
relation to the industrial sector, the trade regime, foreign 1. Export promotion as against import substitution.
investment, foreign technology, the public sector, and the 2. Reliance on the market in place of direction by state.
financial sector. 3. Prominence for the private sector instead of
The structural reforms implemented by the government dominance by the public sector.
4. Openness for international economy and to foreign causal logics of globalisation as a historical process.
capital rather than accent a protected domestic activities. Giddens points to four discrete and intersecting
The process of economic reform is either „strategy- dimensions of globalisation: capitalism, industrialism,
based‟ or „crises driven‟. The reform process in India did surveillance and militarism. He considers globalisation as
not become strategy-based. It was neither shaped by the a consequence of modernity. It involves „time-space
economic priorities of the ordinary people, nor did it have distanciation‟ and „disembedding‟ of social relations. The
a long-term view in terms of development objectives. It increased interconnectedness leads to reflexivity that is
was crises-driven. Economic reform, which is crises- increase in global awareness and consciousness. Even
driven, irrespective of whether the crises is an external in India, especially the urban India, social activity is
shock or an internal convulsion, is more difficult to sustain constantly informed by flows of information and analysis
and less likely to succeed. which subject it to continuous revision and thereby
constitute and reproduce it. Global migrations, both legal
and illegal, have forced a rethinking on the concept of
Theorisations on globalization citizenship. The notion of dual citizenship, which
Vajpayee and also Manmohan Singh promised in the
Globalisation is the new regime of tempo-spatial Pravasiya Bhartiya Diwas, is the result of such reflexive
connectedness and joining of societies and nation-states. processes in India.
It strives to make the world as its market where all the The world is being increasingly characterized by
people are being brought as buyer and seller in unequal extensive connectivity or interrelatedness and extensive
terms. global consciousness, a consciousness which continues
Held et al. (1999) identify three theoretical positions in to be more reflexive. Robertson (1992) defines
relation to globalization, those of the hyperglobalisers, the globalisation as:
skeptics and the transformationalists. Hyperglobalisers
argue that globalisation is a real and powerful “Globalisation as a concept refers both to the
phenomenon and represents an unprecedented change compression of the world and the intensification of
in recent years, so that global flows have undermined the consciousness of the world as a whole…..both concrete
existence of the nation-state. They are primarily global interdependence and consciousness of global
concerned with politics and power. Sceptics like Hirst and whole in the twentieth century”.
Thompson argue that the idea of globalisation is
overrated and that current levels of interconnectedness The first part of the definition, global compression,
are not unprecedented. Some skeptics focus instead on resembles the arguments of theories of dependency and
processes of regionalization which are intensifying world-systems. It refers to increasing level of
activity within major financial and trade groups. interdependence between national systems by way of
Transformationalists see globalisation as primarily a trade, military alliance and cultural imperialism. For
social phenomenon and analyse it in terms of qualitative Wallerstein, the globe has been undergoing social
change and that it is transforming many aspects of the compression since 16th century but Robertson says its
current global order but the old patterns still remain. Now history is much longer. India has always had trade
let us analyze some of the approaches to globalisation relations and cultural exchanges with people away from
and their applicability in the Indian context. the “geographical expression” called India. We have
Wallerstein (1974) has stressed the centrality of redefined and relativised our culture and society over a
capitalism to the process of globalisation (both past and period of time because of these contacts. Contemporary
present). For him, the logic of historical capitalism is globalisation initiated because of economic reforms has
necessarily global in reach. The entire globe is operating deepened and intensified the contact. The essential
within the frame work of singular social division of labour character of globalisation resides here in the
called the capitalist world economy. The world economy consciousness of the global that is, consciousness by
is conceived as having a distinctive, unequal structural individuals of the global situation specifically that the
arrangement with core, semi-peripheral and peripheral world is an arena in which we all participate.
areas each of which has a specific functional role in Robertson illustrates essential processes of
sustaining an overall integrity of the system. The relativisation involved in the progression toward the
economy, therefore, embraces both processes of global experience of globality. India is also witnessing the
integration and fragmentation, which produces relativisation of societies and the Indian State is of course
instabilities and contradictions, which Wallerstein not withering away but becoming increasingly regulatory
believes, will eventually lead to its collapse. rather than being intervensionist. Based on Robertson‟s
Giddens (1990) and Robertson (1992) conceptualized arguments of two interpenetrating processes, India is
globalisation in terms of cultural economy perspective, also witnessing the universalisation of particularism (as in
that is, as a process of historic progression of the world. the nation-state) and the particularization of universalism
Instead of a single casual logic, they stress the multiple (the appropriation of the universal in local contexts, such
Pandey 257
as unisex wardrobe and Valentine‟s Day celebrations in through four interrelated processes - homogenisation,
India). Robertson‟s concept of „glocalisation‟ explains pluralisation, traditionalisation and hybridisation. The
many such phenomena in India. There is a reassertion of process of homogenisation of cultural patterns and
local identity, culture and economy with demand for institutional arrangements initiated by the revolution in
protectionism and religious revival. What Shiv Sena is transport and communication, accelerated by the
asking for in Maharashtra is an example. Giddens (2000) modernisation project, climaxed with the onset of
also talks of tension between local revivals and globalisation. In the cultural context, homogenisation
globalisation when he talks of fundamentalism vs. manifests in evolving a common lifestyle and
cosmopolitan tolerance. McDonald‟s in India is another consumption pattern, that is, dress (For example, jeans),
example of how globalisation has become localized. Beef food (For example, McDonalds), music (For example,
and pork burgers are not sold in India for obvious popularity of Michael Jackson). However,
reasons. Even pizzas in India with typically Indian homogenisation is more visible in certain other contexts:
garnishing are sold. nuclear family, monogamous marriages, parliamentary
While trying to understand the global culture, Appadurai democracy, private property and western technology. The
(1996) talks about „ethnoscape‟,that is, landscape of homogenisation process is characterised by
persons who constitute the shifting world in which we live: displacement syndrome, that is, movement towards
tourists, immigrants, refugees, exiles and other moving homogenisation is taking place through the process of
groups and persons. He talks about „technoscape‟, that displacement. For example, South Indians are wearing
is, the global configuration of technology that moves at pyjama and not only lungi. Some of the old elements are
high speeds across various kinds of previously displaced but some others are retained and new
impervious boundaries. He also talks about „mediascape‟, elements are added.
which refers to the distribution of electronic capabilities to Oommen also talks of the process of pluralisation
produce and disseminate information, are now available accompanied by Accretion Syndrome. Pluralisation
throughout the world. Ideoscape means flow of ideas and concedes and commends the co-existence of a variety of
ideologies. The point that Appadurai wants to make is consumption and institutional patterns. For example,
that the combination of ethnoscape, technoscape, along with Mc.Donalds, other modern varieties of junk
mediascape and ideoscape lead to the globalisation of food and along with Michael Jackson‟s other recent styles
culture. of pop music come to be accommodated. Thus,
Appadurai considers globalisation as disjuncture, pluralisation created a space for a variety of life-patterns
where global cultural system produced a vision of cultural and institutions, that is, accretion.
confusion and chaos. I argue that it is not disjuncture or The hegemonising tendency of globalisation gives birth
disorder but continuity in the form of creolisation and to a loss of meaning and an erosion of identity to the non-
change of cultural identities. Mingling of cultures leads to west. This leads to the resurrection of roots, a search for
fusion and new products (Hannerz, 1992). Take the identity, a process of traditionalisation accompanied by
example of Hinglish, a language formed by the mixing of revivalistic syndrome. Globalisation, thus, proffers
English and Hindi languages. This is an example of fundamentalism. Finally, Oommen, talks of the process of
cultural hybridization in India. The deterritorialised Indian hybridisation with mutation syndrome. The crossbreeding
ethnic diaspora in the Silicon Valley in the US and of the traditional and the modern, the local and the global
Keralites plumbers and waiters in Dubai acquire gives birth to hybridization which creates new cultural
transnational cultural traits leading to the process of elements and social patterns which are neither traditional
cultural hybridisation. nor modern, neither local nor global. The four processes,
Castells (1996) argues that globalisation and operating independently and in interaction give birth to a
informationalism have contributed to a new experience of new world society. It is not a movement from tradition to
time and place in the network society of the „age of modernity, simplicity to complexity, and heterogeneity to
information‟. This borderless and timeless society creates homogeneity, but it produces new permutations and
changing networks of social interaction and produces combinations giving birth to variety and pluralism.
new social relationships. This can be applied in analyzing
the Indian context. The internet, the mass media and ICT
in India have dissolved boundaries and got people closer Social and cultural consequences
and changed the social interaction pattern, now based
more on capital and symbols. They have produced new All countries following neoliberal policies follow the IMF
virtual and electronic relationships on social networking line which thrusts export promotion at the cost of real
sites. Technological advances have altered the social development and import substitution. Structural
and economic life. adjustment is an essential part of program and leads to
Oommen (1998) talks of cultural impact of globalisation misery and food riots. IMF has a record of leaving
and the “Birth of a New World Society”. According to him, devastation behind in Africa and Asia. Neoliberals never
the consequences of globalisation could be discerned worry about the poor or welfare, culture or ecology.
The Economic Reforms in India made India integrated human development and poverty reduction in states left
with the world market, liberated from constraints of time, behind is key to enhancing the national stability that
space and currency. It brought about changes in patterns allows liberalisation and growth to proceed. Besides
of communication, technology, production and inequality and exclusion, another darker side of
consumption, which in turn led to gradual transformation globalisation is violence. It leads to violence of all kinds –
in caste, tribe, family, village and occupational structure physical, in terms of displacement of people by
or to put it generally, the way in which people live and developmental projects and also ethnic upsurges
work. This is because people, capital, goods, information (creation of Special Economic Zones and land acquisition
and images are flowing around the globe at an intensified has led to more Maoist violence) (Pandey 2010a),
speed. Appadurai‟s cultural flows, in terms of against children, in the form of child labour; and against
ethnoscaspes, mediascapes, financescapes, women, minorities and marginalised.
technoscapes and ideoscapes, are happening in India. Urban middle class has benefitted from the fast growth
This is erasing diversities of our culture and economic of white-collar jobs in IT sector, but the blue-collar jobs in
entity and transforming our thought systems. Coke, India‟s manufacturing sector have grown only marginally.
McDonalds, Nike, Ford and other international products This causes widening disparities not only between
are being consumed by the middle and upper class classes but also different sectors of the economy leading
Indians. All these are not causing homogenization but a to social crises. There are many unintended
mélange culture leading to a postmodern world of consequences which the technological growth in India,
differences, disjuncture, new social movements and leading to a risk society which Beck (1992) had talked of.
pluralisation. Besides global environmental risks (For example, global
warming) and health risks (GM food), the contemporary
social life has been witnessing a series of changes
Widening disparities and violence leading to social crisis, such as erosion of traditional
family norms, many unconventional jobs and heightened
Liberalisation has often been identified as a new form of job insecurity, multi-cultural identity amidst global signs
economic imperialism of technologically advanced, richer and images and shifting employment patterns. All these
and stronger nations as against the relatively are socially disruptive and bring tension to the fabric of
underdeveloped, poorer and weaker ones. Liberalisation society.
as a policy is not congenial to poverty-alleviation but
poverty-perpetuation through exploitation of all sorts.
While the economic reforms of the 1990s did much to Income inequality and brewing tension
liberalise and stimulate growth, the direct beneficiaries
were more affluent urban dwellers. Social reforms have Globalisation gives a premium to people with high levels
lagged behind economic reforms. The trajectory of of education and entrepreneurial skills, who are better
development with the LPG model now has created two equipped to survive and succeed in a competitive world.
India – one that has access to modern state, technology, As a consequence, the unskilled labour, uneducated
market and the other which is way behind. With the workers and marginalised population are likely to benefit
withdrawal of the State in education and health sectors, less in a more competitive economy with both public and
the divide between the two India has increased creating private players in the market. The economic reforms have
crises. It has resulted into social oppression and meant loss of livelihood to many people in traditional jobs
brutalisation of the poor. India seems to be distancing like rag-picking (because of import of waste paper from
itself from Gandhian principles of bridging the gap developed countries), silk-spinning (because of Chinese
between the metropolises and the countryside. The thread and yarn), vendors and hawkers in cities (because
chasm between glittering upper class lifestyle of cities of FDIs and super-markets) etc.
and rural poverty is increasing day by day. The widening Thus income and wealth inequality is amplified. If
of regional and interstate disparities during the1990s, economic growth is to continue, employment
despite overall economic liberalisation, highlights the opportunities must be made available to India‟s rural
importance of strengthening slow-growing states. Wealth poor. India must strengthen labour-intensive industries
is generally more concentrated in urban rather than rural like manufacturing if it is to reduce poverty and increase
areas where the majority of Indians live. Economic growth in rural areas. Fewer workers are being employed
growth also tends to be higher in wealthier states in the in the agriculture sector as the use of machinery and
south and west such as Gujarat and Maharashtra than labour-reducing cropping techniques have increased.
poorer states like Bihar, Orissa, and Uttar Pradesh in the Only around 0.1% of India‟s population are benefiting
north and east. Investment naturally flock to the more from employment in India‟s rapidly growing outsourcing,
developed regions equipped with infrastructure IT, and services industries. In the globalized version of
advantages. Additionally, with mounting pressure from capitalism, people of the countries where corporations
internal migration from states like Bihar, investing in are headquartered are also ignored through outsourcing,
Pandey 259
because wages in countries such as India, China and the implications are also serious. The rapid rise in production
Far East are very low and the difference go into the of luxury goods has serious ecological consequences
corporate pockets. The lives of these IT professionals, from resource extraction (mining, tree-felling, etc.) to
business executives and managers have become very production (pollution, working hazards, etc.). Besides
stressful because of excessive pressure to efficiently consumption, environmental impacts are too felt in the
perform and compete in this „hire and fire‟ environment. increasing wastes, which are generated. In this respect,
the phenomenal rise in the use of plastics, detergents,
and other non-biodegradable or hazardous materials in
Digital divide the last few years are alarming.
Thus, the economic reforms in India accelerated flows
Social transformation is happening because the and connectedness of people, goods, technology,
economic reform measures have affected the lifestyle of information and capital. At the same time, globalisation
the Indian urban middle class (Pandey 2010b). It is has intensified exclusion, marginalisation and
believed that they would gradually percolate down to the disconnections among different class of people, regions
villages. Globalisation provides a useful means to and city and countryside. Different people are looking at
develop technologies necessary for production of goods the reforms from their own perspectives. The upper class
and services that improve our well-being. The new is very happy with the ongoing reform process. They
economy focuses on technological progress, increasing have more televisions, more channels on cables, more
opportunities and increasing use of computing and imported goods and so on. Nobody is any longer
information technologies. The internet access is ashamed of conspicuous consumption. The middle class
differentiated by location, social class, gender, ethnicity, is seeing this as an opportunity of its advancement to the
age and education, collectively referred to as digital upper class. Many feel making money one way or the
divide. (Castells, 2001). The Information, Communication, other will get them into the high consumption category.
Technology (ICT) plays an important role in shaping The lower classes want jobs and less inflation. The
uneven development within the economy. In India the economic reforms have created mutually opposed
development of the „shrinking world‟ due to „time-space tendencies like universalisation and particularisation,
compression‟ has led to new social divisions between homogenisation and differentiation, integration and
those who have access to ICT and those marginalised hybridisation in India. They transformed ailing developing
from them. economy into a market economy, attracting foreign direct
investment but far away from self-reliant and indigenous
development. It would not be out of place to mention
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context: we need to embark on „a fierce struggle to re-
While caste is often portrayed as a feature of Indian life of create the world‟ (Words: 5256).
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579517
research-article2015
SGOXXX10.1177/2158244015579517SAGE OpenVenkatanarayanan
Article
SAGE Open
Economic Liberalization in 1991 and Its

April-June 2015: 1–13
© The Author(s) 2015
DOI: 10.1177/2158244015579517
Impact on Elementary Education in India sgo.sagepub.com
S. Venkatanarayanan1
Abstract
The basic foundation of policy making had undergone profound shifts over the past two decades as the policy makers are
inclined to rely heavily on the exercise of power in their pursuit of development and prosperity. Government interventionism
was subject to a strong intellectual and political backlash, and a new ideological movement seeking to redefine the role of
government rose to take its place. This new political–economic liberalism insisted on the removal of governments’ grip
over the economy and the introduction of open competition into economic life. Thus, the market emerged as the central
actor governing economic activity during the 1990s, and the ethos of neoliberalism progressively entrenched itself into law
and public institutions in India. This change in “policy paradigms” implies a substantial reorganization of domestic political
economies for an efficient governance of political and economic institutions in a longer run. This article attempts to look at
the changes in “policy paradigms” that happened after 1990 in the domain of educational governance in India. Along with the
policy changes, there happened a watershed in constitutional rights, making right to education a fundamental right of every
citizen. This article further inquires how far the state has endeavored to fulfill its objective of providing quality education for
all children within these economic and political changes. Indian states’ financial obligation toward elementary education and
the policy directions during the period after 1990 were thoroughly analyzed to find out the commitment of state in providing
universal elementary education of good quality in India.
Keywords
political economy, political science, social sciences, neoliberalism, elementary education, India, economic liberalization
Introduction minds, in a measured manner, in the policy circle worldwide

during the 1970s, which led to a major shift in the political–
While the beginning of the current economic liberalization economic practices, and started moving toward deregulation,
policy in India could be traced to the period much earlier privatization, and withdrawal of state from many areas of
than the 1990s, the explicit acceptance and implementation social security, for efficient governance, based on market
of the economic liberalization program during mid-1991 by economy.
Indian government could be seen as the starting point of the Such policy transformations in India from the 1990s (offi-
new reform program, and its subsequent change of approach cially) have not only changed the nature of state but also var-
and priorities with regard to its governance. It was based on ied implications in the domain of education. Along with
the belief that economic globalization/liberalization worked these political–economic changes, the Indian state through
toward the integration of national economies into the inter- its Eighty-Sixth Amendment in 2002 made elementary edu-
national economy through trade, direct foreign investment, cation a fundamental right by inserting Article 21A in Indian
short-term capital flows, international flow of workers and Constitution, which says that “the state shall provide free and
humanity, and flow of technology. But in the process of lib- compulsory education to all children of the age of six to four-
eralizing the economy, the state’s role has transformed in pri- teen years in such manner as the state may, by law, deter-
oritizing a strong military, police and legal structures, and mine” (Government of India [GOI], 2007, p. 11). The policy
functions to protect private property rights and ensure proper changes along with constitutional guarantee for education
functioning of markets. If the markets do not exist in the
areas of land, water, education, health care, social security,
and so on, the state must take initiative in creating a market. 1
Indian Council of Social Science Research (ICSSR), New Delhi, India
After creating such markets, the state should keep its activi-
Corresponding Author:
ties to bare minimum without interfering with the functions S. Venkatanarayanan, Indian Council of Social Science Research (ICSSR),
of the market for it to perform efficiently (Harvey, 2005). New Delhi, India.
Such thinking based on Neoliberalism1 started occupying the Email: venkatss2000@gmail.com
Creative Commons CC BY: This article is distributed under the terms of the Creative Commons Attribution 3.0 License
(http://www.creativecommons.org/licenses/by/3.0/) which permits any use, reproduction and distribution of the work without further
permission provided the original work is attributed as specified on the SAGE and Open Access page (http://www.uk.sagepub.com/aboutus/openaccess.htm).
2 SAGE Open
have given more scope to critically evaluate the role of state Kothari Commission also suggested to move toward a com-
in educational governance, in fulfilling the constitutional mon school system, where everybody can access neighbor-
right to education and, at the same time, strengthening the hood school system without any class-, caste-, or
governance structures of neoliberal political economy. religion-based hurdle. The Kothari Commission also recom-
This article will assess the changes in the domain of edu- mended that if education is to develop adequately, educa-
cation, particularly elementary education, after the beginning tional expenditure in the next 20 years should rise from Rs.
of economic liberalization in India. Furthermore, the article 12 per capita in 1965-1966 to Rs. 54 in 1985-1986. This
will contrast the contemporary situation with the period implies that the educational expenditure, which increased
before economic reforms in 1991 to understand the nuances from Rs. 1,144 million in 1950-1951 to Rs. 6,000 million in
of policy vicissitudes that engulf the governance paradigm. 1965-1966, will further rise to Rs. 40,365 million in 1985-
The research follows the methodology of critical policy anal- 1986 and that the proportion of gross national product (GNP)
ysis, to evaluate the policy changes in the domain of educa- allocated to education will rise from 2.9% in 1965 to 6.0% in
tional governance and its implications, in India, within the 1985-1986 (Bhatnagar, 1971).
theoretical framework of neoliberalism. This article uses sec- Another important watershed in the postindependence
ondary data, collected from primary and secondary sources educational development of India is the NPE, which was for-
to understand the trajectory of policy changes. mulated in 1986 by Indian government. The NPE reiterated
the issues of equality of educational opportunity and free and
compulsory education for all children up to 14 years. The
Elementary Education in India NPE emphasized three important aspects with regard to ele-
(1947-1990) mentary education. They are as follows:
After independence in 1947, Indian government chose not to
reverse British colonial education policy, specifically with •• Universal access and enrollment,
regard to elementary education. In spite of much debate on •• Universal retention of children up to 14 years of age,
compulsory education for all, it was never made a legally and
binding provision in Indian Constitution, but was included in •• A substantial improvement in quality of education to
the Directive Principles of State Policy2 in the constitution. enable all children to achieve essential levels of
According to Pathak (2002), the postindependence educa- learning.
tional program was nationalist in nature with two main
However, the Nonformal Education (NFE)3 was made
components: part of this policy document for the first time. It also insisted
that NFE can result in provision of education comparable in
i. Attaching great importance to modernity, forecasting an
image of industrially advanced modern state having a
quality with formal schooling in developing the skills of chil-
scientific and rational paradigm of overall development, dren and achieve essential levels of learning. The NFE which
and was an alternative and parallel education model compared
ii. Focusing more on national integration overriding all local with formal schooling was justified, as its essential charac-
identities and regional differences and moving towards teristics contain organizational flexibility, relevance of cur-
realizing our shared Indianness and strengthening the riculum, diversity in learning activities to relate them to
centrality of the newly emerged nation-state. (p. 95) learners’ needs, and decentralization of management (GOI,
1998). NPE once again reiterated the Kothari Commission
Thus, looking closely at all the postindependence agendas (1966) proposal of increase in public expenditure on educa-
of education, such as the Radhakrishnan Commission (1949; tion to 6% of the national income. In spite of various com-
GOI, 1962), the Kothari Commission (GOI, 1966), or the missions and reports insisting on increased public finance for
National Policy on Education (NPE, 1986; GOI, 1998), they education, the government was not able to reach this target.
all had science and technology on their scheme as the para- The number of primary schools increased from 2.15 lakhs
mount goal of education. in 1950-1951 to 5.6 lakhs in 1990-1991; the corresponding
The Kothari Commission (1966) was entrusted with the increase in upper primary schools was from 0.14 to 1.55
task of making a survey of the entire field of educational lakhs (Table 1). Even though, such an increase is not corre-
development, reviewing the country’s national development, sponding with the rise of population and school-going chil-
and, finally, to advise the government on the national pattern dren, it did bring about a major transformation considering
of education on the principles and policies to be adopted for the level of illiteracy and schooling system at the time of
the development of education in the country. The commis- independence. Also, this period witnessed a gradual increase
sion felt that one of the important social objectives of educa- in the educational funding, even though it was not sufficient
tion is to equalize opportunity, enabling the backward or for universal quality education.
underprivileged classes and individuals to use education as a In real terms, the public expenditure on education has
lever for improvement of their conditions (GOI, 1966). The increased from Rs. 114.4 crores in 1950-1951 to Rs. 15,044.2
Venkatanarayanan 3
Table 1. Literacy Rate and Number of Elementary Schools

(1951-1991). Educaon Expenditure as % of GDP
Literacy rate (%) Number of schools 4.5
3.93
4
Year Persons Males Females Primary Upper primary 3.5 2.98
3
1951 18.33 27.16 8.86 2,15,036 14,576 2.5 2.11
2
1961 28.31 40.40 15.34 3,51,530 55,915 1.48
1.5
1971 34.45 45.95 21.97 4,17,473 93,665 1 0.64
1981 43.56 56.37 29.75 5,03,763 1,22,377 0.5
1991 52.21 64.13 39.29 5,66,744 1,55,926 0
1951-1952 1960-1961 1970-1971 1980-1981 1989-1990
Source. Government of India (2000). Expenditure as % of GDP
crores in 1989-1990. But, this growth in public expenditure Figure 1. Share of education in GDP (%; 1950-1990).
on education was not able to keep in tune with increase in Source. Ministry of Human Resource Development(MHRD; 2011).
population and number of students. The period of the 1950s Note. GDP = gross domestic product.
was a period of rapid growth in total expenditure on educa-
tion. This was also the period immediately after indepen-
Table 2. Expenditure on Education in the 5-Year Plans (1951-
dence, which increased the pressure on the governing class 1990).
to make India completely literate. The period of the 1960s
was also a very favorable period for education, as in many % of total plan % share of elementary
developing and developed countries of the world. The global Five-year expenditure on education in total plan
plan period education expenditure on education
disappointment with education due to worldwide unemploy-
ment crisis during the 1970s has caused a great setback on 1951-1956 7.86 56
the expenditure on education. As human resource develop- 1956-1961 5.83 35
ment became an emerging area during the 1980s and educa- 1961-1966 6.87 34
tion was considered to be an important component of it, 1966-1974 5.17 30
expenditure on education during the 1980s was at reasonably 1974-1979 3.27 35
high growth rate (Tilak, 2003). 1980-1985 2.70 30
In spite of many recommendations for increase in educa- 1985-1990 3.55 34
tional finance, the government starting with 0.64% of gross Source.Tilak (2003, p. 20), Planning Commission (2001, 2008).
domestic product (GDP) in 1950-1951 was able to reach
only 3.93% in 1990. During the 1950s, the percentage of
GDP share on education hovered around 1% only. But, dur- Table 3. Government and Nongovernment Sector Contribution
ing the 1960s and 1970s, it has increased and stagnated to Educational Finance (%).
around 2%. This is the period when the Kothari Commission Sector 1950-1951 1960-1961 1970-1971 1980-1981
recommended for 6% share of the national income for educa-
tion. In the 1980s, it has shown improvement and reached Government 68 74.5 81.3 85
around 3%, but compared with the increase in student popu- Nongovernment 32 19.5 18.7 15
lation and demand for educational resources during this Source. Tilak (1989, p. 452).
period, the increase was very minimal (Figure 1).
Five-year plans are an important instrument of devel-
opment strategy adopted by the Indian government after education in the 5-year plans has declined gradually over
independence. Expenditure on education in the 5-year the years, from 7.9% in the first 5-year plan to 3.55% in
plan has shown a rapid increase since the inception of the the seventh 5-year plan. The global unemployment crisis
first 5-year plan. The first 5-year plan invested Rs. 153 during the 1970s has moved the state toward reduced pri-
crores on education. The expenditure rose to Rs. 8,540 ority for education. The expenditure started rising back in
crores by seventh 5-year plan. Expenditure on education the mid-1980s but has not reached back to its previous
was increasing rapidly during the first three planning peri- levels (Table 2). The state played the important role in
ods at cumulative annual rate of 11.7% or 2.2 times the financing education during this period. Even though pri-
rate of the national income (Gounden, 1967). But when vate players participated in the education sector, the major
we look at the percentage of expenditure on education to financial contribution came from the state (Table 3). The
the total plan expenditure, it started reducing from third welfare state principles were followed giving more roles
5-year plan substantially. The relative importance given to for the state in social sectors.
4 SAGE Open
Thus, after independence, there was a considerable effort that out of 78 countries that were implementing IMF-guided
from the state to improve the status of education. But these structural adjustment reforms, 91% had put a constraint on
efforts failed to keep in touch with the needs of the growing government expenditure, 83% had reduced the budget defi-
population. In spite of the Kothari Commission and other cits, and 65% followed a policy of wage restraint. It has fur-
committees recommending increased spending on education, ther noted a strong association between reduction in social
the government was not able to meet its commitment for sector expenditures and social indicators.
increased spending. The share of money allotted to education Thus, reducing the public debt and stabilizing the econ-
has increased manifold, but the share of education in GDP omy were the main objectives of India liberalizing its econ-
has not risen to meet the demands of quality universal ele- omy in 1991. This path toward reducing the fiscal deficit has
mentary education of growing population. Even though ele- resulted in pruning down the expenditure in social sectors
mentary education shared a major part of resource allotted, (which includes education). These measures in a longer run
the overall share of education in the budget does not seem to have affected the development and growth of social sectors
increase keeping in tune with increased demands of the pop- by curtailing its new infrastructure and other resources.
ulation. But from the above data, we can infer a consistent
effort by the state to give more shares of resources to educa- Expenditure on Social Sectors After
tional development.
1990
India’s track record on social development expenditure has
Economic Liberalization in 1991 been poor considering the huge inequality and poverty among
After independence, India adopted a policy of “Mixed its population. Dreze and Sen (1995) remarked that India’s
Economy,” which, within the framework of a multiparty social development indicators in 1991 (when economic
democracy, allowed the private sector to play an important reforms were launched) were lower than in several East and
role in economic decision making and also ensured proper Southeast Asian countries. Curtailing fiscal deficit being the
state intervention to accelerate growth and fair distribution central component of neoliberal program, the Indian govern-
due to the growth (Chandrasekhar & Ghosh, 2000, p. XI). ment proactively curtailed the development-oriented expen-
During 1991, India openly accepted the economic liberaliza- diture in social sector after the 1990s. The expenditure by
tion program and opened up the economy for private players General Government (Central and State combined) on social
officially accepting the neoliberal ideology. Neoliberalism as services has not increased substantially during the period
a theoretical framework of political and economic practices after adoption of economic liberalization program in 1990.
put forward that human well-being can be advanced by liber- The total expenditure by General Government has
ating individual entrepreneurial freedoms and skills, within increased from 20.3% in 1990-1991 to only 24% in 2011-
an institutional framework characterized by strong private 2012. Probing within the expenditure on social services, we
property rights, free market, and free trade. Such institutional find the education and health being neglected as their share
framework has to be created and sustained by the state. on expenditure has not increased with reference to increasing
The economic situation was so precarious at the beginning of population and existing backwardness. The expenditure on
the 1980s; the Indian government had to turn to the International other social services has increased considerably from 5.4%
Monetary Fund (IMF) for loans, and in response to its condi- in 1990-1991 to 8% in 2011-2012. The share of education
tionalities, it had to initiate several deregulation measures. The expenditure has increased only from 10.4% in 1990-1991 to
neoliberal program that was adopted in 1991 had the primary 11.4% in 2011-2012. The share of health expenditure has just
task to reduce the fiscal deficit,4 which led to the economic crisis moved 0.1% upward during the two-decade period (Table 4).
in 1991. Thus, the important components of economic liberal- The state expenditure in social sector in India is a crucial
ization program adopted in 1991, the stabilization and structural domain as large population is still dependent on the state-
adjustment were aimed at reducing the fiscal deficit. The gov- sponsored health and education in India. In spite of the over-
ernment set the target of reducing the fiscal deficit from its all positive growth of economy, the above table shows a
record high of 8.3% of GDP to a targeted 3% to 4% of GDP over declining or stagnating trend in social sector expenditure in
a period of time (Chandrasekhar & Ghosh, 2000). India. This trend is worrying as it will have a direct impact on
The reduction of fiscal deficits is an inalienable compo- the vulnerable groups in a longer run.
nent normally included in the conditionality of Structural
Adjustment Program (SAP)5 and consequently government Constitutional Guarantee of Education
expenditures have to be cut to meet the targets for reducing
fiscal deficits. There are a number of studies that have
and Its Development
pointed out the declining trend in social sector expenditures. In spite of various attempts made to provide free and com-
UNICEF’s Adjustment with a Human Face (Cornia, Richard, pulsory education in India, both before and after indepen-
& Frances, 1987) was the first major study of SAPs to point dence, the materialization and implementation of those acts
out its impact on the vulnerable. This study has also shown have never been a successful one. For implementing such
Venkatanarayanan 5
Table 4. Total Expenditure by General Government (Central India, 1993) held that the right to basic education is implied
and State Combined) on Social Services (% of Total Expenditure; by the fundamental right to life (Article 21) when read in
1990-2012). conjunction with the directive principle on education (Article
Social services 41). The Court held that the parameters of the right must be
understood in the context of the Directive Principles of State
Year Total Education Health Others Policy, including Article 45, which provides that the state is
1990-1991 20.3 10.4 4.5 5.4 to make an effort to provide, within a period of 10 years from
1995-1996 21.6 10.7 4.7 6.3 the commencement of the Constitution, free and compulsory
2000-2001 22.1 11.3 4.7 6.2 education for all children under the age of 14 (Kumar, 2006).
2001-2002 21.4 10.6 4.4 6.4 The Supreme Court also stated in this judgment, “In this con-
2002-2003 20.6 10.3 4.5 5.8 text we feel constrained to say that the allocation of available
2003-2004 19.3 9.5 4.3 5.5 funds in India discloses an inversion of priorities” (Supreme
2004-2005 19.9 9.7 4.3 5.9 Court of India, 1993; p. 52). Following the Supreme Court
2005-2006 21.1 10.0 4.7 6.3 judgment bringing the elementary education within the pur-
2006-2007 21.6 10.5 4.8 6.2 view of fundamental rights, the union government made
2007-2008 22.4 9.8 4.8 7.8 effort and constituted the Muhi Ram Saikia (1997) Committee
2008-2009 23.8 10.1 4.6 9 to consider the implications of making elementary education
2009-2010 24.1 10.6 4.8 8.7 a fundamental right. Some of the important recommenda-
2010-2011 24.7 11.4 4.7 8.6 tions of the Saikia Committee are as follows:
2011-2012 24 11.4 4.6 8
Source. Economic Survey Reports, 2002-2003, 2005-2006, 2006-2007, •• An amendment to the Constitution making the right to
2010-2011, 2011-2012, 2012-2013, and 2013-2014; Ministry of Finance, free elementary education up to 14 years of age a fun-
Government of India. damental right. The provision of free elementary edu-
cation, according to the committee, includes
acts successfully, allocation of appropriate funds at right exemption from tuition fee, provision of free text-
time happens to be an important factor. But, the financial books for all primary school children and girls up to
aspect was always being ignored by the political class, pri- upper primary level, and provision of essential statio-
oritizing other areas (Naik, 1982). The Acharya Ramamurti nery to all children in primary classes.
Committee (GOI, 1990) for review of NPE 1986, constituted •• The committee recommended that the mid-day meal
by the Union Government, had strongly advocated that early program be continued, and provision of other incen-
childhood care and education of the children in the 0 to 6 age tives such as free school uniforms, cash incentives,
group must be made a fundamental right. A rough estimate of scholarships, and so on, could be left to the discretion
the financial requirement for this purpose was also given for of the states subject to “economic capacities and pri-
the first time in the country (Ramamurti, 1990). The govern- orities” of the respective state governments.
ment, shortly after announcing its New Economic Policy in •• It has also recommended the provision of minimum
July 1991, set up yet another committee called the Janardhana infrastructure and teachers to all schools as envisaged
Reddy Committee under the auspices of Central Advisory under the Operation Blackboard Program.
Board of Education (CABE), to look into the feasibility of
implementing the Acharya Ramamurti Committee Report. Nevertheless, the committee’s recommendations did not
But the CABE Committee Report (GOI, 1992) rejected the propose for a central legislation making elementary educa-
recommendation to make early childhood care and education tion “compulsory,” but it suggested that the states could
a fundamental right for the 0 to 6 age group. either amend existing laws or enact fresh legislation in this
In Mohini Jain case in 1992, the Supreme Court observed regard. But the committee did suggest that the governments
that the directive principles cannot be isolated from the fun- should be required to provide accessible schooling facilities
damental rights guaranteed under Part III of the Constitution. to all, and parents should treat it as their fundamental duty to
The two are supplementary to each other, and the state is send their children to schools. Following this report, the GOI
under constitutional mandate to create conditions, in which introduced the Eighty-Third Constitutional Amendment Bill
all could enjoy the fundamental rights guaranteed to indi- in Parliament in 1997 to make the right to education for all
viduals, under Part III of the Constitution. It further opined children from 6 to 14 years of age a fundamental right.
that, without making right to education under Article 41 of After 8 years of the Eighty-Sixth Amendment to Indian
the Constitution a reality, the fundamental rights under Constitution, the Right of Children to Free and Compulsory
Chapter III shall remain beyond the reach of the large major- Education Act or Right to Education Act (RTE) was passed
ity, which is illiterate (Godbole, 2001). Furthermore, the by the Indian Parliament on August 4, 2009. According to the
Supreme Court of India in its landmark judgment in Unni GOI, this act serves as a building block to ensure that every
Krishnan, J.P., v. State of A.P. and Others (Supreme Court of child has his or her right (as an entitlement) to get a quality
6 SAGE Open
elementary education, and that the state, with the help of groups, improving the teaching–learning processes, textbook
families and communities, fulfills this obligation. This act and curriculum reforms, and so on. However, the regional
demands the private educational institutions to reserve 25% spread of projects that were externally funded was skewed in
seats for children from the weaker sections of society. The favor of educationally developed states, ignoring the educa-
Center and the States have agreed to share the financial bur- tionally poor states such as Bihar (Bashir, 2000). The educa-
den in the ratio of 55:45. The Center has approved an outlay tion department takes the lead role in education expenditure,
of Rs. 19,000 crores in 2010-2011. The school management but other departments do spent a substantial amount for educa-
committee or the local authority will identify the dropouts or tional infrastructure and other developments. Out of the total
out-of-school children aged above 6 and admit them in budget expenditure on education, the expenditure on the rev-
classes appropriate to their age after giving special training. enue account6 is very high compared with the expenditure on
Thus, the state has not achieved its target set in Article 45 capital account.7
of the Indian Constitution and has also not implemented vari- The share of expenditure on GDP is one of the important
ous recommendations by various committees from the time indicators showing the priority of government in showing
of independence to provide quality universal education. But considerable improvement in educational development of its
education being enshrined in constitution as a fundamental population. On the recommendation of Education
right recently, the state has more responsibility in providing Commission (GOI, 1966), the GOI quantitatively fixed a tar-
adequate resources to fulfill this right. get of investing 6% of the national income in education. But
looking at the expenditures on education over the years, in
spite of big improvement from 0.64% of GDP in 1950-1951
Educational Finance After 1991 to 3.93% of GDP in 1989-1990, the trend did not continue
In spite of India’s commitment toward “Education of All” positively after 1990. By 2010-2011, we are still hovering
being an important national goal from the time of indepen- around 4% of GDP only (Figure 2). According to Human
dence, the realization of this goal has always been a distant Development Report 2001, India ranked 104th in share of
target. India intermittently reaffirmed the Kothari public expenditure in national income, among the 143 coun-
Commission (1968) suggestion that we should spend at least tries for which such data are available. There are a large
6% of our GDP on education, without any concrete action number of countries that spend more than 8% of national
plan toward achieving that goal. It made a commitment to income on education. Some of the countries, which are
provide adequate funds to achieve “Education for All” by poorer than India, spend more than 4% of national income on
2000 at the World Summit on Education at Jomtien in 1990. education.
And again in 1992, the resolve was repeated at the Nine There are still more than 8 million children who have
Country Summit on Education at New Delhi. In 2000, the never entered or dropped out of school for various reasons
General Assembly of the United Nations adopted eight according to the GOI (Table 5). The rapid privatization and
Millennium Development Goals (MDGs), which include slowly reducing government-funded education are some of
achieving the universal primary education—“to ensure that, the important reasons for huge number of the poor being left
by 2015, children everywhere, boys and girls alike, will be out of the educational participation in India. After 2000 only,
able to complete a full course of primary schooling” (United there was a conscious effort on the part of the state to increase
Nations, 2000). the educational finance in 5-year plans (Table 6). These mea-
The period of the 1990s, after the initiation of economic sures have been carried depending on the external funding
liberalization program, posed a severe financial crisis for the sources in the domain of education. But this demands more
states in India as the transfer of funds from the union govern- increase in educational funding to compensate the reduced
ment underwent a structural change during this period. The spending all these years.
social sector expenditure has always been a soft target under To assess the financial requirements for operationalizing
such crisis. The fiscal policies of the union government have the proposed constitutional guarantee of free and compul-
forced many states to reconsider their priorities in spending sory education, the GOI constituted the Tapas Majumdar
and forced them toward decreasing their social sector expen- Committee in 1997, which submitted its report in January
ditures after 1990 (Jha et al., 2008; 146). The main reason 1999. This report estimated the financial requirements, in
attributed for the increase in union government’s expenditure addition to the prevailing public expenditure on elementary
on elementary education during the 1990s was the sanc- education, over a 10-year period (from 1998-1999 to 2007-
tioned and institutionalized external borrowing after the gov- 2008) for universalizing elementary education in the country
ernment started adopting the policy of economic liberalization by 2007-2008. The Committee estimated an additional
in 1991. investment of Rs. 1,37,600 crores to be made over a 10-year
The projects that were undertaken from external borrowing period to bring all out-of-school children into the regular
mainly during the 1990s, with a small beginning in mid-1980s, schooling system and enable them to complete the elemen-
focused their attention on various subsectors of elementary tary stage of education (Table 7). This requires an average
education such as access and retention of disadvantaged investment of Rs. 14,000 crores a year. Conversely, the
Venkatanarayanan 7
4.5
4.05 4.14 3.95 4.05
4 3.84 3.8 3.72 3.85
3.62 3.56 3.56 3.53 3.68 3.66
3.49 3.4 3.48 3.4 3.56
3.5 3.26 3.34
3
2.5
2
1.5
1
0.5
0
0
1
91 91
92 92
93 93
94 94
95 9 5
96 96
97 97
98 98
99 99
00 00
01 01
02 02
03 03
04 04
05 05
06 0 6
07 07
08 08
09 09
10 10
01
1 9 -1 9
1 9 -1 9
1 9 -1 9
1 9 -1 9
1 9 -1 9
1 9 -1 9
1 9 -1 9
1 9 -1 9
1 9 -1 9
2 0 -2 0
2 0 -2 0
2 0 -2 0
2 0 -2 0
2 0 -2 0
2 0 -2 0
2 0 -2 0
2 0 -2 0
2 0 -2 0
2 0 -2 0
2 0 -2 0
-2
90
19
Figure 2. Share of education on GDP (%; 1990-2011).

Source. Ministry of Human Resource Development(MHRD; 2011, 2014).
Note. GDP = gross domestic product.
Table 5. Out-of-School Children. by the government to achieve the goal of universal elemen-
tary education. But the real allocation by the governments
% of out-of-school children
has been far less from the recommendations of the Tapas
Number of children to total population in the
Year (in millions) age group 6 to 14 Majumdar Committee. Some of the other major recommen-
dations of the Tapas Majumdar Committee are as follows:
2005-2006 13.45 6.94
2009-2010 8.15 4.28 •• Universal participation of children in the age group of
Source. National University of Educational Planning and Administration
6 to 14 years in school education.
(NUEPA; 2014). •• Student–teacher ratio of 30:1 at elementary level.
•• Two teachers in primary school and three teachers and
a headmaster in upper primary school.
Table 6. Expenditure on Education in the 5-Year Plans (From
•• Two classrooms in primary school and three class-
1990).
rooms in upper primary schools.
% of total plan % share of elementary •• Creation of maintenance fund through community
Five-year expenditure education in total plan participation.
plan period on education expenditure on education •• Free uniforms, mid-day meals, and scholarship for all
1992-1997 4.9 47 the children coming from the below poverty line
1997-2002 6.2 57.1 families.
2002-2007 7.7 48
2007-2012 19.4 43 In spite of various lucid recommendations of the Tapas
Majumdar Committee on the financial allocation to achieve
Source.Tilak (2003, p. 20), Planning Commission (2002, 2008, 2013).
universal elementary education, the government has till now
not crossed 4% of GNP for education.
Financial Memorandum to the Constitution (Ninety-Third) The B. G. Kher Committee in 1948 observed with regard
Amendment Bill, 2001, estimated a sum of Rs. 98,000 crores to pupil–teacher ratio (PTR) that 1:30 will be the ideal one
over a 10-year period to implement the fundamental right to and the state should endeavor to achieve this as a soon as
education for children in the age group of 6 to 14 years. This possible. The Tapas Majumdar Committee in 1999 again
amount is 30% less than the amount estimated by the Tapas insisted on maintaining a PTR of 1:30 both at primary and
Majumdar Committee (Sadgopal, 2003). upper primary levels. In spite of the insistence by various
According to the Tapas Majumdar Committee recommen- committees regarding the PTR, the Sarva Siksha Abhiyan
dation, an additional amount of Rs. 2,04,342.7 crores is (SSA)8 norms specify it at 1:40 at both primary and upper
required by the year 2008 in addition to the allotted resource primary levels.
8 SAGE Open
Table 7. Additional Financial Requirement for Universal Elementary Education by 2007-2008—Estimated by the Tapas Majumdar
Committee, 1999 (2008 prices; in Rs. Crores).
Year Recurring Nonrecurring Total

1998-1999 110.6 0 110.6
1999-2000 1,713 2,284 3,997
2000-2001 4,896 3,672 8,568
2001-2002 7,608 5,072 12,680
2002-2003 11,143.5 5,244 16,387.5
2003-2004 13,820 5,528 19,348
2004-2005 19,136 5,888 25,024
2005-2006 24,576 6,144 30,720
2006-2007 32,260 6,452 38,712
2007-2008 46,134.3 2,661.4 48,795.6
Total 1,61,397.4 42,945.4 2,04,342.7
Source.Jha, Das, Mohanty, and Jha (2008, p. 198).
the union governments support for the salary of teachers

recruited under SSA has been declining over the years con-
siderably. It was 85% during 9th plan, 75% during 10th plan,
and 50% during the eleventh 5-year plan. According to
Govinda (2005), the consequences of such a drastic cut in the
finances of SSA
first hides the real magnitude of the problem to be addressed in

the long run, in financial terms; second, distorts the shape of the
budget by projecting teacher salary, which should in the normal
course be part of the recurring expenditure, unlikely to be
absorbed as non-plan component as they are on contract basis;
and third, this places the evolution and strengthening of a
professional community of teachers in a serious jeopardy. (p. 11)
Figure 3. Pupil–teacher ratio (PTR), 1950-1951 to 2010-2011.
Source. Government of India (GOI; 2000) and MHRD (2014). But this trend of recruitment has gained a global accep-
tance under the neoliberal ideology, as the Education for All
(EFA) Global Monitoring Report (2005) points out that a
Eligibility, qualification, and salary of teachers play a number of African and South Asian countries have appointed
very important role in providing quality elementary educa- Para teachers at lower salaries instead of regular, qualified
tion for all as envisaged by the constitutional amendment for teachers at primary and upper primary levels (UNESCO,
right to education for all. After a long drawn debate on the 2004, Chapter 4). It further states, “the long term sustainabil-
desired qualification of teachers, it was agreed consensually ity of the policy of maintaining two groups of teachers with
that the teacher at elementary stage should necessarily pos- blatantly unequal status is questionable. Senegalese experi-
sess at least 12 years of education followed by 2 years of ence suggests that the eventual absorption of Para teachers
professional training in pedagogy (Govinda & Josephine, within regular government service may be difficult to avoid”
2004). The Tapas Majumdar Committee in 1999 also insisted (UNESCO, 2004, p. 167).
on recruiting professionally qualified and trained teachers The PTR has increased from 24 in 1950-1951 to 43 in
instead of undertrained/underqualified contract or Para 2010-2011 at primary level. The ratio has also increased at
teachers in the primary and upper primary stages of school- upper primary level (Figure 3). This indicated the underre-
ing. It further recommended giving Rs. 5,000 per month for cruitment of teachers in pace with increasing population. The
primary school teachers and Rs. 6,000 per month for upper dwindling education expenditure by the State and the Center
primary school teachers as salary. But SSA provides wide toward the formal schooling is the reason for such an increase
scope for recruitment of Para teachers or teachers on contract in teacher–student ratio at primary and upper primary levels.
basis on short-term basis and at very low salaries. As SSA Thus, the provisions of SSA, with regard to teachers’ qualifi-
norms authorize the state government regarding salary and cation, student–teacher ratio, and financial obligation to
qualification of teachers, there has been large scale recruit- meet the needs of quality education, contravened the recom-
ment of Para teachers at lower salaries (Tilak, 2004). Also mendations and suggestions by various committees,
Venkatanarayanan 9
following the path of neoliberalism. The SSA has promised their children to far off “better” schools. They can as well
that “every child will be in school by January 2003,” but in provide the hidden cultural resources such as camps and
reality, more than 35 million children are out of school. after-school programs to learn dance, music, computer
Furthermore, a probe by Outlook magazine showed that SSA classes, and so on, which give their children a set of cultural
is being implemented without infrastructure, required num- resources. Thus, more affluent parents are more likely to
ber of teachers, underqualified teachers, and disinterested have the informal knowledge and skill—what Bourdieu
children (Wadhwa, 2004). (1984) would call the habitus, through which they will be
able to use marketized forms to their own benefit. The match
Education Market and Private between the historically grounded habitus expected in
schools and in its actors and those of more affluent parents,
Schooling combined with the material resources available to more
The onset of economic liberalization has politically extended affluent parents, usually leads to a successful conversion of
the scope of markets even in the fields such as education and economic and social capital into cultural capital (Bourdieu,
health to a larger extent. The neoliberal ideology insists that 1996).
the invisible hand of the market will inexorably lead to better As far as India is concerned, after the economic liberaliza-
schools and quality education. “The market” acts as a meta- tion and its consequent external borrowings from World
phor rather than an explicit guide for action. They are consid- Bank and other international donors, there is a consistent
ered to be natural and neutral, and governed by effort and underhand pressure on the state to constrict its financial
merit. And those who are opposing them are also opposing expenditures and create a favorable environment for reduc-
effort and merit. Markets are insulated from political inter- ing the fiscal deficit. Health and education were not spared
ference and bureaucratic procedures. As the markets are from this. The reduced funding for government-aided educa-
grounded in the rational choices of individual actors, they tion automatically leads to deterioration in quality, which
along with the guarantee of rewards for effort and merit pro- indirectly promotes the mushrooming of private schools to
duce neutral and positive results (Mentor, Muschamp, satisfy the disgruntled parents. The private sector has
Nicholls, Ozga, & Pollard, 1997). But on the other side of the expanded in states of India that have inefficient government
argument, scholars observe that the educational principles schooling system. The private schooling is considered not
and values are compromised, when the commercial issues favorable for girls and gender-biased. The lower caste stu-
become important in curriculum design and resource alloca- dents, who have much lower enrollment rates than upper
tion. The private and profit-oriented schools are increasingly caste students, are less likely to be enrolled in fee-paying
looking for ways to attract “motivated” parents with “able” private schools (Tilak & Sudarshan, 2000). In spite of that,
children. Thus, they will enhance their academic competitive demand for private schools is on the rise, as they offer
position among the local schools. This indicates a subtle shift English as a subject for its students.
from working to fulfill the students’ academic needs to The UNICEF survey comparing the facilities, both in
aggressively move toward student performance. Thus, the terms of physical infrastructure and human resources,
schools will start shifting their resources more toward mar- between government and private schools concluded that pri-
keting and public relations away from the students’ real vate unaided schools account for a major share of enrolled
needs (Ball, Bowe, & Gewirtz, 1994). children in the states of Uttar Pradesh, Bihar, and Rajasthan.
The neoliberal ideology, which bases its roots on classical More number of urban unaided schools have pucca (brick
liberalism, differs from it in some crucial aspects. These dif- building) structure compared with government schools. The
ferences are absolutely vital in understanding the politics of problem of one classroom is largely confined to government
education and the transformations education is currently schools, and private unaided schools have more space com-
undergoing. Mark Olssen (1996) elucidated that the classical pared with government schools. The well-paid, permanently
liberalism represents a negative conception of state power in employed government teachers do not turn up to teaching
which the individual is an object to be freed from the inter- regularly. The school working days are much lower in gov-
ventions of the state, but neoliberalism is to be understood in ernment schools compared with private schools. The above
a positive conception of the state’s role in creating the appro- survey further showed that the share of private aided schools
priate market by providing the conditions, laws, and institu- in total enrollment is lower in rural areas but significantly
tions necessary for its operation. In classical liberalism, the higher in urban areas (Mehrotra, 2006).
individual is characterized as having an autonomous human There has been steady increase in the private unaided pri-
nature and can practice freedom. In neoliberalism, the state mary schools from the 1980s, but after 1990, we can see quick
seeks to create an individual who is an enterprising and com- progress in private schools and a slow decline of government
petitive entrepreneur. primary schools. Even though the local body schools do not
In a marketized society, the rich parents have more flexi- show any decline, the government schools show a sharp
ble hours and can visit multiple schools to get admission for decline of around 8% from the 1970s. The private unaided
their children. They have modern transport facilities to drive schools have increased substantially and reached 7.1% in
10 SAGE Open
Table 8. Percentage of Primary Schools Under Different Table 10. Infrastructure in Elementary Schools.
Managements 1973-1974 to 2010-2011.
Facilities 2005-2006 2008-2009 2010-2011
Year Government Private aided Private unaided
% schools with drinking water 83.1 87.8 92.7
1973-1974 93.34 5.01 1.64 % schools with girl’s toilet 37.4 53.6 60.3
1978-1979 93.99 4.42 1.59 % schools with boundary wall 50.7 51 55.4
1986-1987 93.08 4.34 2.57 % schools with ramp 17.1 40.4 50.4
1993-1994 92.10 3.78 4.12 % schools with computer 10.7 14.1 18.7
1996-1997 91.66 3.34 5.00
1999-2000 91.13 3.17 5.70 Source. National University of Educational Planning and Administration
(NUEPA; 2014).
2001-2002 90.92 3.07 6.01
2002-2003 88.75 3.63 7.63
2003-2004 90.68 2.85 6.48 The growth of private schooling could be the reason why,
2004-2005 90.20 2.55 7.24 despite declining per capita public education expenditure in sev-
2005-2006 89.11 3.09 7.79 eral Indian states, and falling share of basic education expendi-
2009-2010 81.9 6.2 8.6 ture in state domestic product, these states have shown improved
2010-2011 80.8 8.6 7.1
educational outcome indicators in the 1990s (Kingdon, 2007).
Source. Ministry of Human Resource Development (MHRD; 2014). According to Pratham’s (2006) survey, private school students
of Grades 2 to 5 were 37.4% more likely than government
school students to be able to read a text of Grade 2 standard.
Table 9. Percentage of Upper Primary Schools Under Different They were also 50% more likely to be able to solve a division
Managements, 1973-1974 to 2011-2012. problem (3 digits divided by 1 digit). Thus, according to various
Year Government Private aided Private unaided studies, the private school students generally outperform their
public school counterparts in learning achievement.
1973-1974 77.57 17.75 4.67 Although the state-funded education system still domi-
1978-1979 78.44 16.90 4.66 nates the elementary schools in India, the significant growth
1986-1987 75.12 16.30 8.58 of private schools after 1990 has been an important phenom-
1993-1994 79.45 9.53 11.02 enon (Muralidharan & Kremer, 2006). The privatization of
1996-1997 75.54 10.25 14.20
elementary schools could be ascribed to household socioeco-
1997-1998 74.51 9.72 15.87
nomic condition, poorer infrastructural facilities at neighbor-
1998-1999 74.04 9.20 16.76
hood and at government schools. Thus, the government’s
1999-2000 73.12 9.05 17.83
reduced priority toward providing sufficient resources to
2001-2002 76.41 7.81 15.77
2002-2003 72.56 7.37 20.07
elementary education has indirectly increased the privatiza-
2003-2004 72.31 6.68 21.01 tion of schools at elementary level.
2004-2005 72.20 6.41 21.39 Even though government reports show an increasing trend
2005-2006 71.97 6.14 21.88 in educational infrastructure facilities, still a major section of
2009-2010 69.7 10.6 16.1 the school-going children are denied basic infrastructure
2011-2012 70.5 9.5 16.9 facilities. According to the National University of Educational
Planning and Administration (NUEPA; 2014), around 40% of
Source. Ministry of Human Resource Development (MHRD; 2014). schools do not have girl’s toilet, and around 72% of schools
do not have computer facilities (Table 10). The above data
2010-2011 from 2.57% in 1986-1987 (Table 8). The increase show a need for more funding from the state to fulfill the
in private unaided schools could be attributed to some extent basic infrastructure facilities. According to Dhar (2012),
to the decreasing expenditure on education by the Center and almost 95% of schools do not have the basic infrastructure
States together. It is also due to reprioritization of government facilities as stipulated by RTE. The dwindling finances in the
expenditure more toward nonformal learning than toward time of neoliberalism, and the rapid privatization at every
investing in strengthening formal schooling in India. level of education, give weak hope for fulfilling the educa-
The role of private unaided schools in upper primary level tional needs of poorer socioeconomic groups in a long run.
shows a sharper increasing trend than the primary schools.
The private unaided schools have increased from 8.58% in
The Road Ahead
1986-1987 to around 17% in 2011-2012. The same period
shows a decrease in government schools from 75.12% in The economic crisis during the 1980s has pushed many
1986-1987 to 70.5% in 2011-2012 (Table 9). The reasons developing and underdeveloped countries to pursue the path
could be the same policy changes attributed to privatization of economic liberalization. Even though India slowly started
of primary schools as seen above. liberalizing its economy before the 1990s, it officially took
Venkatanarayanan 11
the path of economic liberalization in 1991. One of the prime fulfilling the fundamental right of providing universal
objectives of neoliberal policies being the reduction of spi- quality education. But the policy of economic liberaliza-
raling fiscal deficit, the state started reducing its expenditure tion and external borrowing of funding with conditionali-
to control it. When it comes to curtailing expenditure, the ties attached to it has constricted the government spending
public goods being the soft target received an immediate on education sector to a large extent. This reduction of
attention. Education and health being public goods started government expenditure has resulted in mushrooming of
showing a negative growth trend, as an impact of economic private elementary schools in large numbers. According to
liberalization policies after the 1990s, as their expenditure Ramakumar (2008),
started to stagnate/decline visibly.
The economic liberalization policy being adopted by the The fiscal crisis of the Centre adversely affected the transfer of
Indian Government from the 1990s has brought in various statutory funds to the States; the transfers from the Centre to the
political and structural changes in the domain of elementary States declined in the 1990s. In addition, the deregulation of
education. It can be clearly gleaned from the allocation of interest rates after 1991 led to a sharp rise in the interest rates
that States had to pay, which led to a sharp rise in the debt burden
financial resources to education that the priority accorded
of States. In sum, the finances of the States also entered into a
has been declining or stagnating under liberal economic pol- period of crisis. (p. 78)
icy regime. This clearly shows the reducing priority of public
expenditure in education sector, in spite of various commis-
The above data show the slow withdrawal of state in pro-
sions prescribing 6% share of GDP for education to univer-
viding quality elementary education for poorer socioeco-
salize quality education.
nomic groups in India after the implementation of neoliberal
The CABE Committee’s report on Free and Compulsory
economic policies. The reduced or stagnating public expen-
Education Bill 2005 has recommended that even if the public
diture is reflected in the school infrastructure and other facil-
spending on education was raised to 6% by 2006-2007, and
ities provided in government schools. The decrease in
half of it was earmarked for elementary education alone, fur-
government elementary schools and subsequent increase in
ther allotment of around 1% was needed in excess for ele-
private elementary schools after the 1990s once again reaf-
mentary education alone. The additional financial
firm the state’s commitment toward neoliberal political
implications for the 6-year period 2006-2012 amount to an
economy in creating an appropriate market for the private
average of Rs. 72,678 crores per annum or about 1.5% of
players in the domain of education. The state’s positive inter-
GDP (Jha et al., 2008). Such an increased amount of spend-
vention role before the implementation of neoliberalism has
ing as envisaged by various committees is important not only
taken a backseat, which is reflected in the state’s financial
for universalizing the elementary education but also for commitment toward educational development in India. Thus,
strengthening the government schooling system, which has the economic liberalization policy has not benefited all sec-
deteriorated over a period of time due to lack of sufficient tions of the society in getting quality education from the
financial support. state. The contemporary neoliberal political economy further
Since independence, the successive governments have not creates a wider gap and inequality among the citizens, which
shown interest to make the necessary investments in educa- needs further inquiry.
tion sector. Instead of reaching the level of investment of 6%
of GDP by 1986, as advocated by the Kothari Commission, Acknowledgment
the state was spending only around 4% of GDP till now.
I sincerely thank the anonymous peer reviewers for their critical and
Within this, only half of the investment goes to the elemen- positive comments, which helped me in shaping and strengthening
tary education sector, the remaining being for secondary, this article.
higher, and technical sectors of education and some other
special schemes. This has resulted in ever-widening cumula- Declaration of Conflicting Interests
tive gap of investment in education implying lesser school The author(s) declared no potential conflicts of interest with respect
infrastructure facilities. The recommendations of the Tapas to the research, authorship, and/or publication of this article.
Majumdar Committee were for an additional investment in
the elementary education sector for the next 10 years to fill Funding
up this cumulative gap. The norms under SSA have been in The author(s) received no financial support for the research and/or
contravention with various norms being recommended by authorship of this article.
committees for providing quality elementary education for
all. This clearly shows the lack of commitment on the part of Notes
government to provide quality education to all. 1. Neoliberalism refers to a political ideology that espouses eco-
The recent constitutional changes and the resulting nomic liberalism as a means of promoting economic develop-
“The Right of Children to Free and Compulsory Education ment and securing political liberty.
Act or Right to Education Act (RTE), 2009,” have intensi- 2. It is nonjusticiable and merely acts as a suggestion to the gov-
fied the demand for allocating more resources toward ernment to implement it.
12 SAGE Open
3. The major characteristic feature of nonformal education (NFE) Government of India. (1966). Education and national
in India is its flexibility in terms of organization, timing and development.New Delhi, India: Ministry of Education.
duration of teaching and learning, clientele groups, age group Government of India. (1990). Report of the Committee for Review of
of learners, contents, methodology of instruction, and evalua- National Policy on Education 1986.New Delhi, India: Ministry
tion procedure. of Human Resource Development.
4. The deficit occurs when a government’s total expenditures Government of India. (1992). National Policy on Education,
exceed the revenue that it generates. 1986—With modifications undertaken in 1992.New Delhi,
5. Structural adjustments are the policy changes implemented by India: Ministry of Human Resource Development.
the International Monetary Fund (IMF) and the World Bank Government of India. (1998). National policy on education–
(the Bretton Woods Institutions) in developing countries. 1986.New Delhi, India: Ministry of Human Resource
These policy changes are conditions (conditionalities) for get- Development.
ting new loans from the IMF or the World Bank, or for obtain- Government of India. (2000). Education for All.New Delhi, India:
ing lower interest rates on existing loans. Conditionalities are Department of Education.
implemented to ensure that the money lent will be spent in Government of India. (2007). Indian Constitution. New Delhi,
accordance with the overall goals of the loan. The Structural India: Ministry of Law and Justice.
Adjustment Programs (SAPs) are created with the goal of Govinda, R. (2005, September). Elementary education: Progress
reducing the borrowing country’s fiscal imbalances. and challenges. Yojana, 49, 9-14.
6. Revenue account expenditure refers to the kind of expenditure Govinda, R., & Josephine, Y. (2004). Para teachers in India: A
that does not affect the assets or liabilities of the government review. Paris, France: NIEPA & International Institute for
such as salaries, interest payments, and so on. Educational planning.
7. Capital account expenditure refers to the kind of expenditure Harvey, D. (2005). A brief history of neoliberalism. New York, NY:
that either increases assets or reduces liabilities of the govern- OxfordUniversity Press.
ment such as building a new factory, repayment of loan, and so Jha, P., Das, S., Mohanty, S. S., & Jha, N. K. (2008). Public provision-
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flagship program for achievement of Universalization of Oxford Review of Economic Policy, 23, 168-195.
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Author Biography
Social Scientist, 36(9/10), 48-94. S. Venkatanarayanan has been awarded his PhD in 2012 from
Ramamurti, A. (1990). Report of the committee for the review of Jawaharlal Nehru University in New Delhi. His areas of interest
national policy on education 1986. New Delhi: Government include political theory, political economy, and public policy analy-
of India. sis. Earlier he was teaching in the Department of Political Science
Sadgopal, A. (2003). Education for too few. Frontline, 20(24). & International Relations in The College of Arts and Social
Saikia, M. R. (1997). Report of the committee of state education Sciences, Eritrea (North-East Africa). At present, he works with
ministers on implications of the proposal to make elementary Indian Council of Social Science Research, New Delhi.
Globalization on the Ground
Globalization
on the Ground
Media and the
Transformation of Culture,
Class, and Gender in India
Steve Derné
Copyright © Steve Derné, 2008
All rights reserved. No part of this book may be reproduced or utilized in any form
or by any means, electronic or mechanical, including photocopying, recording or by
any information storage or retrieval system, without permission in writing from the
publisher.
First published in 2008 by
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Library of Congress Cataloging-in-Publication Data
Derné, Steve, 1960–
Globalization on the ground: media and the transformation of culture, class, and
gender in India/by Steve Derné.
p. cm.
Includes bibliographical references and index.
1. Middle class men—India—Attitudes. 2. Middle class—India—Attitudes.
3. Middle class—India—Social conditions. 4. Sociology, Urban—India. I. Title
HT690.I4D47 305.38'96220954—dc22 2008 2008015636
ISBN: 978-81-7829-826-9 (HB)
The SAGE Team: Elina Majumdar, Maneet Singh, Amrita Saha and
Trinankur Banerjee
Contents
Preface 7
Acknowledgements 13
1. Introduction 15
2. Culture, Structure, and Psyche: Understanding
Globalization and Cultural Change 58
3. Making the Transnational Middle Class in India 90
4. Cultural Continuities and Active Resistance:
Gender and the Making of the Indian Middle Class 127
5. Changing Cultural Orientations 162
6. Globalizing Gender Culture 173
7. Conclusion 200
Epilogue: The Effects of Economic and

Cultural Changes, 2001–07 212
References 219
Index 232
About the Author 244
Preface
When I returned in 2001 to the Indian city of Banaras for the first time
in 14 years, I immediately saw signs of the city’s increasing global con-
nections. In 1987, making a long-distance phone call meant trudging
out to the telegraph office, where one often had to sleep for hours on the
hard chairs waiting for a trunk line to Delhi. By 2001, some parts of the
city had Internet service on every block and connections were usually
trouble-free. At Rs 30 an hour (less than US$ 1), an Internet connection
was cheaper than a moderately priced movie ticket, and not much more
than the cost of an air letter to the USA. An hour’s connection via Internet
in 2001 was cheaper than a short long-distance phone call to Delhi had
been just 14 years earlier.
Only one Hollywood film played in Banaras over the 15 months that
I lived in the city from 1986 to 1987, and it failed to attract large audi-
ences to the minor, dusty, back-alley theatre in which it ran for just a
week. Fourteen years later, Hollywood films played in well-appointed
theatres in runs that sometimes lasted for months.
In 1986 and 1987, state-run television programming still enjoyed a
monopoly. During those years, the serialized rendering of the religious
epic Ramayana was just beginning to attract substantial audiences to
television. The men whom I interviewed in 1987 described watching the
serial with reverence befitting a sacred performance. By 2001, dozens of
satellite channels, from CNN to MTV, had become available. While, in
1987, even rich Banarasis could not access cable television, by 2001 even
some non-élites were cable subscribers.
In 1987, India was such a closed economy that only Indian-made
watches, cars, and scooters were readily available. By 2001, economic lib-
eralization, which had begun in earnest in 1991, produced shelves stocked
8 GLOBALIZATION ON THE GROUND
with Barbie dolls, cellular phones, and global brands (like Nike, Benetton,
and DKNY). On city streets, Western icons like tennis players Anna
Kournikova and Pete Sampras, pop singer Mariah Carey, and many
others appeared on posters celebrating Western products like Reebok shoes.
Certainly, Banaras had always encountered transnational flows. By
1987, tourists from around the world had long been visiting the sacred
city along the river Ganges, music shops sold pirated Madonna and
Michael Jackson cassette tapes, and pirated videocassettes of Hollywood
films were available to the tiny number of people with VCRs. But the
volume and speed of transnational connections increased markedly over
the course of the 1990s.
When I returned to the smaller north Indian city of Dehra Dun in
2001, a decade after having worked there in 1991, I encountered a
media and consumer landscape transformed by economic and cultural
globalization. In 1991, the Indian government intensified a policy of
economic liberalization which stimulated the availability of Western con-
sumer goods, American films, and satellite television in India. But when
I worked there in the summer of 1991, Dehra Dun had yet to experience
these changes. While the number of middle class homes with television
sets was expanding, televisions were still relatively rare and state-run pro-
gramming on a single channel was the only offering. The biggest televi-
sion hits were still the weekly Hindi film and the program devoted to
Hindi film song-and-dance scenes.
Just a decade later, dozens of cable channels were available and nearly
70 percent of the non-élite, non-English speaking men whom I inter-
viewed had at least some access to cable television. In the summer of
1991, no Hollywood film played in Dehra Dun’s cinema halls, but over
several months in 2001 the main offerings at the city’s two most élite
theatres were Hollywood action films and films aiming at softcore titilla-
tion that had been dubbed in Hindi. As in Banaras, cellular phones,
Mariah Carey CDs, and Benetton clothing were being sold in Dehra
Dun’s shops.
Certainly, Dehra Dun, like Banaras, has a long history of global con-
nections. For decades, the city’s Doon School has attracted élite students,
some of whom travel abroad. Even in 1991, posters of Samantha Fox, a
Western sex symbol, were commonly sold in Dehra Dun’s streets. But
the volume and speed of global movements increased to unprecedented
levels over the decade of the 1990s.
PREFACE 9
The studies I conducted in Dehra Dun and Banaras prior to the eco-
nomic and cultural globalization of the early 1990s showed that most
Indian men shared a collectivist orientation which was reflected in a
commitment to joint-family living and arranged marriages. The upper-
caste, non-élite middle class men whom I interviewed in Banaras in 1987
voiced nearly universal support for arranged marriages, joint-family
living, restrictions on women’s movements outside the home, and male
dominance within the home. Most of these men saw male dominance in
the home as a distinctive feature of Indianness. Most also embraced a
collectivist orientation which focuses on following the guidance of elders
in a family. The mostly young and unmarried male filmgoers whom I
interviewed in Dehra Dun in 1991 voiced similar support for arranged
marriages and restrictions on women’s movement outside the home, even
as they watched Hindi films which celebrated love marriages and women’s
freedom of movement. These men explicitly distanced themselves from
cinematic celebrations of love, saying that such love would be unwork-
able in the joint-family situation, and praised heroines’ commitment to
family duties.
As I continued to present this research at academic conferences through
the late 1990s, I began to hear of changes in Indian men’s gender ar-
rangements and cultural orientations. Conference-goers (often of élite
background in India) spoke of the increasing number of Indians who
reject arranged marriages and limitations on women. “Everything has
changed,” one global Indian academic told me at the Conference on
South Asia in Madison, Wisconsin, USA, in 1999. “Everyone has
Barbie, now,” she added as an illustration of these changes. Articles in
the English-language press (which are, of course, directed at the 5
percent of Indians who speak English) asserted that such changes were
taking place. These articles described men as doing housework and
childcare (Chandran 1996: 70), work which the men whom I inter-
viewed between 1986 and 1991 saw as an exclusively female task. The
English-language press described men as comfortable with women bosses
(ibid.: 70), while the men whom I had earlier interviewed were strongly
attached to male dominance in the workforce. Men and women were
said to accept dating as a common part of life even for young teens (Jain
1998), while the men whom I interviewed saw dating as impossible.
Some in the mainstream press attributed such new attitudes to
the greater availability of Hollywood productions on cable (Jain 1998),
in theatres (Ray 1998), and to changes in Hindi films, which increas-

ingly celebrated urban Westernized lifestyles and consumerism, and which
showed heroines in clothing styles (like miniskirts) which in previous
eras would have been rejected as excessively revealing (Chakravarti 1998;
Chopra 1997). Indeed, Hollywood productions and the Hindi films
that are influenced by them have celebrated consumerism, individual-
ism, and greater freedom for women, which would be unacceptable by
older standards of morality.
Yet, it was difficult to estimate from press reports the extent to which
gender culture was being transformed by new possibilities presented by
the opportunities associated with economic flows and contacts with
transnational people and media. The English-language press relies on a
readership of educated, high-income people who are most able to take
advantage of the opportunities associated with globalization. Each time
I had previously returned to South Asia (in 1987 after five years away,
and in 1991 after four years away), many reports of change that I had
heard from media reports or from Indian friends based in the USA
had proved to be exaggerated. It seemed significant to me that the same
English-language press that spoke of change also described simultaneous
and widespread resistance to cultural change—especially where it related
to women’s modesty and family orientation.
When Valentine’s Day celebrations grew in popularity because of cable
music channels such as MTV and Channel V, supporters of both the
Congress and the Bharatiya Janata Party (BJP) vowed to ban such
celebrations. Bal Thackeray, chief of the Shiv Sena, asserted that such
celebrations were part of an exhibitionist American culture, while activ-
ists from the Congress party burned Valentine’s Day cards, claiming that
the cards were opposed to Indian traditions. In Delhi, activists attacked
couples in hotels and restaurants, forcing them to flee, while in Kanpur
they blackened the faces of hundreds of couples who were celebrating
Valentine’s Day (India Abroad 2000a). In Kanpur, the youth wing of the
BJP succeeded in persuading the principal of a Kanpur college to bar
college women from wearing jeans and skirts, an action which was pro-
tested so violently by some women that the college was forced to close
for two days (India Abroad 2000b). Protesters have also targeted a Xena
episode and the Hindi films Fire and Hey Ram as well as other media
productions for allegedly defaming Hinduism (India Abroad 1998, 2000b;
Tsering 1999).
PREFACE 11
As scholars recognized the transformed cultural landscape associated

with accelerating transnational global flows of people, media, and
economy, they began to suggest that people’s lives would be transformed
as well. Arjun Appadurai (1996) famously suggested that people around
the world can now imagine a wider set of possible lives than they ever
did before, disrupting people’s sense of the givenness of their culture.
Yet, we have surprisingly few studies that actually try to examine how
people’s culture and social life have been transformed by globalization.
In 2001, I gathered data to try to understand how economic and cul-
tural globalization had transformed cultural understandings, class and
gender systems, and family institutions in India by replicating a study I
had conducted there a decade before. It was the year 1991 in which eco-
nomic liberalization and cultural globalization began in earnest in India,
but when I did my research in the summer of 1991, the landscape of the
city of Dehra Dun in which I worked had not yet been radically trans-
formed. So, in 1991, none of the men I interviewed had cable television
or had seen a Hollywood film, while a decade later a solid majority
enjoyed transnational media products. The ability to make a systematic
comparison between men’s gender culture in these two eras offers a unique
opportunity to understand the effects of globalization.
My main aim is to examine the effects of globalization on common
Indians. I soon discovered that while the lives of élite Indians were trans-
formed by the new opportunities associated with economic liberaliza-
tion, the lives of non-élite Indians were characterized more by continuities
than by changes. This suggested that the effects of purely cultural global-
ization were relatively minor as long as economic and family structures
were not simultaneously transformed. By examining changes associated
with globalization in India, this book ends up improving our under-
standing of the causal dynamics associated with cultural change. In
the process, I try to offer an improved sociological theory of culture. In
addition, the book tries to better understand the operations of class and
gender dynamics in a global environment.
The empirical basis of this study is the comparison of interviews
with 32 young film-going men that I conducted in 2001 with 22 similar
interviews conducted in 1991, as well as with my more extensive
research conducted in 1987. I believe that many studies of transforma-
tion in India have overlooked men like those I interviewed—men of
modest means and limited English-language skills who have more
comforts than the poor but who have not been able to take off with the
global economy. This book begins with a comparison of my 1991 and
2001 interviews, but draws on other research to describe the effects of
globalization on more affluent Indians and on women, and to confirm
that my findings have a broader applicability among people of the class I
interviewed, a class I will come to call the “locally-oriented middle class.”
Readers will be interested in how Indians have responded to ongoing
globalization in the years since I conducted this study. The main contri-
bution of this book, though, is to use a comparison of changes in one
locality to improve our theoretical understanding of the effects of global-
ization more generally. This book argues that globalization’s primary
effects on people occur through new economic opportunities rather than
through new cultural imaginations, and suggests, then, that further changes
would follow from continuing changes in economic opportunities.
Acknowledgements
I wrote this book in 2002 while I was a Rockefeller fellow at the Office
of Women’s Research at the University of Hawaii Manoa. The University
of Hawaii offered just the environment to complete this work. The soft
breeze and smell of flowers pervaded my life as I analyzed the 2001 data.
My biweekly hula lessons infused me with the energy to write this book.
The Women’s Studies Program, Department of Sociology, International
Cultural Studies Program, South Asian Studies Program, and East-West
Center welcomed me, and offered opportunities to present and discuss
my work. I am especially grateful to Guobin Yang and Geoff White for
discussions about cultural theory; S. Charusheela, Kalindi Vora, Monica
Ghosh, Arindam Chakrabarti, and Miriam Sharma for discussions about
changes in India, and Kathy Ferguson, Meda Chesney-Lind, Terry
Greenfield, Ruth Gordon, and Mire Koikari for discussions of feminist
theory. I thank them, as well, for making the University of Hawaii such
a congenial place to work.
I am grateful to the Rockefeller Foundation for the fellowship that
allowed me to write this book. Noreen Young and Konrad Ng were ca-
pable administrators who facilitated my work in Hawaii. David Gordon,
Doug Harke, and Goria Dingledein helped facilitate the fellowship from
my home base. I am grateful to SUNY–Geneseo for granting me leave
to study as a Rockefeller fellow in Spring 2002, and for granting me
sabbatical to conduct research in India in Spring 2001. A number of
small grants from the College Senate helped pay for important costs
associated with my work.
I am grateful to the American Institute of Indian Studies for support-
ing both my 1991 and 2001 research in India. Thanks also go to the
US Department of Education for Foreign-language and Area Studies
fellowships that supported my study of Hindi and for a Fulbright-Hays

Doctoral Dissertation fellowship that first gave me the opportunity to
work in India. I am grateful to the Department of Sociology at Delhi
University for acting as my academic affiliation in 1986–87, 1991, and
2001. André Béteille (1986–87), Veena Das (in 1991) and Radhika
Chopra (in 2001) were helpful sponsors. The comments of department
members at a seminar I gave in 2001 were especially useful.
The research could not have been completed without the research
assistance of Narendra Sethi, who helped me conduct and translate
interviews in Dehra Dun in 2001 (as he did in 1991). His sensitivity was
essential in recruiting many respondents, and his gentle voice seemed to
provide respondents assurance and comfort. His keen knowledge of Hindi
and English made translation of interviews a breeze.
I have been helped by audiences at meetings of the Conference
on South Asia, the American Anthropological Association, and the
American Sociological Association. I am especially grateful to Claude
Fischer, editor of Contexts, for comments that helped me revise a related
essay. The comments helped me revise this book, as well.
I am grateful for the substantial contribution by the SAGE team
especially my Commissioning Editor, Elina Majumdar, and the Editor in
charge of the project, Maneet Singh. Thanks are also due to Diya Dutta,
Kajal Basu, Amrita Saha and Trinankur Banerjee for their help in the
production process. The SAGE team helped with translations, caught
factual errors, and suggested the need for important clarifications.
Thanks to Arlie Hochschild, Ann Swidler, and Gerald Berreman for
their consistent support over the years. Their work is always important,
their encouragement is always there, and they always offer important
commentary that has helped me rethink my claims.
I thank Lisa Jadwin and our cats Bert, Ernie, and Elmo for putting up
with my absences from Rochester, New York, USA.
1 Introduction
Trained at Harvard Business School, Gurcharan Das, former CEO of

Procter & Gamble India, is today a consultant for both government and
industry in India. An ardent advocate of globalization, Das (2001: 213)
refers to the middle of 1991 as the “golden summer” when the Indian
economy finally opened to international trade and the global economy.
Following Rajiv Gandhi’s assassination by a terrorist bomb in May 1991,
a wave of sympathy carried the Congress party to victory. P.V. Narasimha
Rao, the new prime minister, inherited a financial crisis that strength-
ened the hand of the advocates of globalization. With only two weeks of
foreign exchange reserves left in July 1991, the Rao government accepted
a structural adjustment loan from the International Monetary Fund
(IMF), the terms of which demanded a devaluation of the Indian
rupee, the lifting of most restrictions on foreign investment, and the
elimination of licensing requirements in all but a few industries. For a
businessman like Das (ibid.: xii), this “golden summer” opened up the
economy, giving rise to a “rebirth of dreams” which had been buried
in the “licensing blues” of the 1960s and the 1970s. Das regards “the
economic revolution that Narasimha Rao launched in the middle of 1991”
as perhaps “more important than the political revolution that Jawaharlal
Nehru initiated in 1947” (ibid.: 213).
Like Das, many commentators—especially those allied with global
capitalism—optimistically see India as transformed by globalization. To
those who benefit from the global economy, the changes are obvious:
international business has been able to access new markets and exploit
new productive resources; Indians who can market products or skills in
the global economy have improved their fortunes; and, catering to those
with resources and skills, local media highlight the changing lives of those
who can take advantage of new global opportunities. But what have been
the changes on the ground in India, especially for ordinary Indians in the
urban areas?
During Das’s “golden summer of 1991”, I was interviewing non-élite
young men in and around theatres in a small city in north India. Few of
those men had any access to television, and even when they did, it was
only to the single state-run channel. None of these men had seen even
one Hollywood film because of foreign exchange restrictions which kept
foreign films out of India. While many of these men had the education
and the opportunities that offered them more hope than to most young
Indians, they nonetheless often felt that they had only limited economic
options. The men whom I interviewed remained attached to family ar-
rangements that oppressed women and offered young men and women
little choice about whom to marry.
To understand how cultural and economic globalization affected the
lives of ordinary Indians like these young men, I returned in 2001 to
replicate the study I had conducted a decade earlier. The economic liber-
alization of that “golden summer” had radically transformed the media
landscape, providing young people with new cultural resources. With the
end of foreign exchange restrictions, Hollywood films flooded Indian
theatres. With the end of regulations, cable television operators expanded
to meet the needs of advertisers who wanted to reach the newly-available
market. In 1991, while none of the men whom I had interviewed had
seen cable television or Hollywood films, by 2001 more than two-thirds
of them sought out global media. But, like 95 percent of Indians, the men
whom I interviewed spoke little English and lacked skills that they could
market in the international economy. Often college-educated, these men
continued to face limited economic opportunities, even as the global
media were increasing expectations and desires for consumption.
While scholars are beginning to understand how globalization has
transformed the lives of affluent English-speaking Indians, who have skills
that allow them to hitch their dreams to the global economy, we know
surprisingly little about how globalization has changed the lives of ordi-
nary middle class Indians for whom globalization has not radically trans-
formed opportunity. This book identifies the changes, but also the striking
continuities, in the lives of non-élite, urban Indian men.
In some ways culture, class, family, and gender were significantly
transformed, but in many ways transformations were only modest and
INTRODUCTION 17
continuities were of the greatest significance. Globalization has increased

consumerism and layered new meanings on top of the old ones that
Indians continue to use to understand class and gender hierarchies. But
despite new media messages about family life, globalization has failed to
transform the gender and family arrangements of the ordinary middle
class Indians who have been unable to take off with the global economy.
While my focus is on non-élite urban Indian men, I try to provide a
fuller picture of globalization in India by also considering the much larger
effect of globalization on the lives of affluent urban Indians. Using sec-
ondary literature, I am also able to identify some of the changes in urban
women’s lives. I regret that because of limited data, this book has little to
say about changes in the lives of the poor or those living in rural India.
This book has several aims, its fundamental one being to better un-
derstand the processes of globalization by examining its actual effects on
the ground in urban India.
Second, by considering continuities and transformations resulting from
economic and cultural globalization, the book aims to improve our theo-
retical understanding of culture. The revolutions, transformations, and
continuities in culture, class, family, and gender in urban India in the
face of globalization suggest that purely cultural changes have little effect
on social arrangements. Cultural globalization in India has had only lim-
ited effects on social practices because the underlying social structural
realities that root these practices have not been simultaneously trans-
formed. The book argues that because of the fit that tends to develop
between social structures, cultural understandings, and the psychologi-
cal orientations that support them, purely cultural changes have quite
modest effects. The book shows that institutional arrangements ground
cultural understandings and psychological processes, suggesting that theo-
rists like Appadurai are wrong to argue that new transnational cultural
flows have made culture “less what Pierre Bourdieu would have called a
habitus (a tacit realm of reproducible practices and dispositions) and
more an arena for conscious choice, justification, and representation”
(Appadurai 1996: 44). Studying the effects of globalization, then, pro-
vides a key understanding of the relationships between social structures,
cultural meanings, and psychological orientations.
Third, the book contributes to a better understanding of gender by
focusing on the persistence of gender arrangements in the face of global-
ization. I use “gender arrangements” to refer to societal arrangements
that structure gender and family relations. The division of labor and
authority in families and differential access to jobs and to public spaces
are aspects of gender arrangements that privilege men over women, while
the organization of households into nuclear units or more complex,
multi-generational units and the means of organizing marriages are other
aspects of gender arrangements. The book pays particular attention to
gender culture—the ideas that support gender arrangements. The fact
that Indian men tend to embrace aspects of cultural globalization that
are consistent with their existing relations of power over women shows
that the powerful can selectively use the cultural resources offered by
globalization to increase their own power.
Fourth, the book shows how the dynamics of today’s global economy
requires a rethinking of theories of class structure. Affluent Indians who
travel abroad and own automobiles see themselves as middle class, but so
do Indians who own scooters and televisions and can barely dream of the
lifestyles of the affluent. Following Weber, this book assumes that the
middle classes are engaged in a project of constructing themselves in
opposition to their class ‘others’—usually through demonstrating dis-
cernment, taste, or moral uprightness (Liechty 2003). Today, affluent
Indians call themselves middle class: they see themselves on a global stage
placed between the Indian poor and the consuming classes in Europe
and North America. Many ordinary Indians of more modest means also
see themselves as a middle class that exists between the Indian élite who
drive automobiles and travel abroad and poor Indians who live on their
day-to-day earnings.
The book explores how the cultural projects of the affluent and the
ordinary middle classes are influenced by globalization. The affluent
advertise their cosmopolitanism in opposition to the vulgar tastes and
gender arrangements of the poorer Indians. Ordinary middle class
Indians focus both on their cosmopolitan discernment to define them-
selves in opposition to the poor and on an Indianness rooted in sexual
propriety and appropriate gender arrangements to define themselves in
opposition to the “vulgar” Indian élite.
The book proposes that classes today are (a) based more on shared
patterns of consumption than on shared positions in a productive sys-
tem; (b) more and more rooted in transnational contexts rather than
bounded by nations; and (c) are often defined as much by class-specific
gender relations as by their positioning within economic structures.
INTRODUCTION 19
By exploring transformations and continuities in India since Das’s

“golden summer of 1991”, this book seeks to better understand the
processes of globalization and the role of culture in social change. In
addition, the book focuses on how globalization may force us to rethink
our understandings of class and gender.
I begin this introduction by identifying the fundamental features of
globalization today, describing what we know about its sources and con-
sequences, and identifying important questions that press for answers.
I then identify the macrodynamics of globalization that have affected
India since 1991. I next describe the two studies in Dehra Dun, India,
which are the modest empirical bases that launch my analysis, and also
identify the global dynamics that transformed the cultural landscape of
Dehra Dun in the interim between the studies. I identify my study’s
focus on non-élite middle class Indians as an important feature of my
work that should improve our understanding of globalization. I end the
introduction with a brief outline of the book.
Globalization
Today, the speed and volume at which people, products, media, infor-
mation, production, and financing move around the globe continues to
increase beyond previous levels. It appears that this globalization is
drastically transforming society, culture, economics, and politics around
the world. Understanding globalization’s consequences has, therefore,
become a pressing concern for sociologists, anthropologists, economists,
and other social scientists.
Social theorists seem to agree that all areas of contemporary social life
are increasingly characterized by global movements and interconnect-
edness. To identify the distinctive features of globalization, I want to
highlight both the content and character of global movements and inter-
connections. What are the aspects of social life that are increasingly
interconnected and moving? What are the distinctive ways in which these
movements occur today?
In their influential discussion of globalization, Held et al. highlight
the “worldwide interconnectedness in all aspects of contemporary social
life” (emphasis mine) (Held et al. 1999: 2). Arjun Appadurai’s (1996:
27) influential discussion of the global flows of “ethnoscapes”,
“mediascapes”, “technoscapes”, “financescapes”, and “ideoscapes” pro-

vides a useful reference for identifying those movements and connec-
tions that seem most consequential for this study.
First, the world is increasingly characterized by transnational flows of
people. Appadurai uses the term “ethnoscape” to describe the “landscape
of persons who constitute the shifting world in which we live: tourists,
immigrants, refugees, guest workers, and other moving groups and
individuals” (Appadurai 1996: 27). It constitutes an essential feature of
today’s world. The stays of migrants are increasingly intermittent rather
than permanent as many continue to move back and forth across
borders (Cohen 1997: 54, as excerpted in Beynon and Dunkerley 2000a:
52–53). More and more Indians move to Europe, North America,
or Southeast Asia and continue to return to India. As a result of these
movements, more and more Indians know (or know of ) someone who
moves in cosmopolitan worlds.
Mass media heightens ordinary Indians’ awareness of transnational
movements. Advertising billboards trumpet computer courses that will
help young men find jobs in the USA’s Silicon Valley (Shurmer-Smith
2000: 172). Since 1991, a string of hit Hindi films has focused on Non-
Resident Indians (NRIs) living abroad.1 Even when the focus is on Indi-
ans in India, Hindi films today routinely portray Indians’ easy movement
beyond India’s borders: heroes and heroines honeymoon in Europe and
the business or education of heroes takes them abroad.2 In some films
that aim at the urban poor, the focalizing male character tries to find a
way to find opportunities overseas.3 Thus, as Appadurai reports, “more
persons and groups deal with the realities of having to move or the
fantasies of wanting to move” (Appadurai 1996: 34). More and more
Indians think “not just of moving to Poona or Madras but of moving to
Dubai and Houston” (ibid.: 28).
Second, the world is increasingly characterized by cultural globalization,
the transnational flow of mass media around the world. Appadurai calls
attention to the “closely related landscapes of images” represented by
“mediascapes and ideoscapes” (Appadurai 1996: 35). Many social scientists
focus especially on how transnational movements of television and film
generate the desire for cultural icons, imagery, and styles developed in the
Western mass media (Corcoran 1998: 3–7, cited by Richards and French
2000: 15). In India today, Hollywood movies, which have been dubbed
into Hindi, play in Indian theatres throughout the country. American
INTRODUCTION 21
soap operas, MTV, and satellite news channels like CNN are an important
part of cable television programming in India. Partly as a result of this,
ideas such as “freedom” and “modernity” flow from place to place.
Appadurai argues that along with “contacts with, news of, and rumors
about” local people who travel to faraway worlds, the growth of
transnational mass mediation has meant that “more persons in more parts
of the world consider a wider set of possible lives than they ever did before”
(Appadurai 1996: 53). One of the main themes of this book is to consider
whether and how these expanded resources of the imagination have
transformed family institutions, gender practices, leisure choices, social
styles, and cultural understandings in India.
Third, aspects of the economy including products, production, and
financing increasingly flow around the world. Appadurai’s discussion of
“financescapes” and “technoscapes” refers to this aspect of economic
globalization. Production increasingly flows to sites of comparative
advantage: for instance, computer firms situate themselves in Hyderabad
because of the availability of relatively cheap computer programmers.
Finance capital increasingly flows across borders in pursuit of profit, so
much so that much investment in India is driven by the needs of capital
in the USA. Goods produced all over the world find their way to local
markets, and Indians can purchase cellular phones, automobiles, and
Barbie dolls produced elsewhere. This book considers how Indians
respond to the availability of new goods in ways that shape class and
gender identity and how the ways in which different Indians are situated
within the new structural possibilities, presented by economic globaliza-
tion, in turn shape the stances individuals take toward the new imagined
possibilities presented by cultural globalization.
My focus on economic globalization, cultural globalization, and the
global movements of people selectively highlights aspects of globaliza-
tion that are important for this study. There are, of course, many other
elements of globalization. Like the demographic, cultural, and economic
factors that are my focus here, governmental functions have also become
increasingly global. With trade associations like the North American Free
Trade Agreement (NAFTA), regional governments like the European
Union (EU), and international trade regulators like the World Trade
Organization (WTO), more and more of the regulatory functions previ-
ously held by national governments are being shifted to global entities.
As nations come to depend on “help” from the IMF and the World Bank
at crucial times, these international agencies play an increasing role in

shaping the policies and priorities of national governments, as happened
with India’s foreign exchange crisis in 1991. Thus, the globalization of
government functions has been a key factor that has contributed to India’s
economic liberalization since 1991.
Despite the apparent increase in transnational cultural flows, some
scholars emphasize that there have long been global movements of people,
media, and economic systems. Held et al. (1996) are right to argue that
today’s globalization crosses regions and continents, but even this does
not define the uniqueness of the global interconnections in recent de-
cades. With exploration and colonization, Europeans moved around the
world. The slave trade and indenture moved Africans to the Americas
and Indians to the Pacific Islands. Emigration from the colonies to
Britain transformed the UK’s ethnic landscape.
The economic system of capitalism introduced by the colonizers
often transformed economic systems in the places they colonized. In the
colonial era, the introduction of consumer goods like mass-produced
shoes and textiles transformed local economies by ruining indigenous
industries. Goods have long moved around the world: at teatime during
the British Empire, the English added sugar grown in Fiji by indentured
laborers from India to tea made from leaves grown in Sri Lanka by labor-
ers from India. The English language and the books and movies that use
it have long had a worldwide influence.
What, then, is substantively different about the global movements
in the last decades of the 20th century? First, today’s globalization is
characterized by what Held et al. refer to as a “speeding up of global inter-
actions and processes as the development of worldwide systems of trans-
port and communication increases the potential velocity of the global
diffusion of ideas, goods, information, capital and people” (authors’
emphasis retained) (Held et al. 1999: 15). People have always moved—
but in 1817, it took the lieutenant governor of a colonialist trading
settlement in Sumatra five months to reach his post from Falmouth (Collis
1966: 122–23). Today, one can fly non-stop from Chicago to New Delhi.
The said lieutenant governor did not hear for seven months that a
political ally had died in London (ibid.: 83). Today, the Internet and
satellite telephone connections allow realtime communication of
news around the globe. The movement of products from production to
market has been similarly speeded up.
INTRODUCTION 23
Manuel Castells (2000), Arjun Appadurai (1996) and other commen-

tators focus especially on the speed with which global finances move. “The
disposition of global capital” is “now a more mysterious, rapid and diffi-
cult landscape to follow than ever before, as currency markets, national
stock exchanges, and commodity speculations move megamonies through
national turnstiles at blinding speed” (Appadurai 1996: 34–35). For
Castells “new information and communication technologies based on
micro-electronics, telecommunications and network-oriented computer
software” “have provided the infrastructure” (Castells 2000: 52–53) of
the new economy. Castells emphasizes that while the “internationalisation
of economic activities is certainly not new,” the “technological infrastruc-
ture” that allows for “unprecedented speed and complexity in the
management of the economy” is new and is the distinctive feature of our
economic system today. David Harvey’s (1989) focus on “time-space
compression” as a feature of globalization describes the speeding up
that characterizes today’s global movement.
Second, the volume of interconnectedness has greatly increased. As
Held et al. put it, “connections across frontiers are not just occasional . . . ,
but . . . are regularized such that there is a detectable intensification
or growing magnitude of interconnectedness” (Held et al. 1999: 15,
authors’ emphasis deleted). More and more people travel from place to
place. More and more production depends on global connections, as
essential components of any product are produced at various locations
around the world. Less and less of the media that individuals consume
is produced locally. Global movement is not new, but the volume of
movement is unprecedented.
The volume and speed of global flows has intensified what Held et al.
refer to as the “deepening enmeshment of the local and global such
that the impact of distant events is magnified while even the most
local developments may come to have enormous global consequences”
(Held et al. 1999: 15, authors’ emphasis retained). When Indonesian
stocks appeared to be a good market opportunity, investment capital
poured into Indonesia with great speed and volume. When the percep-
tion of the Indonesian economy changed, global investment capital
flowed out with a rapidity and volume that devastated the local economy.
Had global finances been a smaller part of Indonesian investment, or
had the finances flowed less quickly, the disruption might have been
minimized.
Our world, then, is characterized by globalization—the increased (and

increasing) speed and volume of global movements of people, products,
media, information, production, and financing.
While this book focuses on identifying the consequences of globalization
for local systems of culture, class, gender, and family in India, it is worth
identifying briefly two of the most fundamental causes of globalization.
As already mentioned, Castells sees new technologies as vitally impor-
tant in generating the unprecedented speed and scope in the manage-
ment of the economy which allows for the easy movement of production,
financing, and products across borders. Also, of course, new technolo-
gies of air travel allow the speedy movement of people from one part of
the globe to another. Even in the 20th century, colonial administrators
in South and Southeast Asia only got leave to return to Europe once
every five years (while those in the Pacific only got leave once every six
years). Today’s often regular back-and-forth movements of NRIs between
North America or Europe and India would be unthinkable without the
technology of air travel. Satellite transmission of images and sounds is
similarly vital in allowing transnational media flows. Without satellites,
USA Today or International Herald Tribune would not reach India on
the day of their publication. Nor would images of the Super Bowl or
President Clinton’s admission of an affair with Monica Lewinsky be seen
in real time not just in the USA or India but in Laos and Fiji as well.4 As
James Clifford puts it, we now live amidst the possibilities of a “to-and-
fro made possible by modern technologies of transport, communication
and labor migration. Airplanes, telephones, tape cassettes, camcorders
and mobile job markets reduce distances and facilitate two-way traffic,
legal and illegal, between the world’s places” (Clifford 1997: 247; see
also Inda and Rosaldo 2002: 4; Talalay 2000).
Technology facilitates globalization, but the imperatives of global capi-
talism are its motivating force. Economic globalization is fundamentally
shaped by the profit motive. Corporations shift production to lower the
cost of production. Investors move capital to find the most profitable
investment. Corporations move products to reach every possible consumer.
But demographic and cultural globalizations are similarly driven by
global capital’s profit motives. Airlines seek to fill seats and drive up
demand by enticing travelers from around the world. Film studios seek to
sell their films in the largest possible number of markets. Media corpora-
tions seek to deliver the largest possible number of viewers to advertisers.
INTRODUCTION 25
Leslie Sklair focuses on the “profit-driven culture ideology of consumerism”

through which “the globalization of the capitalist system reproduces
itself ” (Sklair 2001: 6). To thrive, Sklair argues, global capitalism must
“persuade us that the meaning and value of our lives are to be found prin-
cipally in what we possess.” Global culture, then, results from transnational
capitalist efforts to shape desires and create needs, opening up new areas
for capital accumulation.
Coming to terms with the effects of globalization has, of course, been
a fundamental aim of recent scholarship. Consistent with Sklair’s ap-
proach, many scholars rightly see globalization as spreading consumerist
cultures across the globe. The transnational movement of consumerism
is often seen, in turn, as having a substantial effect on local identities
and cultures.
Consistent with the transnational media corporations’ aim of reach-
ing consumers around the world, the most fundamental effects of global-
ization is attracting more and more people to consumer lifestyles
(Mankekar 1998: 32; Thussu 2000). Based on his study on the effects of
globalization in Nepal, Mark Liechty concludes that for more and more
people around the world, “modernity is an experience, first and foremost,
of life in emerging local consumer societies, an experience tied to the
steady encroachment of global capitalism and its cultural logics into ever
more communities and ever more domains of life (Liechty 2001: 34).
While most observers agree that globalization has spread consumer-
ism around the world, the implications and extent of this transformation
are debated. At first, scholars emphasized that globalization was homog-
enizing people’s experiences and eroding identity. Some scholars argued
that as people around the world are attracted to cultural icons, styles,
and meanings generated in cosmopolitan centers, cultures have become
disconnected, disembedded or deterritorialized, rather than being closely
tied to time and place (Beynon and Dunkerley 2000b: 13; Perry 1998).
Thus when blacks in UK are attracted to the USA’s National Basketball
Association or Indians are attracted to Barbie or Britney Spears, cultural
products are disconnected from their point of origin. Globalization pulls
culture apart from place (Inda and Rosaldo 2002: 11).
Some argued that the attraction to cosmopolitan consumer styles and
icons produced by cultural globalization was becoming an important
source of identity, which is supplanting identity rooted in class or nation.
Baudrillard (1983) was among the first to theorize that consumption is
increasingly important in defining people’s consciousness and identities.

Some believe that people around the world now form communities based
on supra-national allegiances rooted in consumption. Such allegiances
are seen in global clubs supporting Manchester United in football or
celebrating pop stars like Madonna (Beynon and Dunkerley 2000b: 14;
Golding 1994, cited by Richards and French 2000: 14–15). John Beynon
and David Dunkerley offer a good summary of the point of view that
sees consumer identities as even supplanting identities rooted in nation
and class:
Transnational, transcultural aspirational clusters, based on what people would

like to be rather than what they are, come into existence as a result of com-
mercial lifestyling and are more ‘real’ to people today than the surviving
vestiges of class solidarity. Indeed, the two great traditional markers of collec-
tive identity, nation and class, are seen to be disintegrating under the
onslaught of global media. (Beynon and Dunkerley 2000b: 15)
Sociologists like Hebdige (1989: 90–91), anthropologists like Gordon

Mathews (2000: 9), and media scholars like Michael Richards (2000:
29) all suggest that “identity proffered through the market” is steadily
eroding national and class identity.
In addition to spreading styles of consumption that become a basis of
identity, cultural globalization also facilitates transnational movements
of discourses that affect people’s lives around the world. Liechty argues
that “parallel to, though largely subsumed within,” the spread of con-
sumerist materialism is a “subdiscourse or rhetoric of freedom, equality,
independence and empowerment associated with modernity” (Liechty
2001: 34). The spread of ideas like freedom, he argues, have played a
crucial role in shaping people’s sense of themselves as modern. Other
scholars emphasize the effects of the circulation of discourses on gender.
R.W. Connell (1998: 10–11) and Arjun Appadurai (1996: 45) both show,
for instance, that international media “circulate Western definitions of
authoritative masculinity” and “desirable femininity” that often serve to
extend fantasies of male dominance.
In thinking about how cultural globalization spreads consumerism,
consumer ideology, and discourses associated with freedom and male
dominance, some scholars at first theorized that globalization would
produce global cultural homogeneity. In Samoa in 1999, a recently-
graduated Danish backpacker who had been traveling around the world
INTRODUCTION 27
told me that there were two things that one would find everywhere—
McDonald’s and reggae. As Leslie Sklair shows, this is precisely the
global vision of today’s transnational corporations: “Whatever else might
change or however social systems might diverge . . . people would all agree
on one principle, namely the desirability of consuming more and more
goods and services. In the words of a senior corporate executive, respon-
sible for some of the world’s most successful brands: ‘Once television is
there, people of whatever shade, culture or origin want roughly the same
things’” (Sklair 2001: 255). Since the logic of global capitalism is to
produce unified consumer markets, it is no surprise that early accounts
of globalization feared cultural homogenization.
But most recent approaches identify several reasons why globalization
has not produced homogenization. First, the effects of globalization are
mediated by local interests and actors. Local cable operators decide how
much emphasis to give to transnational media. Local cinema hall owners
decide whether to screen Hollywood films. Local capitalists who form
alliances with transnational capital play a role in shaping production.
Local merchants decide what to stock on their shelves.
Second, transnational messages and images are interpreted locally.
Cosmopolitan cultures disconnected from their places of origin are
“reterritorialized” in particular locales (Inda and Rosaldo 2002: 12,
15–16). Beynon and Dunkerley stress “the ability of consumers to
indigenize products to serve their own cultural interest” (Beynon and
Dunkerley 2000b: 29). Describing the situation in India, Brosius and
Butcher argue that “local audiences do not necessarily identify with
global images on offer” (Brosius and Butcher 1999a: 14). So, some
Indian viewers of the television soap opera Santa Barbara might aspire
to live the lifestyle depicted on screen, while others reject such a lifestyle
as inconsistent with Indian culture. When transnational media offers
enticing, but unavailable, possibilities, the effect of cultural globaliza-
tion often leads to confusion and uncertainty (Tomlinson 1991, as
excerpted in Beynon and Dunkerley 2000a: 53–55).
Third, locals often respond to globalization by highlighting local iden-
tities. Featherstone argues that rather than producing “greater tolerance
and cosmopolitanism”, “increased cultural flows” which “increase famil-
iarity with ‘the other’” just as often lead to ‘a disturbing sense of engulf-
ment and immersion’ (Featherstone 1993: 102, as excerpted in Beynon
and Dunkerley 2000a: 100–02). People often respond to the “threat of
cultural disorder” by retreating into the “security of ethnicity”, religion

or tradition. Thus, as globalization heightens awareness of how local cul-
tures contrast with the global images presented from the outside (Richards
and French 2000), the result is sometimes a revival of local cultures,
often in the form of religious movements (Held et al. 1999: 369;
Tomlinson 1991, as excerpted in Beynon and Dunkerley 2000a: 53–
55). The efforts of Islamic groups to highlight their opposition to an
exhibitionist, consumerist American culture is most in the news today,
but similar processes are occurring among many groups around the world.
Thus, while some in India may respond to globalization by embracing
supranational identities rooted in cosmopolitan consumption, others may
respond by emphasizing distinctive national identities.
Scholars increasingly recognize that the effects of globalization are
uneven and are mediated by class and gender. People’s encounter with
global flows and connections is vitally shaped by class. On the one hand,
as Massey describes it, are those who are “doing the moving and the
communicating and who are in some way in a position of control in
relation to it—the jet-setters, the ones sending and receiving the faxes
and the e-mail, holding international conference calls, the ones distrib-
uting the films, controlling the news, organizing the investments and
the international currency transactions” (Massey 1994, as excerpted in
Beynon and Dunkerley 2000a: 58–60). Then, there are those who may
do a “lot of physical moving, but who are not ‘in charge’ of the process in
the same way.” Refugees are an example of this group. Finally, there are
those people “who are simply on the receiving end of time-space com-
pression” (Massey 1994: 58–59). Thus, some Indians caught in local
circumstances cannot afford a movie because structural adjustment has
increased the price of food, while others now watch dubbed American
films which suddenly appear at a local cinema. The voluntary rapid
movement over long distances that supposedly characterizes the con-
temporary world is strictly applicable to only a relatively few, privileged
people (Inda and Rosaldo 2002: 4; Morley 2000: 13; Tomlinson 1999:
9, as excerpted in Beynon and Dunkerley 2000a: 53–55).
While less often recognized, perhaps, gender too shapes access to
cultural globalization. Morley argues that once we take mobility as a
defining characteristic of the contemporary world, we must “pose the
question of why (and with what degrees of freedom) particular people
stay at home” (Morley 2000: 12–13). Historically, women have often
INTRODUCTION 29
been precluded from movement because of their restrictions to the home

(Wolf 1985, cited by Morley 2000: 67–68). Enloe argues that “in many
societies being feminine has been defined as sticking close to home—
masculinity, by contrast, has been the passport for travel. . . . A principal
difference between women and men in countless societies has been the
license to travel away from a place thought of as ‘home’” (Enloe 1989:
29). While recent hit Hindi films focusing on the NRI experience
show both men and women in cosmopolitan spaces, by highlighting the
threats women face in these spaces (Mankekar 1999b), they often end
up associating men with transnational movement and women with local
rootedness, a theme I explore in Chapter 6.
Just as women and men may have differential access to mobility, so
they may have differential access to transnational media flows. Abraham’s
(2001) study of low-income, college-going men and women in Bombay,
and Liechty’s (2001) study of the interactions of Nepalis with today’s
consumerist culture, show that boys and men tend to watch foreign por-
nographic videos, while girls and women do not. These films, which
are foreign imports and depict foreigners, have shaped the sexual desires
of many men, thereby impinging on women’s lives, a theme which I
explore in Chapter 6.
Of course, the fact that the experience of globalization is shaped by
class and gender does not imply that those with less access to globaliza-
tion are not influenced by it. Morley argues, for instance, that “while
many people remain local and many are ‘kept in place’ by structures of
oppression of various forms, the experience which is most truly global
is perhaps that of the experience of locality being undercut by the
penetration of global forces and networks” (Morley 2000: 14). As
Tomlinson points out, the “paradigmatic experience of global modernity
for most people . . . is that of staying in one place but experiencing the
‘displacement’ that global modernity brings to them” (Tomlinson 1999:
9, 119, 150, cited by Morley 2000: 15). Thus, even if they do not them-
selves have access to pornographic films brought in by transnational cul-
tural flows, Nepali women are probably correct in recognizing that having
watched “blue films”, men “begin to look at” women in a new and sexu-
ally threatening way, which impinges on their lives (Liechty 2001: 46).
While we have a good understanding of the nature of globalization,
the forces that generate it, and the pressures it exerts, existing scholar-
ship leaves important questions unanswered. While Appadurai may be
right that globalization may make people aware of a greater range of

possible lives, we do not know enough about how different groups of
people use these new meanings. While some scholars assert that market
identity increasingly usurps other forms of identity, it is clear that na-
tional, class, and gender identities often remain salient. The contradic-
tory and discontinuous effects of globalization pose a number of questions
that this study aims to answer.
First, what are the social and cultural factors that determine whether
globalization transforms local practices or is fiercely resisted? Why, for
instance, does a relentless celebration of love in the transnational media
and the local media influenced by it fail to move many ordinary Indians
to reject arranged marriages? Why do transnational notions of beauty
and the transnational celebration of consumerism have a much stronger
effect on ordinary Indians than other new ideas? Why has the content
of the transnational media transformed some aspects of Hindi film but
not others?
Second, how do the new possibilities introduced by transnational
cultural flows interact with national, gender, and class identities?
Gordon Mathews (2000) and others argue that supra-national, consump-
tion-based consumer affiliations are core identities, but this study
suggests that people often use the new imagined resources presented by
cultural globalization to re-envision the meaning of nation, class, and
gender. Why do certain groups embrace cosmopolitan identities while
others remain focused on local identity? Are some identities, like gender,
more resilient than others? How are transnational flows transforming,
rather than superseding, class identity?
Globalization in India
Until the 1980s, India pursued autonomous economic development with
limited global entanglements. Refusing to deal with the World Bank, India
relied on loans from the USSR to assist in developing public sector enter-
prises in infrastructure, oil exploration and refining, and other fields. Local
capitalists welcomed these developments because the state limited for-
eign competition. Foreign exchange restrictions limited imports. Licens-
ing, limitations on foreign equity stakes, the reservation of key industries
for the public sector, and tariffs and quotas all limited foreign investment.
INTRODUCTION 31
In the mid-1980s, the Rajiv Gandhi administration tentatively began

a process of economic liberalization. When increased spending and
the oil price rise associated with the 1991 Gulf War led to the crisis of
foreign exchange reserves, the Indian government, with just two weeks
of foreign exchange reserves left, turned to the IMF for a bailout.
The conditions associated with the structural adjustment loans of 1991
ended India’s path of swadeshi (self-reliance) that had been urged by
nationalist leaders like Gandhi and Nehru (see Sharma 1996; Shurmer-
Smith 2000 on these economic transformations). Seeing new opportu-
nities, the Indian élite now welcomed economic liberalization required
by the structural adjustment loan. Still, economic liberalization also
reflects the financial power of the West. As the trade secretary under US
President Ronald Reagan put it, “debt is the crowbar with which
we wrench open economies” (Shurmer-Smith 2000: 21).
In response to the IMF’s demands, the government ended licensing
for all but 18 industries, reduced the number of procedures required for
multinational investment, and increased the permitted equity stake of
multinational firms in Indian enterprises. In the summer of 1991, the
rupee was suddenly and drastically devalued and most foreign exchange
controls were lifted (see Mankekar 1999b: 744; Sharma 1996: 304–05;
Shurmer-Smith 2000: 21–25). Five years later, annual imports had more
than doubled, exports had more than tripled, and foreign capital invest-
ment had more than quintupled (Shurmer-Smith 2000: 22, 25). The
IMF, a transnational government entity, had played a key role in usher-
ing in economic globalization.
Satya Sharma describes the results of the changes that have “come
about slowly” since “around mid-1991”:
Foreign multinationals have come to India in a big way. Even fast-food

businesses have ‘discovered’ India, the second largest market in the world
after China. Kentucky Fried Chicken [and] Pizza Hut . . . are beginning
to crop up in larger centers. Pepsi and Coca-Cola, long banned from
India, are waging big advertising wars in the country. Automobile companies,
American, Japanese and European, are making inroads into India in collabo-
ration with local capitalists. In short, India has become a part of the global
capitalist economy (Sharma 1996: 301, 305).
Honda merged with Bajaj, India’s leading scooter manufacturer, and

Coca-Cola took over Thums-Up (Shurmer-Smith 2000: 25). India’s
experience with economic globalization is, in many ways, typical.

What was unique about India was that it held to the path of planning
and self-reliance longer than most poor countries—and that economic
and governmental globalization began so abruptly.
Cultural globalization followed economic liberalization, as cable
television offerings suddenly competed with state-run television and
Hollywood films competed with local Hindi films. Until 1991, Indian
television and film constituted one of the world’s most protected media
markets. State-run Doordarshan television was all that was available and
foreign exchange restrictions (and Indian tastes) effectively limited
the availability of foreign films. The deregulation and privatization of
television transformed the media landscape. Fueled by the desires of
advertisers to reach the newly-open Indian market, the number of televi-
sion channels grew exponentially from one state-run channel in 1991 to
more than 70 in 1999. In October 1991, Hong-Kong based STAR TV,
part of Rupert Murdoch’s News Corporation, introduced a package
of MTV, BBC, Prime Sports, and Star Plus (a general entertainment
program in English) into India.
Fueled especially by interest in the first Gulf War and events in the
Soviet Union in 1991, interest in cable television expanded rapidly among
the English-fluent urban élite. In October 1992, Zee TV introduced a
cable television package focusing more on Hindi-language programming,
which expanded cable viewing beyond the narrow confines of the afflu-
ent classes. The expansion of cable TV was exponential. In 1991, it reached
300,000 homes; in 1994 it reached 12 million homes; in 1999, it reached
24 million homes. Major cities today have more than 25 channels pro-
viding round-the-clock programming in English and Hindi and other
regional Indian languages.5 In addition, more and more people have tele-
visions: one readership survey estimated, for instance, that the percent-
age of the urban population with access to television increased from
9 percent in 1990 to 74 percent in 1995 (Varma 1998: 178).6 As else-
where, liberalization and deregulation of the media using the principles
of “more market” and “less state” ended up transforming the local mass
media (Hamelink 1997: 96, cited by Richards and French 2000: 15–16).
The growth of global media should be no surprise given the interests
of transnational corporations in exploiting a huge market that was just
opening. India was attractive to transnational broadcasters, who hooked
themselves into India’s expanding cable network because of its growing
INTRODUCTION 33
economy and consuming class, and a consumer market newly available

to foreign products. By 1999, advertising spending in India was US$ 2
billion, making it among the top 20 countries in the world (Thussu 2000).
While its growth has not been as phenomenal as that of cable TV,
Hollywood films, which were introduced into the Indian market in a
big way in the 1990s, have played a role in transforming India’s media
landscape. It is no surprise, of course, that the Hollywood film industry
was attracted to India, given the country’s ability to support the world’s
largest film industry. While foreign exchange restrictions had long
limited the ability of Hollywood films to compete in the Indian market,
Hollywood films were also limited by the Indians’ lack of enthusiasm for
foreign films which lacked essential components like songs and fights
(Derné 2000a: 10–11; Thomas 1995: 161–62).
As foreign exchange restrictions eased with economic liberalization,
Pretty Woman became successful in Bombay and other metropolitan
centers in 1991. By the mid-1990s, Hollywood films were being dubbed
in Hindi and the dubbed version of Jurassic Park was a success in
Indian cities. In 1995, 20th Century Fox was hopeful that the share of
Hollywood films would rise from its level of 7 percent of the market
(Gupta 1998: 69). Today, dubbed foreign films are widely screened in
Indian cities.7
While economic and cultural globalization has transformed India’s
media landscape, like elsewhere, this transformation has been mediated
by local interests, sensibilities, and resistance. Small-scale cable operators
with rudimentary technology found that they could make a profit by
hooking up as few as 200 homes (Mishra 1999; Page and Crawley 2001:
89–90). 8 Thousands of small-scale operators chose programming to meet
local demands (Page and Crawley 2001: 89–93).9 STAR TV’s use of
English-language programming limited its appeal, and cable television
became widespread only when Zee TV (introduced a year later in Octo-
ber 1992) focused on local-language programming. Despite cosmopoli-
tan offerings, Indian-language film programming and programming
featuring popular Indian film songs continued to be the greatest suc-
cesses of cable television (Gupta 1998; Page and Crawley 2001: 89).
Styles, images, and themes apparent in newly available satellite televi-
sion and Hollywood movies have, in some ways, transformed local film
and television productions. While The Bold and the Beautiful may be
watched by only a small percentage of the Indian population, Hindi
films and Indian serials on both state-run Doordarshan and on private

channels are heavily influenced by the content and representational styles
of the American soaps. Entire genres are adopted wholesale. Thus, the
Indian version of Who Wants to be a Millionaire (Kaun Banega Crorepati)
was a big cable TV hit. Hindi films increasingly celebrate urban West-
ernized lifestyles and consumerism, and which show heroines in cloth-
ing styles (like miniskirts) that in previous eras would have been rejected
as excessively revealing (Chakravarti 1998; Chopra 1997). But, in other
ways, there are important continuities between the films of the 1980s
and those of the 1990s and beyond. One central aim of this book is to
consider not only how much Hollywood films and cable television might
have played a role in transforming the content of Hindi films but also
why Hindi films have resisted transformation in many ways.
Even as cultural globalization is transforming India’s media landscape,
there is resistance to the new cultural flows. When Valentine’s Day
celebrations grew in popularity because of cable music channels MTV
and Channel V, supporters of both the opposition Congress party and
the ruling Bharatiya Janata Party (BJP) vowed to ban such celebrations.
Bal Thackeray, chief of the Shiv Sena, asserted that such celebrations
were part of an exhibitionist American culture, while activists from the
Congress party burned Valentine’s Day cards, claiming that the cards
were contrary to Indian traditions (India Abroad 2000a: 43). Protesters
have also targeted cable TV programs and other media productions for
allegedly defaming Hinduism or corrupting Indian values (India Abroad
1998: 8, 2000b: 6; John 1998; Tsering 1999). Activists have tried to
restrict the flow of satellite television into India by, for instance, bringing
litigation against STAR TV for screening obscene movies (Brosius and
Butcher 1999a: 14). While transnational cultural flows are expanding,
some nevertheless resist their impact.
The limited diffusion of economic and cultural globalization in India
also suggests that the impact of globalization has been anything but uni-
fied. While many trumpet the rise of a consuming class in India, most
Indians do not benefit from the new consumer goods and transnational
opportunities of an expanding economy. In a country of about one
billion people (2000), there are still only about 50 million televisions.
Only about 197 million Indians own wristwatches (Gupta 2000: 7). For
the 80 percent who do not own a watch, economic globalization has not
meant new opportunities.
INTRODUCTION 35
Cable television has greatly expanded, but as of 1998 it still reached

only 12 percent of the population (Brosius and Butcher 1999b: 310),
and less than 2 percent of Zee TV viewers lived in the rural areas (Thussu
2000: 307). The reach of Hollywood films has expanded greatly, but
they still constitute less than 10 percent of the market, and many viewers
choose not to watch these films. The great majority of those who view
foreign films also watch Indian films. Our understanding of the effects
of globalization must carefully consider the differential exposure to
global influences and the fact that local media continue to be important.
Studying the Effects of Cultural

Globalization in India
Since the end of the 1980s, scholars had become aware that globalization
represented a revolutionary change in the world in which we live. Yet,
surprisingly few studies have considered how transnational cultural
flows actually transform local culture—which is one reason why so many
questions remain. This study attempts to understand how economic and
cultural globalization has transformed culture, class, gender, and family
of ordinary middle class men in India through a systematic comparison
of important aspects of these systems on the cusp of transformation in
1991 and, again, 10 years later.
As my account of globalization in India suggests, 1991 was the year
that economic and cultural globalization began in earnest in India. That
year, just after the rupee was drastically devalued, I conducted a study of
non-élite middle class men’s reception of Hindi films in Dehra Dun. Ten
years later, after cable television, Hollywood movies, and the growth of
consumerism had in many ways transformed the cultural landscape of
India, I replicated that study. A comparison of Hindi films, Hindi film
culture, non-élite middle class men’s film-going, and these men’s responses
to questions about Hindi films and about family in the two periods
allows me to identify the ways in which globalization transformed cul-
tural orientations, imaginations of class and gender, and family and
gender arrangements. This comparison also allows me to identify conti-
nuities in Indian society and to explore the reasons why some areas of life
were transformed and others remained unchanged. I am able to consider
how new imagined resources sometimes transformed the meanings

associated with class, gender, and family systems, while often leaving
important social practices unchanged.
DATA SOURCES
To understand the effects of the changing media landscape, this study

largely relies on four sorts of evidence.10 First, I use a textual analysis of
Hindi films popular in the two periods to identify changes and continu-
ities in Hindi film content. I analyze the biggest-hit films that played in
the five years prior to the sudden advent of globalization in 1991 and the
biggest-hit films following the sudden transformation. I also analyze the
films that played during the 1991 and the 2001 fieldwork stints in India.
Although the hit films are useful in identifying the themes that appealed
to the largest audiences, even run-of-the mill films often play to large
audiences during the first weeks of their release: by focusing on those
that played during my fieldwork, I am able to improve content analysis
by discussing audience reactions in theatres.
Second, I use a textual analysis of fan magazines in the two periods to
identify the important aspects of Hindi-film culture. Indian films have
sparked a large amount of commentary in fan magazines and popular
journalism. Researchers of popular-culture reception have begun to
consider popular journalism and fan magazines to complement their
interviews and content analysis of film and other media (Derné 2000a:
13; Harrington and Bielby 1995; Uberoi 1998). In India, fan magazines
are an important way by which film-goers learn about lifestyles portrayed
on film (Appadurai 1996: 102; Derné 2000a: 13; Virdi 1997). In addi-
tion, they often provide access to a range of stances taken toward film
representations. 11 Comparing Hindi film content and Hindi film
culture before and after the advent of cultural and economic globaliza-
tion helps me identify continuities and changes in the gender culture
and basic cultural orientations of ordinary middle class Indians who are
the primary viewers of Hindi films.
Third, the study relies on a comparison of participant observation
with film-goers in Dehra Dun that I conducted both in 1991 and 2001.
Each day, over the course of three months in each year, I hung around
the eight movie houses in Dehra Dun, participating in film-going rituals
and watching people watch films, noting when they laughed, when they
INTRODUCTION 37
sang along, and what dialogues they knew. A comparison of film-going

in the two eras provides some insight into how economic and cultural
globalization has influenced people’s use of cinema. Focusing on conti-
nuities in film-going sensibilities helps me identify how persistent film-
going practices correspond to persistent structural realities. Identifying
differences in film-going practices suggests how cultural globalization
has transformed film-going sensibilities.
Fourth, I compare interviews I conducted with film-going men in
1991 and 2001. In both years, I approached men in and around movie
halls.12 I asked them to tell me about their favorite films, their favorite
heroes, and their favorite heroines. In both years, I asked men about love
marriages celebrated in particular Hindi films. Men’s discussion of their
favorite heroes and heroines gave me particular insights into their gender
culture, while my questions about filmi love marriages revealed attitudes
about family arrangements.
Since the bulk of the Hindi film audience consists of young men, it is
not surprising that the bulk of the men whom I interviewed were young
and unmarried. In 1991, 91 percent (20/22) of the men whom I inter-
viewed were in their teens or 20s and 86 percent (19/22) were unmar-
ried. In 2001, 94 percent (30/32) of the men I interviewed were in their
teens or 20s and 84 percent (27/32) were unmarried. While most of the
men I interviewed were Hindu, I also interviewed some Muslims and
Sikhs and one Christian.13 The over-representation of young men in my
sample usefully captures those who might be most influenced by the
global media since the young are big consumers of television and
movies. As anthropologist Edward LiPuma rightly notes, an understand-
ing of changes in thinking and ways of being should focus especially on
“those who are coming of age”, who are often, after all, in the throes
of “forging their identity” (LiPuma 2000: 63). A focus on men in their
teens and 20s in each era allows me to see whether new global possibili-
ties and imaginaries have had an effect on men’s basic orientations
toward family, class, and individual autonomy as they enter adulthood.
While the number of interviews is too small and not sufficiently ran-
dom to reveal small changes in the prevalence of attitudes over the decade
or differences between different sorts of men who see films, the interview
data nonetheless suggest significant continuity between 1991 and 2001.
Men were equally likely to express distrust of love marriages. They liked
particular films, heroes, and heroines for similar reasons. These findings
are consistent with my participant-observation data, which reveals simi-

lar continuities in the ethos of film-going and my consideration of Hindi
films and Hindi film culture, both of which show striking continuities. I
was in Dehra Dun a decade after my earlier observations, but audiences
seemed to enjoy film-going for similar reasons and to interact with
on-screen images in similar ways. While comparing responses to the
questions about Hindi film love marriage in the two years suggested that
cultural globalization did not appear to be prompting many men to reject
arranged marriages, these responses also revealed some of the ways that
transnational cultural flows were subtly transforming the meanings men
attached to arranged marriages and the usual gender hierarchy.
Emphasizing Non-élite Indians’

Encounter with Globalization
One distinctive feature of this study is its focus on non-élites. My
emphasis on how globalization affects ordinary middle class Indians is
particularly useful because academics, policymakers, and élite organs of
public opinion often focus on the experiences of the affluent élite.
THE ÉLITE BIAS IN UNDERSTANDING GLOBALIZATION IN INDIA
Following economic liberalization, there has been increasing discourse

about the rise of the so-called middle class in India. The English-
language Indian press now commonly refers to a growing so-called middle
class that passionately aspires to consumer goods, even luxury goods—
and advertising aims at this class. It is no surprise, of course, that English-
language media, from India Today to Stardust to The Times of India would
focus on groups with disposable incomes who have money to spend on
the scooters and automobiles commonly advertised in these magazines—
especially now that Indian markets have opened up for transnational
corporations with the money to advertise in these print media.
As I discuss in Chapter 3, Indian films today are less likely to depict
the struggles of the urban poor (with whom its main audience would
easily identify). Instead, more and more Hindi films depict an affluent
world of jet travel and automobiles that is beyond the scope of most
ordinary Indians’ aspirations. As the government emphasizes economic
INTRODUCTION 39
liberalization, there is an increased cultural focus on the consuming classes.

In the 1980s, even advertisements for Bajaj scooters in the English-
language India Today showed rural dhoti-wearing sardars carrying a charpai
over a dirt track. By 2001, even advertisements in film theatres for scoot-
ers showed suit-and-tie wearing riders carrying briefcases. Mary John’s
description of changes in condom advertising is telling. Earlier adver-
tisements for Nirodh condoms “were part of an apparatus for addressing
the problem of poverty, understood to be the problem of an underdevel-
oped nation” (John 1998: 386–87). As “the [so-called] middle classes”
have come to constitute “a clear cultural reference point”, Kamasutra
condom advertising focuses not on reducing family size, but instead sig-
nifies “the right to pleasure of this class.”14 Figures of up to 350 million
middle class Indians (which sometimes originate on the Internet) are
repeated in both academic and non-academic discourse.15 Such figures
contribute to the diffuse trend to see India’s “middle class” as constituted
by a large group of persons, each of whom has extensive opportunities
for consumption.
This discourse, focusing on affluent consumers, has played a role in
economic liberalization and, more generally, economic policies. Delhi
sociologist Dipankar Gupta argues that a focus on affluent consumers
now drives much of Indian economic policy:
In this era, trade unions have been laid low and, along with it, the emphasis
on production and producers as the main planks of economic thought and
policy making. In their place, the consumer has stepped in and become
pivotal in all calculations. If the customer wants a product, it must be avail-
able, even if the social costs are high. Economic restrictions and trade policies
that earlier determined what will be produced, and how, are now looked at
with distaste (Gupta 2000: 78).
The sole focus is now on “what consumers want. It is no longer material

if this brings about unemployment, greater economic dependency, or lack
of trade union privileges” (Gupta 2000: 78.) As Gupta argues, this “con-
sumerist globalised approach” detracts our attention from “considerations
the disprivileged and for the downtrodden” in India (ibid.: 81). As a result,
production is geared to meet “the demands of the privileged classes” (ibid.:
82). Thus, India has specialized hospitals, but a poor national healthcare
system (ibid.: 82). It has élite educational institutions, but lacks basics in
many rural areas. Air travel has become easier and more comfortable and
the railways have introduced more comfortable expresses between élite

centers, but roads in the rural areas remain in poor condition.16
The normalization of the consumptive experiences of the affluent in
India has become a common part of academic discourse as academics
from India and abroad now use the term “middle class” to discuss an
English-speaking, suit-boot wearing, world-traveling élite. Shoma Munshi
says that the “global lifestyles of the urban middle classes, in India today”,
which she claims number over 250 million,
are not just “imagined” but very real ones. Large numbers of them have some
close family member living overseas, either studying, working, or in business.
A substantial number of urban, middle and upper middle class Indians also
travel overseas at least once a year, whether on vacation or on work. Mainte-
nance of ties with friends and family overseas has been strengthened by
the new information and communication technologies (like email, or being
able to watch the same television programs) which allow the possibility of
time and space to collapse by their sheer speed and at times, simultaneity of
transmission (Munshi 2001c: 81).
Puri describes her interviews (all of which were conducted in English)

with college-age, college-going readers of English-language romance novels
as a study of “middle class women” (Puri 1997). These examples could
be much multiplied (Fernandes 2000; John 1998) and I do not intend
to single these authors out for criticism. Rather, I mean to suggest the
extent and unquestioned normalcy of an academic discourse that refers
to English-speaking, urban, consuming élite as a “middle class”. The image
of India focuses more now on the Mercedes-driving, tie-wearing New
Delhi-ite and less on the poor man who works and lives on a footpath,
where he earns a living using a charcoal-powered iron to press the shirts
of the Mercedes-driving élite. We focus more on the Dehra Dun-ite talk-
ing on a cellular phone as he waits to find his “VIP” seat from which he
will watch a popular Hindi film featuring a business executive who trav-
els back and forth between Europe and India and who solves his wife’s
infertility by paying millions of rupees to a surrogate mother, and less
on the destitute female beggar who tries to get the VIP’s attention as he
talks on the cellular phone.17 We often now have an image of India that
focuses on the world-traveling, email-using, consumer of Western
lifestyles—and we tend to call these people “middle class.”
As my discussion above suggests, the so-called middle class world ac-
tually applies to very few Indians. While Puri calls the English-language
INTRODUCTION 41
romance readers whom she interviewed in English “middle class,” perhaps

5 percent of the population speaks English well18 and, according to the
2001 Census, nearly 35 percent of the population is still illiterate (Khanna
2001: 18). While estimates of a middle class that aspires for consumer goods
reaches 350 million, only about 200 million people (20 percent of the
population) own wristwatches (Gupta 2000: 7). Just 6 percent of house-
holds have a scooter, 9 percent have a refrigerator, and 26 percent have a
cassette recorder (Shurmer-Smith 2000: 28). In the urban areas, only 20
percent of the population has access to toilets; in rural areas, just 1 percent
(India Today 2002a). The number of people who travel abroad every year
may be substantial, but it is a minuscule percentage of the population.
Pamela Shurmer-Smith rightly argues that when figures of 300
million are used to describe the Indian middle class, this actually refers
to “people who constitute a possible market for things like radios, rather
than expensive consumer durables” (Shurmer-Smith 2000: 29). The dis-
cursive use of “middle class” to describe an urban, English-speaking élite
does not accurately reflect its position in the population. In Chapter 3,
I argue that the urban élite uses consumption to define its class standing
and describes itself as middle class partly because it sees itself between
the poor Indian masses and the richer cosmopolitan middle classes of
Europe and North America. What I want to emphasize here is that
the academic and cultural focus on a consuming élite as defining India
today obscures the lives of non-élite Indians.
Even though they have benefited from globalization, affluent Indians
maintain their lifestyles because of the labor of poor Indians. At a
macro level, cheap labor is one of India’s comparative advantages in the
international economy. Dipankar Gupta argues, moreover, that affluent
Indians can pursue a “rich lifestyle . . . primarily because cheap labour is
still plentiful” (Gupta 2000: 9; see also Shurmer-Smith 2000; Varma
1998: 184). For Gupta, the 1.6 million high-income Indians depend on
the support of millions of poor people. A fulltime live-in servant may
cost less per month than the cost of a single (if deluxe) pizza (Shurmer-
Smith 2000: 32).19
In rich countries, convenience foods, including packaged flour, ground
spices, and readymade bread (not to mention frozen dinners), help pro-
vide a middle class lifestyle, but in India, low-paid servants save the wealthy
from the drudgery associated with food preparation (Shurmer-Smith
2000: 50). In rich countries, clothes- and dish-washing machines do the
work that low-paid servants provide in India. Gupta argues that because
the affluent depend on the availability of low-wage labor for middle class
lifestyles, they have no interest in the “general middle classing of society”
(Gupta 2000: 9). Since they can afford the private education that gives
their children a better chance at the unreserved places at specialized
Indian universities, the affluent have little interest in improving stan-
dards in government schools (Shurmer-Smith 2000: 37).
The (mis)understanding of academics of the effects of globalization
has been, I think, unduly influenced by contacts with affluent Indians
who often benefit from globalization and rely on the low-paid labor of
the urban poor. Conference-goers include Indians who are in a position
to become transnational academics. They travel back and forth between
India and Europe or North America and have seen how their family’s
lifestyles have advanced in recent years. Academics read English-language
magazines and newspapers which try to reach the Indian diaspora
and/or the 5 percent of the population that speaks English well. These
publications, of course, focus on providing advertisers with readers who
have the discretionary income to buy consumer products.
Reliance on transnational research assistants may give foreign scholars
a biased view of globalization’s effect. The implications of using privileged
research assistants have, of course, long been known. Gerald Berreman
(1972) found that while working in a Himalayan village, the mere pres-
ence of a Brahmin research assistant discouraged untouchables from openly
presenting their ideas, a fact which only became clear when the Brahmin
research assistant became ill and was replaced with a Muslim one. Berreman
(1971: 25) describes how when he recounted to low-caste people an ex-
planation of caste which focused on the ritual superiority of Brahmins,
“they laughed, and one of them said, ‘You have been talking to
Brahmans’” (ibid.: 25). Miriam Sharma, who also necessarily relied on a
Brahmin research assistant to help her with research that included inter-
viewing lower-caste individuals, also became “aware of the discrepancies
of some of [the assistant’s] translations and even general interpretations”
(Sharma 1978: 15–16). She concludes that the assistant’s “own attach-
ments, personalities, and feelings” affected the “information he passed on
to her” (Sharma 1978: 15–16). As a result of relying on Brahminical
sources, for years we suffered from what Berreman calls a “Brahmannical
View of Caste” that failed to recognize the opposition of those who were
disadvantaged by the caste system (see also Bremen 1985; Derné 1990).
INTRODUCTION 43
Those of us who do not speak Hindi fluently rely on research assis-

tants who are able to speak both Hindi and English.20 More and more of
the people whom we hire as assistants have increasing transnational con-
nections—and may also be hopeful that our connections represent a source
of patronage.21 Like most English-speaking, educated Indians who can
act as a translator, the capable assistant who helped me in 2001 regarded
life in India as greatly improved by the economic liberalization that has
improved access to consumer goods. While my research assistant was
very helpful in conveying my research to many respondents, I also found
that he sometimes discouraged me from interviewing the poorer Indians
whom we met in theatres. “Why waste the [audio] tape and the paper
[on which we translate the interviews]?” he would ask. Since there are
several levels of ticket prices and different areas in which people wait
to enter the (more expensive) balcony and the (least expensive) floor
seats, I was able to push us in the direction of interviewing some of
the less affluent Indians—but it is still possible that I interviewed more
film-going men with enough income to support a cable connection than
accurately reflects the broader film-going population.22
While my assistant’s gentleness was often very effective in encourag-
ing the respondents to speak openly, the presence of a scooter-riding,
watch-wearing, occasionally jeans-wearing research assistant may have
nevertheless had a chilling effect on the responses of some of the less
affluent film-goers who could not aspire to such consumer items. While
my assistant did a superb job of translation despite being a busy man,
I occasionally saw a reluctance to translate aspects of interviews that
were inconsistent with some of his own beliefs about changes in India.23
Like Sharma, I usually had enough of an understanding of the state-
ments to press for a full translation. I was lucky to have had an excellent
research assistant who understood my aims well, but even in this case
my need for help from a multilingual person may have introduced
subtle biases into the work. Our reliance on transnational research assis-
tants may, then, push us towards developing a “Westoxicated View of
Globalization.”24
THIS STUDY’S FOCUS ON NON-ÉLITES
An important feature of this study is my focus on the effects of globaliza-

tion on non-élite, non-cosmopolitan urban Indians, whom I usually call
the ordinary middle class, the non-élite middle class or, more theoreti-
cally, the “locally-oriented middle class.” With the growing availability
of global goods, Indian cities clogged with cars, prestigious housing de-
velopments and five-star hotels, many commentators see a huge affluent
population in India. Yet as Rao and Natarajan conclude, the “so-called
middle class is a myth” (Rao and Natarajan 1996: 209). Less than one
half of 1 percent of the country’s households makes an annual income
more than Rs 1 million (less than US$ 25,000). Income figures are unre-
liable, but the best estimate is that, in 1996, only about 2.9 percent of
households earned more than Rs 96,000 annually (around US$ 2,150.)25
Given the unreliable income figures and the complications of both
the urban–rural divide and the differences between life in the metropoles
and the other cities, this discussion of lifestyles of different classes and
their relative numbers is necessarily a broad estimate. It is based largely
on my interpretation of the various figures presented by Shurmer-Smith
(2000). Affluent English speakers, constituting perhaps the top 10
percent of the urban population, call themselves middle class, perhaps
(as I argue in Chapter 3) thinking of themselves as “middle class” on a
global scale, situated between the Indian poor (whose work supports
their lifestyle) and the better-off consumers in the Western countries.
This affluent class is the primary market for expensive consumer durables
like cars. Attracted to global products, the affluent might dine at a Pizza
Hut or buy Nike shoes rather than patronizing local establishments
and producers. They buy Benetton, DKNY, or Levi’s brand clothing
rather than rely on tailors to copy the latest fashions. Affluent house-
holds usually employ at least one fulltime servant and avoid shoddy
public services by sending children to private English-language schools,
using private medical clinics, and arranging private backup supplies to
protect against disruption of water or power. They avoid routine fear of
crime by living in gated colonies and avoid the crush of Indian railways
by traveling in the air-conditioned class or by air.
Often possessing a college degree and a good job, ordinary middle
class Indians lack the English-language skills and the global connections
which would allow them to take off with the global economy. Gupta
argues that there is a:
huge divide between those who call themselves ‘middle class’ (quite errone-
ously) and the rest. The middle class upwards strata actually constitutes the
INTRODUCTION 45
elite of Indian society. . . . [This elite sector stands out] because those below
them live in such desperately unenviable conditions. Frayed white-collar fami-
lies struggle and save to buy a scooter; those who belong to the dirty white
collar sector are in debt up [to] their ears trying to marry off their daughters
or to give their children a halfway decent education (Gupta 2000: 60).
Earning Rs 45,000–96,000 (US$ 1,000–2,150) annually, ordinary middle

class Indians constitute 16 percent of households India-wide, perhaps
40 percent of the urban population. They work as clerks, police officers,
teachers, government transportation workers, and so on. They buy few
“global” products, preferring the Rs 50 restaurant meal to the Rs 300
Pizza Hut meal, the Rs 300 Indian-made shoe to the Rs 3,000 Nike.
They may be able to afford a scooter, television, and perhaps a refrigera-
tor and will try to send their children to private English-language schools,
although the quality may not be good. The ordinary middle class that
constitutes nearly 40 percent of the urban population is the primary
focus of this study.
Gupta is right to emphasize that “once we go below this segment of
the population the situation is really quite abysmal. Chasing after buses,
cycling for miles to work, pulling rickshaws, slogging in sweat shops,
and it just keeps getting worse” (Gupta 2000: 60) (53 percent of Indian
households earn less than Rs 22,500 [about US$ 500] annually). Seeing
the desperate conditions of the poor, the non-élite middle classes worry
about “erosion of real income, impoverished retirement and, more than
anything, the job prospects of their children” (ibid.: 60). As Shurmer-
Smith rightly argues, the ordinary middle class feels insecure, “acutely
aware of the” widening gulf between themselves and the more privileged
and worried about the threat “against real impoverishment and the loss
of the few advantages they have” (Shurmer-Smith 2000: 52).
Despite the discourses in Western scholarship and the English-
language media that identify the consuming élites as middle class, the
people whom I call the ordinary middle class also see themselves as India’s
middle class. Dickey’s (2002: 218) research in Madurai and Saavala’s (2001:
302–03) research in Hyderabad shows that ordinary middle class people
use vernacular Tamil and Telugu expressions to refer to themselves as India’s
“middle class”—below the position of the “great people” who drive auto-
mobiles and travel to foreign places, but well above the position of those
who live in the slum areas, cycle miles to work, and survive on day-to-day
earnings.26 Their positive notion of their middle-class status centers on
having a pukka (concrete) house in a neighborhood with other middle

class people, and on possessing non-economic signs of middle-classness
such as “cleanliness, [a] neat way of dressing, [and] healthy appearance”
(Saavala 2001: 303). I interviewed the ordinary middle class that is
between the urban poor and the affluent, consuming classes. In doing
so, I am privileging the non-élites’ own indigenous understandings of
class while contesting the discourse that identifies the top 3 percent of
the population as India’s middle class.
I studied ordinary middle class Indians by examining Hindi films—
one of ordinary Indians’ main forms of entertainment27—and by inter-
viewing ordinary middle class men. Most of the men whom I interviewed
had reasonable jobs or job prospects but did not speak any (or very
much) English. Their families often owned scooters or televisions, but
they could barely dream of automobiles or traveling abroad. The
ordinary middle class Indians whom I interviewed included successful
laborers, lower-middle class people, people with professional or admin-
istrative posts, the successful self-employed, and students aspiring to
middle class jobs.
Eight (25 percent) of the 32 men whom I interviewed in 2001 were
successful laborers, half of them with rural connections.28 The success of
these laborers is apparent in the fact that three-fourths of these men had
televisions in their homes. Three (9 percent) of the 32 men whom I inter-
viewed in 2001 had non-laborer, lower-middle class jobs: one worked as
a driver for a state board, another as a traveling salesman, and yet another
as a peon in an architecture firm. All these men owned a television; two
of the three had cable television. Three (9 percent) of the men whom I
interviewed were successfully self-employed: one as a mechanic, another
as a tailor, and the third as an anchor for a musical group. Two of these
three men had television and cable. Two (6 percent) of the men whom I
interviewed had good middle class jobs: the first as a civil draftsman
and the second as a clerk in a government agency. Fifteen (47 percent) of
the young men whom I interviewed were students, all of whom were
seeking good middle class jobs. (I also interviewed one unemployed
recent graduate.) Five of these students were doing postgraduate studies
and the others were undergraduate students. Most of their parents were
in non-élite upper-middle class jobs (for instance, bank manager, army
officer), but some farmed in rural areas. My earlier research in Dehra Dun
was with people of similar class standing.29
INTRODUCTION 47
I did not select my interviewees in a systematically random fashion—

I approached men at the range of theatres, showing a range of shows,
and at waiting areas for the various classes of theatre tickets. Since 1991,
two theatres had closed in Dehra Dun and one which had been shut in
1991 had reopened, leaving five theatres showing Hindi films and dubbed
Hollywood films, and an additional two theatres showing Indian-made
pornographic films. One of the theatres that had closed—the Orient—
had catered largely to the urban poor. It had been the cheapest and least
comfortable theatre in town. The closure of the Orient reflects the
decreased availability of going to the theatre as a leisure activity for
poorest Indians. While in 1991 ticket prices in Dehra Dun ranged from
Rs 3 to Rs 10 (about 12–40 cents),30 by 2001 the range of ticket prices
had increased to Rs 20 to Rs 55 (about 45 cents to about US$ 1.25).
Even though regular “cut rate” showings of B-grade fare and revivals
aimed to attract less well-off Indians, more and more Indians may be unable
to afford India’s least expensive entertainment. I interviewed men who
arrived on motorcycle at the most comfortable theatres in town to watch
Hollywood films from the most expensive balcony seats. But I also inter-
viewed laborers who attended cut-rate revivals of big hits or enjoyed the
day’s biggest social or fighting-and-killing films from the cheapest seats.
At the social films aiming for the broadest audiences, I interviewed front-
benchers purchasing the cheapest Rs 20 seats, more affluent men who
bought Rs 25 seats, and balcony-walé who bought Rs 35 seats to watch a
film in relative comfort. While fewer poor Indians may attend films
today, the men whom I interviewed broadly represent the ordinary middle
class male audience of Hindi films and are roughly comparable to the
men whom I interviewed a decade previously (see Derné 2000a: 19–25).
This study focuses on the effects of globalization on family institu-
tions, cultural orientations, and imagination of class and gender systems
on the ordinary middle classes who cannot participate fully in the
cosmopolitan worlds opened up by globalization. While globalization
has tremendously transformed life possibilities for the affluent Indians
who speak English well, the effects on ordinary middle class Indians
have been more modest. This study emphasizes how ongoing structural
realities have limited the effects of globalization on ordinary Indians, but
also notes the ways in which globalization has nonetheless transformed
the way ordinary Indians orient themselves culturally and understand
the meanings attached to class and gender categories.
Globalization in Dehra Dun

Over the decade since 1991, opportunities for affluent Dehra Dun-ites
have increased. In 2001, I met many more Dehra Dun English speakers
who were working in telecommunications or computer programming. I
met many more English speakers with relatives working in the USA. In
2001, I met Dehra Dun-ites with automobiles, computers, cellular
phones, and home appliances. But economic liberalization had not had
the same effect on the opportunities of the non-élite whom I met in
Dehra Dun. While economic liberalization has improved opportunities
for affluent Indians, for ordinary Indians the local employment market,
oriented to local production and wages, remains the source of most
jobs. Although some of the students whom I met were hopeful, most of
the non-cosmopolitan middle class people did not have vastly improved
job prospects. And for the poor, economic liberalization’s devaluation of
the rupee and limitation on subsidies of basic food items had increased
the costs of many essentials from food to fuel, often worsening their
condition.31
While the effect of economic liberalization on most Indians’ job pros-
pects was limited, the cultural globalization that took place in the 10
years between the two studies dramatically changed the cultural land-
scape for even non-élite Indians. In 1991, no Hollywood films were
screened in the three months that I worked in the city, but in 2001,
dubbed Hollywood films were the main fare at the city’s two most élite
theatres.32 While the two élite theatres showed an exclusive fare of dubbed
films during my fieldwork, they probably will continue to show Hindi
films as well. Previews of upcoming Hindi films continued to play
during my fieldwork. In addition, these élite theatres had screened the
biggest Hindi film hits of 2000, Mohabbatein and Kaho Na Pyar Hai.
Audiences could watch Hollywood films about adventurers traversing
dangerous snowy peaks (Vertical Limit), B-grade films aiming at sexual
titillation (like Yeh Kaisi Chahat [This Sort of Desire], a dubbed version of
the low-budget Hollywood film Sexual Intent) and action films with spec-
tacular special effects like Arnold Schwarzenegger’s Arnold Ka Mukabla
(Arnold’s Confrontation, a dubbed version of Hollywood’s The Sixth Day).
While in 1991, none of the men whom I asked had seen Hollywood
films,33 nearly 60 percent of the men whom I interviewed in 2001 had
watched such films.34
INTRODUCTION 49
I generally asked whether a respondent had seen “American” films,

and then, if the respondent appeared to need further prompting,
followed up by asking about “Hollywood” films or “foreign” (videshi)
films. Occasionally, my research assistant prompted respondents by
asking about Mission Impossible 2, Godzilla, or The Mask. While some of
these men claimed to see very few foreign films because they disliked
them or lacked cable television, nearly half of them enjoyed dubbed
films as part of regular film consumption.35 In addition, one man,
who claimed to see “few” American films, said that he enjoyed the
picturization of Godzilla and Jurassic Park. While American films may
not be a regular part of his diet of film consumption, he brings the per-
centage of men who enjoy at least some American films to 50 percent
(16/32).
Certainly, none of the men whom I interviewed considered seeing
films in English. “They wouldn’t make sense” unless they are dubbed
into Hindi, one man told me. But the dubbed version of Mission Impos-
sible 2 and Godzilla were part of many film-goers shared experiences36—
and 22 percent (7/32) of the men I interviewed were so charmed by
foreign films that they claimed to see very few Hindi films. While exag-
gerated,37 the claim that they saw few Hindi films nonetheless suggests
the important attraction of the newly-available Hollywood films for a
number of young Indian men.
Perhaps more important than the growing popularity and availability
of American films was the growing access to television, especially cable
television. In 1991, few of the men whom I interviewed had access to
television, and even those who had televisions were limited to state-run
Doordarshan programming (as satellite television was completely un-
available). In 1991, Doordarshan’s hits were family serials, serialized
Hindu mythologies, and (biggest of all) a weekly Hindi film and a weekly
program devoted to Hindi film songs. By 2001, television had rapidly
expanded so that nearly 88 percent (28/32) of the men whom I inter-
viewed had access to television.38 The expansion of cable TV was revolu-
tionary. While none of the men whom I interviewed in 1991 had access
to cable TV, by 2001 about 69 percent (22/32) had at least some access
to cable television.39
Like the effects of economic liberalization, the exposure to cultural
globalization is uneven. While about half of the film-going men whom I
interviewed in 2001 made foreign films a regular part of their film-going
pleasure, 40 percent (13/32) had not seen even one Hollywood film.40 As
one man said, “I want no business with such films.” The consumption of
Hollywood films appears to be linked to class. None of the eight laborers
whom I interviewed in 2001 made Hollywood films a regular part of their
film-going experiences and only two had seen even one Hollywood film.41
Of the three lower-middle class people whom I interviewed, only one
made Hollywood films a part of his regular film-going.42 By contrast, all
five of the professional and self-employed men whom I interviewed had
seen Hollywood films, and all but one of these men made Hollywood
films a regular part of their film-going experiences.
It is difficult to tell whether poorer Indian men’s limited consump-
tion of Hollywood films represents a preference for Hindi films or a lack
of opportunity to see Hollywood films. Dubbed films, after all, tend to
play at the more comfortable (and more expensive theatres) and do not
screen at the “cut rate” which is becoming increasingly common for some
of the Hindi film offerings. Less likely to have as much access to cable
television as the better off, poorer Indians may not develop the same
taste for American films as those who have access to such films on cable
television in their homes.
However, it is important to emphasize that class does not fully deter-
mine the consumption of Hollywood films. One-quarter of the laborers
whom I interviewed had, in fact, at least sampled foreign films. More
interesting, some of the better off Indians seemed to enjoy Hindi films
to the exclusion of foreign films. Most of those with less than grade-
school education avoided Hollywood films43, but five of the 15 college
students whom I interviewed also avoided watching foreign films in
theatres. Even some of the ordinary middle classes in the somewhat
cosmopolitan city of Dehra Dun had not expanded their tastes beyond
indigenously-produced Hindi films.
This Modest Study in the Broader Context

The empirical bases of the comparison I use to anchor an understanding
of globalization is quite modest. But the implications of my systematic
comparison of the gender culture of young, non-élite male film-goers in
one north Indian city in 1991 and 2001, based on brief interviews, is
nonetheless significant.
INTRODUCTION 51
Most importantly, because I had completed a study in 1991 on the

eve of globalization, my 2001 study allowed me to make a systematic
comparison between two eras—one in which access to cosmopolitan
media was limited, and a later era in which transnational flows had
revolutionized the “mediascape”. Even if the locale, the regional city of
Dehra Dun, is not broadly representative, the data offer a good case
study of the effects of social change.
Still Dehra Dun may be nonetheless a good locale to understand the
effects of cultural globalization in north Indian cities (beyond the largest
metropoles, more generally). While a regional city, Dehra Dun has at-
tracted migrants from throughout north India: some of those I inter-
viewed were from as far away as the state of Bihar. Like other regional
cities, Dehra Dun has attracted migrants—especially students—from
nearby rural areas, and some of those I interviewed had a rural back-
ground. Indeed, the secondary survey data I cite indicate that the conti-
nuities and transformations in non-élite men’s gender culture have parallels
that exist beyond Dehra Dun.
Dehra Dun is a relatively cosmopolitan place where one might expect
the effects of transnational cultural flows to be, indeed, more significant
than other cities (again excluding the largest metropoles such as Delhi).
The fact that the effects of cultural globalization that I identified were
quite modest in a cosmopolitan city like Dehra Dun suggests that (at
least in the relative short-term) the consequences of cultural globaliza-
tion may be quite limited.
Finally, I try, in this book, to widen my discussion of the effects of
globalization by using secondary literature to discuss changes in the gen-
der culture of both women and affluent Indians. This discussion of changes
in the thinking of affluent Indians and women highlights the importance
I place on social structures in rooting cultural understandings. This
consideration of affluent Indians and women contributes to my argu-
ment that cultural globalization is unlikely to generate major changes
unless accompanied by simultaneous transformation of social structures.
Outline
Chapter 2 develops a theory of the fit between culture, structure, and
psyche. In developing this theory, I introduce readers to central elements
of culture and social structure in India that are the focus of this book.
Chapter 3 considers how globalization has made affluent Indians think

of themselves as a “transnational middle class.” Cultural and economic
globalization has incited consumerism among the affluent who come to
see themselves as having more in common with consumers around the
world than with their compatriots in India. For the affluent, a cosmo-
politan identity rooted in consuming certain goods has greater salience
than national identity rooted in Indianness. In developing this argu-
ment, I suggest the need to rethink class analysis in light of the changes
brought about by globalization.
Chapters 4, 5, and 6 shift the focus to the non-élite middle classes that
are the empirical focus of this study. In Chapter 4, I consider how the
failure of globalization to transform the structural conditions of non-élite
Indians has limited its effect on family and gender arrangements. Non-
élite middle class Indians not only distance themselves from cosmopoli-
tan arrangements celebrated in transnational media forms, but sometimes
also engage in outright resistance to globalization. I suggest that unlike
affluent English speakers, ordinary Indians continue to have a strong Indian
identity, which is often rooted in particular gender arrangements.
While Chapter 4 focuses on continuities in ordinary Indians’ lives in
the face of globalization, Chapter 5 considers how globalization has
changed the meanings that non-élite middle class Indians use to under-
stand their lives. While globalization has had only modest effects on how
non-élite middle class Indians live, it has had somewhat greater effect on
their cultural understanding of how they live. The increase in individu-
alism may portend greater changes in the future.
Chapter 6 considers how globalization has added additional layers of
meaning onto oppressive gender arrangements in India. I suggest that
globalization has generally failed to disrupt existing gender structures and
meanings. Instead, it has introduced new meanings which have intro-
duced new bases of, and justifications for, women’s subordinate position.
Chapter 7 highlights how the book improves our understanding of
the processes of globalization, the dynamics of culture, the persistence of
gender, and the workings of social class in today’s global economy.
Notes
01. See, for example, Mankekar 1999b; Uberoi 1998. Some of these hit films included
Dilwale Dulhania Le Jayenge (1995), Pardes (1997), and Kaho Na Pyar Hai (2000).
INTRODUCTION 53
02. These tropes are so common that they hardly need documenting. Films that include
honeymoons in Europe run from Chandni (1989) through Chori Chori Chupke
Chupke (2001). Films that reference Indian men’s business or education in Europe
or North America run from Maine Pyar Kiya (1989) through Chori Chori Chupke
Chupke (2001).
03. Zahareela, a film made years earlier, was so B-grade that it remained in the can until
the slowing of releases in 2001 due to the Gujarat earthquake and the scandals
surrounding film financing. It showed at cut-rate prices in Dehra Dun to an audi-
ence of the urban poor. The focalizing character and former hero Mithun Chakraborty
was scammed in his efforts to get abroad.
04. On my way to India in 2001, I noted that the Super Bowl was playing on the
televisions in the departure lounge in Vientiane, Laos. In Lautoka, Fiji, in 1998, I
watched President Clinton’s admission about his affair in a bar crowded with both
locals and expatriates.
05. This paragraph draws on Gupta 1998, Munshi 2001c, Rao 1998, Sharma 1996,
Skinner et al. 1998, and Thussu 2000.
06. The percentage of urban people with access to television in their own homes was 60
percent—the other 14 percent have access to television outside their own home
(Varma 1998: 178).
07. I often use terms like “Hollywood films” to refer to the cosmopolitan, non-Indian
movies that have become available. It might, of course, be more accurate to speak of
foreign movies to refer to the cosmopolitan films—which include Jackie Chan
movies—that have made their way to India. Still, it is significant that films like
Crouching Tiger and the Jackie Chan movies have become available and popular in
India via American distribution systems because of their popularity in Western
centers. My respondents, moreover, usually use terms like “Hollywood films”,
“American films” and “foreign films” to refer to the range of non-Indian films that
have become available.
08. In 1994, Bombay had 3,000 registered cable operators. Even after some years of
consolidation, Pune had 1,800 cable operators in 1998 (Page and Crawley 2001:
90).
09. For many years, small-scale cable operators were the only ones making money from
cable. The large cable programming networks were trying, instead, to get a foothold
in the Indian market (Page and Crawley 2001: 90).
10. For a fuller discussion of the four sorts of evidence that I used, see Derné 2000a:
10–14. (The 2001 study replicated the methodologies of the 1991 study.)
11. I have also used newspaper accounts of changes in India and resistance to these
changes. Following Akhil Gupta, I do not see newspaper reports as having a “privi-
leged relation to the truth of social life”, but I do believe that they can be usefully
analyzed as a “major discursive form through which daily life is narrativized and
collectivities imagined” (cited by Mankekar 1997: 28).
12. While the interviews were not systematically random, I approached men who were
purchasing expensive balcony tickets and cheap floor tickets at all of the theatres in
Dehra Dun and at showings of hit films and run-of-the-mill films, fighting-
and-killing films and love stories, Hindi films and English language films. The rate
of refusals was low. In both years, I conducted the interviews with the help of a
journalist for a regional Hindi newspaper. The interviews were conducted in Hindi
and took about 30 minutes. The taped interviews were conducted in public in
and around cinema halls. See Derné (2000a: 13–14) for further description of the
interview process. The same method (even the same research assistant) was used in
2001.
13. In 1991, 82 percent (18/22) of the men I interviewed were Hindu, two were
Muslim, and two were Sikh. In 2001, 81 percent (26/32) men I interviewed were
Hindu, five were Muslim, and one was Christian.
14. Nirodh means “protection” in Hindi, while the Kamasutra refers to an ancient text
famous for its focus on sexual pleasure.
15. Sharma says we “hear now of the ‘middle class bulge’” in India, its population
estimated anywhere from 100 million to 200 million, all aspiring passionately for
consumer goods, some even for luxury goods” (Sharma 1996: 299). Munshi (2001c)
cites an internet source (Internet 1999) to describe India’s “large middle class as
numbering over 250 million”.
16. Fernandes similarly argues that “the early decades of economic policy in post-inde-
pendence India were focused on the development of large scale industrial
units . . . rather than on the production of consumer oriented commodities”
(Fernandes 2000: 613). This focus, she suggests, was “linked to a political culture
which was constituted by public discourses on the need for the advancement of the
rural poor” (ibid.: 613). Like Gupta, Fernandes similarly suggests that the economic
reforms introduced by Rajiv Gandhi were rooted in a “vision” that “substantially
rested on the role of the [so-called] middle classes. His vision was encapsulated in
concrete economic policies that began to loosen up import regulations to allow an
expansion of consumer goods (such as automobiles and washing machines), that
could cater to middle- and upper-middle class tastes” (ibid.: 613). Thus, “public
political discourses” have shifted “away from a focus on poverty reduction” toward a
“growing public culture of consumption” (ibid.: 614).
17. I witnessed both of these incidents in 2001. I witnessed the former again during a
brief visit to Delhi in 2007.
18. Shurmer-Smith (2000: 14) estimates that 2 percent of the population speaks
English well. Page and Crawley (2001: 77) estimate that 5 percent of the population
speaks English well. None of the men whom I interviewed in 2001, most of whom
were affluent enough to have cable television in their homes, spoke English well.
The 1991 Census reports that 8 percent of Hindi-speakers spoke English as a
second language and another 3 percent knew it as a third language (Thussu 2000:
299). The above estimates suggest that perhaps half of these people who claim to
speak English as a second or a third language speak it well.
19. Shurmer-Smith reports that “a live-in maid earns about Rs 300 a month, plus her
food and accommodation” (Shurmer-Smith 2000: 32). When I was in Dehra Dun
in 2001, a live-in maid could still be had for about Rs 300, but I could order a
small Domino’s pizza (with mushrooms) for about Rs 110. Of course, the price of a
deluxe pizza could exceed Rs 300 (less than US$ 7).
20. Even foreigners who speak Hindi reasonably well still need to include research assis-
tants for ethical reasons. We must, of course, obtain the informed consent of those
whom we interview. Given the elliptical, indirect ways that respondents sometimes
INTRODUCTION 55
express their reluctance to be interviewed, I have found it necessary to employ

assistants to be sure that respondents fully consent to the interview. (I also do not
speak Hindi well enough to fully understand respondents” statements—and have
occasionally made grave mistakes in translation—which highlights the need to tape
interviews.)
21. Gupta rightly argues that the élite “thrives on connections, family and patronage. . . .
Instead of pursuing individualism as the [so-called] Western middle class did, the
Indian middle class is an ardent advocate of privilege. . . . A good patron is one who
can break rules. . . . A patron can help to bypass queues, bend regulations, and allow
nepotism to thrive against all stated legal statutes” (Gupta 2000: 9–10).
22. Since I used the same procedures and the same assistant in 1991 and 2001, the
biases would have pushed in the same direction in both the years. This suggests
that the two groups of people are broadly comparable, allowing me to examine the
effects of globalization between the two eras.
23. At the end of many interviews, my assistant asked some questions about the desir-
ability of increasing equality in India. He, for instance, asked about the widening
difference in ticket prices between the cheap floor seats and the comfortable balcony
seats. His own view was that there should be increasing equality in social arrange-
ments. In many ways, these questions were the project of the research assistant—
and they were questions that I did not mind coming at the end of the interview. But
I noticed that he occasionally was brief in translating the statements of individuals
who emphasized views opposed to his own. Some respondents indicated, for
instance, that the shareef (upstanding) people would not want to come to theatres if
they had to mix with lower sorts of people (neeché log), but my research assistant
sometimes had to be prodded to translate such statements. (Of course, the state-
ments were not essential and occurred at the end of a lengthy translation process. In
addition, I understood enough to press for a translation. Nonetheless, his reluctance
may suggest a bias in favor of the view that globalization is helping all Indians.)
24. The term is introduced by Gupta (2000) who characterizes the affluent in India as
“westoxicated” rather than westernized. Rather than emphasizing respect for others,
commitment to democracy, or universalistic values which imply respect for achieve-
ment over birth, the affluent have become focused on “superficial consumerist
display of commodities and fads produced in the West” (Gupta 2000: 11). Focused
on “fads, blue jeans, BMWs, or discotheques” (ibid.: 14), the westoxicated élite has
benefited from globalization which has greatly expanded the available commodities.
Global products have replaced locally-produced wind-up HMT watches and
boxy 1940s-style Ambassador automobiles, which were the only watches and cars
available through the 1980s. For Gupta, globalization has not much changed the
ways of thinking of the affluent Indians who use “western clothes, mannerisms
and lifestyles” to reassert traditional privilege “with more contemporary artifacts”
(ibid.: 13).
25. I have calculated this from estimates given by Shurmer-Smith 2000: 31. Admit-
tedly, income figures are notoriously unreliable in India, but there is no doubt that
the market for BMWs and Mercedes-Benz cars is extremely low.
26. Mark Liechty (2003: 65) found a similar indigenous version of middle classness
among non-élites in Kathmandu, Nepal. One 25-year-old whom he interviewed
said that “if they have a car and a beautiful bungalow, then they’re upper-class. . . .
And if they have a motor bike and a house of their own, and, well, if things are going
easily, that’s middle class. Lower-class people, they are the ones who if they don’t
earn today, they don’t eat tomorrow.”
27. While, as Shurmer-Smith (2000: 54) argues, the lower middle class is the biggest
market for Hindi films, it is important to realize that both the poor and the affluent
sees films as well.
28. Two of these men migrated from India’s poorest state, Bihar, and a third migrated to
Dehra Dun from its rural hinterland. One other man commutes to work each day
from a village outside Dehra Dun.
29. In 1991, 36 percent (8/22) of the men whom I interviewed were lower middle class
or laborers (compared to 34 percent in 2001). In 1991, 23 percent (5/22) of men
whom I interviewed were successfully self-employed or working in good service jobs
(compared to 16 percent in 2001). In 1991, about 41 percent (9/22) of the men
whom I interviewed were aspiring to middle class jobs as students or unemployed
persons (compared to 50 percent in 2001). While all of the men whom I inter-
viewed in 2001 were non-élite, one of the successful self-employed men whom I
interviewed in 1991 spoke English well and had been abroad.
30. I was in India during the summer of 1991 just after the rupee was suddenly and
drastically devalued from roughly Rs 14 to the US dollar to Rs 24 to the US dollar.
So, translating the Rs 3–10 price range into dollar terms may understate the long-
run cost of a theatre ticket. Still, there is no doubt that the cost of theatre tickets
increased over the course of the decade.
31. Both urban and rural poverty have increased in the first decade of economic liberal-
ization (Dev 2000; Oza 2001: 1074n. 15; Varma 1998: 192).
32. One owner of another theatre told me, however, that the emphasis on dubbed films
in the élite theatres was partly due to the lack of good Hindi film releases. Both he
and the Indian press noted that the delay of the big film Chori Chori Chupke Chupke—
because of allegations of illicit financing—had had a chilling effect on the number
of releases. The Indian press noted as well that the earthquake in Gujarat had de-
layed important releases because Gujarat was such an important market for Hindi
films (Screen 2001: 6). It is worth noting, though, that in 1991, when the film
industry delayed the flow of releases to protest the government’s action which in-
creased the price of raw film stock, Dehra Dun’s theatre owners did not then substi-
tute dubbed films to fill the absence of Hindi film releases.
33. I only asked the first dozen men I interviewed. After I discovered that not one had
seen a Hollywood film, I stopped asking the question.
34. Fifty-nine percent (19/32) had watched at least a few dubbed films and over 62
percent (20/32) had seen at least one dubbed film. (15 men claimed to enjoy many
Hollywood films, four said that they saw “very few” Hollywood films and one said
that he had seen one dubbed film which he disliked).
35. For 47 percent of the men (15/32), dubbed Hollywood films were clearly part of their
regular film consumption. Seven claimed to be mostly or exclusively interested in
Hollywood films and to see very few Hindi films, and another eight men (all of whom
were interviewed at theatres showing Hindi films) said they enjoyed Hollywood films
as well as Hindi films and described a number of Hollywood films they liked.
INTRODUCTION 57
36. At least one of these two films was mentioned by 12 of the 32 film-goers I inter-
viewed. Of course, many others may have also seen these films. Occasionally, my
research assistant referred to MI 2 as he prompted a respondent about whether he
had seen any Hollywood films. These respondents were usually at least aware of the
film. Thus, it seems likely that most respondents had at least heard of some popular
Hollywood films.
37. All but one of the men, who claimed to watch American films exclusively, clearly
saw and enjoyed more Hindi films than they liked to admit. One of these men had
seen the hit film Kaho Na Pyar Hai six times, and two others had seen it at least three
times. A fourth man, who claimed to have seen the film just once, enjoyed singing
the film’s hit song. Two others could name a number of Hindi films and Hindi-film
heroes and heroines whom they particularly liked. One of these two men also clearly
enjoyed the preview for a Hindi-film—which we watched together—before an Arnold
Schwarzenegger film, saying that he could see why I liked Hindi films so much, as
he too was entranced by the dancing in the preview.
38. Five men had no televisions in their homes, but one of them seemed to watch TV
regularly at a friend’s house. Another two men lacked television at the hostels in
which they were staying to complete their undergraduate education, but had had
television and cable at their parents’ homes.
39. Twenty of the 32 men I interviewed had cable in their homes. In addition, two
students staying in hostels in Dehra Dun had cable at their parents’ homes. Of the
five men with TV but no cable, three commuted to Dehra Dun from a rural area
that had no cable connections.
40. About 10 percent said that they had seen “very few” Hollywood films.
41. Four of these men worked in construction, one was a whitewasher, two worked in
manufacturing, and one operated a cycle stand.
42. The lower middle class men included a peon in an architecture firm, a traveling
salesman, and a driver for a state agency. One of these men had never seen an
American film and the third saw very few such films.
43. Only one of those with less than grade-school education said that he had seen an
American film.
2 Culture, Structure,
and Psyche
Understanding Globalization
and Cultural Change
Following Richard Shweder’s (1991: 73) insights, this chapter suggests

that culture, social structure, and psyche jointly, dialectically, and dy-
namically make each other up. A correspondence, or fit, tends to develop
between cultural meanings, social institutions, and aspects of the psyche
such as emotions and self-conceptions. This “fit” between cultural orien-
tations, social structures, and psyche militates against easy social changes.
Given the mutually reinforcing character of culture, structure, and
psyche, it is difficult to assign causal priority to these elements. But by
identifying those locations from which newly introduced cultural
ideas have transformed life in India and those locations from which
Indians have resisted these transformations, this book suggests that it
is social structure that has the greatest causal priority. This book shows
that when existing cultural meanings are supported by social institutions
and reinforced by psychological orientation, newly introduced cultural
ideas usually do not transform people’s imaginations.
I see institutions as central in rooting cultural understandings and
emotional orientations. Ann Swidler comes to a similar conclusion,
arguing that cultural “consistencies across individuals come less from
common inculcation by cultural authorities than from the common
dilemmas institutional life poses in a given society. Not shared indoctri-
nation but shared life-structuring institutions create the basis for a
CULTURE, STRUCTURE, AND PSYCHE 59
common culture” (Swidler 2001: 176). Anthropologists Claudia Strauss

and Naomi Quinn (1997: 190–91) have taken issue with the impor-
tance Swidler places on institutions. Contesting Swidler’s argument that
the institution of marriage structures the cultures of love in the USA,
Strauss and Quinn insist that it is ideas of love that structure institutions
of marriage. By showing that purely cultural innovations in understand-
ings of love and marriage have a limited effect in the absence of simulta-
neous changes in social institutions, this book confirms the fundamental
importance of social structure.
Highlighting the centrality of institutions, this book shows that
cultural globalization has been resisted (or ignored) when underlying
social structures and institutions have not been simultaneously trans-
formed. Hindi films have long celebrated consumerism, but until
economic liberalization opened up the Indian markets, consumerism did
not take root in the consciousness of many Indians. Hindi films have
long celebrated love marriages, but until opportunities for free interac-
tions between unmarried men and women increase and young people
develop more economic independence, love marriages are unlikely to
grow substantially. Indeed, the strong resistance apparent in yearly
and widespread protests of Valentine’s Day celebrations suggests that
newly available imaginations are strongly at odds with the structural
reality of arranged marriages and the psychic orientation that love
between spouses should be subordinate to respect for family authorities.
This chapter introduces a theory of the fit between culture, structure,
and psyche. In doing so, I describe the fundamental cultural and institu-
tional features of Indian society that are the focus of this book. I describe
institutions of family and economy in India, and the basic emotions and
cultural meanings and orientations which fit these structural realities. I
highlight how affluent Indians and ordinary middle class Indians are
located differently within the economic institutions that have been trans-
formed by globalization, and how affluent Indians and ordinary middle
class Indians live in different institutional matrices of family.
Social Structure
I use social structure in an older sociological sense that focuses on how
society is organized. In this usage, culture refers to meanings, norms,
and values, while structure refers to social organization.1 The 1960s and
1970s culture-of-poverty debates reflected this usage. Some saw the
position of the American poor as reflecting particular cultural norms
and values that opposed achievement, while others believed that poverty
reflected differential structural opportunities in education and work
institutions that limited possibilities for achievement. Social structure
or social institutions refer to how society is organized to meet necessary
social functions.
A social structure is made up of a system of positions and a system
of rewards and opportunities associated with positions. Economic struc-
tures are defined by the productive roles that exist in society, the rewards
associated with these roles, and the means of assigning people to those
roles. Some people make decisions about what is produced and how
things are produced; some people manage and organize production; some
people labor to produce goods. Some positions are well-compensated,
while others provide limited rewards. Economic structures also organize
how people are assigned different roles. Family connections, race,
gender, and educational achievements are among the factors that can
be important in assigning economic roles in different institutional
contexts.
Family structure can similarly be described as a system of positions.
In family, some people do more housework and childcare than others;
some individuals do more work aimed at earning income or producing
goods; some positions involve more control, power and prestige, while
others are subject to the control of others. As with the economy, struc-
tural factors such as gender and age play an important role in assigning
people to different positions in the family.
Of course, the coherence and homogeneity of institutional arrange-
ments varies. Institutions represent patterns of individual behavior. Some-
times, these patterns reflect unified, coherent arrangements. At other times,
institutions represent a more heterogeneous mix of possibilities. As
divorce has become part of the way the institution of marriage works in
the USA, single-parent households and households of a second (or third)
marriage that include children from previous marriages have become
part of the repertoire of institutional possibilities. Despite the widening
of institutional possibilities in the USA, family institutions still limit
possibilities. An adult son in his 40s living with his parents is not an easy
institutional possibility. While same-sex partnerships can be enduring,
and, in some cases, admit the possibility of limited legal recognition in

every state in the USA same-sex marriage is still precluded by law.
My focus on how social structures and institutions can be analytically
separated from the cultural meanings that support them goes somewhat
against the grain of recent theorizing. Social theorists with diverse orien-
tations emphasize what I would consider cultural components of social
structures. Bourdieu, for instance, identifies structures as having a double
existence: structures exist not just in the material world of institutions
but are internalized in the “conduct, thought, feelings, and judgments”
of social agents (Bourdieu 1992: 7, 18). For Bourdieu (1992: 12–13),
constant exposure to particular social structures instills structured dispo-
sitions in individuals that internalize the necessities of the social envi-
ronment. Recognizing the problems separating culture and external
structures, Bourdieu usefully calls attention to mutual relations between
external and internal structures (ibid.: 16).2
Indeed, many sociologists today (Sewell 1992) see culture as consti-
tuting social structures. For Bourdieu, “symbolic systems,” which are
themselves social products, centrally “contribute to making”(Bourdieu
1992: 14) the social world. Randall Collins is right to argue that
sociological descriptions of social structures and institutions “are only
abstractions from the behavior of individuals” (Collins 1981: 989). “The
structures never do anything; it is only persons in real situations who act”
(Collins 1987: 195). Thus, most definitions of social structure or social
institutions emphasize the “rules,” “shared meanings,” or “norms” that
support them (Parsons 1951: 39). So, Giddens defines structure as “rules
and resources, recursively implicated in the reproduction of social sys-
tems” (Giddens 1984: 377). Sewell emphasizes that “structures are not
the patterned social practices that make up social systems, but the prin-
ciples that pattern these practices” (Sewell 1992: 6). As Fligstein puts it:
institutions are rules and shared meanings (implying that people are aware of
them or that they can be consciously known) that define social relationships,
help define who occupies what position in those relationships, and guide in-
teraction by giving actors cognitive frames or sets of meanings to interpret the
behavior of others (Fligstein 2001: 108).
This focus correctly emphasizes that it is through following certain cul-

tural rules, whether voluntarily or due to coercion, that social structures
or institutions are produced and reproduced.
Despite the importance of focusing on the interrelations between

cultural meanings and social structures, I argue, following Lyn Spillman
(2002: 5, 1996, 1995) and many others, that it is still helpful to distin-
guish social structures from the processes of meaning-making that may
play a role in creating and reproducing them. While both the material
and the mental may be structured and interrelated, it is still useful to
distinguish between the two, and the terms “structure” or “institution”
and “culture” remain a good way of doing so. As Spillman (2002: 5)
points out, it is useful to study class consciousness separately from class
structure, organizational culture separately from organizational forms.
While social structures may ultimately be rooted in the meaningful
conduct of individuals that produce and reproduce the institution,
individual actors still face an institution as an external social structural
reality. Thus, Weber explored the meanings that gave rise to capitalism,
while still recognizing that contemporary individuals contend with an economy
structured according to capitalist principles.3 Even if the institution of
arranged marriages is merely the aggregation of the meaningful conduct
of individuals, individual actors still face the structural reality of living
in a world in which marriages tend to be arranged by the parents of the
bride and groom.
That the rules or norms that individuals follow in producing and
reproducing institutions are sometimes institutionalized in law highlights
the external and constraining power of social structures. Swidler empha-
sizes that institutions are not simply “well-established, stable sets of
purposes and rules” but that these guidelines are “backed by sanctions”
(Swidler 1995: 319, as excerpted in Spillman 2002) which are often
reflected in law. Same-sex partnerships can remake families, but legal
institutions limit the ease with and extent to which this can occur. When
divorce is legally difficult to accomplish, it is not well institutionalized
in society and may not appear to be an easy institutional possibility for
individuals. Laws that restrict foreign exchange or limit equity stakes
of foreign companies constrain the behavior of individuals which, when
aggregated, constitutes the economy. Certainly, many sorts of social
structures are not institutionalized in law, but highlighting such legal
sanctions is useful to emphasize how institutions may appear to actors as
an external constraint.
For this study, the key aspect of social institutions or social structures
is that they are experienced by individuals as external and constraining
(Calhoun et al. 2002: 133; Fligstein 2001: 107; Parsons 1951). Institu-
tions are obdurate, external realities, which constrain individuals (see
Giddens 1984: 236, 239). Much social theory today rightly emphasizes
that institutions enable individuals as well as constrain them (Bourdieu
1992; Sewell 1992: 27; Swidler 1995: 319), but the external institution
still structures possibilities. While individual actors face an institution as
an external constraint, that constraint does not determine individual
behavior. Individuals can still work around or through an institution, but
individuals usually cannot act as if the institutions they face do not exist.
Living with the institution of love marriages, Americans are enabled
to pursue a range of choices, but there is no institutionalized way for
American parents to arrange children’s marriages or young Americans
to seek an arranged marriage. Living with the institution of arranged
marriages, Indians may try to insist that they meet their spouse before
marriage is finalized, or even that their parents arrange a marriage with
the person of their choosing, but most Indians lack the institutional
structures that would facilitate marrying for love. Most Indians lack
structural opportunities to become close to someone of the opposite sex,
or to develop the economic independence that would facilitate bucking
parental guidance.
Even when people buck institutional constraints, they must nonethe-
less contend with institutional arrangements (Derné 1994a, 1995:
Chapter 7). American parents may try to influence a daughter’s choice of
spouse, but they are constrained by the institution that structures
marriage according to the participants’ choice (rather than the choice of
the parents). American parents cannot easily argue that the daughter
should marry according to their wishes out of duty or obligation, but
must instead suggest that the daughter would herself benefit by marry-
ing according to the parents’ wishes and should herself choose to do so
(Derné 1995: 137–38; Varenne 1977). Utopian Americans who buck
the institution of marriage between two people by pursuing “non-
monogamous polyfidelity” in “Best-Friend Identity Clusters (BFICs)”
must consciously come to terms with the American institution of one-
on-one marriage. In justifying BFICs to themselves and others, they have
to address the American institution of one-on-one love and expose it as a
myth. Facing the Indian institution of arranged marriages (and the nega-
tive consequences of marrying for love), most Indians who marry for
love present the marriage as an arranged one by seeking parental consent
and embracing the ritual public display of marriage with pandits (priests)
and a showy baraat (wedding procession) (Derné 1995: 122–37). Even
as they marry for love, they must contend with the obdurate structural
reality that most marriages are arranged.
ECONOMY AND FAMILY IN INDIA
This book is centrally concerned with the institutions of family and

economy in India. This chapter illustrates a theory linking structure,
culture, and psyche by describing how the institutional aspects of economy
and family in India correspond with particular cultural meanings
and psychic orientations. One central argument of the book is that
these institutional arrangements are crucial in shaping the response to
globalization.
Globalization, I argue, has the greatest effect on those who are insti-
tutionally positioned in ways to take advantage of changes in the economy.
For the ordinary middle classes, persistent, institutionalized patterns
in family and the economy have limited the impact of cultural and
economic globalization. This section highlights how affluent Indians
and non-élite middle class Indians are situated with respect to the family
and economic institutions that are most significant for this study.
Since 1991, the economic structure in India has been transformed by
economic liberalization. Foreign exchange restrictions have lessened, the
regulatory demands placed on foreign investment have decreased, the
potential equity stake of foreign investors has increased, local markets
have opened up to foreign competition, regulations and licensing have
decreased, and the public sector controls a smaller part of the economy.
These legal changes and changed structural realities altered the rules that
shaped the behavior of both individual and corporate economic actors.
When aggregated, the new individual economic actions that responded
to these realities changed the economy, increasing the availability of for-
eign goods, making pricing of goods more sensitive to non-local forces
of supply and demand, and gearing production more to the demands of
the international market.
The class position of individuals strongly affects whether the global-
ization of the economy has transformed their opportunities. Indians with
income, education and English-language skills are situated in ways that
provide increased employment opportunities. For them, the increased
number of corporations oriented toward the international market has

increased the number of high-paying jobs that are available. As a result,
cities like Bangalore and Hyderabad have emerged as centers for the
production of computer software. Enticed by high salaries abroad, many
Indian computer programmers do contract work in the USA and Eu-
rope, where they make much more money than they could have in India
(even though they make much less than other programmers in the West)
(Shurmer-Smith 2000: 26). With decreased foreign exchange restrictions,
opportunities for training abroad have expanded for those with money.
The changing economic structure has also provided affluent Indians
with greater opportunities for consuming a more diverse array of
consumer goods. Before liberalization, few international products were
available on the open market. There were waiting lists for consumer
durables like cars, scooters, TVs, air-conditioning units, and refrigera-
tors. Trips abroad were often necessary to procure consumer items like
VCRs. Now, most of these goods are legally available in the market to
those with the cash to buy them (Shurmer-Smith 2000: 33).
Ordinary middle class Indians are positioned within the transformed
economy in ways that have not increased opportunities. While the posi-
tion of the affluent has improved, the rest of the class structure remains
largely unchanged. A similar percentage of workers continue to toil in
agriculture, manufacturing, and primary industry (Shurmer-Smith 2000).
For those without much income or education, especially those who lack
English-language fluency, the local employment market, oriented to
local production, remains the source of most jobs. Indeed, the decline in
public sector enterprises has diminished employment opportunities for
women and lower-caste Indians, who face pervasive caste and gender
discrimination in the private sphere (Saavala 2001: 306–07; Shurmer-
Smith 2000). While some consumer goods, including televisions, are
increasingly available to the non-élite middle class in India, economic
globalization has often harmed the consumption possibilities of the non-
élite. Of perhaps the greatest importance, the structural adjustment
policies necessitated in 1991 cut government subsidies on agricultural
inputs, raising food prices (Shurmer-Smith 2000: 22). Now, basic items
are also exposed to price fluctuations caused by the non-local market.
As more refrigerators, generators, and air-conditioners become legally
available, their prices have declined since the 1980s. But the prices of
basics such as food have often increased.
Non-élite young men who are frustrated with their lack of opportu-
nities have long constituted the biggest market for Hindi films (Derné
2000a; Shurmer-Smith 2000: 54). The many continuities in Hindi film
pleasures in the decade since 1991’s economic liberalization are rooted
in the unchanged economic conditions of the non-élite. The rest of
this book describes continuities in Hindi films, which continue to offer
refreshing reversals of structural realities, and to celebrate the male domi-
nance that so many viewers are attracted to as compensation for lack of
economic opportunities.
There are similar institutional continuities in the family arrangements
of the non-élite middle classes, who continue to embrace arranged mar-
riages, joint-family living, and a gendered division of labor in the home.
Non-élite Indians have long married according to the wishes of their
parents (Derné 2000a: 84–88). It appears, moreover, that the globaliza-
tion of recent years has had little effect on the institution of arranged
marriages for non-élites (Abraham 2001: 49; Basu 1999; Gupta 2000:
49–50; Pathak 1994: 48, 59; Shurmer-Smith 2000: 48; Uberoi 1998:
307). Abraham (2001: 149–50) found, for instance, that the low-
income, college-going, English-speaking boys and girls whom she inter-
viewed in Bombay in 1996–98 continued to prefer arranged marriages.
While living in a metropolitan center and speaking English well, the
young women continued to condemn love marriages for making brides
vulnerable in their marital homes, while the young men worried that
love marriages would cause problems of adjustment with their own
parents. Like the non-élite men whom I interviewed before the intensifi-
cation of globalization in Banaras in 1987 and Dehra Dun in 1991, they
rejected love marriages as likely to fail.
Similar continuities are apparent in the Indian institution of joint-
family living. Indian men have long contended that the ideal state of
affairs is for a young man to live harmoniously under one roof with his
wife, parents, and brothers, and that such a life would be full of love and
happiness (Derné 1995, 2000a: 25). Certainly, women often do not share
this commitment, and many family households do not reflect this
pattern. But most couples live with the husband’s parents or brothers in
the early years of married life, even if they eventually form a nuclear
family as their children grow (Derné 1995). In India today, joint-family
living continues in the early married lives of most young non-élite couples
(Kishwar 1994: 11; Shah 1996, cited by John 1998; Wadley 2002: 20).
Indian men continue to want a gendered division of labor in which

women are responsible for all housework and childcare.4 Rather than
tempering this commitment, economic and cultural globalization seem
to have increased anxieties about identity that have only intensified non-
élite men’s commitment to a gendered division of labor. Non-élite men
have long worried that providing their daughters with education much
beyond high school would jeopardize their marriage prospects, since the
fathers of sons want daughters-in-law who will toil in the home and
believe that educated women would be unwilling to do so (Derné 1994b).
Facing the institutional reality of women’s exclusive responsibility for
household labor, ordinary middle class fathers discourage daughters
from getting an education that might disrupt the institutionalized gen-
der division of labor. The limited economic opportunities for ordinary
middle class women, the structural realities associated with women’s work
in the family, and the structural realities that guide how parents of grooms
choose brides for their sons mean that women of the non-élite middle
classes remain unlikely to work outside the home (Shurmer-Smith 2000:
47). Women in lower middle class homes often still do much of the house-
hold work that is done by servants in the homes of the affluent (ibid.: 50).
Subsequent chapters show how institutional continuities in Indian
families are a source of key continuities in Hindi films even in the face of
a changed cultural landscape. Hindi films have long addressed tensions
inherent in the institution of arranged marriages, arousing anxieties that
parents may not have their children’s best interests at heart in arranging
their marriages, while simultaneously relieving these very anxieties by
suggesting that arranged marriages are the best path to happiness (Derné
2000a: 168). Similarly, Hindi films continue to help viewers handle anxi-
eties associated with the gendered division of labor and joint-family
living. Here my emphasis on identifying arranged marriages, joint-
family living, and a gendered division of labor as a persistent part of the
institutional landscape of the non-élite in India aims to demonstrate that
these practices play a key part in rooting cultural meanings and psychic
orientations.
It is worth noting that the élite classes are less attached to these family
structures. While most affluent Indians continue to embrace arranged
marriages, love marriages are becoming more common (Shurmer-Smith
2000: 41). Economic independence is one structural fact that makes
love marriages and nuclear family living a more realistic possibility for
affluent young couples (Shurmer-Smith 2000: 39; Varma 1998: 167).

Affluent women’s structural opportunities for earning high incomes may
similarly be altering the gender division of labor for élite Indians. If women
in affluent households can get good paying jobs, they often do so, em-
ploying servants to do the housework. Affluent women, then, are more
likely to work outside the home than non-élite middle class women
(Shurmer-Smith 2000; Standing 1991).
INTERESTS AND INSTITUTIONAL PERSISTENCE
Of course, institutions position some people in ways that advance their

interests, and these people, in turn, often work to support these institu-
tions. It is not merely norms and meanings that support institutions, but
the interested actions of those who benefit from them. One reason that
economic globalization may have failed to increase opportunities for the
non-élite is that the élite know that their relative comfort continues to
depend on cheap labor in India. At a personal level, the ability to hire low-
wage servants to cook and clean is necessary to maintain affluent lifestyles.
At a collective level, India’s comparative advantage remains the cheap
labor that can attract investment from elsewhere. Thus, as Gupta argues,
the élites have no interest in the “general middle-classing of society” (Gupta
2000: 9). Despite economic globalization and the increasing celebration
of consumption, the economic structure that severely disadvantages the
non-élite of society persists, partly because the affluent benefit from it.
One reason that cultural globalization may not have transformed most
non-élite Indian families is that men’s relative comfort depends on the
existing family arrangements. Joint families often provide important prac-
tical support in a country without large government programs of social
security, unemployment compensation, and old-age benefits (Derné
2000b: 335). Men often see joint families as providing practical support
as brothers and sisters-in-law can divide responsibilities in a joint house-
hold (Derné 1995: 42). In many contexts, joint-family living is a sign of
honor, which men regard as essential for economic success (Derné 1995;
Wadley 2002). Wadley (2002: 19) suggests that for many non-élites,
new economic opportunities in cities actually support joint-family living
as temporary migrants leave wives and children with their families in the
villages. Thus, the self-interested action of those who benefit from joint
families contributes to their institutional persistence.
While economic interests support joint-family living, men’s percep-

tion of their own gendered interests also leads them to act in ways that
reproduce family institutions (Derné 1994c, 1995: Chapter 2). In 1987,
one 28-year-old man whom I interviewed contrasted his happy situation
with that of the man whose wife was in the paid labor force:
My wife remains at home doing all kinds of service, adorning the house, the
door and herself . . . when I come home and see the beauty, I become very
happy. [But if the wife works outside], there is daily quarrel. The husband
comes into the house and knows that his wife has gone outside to earn. The
tired husband makes his own tea. He does everything by his own hands. He
even has to make his own tea!
Men commonly complained that if wives were in the paid labor force,
the wives would have so much pride that they would not be able to
properly love their husbands and other family members (Derné 1995:
28–30). What is less obvious than their attachment to the gender divi-
sion of labor is that men are also attached to arranged marriages and
joint-family living partly for selfish reasons (Derné 1995: 17–19; see also
Wadley 2002). They believe, for instance, that in the joint family, their
parents can exert control over their wives. Even while they are away at
work, they think that their parents can watch over their wives and pre-
vent them from going outside the home. They believe that with an
arranged marriage, the parents of the wife and the parents of the husband
would be able to get together to put pressure on the wife to ensure that
she follow her husband’s orders. As one 33-year-old told me in 1987, “If
the marriage is through the parents, and we live in a joint family, the
influence of [the wife’s] father, [the husband’s] father, and the whole joint
family is on the woman. The woman is kept down a little from all sides.”
Institutional arrangements in non-élite families are reinforced by the
self-interested actions of the men who benefit from these arrangements.
Indeed, the primary uneasiness that men feel about globalization cen-
ters on their concern that it might lead women to abandon the family
duties that men so often see as a source of their own comfort (Derné
2000a: 27–30). Even in 1987, a 28-year-old complained that the women
of the day had a craze (phitur) for moving around, attending parties, and
being independent. This man attributed the progressive (pragatisheel)
ways of thinking that make women want to work outside the home to
being driven by materialism. He condemned any paid work women do
as worthless (vyarth) because it spoils their families. Especially sickened

by market relations entering the home, he complained that “no maid
servant is full of motherliness (matrtav). Maids work to get a salary and
then leave the child behind.” Men are uneasy about globalization
because they fear that it threatens family arrangements, which they
believe work in their own interests.5
Men’s interests often drive micro-level interactions that make up the
social structure (Derné 1994c, 1995: Chapter 2). Attached to the gender
division of labor in the home, men tell their wives not to go outside
the home alone, and try to marry their sons to women who will work
diligently in the home. Concerned about arranging their daughters’
marriages, parents discourage daughters from getting too much educa-
tion or pursuing careers that will brand them as too independent to
perform the work of a daughter-in-law in her husband’s family (Derné
1994b). Wanting to control their wives, men embrace arranged mar-
riages and joint-family living.
This focus on the interests of those with the ability to shape institu-
tions suggests how interests (which are rooted in structural realities) drive
the interactions that reproduce social structure. One of the implications
of this book’s consideration of cultural globalization is that cultural
changes that are independent of changes that transform the interests of
powerful people often have little effect on transforming social structures.
Culture
While structure refers to how society is organized, culture refers to the
meanings people use to understand their social world. Culture consists
of a range of symbolic vehicles that convey meaning, including beliefs,
worldviews, values, stories, sayings, rituals, movies, religious performances,
and works of literature. People use meanings to both understand their
world and to convey these understandings to others (see Derné 1995: 9;
Spillman 2002: 4–9; Swidler 1986: 273; 2001: 12–13).
The notion that sets of meanings are shared, coherent, or consistent
within a common group or society has been thoroughly critiqued
(Spillman 2002: 7; Stromberg 1981: 545). Nor are meanings a clear
guide to action: individuals often know cultural meanings without
embracing them; they regard some as authoritative guides to action and
others as meaningless entertainment, and they interpret existing sym-

bols and stories in diverse ways (DiMaggio 1987: 448; Stromberg 1986;
Swidler 2001: 1519).
Yet, even as individuals are able to use and manipulate meanings,
their actions are still oriented by the meanings they receive. Individuals
use culture, as Clifford Geertz puts it, “to orient themselves in a world
otherwise opaque” (Geertz [1966] 1973: 363), to make sense of the world
they see around them. As C. Wright Mills argues, culture is the “lens”
(Mills [1959] 1963) through which people see the world. Certainly, people
actively contest meanings, and social movements struggle to change
meanings (Lichterman 1996; Williams 1995). But the Durkheimian
insight that ways of thinking are external to the individual is also correct.
“The church member finds the beliefs and practices of his [or her] reli-
gious life ready-made at birth” (Durkheim [1895] 1938: 1–2). Individu-
als use symbols, stories, and sayings that they themselves did not invent.
While individuals sometimes contest and reinterpret—and, indeed,
invent—such symbols, stories, and sayings, they still draw on a common
repertoire of cultural meanings. Thus, the utopian American who em-
braces non-monogamous polyfidelity by living in a BFIC also lives with
the American cultural celebration of romantic love and must counter
that repertoire of cultural meaning to justify his or her lifestyle. Indians
who marry for love live with the cultural understanding that love
marriages cause destructive conflict between husband and wife. Even if
they reject this cultural understanding, Indians must come to terms with
it by suggesting reasons why their love marriage might not fall into this
trap (Derné 1995: 128–34). Cultural meanings do not determine con-
duct, but when they are widely held, individuals usually must come to
terms with them to explain their own unconventional actions.
I distinguish between two broad sorts of cultural meanings (Derné
1995: 9–11). First, cultural components of a cultural repertoire or toolkit
help people understand particular social practices, such as arranged mar-
riages and love marriages, joint-family living and nuclear-family living,
gendered divisions of labor and shared earning and housework, open
economies and closed economies. These sorts of meanings are conveyed
in stories, values, worldviews, myths, etc. Second, frameworks for under-
standing action (see Derné 1994b, 1995) are used to understand action in
general. These frameworks help individuals understand any act a person
encounters. Individuals must attribute motives to the actions they see
around them (even if the actions are not part of a familiar social practice).
Some frameworks for understanding action may emphasize selfish mo-
tives, while others emphasize family obligations; some frameworks focus
on individual choices, while others focus on social imperatives.
CULTURAL COMPONENTS THAT GIVE

MEANING TO FAMILY INSTITUTIONS
The toolkit of the ordinary middle class men whom I interviewed

includes a range of cultural components that they use to understand
family institutions like arranged marriages, joint-family living, and a
gendered division of labor. Most of the non-élite men whom I inter-
viewed prior to the 1990s’ growth of globalization used a moral vocabu-
lary that focused on the importance of honor and tradition to understand
family arrangements. “The tradition” of arranged marriages, one man
told me, “is the Hindustani tradition. . . . It is right and good. . . . As long
as there are Hindustani people in the real sense, the tradition will run.”
By contrast, many men told me that love marriages were very dishonor-
ing and were looked at by society with “bad eyes.” They understood the
practice of joint-family living as a “tradition” that should be continued
since it had “been running from the beginning”. Men say, moreover, that
the joint-family protects a man’s honor (izzat) and esteem (maan) by
letting everyone know to what khaandaan (family lineage) a person
belongs. Similarly, men often regard restricting women to the home as
essential to protect family honor. “To talk with any other male is harm-
ful to our prestige (pratishtha),” one man told me.
Detailed cultural components give meaning to each institutional
arrangement that most men embrace—for instance, the institution of
arranged marriages is supported by cultural stories describing the rea-
sons why love marriages fail (Derné 1995: 45–53). The men whom I
interviewed tell of young men, blinded by raw emotion, who are less
able than sober elders to choose an appropriate spouse. They tell stories
of how love marriages break because they reflect an unstable, volatile,
equal relationship between husband and wife that is not appropriately
controlled by social pressures. “Love marriages often break,” one man
told me. Neither husband nor wife “considers himself or herself less than
the other one. . . . There is no pressure from the family. . . . All these things
lead to destruction.”
Similar stories support joint-family living by warning of the struggles

that those who live in nuclear families face, or by telling tales of wives
(and husbands) who act inappropriately without joint-family control.
Other stories support the gendered division of labor by warning that
wives in the paid labor force often neglect family duties. “When a woman
earns something,” one man told me, “she has the pride that ‘I am also
something.’ For this reason, she cannot give so much love (prem), and
cannot see things with the same eye with which she saw things before she
started earning.”
Men’s stories of how educated women neglect their responsibilities in
the home similarly support restrictions on women’s movements outside
the home. “I get up early in the morning and recite Ramayana,” one
man told me. “How would it be if the girl got up and started singing
English poems?” For this man, the educated woman who is so attached
to Western culture and her singing English poems could never have the
appropriate “feeling (bhavna) of adjusting in the family” and might thus
fail to “rise before her mother-in-law and successfully complete all of the
arrangements for the house” (Derné 1994b: 92–96, 1995: 28–30).
These cultural meanings support the structures of family life described
earlier in the chapter. They provide a way for people to make sense of the
institutional worlds that they face, while simultaneously motivating the
actions that serve to reproduce these structures. Like interests, these
meanings drive the actions that reproduce the patterns that constitute
the social structure.
Of course, it is important to note that this cultural repertoire is not
unified and uncontested. A range of alternative understandings offers
alternative ways of seeing social practices. Men have long separated
from joint families headed by brothers or parents. A plethora of stories
give meaning to such practices. People often talk of family conflicts that
divide brothers. One 35-year-old man who separated from his brothers
spoke of the “daily quarrels” of joint-family living: “I have [set up a sepa-
rate household] so that I will be separated from these problems.”
Even in the 1980s, the men whom I interviewed understood that the
changing times sometimes demanded separation from joint families
(Derné 1995: 84–85, 131–35). Men’s cultural toolkit even offers posi-
tive stories that might support love marriages. People tell stories, for
instance, about how love marriages might succeed if the young couple
appropriately seeks parental consent, marries within caste, and embraces
the proper Hindu rituals. Some hold that love marriages might succeed
if people are from the modern or privileged sectors of society (Derné
1995: 122–35). But the cultural components that might be used to
support love marriages are less legitimate, familiar, and rich than the
understandings that support arranged marriages. What is important to
emphasize is that the cultural components available in a toolkit can be
used to support diverse (but not infinite)6 lines of action.
Since women are positioned differently in joint families, they tend to
develop alternative cultural understandings of family (see Derné 1994d:
300, 2000b: 338–40). Frequently faced with greater burdens and less
autonomy in joint families, young women often have an incentive to
disrupt joint families. Thus, women’s folk songs stress that joint-family
living breeds discord and that faith in elders may lead to disaster (Raheja
and Gold 1994: 112–13). Disadvantaged by the gender division of
labor in the home, women enjoy folk songs that portray independent
and powerful women in a positive light, rejecting the focus on wifely
submission in her husband’s home (ibid.: 132). Women find positive
meanings in romance-novel stories of independent women (Parameswaran
1997; Puri 1997: 442) and in Hindi film stories of heroines who are
confident and able to hold their own with anyone (Dissanayake and
Sahai 1992: 102). The cultural meanings that support social structures,
then, are not likely to be shared by those who are disadvantaged by these
structures. This highlights how cultural meanings probably arise pre-
cisely because they support the interested actions of individuals—and these
individual interests are defined precisely by the way these individuals are
placed within a social structure.
SOCIAL FRAMEWORKS FOR UNDERSTANDING ACTION
Among the orientational requirements that every cultural apparatus must

fulfill (Geertz [1966] 1973: 363) is some understanding of what
motivates people’s actions. A growing body of anthropological studies
of ethnopsychology—indigenous understandings of the psyche and of
mental processes—demonstrate the rich variety of cultural conceptions
of human motivations (Heelas and Lock 1981; Lutz 1988; White and
Kirkpatrick 1985). Actions can be understood, for instance, as driven
by gods or spirits, by respect for elders, by spells cast by witches, by
“substances” in the village soil (Daniel 1984), or by the self based on

individual interests and desires. Nevertheless, two general types of
understanding are fundamental (see Heelas 1981b). According to one
understanding, actions are chosen by individuals themselves, while
through the lens of a second understanding, actions seem to be driven by
forces outside the individual.
Bellah et al.’s (1985) discussion of “languages”—distinct vocabularies
attached to discourse—points to the individualistic understanding of
action that is dominant among white middle class American men today.
Bellah et al. argue that most Americans are limited by a “language of
radical individual autonomy” and “cannot think about themselves or
others except as arbitrary centers of volition” (Bellah et al. 1985: 81).
The American understanding, they argue, focuses on “the autonomous
individual, presumed able to choose the roles he [or she] will play and
the commitments he [or she] will make, not on the basis of higher truths,
but according to the criterion of life-effectiveness as the individual judges
it” (ibid. 1985: 47; see also Heelas 1981a: 4; Shweder 1991; Swidler
1986: 276; Varenne 1977).
By contrast, the non-élite Indian men whom I interviewed in the
1980s have a collectivist understanding that holds that action is driven by
social pressures from an individual’s social group (Derné 1995: 38–65;
see also Kakar 1981; Roland 1988; Shweder 1991). Men see proper be-
havior as appropriately dictated by social pressures. Rather than focusing
on individual morals or commitments as the guide to correct action,
men tend to focus on the appropriate pressures from society. “We have
to move under whatever is the family’s society,” one 32-year-old told me
in 1987. “Whatever customs are there in the society of Brahmins, we
move according to those customs.” In understanding how they manage
not to act on their own inappropriate sexual urges, unmarried men
emphasize that they are being controlled by parents. One 24-year-old
told me that he would never “run behind the back of girls” because of his
“emotional calculation” that his “parents are above” him. In understand-
ing the inappropriate actions of others, men focus not on variant indi-
vidual dispositions but on the breakdown of group control. Men believe
that college women act inappropriately because their parents are not
there to control them. They believe that love marriages almost inevitably
break down because a young man and woman who marry for love have
rejected the appropriate guidance of parents.
When understanding actions that are inconsistent with existing social

patterns, men do not emphasize individual variations, but the actions of
people driven by different social groups. For instance, men explain why
some fathers choose to introduce their son to a potential bride before
setting a marriage by pointing to these fathers’ class and caste, rather than
to their individual decision-making process. They refer to the class and
caste of fathers, rather than to their individual choices. Men do not see
women who work outside the home as motivated by their own choice (or
the choices of parents who provided education) but as reflecting the castes
or economic groups to which these women belong.
Frameworks for understanding action are not ways of acting, but ways
of understanding or perceiving actions. Social groups have an important
influence on actions of middle class American men even though these
men are unlikely to recognize that influence. In their accounts of their
own success, for instance, middle class American men emphasize their
own individual efforts, ignoring the contributions of family and neigh-
bors, which are often just as essential (Bellah et al. 1985: 82; Varenne
1977: 28–29). At a more general level, the imperative that Americans be
self-reliant and make decisions on their own is itself not chosen by the
individual, but is imposed by society (Bellah et al. 1985; Dumont [1966]
1980: 9–10; Varenne 1977: 47–48).
Similarly, individual interests play an important part in driving the
actions of individual Indian men though they may see even their most
self-interested actions as directed by the received authority of caste and
family. An individualistic understanding of action does not imply greater
individual autonomy, just as a collectivist understanding does not imply
stronger group control. Culture is not behavior, and indigenous ethno-
psychologies are not a completely accurate description of psychological
motivations (see Ewing 1991: 132–34).
Second languages which give voice to the opposite pole of human
experience also exist in all cultural systems. While middle class American
men’s framework for understanding action focuses on individual voli-
tion, this focus is sometimes tempered by “second languages” often rooted
in Biblical and republican traditions (Bellah et al. 1985; Derné 1995)
which allow for a discourse based on shared commitments to communi-
ties. Similarly, because total passivity or powerlessness runs counter to
the human experience of being able to act in the world (Heelas 1981b:
47), various second languages that recognize the importance of the
individual complement the dominant Indian first language that sees

action as driven by forces external to the individual (Derné 1995: 84–
103, 2000a: 88–111, 164–67; Mines 1988). The Indian Constitution
makes individuals important bearers of rights and obligations (Béteille
1983). The spiritual realm is another arena in which Indians can empha-
size “particular proclivities of a person” (Roland 1988: 228). Individual
competitions, such as wrestling, contest the dominant focus on group
membership (Alter 1992).
In Hindi films, uniquely powerful action heroes successfully fight in-
justice and fans emphasize the “specialness” of individual stars. Both Hindi
films and popular theatre celebrate challenges to parental authority as
heroes and heroines marry against the wishes of their parents or rebel
against unjust political, economic, and family powers. The act of film-
going as a time when young people can be separated from their family
emphasizes their autonomy. Perhaps as a result of such cultural help,
many men focus on their own individual sensual desires in relationships
with their wives (Derné 1995: 90–93).
People may be less familiar with their culture’s second languages. They
may have less facility using the vocabulary of second languages, which
may be less rich than the dominant first language. So, as Sudhir Kakar
puts it, even though Indians are often “more individual . . . than they
realize,” the “cultural highlighting” (Kakar 1981: 275) of the group makes
it difficult for them to recognize their individual autonomy. While
Indian men experience individual desires and inclinations, they may
still use the first language of group control to talk about these desires.
Bellah et al. similarly argue that because of the American “first language
of individualism,” Americans “have difficulty articulating the richness of
their commitments” (Bellah et al. 1985: 20–21) to others.
While second languages allow people who share the dominant frame-
work for understanding action to express aspects of human experience
that are contrary to their first language, there are other groups in both the
USA and India who do not embrace the dominant framework as their
primary orientation. American women, for instance, think much more in
terms of relationships to others than in terms of the isolated individual
that dominates the thought of American men (Bellah et al. 1985: 111;
Gilligan 1982). African-Americans, recognizing how their life-chances are
limited by forces outside themselves, are more likely to emphasize collec-
tive strategies for advancement than are European-Americans, who focus
more on individual volition (Stack 1974; Weis 1990). While members of

the American middle class focus on success through individual initiative,
members of the American working class may focus more on advancement
through adherence to external authority (Carnoy and Levine 1985).
Similarly, lower-caste Indians may have an individualistic rather than
a collectivist understanding of the world (see Appadurai 1986: 751–52;
Khare 1984). They understand the social roles that constrain them as
something imposed on them by the efforts of the powerful, rather than
as a legitimate part of the social order. While upper-caste Indian men try
to advance their position by strengthening their families, Indian women,
often isolated and subjugated in their husbands’ households, may try
to advance their own position by persuading their husbands or sons to
separate from the joint family, breaking up the larger groups that men
prefer to hold together (Bennett 1983; Raheja and Gold 1994). Erin
Moore (1995: 290) found that because joint families often do not work
to women’s interest, their moral reasoning relies more on “personal inter-
ests” than the voice of authority on which men rely.
Linking Culture and Structure

A correspondence develops between institutional structures and the
cultural components that support them. Institutions that position people
within these structures in particular ways create interests that attract people
to cultural meanings that support actions they want to take. Facing the
institutional reality of joint-family living, arranged marriages, and a
gender division of labor in the home, people who have to, or want to,
live in these structures produce stories, values, and other elements of
culture that make these structures meaningful. When people act on these
meanings by living in a joint family, practicing arranged marriages, and
dividing labor in the home, they reproduce those macro-level structures.
But since family institutions not only help individuals, but also
simultaneously disadvantage them, alternative meanings develop. Since
joint-family living may prevent a man from attaining desired closeness
with his wife, he may come to understand the joint family as the cause of
hardship and strife. A man may see that parents do not always have their
children’s best interests at heart in arranging a marriage, and he may
come to understand love marriages as desirable. Women, because they
are disadvantaged by these family institutions, often develop and em-

brace contrasting cultural components that emphasize conjugal love over
joint-family living and women’s independence over a strict division in
the household. Thus, the same structures that situate actors in ways that
make them generate meanings that reproduce these structures situate
other actors in ways that lead them to develop alternative meanings,
which challenge these structures.
Less obviously, joint-family living structures interact in ways that gen-
erate the collectivist framework for understanding action.7 Durkheim
suggested that a social group can only make its influence felt when “it is
in action” and it is only in action when the “individuals who compose it
are assembled together and act in common” (Durkheim [1912] 1915:
465). By putting individuals together where they can act in common,
joint families may increase the awareness of a group. A sense of interde-
pendence may be shaped by joint families that appear to work for a
common good. This sense of depending on others may be similarly shaped
by the institution of arranged marriages, which leads individuals to learn
that they must rely on others in their choice of a spouse. By increasing
the availability of caretakers, joint-family institutions may also create a
sense of interdependence by prolonging a child’s dependence on others.
The greater focus of Indian women on individualism may similarly
be related to how family institutions structure their experiences (see Derné
2000b). Women, who are expected to leave their parents’ home to live
with their husbands, develop a greater sense of themselves as separate
from family. Indian “women’s personhood is unique,” Sarah Lamb ar-
gues, “in that their ties are disjoined and then remade, while men’s ties
are extended and enduring” (Lamb 1997: 289–90). A grown man will
remain in his parents’ community: by the time of a boy’s marriage, he
will have undergone many more rituals tying him to that community
than will be performed for the girl (Lamb 1997: 290–91). Since she
must shift her allegiance from one group to another, a woman may be
more likely to develop a sense of independence from any particular group.
Women may focus on independence and self-reliance precisely because
they do not have the same sense of group protection that men do: grow-
ing up, girls may see a sister go to her husband’s house and later hear her
complain of the loss of freedom and respect that greeted her there. In
short, Indian family institutions structure men’s experiences in ways
that lead them to embrace a collectivist understanding of action. Placed
differently in families, women’s experiences tend to provide them with a

contradictory set of meanings.
When deeply held, the collectivist framework for understanding
action bolsters the institutions of joint-family living and arranged
marriages, which play such a vital role in generating that collectivist
understanding. Because men see appropriate action as guided by the group,
they willingly embrace arranged marriages, believing that the group can
make a better decision than an isolated individual. Given the American
understanding that action is best chosen by the individual based on his
or her own desires, individuals want to choose their own spouse. But
given the Indian understanding that actions are best guided by family,
most Indians embrace arranged marriages.
Similarly, because men see appropriate action as guided by social pres-
sures, they choose to live in joint families to facilitate such guidance (Derné
1995: 42–44). As one newly married man told me, “I wouldn’t want to do
even the smallest bit of work without asking my father.” By contrast, many
Indian men are uneasy with the thought of living separately and making
decisions on their own (Derné 1995: 44–45). One 26-year-old told me
in 1987, for instance, that the person forced to live alone “will either do
bad things or commit suicide. But living jointly, one can pass one’s life.”
Given their individualistic understanding of action, American men are
happy living separately and making their own decisions. But because
Indian men usually see action as rightly driven by group guidance, they
often prefer to live in joint families that can provide that guidance.
Despite the fit between family structure and cultural understandings,
the second languages of individual autonomy and the diversity of family
arrangements are longstanding—and are, in fact, generated by tensions
in family institutions. Individual actors have long had cultural and insti-
tutional resources that could be used to buck institutional patterns. Given
the existence of these resources, new cultural meanings are unlikely to
create change unless external forces also disrupt institutional structures
which support a collectivist cultural orientation.
Psyche8
The resilience of the Indian family structure and collectivist cultural under-
standing is even stronger because the two have also rooted themselves in
the psychic orientations of Indians. Unlike Bourdieu, I separate structure

from psyche, but the difference is a matter of terminology: my argument
is consistent with Bourdieu’s (1992: 7, 12–13, 18) focus on how
social structures have a material existence that is also internalized into
dispositions that reflect the necessities of the material environment.
Consistent with the collectivist framework for understanding action,
Indian men’s emotional repertoire emphasizes fear as a good, moral
emotion that prompts correct behavior, while regarding love as a poten-
tially dangerous emotion that might prompt dangerously individualistic
actions.
This psychic orientation is intensified by men’s attachment to a
family structure which includes joint-family living and arranged mar-
riages. In the context of joint families, social fear is an emotion which
prompts respect for elders, while love is a dangerous emotion that might
split families apart. In the context of arranged marriages, fear of parents
prompts correct behavior. While Indians hope that love between hus-
band and wife develops, they believe that this emotion is not a solid basis
for marriage. When deeply rooted, these emotional repertoires play a
role in motivating actions that reproduce the enduring aspects of Indian
family structure, like joint-family living and arranged marriages.
COLLECTIVIST ORIENTATION AND EMOTION IN INDIAN FAMILIES
It is increasingly recognized that emotions are not biological universals

but are culturally and socially shaped (Derné 1994d; Hochschild 1983;
Lutz 1988; Shweder 1991). Indian men tend to see social fear as a good,
moral emotion because the collectivist framework for understanding
action sees action as rightly shaped by the guidance of others. Lacking
a focus on the individual, men see love as duty-based and extended
toward many in the family. Recognizing love as a potentially individual-
istic emotion that emphasizes another’s special qualities, men tend to
see love as a possibly dangerous emotion that should always be tempered
by fear of society.
Catherine Lutz found that the Micronesian Ifaluk people see the per-
son “as first and foremost a social creature and only secondarily and in a
limited way, an autonomous individual” (Lutz 1988: 88). Given this
framework for understanding action, the Ifaluk see “fear” as “what keeps
people good” (ibid.: 88). Indian men’s collectivist understanding of
action similarly implies an understanding of fear as a moral emotion

that is the foundation of good behavior (Derné 1994d, 1995: 72–73). A
54-year-old told me in 1987 that people “are only educated from doing
wrong by the fear of society (samaaj ke dar).” Another man said that
arranged marriages run because of the “fear (dar) of society,” while an-
other said that the “fear (dar) of public shame” is what makes arranged
marriages successful. Another man connected social fears in a family to
the love that holds a family together: The family remains united, he said,
because “everyone in the family fears [bhaybhit] to do something to each
other. They yield [manana] to each other, love [paraspar prem rahana]
each other and fear [darna, bhaybhit rahana] each other. A 24-year-old
man whom I interviewed in 1987 distrusted his own sexual urges, saying
that if he didn’t live with his parents, he couldn’t help but “run behind
the back of girls.” By living with his parents, this young man is
comforted to have “the emotional calculation [bhavatmak hisab] that my
parents are above me. There is somebody to guide me and I am under
somebody.” The collectivist framework that sees action as correctly driven
by family pressures leads men to value the social fear that prompts people
(including themselves) to be driven by such pressures.
Since Indian men see people as driven by social groups, they put rela-
tively little emphasis on an individual’s personal traits. Hence, the idea
of love as directed toward a special, unique individual makes little sense
(Derné 1994d, 1995: 72–74; see also Kurtz 1992: 254). Thus, when I
asked husbands (in 1987) to tell me about their wives’ special qualities,
the most common response was that she “has no special qualities.” Some
men described their love for their wives as based on their duties rather
than on a wife’s special qualities. One man used the analogy of a parent’s
love for the child. “I will love (pyaar) my child,” he said, no matter what
the child’s qualities. “It should also be this way with the wife. Whether
she is good or bad . . ., she is a member of the family and for the sake of
the relationship we certainly love (mohabbat) her.” The collectivist frame-
work that de-emphasizes personal characteristics and emphasizes
embeddedness in a web of relationships pushes one toward seeing love
as rooted in a duty attached to a role rather than in a person’s special
characteristics.
Indian men de-emphasize the individual, so love is not for an exclu-
sive individual but is owed to many in a family. Men often describe
the pleasures of joint-family living by focusing on what one young
unmarried man called the “love (prem)” that one gets “from every mem-
ber of the family.” Men commonly emphasize that a woman’s love should
not be directed toward her husband alone but toward many in her
family. A married 47-year-old man told me in 1987, for instance, that a
wife should “live in love (pyaar-mohabbat se rahana) with her husband,
mother-in-law and father-in-law, and with other people, too.” This man
emphasized that a woman should love not just her own children but
those of other men in the family as well. As one unmarried 24-year-old
put it, a wife should “love (prem karna) everyone in the house.”
The cultural emphasis on being guided by social groups leads most
men to emphasize that love is dangerous if it becomes too focused on
one individual or aspect of life. The danger is that an exclusive love which
is not balanced with love for other family members will get out of hand.
Phoolchand Mishra, a married 28-year-old, focused on how an overem-
phasis on sexual attraction is dangerous:
If the husband and wife love (chaahat) each other because of sex, then they
may neglect their elders. But if the reason for the deepness of their relation-
ship is not the sexual relationship, then it is less possible to have this type of
corruption of neglecting elders because the mentality of human beings doesn’t
remain restricted to one place. It keeps reflecting everywhere. [Emphasis added.]
For Phoolchand, “love (chaahat) should be for everyone—not for some

special person.” Like many Indian men who focus on appropriate behav-
ior as guided by social pressure, Phoolchand saw love as dangerous
when it becomes too focused on one person, instead of being extended
to everyone in a family.
The sociocentric cultural emphasis similarly leads men to see love as
safe only when it is tempered by social fear. Men see love as a danger-
ously individualistic emotion that might tempt them away from the
benevolent guidance of social pressure from a wise family. Men fear that
love may pull unmarried men away from their responsibilities to their
families. The unmarried 25-year-old Prem Singh described the “hobby
of sex” as an addiction:
The man who will lose himself in sex can forget the roles he has to play, as in
any intoxication. If you drink wine and you’ve got 100 rupees, then you will
go straight to the wine shop—whether there is food in the house or not. The
same process runs with the worshipper of sex. His mind will not be peaceful
because he will always be entangled in women.
Although Prem’s marriage had been arranged, he still felt the pull of
love:
Because I have joy within me, I am not sure if I can control myself. I may
become entangled with the love [English word] of somebody. If I meet a girl
and love [English word] happens between us, I cannot stop meeting her. I
will meet her.
Prem lamented these sexual urges as destructive to his “power of think-

ing and understanding,” but described these urges as checked only by
the fear of his family. He said that because he lives with his parents he
knows that “there is somebody to guide me and I am under somebody.”
The cultural focus on social pressures as rightly guiding action leads men
to be wary of love that is not tempered by social fear.
The construction of social fear as a good, moral emotion—and love
as potentially dangerous unless duty-based, extended toward many in
the family, and tempered by social fear—is, in many ways, rooted in a
collectivist orientation that is wary of individual desires and that values
guidance by social pressure. But men also develop these emotional para-
digms as they build strategies around family institutions.
SOCIAL STRUCTURE AND THE CONSTRUCTION

OF EMOTIONAL PARADIGMS
In working to keep joint families together, men develop an elaborate

emotional paradigm that describes the dangers of unbounded love
between men and women. Men are attached to joint-family living, but
the joint-family structure which subordinates young wives by making
them do the most burdensome household tasks creates a persistent
dilemma. Men want to live in a joint family with their parents, but they
also become close to wives who often want them to separate from their
parents. In developing strategies for facing this structurally persistent
dilemma, men repeatedly focus on the imperative that love be tempered
by social fear and directed toward many in the family, constituting and
reconstituting the dominant culture of emotion.
Since men are concerned with the threat that women pose to joint-
family living, they often warn each other of the dangers of closeness
between husband and wife, elaborating a paradigmatic scenario of a
wife cultivating her husband’s love in order to manipulate him. Men
repeatedly remind each other that a wife may tear a family apart by
seducing her husband. The warning of a married 35-year-old whom I
interviewed in 1987 is typical:
When four brothers marry, four women come from four houses. They are of
separate natures. They will be from separate environments. They will want
to separate. They will put pressure on their husbands, saying, ‘You should
separate from the family. I do not like living in a crowd.’
Another married man in his 30s similarly reiterated a cautionary tale

about how fighting among women might cause a family to break:
One woman will tell the other to cook. The other will say, ‘No, you cook.’
The first one says, ‘I have to go outside to do some work’ and the others say
it also. They complain to their husbands. Before marriage, brothers are com-
pletely one. But after marriage, a man’s wife attacks his mind. If he lives with
his wife 24 hours a day, a man will never be able to understand whether it is
his brother’s fault or not.
As another married man put it, women “create fights between brothers
and talk in such a way that mutual tension is born. Without this [talk of
wives], there is no tension between brothers.” Men continually talk, then,
about the threat that attachment to one’s wife poses to the joint-family
lifestyle that they value.
To ensure that the love for a wife does not get the upper hand, men
continually caution each other against becoming too close to their
wives. They tell each other that a husband must always ignore his wife’s
complaints in order to protect the joint family. One man cautioned, for
instance:
Since wives have come from separate places, they cannot adjust among them-
selves. If we five brothers do not pay attention to their talk, then the joint
family can work for a long time. But if we constantly listen to our wives talk,
then the family will not manage to run very long.
Another married man warned that “if one obeys one’s wife’s talk, it will
create tension and fighting, and one will become separate.” Another man
cautioned that the “family will be harmed” if the husband “listens to his
wife’s talk.” The emotional culture which holds that love must reflect in
many directions, and that love between husband and wife must always
be tempered by social fear, arises through men’s telling of cautionary
tales that they hope will protect the joint family.
Men similarly create discourses around the institution of arranged

marriages that focus on love as potentially dangerous. Young men may
feel the pulls of love, but in the institutional context of arranged mar-
riages, such men are warned—and warn themselves—that such feelings
can never be the basis of marriage. An unmarried film-goer whom I
interviewed in 1991 told me, for instance:
Most love marriages are not successful because as long as you have mutual
love (pyaar) you will want to marry and you will want to remain in that true
way of mutual love. But after the marriage it cannot be obtained in the famil-
ial situation. Most girls think that the boy will love the girl the way he loved
her (pyaar karma) before marrying her, but that can never be. (see Derné
2000a: 84–88 for other examples)
When the reality of feelings between young men and women comes face
to face with the obdurate family structure in which marriages are arranged
by parents, men often conjure up the scenario of an uncontrollable love
that could never be the basis of marriage. According to a married man in
his 30s:
Love marriages often break. The thing is that neither one considers himself
less than the other one. They become stubborn. If they both are stubborn,
then the marriage will spoil. One of them has to yield. But often this doesn’t
happen in love marriages, because the couple doesn’t live under pressure.
As they construct strategies around obdurate family structures, men develop

emotional dispositions that maintain these structures.
EMOTIONS AND THE REPRODUCTION OF SOCIAL STRUCTURE
Generated by a collectivist cultural orientation and the strategies men

build around Indian family institutions, these emotional paradigms,
in turn, motivate actions that reproduce those structures. Men who
find social fear comforting want to live in a joint family where they
can be continually subjected to the pressures that prompt that fear.
Husbands who see love as based more on duty than a wife’s special char-
acteristics, or who see love as only appropriate when it is reflected
in many directions within a joint family, will check powerful love
for their wives that might lead them to separate from a joint family.
A man who focuses on the dangers of unbounded love will be less

likely to buck social pressure and marry for love. The Indian family struc-
ture, in short, creates emotional dispositions that reproduce those very
structures.
Culture, Structure, and Psyche

There is a fit, then, between a sociocentric cultural orientation, family
structures of joint-family living and arranged marriages, and emotional
paradigms that celebrate fear and caution of unbounded love. Culture,
structure, and psyche reinforce each other. In addition, real interests and
specific cultural understandings that arise due to structural arrangements
provide further mortar, contributing to the persistence of these struc-
tures. By benefiting particular categories of people, family structures
create interests that motivate agents to act in ways that contribute to
maintaining existing structures. Given their interests and the specific
cultural understandings that support joint families and arranged mar-
riage, men are motivated to act in ways that reproduce these structures.
The cultural orientations, material interests, and psychological disposi-
tions that support the structural edifice reinforce each other, creating
resistance to change.
This book shows that in the context of a solid fit between culture,
structure, and psyche, new ideas introduced by cultural globalization
have a limited independent effect. The transnational celebration of love
has had little effect, for instance, on the institution of arranged marriage,
given the sociocentric cultural orientation, a psychological disposition
that makes men wary of love, men’s interests in maintaining control of
their wives, and obdurate economic and family structures that support
arranged marriages. The transnational celebration of women’s movement
outside the home has similarly had little effect on ordinary middle class
men’s resistance to such movement, given men’s interests in restricting
such movement to support both their own leisure in the home and
economic structures, which have not changed to increase non-élite
women’s opportunities. Transnational media celebrations of individual-
ism have had little effect on non-élite men’s collectivist orientation,
because the social structures that support this deep-seated orientation
have not been transformed.
This book suggests that cultural globalization transforms life in India

only when new ideas can be layered on top of obdurate social realities, or
when simultaneous changes in social structures make new ideas work-
able and, hence, meaningful. This book also suggests that the biggest
changes introduced by globalization come more from the transforma-
tion of India’s economy rather than from the influx of new media.
The next chapter argues that because opportunities of affluent
Indians have been radically transformed by economic liberalization,
changes in the lives of the English-speaking élite have been profound.
Since economic globalization has transformed their opportunities, afflu-
ent Indians have experimented with the alternative family arrangements
celebrated in the transnational media. With their economic opportuni-
ties having increased, affluent Indians have embraced the consumerism
and individualism celebrated in the transnational media. Changed
structural realities that place affluent Indians on an international stage
have given them a global horizon. Seeing themselves in the global arena,
affluent Indians have become a transnational middle class, existing
between the poor in India and consumers in Europe and North America.
Given their new location in a global economy, affluent Indians increas-
ingly root their global orientation in cosmopolitan consumption and
cosmopolitan gender arrangements.
Notes
01. As Sewell (1992: 3) puts it, this older usage saw structure as “hard” or “material”
while “culture” was seen as “soft” or “mental.”
02. Giddens takes a similar position, arguing that “the same structural characteristics
participate in the subject (the actor) as in the object (society). Structure forms ‘per-
sonality’ and ‘society’” simultaneously—but in neither case exhaustively (Giddens
1979, as excerpted in Calhoun et al. 2002: 238).”
03. Weber ([1904–05] 1930: 69) sees the growth of capitalism as caused by a “new
spirit” that had “set to work”. But contemporary workers may not attribute “mean-
ing” to “their restless activity” (ibid.: 70). For contemporary workers, “business
with its continuous work has become a necessary part of their lives” (ibid.: 70). The
worker who “does not adapt his [or her] manner of life to the conditions of capitalist
success must go under” (ibid.: 72). Weber focused on the motivated meaningful
conduct that generated capitalism, while recognizing that workers today face a capi-
talist economy as a structural reality.
04. On the era prior to 1991, see Channa 1997: 31; Derné 1994b, 1994c, 1995:
Chapter. 2; Sharma and Vanjani 1993: 30.
05. Men similarly see globalization as a threat to joint-family living and arranged
marriages. They fear that it is because of parents’ new consumerism that parents
sometimes focus more on dowry than on their sons’ interests. They also fear that it
is the new consumerism that leads to the selfishness that disrupts joint families
(Derné 2000a: 27–30).
06. In most men’s toolkit, there are few stories available to support same-sex marriage or
living in a family headed by one’s sister. Some people in India may have access to
stories supporting such practices, but they are rare.
07. This paragraph briefly summarizes Derné 1995: 158–63 and Derné 2000b. Others
who make similar points include Kakar 1981; Kurtz 1992; Seymour 1993.
08. This section is based on Derné 1994d, 1995: Chapter 9.
3 Making the
Transnational
Middle Class in India
Fast, air-conditioned trains that now connect urban centers in India ap-
peal to affluent Indians because of their speed and comfort, and because
they enable the affluent to avoid non-élite crowds that pack the Indian
railways. In the spring of 2001, two college-going women on a fast train
connecting Dehra Dun and New Delhi openly flirted in English with a
young college-going man. All three wore jeans and Western-style shirts;
not one Hindi word passed between them in a half-hour of banter. They
passed copies of Cosmopolitan and Time magazines back and forth to
each other.
After asking the young man about his education and family, one young
woman asked the man if he was flirting with her. “Are you pulling my
leg?” the young man replied. “What do you want me to pull?” countered
the woman provocatively. On learning the man was from Bombay, the
young woman asked him whether he knew the film stars Jackie Shroff
and Hrithik Roshan. “They’re personal friends,” the man replied. The
woman commented on the man’s consuming ability: “Do you have a
car? Will you take me for a ride?”
The orientation was American rather than British: the young man
joked about using “zee” rather than “zed”. “I have an American accent,
now,” he said. While initiating this encounter, the young woman still
joked about men appropriately having more stature than women. “Stand
up”, she said. On seeing the results, she remarked, “It’s OK. You are
taller than me.”
MAKING THE TRANSNATIONAL MIDDLE CLASS IN INDIA 91
This encounter, the likes of which I had never observed in India

before,1 suggests important imaginings and desires of the affluent
English-speakers who call themselves middle class. Discussions of auto-
mobiles and the back-and-forth passing of Cosmopolitan magazine indi-
cate an increased focus on consumption. The wearing of jeans—by women
as well as by men—indicates an embrace of Western fashion. The woman’s
open flirtation reflects a diminished celebration of women’s modesty
and—perhaps—some loosening of gender roles. Speaking English
exclusively, using Americanisms, and enjoying transnational magazines
suggest an orientation toward movement beyond India. At the same time,
the discussion of Indian film stars and the woman’s assumption that
she should be shorter than a male companion suggests continuities with
Indian traditions.
The ordinary middle class Indians whom I met in and around the-
atres in Dehra Dun had not embraced the new imaginings and desires of
the English-speaking élite I observed on the train. They continued to
speak in Hindi, rather than English. While they desired consumer items,
especially fashion and televisions, they knew that cars were beyond their
reach. While non-élite middle class men often wore jeans, non-élite
women almost always wore Indian-style clothing. Mostly embracing
arranged marriages, the ordinary middle class men whom I interviewed
tended to reject open flirtation between men and women as having little
to do with their actual lives.
This chapter examines the effects of globalization on affluent Indians,
and it also considers how globalization is shaping the imagination of
affluent Indian life held by élites and non-élites alike. First, I focus on
the importance of the film and global media in defining the affluent as a
middle class and normalizing their position in Indian society. Second, I
argue that films and the global media are part of a process that associates
élite status with transnational movement. Third, I argue that films and
the global media have played a role in inciting the desire of the affluent
for consumption, while the globalization of the economy has facilitated
the ability of affluent Indians to meet these desires. I argue that for afflu-
ent Indians, consumption is an increasingly strong basis of identity.
Fourth, I consider the extent to which globalization is exerting pressures
that might contribute to transforming the affluent Indians’ gender ar-
rangements. I especially note how films and the global media play a part
in constructing gender arrangements that facilitate consumption.
I conclude the chapter by discussing how class identity needs to be

newly theorized in a globalizing economy. This chapter’s focus on afflu-
ent Indians suggests that class identity is increasingly rooted in consump-
tion as much as in production, and that class is increasingly transnational.
Affluent Indians often see themselves as having more in common with
people living abroad—who have similar abilities to consume—than they
do with ordinary Indians. While there has been some discussion of
how globalization is producing a transnational capitalist class (Sklair
2001), not enough attention has been given to the production of a
transnational middle class that comprises the primary consumers who
fuel the capitalist system.
Normalizing Élite Experience

Increasingly, discourses in India focus on the consuming classes. From
independence until the late 1970s, the producing classes were at center
stage in the imaginations of India. Despite limited effectiveness, govern-
ment policies tended to focus on improving the lot of working Indians.
Government controls kept prices of food staples down. The needs of
the laboring classes were central to arguments in favor of the large
government sector and the policies pursued in governmental enterprises.
The needs of a developing nation were seen to trump the needs of the
consuming classes. Hence, tariffs, licensing, and foreign exchange re-
strictions, which were seen as improving the lot of Indian workers,
trumped the desires of Indian consumers to have access to cheaper,
better quality foreign products.
But today, as I noted in the introduction, economic policies are aimed
at the consuming classes. As Dipankar Gupta argues, the sole focus
now is on what the consumer wants, irrespective of whether this brings
about unemployment, weakens trade unions, or increases India’s eco-
nomic dependence. This is because the primary imagination of India
for policymakers, élites, and even non-élite Indians now focuses on the
consuming classes.
The focus on the consumption of transnational commodities also
serves to signify India’s participation in the valued global economy.
As Fernandes argues, “images of the consumption of newly available
commodities serve as signifiers that assimilate globalization to the
Indian nation-state” (Fernandes 2000: 613). Drawing on interviews

with the élite middle classes, Fernandes concludes that “visual signs of
wealth” have come to be “the new symbols of national progress in India”
(ibid.: 614). Participation in the cosmopolitan fashion industry is one
symbol of India’s participation in the global economy. Rupal Oza
points out, for instance, that India’s staging of the 1996 Miss World
pageant provided the State and domestic capital “an international op-
portunity to “showcase” [a] new, liberalized India to the world” (Oza
2001: 1067). The focus on the attraction of affluent Indians to cosmo-
politan fashion shows India participating on par with other States in the
global economy.
Advertising, television programming, and Hindi films all play a role
in constructing the experiences of the élite consuming classes as the norm
in India.2 Advertising in magazines, movie theatres, and on television is
crucial. With the opening of the Indian economy, advertisers flooded
into India to seduce a previously unavailable market. Less than 10 per-
cent of Indian households own a refrigerator, but that still constitutes a
market of 100 million people with discretionary spending. Scooter
advertisements, which often screen prior to Hindi films, now commonly
picture the suit-boot-wearing businessman who commutes to work rather
than the rural householder, whom the advertising of the previous
decades showed as using a scooter to haul an old-fashioned charpai (string
bed) across a village. Advertising in magazines and on television, espe-
cially cable television, focuses on an exclusively élite world of cars,
carpeting, air-conditioning, and travel abroad that is distant from the
lives of most Indians. A 1995 content analysis of 200 episodes of the
most popular television serials found that 80 percent of both male and
female characters “belonged to the upper stratum of society” (Varma
1998: 178). Showing the élite world and hiding the world of ordinary
Indians normalizes the élite experience.
Since Hindi films still comprise the primary entertainment of ordi-
nary Indians, it is interesting that they, too, normalize élite worlds,
suggesting that non-élites, too, may come to see India as primarily
constituted by the consuming classes. The new Hindi film emphasis on
the consuming élite represents a shift from the “Five-Year-Plan-Heroes”
(Srivastava 2001: 241) of the 1950s, the angry-young-man films of the
1970s and the 1980s, as well as love stories in earlier eras, all of which
kept the honorable Indian producers as a central part of the picture.
Sanjay Srivastava (2001: 241) usefully argues that the Hindi films of
the 1950s and the 1960s constructed “Five-Year-Plan-Heroes” who were
shown to be members of the élite classes, but who nonetheless worked as
doctors, scientists, or engineers whose work aimed at helping working
Indians by building roads and dams or improving the health of the
nation.3 The angry-young-man hero of the 1970s and 1980s, immortal-
ized in the many portrayals by Amitabh Bachchan, focused on the moral
working class man as the center of Indian life. The hero of these films is
of the subordinate classes, and fights to provide justice to the poor—
justice that is not provided by the legitimate institutions of society.
The 1970s hero is poor or working class but often rises to an improved
station without losing moral superiority (Derné 2000a: Chapter 4; Kazmi
1998).
Even in the love stories of the late 1980s and the early 1990s, which
focused more on heroes of an élite background, the honorable poor were
also at center stage. In the superhit film Ram Teri Ganga Maili (1985),
the hero is the son of an élite family, but his beloved is a poor village girl
whose honor and dignity is contrasted with the hero’s father’s greedy
unconcern for others. Without care for his workers, the hero’s business-
man father burns down his own factory to collect insurance money and
has no concern for the pollution of the Ganga that his operations cause
(Derné 2000a: Chapter 3). In the superhit film Maine Pyar Kiya (1989),
the hero studies in America and his father is a business mogul. But, again,
the film does not lose sight of the moral center of India—its working
class. The heroine’s father is an honorable rural laborer. The élite hero’s
father’s greed for money prevents him from being concerned with
others. Despite his son’s authentic love for the heroine, the hero’s father
tries to marry the hero to the daughter of a business ally. When the hero
is denied his father’s support, he must prove himself by laboring as an
ordinary Indian to win the heroine’s love (Derné 2000a: Chapter 6).
While these hit love stories featured affluent heroes, they criticized
affluent lives that neglected the needs of the poor.
In the 1990s, the focus of Hindi films shifted decisively towards the
lives of the consuming élite. This is widely recognized to have intensified
with the 1994 hit film Hum Aapke Hain Kaun! (HAHK), which ushered
in a wave of films that were perceived as “clean” by audiences precisely
because of their depiction of the ease of affluent lifestyles (Brosius and
Butcher 1999a: 26; Kazmi 1999: 144; Uberoi 1998: 314). Patricia Uberoi
points out that HAHK, like more recent films, “endorses glamorous
lifestyles and effortless guileless consumption” (Uberoi 1998: 314). Rachel
Dwyer argues the “absence of poverty and of servants”4 characteristic of
recent movies presents a world in which “everyone is rich, usually way
beyond any means of possible earned income”5 (see also Inden 1999: 59;
Kazmi 1999: 159–60). In the string of successful films that depict the
lives of NRIs living abroad “the foreign setting functions to naturalize
this affluence.”6
Other 1990s films set in India similarly normalize the consuming
experience of the élite. The 1997 superhit film Dil To Pagal Hai shows
a nearly all-élite world. The heroine (played by Madhuri Dixit) is from
an élite family and is engaged to a man whose business regularly takes
him to Europe. The hero (played by Shah Rukh Khan) is a successful
entertainer with his own posh city flat, which, as Ronald Inden points
out, “could be anywhere (but more likely in Manhattan than in Mumbai)”
(Inden 1999: 60). The hero’s female friend (who is also the heroine’s
honorable rival), played by Karisma Kapoor, easily travels back and
forth to Europe where her mother lives. Shopping for transnational goods
weighs large in the film: the Karisma Kapoor character outfits the hero
in Levi’s-brand jeans at a posh store, and it is here (in the dressing room)
that he first runs into the heroine. In the superhit film Kaho Na Pyar Hai
(2000), the heroine’s rich father can buy his daughter an automobile as a
birthday present and arrange for her to cruise on a luxury ship to beauti-
ful islands. Unusual in today’s films, the hero of Kaho Na Pyar Hai is of
modest means, but he quickly finds himself hired to entertain on the
luxury cruise ship. It is notable that this hero-of-modest-means is killed
before the interval and the distraught heroine falls in love for a lookalike
élite (Hrithik Roshan in a double role) who drives cars, wears suits, and
resides in New Zealand, for which country the heroine eventually aban-
dons India.
Chori Chori Chupke Chupke (CCCC ), the most successful film of my
2001 fieldwork, opens with the focalizing family being featured on the
Indian television version of Lifestyles of the Rich and Famous. The hero of
the film does business in India, Europe, and Malaysia, honeymoons in
Switzerland, and is so well known in Delhi and Bombay that he is treated
with awe everywhere he goes. My discussion of the most successful films
since Maine Pyar Kiya should not suggest that this increasing focus on
the élite classes has been limited to hit films. In run-of-the-mill films,
too, suits-and-ties, automobiles, business abroad, and honeymoons in

Europe are represented as the lifestyles of the focalizing characters.
On screen, élite lives no longer intersect as regularly with the lives of
the poor. More rarely is villainy presented as a greedy desire for money
that overweighs family obligations, as was common in the 1970s and the
1980s (Derné 2000a: Chapter 6; Thomas 1995). Rarer still are depic-
tions of honorable (if poor) servants. In love stories, it is equally rare to
find either the hero or the heroine from a poor background.7
Hindi films, then, contribute to the process of normalizing the élite
situation in India.8 Policymakers and the élites now see affluent life
as central, as is reflected in the use of the term “middle class” to refer to
an élite segment of the population. The English-speakers with whom
I talk in Delhi often describe “everything” as changed. As one Indian
woman whom I met at a conference in the USA put it in 2000, “every-
one has Barbie, now.” And for the élite, changes have been great. Oppor-
tunities for both consumption and employment have expanded almost
fantastically.
Increasingly, though, affluent Indians only see their own world.
Shurmer-Smith describes talking to an 11-year-old who said that the British
system’s school-leaving age of 16 would be impossible in India “where
everyone had to go on being educated until after their Master’s degree”
(Shurmer-Smith 2000: 37). When Shurmer-Smith reminded the boy
that lots of people in India never went to school at all, he looked scornful
at [her] naivety and sniffed, “That is an altogether different matter!”
The Hindi films that are the primary entertainment of the non-élite
may also make élite life loom large in the imagination of ordinary Indi-
ans. In 2001, I conducted interviews at the élite theatres in town (one of
which showed Hollywood fare dubbed in Hindi) and also at the theatres
which catered more to the urban poor by showing second-run films (like
the previous year’s hit love story Mohabbatein) at cut-rate, or low-budget
films (like the Mithun-starrer Zahareela) at a reduced price. A decade
previously, the lower-middle classes who enjoyed films at the latter sorts
of theatres were eager to talk to me. In 1991, the lower-middle class
would enthusiastically discuss their attachment to their favorite heroes,
who often played characters associated with the subordinate classes. In
1991, the now-defunct Orient theatre, which had catered to the urban
poor, often showed Bachchan’s classic angry-young-man films in revival,
so this is perhaps why the poorer Indians felt empowered to speak.
By 2001, though, it had become clear that the biggest films were
depicting élite life. In addition, the film world itself might be seen as
catering more to the élite—the low-budget theatre in town had shut
down, ticket prices had risen, and film-world discussions focused less
on appealing to the “masses.” More often than in 1991, I encountered
resistance on the part of poorer Indians whom I approached for an inter-
view. A 17-year-old laborer who lived alone in the city away from his
parents in the village urged me to “go ask at Chayadeep” (where the day’s
biggest hit, CCCC, was playing) “to learn about Hindi films. The
Chayadeepwalé 9 can talk to you.” While the young man’s resistance could
have been based on a desire not to be disrupted from the anticipation of
the four-hour pleasure of seeing Mohabbatein in revival, it might also
reflect the man’s sense that it is the élite classes who are important in
India today.
Indian Élites as a Transnational Middle Class

Not only does élite life loom large in the imagination of Indians today,
but Indians also increasingly see élite life as middle class life. As I noted
in the first chapter, recent years have witnessed an increasing discourse
on the growth of the consuming middle class in India. English-language
publications from India Today to Stardust refer to those who wear
modern fashion, move about in automobiles and travel abroad as middle
class. Even Western academics use the term “middle class” to refer to
the 5 percent of Indians who speak English well, or the 6 percent of
households with income that allows them to purchase a scooter.
The use of the term middle class may be effective because the refer-
ence for affluent Indians is not India but the globe. The affluent may
see themselves as “middle class” on a transnational scale. Indian élites
may see themselves as situated between the consuming middle classes
in the USA and Europe, for whom automobiles are regular purchases
rather than once-in-a-generation outlays, and the mass of the Indian
poor and ordinary middle classes for whom an automobile is a distant
dream.
Both changing structural realities and changing cultural imaginations
serve to orient the élite to the transnational stage. As India’s economy
opened, transnational firms saw the opportunity to lower their costs by
using Indians to work as computer programmers and operate customer-

service phone banks. More and more Indians were able to find work
abroad or for transnational firms operating in India. As foreign exchange
restrictions have lessened, Western universities have increasingly recruited
Indian students (Shurmer-Smith 2000: 173). With the newly-available
possibilities, the affluent have come to value overseas education precisely
because it is expensive and it is overseas (ibid.: 173). The imagination of
such possibilities for the élite may have increased even more greatly than
the realities. In Hyderabad, many aspiring computer programmers hang
out in cafes waiting for high-paying transnational jobs, often receiving
funds from family members working abroad rather than taking relatively
low-paying jobs in India. Mass media play a role in highlighting the
possibilities of transnational work. One magazine advertisement describes
how computer training could mean that “two years from now 19-year-
old Vijay will be driving his own car. . . on the other side of the globe”
(ibid.: 36). The reader may see the advertising depiction’s of jeans-
wearing “Vijay” sitting on his motorcycle in front of his obviously
Indian house as existing between the status of the Indian poor and the
automobile-driving life that is on offer in “Silicon Valley, California,”
the place the advertisement trumpets as Vijay’s destination.10
This suggests as well that the élite status of the so-called middle class
in India is defined by transnational movement. The English-language
magazine advertising that depicts airplane travel and the aspiration of
movement to Silicon Valley, California, contributes to this growing imagi-
nary of the Indian élite, but Hindi films play a role as well. A string of hit
Hindi films since the mid-1990s have focused on NRIs living abroad
(Mankekar 1999b; Uberoi 1998).11 Equally importantly, Hindi films
now routinely portray Indians’ easy movement beyond India’s borders:
heroes and heroines, for instance, honeymoon in Europe. In film after
film, a hero’s business or education routinely takes him abroad.12 In con-
trast to the 1950s’ and 1960s’ Five-Year-Plan engineer/scientist/doctor
hero and the 1970s’ and 1980s’ angry-young-man hero, transnational
movement is a fundamental feature of the hero of recent years. Coupled
with structural realities and other cultural products, films play a role as
defining the Indian élite by transnational movement and placing the
imagination of the élite on a transnational scale. It is this placement of
the élite on the transnational field that allows élites to see themselves as a
“middle class.”
Inciting Consumption
Affluent Indians see the opportunity for cosmopolitan consumption as
the primary benefit of globalization. The élite middle class people whom
Fernandes interviewed saw “new choice of commodities as a central indi-
cator of the benefits of economic liberalization” (Fernandes 2000: 614).
They talked about how, previously, access to goods was limited to those
who had the financial means to travel abroad to purchase them. But,
today, as one person told her, “abroad is now in India”, a statement that
shows that affluent Indians’ “aspirations of consumption” can “now take
place within India’s borders” (Fernandes 2000: 614). The people whom
she interviewed in 1998 also saw the new cultural support of consump-
tion as crucial. Referring to the desire for cellular phones and holiday
homes, the editor of a print magazine told Fernandes that previously
“people would feel a sense of guilt—that in a nation like this a kind of
vulgar exhibition of wealth is contradictory to Indian values. I think
now consumerism has become an Indian value” (ibid.: 614).
While the opening of markets has perhaps been most essential in en-
couraging consumerism, films, television serials, and advertising, all of
which glamorize international standards of consumption, also played an
important role in inciting affluent Indians’ desire to consume. Purnima
Mankekar, who was doing fieldwork in India just as global media and
advertising began to flood in, provides a useful account of the role that
television has played in expanding “consumerist desires” through the
“portrayal of ‘modern’ middle class lifestyles” (Mankekar 1999a: 9). She
analyzes advertisements that “titillated the consumerist desires of view-
ing subjects by introducing them to a range of goods that promised to
make their lives more modern, more exciting, more middle class” (ibid.:
76). One of her informants describes a friend with a “good income” who
was “very happy” and had a beautiful flat, “just like the one we saw in the
paint ad” on television. Since the informant had not visited her friend’s
house, Mankekar is right to argue that the “advertisement” represented
“the benefits of a ‘good income’” to her informant (ibid.: 88). For this
person, class became associated with the consumption that it implied.
While Hindi films have been participating for many years in this
process of encouraging consumerist desires, in earlier years the consump-
tion of foreign goods was presented as desirable but difficult to achieve.
In the 1985 superhit film Ram Teri Ganga Maili, the élite hero’s uncle,
who has returned from a foreign trip, presents the hero with an “alpine
hat—from Switzerland!—a leather jacket—from France!”, and a Polaroid
camera, the novel operation of which he explains excitedly. In the days of
licensing and regulation, such items were novelties, the result of a for-
eign trip. But in films today, consumption is routine. In the 1997 superhit
film Dil To Pagal Hai, the Karisma Kapoor character takes the hero to a
boutique to equip him with fashionable clothing, but for the hero the
availability of such clothing has become so routine that he is unhappy
about the time the shopping takes. “Never come shopping with a girl,”
he complains to a friend. In the films of the 1990s, the highlighting of
Western brands had become commonplace, from the Levi’s logo the hero
walks past on his way to the dressing room in the Dil To Pagal Hai scene
described above, to singing heroes who performed in front of Pepsi signs
in films like Kaho Na Pyar Hai.
Fashion and beauty, which are increasingly shaped by international
standards, are among the most important consumer desires. As Leslie
Sklair and others have pointed out, “global capitalism thrives by per-
suading us that the meaning and value of our lives are to be found prin-
cipally in what we possess” and this starts with “fashion and style” (Sklair
2001: 6). Thus, English-language Hindi film fan magazines, which cater
to the English speaking-élite, routinely advertise cosmopolitan fashions
for men and women.13 Advertising aims to incite men’s desire for “Italian
look” trousers (Cineblitz March 2001), “Rich look” shirts (ibid. March
2001), watches worn by transnational endorsers like Pete Sampras (Movie
Mag International 14 March 2001), shoes that will attract female admirers
(ibid. March 2001), cosmopolitan Benetton shirting (Stardust March
2001), and “cargo pants with multiple pockets” to accommodate “loose
change”, “sun glasses”, a “cell phone”, or “pocket refreshments” like “gums
and mints” (Movie Mag International March 2001). Cargo pants are de-
sirable because they allow the wearer to equip himself with a range of
consumer goods.
Adapting the fashions of satellite TV to give films a hip feel, filmmak-
ers increasingly show heroines in jeans and short skirts. While standards
of female modesty in films have been steadily loosening over the years,
the recent changes constitute a real departure. The most popular films
from the 1970s through the early 1990s contrasted traditionally modest
Indian heroines, who were portrayed as devoted to family obligations,
with “Westernized” Indian women who were portrayed as immodest,
sexually forward, and more focused on money than family duties

(see Derné 2000a: Chapter 6; Thomas 1995). In these films, Indian cloth-
ing, which is presented as modest—saris and salwar-kameezes—are the
markers of a traditionally Indian devotion to family duty.
Prior to the 1990s, heroines tried to gain popularity by emphasizing
their unwillingness to wear miniskirts or revealing clothes. Fan maga-
zines criticized Indian heroines for wearing revealing clothes that identi-
fied them more with Western icons like Madonna than with appropriate
Indian womanhood. The men whom I interviewed in 1991 emphasized
that Indian heroines should reject Western-style clothing, saying that
Indian traditions and culture demand salwar-kameezes and saris, and
that rejecting such clothing showed a lack of understanding of family
duties (Derné 2000a: Chapter 6). Today’s films celebrate miniskirts
and jeans so much that the contrast between a modest heroine and an
excessively Westernized anti-heroine who wears revealing clothes is
much less common. As I argue below, with the emphasis on glamorous
heroines, the smoking, drinking vamp whose non-Indianness and pro-
miscuity were highlighted by her Western clothing has disappeared
from the Hindi film scene.
Given international standards of beauty, the well-rounded, voluptuous
heroines that characterized Hindi films through the 1980s have been
replaced by an emphasis on thinness (see Munshi 2001c: 83, 85) which
can be attained through the purchase of gym memberships and dieting
aids. The thin bodies of the heroines of the 2000 hit film Mohabbatein
look like those of the stars of the American serial Friends. The top 1970s
heroine, the curvy Sridevi, fits an older Indian standard, which is re-
jected by the taut Karisma Kapoor or Kajol of the 1990s. While in
earlier eras, English-language fan magazines referred to Sridevi as “thun-
der thighs” without too much disapproval, fan magazines today rou-
tinely praise heroines’ weight loss, indicating the rise of a new regime of
female beauty. Describing Shamita Shetty’s workout regime, one fan
magazine praises the heroine for turning herself from the “once-upon-a-
time pleasantly plump person to the toned-to-almost-perfection person-
ality” (Sai 2001a: 54). The magazine quotes the heroine as saying that
she has become a “health freak” who has to “spend hours in the gym
work[ing] out like crazy” and even then must “avoid stuff like fries
and chocolates” which would just end up on her “hips and multiply”.
(ibid.: 54). Another film magazine praises the heroine Rani Mukherjee
for making herself “yummy-licious” by losing “oodles of weight” through

an “exercise program and Spartan diet” (Filmfare 2001a: 16). It is
notable that such comments appear largely in English-language fan
magazines catering to the more affluent Hindi film viewer.
Susan Parulekar’s fieldwork with affluent Bombay women from 1997
through 2001 shows that élite women increasingly pursue these new
standards of beauty through consumption, and that, indeed, women’s
pursuit of transnational standards of beauty have become a key aspect
of élite identity. Élite boutiques, beauty parlors, and fitness centers are
proliferating. In central Dehra Dun, the main hoarding for the “Vaibhav
Women Beauty World” emphasizes that it now acts as a “slimming
and coaching center.”15 That the advertising is in English suggests, of
course, that most of the beauty center’s clientele are members of the
English-speaking élite. As Shoma Munshi (2001c: 86) notes, fitness
centers are quite new in India. In previous eras, “well-fed bodies” were
“testimony to the fact that the person came from a well-to-do family”
(Munshi 2001c: 86).
Agreeing with Ghosh (1999b, cited by Munshi 2001c), Munshi
argues that the “professional body” has arrived—a body that can be
produced through working out, plastic surgery, and the use of fashion
and cosmetics. Parulekar reports that in Bombay, modeling has become
a hobby for élite women who pay US$ 100 or more for photo shoots.
Mary John (1998: 375) similarly reports that college-level beauty
contests have become “hugely popular events” in Delhi, which attract
the participation of many women. She describes how advertising that
caters to élite Delhi women highlights “beauty treatments and weight
loss programs” (John 1998: 375). She notes that these advertisements
often highlight “imported services such as bleaches and perms” (ibid: 375).
Clothing styles, too, increasingly follow Western standards, as élites wear
jeans and short skirts rather than saris and salwar-kameezes. Page and
Crawley report that the 17 to 18-year-olds whom they interviewed in
Ahmedabad “were openly enthusiastic about TV fashions” (Page and
Crawley 2001: 150). One young woman said that she only watched music
channels for “the hairstyles, the shoes, the clothes.”
As in Malaysia (Chin 1998: 185), Nepal (Liechty 2003) and else-
where, the appearance of new media and new opportunities associated
with globalization has incited new consumer desires—especially for fash-
ion—among the affluent members of society.
Élite Identity Rooted in Consumption

Consistent with the arguments of a number of commentators on the
effects of globalization,16 élite identity appears to be more and more rooted
in cosmopolitan consumption. Consumption, as Mathews puts it, becomes
a way of advertising one’s “cosmopolitan discernment” (Mathews 2000:
21). By consuming Pepsi rather than the local Thums Up!, or Domino’s
Pizza rather than a roadside samosa (at a cost—in the case of the Pizza,
which might be 35 times higher),17 one presents oneself as a cosmopoli-
tan, transnational mover who is oriented globally rather than locally. By
wearing jeans rather than a dhoti, one presents oneself as oriented toward
the transnational world. Media scholars Page and Crawley argue that
advertising aims to transform India’s caste society into a society in which
people “are defined by consumption” (Page and Crawley 2001: 143).
Thompson (1992, cited by Beynon and Dunkerley 2000: 6) rightly
suggests that for those who can afford it, shopping becomes more than
purchasing goods. Rather, “shoppers feel that through the act of shop-
ping they are buying into. . . a more exciting, sensual world” (Thompson
1992, cited by Beynon and Dunkerley 2000). If advertisers are success-
ful, consumption becomes a stronger, more affect-laden basis of shared
identity than the dreary commonality of a shared position in a produc-
tive system. How much more exciting to talk of one’s shared love of Nike
or Ally McBeal than to talk of one’s shared toils for a transnational firm!
As Golding argues, globalization has meant that people more and more
identify with “supra-national cultural affiliations” (Golding 1994, cited
by Richards and French 2000: 15) rather than those of nation or class.
The orientation toward consuming the same goods that are consumed
by other cosmopolitans in Europe, North America, or elsewhere sug-
gests, as other commentators have argued, that national identity is being
eroded by an identity rooted in consumption.18 The élite Indian who
prefers Pepsi and Pizza Hut may see himself or herself as having more in
common with the Western consumer than with the non-élite Indian who
can only afford locally-produced goods (see Page and Crawley 2001: 146).
Shoma Munshi reports that many Indians take pride in the string of
Indian beauties who have triumphed in international beauty pageants as
evidence that “our own girls” can “hold their own against the best from
the rest of the world” (Munshi 2001c: 89).19 According to Mary John
(1998: 379), these victories have even been the source of nationalist
fervor. But this pride in victory is pride in an ability to compete accord-

ing to non-Indian, transnational standards of beauty. One of the men
whom I interviewed in 2001 told me that since Indian women “are work-
ing out, they are getting smaller and looking more like American women,”
even surpassing American women in beauty. By embracing what are seen
as cosmopolitan sensibilities, identity is increasingly transnational rather
than rooted in national groupings.
As more and more affluent Indians embrace individualism, group iden-
tity may be declining altogether. Hindi films have long celebrated larger
than life individuals. Viewers have long identified with their favorite hero’s
special qualities (Derné 2000a: Chapter 5). But for the affluent today,
increased income and increased opportunities for consumption associ-
ated with globalization have allowed the élite to more than ever pursue
their own styles through the fashions they choose. As Page and Crawley
(2001: 140–41) put it, personal choice is increasingly “a new ideology”
for the affluent—an ideology that has been especially promoted by glo-
bal media. According to marketing consultant Rama Bijapurkar, Indians
have responded to economic liberalization by emphasizing “freedom of
choice” (ibid.: 140). Page and Crawley report that among the “English-
educated middle class [whom they interviewed], there is wide apprecia-
tion for the extension of choice” (ibid.: 147) and the role of satellite
television in bringing it to them. An identity rooted in consumption
increasingly focuses on showing off allegedly special and individual tastes
that distinguish individuals from one another. As the nation declines in
affluent Indians’ identity, their group identity lessens altogether.
Transnational sensibilities appear increasingly important in rooting
gender identities of the élite. The importance of transnational standards
of masculinity (and femininity) will be discussed more fully in Chapter
6. Here, I want to note that élite standards of masculinity and femininity
are rooted in transnational consumption. By adhering to these standards,
élites confirm both their éliteness and their gender identity. In the 1980s,
advertisements for Bajaj scooters that appeared in the English language
newsweekly India Today—a magazine read by English speakers—
celebrated Indianness. Describing “Hamara [our] Bajaj” as providing
“value for money for years”, this series of print advertisements featured a
traditionally-dressed Muslim man painting his scooter, smiling Sikh chil-
dren riding on the back of a Bajaj piloted by their father, and two rural
men using their Bajaj to carry a string charpai along a dirt track. In 2002,
a motorcycle advertisement for Bajaj’s “definitely male” Pulsar graces the

same privileged spot in India Today. There are no images of turbans,
string beds, dirt tracks, or white kurtas. Indeed, only the vehicle is shown—
there are no images of India at all. Instead, the advertisement focuses on
a “design team at Bajaj” that “conceptualized and built the robust look-
ing Pulsar, which at a glance would have you agreeing it’s definitely male.”
The man who purchases the Pulsar may confirm not just his cosmopoli-
tan status, but his masculinity as well.
The affluent woman who makes modeling a hobby and tries to achieve
a cosmopolitan look by purchasing cosmetics, fashionable clothes, and
health club memberships similarly uses consumption to confirm not just
cosmopolitan standing, but a femininity defined by transnational stan-
dards. Thus, women’s successful pursuit of transnational standards of
beauty is emerging as a key part of élite identity. Parulekar found that the
taut female body has become a locus of éliteness for Mumbaites, while
Liechty similarly argues that among Kathmandu women, “fashion has
become one of the main material components of middle class status”
(Liechty 2001: 35).20 Adherence to transnational standards of masculin-
ity and femininity themselves become the key markers of affluent status
in India.
Making Women Consumers

When I interviewed urban men in the 1980s, they told me that men,
children, or older women did the marketing so that younger women in
their teens, 20s, and 30s could be restricted to the home (Derné 1995).
As Maria Mies (1986) and others argue, capitalism depends on the
“housewifization” of women. Capitalism profits when women are defined
as housewives: when it is assumed that a woman depends on a man for
income, the employer need not pay her a living wage (Mies 1986: 116).
But capitalism also needs housewives to engage in the consumption that
is the engine for the economy (Mies 1986: 120–26). And fashion is a
central aspect of the impulse to consume. As Liechty argues, commercial
interests always “target middle class women as the primary objects of
fashion in films, magazines, fashion shows, etc” (Liechty 2001: 36).
As Munshi (2001c: 82) argues, the growth of consumerist culture
everywhere emphasizes women as active consumers. Thus, John reports
that advertising in India today often addresses women as “active and

vital consumers in their own right” (John 1998: 379). Munshi argues
that while the 1960s and 1970s advertising which aimed at the élite class
focused on women as homemakers, advertising today emphasizes “glam-
our, sexuality and appearance” (Munshi 2001c: 82). So, with the growth
of a consumer economy and culture, advertising incites women to be
consumers—especially consumers of fashion and glamour.
While advertising and television are central, Hindi films, too, partici-
pate in the process of creating consumption as an important role for
women in India today. In 1985’s Ram Teri Ganga Maili, it is the travel-
ing uncle who introduces his nephew to transnational goods that he has
brought from Europe, but in 1997’s Dil To Pagal Hai, it is the Karisma
Kapoor character who drags the hero to a boutique to outfit him in
stylish clothing. Perhaps one can trace the widely recognized (Ghosh
1999a: 238) decline of the vamp in Hindi films to the capitalist impera-
tive that it is no longer discrediting to want to consume Western
fashions. Previously, wearing Western fashions were partly a marker for
greed and non-Indian sexual promiscuity, but now such consumption is
presented as honorable.
Until the early 1990s, the hero and heroine’s love might be threat-
ened by an anti-heroine vamp. While the heroine was portrayed as mod-
est, family-oriented, and dressed in Indian dress like saris or salwar-kameezes,
the anti-heroine was presented as greedy, neglecting family responsibili-
ties, and decked out in immodest Western clothes. The anti-heroine would
try to seduce the hero—often in a greedy attempt to grab the company
of the hero (or his family) for herself (or her own allies) (Derné 2000a:
Chapter 6).
Since the early 1990s, films have shown a hero and heroine’s love
which may be threatened by another woman—but that woman is not
presented as an anti-heroine. Dil To Pagal Hai opens with the heroine’s
certainty that there is someone somewhere who was made for her—a
soulmate. The hero (played by Shah Rukh Khan) has a close friendship
with another woman, Nisha (played by Karisma Kapoor). Unlike an
anti-heroine, Nisha is not greedy but honestly loves the hero. Unlike in
previous films, the heroine, Pooja (played by Madhuri Dixit), is not at-
tached to Indian modesty. Like Nisha, she works out at a gym to develop
her body and wears revealing Western clothes such as leotards. So, while
a love story may portray a competitor to the heroine, the two are no
longer opposed types. The competitor is not a villain. Indeed, the hero-
ine in Dil To Pagal Hai respects the Karisma Kapoor character, and the
film’s conclusion suggests that the Karisma Kapoor character will also
find true love.
Sometimes, indeed, today’s films portray excessively sexual, greedy
women who are redeemed by being remade as consumers. In Chori Chori
Chupke Chupke, the biggest hit film of my 2001 fieldwork in India,21 the
hero and heroine marry but are unable to conceive a child. To provide
progeny, the heroine, Priya (played by Rani Mukherjee), convinces the
hero, Raj (played by Salman Khan), to find a woman to hire as a surro-
gate mother. The hero approaches Madhu (played by Priety Zinta), who
is a dancer in a nightclub. Priya first attracted Raj with her sexy (but non-
commercial) dancing at a wedding they both attended, but Madhu dances
in a nightclub for money. When Madhu learns that she is to be paid lakhs
(one lakh = 1,00,000) of rupees to act as a surrogate mother, she throws
the money up in the air in delight (provoking laughter from the audi-
ence). Willing to prostitute herself (which is what she believes the hero is
asking before she learns of the plan to bear his child), Madhu is focused
exclusively on sex and money—the sign of an excessively Western anti-
heroine in earlier films. But in the most important way, she is not West-
ern enough—she is not a skilled consumer but suffers from crass tastes.
CCCC redeems Madhu by introducing her to the magical world of
commodities. When Raj, himself a wealthy business executive, first takes
her to his luxury hotel room, Madhu mistakes a television remote for a
cellular phone. She is happy to discover cable television and its cartoon
channel, the delights of which she had not previously encountered. When
Raj criticizes Madhu’s fashion, she asks him why he does not like her body.
Raj says that her body is fine—but she should get clothes to cover it. It is
not enough, then, to create the Western body—one must also embrace
an appropriate dress code. The appropriate dress may be Western—Raj
does not outfit Madhu in salwar-kameezes or saris—but the appropriate
fashion nonetheless must cover the body more than the tawdry clothing
of a dancing girl. Indeed, Madhu cannot enter the utopia of consump-
tion without developing a cosmopolitan refinement and fashion sense.
Raj gives Madhu money to shop for more appropriate clothing at a
boutique, but she has difficulty when a sales clerk speaks to her in
English, not Hindi. When she catches the attention of the boutique’s
manager, he tosses her out on the street because of her crass appearance.
Discounting her handbag full of rupees, the manager insists that the
boutique is only for shareef (honorable) people. Refinement, in addition
to money, is needed to become élite. Only when Raj appears with Madhu
will sales clerks help her exchange her tawdry appearance for sleek West-
ern fashions that make her shareef (honorable).
Later, Raj weans her away from smoking and alcohol, teaches her to
use a knife and fork (rather than eat, village-style, with her hands), and
introduces her to hairstyling salons. The vamp’s excessive modernity is
rooted in an inappropriate focus on money and sex. In shifting attention
from the acquisition of money (and men) to the appropriate consump-
tion of élite items, the former anti-heroine is redeemed as a good con-
sumer of the products of the West. Madhu is redeemed by her ability to
reject uncouth tastes for the consumption patterns appropriate to the
mother of a rich man’s child.
In films like CCCC, the heroine and the “vamp” of earlier decades
meld together.22 As Madhu learns to be a consumer and avoid the temp-
tations of alcohol, she becomes like a second heroine. When Priya (Raj’s
wife) first meets Madhu right before the film’s interval, the salwar-kameez-
wearing Priya and Madhu in her Western dress lock hands and raise
them in triumph, causing raucous applause from the audience. In
Europe (where Raj has taken the two women on a business trip), they
ride together happily in automobiles, even as Raj steals a kiss from Madhu
to the delight of the audience. Both wear Western clothing (like jeans
and New York Yankees caps) on such rides. Madhu has second thoughts
about giving up her child, but ultimately hands him to Priya, saying
“You are now a mother.” The audience whistles as the two hug.
In Dil To Pagal Hai, too, the Madhuri Dixit character and the Karisma
Kapoor character are never in open conflict over the hero. Ultimately,
each supports the other, even though only one can marry him. In these
recent films, then, not only has the vamp left the scene, but she eventu-
ally reconciles with—indeed, melds with—the heroine, valorizing the
modern woman’s consumption and sexuality (although not her acquisi-
tiveness and promiscuity).
The men whom I interviewed in 1991 were titillated by the sexy danc-
ing of anti-heroines, but they always said that they disliked heroines who
exposed too much. But male viewers seem to like the second heroines of
films like Dil To Pagal Hai and CCCC. The actresses who took these roles—
Karisma Kapoor and Preity Zinta—are often legitimate heroines.
During the nightclub scenes in which the Preity Zinta character (Madhu)
dances provocatively, audiences responded with deafening wolf whistles.
Yet, two of the men whom I interviewed in 2001 named Preity Zinta as
their favorite heroine (while a third man named another actress who plays
similar roles). In 1991, the Hindi film world’s celebration of women’s
modesty was so strong that it is difficult to imagine that an actress playing
a prostitute-turned-surrogate mother would be named by any man as
a favorite heroine. In short, film-going men do not regard a modern,
consuming Madhu as a disliked anti-heroine. Instead, consumption has
become an essential part of the femininity of the élite classes in India.
The denigration of the sexuality of anti-heroines is, moreover, incon-
sistent with the new focus on consumption. As John suggests, recruiting
“the new middle class woman as a ‘consuming subject’ of local/global
products” cannot take place without “her sexualization as an actively
desiring subject” (John 1998: 382). The transnational advertising
that urges consumption by the so-called middle class women of India is
combined with a validation of these women’s desires. In previous eras,
such desires threatened women’s Indianness. The new imperatives of
the global economy focus, instead, on how such desires are essential to
becoming middle class.
CCCC highlights women’s role in consumption. Despite Raj’s efforts,
Priya still sees Madhu’s crass background. Priya thanks Raj for training
Madhu, but announces that she will continue the training. She, then,
takes Priya to a supermarket. When Raj meets Madhu and sees the amount
of goods purchased, he comments that Priya must have been doing the
shopping, but Madhu is impressed with the goods as well.
It appears, moreover, that an emphasis on women’s role as consumers
appears to be a common result of globalization around the world. Chris-
tine Chin (1998, 1996) shows, for instance, that the State in Malaysia
works to advance the interests of capital by facilitating the import of
foreign domestic workers precisely to free “middle class” women to
engage in consumptive activities outside the home.
Changing Gender Arrangements

Media influenced by transnational standards increasingly present women
as consumers with independence who work outside the home. This
occurs not just on cable television and in American films but in Hindi
films as well. In Dil To Pagal Hai, for instance, the Karisma Kapoor
character is an independent woman who makes up her own mind to
travel back and forth between London and India. She introduces the
hero to the pleasures of consumption.
Media influenced by transnational standards increasingly emphasize
love rather than parental choice as a basis for marriage, and present rela-
tionships between husband and wife which are not tempered by com-
peting joint-family demands. While this is most clear in American
television serials and Hollywood films, a similar trend has emerged in
Hindi films. Hindi films have, of course, long celebrated love marriages
in stories that tell of rebellions against parents, but in recent years, there
has been an emerging trend in which these films make the young people’s
choice even more central.
First, in some hit films (for example, Dil To Pagal Hai and Kuch Kuch
Hota Hai), parental opposition to choice is not an issue. Here, the focus
is more on finding the right lover. Second, in some hit films (for ex-
ample, Dil To Pagal Hai and Kuch Kuch Hota Hai), it is largely a young
people’s world. In previous films, the larger (and usually joint) family
loomed large. But in some films today, “kids” move about in their own
world and their seniors rarely appear. Third, some films today (for ex-
ample, Dil To Pagal Hai and Kuch Kuch Hota Hai) focus on the love
story to the exclusion of other masala (mixed spices) elements such as
fighting and killing. In earlier decades, all Hindi films were referred to as
masala films because they would mix comedy, music, spectacle, beautiful
scenery, love and romance, and fighting and killing into one concoction
(Ahmad 1992; Derné 2000a: Chapter 3; Thomas 1985). In some hit
films today, the love story is so much the focus that there is no fighting
and killing.
I do not, however, want to emphasize that these types of films have
taken over the Hindi market. Certainly, in many hit films, parental op-
position still looms large (for example, Kaho Na Pyar Hai, Mohabbatein,
and many others). In many hit films, the larger joint family (rather than
a young people’s world) is the main terrain (for example, Hum Saath
Saath Hain, and CCCC). In many films, fighting-and-killing storylines
are still combined with romance (for example, Kaho Na Pyar Hai). But
the emergence of films that focus more on finding the right love rather
than on overcoming parental opposition, on the young people’s world
of choice rather than living with a larger joint family, and more exclu-
sively on romance rather violent rebellion is a distinctive trend. Along
with American films and serials, these films push in the direction of
making love marriages and nuclear-family living more legitimate.
Have there been changes in the family institutions and gender ar-
rangements of élite groups in India that may be influenced by these
changes in the cultural arena?
There is strong evidence that élite women who embrace Western fash-
ions are playing an increasing role as consumers. Munshi and Parulekar’s
fieldwork provides good evidence that élite women are enthusiastically
pursuing Western standards of beauty by buying cosmetics and other
beauty aids, joining gyms, and arranging photo shoots. Page and Crawley’s
(2001: 160) interviews with cosmetic-shop staff in Banaras reveal that
lipstick sales have increased dramatically since the early 1990s. The dress-
shop proprietors they spoke to indicated that demand for jeans had soared
along with other fashion styles celebrated in recent Hindi films. In Dehra
Dun in 2001, boutiques with Western brand-name clothes had become
quite extensive, and a variety of enterprises advertised slimming and
beauty-making techniques.
Accounts in the English-language media aimed at the élite and a num-
ber of impressionistic accounts by social scientists suggest that there may
also be a move away from arranged marriages, joint-family living, and a
strict gender division of labor in the home. Articles in the mainstream
press describe dating as becoming common for young teens (Jain 1998;
Sengupta 2001a). Reports suggest that the marketing of Valentine’s Day,
associated with economic liberalization, has increased a focus on roman-
tic love. One advertising campaign manager describes Valentine’s Day as
increasing young people’s focus on choice of partner (Sengupta 2001a).
Nandini Sundar, a Delhi sociologist, describes the Valentine’s Day rage
as occurring as card manufacturs promote their products. In doing so,
she argues, manufacturers promote the idea of love (Sengupta 2001a).
Another Delhi sociologist, J.P.S. Uberoi, argues that Valentine’s Day
celebrations are part of a transition that is making “the idea of romance”
“more legitimate now” (Sengupta 2001a). So, press reports suggest that
despite protests, “young romantics” celebrate Valentine’s Day “by flood-
ing to restaurants, cinema theatres and shopping plazas” (Sengupta 2001b).
The generally sober observer Pamela Shurmer-Smith (2000: 39–41)
emphasizes that while arranged marriage remains the norm, love
marriages are increasingly common in élite families.23 Sociologist Jyoti

Puri found that of the 101 élite Bombay college-going female readers
of English-language romance novels whom she surveyed, 98 “believed
that a girl should marry out of choice” (Puri 1997: 438).24 Puri’s work
suggests a growing possibility of love marriages among the élite classes in
India. But one should not interpret her questionnaires distributed to
16–22-year-old readers of romance novels to suggest that 98 percent of
élite classes will marry for love. Media scholar Melissa Butcher’s focus
group interviews with 15–20-year-olds in Delhi and elsewhere in 1996–
97 found that those from the “consuming classes” “with a high level of
education and/or professional development” “expressed a declining
adherence to the ritual of arranged marriage” (Butcher 2003: 41–41,
129). Certainly, we lack systematic data that we would like, but the re-
ports we do have suggest some increase in the acceptance of love matches
among the most affluent Indians.
Shurmer-Smith also suggests a growth in nuclear-family living among
the élite because the generous salaries of their jobs allow an easier setting
up of separate households, and often require mobility.25 She emphasizes
that élite women’s ability to get good paying jobs has contributed to an
increase in their participation in the paid labor force.26
It appears, moreover, that among the élite youth, women are rejecting
being restricted to the home. Cyrus Broacha, an MTV VJ who traveled
across India from campus to campus, says that TV has made young women
more free. Even outside the metropoles, Broacha reports, college women
are enthusiastic to speak, to snatch the microphone from him (Page and
Crawley 2001: 150). Media researchers report that many young women
throughout India desire to participate in the musical talent shows that
now run on Zee TV. One principal of a Maharashtra school says that
girls sometimes join colleges with the desire to appear in musical shows
(ibid.: 143). While these reports may seem trivial, they do suggest an
increased willingness on the part of élite women to participate in events
outside the home.
While it seems clear that élite women are increasingly active consumers
who embrace Western fashions and standards of beauty and want more
and more to participate in events outside the home, it remains difficult
to estimate the extent to which joint-family living, arranged marriages,
and a focus on women’s domestic duties are declining among the élite.
While we have some impressionistic accounts of these changes, there is
little at this time that is sufficiently systematic to estimate the extent of

such changes.
Local Mediation of Global Processes

This chapter argues that the processes unleashed by economic and
cultural globalization are remaking affluent Indians’ class identity and
ordinary Indians’ imagination of these classes, and may be reshaping
gender and family arrangements of élites as well. But it is important to
emphasize that these global forces are mediated by local interests and
concerns.27 Local Hindi films have been transformed. They celebrate new
styles and standards of female beauty. They no longer emphasize a vamp
who is denigrated as Westernized. More and more, they celebrate young
people’s choice of partner and women’s greater economic freedom. The
influence of Hollywood is often direct. Bollywood fashion designers
say that they use Hollywood fashion that they see on The Bold and the
Beautiful to give films a glamorous, hip, glossy feel (Chopra 1997).
Scriptwriters say that producers sometimes provide “video cassettes of
the latest American releases” and tell writers to “watch them and make
something like that” (Chhaya 1991; Chopra 1997).
Despite the impetus of transnational media, these changes have none-
theless been introduced by local Indian filmmakers. These filmmakers
have been influenced by the growing availability of Hollywood films
and American television serials and (perhaps) by changes in their élite
lives, but nonetheless it is Indian filmmakers who have been making
these changes.
Satellite television has been even more influential than Hindi films in
inciting consumerism and presenting alternative gender arrangements.
It may appear that with satellite television, the effects of globalization are
more direct. After all, it is American serials like Santa Barbara that have
had great influence. Yet, while American programming has been success-
ful, local programming was essential to satellite television’s growth. In
1991, the Murdoch News Corporation introduced STAR TV, a package
of MTV, BBC, Prime Sports, and Star Plus (a general entertainment pro-
gram in English) in India. But it was Zee TV, introduced a year later,
which found success with a formula of Hindi-language serials, Hindi films,
and programs of Hindi film songs (Gupta 1998; Thussu 2000: 297).
As Page and Crawley put it, Zee TV’s programming of the “popular
culture of the Bombay film industry” “provided the momentum to the
penetration of cable” (Page and Crawley 2001: 89). Even transnational
programming is now dubbed in Hindi (Brosius and Butcher 1999a: 20).
MTV’s experience similarly shows the imperative that programming be
localized. Music video channels like Channel V became successful only
with the introduction of Indian Video Jockeys (VJs) and Indian music
(Butcher 1999). When MTV reentered the Indian market in 1996, it at
first announced that Hindi film songs would not be played, and that
the channel would retain its international identity. But it found that to
be successful, it had to introduce local songs. As a result, 70 percent of
the MTV playlist today consists of Indian pop and Hindi film songs, and
there are 12 local Indian presenters (Brosius and Butcher 1999a: 20).
Just as Hindi films have been shaped by the filmmakers’ experience with
transnational media, so indigenous cable serials, which continue to be the
most popular, are influenced by American serials. Gupta points out that
“while The Bold and the Beautiful may be watched by only a small percent-
age of the Indian population, the Indian soaps on both Doordarshan and
on private channels are heavily influenced by the content and representa-
tional styles of the American soaps” (Gupta 1998: 72). Entire genres from
Zee TV’s High Life (patterned on Lifestyles of the Rich and Famous) to Star
Plus’ Kaun Banega Crorepati (Who Wants to be a Millionaire) are adapted
from American models to Indian conditions (Brosius and Butcher 1999a:
13; Gupta 1998: 72). While the influence of transnational media is clear,
it is local actors who reinterpret transnational productions for local tastes.
Similarly, while cable television screens non-Indian programming, local
entrepreneurs who set up the cottage industry of cable enterprises spread
the new serials and the popularity of cable television. (Mishra 1999;
Page and Crawley 2001: 89). Global media has played a role in making
the transnational middle class in India, but local actors played a central
role in indigenizing global media’s images and messages and disseminat-
ing them throughout India.
Satellite TV and a Changing Economy

I have tried to be cautious in arguing no more than that films contributed
to changing the lives of élites in India. Since they are the primary
entertainment of ordinary Indians, Hindi films have probably had a

greater influence on these groups than they have had on the English-
speaking élites. Thus, it may be that the most important effect of Hindi
films is on non-élites’ imaginings of élite lives.
In affluent circles, cable television has probably played a more pro-
found role in inciting consumer desires. While the proprietors of cloth-
ing shops recognize that the styles of Hindi film stars shape the purchases
of consumers, they mainly see advertising and cable as stimulating their
business (Page and Crawley 2001: 159). Page and Crawley’s (2001: 149–
50) discussion with 17- and 18-year-old female students at an élite
Bombay college revealed that most of them spoke English at home and
watched English-language television programs. None of the group
reported watching state-run Doordarshan over-the-air television and many
cited Ally McBeal as someone they could “relate to very well” (in the
words of one student). Similar discussions with 12- and 13-year-old
students at élite Bombay schools showed a similar preference for British
comedies, American sports, and Hollywood television serials like The X
Files (Page and Crawley 2001: 147–48).
While Hindi films often present a loosening of Indian gender arrange-
ments, this focus is undoubtedly stronger in satellite television. Follow-
ing satellite channels, television serials present more sexual openness than
Hindi films. Serials commonly examine issues like divorce and extra-
marital relationships, which are uncommon in Hindi films, and they are
much more likely than Hindi films to focus on women in the paid labor
force (Page and Crawley 2001: 166). In Hindi films, lovers often recon-
cile with extended patriarchal families, but in serials there is a greater
focus on living outside of joint-family contexts (ibid.: 152–53). The Hindi
film heroine may marry for love and wear Western clothing, but Ally
McBeal or one of the characters in Friends have even more independence.
While changes in Hindi films may contribute to the process of inciting
consumerism or shifting the gender relations of affluent Indians, foreign
television serials and indigenous serials influenced by them have prob-
ably had even greater effects.
Moreover, one should not overestimate the effects of purely cultural
change. At the center of changes in the lives of affluent Indians are struc-
tural changes in the economy. Expanded economic opportunities brought
about by participating in trans-local labor markets provided the income
that allowed people to act on consumer desires. The decline of foreign
exchange restrictions made more goods available. As Rama Bijapurkar

puts it, the liberalization of the Indian economy was a macro-event which
transformed Indian culture. For Bijapurkar, “the structural reality of more
consumer choices is what generated the cultural emphasis on freedom of
choice” (quoted by Page and Crawley 2001: 141). The new economic
opportunities provided by a global economy made social arrangements
like love marriages or nuclear family-living economically viable. The new
economy that opened up new jobs for affluent women played a role in
expanding élite women’s participation in the paid labor force. While films
and other globally-influenced media contributed to the creation of cul-
tural imaginations supporting these changes, the structural changes are
what allowed people to act on these imaginations.
The importance of the new structural opportunities is highlighted by
the fact that so many ordinary Indians reject the messages of television
serials. Page and Crawley (2001: 166) report, for instance, that while
affluent urban women often identified with television heroines who cope
with divorce, sexual harassment, rape, and abortion, ordinary women
outside cities tended to describe television serials as presenting an “un-
real and perverted picture of women.” Working class women voiced strong
objections to the “misbehavior of the young women in the serials.” While
students in élite Bombay colleges enjoyed television depictions of women
who became sexually involved with their bosses, the story line did not go
down as well with students elsewhere, who complained that serials gave
the wrong message by encouraging extra-marital affairs (ibid.: 155–56).
The importance of the new structural opportunities in facilitating
change is also highlighted when one remembers that the “new” messages
and images of Hindi films have, in fact, been part of Indian culture for a
long time, but have typically been rejected as fantasy with little to teach
about how to live. Because human experience is contradictory, cultures
are not consistent, coherent wholes. Rather, each culture develops “sec-
ond languages” which recognize human experiences that are opposed to
the more easily recognized experiences which are captured by the richer
“first language” with which people are more familiar (Bellah et al. 1985;
Derné 1995: Chapter 5: 60–62, 2000b). While Indian culture has long
emphasized adherence to family duty and group pressures, this very
focus allows people to imagine the opposite—individuals who are free
from constraint. A focus on social duty to a family allows one to imagine
its opposite—individual freedom and marital love. In all societies, people
experience both individual autonomy and the guidance and control of

groups. So, cultures tend to give expression to both poles of human ex-
perience. In India, the focus has very much been on group dictates, but
second languages, which are less rich, legitimate and familiar nonethe-
less have long given voice to the desire for individual autonomy
(Derné 1995: Chapter 5, 2000b: 165–67). Indian popular theatre
(Hansen 1992) and women’s oral traditions (Raheja and Gold 1994)
reveal the strength of a second language embracing equality between
men and women, individual autonomy, and love over family duty. But
without transformed structural possibilities, not very many people
embraced these “second languages”.
Hindi films have long celebrated individual autonomy and love over
family duty, but relatively few men rebel by marrying against their
parents’ wishes, precisely because of the structural realities they face.
Of course, some men marry for love and many more separate from their
parents, and films may play a role in inciting this desire for autonomy
(Derné 1995: Chapters 5, 7, 2000a: Chapter 5). But the quest for au-
tonomy often occurs only when men have established themselves as
economically independent—that is only when the structural realities of
their situation facilitate greater independence (Derné 1995: Chapter 8;
Mines 1988). My interviews with film-goers in 1991 demonstrate that
most men rejected Hindi films’ celebration of love marriages and of love
as having priority over duties to the joint family (Derné 2000a: 84–88).
While films provided an enjoyed and exciting liminal escape from day-
to-day realities, they did not tend to transform the lives of the filmgoers.
The film-going men whom I interviewed in 1991 tended to be guided
by their very real fears rather than by the fantastic celebrations of love
that they saw on the screen. Young film-goers who were not yet well
established in their careers relied on parental support and had, therefore,
a hard time imagining forsaking this support to marry against their
parents’ wishes. There were few structures, moreover, that facilitated the
interaction of young unmarried men and women that would allow young
film-goers to develop a desire to marry for love.
Thus, while the new messages of transnational media may play a
role in transforming the live of affluent Indians, we should always keep
sight of the structural realities that have facilitated these new lives. The
next chapter focuses on how the non-élite film-goers whom I interviewed
in 2001 also reject contemporary messages of transnational media,
highlighting that such media messages have little effect without a change
in the underlying structural realities.
Indeed, we should not forget that the new cultural imaginations pre-
sented in Hindi film, satellite television, and advertising are themselves
based on underlying economic changes. The decline of regulations and
the loosening of foreign exchange restrictions were what allowed the
growth of satellite television and Hollywood films. The opening up of
the markets fired up the economic engine of advertising that made cable
television viable.
The Transnational Middle Class

in a Globalizing Economy
Only recently has class analysis begun to address how a globalizing
economy is fundamentally altering the class system. Most notably, Leslie
Sklair (2001) has analyzed the emergence of a transnational capitalist
class that works to advance the interests of transnational corporations
(TNCs). Because, “those who run the TNCs cannot achieve their ends
alone,” the class includes “globalizing bureaucrats, politicians and pro-
fessionals” that the corporations need to carry out their work (Sklair
2001: 295). This group remains a “capitalist class” for Sklair because it
continues to direct or control the major forms of capital. This group
comprises a distinctly transnational class because “they operate across
state borders to further the interests of global capital” (ibid.: 295).
Ostensibly, Sklair (ibid.: 295) embraces the basic Marxian analysis of
class, arguing that TNC executives, globalizing bureaucrats, politicians,
and professionals share a similar “relationship to the means of produc-
tion, distribution, and exchange,” but he—perhaps unwittingly (and,
I think, correctly)—focuses attention on how transnational capitalists
pursue the interests of TNCs despite the various ways they are related to
the system of production.
While the transnational capitalist class has an interest in promoting
open markets and ensuring cheap labor, Sklair (2001: 6) is right to focus
attention on how this class also has a strong interest in promoting the
“culture ideology of consumerism” which is central to the reproduction
of the global capitalist system. Sklair suggests that the transnational
capitalist class’ main aim is “sustaining global capitalism based on

mass . . . consumerism forever. . . . Whatever else might change or how-
ever social systems might diverge . . . people would all agree on one prin-
ciple, namely the desirability of consuming more and more goods and
services” (Sklair 2001: 255). “The prime culture-ideology task of global
capitalism,” Sklair argues, “is to ensure that as many people as possible
consume as much as possible by inculcating beliefs about the intrinsic
value of consumption as a ‘good thing’ and the key component of the
‘good life’” (ibid.: 11). The transnational capitalist class, of course, wants
to create more than just the desire to consume: it wants to create the
desire of everyone around the world to consume the same products. “Once
television is there,” the CEO of Heinz opined, “people of whatever shade,
culture or origin want roughly the same things” (ibid.: 255).
While Sklair emphasized the creation of a transnational capitalist class,
there has so far been insufficient attention paid to how globalization is
shaping other classes. But in inciting consumption, the transnational
capitalist class ends up creating the transnational middle class described
in this chapter. This transnational middle class is oriented to cosmopoli-
tan consumption and makes up the primary consumers fueling the capi-
talist system.
Most theories of class followed Marx in focusing on a person’s posi-
tion in a productive system. But my study, along with other recent
ethnographic studies of class in poor countries exposed to global mar-
kets, suggests the importance of the Weberian focus on how the middle
classes are made by defining themselves in opposition to class ‘others’
through cultural practices associated with consumption. Mark Liechty’s
analysis of the development of the middle class in Kathmandu, Nepal,
follows Weber in emphasizing two key aspects of the middle class. Middle
classes, Liechty emphasizes, construct their identity “in opposition to its
class others, above and below” (Liechty 2003: 15). In addition, because
the contributions of the middle classes to production often do not seem
obvious, they stake claims to identity through discernment, which is
often focused on consumption. He argues that the middle classes dis-
tance themselves both from “mere laboring” and “mere wealth,” staking
their identity on “its accomplishments and refinement, moral discourses
that it pursues largely through its privileged access to goods and services
(from education to fashions) in the free market” (ibid.: 17). For Liechty,
“cultures of consumerism” are part of the cultural process “through which
an emerging middle class actually creates itself as a sociocultural iden-

tity” (ibid.: 7). In the middle class world, Liechty (2003: 15) argues,
identity is based more on what you have than on what you do.
Several features define the transnational middle class in India. First,
the transnational middle class defines itself in opposition to class others
on a global field. Affluent Indians, whose opportunities for consumption
and employment are now shaped by global markets, increasingly consti-
tute a transnational middle class that holds the space between the poor in
India and the consuming classes in North America and Europe. These
élites are constantly reminded of the lifestyles of the consuming classes
in rich societies, yet they also know that their own élite status, and India’s
comparative advantage in the international economy, is based on the
low-wage Indian poor. Affluent Indians show themselves to be a
transnational middle class by consuming products that advertise the emu-
lation of the lifestyles of cosmopolitan consumers in Europe and North
America while distinguishing themselves from the vulgar tastes and
arrangements of poor Indians. Since the class identifies with cosmopoli-
tan consumers around the world, it is a transnational class for whom
national identity is relatively unimportant. In working to create similar
global consumers around the world, the transnational capitalist class binds
people together by shared attachment to a middle class lifestyle in spite
of language, religious, and national differences.
Second, transnational middle class identity is rooted more in shared
consumption than in a shared relationship to the productive system.
People advertise themselves as cosmopolitan by showing discerning tastes,
especially in fashion, but also in consuming goods. Often, the discern-
ment being advertised focuses on particular ways of being male and
female. So, the transnational man shows his maleness and his cosmo-
politanism through his attachment to products (like the Pulsar motor-
cycle) which are associated with male strength. The transnational woman
shows her femaleness and her cosmopolitanism through attachment
to transnational standards of beauty, like a thin body and up-to-date
fashion. In trying to unify consumers around the world, the transnational
capitalist class helps create this orientation, especially through media and
advertising.
Third, transnational middle class identity is rooted in cosmopolitan
gender arrangements which give women freedom as consumers. One
way that the most affluent Indians advertise their cosmopolitan status is
by easing attachment to distinctively Indian gender arrangements. While

relatively few affluent Indians have embraced love marriages, some
affluent Indian women work outside the home and many more affluent
Indians live in nuclear families. Most women in the transnational middle
class move more freely outside the home—certainly, as they shop in élite
boutiques. These gender arrangements emulate those of the consuming
classes in Europe and North America and distance themselves from the
local arrangements of poorer Indians.
The transnational middle class often defines itself in terms of women’s
attachment to shopping and pursuit of cosmopolitan standards of beauty.
As Mark Liechty (2003: 253–54) argues, “consumption is the cultural
labor of the middle class”, and it is important that women are the pri-
mary consumers. Theorists like Maria Mies (1986) are correct to see
“housewifization” as a fundamental basis of capitalist profit, and it is
certainly through transnational capitalist class efforts that so many
transnational middle class Indians have come to see women as cosmo-
politan consumers.28
This analysis suggests that a globalizing economic system has pro-
duced not just a transnational capitalist class, but a transnational middle
class as well. The transnational capitalist class shares the common aim of
promoting a consuming ideology around the world. When it is success-
ful, the transnational capitalist class produces a transnational middle class
that finds its identity by defining itself in comparison to class ‘others’ on
a global stage, advertises cosmopolitan discernment through consump-
tion, and embraces distinctively cosmopolitan gender arrangements.
Media help members of the transnational middle class see themselves
as having more in common with other consumers around the world
than with others in their own country. While people in the transnational
middle class commonly have positions in the global economy that pro-
vide good incomes, media help root their identity more in consumption.
Through the prompting of advertising initiated by the transnational capi-
talist class, the transnational middle class increasingly finds its identity
in distinctively cosmopolitan gender arrangements which give women
increasing freedom to act as consumers. In short, the globalization of
the economy suggests the need to fundamentally rethink our analysis of
class identity.
While I have drawn especially on the insightful work of Mark Liechty
(2003), there are important differences in our approaches. (Indeed, I did
not read Liechty’s work on “making middle class culture in a new con-
sumer society” until after I had completed a draft of this chapter.) Liechty’s
analysis is helpful in confirming my analysis of focusing on consump-
tion as a key cultural practice in the making of class identity today. His
analysis of how the middle classes define themselves in opposition to
class ‘others’ is also helpful in confirming my analysis. But in focusing on
the cultural practices of the middle class itself, Liechty under-emphasizes
the role of the transnational capitalist class in prompting these practices.
In focusing on cultural practices, Liechty unduly de-emphasizes struc-
tural positioning. My analysis certainly emphasizes cultural factors, but I
see structural factors as important as well: affluent Indians today are more
and more located on a global field. Their jobs are high-paying precisely
because they produce for a global market. Their lifestyles can aspire to
those of the consuming classes in the rich countries precisely because
global goods are more and more available.
A more serious difference between our approaches is that Liechty fails
to distinguish between the transnational middle class that I describe in
this chapter and the ordinary middle classes that I focus on in the rest
of the book. Liechty explicitly suggests that Weber would have better
focused on “a middle class” rather than a set of “middle classes” (Liechty
2003: 13) between labor and capital. Provided new global opportuni-
ties, the transnational middle class that I describe in this chapter sees
itself on a global field located between the Indian poor and the consum-
ing classes in Europe and North America. Lacking these new global
opportunities, the ordinary middle classes I describe in the next chapter
see themselves as on a purely local stage, between the Indian poor and
the affluent ‘great’ people in India who drive automobiles and travel
abroad. While the transnational middle class I describe in this chapter is
oriented globally and embraces cosmopolitan gender arrangements to
advertise its discernment, the ordinary middle classes are oriented locally
and reject such gender arrangements as a threat to Indianness.
Liechty, it turns out, focuses not on the transnational middle class I
describe in this chapter but the ordinary middle classes who define them-
selves in opposition to the vulgar poor, and the promiscuity and excessive
consumerism they attribute to the sorts of affluent people I described
here. Liechty is right that we need to focus more on consumption and on
how groups are positioned globally to understand class today. But we must
also focus on distinctive gender arrangements and the role of the most
élite transnational capitalist class in producing class arrangements. Addi-

tionally, we must apply the focus on consumption and global location to
understand not just a middle class, but a range of middle classes today.
Conclusion
This chapter suggests that economic and cultural globalization may be
transforming the lives of affluent Indians who are most able to partici-
pate in the new economic opportunities brought about by economic
liberalization. Affluent Indians embrace a new sort of consumerism.
Certainly, the affluent have always used consumption (as, for instance,
in marriage ceremonies and dowries) to advertise wealth, but now they
use consumption to advertise cosmopolitan discernment and taste. While
the change is probably less far-reaching, globalization has also influenced
the gender arrangements of affluent Indians. For some affluent Indians,
new economic opportunities have made nuclear-family living and love
marriages more of an economic possibility, but for nearly all, new oppor-
tunities for consumption have fueled women’s greater freedom of move-
ment in public.
This chapter suggests as well that the imaginations of élite lives pre-
sented in the transnational media may shape the understanding of what
it means to be élite in India. Both élites and non-élites may increasingly
see élite status as rooted in consumption and transnational movement.
These orientations may, moreover, associate élites more with élites in
other countries than with their own compatriots in India, diminishing
the hold of national identity. Films play a role in this process, but
undoubtedly the growth of satellite television has had at least as much of
an effect.
While transnational cultural flows influence these processes, we must
keep in mind that these processes are mediated by local actors, from local
filmmakers to local cable operators. While it may appear that cultural
globalization is an important engine of change, we must always keep in
mind that changing structural conditions is what allows these new
understandings and desires to grip the imagination of people in India.
Indeed, the next chapter’s consideration of globalization’s failure to
radically transform the lives of ordinary Indians suggests that changing
structural realities constitute the main engine of the changes brought
about by globalization. Since their structural worlds have not been fun-
damentally transformed, ordinary Indians find pleasures in Hindi films
that are similar to those of previous decades. Although the men I inter-
viewed often have cable television and enjoy Hollywood films, these glo-
bal media have not fundamentally transformed the lives of ordinary
Indians. Non-élite Indians have been less able to participate in cosmo-
politan consumption and national identity continues to loom large (and
is, indeed, a basis of collective resistance to globalization). Despite pro-
ductive positions that have commonalities with those of other non-élites
around the world, non-élite Indians have not developed a transnational
identity that parallels the class identity of the transnational capitalist
class and the transnational middle class described in this chapter.
Notes
01. I spent most of my time in Banaras, Dehra Dun, and Delhi, and have never been to
the cosmopolitan center of Bombay. I lived in India for about 21 months, between
1986 and 2001.
02. It was only after completing a draft of this section that I discovered the work of
Leela Fernandes who similarly argues that “media images produce a vision of the
Indian nation based on an idealized depiction of the urban middle classes and new
patterns of commodity consumption” (Fernandes 2000: 612).
03. Fernandes similarly argues that in the early decades of independence, the strength
of a “political culture which was constituted by public discourses on the need for
advancement of the rural poor” was apparent in forms ranging from “the speeches
of politicians to popular films”. “The urban middle classes were,” she argues, “rela-
tively invisible in this visual political culture” (Fernandes 2000: 613).
04. As Kazmi (1999: 159) notes, the servant in HAHK is “virtually a family member”
who is called “son” by the family patriarch. Kazmi emphasizes how the source of
the rich’s “ill-gotten wealth” and the dire straights of the poor are hidden by films
like HAHK.
05. These quotations are cited by Uberoi (1998: 314) as a personal communication.
06. The quote is a personal communication by Rachel Dwyer cited by Uberoi (1998:
314). See also Inden (1999); Kazmi (1999: 159–60).
07. There are, of course, exceptions, but these are increasingly rare and marginalized. A
mainstream hero in the 1980s and the early 1990s, Mithun Chakraborty today
portrays fighting-and-killing anti-heroes who are poor. But the films in which he
stars today are low-budget and attract small audiences (for example, Zahareela).
08. See also Gupta (2000); Shurmer-Smith (2000); Varma (1998: 194).
09. He is referring to those who are seeing films at the Chayadeep theatre.
10. English-language Hindi film fan magazines now routinely include advertisements
of luggage, so necessary to the life of mobile global citizens.
11. Some of these hit films included Dilwale Dulhania Le Jayenge (1995), Pardes (1997),
and Kaho Na Pyar Hain (2000).
12. Those familiar with Hindi films will recognize these as tropes that are so common
that they hardly need documenting. Films that include honeymoons in Europe run
from Chandni (1989) through Chori Chori Chupke Chupke (2001). Films that refer-
ence Indian men’s business or education in Europe or North America run from Ram
Teri Ganga Maili (1985) and Maine Pyar Kiya (1989) through Dil To Pagal
Hai (1997), Hum Aapke Dil Mein Rehte Hain (1999), and Chori Chori Chupke Chupke
(2001), to name just a few.
13. Such advertising is notably absent from Hindi-language fan magazines.
14. While the title of the magazine highlights its international character (perhaps to
appeal to the transnational middle class) it is “for sale in India only”.
15. At other hoardings in town, the same establishment instead emphasizes more tradi-
tional specialties in “make up”, “yoga and meditation”, “bridel [sic] mehndi,” “hair
problem”, and “skin problem”.
16. This literature is discussed in Chapter 1. See especially Baudrillard (1983); Hebdige
(1989); Mathews (2000); Richards (2000).
17. Because Coke now owns Thums-Up!, Pepsi only costs about three times as much as
the cost of Thums Up!.
18. This literature is discussed in Chapter 1. See especially Mathews (2000); Richards
(2000).
19. Social scientist Anjali Monteiro similarly reports that these victories have been a
source of national pride (interview quoted by Page and Crawley 2001: 142).
20. Chin (1998: 185) shows similar dynamics in Malaysia.
21. The film played to sold-out houses in Dehra Dun. While not as big hits as Kabhi
Khushi Kabhi Gham or Lagaan, which played after my departure from India, the
press describes CCCC as a hit that “fast recovered the Rs 30 million per territory
investment for distributors” (Vijayakar 2002a).
22. Shohini Ghosh rightly sees the “blurring of distinction between the ‘bad’ vamp
(Westernized, sexy and promiscuous) and the ‘good’ heroine (chaste and virtuous)”
as a “major representational shift” (Ghosh 1999a: 238). She rightly traces this trans-
formation to 1993’s Khalnayak, which featured the hit song “Choli Ke Peechey Kya
Hai?” (What’s Behind my Blouse?).
23. Anthropologist Satya Sharma (1996: 311) similarly reports a rise in dating and a
related decline in arranged marriages among the élite.
24. I report this finding because it suggests the growing possibility of love marriages in
élite families. But I do so reluctantly because the findings could be misinterpreted.
Puri’s finding that 98 percent of a sample of Bombay readers of English-language
romance believe a “girl should marry for choice” does not reflect the preference of
most élite Indian women. Puri’s (1997) questionnaire survey of Bombay college
women who self-identify as readers of English-language romances may have accessed
an extremely élite group (which she describes as middle class). But it seems more
likely to me that these questionnaire results indicate a desire for a love marriage more
than an expectation of achieving them. Forty percent of the women report having
to read romances on the sly because their family prohibits their habit (Puri 1997:
439), suggesting they are a long way from rebelling against the cultural norm that
marriages ought to be arranged by the parents. Parameshwar’s (1997) survey of

English-language romance readers found little support for love marriages.
Puri’s (1999) more recent work on narratives of élite Delhi women suggests,
moreover, that women’s discussion of love marriages and arranged marriages often
includes much ambiguity. Puri does not report what percentage of these women
want love marriages, focusing instead on how these women describe “the meaning
of marriage in ways that are neither traditional nor Western, that are neither easily
categorized as ‘love’ nor ‘arranged marriages’” (Puri 1999: 139). Thus, two of 20
marriageable-age women discussed planning an immanent love marriage, but these
“narratives” were “driven with the practical considerations typically associated with
‘arranged marriages’.” Many women aimed at finding a husband whom they can get
to know and discussed the drawbacks and benefits of both love marriages and
arranged marriages in attaining this goal (ibid.: 141). These urban women have
“convent education,” have the “ability to converse in English” (ibid.: x), and hold
jobs that include those of flight attendant and film star. Focusing on the women’s
self identification, she describes the sample as “middle class” (and sometimes upper-
middle class). She was not interested in a sample that revealed “typical middle-class
Indian women’s” “typical answers to questions”, but conducted the interviews mostly
in English and used a snowball method of sampling through “personal networks”
(ibid.: 19).
25. Communications scholar Shoma Munshi (2001c: 83) similarly reports a decline in
joint-family living among the élite.
26. Social scientists Shoma Munshi (2001c: 83) and Satya Sharma (1996: 311) similarly
argue that élite women are increasingly in the paid labor force. Marketing consult-
ant Bijapurkar believes that television has played a part in making it acceptable
for élite women to work outside the home “even if the numbers have not grown
substantially over the past ten years.” The serials, she says, say “that it is ok to walk
out on your husband and get involved with a married man and have a child out of
wedlock . . . and yet the feeling towards the protagonist is overall positive. . . . The
audience is not rejecting the serial” (Page and Crawley 2001: 167).
27. This has often been recognized by students of globalization (Richards and French
2000: 14).
28. Christine Chin’s (1998) study of foreign female domestic workers in Malaysia simi-
larly shows the capitalist interest in producing housewives as consumers. In concert
with transnational capital, the Malaysian state encourages the import of Filipino
domestic workers so that more Malaysians can live in nuclear families. Living in
nuclear families, Malaysians rely more on the market than the extended family to
meet basic needs. Filipino domestic workers in these households allow women to
take public roles in consuming. Chin shows that this nuclear family form that relies
on foreign domestic servants is seen as crucial to middle class status in Malaysia.
4 Cultural Continuities
and Active Resistance
Gender and the Making
of the Indian Middle Class
Attracted to images of new affluence as India enters the global economy,

22-year-old Amit left his village to study at a Dehra Dun university with
the hope of landing a high-paying job. Fashionably dressed, he waits with
a diverse crowd (that includes people of humble means) to get one of the
cheaper seats at the Dehra Dun theatre showing Chori Chori Chupke
Chupke, the most respectable Hindi film that was screened during the
period of my 2001 fieldwork. Fancying himself a connoisseur of Western
fashion, he comments that the “fashion in films impresses me. We should,”
he says, “update and change our style.” Amit enjoys seeing films for en-
tertainment (manoranjan). He especially enjoyed the hit Hindi film Kaho
Na Pyar Hai because of the physique and dancing of the film’s powerful
hero (Hrithik Roshan) who played an émigré to New Zealand. On cable,
he enjoys watching Arnold Schwarzenegger films and National Basket-
ball Association games beamed to India from the USA. These media pref-
erences seem to suggest a global orientation as well as an attraction to
male strength and power.
Yet, Amit also seems attached to gender arrangements that he sees as
distinctively Indian. He says that he will only watch a Hindi film if he
has heard that it is a “good family movie”. Hum Saath Saath Hain, a
straightforward celebration of joint-family life, is one of his favorite films.
Currently staying in Dehra Dun for his studies, Amit describes leading a
happy joint-family life in a Kumaon hill village with his mother, retired
army father, a sister, two brothers, and bhabhis (brothers’ wives). Al-
though the cosmopolitan media he likes often celebrates love marriages,
he firmly believes that “love marriages are only successful in films.” Love
marriages, he says, wrongly distance boys from their parents. While see-
ing himself as a cosmopolitan connoisseur of fashion and identifying
with the Kaho Na Pyar Hai hero who emigrated abroad, this young stu-
dent, like many others, is nonetheless uneasy about how new cultural
influences might affect the Indian gender arrangements that he likes. “I
want an arranged marriage,” Amit says, “but I fear that Fashion Televi-
sion,1 MTV, and [music] Channel V are affecting the desires of the
younger generation.”
The last chapter suggested that transnational cultural flows have played
a role in creating a transnational middle class in India which is oriented
toward cosmopolitan worlds outside India. This class defines itself by
movement and the consumption of cosmopolitan goods. It appears that
the gender arrangements of the transnational middle class examined in
the last chapter may be shifting so that more women participate in the
paid labor force (bringing in more money for consumption), and more
women move freely outside the home often to engage in consumption.
Global media play a role in encouraging dating by members of the
transnational middle class, who see themselves as guided by cosmopoli-
tan standards, while better economic opportunities for the affluent make
nuclear-family living and love marriages a more realistic possibility.
We must always keep in mind that the effects of globalization are
mediated by class.2 For the educated English-speaking élite, the speeding
up and increasing volume of global movement have increased possibili-
ties and opportunities. But ordinary Indians like Amit are mostly at the
receiving end3 of globalization. The transnational movement of media
makes Amit (and other middle class Indians) more aware of cosmopoli-
tan lifestyles—and Amit is attracted to external signs of cosmopolitan
status such as fashion. But Amit is neither affluent nor globally con-
nected; he does not speak English well; the university he attends is not
prestigious; and while his father’s army career provides a good standard
of living, it does not provide transnational connections.
Amit is highly educated, having nearly finished his university
program, but his limited English-language skills and lack of élite
CULTURAL CONTINUITIES AND ACTIVE RESISTANCE 129
connections (which he shares with other ordinary middle class Indians)

limit his ability to hitch his dreams to the global economy and pursue a
fully cosmopolitan lifestyle. Awareness of the utopia of consumption
partly brought about by global media has not fully transformed
Amit’s desires and identity. Rather, his desires about gender and family
remain most strongly influenced by local Indian cultures to which
he remains strongly attached. While affluent Indians now embrace
cosmopolitan identity over Indianness, Amit’s Indianness is central to
his identity.
Like the economic situation he finds himself in, the enduring family
structures that Amit confronts also play a part in limiting cultural
globalization’s effect on him and other non-élite middle class Indians
like him. Like most non-élite middle class Indians, Amit lives in a world
in which dating can still fundamentally harm parents’ ability to arrange
a daughter’s marriage.4 He lives in a world in which job opportunities for
women of his class are not good enough to be of much help in pushing
toward the utopia of consumption. He encounters a world in which
parents closely watch any contacts between unmarried men and women.5
Given these structural realities, the celebration of greater independence
for young couples in global media does not make much sense to Amit.
Like most non-élites, Amit dismisses the celebration in films of love
marriages as fantasies with no connections to his daily reality.
For Amit, as for many ordinary Indian men, gender and family ar-
rangements that subordinate women are fundamental to their Indianness.
Amit wears fashionable clothes and is attracted to powerful male figures
that he encounters in the transnational media. What makes him uneasy
is global media, which seems to encourage the breakdown of family
arrangements that benefit men like him and which he sees as distinc-
tively Indian. When ordinary Indians resist globalization, they often
focus on perceived threats to Indian family life.
This chapter focuses on continuities in non-élite Indian culture de-
spite a media landscape that has been transformed by globalization and
that appears to offer new cultural understandings and resources. First, I
argue that for young men whose lives remain constrained by limited
opportunities, films still provide an escape from day-to-day realities,
but do not transform most men’s understandings of those day-to-day
realities. Despite the messages of transnational media, ordinary middle
class men continue to be attached to arranged marriages and a strict
division of labor in the home. Second, I argue that even as they highlight
non-Indian cosmopolitan identities which ordinary Indians cannot suc-
cessfully pursue, films end up awakening anxieties about identity that
films themselves resolve by bolstering the Indian identities of non-élite
viewers. Third, I emphasize that the consuming appeal of cosmopolitan
identities makes ordinary middle class men pursue aspects of those iden-
tities (like fashion) wherever they can, rooting their own Indianness in
women’s adherence to standards of femininity that men see as distinc-
tively Indian. Fourth, I suggest that because ordinary Indians remain
attached to their Indian identity, they sometimes actively resist cultural
globalization, but this resistance focuses especially—although not exclu-
sively—on challenges to gender arrangements. Finally, I suggest how
the cultural practices I describe in this chapter contribute to making a
locally-oriented middle class more rooted in Indian identity, and to focus-
ing on different class ‘others’ than the transnational middle class that I
described in the previous chapter.
This chapter emphasizes how class-based structural realities of economy
and family which non-élites face limit the ways in which cultural global-
ization transforms their lives and understandings. Subsequent chapters
show, however, that globalization is also bringing about some important
changes in non-élite middle class culture. Chapter 5 shows that while
globalization has not fundamentally transformed gender and family
arrangements of ordinary Indians, it has transformed some of the mean-
ings that ordinary Indians attach to these arrangements. Chapter 6 shows
that cultural globalization is providing new layers of meanings that
further strengthen an already oppressive gender culture—as in Amit’s
attraction to cosmopolitan action films and global sports that show male
violence.
Escape from Day-to-Day Realities

Like the non-élite middle class men whom I interviewed in 1991 (Derné
2000a: 65), the men whom I interviewed in Dehra Dun in 2001 en-
joyed Hindi film-going as an escape from their day-to-day lives. Men
said that they watch films for entertainment (manoranjan), to fondle
their hearts (dil ko bahalaana) (in Amit’s words) or for mauj-masti—a
difficult-to-translate term that might best be glossed by joi de vivre or a
delighted state of passion.6 As one 25-year-old put it, “our hearts get
satisfaction from films.”
One reason that film-going refreshes is that it provides a time outside
of normal family and work responsibilities (Derné 2000a: 62–66). Film-
going is a liminal, antistructural time of relative anonymity in which
men feel free to shout, laugh, and whistle without concern about how
they are seen by others. As in 1991, men make bawdy comments and
clap and whistle with abandon when Hindi film heroines dance. They
continue to shout their approval when the heroes beat up the villains,
to laugh at comedic elements, and sing along with hit music. They
continue to enjoy close connections with male friends away from the
eyes of family. The ritual of escape provided by film-going may be one
reason so many men continue to say that they enjoy all the films they
see. “I love them all,” says one married 25-year-old laborer who lives
with his wife and children along with one brother. “What’s not to like?”
The ongoing desire to escape from day-to-day realities reflects the
fact that structural realities have not changed. Most men still face
limited opportunities or work under demanding bosses. Most still live in
households that include more than two adults. Film-going is an escape
from usual lives in which autonomy is limited by family and economy.
The ongoing structural realities of tight family connections and lim-
ited job opportunities continue to lead filmmakers to present fantastic
reversals of existing hierarchies and arrangements, which excite viewers,
even if they do not transform their ways of thinking about the usual
realities. While love stories today are the biggest hits and get most of
the attention from the media and fans, fighting-and-killing films that
emphasize a hero’s rebellion against unjust authority continue to play to
enthusiastic male audiences.7
The audiences for fighting-and-killing films usually do not include
many women. While women might make up one-quarter of the balcony
audience at some showings of a film like Officer—one of the more suc-
cessful fighting-and-killing films of my 2001 fieldwork—systematic
counts sometimes showed an overwhelming male audience: leaving one
afternoon show of Officer were 485 men and just 12 women. Waiting for
another afternoon show were 175 men and 15 women. The audiences
that watched showings of Zahareela, a less popular, low-budget fighting-
and-killing film, were even more overwhelmingly male. The audience for
one showing consisted of 368 men and 11 women, while the audience
for another showing consisted of 294 men and 12 women. In 1991, fight-
ing-and-killing films similarly attracted an overwhelmingly male audi-
ence (Derné 2000a: 37).
As in 1991 (Derné 2000a: 66–75), audiences in 2001 responded en-
thusiastically to such rebellions. At showings of 2001’s Officer, the audi-
ence would applaud with abandon when the hero grabbed the face of his
supervisor. At showings of low-budget Mithun Chakraborty-starrers like
Zahareela and Bhairav, audiences would shout when Mithun slammed an
affluent Indian’s head into a table. Even in love stories, reversals of usual
power dynamics are important elements. In the big 2000 hit film Kaho
Na Pyar Hai the hero’s rise from humble origins is an important appeal.
Rebellions against family authorities and the presentation of a world
in which men and women interact more freely continue to be the central
appeals of Hindi films. As they did in the previous decades (Derné 2000a:
91–96), film love stories continue to celebrate individual autonomy
that allows a young couple to live independent of parental support. In
films like Dil To Pagal Hai (DTPH) and CCCC, the hero’s ability to live
without parental help has become so normalized that it does not even
appear to be a struggle. In earlier films (for example, Maine Pyar Kiya),
the hero might be a business executive, but he often needed to kowtow
to a father who ultimately controlled the company. But in recent films
like DTPH and CCCC, the hero’s position of financial independence is
unquestioned. While in some films (like DTPH and CCCC), parental
opposition to love is not an issue, the young couple’s rebellious defiance
of family authorities remains central in some hit films (like 2000’s
biggest hit film, Kaho Na Pyar Hai).
Sexy song sequences remain (Derné 2000a: 57–59) an important
attraction for ordinary men who often lack other outlets for sexual
energies that films themselves incite. In 2001 (as in 1991 [Derné 2000a:
147–49]), men enjoy whistling and shouting during sexy song sequences.
In fighting-and-killing films like Officer, deafening and numerous whistles
greeted a scene showing the bikini-clad heroine emerging from the ocean.
Whistling, clapping, and shouting only intensified as the heroine began
to swing her hips in the dance scene that followed. In love stories like CCCC,
deafening whistles accompanied the heroine’s dancing in a honeymoon
scene. The male audience response to CCCC’s scene in which the hero
first encounters the dancing girl whom he hires to be a surrogate mother
was even more raucous. The scene quickly became so anticipated that
the whistles began even before the scene came on the screen. Whistles
intensified as the audience saw the heroine’s hat that read “Sexy” (in
English). As she shook her hips on screen, the response went so wild that
the seats seemed to shake, especially in the front sections of the audito-
rium. Nine (28 percent) of the men whom I interviewed in 2001 named
particular heroines as their favorites because of their “beauty”, figure, or
dancing skills, often talking wide-eyed about their attraction to their
favorite heroines’ beauty.
Audiences continue to enjoy film themes that turn the world that
they know upside-down, offering vicarious escape from day-to-day
realities. In Hindi films, young adults have financial independence,
reject parental authority, and marry according to their own wishes. Film
heroes rise to wealth from humble origins and the powerless struggle
with the powerful. Young people pursue their passion and seek their own
mates. The usually strict limits on sexual exploration are lifted. As long
as the structures of Indian society limit the possibilities of autonomy for
most young people, placing them in tightly watched family and work
environments, Hindi films will probably continue to provide the fantasy
of escape from the worlds in which most Indians live.
Attachment to Existing Family

Arrangements in a Globalizing World
The advent of globalization has intensified the celebration of autonomy
and individual choice. The idea that young people’s love for each other
should be the basis for marriage is reasserted by cable television’s
American serials that show young people in pursuit of the “right one”.
Hollywood films show men and women falling in love outside of paren-
tal dictates. Influenced by global media, Hindi films now focus more
on a search for the right partner rather than on overcoming parental
opposition. The 1997 big hit film Dil To Pagal Hai famously opens with
the heroine voicing her certainty that “someone somewhere was made
for me and that I’ll meet him.” The hero scoffs at the “nonsense” of a
“soulmate”, but the heroine remains firm: “When I meet my soulmate, I
will recognize him. He will speak to me and give me a sign and my heart
will realize . . . this is love.” In the increasingly cosmopolitan media world,
love as a basis for marriage becomes more and more a celebrated goal.
Yet, despite the transformed media landscape and the increased cel-
ebration of cosmopolitan lifestyles, the men whom I interviewed in 2001
remain as committed to arranged marriages as the men whom I inter-
viewed in 1987 and 1991 (Derné 2000a: 84–88). In 2001, men still see
films as a fantasy that provides no guidance about how they should marry.
Pramod, a 20-year-old Scheduled Caste laborer with little schooling,
talked with me as he waited to watch the love story CCCC. Pramod
enjoys Doordarshan television serials but does not have cable television
and does not watch American films. His favorite film is Kaho Na Pyar
Hai, which he only watched twice because he did not want his craze
(chaska) for it to diminish. Although Kaho Na Pyar Hai celebrates a
heroine’s decision to abandon her parents (and India) to follow her love
for the hero (to New Zealand), Pramod remains committed to arranged
marriages: “Love marriages are only successful in movies. They’re only a
story. I’ll marry according to my parents’ wishes. As a devoted son, I
wouldn’t go against my parents’ wishes when it comes to marriage.”
Vinod, an unmarried 22-year-old laborer from the depressed state of
Bihar, enjoys Hindi film love stories, especially those starring Shah Rukh
Khan. A high school graduate, Vinod also enjoys cable television’s Zee
TV. But, like Pramod, Vinod remains committed to arranged marriages:
“Love marriages are only stories in films. In real life they are not possible.
I haven’t given a thought to marriage, but I know I’ll marry according to
my parents’ wishes.” This mantra was voiced by the range of ordinary
middle class men whom I interviewed.
Virendra, 22, is a Jat Hindu in a postgraduate engineering program.
His family is headed by his father who is a local Superintendent of Police
and Virendra’s stay-at-home mother. While Vinod and Pramod bought
cheap Hindi film tickets, Virendra was buying an expensive balcony ticket
when I interviewed him. Virendra likes to copy the “smart (sunder) dress”
of his favorite heroes. He likes Hindi film love stories like Kuch Kuch
Hota Hai and CCCC, yet he, too, remains committed to arranged mar-
riages: “In reality, [love marriages] are not successful. . . . In actual life, a
love marriage is not possible. I’ll marry with my parents’ wishes.”
Another 19-year-old upper-caste Hindu student living in a joint-family
headed by a father with a good service job similarly said that while the
films he likes are “love stories, it wouldn’t be possible in real life.” Al-
though his favorite film, Mohabbatein, features a schoolteacher who
encourages his students to pursue love, this student remains certain that
“any girl I could find for myself would not be as good as the girl my
parents will find for me.” These comments show that despite cultural
globalization, men continue to prefer arranged marriages, dismissing film
love stories as just fantasy.
Despite a decade of cultural globalization celebrating cosmopolitan
lifestyles, the percentage of men who support love marriages has not
increased. In 1991, 68 percent (15/22) of the men whom I interviewed
voiced an on-balance disapproval of love marriages, while in 2001, 66
percent (21/32) indicated similar disapproval. The percentage of men
voicing an unqualified support of love marriages also changed little in a
decade: in 1991, 14 percent (3/22) approved of love marriages without
qualification, while in 2001, 19 percent (6/32) voiced unqualified sup-
port of love marriages.
In affluent circles (and in the media that cater to them), there is a
widespread belief that globalization has encouraged dating and love mar-
riages. But my study’s systematic comparison showing little change in
ordinary middle class Indians’ attitudes toward marriage is confirmed by
a number of other studies. Geographically extensive evidence of the sort
we would like is lacking, but most sober commentators (Gupta 2000:
49–50; Shurmer-Smith 2000; Uberoi 1998: 307) see little increase in
love marriages, and the few systematic studies we do have suggest that
even those with more economic opportunities and exposure to the
transnational media than the people whom I interviewed continue to
voice little support for love marriages. A mid-1990s study showed that
68 percent of urban college students—a group that is perhaps most ex-
posed to transnational celebration of cosmopolitan lifestyles—said they
wanted to have their parents arrange their marriage (Pathak 1994: 48,
59). Page and Crawley’s (2001: 176) 1998–99 survey of 15- to 34-year-
olds in Delhi, Bombay, Kanpur, and Lucknow found that 65 percent
tried to obey their elders “even if it hurts.”
Leena Abraham’s (2001) 1996–98 study of urban college students
showed similar results. While she interviewed low-income youth, their
English-speaking skills and residence in Bombay, India’s most cosmopoli-
tan metropolis, suggest more exposure to cosmopolitan flows than the
men I interviewed. Abraham (2001: 149–51) found that “a majority of
both college men and women” thought that love marriages were unsuc-
cessful, while arranged marriages were successful. Students “preferred an
arranged marriage for its stability and security” (Abraham 2001: 149–51).
College men, especially, focused on how love marriages might lead to

“conflicts within the family”, believing that a love marriage put a young
man in a dilemma about “whether to listen to his mother or to his wife”.
These unmarried men continued to believe that “‘love’ and ‘marriage’ do
not go together” (Abraham 2001: 149–51). As one young man put it,
“love is only with the opposite sex and marriage is with the whole
family” (ibid.: 149–51). Like the men whom I interviewed in the late
1980s and the early 1990s, the college men Abraham interviewed still
saw the need for the love between husband and wife to be tempered by
the demands of joint-family life. Without a change in the structural
realities of family life or economy, a decade of cosmopolitan celebration
of love has apparently done little to change men’s views.
While transnational media have intensified favorable images of inde-
pendent women who often work in the paid economy, ordinary middle
class men seem no less attached to gender arrangements which limit
women’s public activities and freedom. Men continue to enjoy cinema
halls as a largely male arena in which they can enjoy homosocial bond-
ing. As in 1991, men are the primary consumers of fighting-and-killing
films, and even at screenings of the more respected social films (where
women might make up a full third of the balcony audience), there are
few women in the cheap floor seats. Men continue to enjoy bonding in
this all-male world (see Derné 2000a: 159–60 on my 1991 study).
In 2001 (as in 1991), they shout out to greet friends both in the hall
and while waiting outside. Men enjoy putting arms around each other or
playfully batting each other. They joke, dance, and roughhouse together.
Young men often hold hands and put their arms around each other; they
push tightly together when fighting to buy tickets. Homosocial joking
continues to be a loved part of most films. At screenings of the fighting-
and-killing film Officer, the antics between the hero and a joking male
servant were much loved by the audience. When the hero told his ser-
vant, “You’re acting like a dancing girl, get over here with tea,” audiences
responded with whistles. When the servant gets jealous of the hero’s rela-
tionship with the heroine, he goes on a drinking binge, which leads the
hero to nurture the servant. Again, many members of the audience whistled
as the hero put his drunken servant to bed, taking off his servant’s socks
and trying to take off his pants. Anyone familiar with fighting-and-
killing Hindi films of this period will recognize the almost formulaic nature
of such homosocial antics (see Derné 2000a: 159–60 for earlier examples).
Some men seem to enjoy their exclusive use of cinema hall public
spaces, while emphasizing how this contrasts with women’s home-based
lives. Tahsin, a married 25-year-old, describes his compelling attraction
(chaska) for Hindi films as so strong that he used to see at least one movie
a day. Even now, he says, he sees at least two movies a week. When I
asked him why he does not bring his wife of seven years to the movies, he
proudly relates that she is not very interested in film-going. She does not
like the “seductive dresses of the heroines,” Tahsin says. She is so “home
loving” (gharelu), he says admiringly, that “she even objects to seeing
movies with her own husband.” For Tahsin, the cinema hall is a place
that men enjoy, while women should remain at home. Tahsin does not
watch television at home much. “It’s for women and children,” he says.
Men’s discussion of their favorite heroines continues to show a focus
on women’s home responsibilities. Tahsin does not like many of today’s
heroines, saying that they expose too much of their bodies. For Tahsin,
women should not show themselves off outside the home. Tahsin’s
favorite heroine is Kajol because of her innocence (bholapan), he says.
Unworldliness is what men like Tahsin want in their favorite heroines.
A 25-year-old who likes STAR TV and American films like Titanic
and Godzilla similarly told me that Aishwarya Rai was his favorite Hindi
film heroine because of her generosity. He referred to her widely-reported
willingness to donate her eyes to science after her death. This focus
on the heroine’s “generosity” shows that he likes women who want to
sacrifice for the broader society. My subsequent discussion of ordinary
middle class men’s continued preference for heroines’ modesty provides
further evidence of men’s attachment to gender arrangements that
restrict women’s freedom in public spaces, while emphasizing women’s
home-based responsibilities.
Other local surveys show ordinary middle class men’s ongoing attach-
ment to gender arrangements that make women primarily responsible for
home duties. Abraham’s (2001: 142) interviews with English-speaking,
low-income college-going men in Bombay reveal attitudes about women
that are very similar to the attitudes of men whom I interviewed from
the mid-1980s through the early 1990s. She quoted men as saying that a
“girl should be simple”, “should be ghareloo [home loving]”,8 “should be
of understanding and compromising nature” and “should respect elders”
(Abraham 2001: 142) (emphasis mine). Men tend to see a compromising
nature as essential for balancing the competing demands of joint-family
living. Mankekar found that “aspirations to upward mobility” of the

lower-middle class men and women she interviewed “were frequently
expressed in terms of a greater preoccupation with female modesty and
respectability and, in many cases, an increased surveillance of women’s
sexuality” (Mankekar 2004: 411) (emphasis mine). The 15- to 20-year-
olds whom Butcher interviewed in 1997–98 similarly reported that
“Indian culture” means that Indian women are “better than others”
because of their modest dress and the limitations on their freedom (Butcher
2003: 116–17, 128, 216).
This attachment to women’s restriction to the home, of course, re-
flects the structural realities of ordinary middle class Indian families that
I outlined Chapter 2. In the early years of married life, couples often live
in joint households where respect for elders and compromising attitudes
toward competing demands are required. Lacking élite connections and
strong English-language skills, ordinary middle class women often could
not provide income from paid work that would be sufficient to make up
for the loss of their unpaid work within the home. In addition, of course,
men’s interest in maintaining gender arrangements which provide their
own comfort also press them to want to keep the existing arrangements
despite the celebrations of women’s independence that they see in Hindi
films, and especially in Hollywood films and the American television
programming shown on cable television.
Given that the audience for most Hindi films continues to consist of
non-élite viewers who live in a world of joint families and arranged mar-
riages, it is not surprising that films continue to help resolve persistent
tensions ordinary Indians may feel about these institutions. Men have
long wanted arranged marriages because they believe that parents have
the experience to soberly look at a potential bride’s family background,
and because they believe that those who marry against their parents’ wishes
sacrifice essential parental and social support (Derné 1995: 45–57). But
men have also long recognized dilemmas associated with arranged
marriages. They see that husband and wife are not always well-matched
and fear that fathers may be more concerned with getting a big dowry
than ensuring their sons’ happiness (Derné 1994b: 87, 1995: 117–19).
Women, of course, face similar anxieties about marrying someone whom
they have never met (Parameswaran 1997)—anxieties that continue to
be reflected in Hindi film fan magazine advice columns in 2001 just as
they were in 1991 (Derné 2000a: 26).9
As they did in 1991 (Derné 2000a: 168), films continue to both arouse
and relieve tensions men may feel about arranged marriages. The 2001
hit film CCCC opens with a wedding at which both the hero and
heroine are guests. Audience applause is raucous at the hero’s dancing,
which soon attracts the notice of the heroine. The electricity between
the hero and the heroine is palpable—as is apparent in the audience’s
whistling and applause—but because of a misunderstanding, the hero
assumes that the heroine is already married and does not pursue her.
The hero’s grandfather badly wants a great grandson and pressures the
hero to marry.
In showing the hero’s reluctance, CCCC reminds viewers of the anxi-
eties they may feel about the practice of arranged marriages. When
the hero finally agrees to marry, he learns that his father was insightful
enough to arrange that he marry the heroine whom he had met at the
wedding party. When he appears at the engagement and sees the hero-
ine, the hero assumes she is unavailable and wrongly believes that his
father has arranged that he marry the unattractive woman who accom-
panies the heroine. His obvious (and humorous) discomfort arouses
anxieties an audience might feel about an arranged marriage. When it
dawns on the hero that it is the heroine whom he is to marry, he shares a
knowing smile of relief with the heroine, as the audience screams its
delight. The screams at this recognition have yet to die down before the
subsequent wedding scene appears on the screen. While men may be
concerned that an arranged marriage might not net an appropriate
bride, films continue to show that parents really do know best. While
many films celebrate love marriages, films never show an arranged
marriage of a hero or heroine that fails.
Of course, in presenting the hero (and the heroine) as having loving
families that care about their welfare, CCCC (like other films)10 similarly
alleviates concerns about joint-family living. Films like CCCC and many
others depict happy joint-family life in which parents care about their
sons. Women who often fear mistreatment in their husbands’ home are
comforted by films like CCCC, which show the heroine happily living as
a respected bahu (daughter-in-law) in her husband’s joint family. Through-
out CCCC, her husband’s elders show love and respect for their bahu,
suggesting that films comfort women about the lives they may face in a
home headed by parents-in-law11—a theme that has long been common
in Hindi films.
Relieving Tensions Associated with

Attraction to Cosmopolitan Lifestyles
Vinod, the young laborer from Bihar who enjoys cable television but
regards love marriages as impossible in real life, is quite attracted to the
cosmopolitan lifestyles that he sees on television. Like some of the men
whom I interviewed in 1991 (Derné 2000a: 117–18), Vinod sees Hindi
films as offering valuable lessons about cosmopolitan lifestyles. “Having
come from the village,” he says, “I am learning the ways of city life by
watching films.” While two other men mentioned that they learned about
how to live from films today, many more said that they liked the fashions
that they saw on the screen. Many others praised their favorite heroes
for their style.
Indeed, through film-going and satellite television, many men have
become attracted to styles that originate in Hollywood. Increasingly, film-
makers are using Hollywood fashions they see on The Bold and the Beau-
tiful and Beverly Hills 90210 to give films a glamorous, hip, glossy feel
(Chopra 1997). Throughout the 1990s, Hindi films exaggerated West-
ern name-brand clothing (for example, Levi’s, DKNY) worn by heroes
and heroines. Indian film fan magazines heighten Indian film fans’ aware-
ness of, and fascination with, lifestyles associated with the West (Appadurai
1996: 102). Magazines with names like Stardust and Tinseltown include
all sorts of non-Indian expressions such as “abracadabra,” “razzmatazz,”
and “ooh la la”. Fan magazines include sections on American films and
show Indian heroes and heroines in name-brand clothing like DKNY,
Nike and Levi’s, while fan-magazine advertisements trumpet global
brands-name and feature Indians in brand-name clothing.
As was the case in 1991 (Derné 2000a: 118), the attraction to cosmo-
politan lifestyles is especially apparent in male film-goers’ attraction to
cosmopolitan fashion. Jeans and clothing with English messages were
prominent in men’s apparel in 2001. Reflecting the opening of the
economy, “Nike,” “McDonalds”, and “Reebok” were more commonly
printed on clothes than the American flags or English slogans, which
were most prominent in 1991. Most ordinary middle class men cannot
afford to buy cosmopolitan name-brands, but instead wear jeans that
local tailors design as copies of global fashions.12 As they did in earlier
eras, film-goers continue to enjoy “promenading in public with no other
purpose than to show off ” (Alter 1992: 242), and cinema halls continue
to be surrounded by hairstyling salons for gentlemen.
While films celebrate cosmopolitan lifestyles, they continue to help
Indian men handle the ambivalence they may feel about their attach-
ment to seemingly alien ways of living by celebrating family relations
that are emphasized as distinctively Indian. Films continue to show
heroes who are guided by emotion and family obligation, although they
move about in cosmopolitan worlds oriented to money. They continue
to show Indian heroines who are devoted to home-based duties despite
their cosmopolitan fashion. Men continue to identify their Indianness
with following family duties, allowing them to more comfortably em-
brace elements of the global world—such as cosmopolitan clothing styles
and working in a bureaucratic economy—that would otherwise seem
opposed to Indian traditions (see also Mankekar 2004: 418).
My analysis of the most popular Indian films from the late 1970s
to the early 1990s (Derné 2000a: Chapter 6) shows that heroes and
heroines mediate between the dangers of excessive traditionalism and
excessive cosmopolitanism. Films tended to contrast heroes’ cosmopoli-
tan fashion and their successes in the economic realm with poor villagers
whose traditionalism limited their economic opportunities and sense
of style.13 In addition, heroes’ orientation to family was contrasted
with the too-cosmopolitan villains’ greediness and orientation to selfish
interest over family obligations. The emotion and restrained sexuality
of the heroes contrasted with the out-of-control sexuality of the too-
cosmopolitan villains.
In 2001, film-going men continued to identify with film heroes whose
emotion and family obligation tempered the greediness and out-of-
control sexuality that so often are identified with the West. As in the
earlier decades, films show the modernity of heroes as tempered with
controlled sexuality and respect for family obligations. In CCCC, for in-
stance, the young hero is a business executive, but he freely admits that
he has difficulty concentrating on business when he is thinking about his
wife’s problems: he willingly sacrifices a million-dollar deal in order to
fend off a businessman who tries to rape the woman he hired as a surro-
gate mother. Unlike the businessman-rapist (who was an old childhood
friend), the hero’s sexuality is so controlled that his love for his wife makes
it difficult for him to impregnate the woman whom he hired as a surro-
gate mother. Although the hero is an ultramodern business executive,
he is so committed to the Hindu rituals devoted to an unborn child that

he and his wife go through many humorous machinations (often facili-
tated by a traditional use of the veil) to ensure that the rituals be directed
at the surrogate mother—and not the heroine (who is feigning pregnancy).
Men seem to continue to be attracted to the emotions and commitment
to family obligations of the heroes.
One unmarried 22-year-old postgraduate commerce student said that
Shah Rukh Khan was his favorite hero because of the way he showed
emotion in Kuch Kuch Hota Hai. In describing how the Shah Rukh
character’s daughter Anjali read a letter from her deceased mother (the
hero’s wife), this man showed genuine emotion in thinking of how much
Shah Rukh cared for his wife and family. He especially liked Kuch Kuch
Hota Hai because “it is a family film”.
Umesh, a 26-year-old Punjabi Hindu who works as a civil draftsman
and who has just had his marriage arranged, similarly shows an attrac-
tion to men’s emotion and family responsibilities in describing his
favorite heroes. He likes Amitabh Bachchan and Dilip Kumar because
they provided the message that “one should be trustworthy and selfless
and accountable in relationships. These heroes,” he said, “acted with real
emotion.” As I show below, recent films continue to emphasize the will-
ingness of heroes to sacrifice their own desires for family duties.
My earlier analysis of the most popular Indian films from the late
1970s to the early 1990s (Derné 2000a: 119–25)14 describes how
heroines mediate between the excesses of traditional and of cosmopoli-
tan lifestyles. Unlike too-traditional characters, heroines often have
independence in employment or in pursuit of relationships with men.
Unlike too-traditional characters, they are not subservient to their
husbands; instead heroines end up close to the men they love. Unlike
too-cosmopolitan antiheroines, heroines do not use sex for selfish
motives. Unlike too-cosmopolitan women, their focus is not on money
but family. In these films, the heroine’s modest clothing is a sign of
her emphasis on family duties.
In the course of the 1990s, the push of films toward cosmopolitanism
and consumerism has been so strong that heroines now wear fashions
that would have been unacceptably Westernized and revealing in previ-
ous decades. Film-world discourse often uses the term “millennium
woman” to describe a woman with a cosmopolitan sense of style who
rejects excessive constraints on her movement and freedom. Yet, despite
this celebration of cosmopolitan fashion and rejection of limitations on

women’s movement, the imperative that heroines be committed to
family duty remains strong in Hindi films—probably because so many
ordinary Indians find such a commitment fundamental to their idea
of Indianness.
In the 1997 superhit film Dil To Pagal Hai, consumerist cosmopoli-
tanism reigns. The images are of Pepsi, Levis, and automobiles. Both
Pooja (the heroine played by Madhuri Dixit) and Nisha (the hero’s friend
and the heroine’s competitor, played by Karisma Kapoor) wear clothes
that would have been excessively revealing according to earlier standards.
Family resistance is not central in pushing the story forward. Dil To Pagal
Hai presents a young people’s world largely unimpeded by elders: Nisha’s
family is in Europe, Rahul (the hero, played by Shah Rukh Khan) lives
an independent existence as a popular singer and dancer with his own
flat, and Pooja lives with a family that does not interfere with her choices.
Pooja’s respected dance teacher (who represents one of her elders) tells
her that she should pursue her love (mohabbat) because it is something
that only happens once. Unlike most love stories from previous decades,
the story revolves around the couple’s discovery that they love each other,
rather than centering on overcoming parental opposition. In Dil To Pagal
Hai, the couple does not realize their love until the last third of the film,
while in most 1970s and 1980s love stories the hero and heroine are well
in love and facing parental opposition by the interval (for example, Maine
Pyar Kiya, Ram Teri Ganga Maili and Dil).
While celebrating cosmopolitan fashion and individual pursuit of love
and normalizing family arrangements that do not restrict young people,
Dil To Pagal Hai nonetheless celebrates the heroine’s commitment to family
duties. Nisha, the Karisma Kapoor character, is neither an antiheroine
nor a vamp, but she is still shown in ways that emphasize the Indianness
and commitment to family duties of her competitor, Pooja, the Madhuri
Dixit character who is the film’s heroine. Both are dancers, but Nisha
dances as a professional to make money, while dancing was Pooja’s hobby.
Nisha is separated from her family, who live in London, while Pooja lives
with family members in India. Lacking traditional feminine skills, Nisha
orders Chinese food, while Pooja cooks Indian food when visiting her
dance instructor. Nisha openly pursues the hero, while the shy Pooja is
pursued by him. Both Nisha and Pooja wear revealing clothes—Pooja
sometimes dances in a leotard, while Nisha often dances in Western-style
outfits—but Pooja is also comfortable dancing with ghungroos on her

ankles in traditional Indian clothing when she visits her traditional dance
instructor. Nisha, unlike Pooja, drinks tequila, which puts her in a com-
promising position with the hero. This focus on looseness and lack of
modesty as a sign of a lack of commitment to family values reflects an
earlier era. Yet it is especially important that the Karisma Kapoor charac-
ter is neither denigrated nor criticized. Perhaps the Madhuri Dixit char-
acter is more right for the hero because she can more easily move in both
the cosmopolitan and the Indian worlds.
The fact that hit film after hit film continue to focus on the heroines’
commitment to family duties shows its importance to Hindi film audi-
ences. In CCCC, for instance, it is the heroine’s concern with providing
her grandfather-in-law with progeny that drives her desire to find a
surrogate mother after she herself miscarries and is subsequently unable
to have children. The hero suggests that the happy couple look into
adoption, but she talks of how the hero’s grandfather envisions a great-
grandson that looks just like the hero. It is her commitment to the im-
peratives of her husband’s family that drives her desire to find a surrogate
mother. While Madhu, the surrogate mother (played by Preity Zinta), is
not an antiheroine, she continues to contrast in important ways with
Priya (the heroine played by Rani Mukherjee). Madhu is presented as
part of a “Western” world run by money—a world in which (as one Delhi
columnist puts it) “people are known to rent a womb like they rent a car
or a room in a motel” (Shamim 2001). While Priya wants a child for
her husband’s family, Madhu becomes pregnant (renting her womb) for
money.15 This theme was recognized in some Indian reviews of the film.
One reviewer says that the Madhu character could never have known
that “it would be not for money that she would fulfill her part of the
bargain but for a more basic instinct called love” (Shamim 2001).
While both Priya and Madhu are sexy dancers, Priya dances on
appropriate occasions like weddings and honeymoons, while Madhu
dances for pay in a nightclub. Priya is part of a large family (on both her
parents and her husband’s side) while Madhu is presented as having no
family at all. As I note in the last chapter, Priya is traditional but is none-
theless a good consumer who uses her wealth to buy the appropriate
“millennium” fashions.
In CCCC, an attraction to cosmopolitan lifestyles is not presented as
opposed to a traditional family orientation. Priya is a millennium woman
who also has her husband’s family at heart. It is worth noting as well that
the fashion celebrated in CCCC is sometimes presented as modest.
Madhu’s crass appearance initially prevented her from entering the
utopia of consumption as élite boutique managers denied her entrance
despite her money. But she was shopping for such clothing precisely
because Raj told her that to have his child she must first find appropriate
clothing to cover her body.
Patricia Uberoi’s (1998) and Purnima Mankekar’s (1999b) indepen-
dent analyses of the 1995 hit film Dilwale Dulhania Le Jayenge (DDLJ )
highlight this new emphasis on combining (rather than contrasting) cos-
mopolitan consumerism and commitment to family (see also Mankekar
2004: 423). Uberoi (1998: 308) notices that recent films focusing on
NRIs (non-resident Indians) challenge the typical filmic polarization
between “the émigré or foreign returned Indian” who has lost Indian
values and the steadfast Indianness of the ones who remain behind. Uberoi
suggests that like earlier films, DDLJ shows Indian family values to be
the “crucial markers of Indianness,” but indicates that now the Indian
family system is “portable” (Uberoi 1998: 308–09). “It can remain
firm . . . even when all else changes” (ibid.: 308–09). Despite the cosmo-
politanism that even involves residing abroad, commitment to Indian
values can be maintained.
Mankekar sees DDLJ as presenting the West as a “site of rampant
sexuality and promiscuity” (Mankekar 1999b: 737) but nonetheless
emphasizing that Indians can maintain the usual family values that dis-
tinguish them as Indian. Mankekar points out that the heroine “neither
drinks nor smokes” and “respects and obeys her father” so much that
“she submits to him at every step” (ibid.: 737). Mankekar (1999b: 739)
emphasizes that although the hero lives in London, he shows himself to
be a true Indian by respecting the heroine’s honor when drunkenness
would have allowed him to take advantage of her. Even though the hero
is an NRI who bucks the system of arranged marriages by pursuing the
heroine to India, he would not consider eloping without the heroine’s
parents’ consent—even in the face of strong parental opposition (Uberoi
1998: 313). Enraged at the hero’s pursuit of the heroine, her father
refuses consent, but the hero insists that he will marry the heroine only
in the “right” way, that is, with her father’s approval (ibid.: 313). Thus,
for both hero and heroine, commitment to following family hierarchies
remains important.
The director of DDLJ says that he was guided by the idea that no
matter how much in love they may be, a young Indian man and woman
would also be guided by their love for their parents:
I’d be quite troubled by watching those love stories in which the boy and girl
elope. I’d wonder how can they just cut themselves off from their parents
who’ve done so much for them? . . . I wanted to say that if your love is strong
enough, your parents will be convinced about your love ultimately (cited by
Uberoi 1998: 312).
The director believes that audiences react to the fact that lovers are “will-
ing to sacrifice their own feelings for their families” (cited by Uberoi
1998: 309). In Indian fan magazines, Shah Rukh Khan, DDLJ’s hero,
endorses the importance of this theme by noting that he, too, did not
consider eloping with his off-screen wife:
The thought of running away from home never crossed our minds. . . . I just
couldn’t get myself to say that I loved their daughter. That, I thought, was a
stupid thing to say. . . because I could never love their daughter as much as
they loved her. They had given birth to and brought up Gauri. . . . My love
would never be a substitute for their love (cited by Uberoi 1998: 321).
Audiences’ longstanding attraction to heroes and heroines who balance a

love for each other with their other responsibilities is apparent in the
statement of a 28-year-old whom I interviewed in 1987:
The hero and heroine love each other, but they also love the whole society.
The hero and heroine don’t forget their obligations to others. Their love for
each other does not minimize their love for the whole society. Their feelings
are not limited to each other. The hero likes the society as much as he likes the
heroine. By contrast, the villain is evil because he likes the heroine’s fleshy
beauty alone. He has no concern for the beauty of society.
So, while heroes and heroines embrace cosmopolitan fashion, Indian family
values remain a star of even recent films. As Shoma Munshi puts it, film
stars:
are practiced in the ways of the west, and at the same time retain their Indian
values. . . . Karisma Kapoor has a perfectly sculpted body and wears designer
tops, but tears up divorce papers in Raja Hindustani. . . . Mahima Chaudhury
may have reached Las Vegas but refuses to sleep with her fiancé . . . till they are
married in Pardes. . . . The Oxford educated Rani Mukherjee returns in mini
skirts and can pluck the strings of guitar, but can equally well sing . . . a devo-
tional hymn in Kuch Kuch Hota Hai (Munshi 2001c: 90).
The notion that cosmopolitanism can be combined with attachment

to Indian family traditions is confirmed by fan magazine discussions of
heroines’ adherence to traditional family arrangements. As in 1991 (Derné
2000a: 140–41), fan magazines present heroines as usually marrying
according to their parents’ wishes. Hindi film heroines represent cosmo-
politan lifestyles: their high-paid, high-flying jobs allow them great
independence and they are shown in cosmopolitan fashion. Yet, the im-
perative that an Indian woman follows the usual gender arrangements is
so strong that heroines continue to trumpet their commitment to these
arrangements as guiding their off-screen lives. When one gossip colum-
nist suggested that as a “millennium woman” the heroine Shilpa
Shetty would probably “never let her father” make such a life-making
decision as whom she should marry, the heroine “frowned” and voiced
her disagreement:
I’m a millennium woman and I’d like to believe that if I felt as strongly as [my
on-screen character] felt for [her love], I’d never marry someone else. But if
my parents really insisted on an arranged match . . . I would give in. I know
my parents are the only people in the world who would never hurt or harm
me intentionally. Whatever they chose for me would be right and in that
respect I’m a lot like [a character I play] (Bhattacharya 2001: 2).
Renowned for her thin figure and exposing in films, Shilpa Shetty says
that, for her, “marriage is for keeps” and that she would “never walk out
of a marriage.” If her husband tried to divorce her, she might let him go,
she says, but “not easily.” She even implies—as heroines have throughout
the two decades I have followed the Hindi film world—that after her
marriage, she would give up her career. When asked whether she would
want a husband who would “let” her “continue working after marriage,”
she refers to the “limited” “life span of a glamorous heroine,” and says
that she would not want to put chalk in her hair—implying that at the
time of marriage, her career would recede to the background.
Another gossip columnist praises the glamorous heroine Manisha
Koirala for marrying a boy chosen by her family (apne parivaarwallon
ki pasand ka ladka). The gossip columnist highlights the wisdom of the
strategy, noting that Koirala had had a number of affairs, not one of which
had been successful. The columnist suggests that Koirala’s success in
films may have prevented her from a happy marriage. “Perhaps now that
her films aren’t successful,” the columnist muses, “her marriage will be”
(Filmi Kaliyan 2001b: 19). Thus, even work outside the home is presented
as something heroines abandon to ultimately be successful in marriage.
In fan magazines, heroines also describe themselves as liking the usual
gender arrangements in which men protect women. In Stardust (March
2001), perhaps the most cosmopolitan film fan magazine, Sushmita Sen
praises the hero Sanjay Dutt’s violent assault on a media person who had
approached her. Although the incident had been criticized in the press,
the heroine says that “Sunjay Dutt would not be a gentleman, trust me,
if he waited for the security guys to do something when somebody grabbed
my arm” (Samant 2001). So, even Hindi film heroines who seem very
involved in cosmopolitan worlds choose to present themselves to the
public as devoted to the existing gender arrangements.16
Hindi films and Hindi film-world discourses suggest, then, that a
strong attraction to cosmopolitanism—even on the part of women—
need not threaten Indianness. Films encourage men and women to be
cosmopolitan, but highlight that there is a distinctively Indian kind
of cosmopolitanism which appropriately focuses on family duties,
female modesty, and sexual control. Films ease men’s anxieties about
cosmopolitanism by suggesting that even cosmopolitan Indian women
are committed to the family arrangements toward which male viewers
are especially attracted.
Indian Family Arrangements,

Women’s Modesty, and Indian Identity
My discussion suggests that both film heroes and film heroines tend to
demonstrate their fundamental Indianness by commitment to family
duties. Filmgoers like these portrayals because it helps them handle
ambivalence about cosmopolitan ways by seeing that they need not
threaten Indianness, which is fundamentally rooted in family arrange-
ments. But it also appears that women’s commitment to family duties is
more important in films than men’s is.17
The decline of the vamp and the declining cinematic association of
immodest fashion with women’s rejection of family duties has not ended
ordinary middle class men’s attachment to women’s modesty. The asso-
ciation of immodesty with the rejection of family duties is too strong in
many men’s minds, and the unease about how globalization might threaten
existing gender arrangements is too pressing—especially given men’s at-

tachment to gender arrangements that provide them comfort and power.
Even as films increasingly present heroines in revealing clothing, Hindi
film fan magazines continually quote heroines as opposing “exposure”,
much as they did in previous decades (Derné 2000a: 125–27). In re-
sponse to a question about her “views on exposing”, one heroine replied
that she did “not wish to achieve fame via this route” and would, thus,
“only accept clean films”. Following the established mantra (Vijayakar
2001a: C27) she emphasized that she remained “against vulgarity of any
sort” (Vedpathak 2001: 73). After top heroine Aishwarya Rai reportedly
walked out of a film because her then boyfriend, the hero Salman Khan,
was “dead against” “a red-hot kissing scene,” the cosmopolitan Hindi film
magazine Stardust queried her replacement about why she had “changed
her policy” against exposure. “As far as I know, there is no kissing scene in
the film,” the heroine replied, maintaining her commitment to modesty
(Jaffer 2001: 77). “I was told,” the actress said, that Aishwarya Rai had
“opted out of the film on account of date problems”(ibid: 77).
Even Shamita Shetty, a heroine famous for her exposure in the 2000
hit film Mohabbatein, presents herself as appropriately modest. She rec-
ognizes that a “big deal” was made about how “all of us girls showed a lot
in Mohabbatein.” Even as she justifies this by saying that “everyone’s wear-
ing those kind of clothes out there” and that “most roles are written with
exposure in mind,” she still says that she is not a “bare and dare all”
heroine. Having been “labelled ‘kiss girl’ thanks to the passionate screen
smooch she indulged in in Mohabbatein” she now insists she will not do
it again. “I’m not comfortable with the idea of kissing,” she says, and
“wouldn’t like to be viewed as the girl who kisses in her films” (Sai 2001a).
The association between cosmopolitan clothing and rejection of
Indianness and family responsibilities is so strong that heroines who want
to move up the ladder of success continue to find it necessary to present
themselves as appropriately modest (and Indian).
The failure of the heroines of Mohabbatein to become big stars illus-
trates the ongoing importance of heroines’ modesty. One of the two
biggest hits of 2000, Mohabbatein focuses on three young couples falling
in love against the backdrop of the conflict between a patriarchal school
principal (played by Amitabh Bachchan), who opposed youthful love,
and a schoolteacher (played by Shah Rukh Khan) who encouraged his
young charges to pursue love. Unlike the heroines of the 1980s and the
1990s, the young heroines in the hit film appear ultramodern, wearing
jeans, Christian crosses, and tank tops. They dance and pursue their
lovers with abandon. While the heroines were not denigrated in the film,
the imperative of modesty may have hindered their subsequent careers.
“We were all under this impression,” Shamita Shetty recounted, that
because of the film’s success “we’d be flooded with offers, but that didn’t
happen. The film did well, we were liked, but that’s it” (Sai 2001a: 54).
It appears that a film can be a hit with heroines who dress in ultra-
cosmopolitan clothes and pursue love with abandon, but the focus on
women’s modesty remains so strong that exposing too much still limits
the ability of heroines to succeed in the Hindi film world.18 It is notable
as well that the Shah Rukh Khan character’s love is shown in Indian-style
clothing. The Shah Rukh character had truly loved the Bachchan
character’s daughter, but was unable to fulfill that love because of the
Bachchan character’s opposition. She appears (in flashbacks and as a spirit)
in Indian clothing like salwar-kameez.
The men whom I interviewed, moreover, seem committed to hero-
ines’ modesty. While the media often tagged Karisma Kapoor (Gupta
2001) as the number one heroine of the day, none of the men whom I
interviewed in 2001 named her as their favorite. From the outset of her
career, Karisma has taken roles in which she wears revealing outfits. One
man whom I interviewed in 1991 said that he liked her 1991 debut film,
Prem Qaidi, because Karisma was “not at all modest (sharmili)”—even
dancing in a swimsuit (Derné 2000a: 148). In 1997’s Dil To Pagal Hai,
as I note above, she plays the heroine’s foil who might have been consid-
ered a vamp in earlier eras. Yet, given Karisma Kapoor’s important roles
and the discussion of her in the film press, I thought that she would
probably be recognized as the top heroine of Hindi cinema when the top
spot opened with Madhuri Dixit’s marriage.19 But I should have listened
to my Indian-American students who denigrated Karisma for exposing
too much. The fact that not one of the men whom I interviewed in 2001
mentioned Karisma as their favorite is one indication of the importance
men continue to place on modesty as a sign of the commitment to fam-
ily duties that men want and expect in Indian women.
As in 1991 (Derné 2000a: 127–29), the men whom I interviewed in
2001 continued to say that they like heroines whose modesty signals their
commitment to family duty. Thus, the married 25-year-old Tahsin, who
does not like heroines who expose too much, likes Kajol because of her
innocence, which for Tahsin suggests a protected lack of knowledge that

comes from remaining at home. What men seem to like in heroines is a
concern for others.
It appears, then, that ordinary middle class Indian men may handle
their ambivalences about attraction to cosmopolitan lifestyles by heartily
embracing existing gender arrangements that they see as distinctively
Indian. While men are attracted to cosmopolitan media and fashion,
these media nonetheless appear to challenge men’s notions of Indianness
and the appropriate gender arrangements. Men handle this attraction to
cosmopolitan lifestyles by emphasizing oppressive gender roles as funda-
mental aspects of their Indianness. In particular, men tend to identify
public cosmopolitan spaces as masculine preserves, while focusing on
women’s domestic responsibilities as essential to Indian identity. Anxi-
eties about cosmopolitanism introduced by globalization lead many men
to reassert local gender arrangements.
Given this ongoing attachment to women’s modesty and Indian attire
as a sign of their commitment to family duties, it should come as no
surprise that ordinary middle class women have not embraced cosmo-
politan fashion to the same extent that men have. When they go to the
cinema hall, men wear jeans and t-shirts and caps with Western name-
brands, but non élite women in Dehra Dun almost all wear saris and
salwar-kameezes. At all of the films that I saw in Dehra Dun in 2001, it
was rare for there to be even a few women (excepting Tibetans)20 in jeans.
Instead, the great majority of non-élite women still wear Indian-style
clothing.21 While affluent men and women may embrace cosmopolitan
fashion, it appears that the attachment to Indian modesty as a sign of
women’s attachment to gender arrangements is so strong that most ordi-
nary middle class women remain attracted to Indian fashions.
Resistance
Virendra, the prosperous 22-year-old postgraduate engineering student
with cable television, is committed to Indian gender arrangements. He
wants an arranged marriage and enjoys living in a joint-family headed by
his father who works as a police-officer and mother, who works at home.
He likes cosmopolitan styles, naming Salman Khan his favorite hero
because of his “smart dressing”. But he is uneasy about the influence of
cosmopolitan media. He avoids American films, having seen only one,

and he also claims to avoid the cable television his family has at home.
He says that he sees few Hindi films now because he does not like the
sexy look that so many heroines give their characters. He complains that
Dehra Dun has changed because of satellite television. “Satellite TV,” he
says “is making the younger people too mature. During my earlier years,
I didn’t know what kids know today.”
Umesh, the Hindu civil draftsman whose marriage has just been
arranged, believes that Hindi films should teach “how a sister and brother
should relate or how an ideal son should relate to his parents.” Yet, he
likes Hollywood movies like Mission Impossible 2 and enjoys watching
STAR TV and Channel V in the joint household in which he lives. While
Umesh is attracted to the new global media, he also claims to be dis-
turbed by programs that “give the message that fathers should booze
with their sons and a brother should allow his sister to go with her boy-
friend to watch a movie. These are not good things,” he says. “They’re
not possible in real life, so they shouldn’t be shown on television.”
Sanjay, a prosperous unmarried 30-year-old who lives in a joint family
that includes his parents, brothers, and bhabhis, enjoys the suspense seri-
als he sees on late-night Zee TV and especially likes American movies for
showing things “as they actually are.” Well dressed, he says that he sees
Hindi films “for a bit of fashion.” Yet, even Sanjay finds it pathetic that
“young people” only care about how the hero and heroine look, rather
than the “message” that they should learn from the role the hero and
heroine play.
Butcher reports that the young students she interviewed similarly com-
plained that too many youth “change their appearance” due to “models in
[television] ads,” bringing “a lot of problems on themselves” (Butcher 2003:
165). One high school student complained that rapes occurred which
copied a movie shown on STAR TV. Mankekar (2004: 417) similarly
reports that the lower middle class men and women she interviewed were
excited by satellite television, but also felt “anxiety” about the perceived
“threat” that television programs like The Bold and the Beautiful would
“erode” or “contaminate” the “purity” of “Indian culture”.
Such concerns about how global media images might disrupt local
gender arrangements that are often seen as the basis of Indian national or
religious traditions have been the source of protests against globaliza-
tion. Resistance to cultural change often focuses on threats to existing
family arrangements. For many years now, regular protests have greeted
Valentine’s Day celebrations (India Abroad 2000a; Sengupta 2001b).
Observers believe that Valentine’s Day has grown in popularity because
of Hindi film love stories of the early 1990s, but especially because of
cable channels like MTV and Channel V and economic liberalization
that spurred the Valentine’s Day Card industry (India Abroad 2000a;
Sengupta 2001a). In protesting Valentine’s Day, activists in Delhi at-
tacked couples in restaurants and forced them to flee. Activists in Kanpur
blackened the faces of hundreds of couples celebrating Valentine’s Day.
Elsewhere activists have burned Valentine’s Day cards (India Abroad
2000a) or thrown stones at shops selling such cards (Sengupta 2001b).
Protestors are uneasy with Valentine’s Day’s celebration of love that would
threaten the institution of arranged marriages and the basis of joint-
family living. Discotheques, another institution that seems to push young
people toward love, have been similarly protested for “spoiling the minds
of youth” (India Abroad 1999).
Protests have also targeted women’s embrace of cosmopolitan fashion.
Kanpur youth associated with the Hindu fundamentalist BJP persuaded
the principal of a local college to bar college women from wearing jeans
and skirts, an action which was protested so violently by other women
that the college was forced to close for two days (India Abroad 2000b).
More recently, a Pune college responded to a rape on campus by barring
women from wearing revealing clothes (India-West 2002a).
Perhaps most notably, a range of groups that included farmers, stu-
dents, and trade unionists from around the country protested the 1996
staging of the Miss World pageant in the Indian city of Bangalore as a
threat to Indian womanhood (Fernandes 2000: 625; Oza 2001: 1067) .
Many élite women participate in beauty contests to claim cosmopolitan
identity, and others take a cosmopolitan pride in India’s victories. But
many non-élites are threatened by Indian women’s apparent embrace of
cosmopolitan fashion and standards of beauty. The reason why immod-
est clothing and immodest exposure in these competitions threatens so
many non-élites is that women’s modesty is a sign of women’s commit-
ment to family duties that so many men value.
The concern that it is the transnational media that are the source of
trouble is apparent in the fact that so many protests target this aspect of
globalization. While protestors have targeted transnational media that
supposedly defame Hinduism (India Abroad 1998, 2000b; Tsering 1999),
more often protestors are concerned with those transnational media that
threaten Indian family traditions.22 Protesters have been upset by film
awards given to heroines who display their “semi-nude bodies” (Vijayakar
2002b). Groups affiliated with the Hindu fundamentalist BJP protest
sexual media representations, including contraception advertisements,
revealing clothing of female newscasters, and advertisements that depict
a woman in a billowing skirt (Brosius and Butcher 1999a: 14; Fernandes
2001: 158, 2000: 624; Ghosh 1999a: 234; India-West 2002b). Protest-
ers have sometimes succeeded in stopping cable serials that they find
offensive (John 1998: 368). The focus has been especially on the “ob-
scenity associated with satellite and cable television” (Oza 2001: 1072).
Rupal Oza notes that protest rhetoric prominently features “women and
children” as “most in need of protection against the corrupting influ-
ences of new media” (ibid.: 1072).
It is worth noting, as well, that private protests may parallel the pub-
lic ones. Mankekar (2004: 412, 413) reports that husbands complain
about how television is encouraging “extravagant habits” in wives and
daughters. At least some husbands who worry that cable television would
encourage their wives to become independent have tried to keep their
wives from watching particular serials (Page and Crawley 2001: 167).
In focusing on resistance against globalization’s disruption of gender
arrangements, I do not mean to imply the absence of other protests.
Facing free markets and global competition, farmers have protested India’s
negotiations with the World Trade Organization (India-West 2001). Non-
élites have protested the price rises that they associate with globalization
(Dalrymple 1998: 179). Ongoing (if sporadic) protests against multina-
tional fast food giants like Kentucky Fried Chicken (KFC), McDonald’s,
and Pizza Hut (ibid.: 169–72) reflect unease with consumerism, the loss
of India’s self-sufficiency, and the disruption of India’s traditions. Slogans
have denounced KFC’s “non-veg23 poison”, while praising good old masala
dosas (Dalrymple 1998: 169). Attacks on Pizza Hut denounce the restau-
rant chain’s refusal to translate menus into local script (ibid.: 170). Some
political leaders describe these protests as targeting “foreign restaurants”
as “symbols of disparity between rich and poor” which they believe have
been brought in by “the entry of multinationals into India” (ibid.: 179).
Despite the significance of these protests against globalization, it is
also appears that diverse anxieties generated by globalization get focused
on concern about changes in gender and family. One Indian who
communicated to a mainstream English-language newspaper (via email)

recognized “positive influences of Western culture” like “patriotism, hard
work, and fearlessness,” but noted that much that is bad about the West
can be found in Valentine’s Day celebrations: “The way that Valentine’s
Day is celebrated makes it a celebration of materialism,” he wrote (Acharya
2001). Believing that Valentine’s Day symbolizes the fact that “in the
West, unlike in India, love and sex have become synonyms,” he criticizes
the celebration as contributing to “the ugly practice of dating” (ibid.).
This writer is certainly concerned about changes in Indian families, but
he sees Valentine’s Day as demonstrating an alien materialism as well.
Oza argues that the protests against the Miss World pageant similarly
crystallize a range of concerns—“opposition to imperialism, resentment
against the retreating role of the state, high inflation, threatened Indian
culture, and an anxiety with the ‘foreign’” (Oza 2001: 1067). While
other protests are also important, it remains significant that so much
protest against globalization is concerned with the alleged effect on mar-
riage and family.24
Making a Locally-oriented Indian Middle Class

Limited to local production and consumption, the ordinary middle class
I describe in this chapter is located on a local field between poor Indians
who struggle to survive each day and the affluent Indians who aspire to a
utopia of cosmopolitan consumption. By wearing fashionable clothing,
members of this class distance themselves from the poor by showing that
they have cosmopolitan discernment and income for discretionary pur-
chases. But by showing their attachment to traditional gender arrange-
ments and protesting Valentine’s Day celebrations and other practices of
affluent Indians, they advertise their sober work ethic and their Indianness.
The class analysis I used in the previous chapter to describe the
transnational middle class can also be usefully applied to the Indian middle
class I describe in this chapter. First, class now operates on a global scale.
The class described in this chapter is a distinctively Indian middle class
precisely because the opportunities for employment and consumption
are oriented toward the Indian market. The horizons of the class are
local, and so this class focuses on its position between the Indian poor
and the affluent Indians I described in the previous chapter. Because of
this local horizon, identity remains rooted in Indianness rather than in

cosmopolitanism.
Second, the Indian middle class identity described in this chapter is
displayed in consumption. Buying televisions and other non-essentials
separates the Indian middle class from the Indian poor. Distinguishing
itself from affluent Indians, the Indian middle class shows women’s mod-
esty in rejecting revealing fashion, and shows sobriety in its limited cos-
mopolitan consumption.
Third, the Indian middle class roots its identity in gender arrange-
ments—and, again, the focus is on local, Indian gender arrangements.
The Indian middle class’s local orientation focuses especially on distinc-
tive gender arrangements, especially attachment to arranged marriages
and restrictions on women’s movements outside the home. Poor Indian
women often must work outside the home, so restricting women’s move-
ments distinguishes the Indian middle class from the Indian poor. Since
affluent women are often seen as moving freely in offices or élite shop-
ping malls, restrictions on women also distinguish the locally-oriented
middle class from the affluent. Urban legends of élite Bombay women
using chauffeured cars to look for sex in nefarious neighborhoods and
élite women running naked through their own neighborhoods (reported
by Parulekar [n.d.] in 1998 and 2000) reflect the locally-oriented Indian
middle class’ efforts to distance themselves from affluent Indians who
they indict for supposedly rejecting Indian sexual sobriety under exces-
sive foreign influence.
The locally-oriented Indian middle class I describe in this chapter has
concerns that parallel those of the Kathmandu middle class Liechty (2003)
describes. Like the Indian middle class, the Kathmandu middle class’s
Liechty describes “adopts modernity as a means of distinguishing itself
from those below and morally critiques modernity as a means of separat-
ing itself from the national élite” (Liechty 2001: 67). Like the Kathmandu
middle class described by Liechty (2003: 70–73), the locally-oriented
Indian middle class Indians I describe here define themselves in opposi-
tion to the national élite by focusing on that élite’s excessive consumer-
ism and sexual excess which push away from indigenous values. Like the
Kathmandu middle class Liechty (2003: 74–81) describes, the locally-
oriented Indian middle class I describe here is attracted to cosmopolitan
fashion, but criticizes excessive focus on fashion which they associate
with women’s promiscuity. By consuming fashion, locally-oriented middle
classes in both Nepal and India distinguish themselves from “the vulgar-
ity of those ‘below’ them,” but by upholding “the moral canons of sexual”
practice, they also distinguish themselves from those “‘above who have
sold out to the morally bankrupt lifestyles of affluence, pleasure and
foreignness” (Liechty 2003: 84).
Conclusion
Non-élite middle class people continue to face limited opportunities in
the global economy. Since their economic opportunities have not greatly
expanded, their ability to succeed in a consumerist world is limited. Their
ability to act independent of family support remains circumscribed, and
the benefits of women’s paid labor often do not provide entrance to the
utopia of consumption. The family arrangements ordinary middle class
men are faced with continue to limit interactions between unmarried men
and women. Yet, ordinary Indians live in a world in which transnational
cultural flows celebrate a consumer paradise and greater independence
for women and for young couples. Certainly, ordinary middle class male
viewers are sometimes attracted to this vision. But their inability to act
according to it leads to anxieties.
Unable to participate fully in the utopia of cosmopolitan consump-
tion, ordinary Indian men tend to emphasize Indian identity. But because
ordinary Indian men are attracted to aspects of cosmopolitan identity that
they can pursue—from fashion to drinking Pepsi—ordinary men tend to
find their Indianness in women’s attachment to gender roles that men see
as distinctively Indian. Indian women’s commitment to family duties
emerges as an important basis of ordinary Indian men’s own Indianness.
Indeed, partly because ordinary Indian men cannot successfully achieve
the affluent lifestyles that loom large today, they find compensation in
existing gender arrangements that work as a source of status, comfort,
and power in their lives. Unable to pursue new possibilities brought about
by globalization, ordinary middle class men focus even more on reserv-
ing public pleasures and privileges for themselves. Men, then, become
especially uneasy with globalization when they feel that it threatens the
gender arrangements that are a source of their status and comfort. This
is why resistance to globalization so often targets cable television and
Hollywood films for allegedly threatening Indian family arrangements.
The structural realities they face have not changed greatly, and
ordinary middle class Indian men tend to reject the new possibilities
celebrated by transnational media flows. They especially reject new
gender arrangements presented in the global media. Despite the new
possibilities presented in the cosmopolitan media, most men remain
attached to arranged marriages and continue to want women to be re-
stricted to the home.
This suggests that the effects of purely cultural globalization are lim-
ited as long as economic and family possibilities are not simultaneously
transformed. Affluent Indians embrace cosmopolitan celebrations of con-
sumerism because economic liberalization has expanded their opportu-
nities for employment and consumption. For the affluent, challenges to
arranged marriages and joint-family living introduced by the transnational
media make sense because new institutional possibilities allow more young
couples to support themselves. The affluent embrace work by women
when women have the skills to earn good incomes. But because their
institutional possibilities have not greatly changed, ordinary men’s ideas
about family have been unaffected by newly available cable television
and Hollywood movies.
Notes
01. FTV is a newly introduced (and actively protested) cable channel that features scantily
clad women modeling cosmopolitan fashions.
02. I discuss some of this literature in Chapter 1. See especially Massey 1994; Morley
2000: 13; Tomlinson 1999, cited by Morley 2000.
03. This conceptualization draws on Massey 1994.
04. See, for example Abraham (2001); Derné (1994b); Parameswaran (1997). Abraham’s
(2001: 151) 1996–98 study of English-speaking, low-income college students in
the metropole of Bombay revealed, for instance, that college men still regard “good
character” and virginity as essential in any women whom they might marry. The
college women whom she interviewed doubted that anyone would marry a woman
who had kissed or held hands with another man (Abraham 2001: 154). College
women described how their parents warn them to avoid even talking with boys and
many expressed fear of the social consequences of being seen talking with boys
(ibid.: 140).
05. The ordinary middle class men whom I interviewed in 1987 reported that inter-
actions between unmarried men and women were closely watched. Parents warned
daughters about any interactions with men outside of the household (Derné 1994b).
While interactions are now freer in the élite world, non-élites still find the pos-sibilities
for interaction limited. Abraham’s (2001: 137) 1996–98 study of English-speaking,

low-income college students in the metropole of Bombay revealed “considerable
segregation of boys and girls in [non-élite] colleges as compared to the élite colleges”
(Abraham 2001: 137). The girls whom she interviewed reported being carefully
watched by “family elders, teachers, relatives, neighbors and family friends” (ibid.:
141). They reported that parents told them to stay away from boys, avoid talking
with boys, and avoid laughing with boys (ibid.: 140).
06. Dictionary definitions for mauz list whim, caprice, luxury, and delight, while the
definitions for masti list intoxication, joi de vivre, passionateness, sexual excitement,
carelessness, wantonness, joyous radiance or frolicsomeness.
07. Fighting-and-killing films are rarely hits, usually playing for just one to three weeks.
But at Dehra Dun cinema halls, they continue to attract big audiences for these
short runs.
08. Abraham translates ghareloo as “homely”.
09. As in 1991 (Derné 2000a: 82–83), advice columns in Hindi film fan magazines
continued to respond to questions from those who had fallen in love by reminding
readers of the problems associated with love marriages. They continued to respond
to questions about difficulties associated with arranged marriages by urging readers
to work to make the marriage work. One advice columnist told a reader whose
husband’s behavior toward her was not right (theek) that she should be “patient” and
“not take a decision to divorce quickly”. “With a little patience, it will work and
your husband will be OK (theek). A divorce should only be considered if it is the last
way” (upadhyay) (Filmi Kaliyan 2001a: 83). In another case, the advice columnist
suggested that if a husband pursues other women after marriage it is the “fault” of
the wife because of her own inability to tie her husband to herself. Rather than
thinking of divorce, the advice columnist urges the reader to examine her own be-
havior, and then work harder to satisfy her husband (Filmi Kaliyan 2001a: 83).
(The magazine seems [from its advertisements] to aim at female film fans.)
10. HAHK and DDLJ are examples of superhit films that recreate “an idealized world of
the happy joint family” without the usual “strife and tension” associated with joint-
family living (Varma 1998: 167).
11. When Priya (the heroine) tells Madhu (the surrogate mother) about her happy joint-
family life, Madhu (who herself is unmarried and living alone) voices the common
view that mothers-in-law are monsters. Priya assures her that she is treated with love.
12. Three tailors described this to me in 2001. See also Shurmer-Smith 2000. In
Kathmandu, Nepal, too, cosmopolitan readymade name-brand clothing is bought
by the affluent, while ordinary middle class Nepalis arrange to have tailors copy
such clothing (Liechty 2003: 131).
13. They were also sometimes contrasted with bumbling priests who were presented as
out-of-touch with the times.
14. Other scholars have made similar claims. See Mies 1988: 139; Roland 1988: 153;
Thomas 1985, 1995; Uberoi 1998: 308.
15. Indeed, as part of Madhu’s redemption, she rejects her earlier focus on money. Hav-
ing fallen in love with her newborn (and with the hero), she heads to the railway
station leaving the money behind. When the heroine arrives and asks for her baby,
Madhu in turn asks the heroine to give up her husband. After the heroine slaps her,
Madhu realizes what she has to do. She heads to the hospital and hands the baby to
the heroine telling her, “You’re a mother, now” and the two hug.
16. Shoma Munshi (2001c: 89) shows how similar discourses about the Indian winners
of international beauty contests root the victors’ Indianness in distinctive gender
arrangements. The Indian press, she relates, repeatedly emphasizes “how ‘modern’
the girls have become” and how they can “hold their own against the best from the
rest of the world” (Munshi 2001c: 89). But the focus of indigenous discourse is on
how “our girls” have not forgotten the importance of “traditional Indian values.”
Although workouts, training, and beauty makeovers are presented as part of their
success, the winners focus on how their parents have been “responsible for their
mindset” (ibid.: 89).
17. Mankekar (1999b) reads Hindi films similarly. She rightly sees both heroes and
heroines as showing their Indianness in their dutifulness to family obligations. But
she is also right to recognize that the “locus of anxieties” is “emblematized in the
figure of the westernized NRI woman.” “The sexual purity of Indian women,” she
argues, is “iconic of the purity of national culture” (Mankekar 1999b: 739).
18. Even Mohabbatein, a film with ultramodern heroes and heroines, nevertheless makes
reference to the importance of modesty. When one of the heroines is thrown into
a pool by a boyfriend, the hero who is courting her wades into the pool and covers
her with his coat. After carrying her out of the pool, he takes the coat off and says,
looking at her short dress, “You’re not the Sanjana I knew from childhood.” He takes
down her hair, wraps his coat around her waist, covering her short skirt, and says,
“This is the Sanju I knew.” Another young hero who dances with an even more
ultramodern heroine covers her head at the end of one of their sexy dances. While the
big hit Mohabbatein showed heroines in more revealing clothing than ever before, even
this film gave some voice to the imperative that Indian women should be modest.
19. Throughout most of the 1990s, Madhuri Dixit was indisputably the top heroine in
Hindi films. With her marriage, however, she quickly fell from the top spot. I was
surprised that none of the men whom I interviewed in 2001 mentioned her as their
favorite heroine, but this only demonstrates the strength of the imperative that
heroines (unlike heroes) remain single in their private lives.
20. Hindus and Muslims nearly always wore saris, salwar-kameezes or burkas. There is a
substantial Tibetan population in Dehra Dun. Tibetan women more often wore
jeans to theatres.
21. Wherever I was seated in theatres, I noticed that almost all ethnic Indian women
were wearing saris, salwar-kameezes, burkas, or school uniforms. A few systematic
counts reflected this prevalence. Thus, 15 of 16 women leaving a showing of Officer
were wearing saris, salwar-kameezes, burkas, or school uniforms, while 44 of 48
women departing from a showing of CCCC were similarly dressed in Indian attire.
These systematic counts of whole audiences leaving theatres were confirmed by
impressions from the areas in which I was seated, demonstrating that only very few
ethnic Indians wear jeans or pants to films. My observations in Delhi, Dehra Dun,
and Banaras in 2001 similarly show that most women continue to choose Indian
attire for their day-to-day public actions.
22. There has been of course a long history of protesting Hindi films that seem to threaten
either Indian religions or Indian family traditions (see Derné 2000a: 44–45).
23. “Non-veg” is a common Indian term for non-vegetarian food.

24. In focusing on reasons for non-élite resistance to cultural globalization, I do not
mean to imply that such resistance takes place without influence and orchestration
by some élites. Political parties, notably the Hindu fundamentalist BJP, but also the
Congress party, have been involved in orchestrating protests against Valentine’s Day
(India Abroad 2000a; Sengupta 2001a). Local BJP organs have been involved in
organizing struggles to bar women from wearing jeans in local colleges (India Abroad
2000b). The BJP also spearheaded protests against the staging of the 1996 Miss
World pageant in India, charging that it was a “show of obscenity” “against Indian
culture” (Oza 2001: 1079). Politicians, themselves part of the English-speaking élite,
play a role in voicing frustrations with global intrusions in ways that the non-élites
recognize. Bal Thackeray, head of the Shiv Sena, a group affiliated with the BJP, has
perhaps been most influential in pushing non-élites to see their ills through a lens
that highlights cultural intrusion. In urging India to burn Valentine’s Day cards,
Thackeray critiques the influence of an “exhibitionist American culture” in India
(India Abroad 2000a). Despite this élite influence, it is nonetheless also the case that
concerns about the effects of global media on Indian family arrangements resonates
with ordinary middle class Indians because cosmopolitan messages are at odds with
the world in which non-élites live and often want to live.
In focusing on the protests of non-élite men, I do not mean to neglect women’s
resistance to globalization. As I discuss in Chapter 6, women have been especially
involved in resistance that reflects unease with new portrayals of gender and beauty
in transnational media. Women have been at the forefront of protests against India’s
embrace of beauty pageants and against global media’s portrayals of women. While
men are uneasy about these global media because they threaten existing gender
arrangements, women are often uneasy about them because they introduce new
layers of meaning that contribute to women’s subordination in India.
5 Changing Cultural
Orientations
Non-élite men resist meanings that appear to threaten gender and family
arrangements that they have an interest in maintaining. They are not
guided by apparently alien messages that are inconsistent with the struc-
tural realities in which they live. Global media show women working in
the paid labor force, but because of their interests in existing gender
arrangements, ordinary middle class men resist transnational messages.
Global media increasingly celebrate love marriages and independence
from family authorities, but ordinary middle class men’s structural reali-
ties do not provide the possibility of acting on these messages: these men
tend to regard these media messages as fantasies with no connection to
their daily lives.
Transnational cultural flows affect local culture only when new mean-
ings can be layered on top of existing structural realities. While cultural
globalization may not independently affect structural arrangements, it
may affect the meanings people attach to those arrangements. The next
chapter focuses on how transnational media may be altering men’s
gender culture by intensifying their commitment to male dominance.
Rejecting global media messages that are inconsistent with existing
gender arrangements, men are attracted to those messages which provide
new or intensified ideological justifications for male privilege.
This chapter suggests that global media may have introduced a mod-
est intensification of the legitimacy and appeal of individualism as a way
for non-élite men to understand the world. Intensified attraction to in-
dividualism has not led non-élite men to buck obdurate social realities:
even if they emphasize individual choices more than they once did, this
CHANGING CULTURAL ORIENTATIONS 163
emphasis is not applied to choosing a marriage partner since existing

institutions continue to restrict interactions between unmarried men and
women and the economy continues to provide insufficient independence
for non-élite young people. A greater focus on individual autonomy does
not lead men to reject joint-family living as long as economic structures
do not provide sufficient structural opportunities for such independence.
However, even though it has not much changed actions, global media’s
emphasis on choice and personal freedom may have strengthened the
cultural orientation that emphasizes individualism.
This chapter is brief because most of my findings mainly reveal conti-
nuities in non-élite arrangements and culture. Yet, the changes I identify
here are potentially significant if they intensify and end up altering fun-
damental orientations and motives.
Cultural Orientations in India

In Chapter 2, I emphasized that Indian men’s ethnopsychology has long
tended to see the world through a sociocentric lens: their ethnopsychology
has tended to explain people’s actions by focusing on the groups to which
they belong rather than the personal characteristics of the individual.
Men have tended to see it as proper that people be guided by family
authorities and be suspicious of actions which individuals embark on
without familial guidance.
But I also emphasize that Indians have long had “second languages”
which emphasize the individual. Both being nurtured by others and
being able to act on one’s own are universals of human experiences that
all cultures recognize in some way. Indians have long seen attachment
between siblings or between husbands and wives as an arena in which
individuality might be expressed. While they are an important resource,
second languages are less rich, legitimate, and familiar than the domi-
nant first language.
Even before the advent of globalization, films and film-going have
been arenas that give expression to individualism and individual desires
(Derné 2000a: Chapter 5). In 2001, as in 1991, film-going provides
space for the individual by allowing the male filmgoer to escape from the
authority of home and work. In 2001, as in 1991 (Derné 2000a: 92–
93), filmgoers and film culture focus on individual stars. Like the men
whom I interviewed in 1991, the men I interviewed in 2001 talk about

their favorite heroes as having special qualities: one likes Ajay Devgan
because of his particularly sweet style and dialogue; another likes Hrithik
Roshan because of his particular laughing smile; many say Salman Khan’s
body is unique. When their heroes first appear on the screen in any film
(and sometimes when their names appear on the credits), whistling and
shouting can be intense.
Film themes, of course, continue to assert individualism and choice:
action heroes fight alone against injustice; young lovers struggle against
the odds. Film-going continues to be a way that Indian men have devel-
oped a taste for, and familiarity with, individual autonomy. It has long
been one of the privileged arenas of the second language of individualism
in Indian culture, which develops a taste for autonomy in young men.
Films continue (Derné 2000a: 117–18) to push some men to develop
an attraction to fashion and consumerism as a way of expressing indi-
viduality. Quite a few of the men whom I interviewed emphasized
fashion as a reason that a particular hero was a favorite.
Globalization and Individualism

One might expect that economic and cultural globalization would push
in ways that might advance this existing focus on the individual. Through
cable television and American movies, global media push toward invigo-
rating, intensifying, and legitimizing a focus on the individual over the
collectivity. Advertising emphasizes choice. American serials and Holly-
wood movies show young people choosing their own spouses. Holly-
wood movies show larger-than-life action figures who struggle against
injustice. Influenced by global media forms, Hindi films increasingly
show young people’s autonomy as an accepted fact of life rather than a
struggle.
While Indians have long denigrated Hindi films (Derné 2000a: 37–
41), they have tended to see Hollywood films as more substantial,
increasing the legitimacy of their messages. One of the men I interviewed
said that he liked American films because “they show things as they actu-
ally are.” Several men praised the “financial infrastructure” of American
films for allowing a better product. Another man said that Hindi
filmmakers should make good films like Titanic: the greater worth at-
tached to Hindi films might push toward a greater tendency to accept
their messages.
More important, economic globalization has actually increased people’s
choices. Chapter 3 argues that affluent Indians embrace the ideology of
personal choice because opportunities to consume have increased greatly.
Non-élites do not experience the increased job opportunities that élites
do. Nor do the non-élites have the range of consumptive choices that
economic liberalization has opened up for the élites. Nevertheless, the
new availability of foreign brands of clothing and food has provided
somewhat greater choice to non-élites as well.
The last chapter suggested that cultural globalization and the open-
ing of the economy have, in fact, introduced a new attraction to con-
sumerism into ordinary middle class culture—and this is perhaps the
most prominent way in which new individualism is expressed. One self-
employed man whom I interviewed was proud to own a motorcycle and
hoped to be able to buy an automobile within five years. Many of the
men whom I interviewed enjoyed wearing cosmopolitan fashions and
were happy with consumer items like televisions. The ordinary middle
class men whom I interviewed in 2001 often praised their favorite
heroes’ fashion, a focus which is reflected in the jeans and brand-name
logos that they showed off as they promenaded in public around cinema
halls. Many men’s clothing—from Nike hats to McDonald’s jackets—
advertised attachment to consumer items.
This focus on consumerism trickles far down the class hierarchy, as is
seen in the desire for the ubiquitous Coca-Cola (Shurmer-Smith 2000:
33), and certainly affects women as well as men. Sanjay Srivastava shows
that the advertising in cheap Hindi footpath pornography introduces
male readers to “contemporary commodity culture” (Srivastava 2001:
233). Srivastava shows that advertisements in footpath pornography lead
ordinary men to desire a “fantasy culture of modernity” (believing, for
instance, that a course might help them “speak English in 50 days.”)
(Srivastava 2001: 233). Purnima Mankekar’s (2004: 411) interviews with
lower-middle class women similarly show attraction to advertised com-
modities, even when they cannot afford them. “We may never be able to
afford them,” one said, “but who knows. And in any case, what is wrong
in wondering” (Mankekar 2004: 411).
Strengthening Individualism
A comparison of men’s reasoning about whether a love marriage or an
arranged marriage is appropriate suggests that such global influences
may indeed be strengthening the second language of individualism as a
cultural orientation of non-élite men. While individualism has not led
to a decreased preference for arranged marriages, it has led to subtle shifts
in how men understand appropriate means of marrying.
First, the percentage of men who categorically disapprove of love mar-
riages declined significantly. In 1991, 22 percent (7/22) of the men I
interviewed simply disapproved of love marriages as wrong or improper,
saying things like “the love marriage is not a good way,” “I say it’s wrong”,
or “a love marriage is dishonorable”. In 2001, none of the men whom I
interviewed offered such a categorical disapproval of love marriages. The
percentage of men who offered an on-balance disapproval of love mar-
riages was almost identical in the two years (68 percent in 1991, 66
percent in 2001). Yet, in 2001, men did not dismiss love marriages out-
of-hand, but instead called them unworkable, not possible in actual life,
or only existing in stories.1
Perhaps the intensifying celebration of love and choice pushes against
a categorical rejection of love marriages. There are now so many positive
representations of love matches that a simple rejection of them as “wrong”
may no longer be a viable cultural position. So, while men’s on-balance
assessment of arranged marriages has not changed much, there may be
greater recognition of the validity of love marriage as a choice that some
people might make.
Second, in describing the exceptional love marriage that might suc-
ceed, men increasingly focus on the characteristics of individuals choos-
ing such love marriages rather than on the groups to which these
individuals belong. An important feature of Indians’ collectivist culture
is a focus on an individual’s social group as the best way of understand-
ing an individual’s character (Derné 1995: 38–40, 53–55). Thus, when
they witness actions they regard as improper, Indians tend to explain
these actions by considering the group to which an individual belongs.
In choosing a spouse for a child, parents see the potential spouse’s family
as the most important determinant of the potential spouse’s character.
To understand love marriages or women’s paid labor, Indians who reject
such arrangements tended to focus on the nature of the family that such
individuals come from, saying, for instance that people “from educated
families” “like it if their wife works” or “try to do love marriages”.
In 2001 (but very rarely in 1991), some men said instead that a person’s
individual characteristics could facilitate a love marriage’s success. Tahsin,
the married 25-year-old who enjoys the public space of theatre but is
glad that his wife would rather stay at home, is happy that he had an
arranged marriage. But Tahsin describes love marriages as “possible if a
person has money and backbone. It depends on the person,” A married 22-
year-old Hindu father who drives a truck for a state agency is happy that
he had an arranged marriage, but nonetheless says the “success of love
marriages depends on the person. Love marriages,” he says, “are successful
with certain persons and in certain places.” Umesh, the 26-year-old civil
draftsman who likes films that provide a message that “one should
be trustworthy and selfless and accountable in relationships” opposes
television programming that “gives the message” that a “brother should
allow his sister to go with her boyfriend to watch a movie.” He says that
these television messages are “not a good thing,” and is concerned
that people of an “immature age” could be “swayed by emotion,”, “spoil-
ing their life and also ruining the future for the girl [they love].” But
he still says that he is “not against love marriages.” Rather, Umesh con-
tends that a man who has achieved his own “self-standing should opt
for a love marriage.”
In 2001, six of the seven people who discussed why some love mar-
riages might succeed focused on the individual characteristics of the people
embarking on these marriages. In 1991, only one of the eight people
who discussed why some love marriages might succeed focused on such
individual characteristics. While the percentage of men who offer an on-
balance disapproval of love marriages has not changed, men are more
likely to evaluate the possibility of a love marriage’s success based on
particular characteristics of the individuals involved. This suggests, of
course, that the intensifying cultural celebration of choice may lead more
non-élite men to focus on individual choices as they orient themselves in
the world—even as they continue to reject the possibility of such choices for
themselves.
Third, in describing why love marriages tend to fail, men are less likely
to cite parental and societal opposition. In 1991, 27 percent (6/22)
of the men whom I interviewed focused on obstacles from parents or
society in explaining why love marriages should be avoided. They said,
“The consent of the parents is important,” “parental consent is needed”

or “a love marriage might be good, but society would never allow it.”
This sort of reasoning makes sense within a collectivist cultural orienta-
tion that sees people as rightly guided by social pressures and that dis-
trusts individuals who act on their own desires (Derné 1995: 45–56).
After a decade of intensifying celebration of individuals pursuing their
own desires, none of the men whom I interviewed in 2001 referred to
parental or social opposition as a reason that love marriages would be
best avoided. While structures have not changed to open the possibilities
of young people’s independence in ways that would allow them to buck
social pressure to accept an arranged marriage, the intensified cultural
celebration of individual choice may make a conscious emphasis on
social pressure to explain one’s willingness to marry according to one’s
parents’ wishes less legitimate. Because there has been little structural
transformation in the opportunities of non-élite men, new imaginations
associated with cultural globalization have not prompted young men
to abandon arranged marriages. Nor have these new imaginations
prompted non-élite men to change their on-balance assessment of the
best way to marry. But the emphasis on choices and freedom in global
media may have played a role in decreasing men’s emphasis on the im-
portance of following social pressures as an explanation for appropriate
behavior.
Fourth, while the percentage of men who offer an on-balance disap-
proval of love marriages has not changed much, there appears to be less
hostility to love marriages and some acceptance of a wider range of
possibilities—at least, in principle. While eight of the men whom I
interviewed in 1991 voiced the idea that some love marriages might
succeed, these men usually dismissed successful love marriages as extremely
unlikely. Two said, for instance, that only five in 100 love marriages might
succeed. One man who thought that boys engage in love marriages “for
amusement” reasoned that if a love marriage could avoid being “one-
sided”, it might be workable. But this man clearly thought such success
unlikely. In 1991, when men admitted that some love marriages might
succeed, they had little idea of what a successful love match might look
like. Their reasoning was thin. Four men said that “some love marriages
might work” but simply held that they did not want one for themselves.
One man said that some love marriages were good and some were bad,
but refused to elaborate.
But in 2001, love marriages appeared to be more of a considered pos-

sibility that someone might actually pursue. As I note above, six men in
2001 discussed individual characteristics that might allow a love mar-
riage to succeed, usually focusing on a boy’s independence and moral
worth. Two men focused on their own individual characteristics as they
themselves considered the possibility of marrying for love. A 20-year-old
self-employed Hindu mechanic living in a joint family with his mother,
brothers, and one bhabhi said, for instance, that his “confidence and
self-determination” might allow him to marry for love. A 22-year-old
Muslim postgraduate commerce student living in a joint family insisted
that he intended to pursue a love marriage. He said that because he would
“select a bride with thought and understanding,” his marriage would
surely succeed.2 (Of course, it remains to be seen whether these two men
will manage to marry for love—neither has ever had a girlfriend, and the
commerce student admits that only about 20 percent of love marriages
might succeed.)
While, for many, structural possibilities have not changed in ways
that might allow a serious consideration of turning away from the usual
way marriages are arranged, the intensified cultural celebration of choice
and love influenced by global media may be providing more elaborate,
rich, and familiar ways of considering the possibility of a love marriage.
Thus, while cultural globalization may not have had much influence on
ordinary middle class Indian men’s behavior, it may be strengthening a
legitimate second language that emphasizes individual desires.
While it appears that there may be a modest increase in the richness,
familiarity, and legitimacy of second languages that emphasize individual
volition and choice over group guidance, I do not want to overestimate
this change. As I have emphasized elsewhere, Indian films have long
been one of the many cultural arenas that give voice to second languages
celebrating the individual (Derné 2000a: 165–67). Transnational cul-
tural flows and economic liberalization that change real possibilities
may be strengthening these second languages, but they did not create
them.
One must simultaneously keep in mind the ongoing importance of
collectivist cultural understandings. Non-élite men continue to enjoy
films like CCCC and Hum Saath Saath Hain that present happy joint-
family life. They continue to stress Indian heroes and heroines’ commit-
ment to family duties over their own desires. Sunil Khilani points out
that “rising consumerism” in recent years did not “fuel an individualistic

hedonism nor breed liberal individuals” (Khilnani 1997: 186). Rather,
he argues that as in the hit film Hum Aapke Hain Kaun!, consumerism
“was experienced as an opportunity to sample the pleasures of moder-
nity within collective units like the family” (my emphasis) (ibid.: 186).
Ramu, a 20-year-old Brahmin medical student whom I interviewed,
describes himself as in love with an 18-year-old student. He enjoys a
range of American movies and says that he will marry his girlfriend. But
Ramu does not see movies with his girlfriend and has not told his par-
ents (with whom he lives in a joint family) that he has one. He speaks
with bravado that he will marry for love, and says that he will try to
convince his parents to consent to the marriage.3 But he also says that he
loves his parents enough (kaafi pyaar) that if they refused their consent,
he would go through an arranged marriage according to their wishes.
Referring to the hit KKHH, he says that he would be able to love his
wife even after loving a girlfriend, just as the hero of that film was able to
fall in love again after his wife’s death. His focus on how any love he
might feel for his girlfriend should not jeopardize his love for his parents
is, of course, consistent both with the priority that recent films like DDLJ
give to family connections over two individuals’ love for each other and
with the collectivist orientation I described in Chapter 2.
For this young man, his love for a woman should not jeopardize his
essential Indianness by tempting him away from commitment to family
duties. Ramu is attracted to new possibilities of love and choice which
might be intensified by global media.4 But he also falls back on the usual
emphasis on following parental authorities. So, while global media may
be increasing the richness, familiarity, and legitimacy of languages that
emphasize the individual, collectivist cultural understandings remain
salient as well.
But it is also possible that small shifts away from collectivism in some
non-élite Indians’ basic orientation might lead to other changes in thinking
and behavior. The modest changes described in this chapter may have
more widespread effects in future years—especially if the changes broaden
and intensify and are fueled by new structural possibilities. At this point,
a second language of individualism seems to be strengthening, although
collectivism remains salient. The shift toward greater individualism among
the non-élite men whom I interviewed is neither broadbased nor thor-
oughgoing, but such changes may intensify in future years.
Conclusion
New meanings, then, are layered on top of existing structural arrange-
ments. A new focus on the individual, perhaps generated by new
economic possibilities and/or new cultural imaginations, has not led to
new ideas about how one should marry. But it has changed the meanings
men use to understand how one should marry. While the focus on the
individual has not led to a focus on individual choice in marriage, it
has decreased the focus on social pressure as the reason men give for
objecting to love marriages. The focus on the individual may have also
generated reasoning that emphasizes individual characteristics (rather than
group ones) that make the exceptional love marriage succeed. The
increased celebration of love has not led to much increase in the number
of men who believe that they will marry for love, but it has decreased the
hostility that men express towards love marriages.
This suggests that non-élite Indians accommodate new meanings intro-
duced by cultural globalization to obdurate structural realities they face.
They use an individualist orientation to understand love marriages and
arranged marriages in new ways, but the orientation does not change
their overall assessment of marriage arrangements—precisely because
institutional possibilities have not greatly changed.
The last chapter suggested that non-élite men rejected global media
meanings which were inconsistent with the gender arrangements they
had an interest in maintaining. Without changes in non-élites’ structural
possibilities, men’s attachment to proper family arrangements has re-
mained unchanged.
The next chapter shows a continuity in men’s gender culture, but
highlights how cultural globalization may layer new meanings on top
of the existing gender arrangements. These new meanings bolster and
intensify male dominance, providing new avenues for its operation.
Notes
01. In 1991, men also cited these reasons for their opposition to love marriages.
02. This young man had other individualistic attitudes as well. He did not criticize
cable television, believing that it was “up to the viewer to grasp what he [or she] sees
on television.” He was not too concerned with the movement from salwar-kameezes
to cosmopolitan fashion like jeans, saying that “while the costumes have changed,
there will be no hassles if the person is self-determined.”
03. Ramu had cogent reasons for believing that he might marry for love, but I got the
sense that there was a great deal of bravado in his talk. My research assistant felt,
instead, that Ramu was speaking in earnest of a sober and serious desire to marry for
love.
04. It is also worth noting that because this young medical student is pursuing a high-
paying profession, he may be more hopeful about the possibility for independence
than many of the other men whom I interviewed. Although Ramu was buying a
cheap movie ticket, seemed to be rooted in a prosperous world. His father is a bank
manager and an uncle is a university lecturer. That he lives in Allahabad but is
stationed in Dehra Dun for university studies may suggest greater movement and
cosmopolitanism than many of the men I interviewed. Unlike most men, he men-
tioned a long list of American films that he enjoyed, and he claimed to have watched
some of them in English (rather than dubbed in Hindi). His greater cosmopolitan
possibilities may be an important background factor that leads him to believe he
might marry for love.
6 Globalizing
Gender Culture
In Chapter 4, I argued that because of obdurate social realities and men’s

interests in maintaining existing gender arrangements, new imaginations
of gender and family introduced through cultural globalization have been
largely rejected by non-élite men. Yet, these same men embrace other
imaginations of gender introduced through global media flows because
they can be combined with existing gender arrangements. Men often have
an interest in maintaining gender arrangements that provide them with
status and comfort. Often, men may not be able to imagine alternative
family arrangements such as marrying for love as a real possibility
because the structural realities they face seem too ingrained. But global
media—and the Hindi films that are influenced by them—may intro-
duce or intensify other gendered meanings that can be layered on top of
existing family arrangements and gender culture. This chapter explores
how cultural globalization may be remaking the gender culture of
ordinary middle class men.
I begin the chapter by describing continuities in Indians’ oppressive
gender culture in the face of global media. As they did previously, Hindi
films continue to show men as active and women as passive. They con-
tinue to show women as existing for men’s pleasure. They continue to
celebrate male violence and to promote a controlling gaze that limits
women’s opportunities.
Second, I argue that the cosmopolitanism and transnational move-
ment celebrated by global media and Hindi films introduces a new
dimension of privilege that men layer on top of existing gender hierar-
chies. Chapter 3 argued that Hindi films portray privilege in terms of
transnational movement. Today’s heroes move back and forth between

India and Europe for business, education, and pleasure. Even non-élite
men may now associate such movement with privilege. Seeing the
world through the lens of a gender culture which emphasizes women’s
restriction to the home, non-élite men see such transnational movement
as a distinctively male privilege. Thus, the awareness of new possibilities
provides a new basis which men add on to the existing dimensions
of male privilege. As a result, increasingly valued transnational move-
ment may come to be associated with masculinity while increasingly
devalued rootedness comes to be associated with femininity. Here,
non-élite men interpret the new possibilities introduced by cultural
globalization within the existing frameworks in which they live. While
the affluent Indians whom I discuss in Chapter 3 see both men and
women as moving in cosmopolitan worlds, ordinary middle class men
tend to associate maleness with cosmopolitanism and femaleness with
local Indianness.
Third, I emphasize that global media may have intensified central as-
pects of male dominance. The flows of global media have intensified
images of male violence. The Hollywood films that are most liked are
“action” films that show violent heroes. Men often like these films more
than the “fighting-and-killing” Hindi films—which were previously the
only action option available—because they see these foreign films as “more
realistic”. Hollywood films—because they are Hollywood films—are not
as denigrated as Hindi films are, and men may find it easier to appropri-
ate these films’ celebration of male violence. The wave of global media
that has flowed into India has made men and women live more and
more in a world of images of male violence, which intensifies the associa-
tion of maleness with such violence.
In addition, non-Indian pornographic and semi-pornographic
films, which now circulate as rental videos and play in more and more
theatres and on cable television, may be intensifying men’s objectifica-
tion of women. Indian feminists (like Western academics) rightly
identify sexual objectification as a cornerstone of male dominance.
Men are, of course, partly attracted to these objectifications because they
are consistent with the existing gender arrangements that they value,
but the fact that these images originate in the West may allow men to
identify themselves as cosmopolitan through their intensified object-
ification of women.
GLOBALIZING GENDER CULTURE 175
Fourth, I suggest that new standards of male and female beauty

which have been revolutionized by cultural globalization introduce
new means of male dominance. Influenced by Hollywood action films,
Hindi films have moved away from heroes with soft, pudgy, smooth
bodies to the muscled heroes of today. The association of masculinity
with muscled fighting bodies intensifies the association of masculinity
with violence.
Similarly, influenced by global media, images of female beauty are
moving toward thinness produced through dieting and working out. In
Chapter 3, I described how more and more affluent men and women
may be rejecting voluptuous, well-rounded standards of femininity for
the taut, disciplined bodies celebrated in the transnational media. Many
affluent women turn to the market to produce such bodies through
gym memberships and beauty aids. I argue there that in embracing
transnational standards of beauty, affluent Indians focus on cosmopoli-
tan identities rather than Indian ones. But transnational standards
of female beauty have also affected non-élite men, who now are more
attracted to thinness over roundedness. In considering new standards of
beauty introduced by cultural globalization, this chapter suggests how
cultural globalization may be introducing new methods of male domi-
nance. The role of cultural globalization in intensifying male dominance
is seen in women’s various protests against global media.
While some have suggested that cultural globalization might intro-
duce new imaginations that would improve the status of women, this
chapter suggests, instead, that it has provided non-élite Indian men
with new cultural resources that they layer on top of existing meanings
to intensify or further justify existing gender privilege. Thus, new mean-
ings introduced by globalization are most likely to be actually used
in shaping social life by those who already have power and privilege.
Cultural globalization, then, ends up providing additional resources that
already privileged men use to solidify their position.
Continuities in Constructing Gender Culture

Like global media around the world, Hindi films mediate between cos-
mopolitanism and local concerns. On the one hand, filmmakers are
influenced by cable television, Hollywood films, and other transnational
media and so introduce cosmopolitan themes and fashions into their

films. Love marriages, transnational movement, and Western fashion are
all celebrated, even normalized. But, on the other hand, filmmakers must
address an audience whose realities have not changed. Thus, filmmakers
simultaneously reconstitute existing cultural realities. Filmmakers today
continue to alleviate concerns about joint-family living and arranged
marriages that so much of their audience faces as obdurate social realities
by showing caring joint-family authorities who look out for their children’s
happiness (Chapter 4). Knowing their audience’s anxieties about alien
cosmopolitanism, they show cosmopolitan consumption and attitudes
to be consistent with adherence to family duties (Chapter 4).
Filmmakers similarly continue to reinforce an oppressive gender cul-
ture as they always have. Filmmakers’ construction of men as active
and women as passive, of men as looking and of women as the object of
the gaze, and of men as aggressive and women as needing male protec-
tion is strikingly similar to the era that preceded the advent of globaliza-
tion. As in the previous eras, these cinematic messages are consistent
with other broad cultural discourses. While cinematic messages are
centrally important in shaping young men’s behavior, films should not
be privileged as the only socializing agent. Since cinematic conventions
are so similar to those of a decade prior, here I only briefly sketch some of
these ongoing dynamics (see Derné 2000a: Chapter 7, 1999; Derné and
Jadwin 2000).
First, filmmakers continue to present men as active and women as
passive. Notably, filmmakers tend to present men as initiating romance,
while presenting women as passive objects of male interest—a presenta-
tion that encourages the harassment of women, which limits their
opportunities in the public sphere (Dasgupta and Hegde 1988; Derné
2000a: 157–59). In films like Dil To Pagal Hai, the Madhuri Dixit hero-
ine character wins the hero precisely because she does not pursue him
as actively as her rival, the Karisma Kapoor character who plays his col-
league and friend. In the 2000 hit film Mohabbatein, the young
heroes pursue the heroines so aggressively that it often causes the hero-
ines visible discomfort. The young heroines often ask to be released by
the heroes, a request the young heroes often refuse. In one raucous Holi
dance in Mohabbatein, the heroes capture and carry away the heroines.
So common are such scenes that the active, pursuing male hero seems
almost as unvarying as in fights and song-and-dance sequences.
Of course, Hindi films only contribute to a much wider cultural

emphasis on men as aggressive and uncontrollable and women as passive
and compromising (Abraham 2001: 134). Influenced by these cultural
messages, boys often begin “touching” and “pushing” girls in crowded
places from a young age, often believing that girls like such advances
(Abraham 2001: 138; Puri 1999: 87–90). The affluent Delhi women
whom Puri interviewed describe “being slapped on the bottoms, being
touched on the breasts, being whistled at, being deliberately brushed
against, [and] receiving catcalls or sexually suggestive comments” (Puri
1999: 87) as routine events from their early teens. Consistent with the
cultural emphasis on female passivity, women usually do not resist such
unwanted advances, even though they are usually not just offended but
feel seriously threatened (Abraham 2001: 138; Derné 2000a: 155–56;
Puri 1999: 75). Hindi films continue to play a part in stimulating men’s
aggressive behavior toward women, which keeps women from using public
spaces as freely as men, limiting their opportunities.
Second, filmmakers continue to position men to look and women
to exhibit “to-be-looked-at-ness”, which similarly encourages behavior
that limits women’s opportunities (Derné 2000a: 147–49).1 Hindi films
position, within the narrative, male viewers to gaze at onscreen women
by making women the object of both the camera’s gaze and the gaze of
men, a technique that is so common that it, too, is almost as ubiquitous
as fights and song-and-dance. In CCCC, the hero approaches the danc-
ing girl as a potential surrogate mother, but becomes spellbound when
he sees her sexy dancing. Purnima Mankekar similarly says of DDLJ that
the “voluptuous body” of the heroine “is made the object of [the viewer’s]
gaze through the first half ” (Mankekar 1999b: 752). Again, this ma-
nipulation of the gaze is ubiquitous, appearing in nearly all films.
Influenced by what the camera positions men to see, film-going men
continue to like particular heroines because of their beauty, sexiness, or
dancing ability.2 As in previous eras, male filmgoers whistle, clap,
and yell at onscreen women whom filmmakers position as the object
of the gaze. At the screenings of the fighting-and-killing film Officer
in 2001, the hall was often filled with deafening whistles as the heroine
emerged from the ocean in a bathing suit. Members of the overwhelm-
ingly male audience at such screenings also consistently whistled and
clapped as the heroine swayed her hips as she walked to a table at
which she would eat a meal. At screenings of CCCC, men in the more
mixed audiences—which included men and women—began whistling

in anticipation of the scene in which the hero approaches the potential
surrogate mother at a nightclub. The hall was repeatedly rocked by
tremendous, deafening whistles during this scene as the dancer swayed
her butt for the audience. “Oh, oh, oh,” men often shouted when they
finally saw her face.
I saw such examples of a rowdy male response to onscreen women
being made the object of the gaze at all film screenings I attended. The
instances I report above are just a few of the most raucous examples of
many other similar responses at the same films. Like films’ normaliza-
tion of female passivity, the cinematic encouragement of the male gaze
continues to limit women’s free participation in public. To avoid being
ogled by men, women have had to limit participation in the public sphere
(see Derné 2000a: 149 for a summary). Radhika Parameshwaran’s (1997)
interviews with unmarried women in their 20s reveals, for instance, that
“being constantly watched and surveyed by men in public” leads to a
“feeling of resentment.” Women reported that they even avoided a soda
in a restaurant because men “stare at you and make comments.” Women’s
need to protect themselves from the gaze often makes them less able to
act as effectively as men can in the public sphere. Films are one of the
cultural dynamics that incite men’s desire to harass women.
Third, films continue to present men as powerful protectors and
women as constantly threatened (see Derné 2000a: 150–58 on the era
prior to globalization). A hero’s protection of women who are threatened
is still an important theme of fighting-and-killing films which continue
to play to large, mostly male, audiences even though the biggest money
is in romances. In films like Officer and Zahareela, which played in Dehra
Dun in 2001, the main theme is of a hero protecting a heroine, wife, or
sister who is continually threatened outside the home. (In some instances,
the heroine may fall in love with the hero precisely because of this
protection.) The centrality of this theme in Officer is apparent in the
hoardings which celebrate the hero as “The Protector.”
While less central, the elaboration of threats against women continues
in the more popular romances as well. In CCCC, for instance, the hero’s
business partner tries to rape the woman acting as the surrogate mother
of the hero’s child. While the surrogate mother is an independent woman,
she nonetheless needs the hero’s protection to avoid being raped. In
Mohabbatein, one of the young heroes rescues a young heroine who is
thrown into a swimming pool by a suitor. In film worlds, women who are
under constant threat continue to need good men for protection.3 Like
other cultural arenas in India, films remind women of the threats that
keep many of them from participating freely in public spaces without
male protection, even as they incite men’s desire for sexual aggression.
As Sanjay Srivastava (2007) argued, cinematic celebration of male
strength is emphasized by the timbre of male and female voices. Hindi
film heroes always have deep voices, while heroines’ voices are painfully
high to Western ears. Dubbed Hollywood films highlight the essential
nature of this convention. To the Westerner, the Hindi spoken by the
Hollywood hero is impossibly deep, while the Hindi-language voice of
the Hollywood heroine is impossibly high. Srivastava focuses especially
on the timbre of Lata Mangeshkar’s voice to explain her tremendous
success as a playback singer in Hindi films. Critics report that Lata’s agile
light voice with its piercing upper extension is so familiar; Srivastava
argues, that it has become “the ultimate measure of sweetness in a woman’s
voice.” It has become so common that “it soon became difficult to imag-
ine a female voice that is not Lata Mangeshkar’s” (quoted in Manuel
1993: 53, as cited by Srivastava 2007). Srivastava rightly suggests that:
at the same time that women’s bodies became visible in public spaces via
films, their presence was ‘thinned’ through the expressive timbre granted to
them. The heroines for whom Lata provided the singing voice may well have
been prancing around hill-sides and streets while performing a song-sequence,
but this gesture which otherwise threatened male dominance of these spaces,
was domesticated through the timbre and tonality which marked their pres-
ence. (Srivastava 2007).
Despite the increasing presence of Hollywood films and cable offerings

which sometimes present alternative gender orders, Hindi films continue
to contribute to male dominance by normalizing an oppressive gender
order. They continue to be part of the socializing process that attaches
men to the conventions associated with these oppressive arrangements.
By celebrating male aggression, showing the harms attached to being
made the object of a male gaze, and dramatizing the threats that women
face outside the home, films play a part in limiting women’s effective use
of the public space: as long as women need to be concerned with male
aggression and threats outside the home, they are less free than men in
their use of public space.
Layering New Meanings on Existing

Gender Culture: Transnational Heroes
But the new imaginations introduced by cultural globalization are also
layering new meanings on top of the existing gender arrangements. As
transnational movement is increasingly valued, Hindi films contribute
to a process that makes transnational movement a distinctively male pre-
rogative. Films today emphasize that the dangers women face in public
spaces are intensified in the transnational arena. Thus, films contribute
to a process of reserving increasingly valued transnational terrain for men.
As I argued in Chapter 3, the 1950s’ and 1960s’ Five-Year-Plan
Heroes, whose technical expertise was aimed at building the nation, were
supplanted in the 1970s and 1980s by the angry-young-man hero who
valorized the discontent of the producing classes. Since the advent of
globalization, a new hero has emerged on the scene—a consuming hero
for whom transnational movement is a distinctive feature. Today’s
Transnational Hero often moves easily beyond India’s borders. Many hit
Hindi films since the mid-1990s have emphasized the situation of NRIs,
and most Hindi films now routinely portray heroes who move easily in
the global sphere. In film after film, a hero’s business, education, or hon-
eymoon takes him abroad.4 In CCCC, for instance, the hero is a global
Indian executive whose business takes him and his family to Europe.
Fan magazines often describe the jetsetting lives of screen stars. One fan
magazine described six months of “jet-setting” in one film hero’s life.
After filming in Mauritius, he shops and visits his girlfriend in London,
helps launch a film in America, and (after a brief return to India) flies to
Switzerland to shoot a honeymoon scene (Sai 2001b: 32).
While today’s heroes easily move in transnational spaces, films often
highlight the dangers that these spaces pose for Indian women, reserving
transnational movement as an arena for male freedom. Films focusing
on the situation of NRIs continue to present the West as the “site of
rampant sexuality and promiscuity” (Mankekar 1999b: 736; Uberoi
1998). To maintain their Indianness, film heroes and heroines need to
resist these temptations. NRI heroines obey family hierarchies and avoid
liquor, while NRI heroes do not take sexual advantage of women and
respect their obligations to their parents (Mankekar 1999b: 737–39;
Uberoi 1998). Purnima Mankekar rightly argues that these films portray
the West as a “place where cultural purity and authenticity can be main-
tained,” while emphasizing that the rampant sexuality of Westerners in
these films puts “the purity of NRI women . . . always at risk” (Mankekar
1999b: 737). “The West is a place where the virginity of Indian women
is under constant threat” and (in films) NRI men protect Indian women
from these assaults (ibid.: 737–39). Living in Europe without his joint
family, the hero of CCCC struggles alone to keep men from raping
the woman he has hired as a surrogate mother. While these films
focus on NRI women who are able to maintain their Indianness, their
effect is to emphasize the unacceptable risks that NRI women face in
transnational spaces.
As transnational movement is increasingly valued, global spaces are
more and more defined as distinctively masculine spaces which threaten
the purity of women who are the distinctive bearers of Indianness.
Mankekar argues that in these films “the Indian nation . . . is where
Indian women’s sexual purity may be preserved. Indeed, the sexual
purity of Indian women becomes iconomic of the purity of the national
culture” (Mankekar 1999b: 739). The threats and temptations that
women face in Western settings are, then, far more consequential
than threats and temptations that men themselves face. The longtime
cinematic emphasis on male protection and female vulnerability in the
public sphere is extended to the global arena, reserving the highly valued
transnational sphere as a locale of male privilege.
As a number of theorists have argued, the increasing value placed on
global spaces often ends up associating these spaces with masculinity,
while local spaces come to be associated with the feminine (Gupta and
Ferguson 1997: 7, as cited by Morley 2000). As Enloe puts it, “being
feminine” is often defined as “sticking close to home” while “masculin-
ity” is a “passport for travel” (Enloe 1989: 21).
The rise of the transnational hero reinforces the ways that Hindi
films have long contributed to male dominance, which I identified
earlier in this chapter. If men are the ones that move, it reinforces
the image that men are active and women are passive; even when
onscreen heroines move, they do so, like the hero’s entourage in CCCC,
because of the hero’s business or entertainment needs. By emphasizing
the threat that women face in the global arena, films that focus on
transnational heroes emphasize women’s need for protection from male
threats.
Intensifying the Association of

Maleness with Aggression
The cultural association of maleness with violent aggression has, of course,
long been an important cornerstone of male dominance. Fighting-and-
killing films continue to celebrate such male violence. Members of the
male audience continue to clap and shout when heroes beat up their
opponents. Indeed, men seem to enjoy watching aggressive violence of
all kinds. In theatres, men even respond enthusiastically to violence
committed by onscreen villains—which may be one reason why villains
develop their own following.
Today, cable television and foreign movies appear to be intensifying
the attraction to violent masculinities. Nearly 60 percent (11/19) of the
men I interviewed who watch foreign films regularly say that they do so
because of the excellent action sequences in these films. Men talk of Jackie
Chan or Arnold Schwarzenegger as favorite heroes because of their fight-
ing ability. They say they like American films like Gladiator or Godzilla
because the action appears more realistic than in Hindi films. As I sat
watching the previews before one screening of an Arnold Schwarzenegger
film, one of the men I interviewed smiled broadly on seeing Jackie Chan.
“Jackie’s a good fighter,” he said with a grin. Ramu, the 20-year-old
Brahmin medical student who wants to marry for love, says that he likes
watching Hollywood action movies because the Hollywood industry
has the backbone to make the action more exciting and realistic.
Indian men appear to be attracted to violent masculinities portrayed
in non-Indian media. Anand Patwardhan’s 1995 documentary film,
Father, Son, Holy War shows boys, teenagers, and young men in Bombay
who are attracted to Arnold Schwarzenegger’s bodybuilding. Patwardhan
shows one 25-year-old man saying that he was “inspired” by watching
videocassettes of “Arnold’s movies”. Saying that he was attracted to
the “body builder and winner of seven Olympic titles,” the young man
described how he “started to exercise until” he became an “expert”.
Patwardhan shows adolescent Bombay boys’ attraction to World
Wrestling Federation (WWF) characters. In one scene, boys in a room
decorated with posters of Hit Man watch this WWF hero on cable tele-
vision. Boys smile, make faces, roughhouse, and imitate the headlocks
they see on television. “That’s Hit Man, the World Wrestling Federation
wrestler,” one says. “He hits hard. He’s good.” One boy who had another
boy in a headlock says that “only boys” wrestle “because boys are heroes.”
Pressed by the interviewer, the adolescent says he does not play with girls
“because girls wear saris, because girls are a calamity, because girls make
too much fuss, because girls are girls and boys are boys.”
In another scene, boys react enthusiastically to WWF wrestler Macho
Man Randy Savage, who makes a local appearance to promote WWF
on local cable. Boys chant “We want Macho; we want Macho” in antici-
pation of the hero’s arrival. “Macho, Macho, Macho,” they chant as he
comes into the promotional tent. One boy says that he likes “Macho
Man because he’s strong and tough. And, also, he’s macho.” The boy says
that he would like to be like Macho Man because he is “quite dangerous
and well known all over the world and fights quite well.”
Many men apparently find it easy to identify with violent masculinity,
celebrated in transnational cultural forms. Many adolescents identify with
Hit Man—even though (or perhaps because) he wears wrestling briefs made
of a stylized American flag. Thus, transnational cultural forms may ex-
tend and exacerbate men’s attachment to violent forms of male dominance.
The increased realism men find in the foreign media’s presentation
of male violence may increase their attachment to male strength and
violence as an actual possibility. The violence in Hindi films has long
been presented as a fantasy, clearly separating it from the day-to-day world.
The special effects were both wildly unbelievable (like heroes jumping
incredible heights to the tops of buildings) and crude (accomplishing
the jump upward by reversing a film of a hero jumping down). “By exag-
gerating the violence out of all proportions,” Ashis Nandy (1989: 48–49)
argues, Hindi films create the “overall impression” of a “fairy tale” or
“comic strip” (see also Derné 2000a: 64; Dickey 1993: 69 on Tamil films).
By contrast, many cable television events, from violent American sports
to WWF wrestling, appear to be actual social realities—and, indeed, one
of the appeals of the cosmopolitan media is that it appears plausible,
lifelike, almost real (Gitlin 2002: 22). Some of the men whom I inter-
viewed believe that the violence they see is common in foreign societies,
with which they have no real experience.5 Several men commented that
they liked foreign films precisely because the world they present appeared
authentic due to their realistic special effects. The cable television and
movie preferences of Sanjay, a prosperous unmarried 30-year-old,
suggest a strong attraction to media that emphasize male violence and
villainy.6 For Sanjay, American films are especially pleasing because, he

says, they “show things the way they actually are [actual hota hai].”7
The intensified male violence in the transnational media appears to
be intensifying Hind films’ focus on male strength. I argue below
that Hindi film heroes increasingly sport buffed, muscled bodies that
highlight male power. An important, if minor, trend is the number of
recent Hindi films which lack a true hero. The all-male audience whom
I observed watching these films often reacts with enthusiasm to depic-
tions of male strength—even when it is wielded by a villain. In several
films (like Zahareela [Venomous]), former hero Mithun Chakraborty,
who was much-loved in the Hindi belt for his fighting-and-killing roles,
now plays roles that are wholly villainous. Male audiences nonetheless
respond enthusiastically when he pushes an enemy’s head through a table
or breaks a chair over an enemy’s head.
The male audience’s identification was perhaps the strongest when
the Mithun character was sexually violent. Men clapped and whistled as
the Mithun character forced a woman to dance for his pleasure. They
whistled when (in a dream), one of the heroines appears as a rape victim
in the Mithun character’s bed. They whistled and clapped again when
the title song (which emphasized Mithun’s venom) opened with the
Mithun character smiling lecherously. In past action films, audiences
always responded with enthusiasm when the villain was killed (see Derné
2000a: 73). Yet, when the Mithun character is finally killed at the end
of the movie (as the genre dictates he must), there was little applause.
Instead, the all-male audience seemed to most enjoy Mithun’s villainous
joy at harassing and even raping women.
Mithun, now a washed-up former hero, has begun specializing in play-
ing such roles for low-budget films, another of which (Bhairav) also played
in Dehra Dun in 2001. But the more mainstream film Kasoor (which
introduced the much-hyped Canadian-born beauty queen Lisa Ray) also
lacked a hero. While the lack of a hero limits such films’ appeal,8 male
audiences that watch these films are attracted to these films’ violence—
especially, it appears, if the violence is directed against women.
Rather than successfully introducing new cultural blueprints, cultural
globalization may more often offer new resources that intensify the at-
traction to existing cultural meanings. The intensified celebration of male
violence influenced by the foreign media serves to reinforce the ways that
popular culture has long contributed to male dominance in India. The
intensified association of masculinity and violence only reemphasizes that

men are active while women are passive. The greater violence serves to
emphasize that, even more than in the past, women are vulnerable to
such assaults and so should limit their public actions.
Foreign Pornography
Cultural globalization has brought more foreign pornography to India.
In 1991, two cheap theatres showed Indian-made pornographic films
carrying an A (Adult-only) rating. In 2001, these theatres continued
to operate, but one of the two most prestigious theatres in town also now
routinely showed dubbed foreign films which carried the A-rating
reserved for pornography. Low-budget and dubbed in Hindi, these for-
eign films aimed at softcore titillation, as Indian censors bar all nudity.
The foreign pedigree and prestigious venue attracted good audiences that
included ordinary middle class men and male adolescents (as age restric-
tions were not enforced).9
More hardcore foreign pornography (or “blue films”) has also become
available. Boys now watch these films in video halls with their peers
(Abraham 2001: 139). Mainstream film magazines increasingly carry
advertising for phone sex.10 Abraham’s 1996–98 study of English-
speaking, low-income college students in the metropole of Bombay
revealed, for instance, that while girls did not have access to pornogra-
phy, more than half of the male students had seen pornographic films
(Abraham 2001: 144). Pornographic films, she concludes, are “the main
source of information for many boys on matters concerning sex.” While
girls lacked a terminology for sexual acts, pornography provided boys
a complex language—much of it (for example, “dog-shot”, “taking in
mouth”) in English. The emphasis on English-language terminology,
of course, highlights the influence of newly available pornography. It
appears, moreover, that these pictures are leading to conceptions of sex
that men lacked previously.11
Catharine MacKinnon rightly argues that the construction of women
as existing for men’s pleasure is a fundamental part of male dominance:
So many distinctive features of women’s status as second class—the restric-
tion and constraint and contortion, the servility and the display, the self-
mutilation and requisite presentations of self as a beautiful thing, the enforced
passivity, the humiliation—are made into the content of sex for women.
Being a thing for sexual use is fundamental to it. (MacKinnon 1989: 130.
Emphasis mine).
A woman, she says, is “identified as one whose sexuality exists for some-
one else” (MacKinnon 1989: 118). She argues that this “sexual objectifi-
cation” is “the primary process of the subjection of women” (ibid.: 124).
Hindi films have long played a role in this construction of sex in
India (Derné 2000a: 149–50). The theme especially comes through in
the dance scenes. The sensitive hero of the pre-globalization superhit
film Maine Pyar Kiya (1989) guided his beloved in dancing for his
pleasure in a number of sexy rooftop dances. The skimpy dress the hero-
ine wore prompted the hero to gaze spellbound, causing a look of pain
on the heroine’s face. Prior to globalization, ubiquitous fantasy dance
sequences made usually-modest heroines wear jeans or shorts to please
their beloveds. The message continues to come through in recent films
as well. In fighting-and-killing films, villains try to victimize women
for their own pleasure—often to the delight of males in the audience—
while in social films, heroines often focus on pleasing the hero. In CCCC,
for instance, the heroine’s desire to provide her in-laws with a grandson
is what leads her to insist that he find a surrogate mother to give birth
to a child.
The availability of foreign pornographic films has intensified the
emphasis on women’s “to-be-looked-at-ness” (Mulvey 1975 [1988]) and
the construction of women as existing for men’s pleasure. Thus, at screen-
ings of A-films in Dehra Dun, the wholly-male audience whistled its
enthusiasm at any scene suggesting sex. “Oh, oh, oh,” men would shout
as a female character in a dubbed film took off a sweater (revealing a shirt
underneath).12
The cultural emphasis on men as active and women as passive, on
men as positioned to look and women as positioned to be looked-at, and
on the imperative that women act for men’s pleasure has been intensified
by the newly-available transnational cultural resources. Dr Neelam Gore,
of a Pune-based women’s organization, reports that because of pornogra-
phy, more and more women complain that men demand sex more
often—often in ways that women see as “perverse” (Page and Crawley
2001: 168).13 Mark Liechty’s (2001) pathbreaking study of the effects of
newly-available cosmopolitan pornography reveals dynamics in
Kathmandu, Nepal, that may also be taking place in urban India.
Liechty found that men’s use of foreign pornography intensifies the

demands that they make on women. Women complain that husbands
bring pornographic videos home, expecting that their wives will “supply
the sexual gratification demanded by a new electronic commercial means
of sexual arousal” (Liechty 2001: 43–44). One woman commented on
the sexual aggression induced by foreign pornography:
I mean, while watching these films, in what a bad manner [men] think of
others! Even their own sisters they begin to look at in this way! This is what
they do once they have become like that. (quoted by Liechty 2001: 46)
Liechty found that Nepali women who “condemned the contents of

pornographic videos based on their own identities as individuals and
Nepalis” nonetheless believed that the videos portrayed a valid sexuality
for “other women” or people from “other places” (Liechty 2001: 48).
Women, Liechty says, understand “the images of women in ‘blue films’
to be not merely male fantasies, but the realities of some other place”
(ibid.: 46). “For the tourists,14 maybe it’s good,” one Nepali woman said
(ibid.: 48). If it was not good for them, “why would they make them?”
she asks (ibid.: 46). Liechty argues that the fact that pornographic videos
are “foreign imports depicting foreigners” allows women to distance them-
selves from pornographic sexuality but “at the expense of granting
reality. . . to the sexual culture of the ‘blue film’” (ibid.: 48–49). In addi-
tion, any “critical perspective” on pornography is “neutralized” because
of pornography’s association with the cult of “imported ‘modern’ con-
sumer goods” like VCRs and televisions and the lifestyle associated with
them (ibid.: 49). Moreover, Nepali women themselves tend to see
foreign women as “free” and “modern” because of the value attached to
foreign places and lifestyles, thus “surrendering the concept of ‘freedom’”
to an “alien reality” that they themselves want to avoid because of the
sexual objectification it entails (ibid.: 48–49).
Cultural globalization, then, often provides new meanings that become
additional resources that strengthen the hands of men. Abraham’s study of
low-income college students found that while foreign pornography
had given boys a sense that they had knowledge of sexual practices, girls
often felt that they did not “know that much” about sex (Abraham 2001:
147). In contrast to boys, girls have only a “severely limited vocabulary
to describe body parts or sex” (ibid.: 145). Abraham found that many
girls were “unaware of the penetrative aspect of intercourse” (ibid.: 147).
From “their expressions of surprise and doubt,” Abraham concludes that

they were “not feigning ignorance” (Abraham 2001: 17).15 Not only do
boys have more information, but girls see boys as more informed. One
girl who said that she had no proper understanding of sex said that, by
contrast, “boys know all this” (ibid.: 147). Often with new access to
foreign pornography, men are incited to increasingly objectify women.
Liechty suggests that valued modernity often becomes associated with
“free” lifestyles which men associate with the objectification of women
(Liechty 2001: 46–49). Rather than offering alternative resources for the
disadvantaged, cultural globalization ends up providing new meanings
that already privileged men act on to further advance their position.
Changing Body Ideals for Men and Women

Raj, a 20-year-old Hindu student whose father is a Dehra Dun shop-
keeper, is attracted to Western fashion. He wears jeans and a silk shirt to
an afternoon screening of a dubbed Arnold Schwarzenegger film, which
he watches with three or four student friends who are living in a hostel.
He laughs and jokes with these friends, enjoying a day of leisure. Raj says
he only likes American films and is derisive of my own taste for Hindi
films. “It’s American films that I like,” he says. When I mention the popu-
lar CCCC, he calls it a “stupid story,” and claims that he has not seen it.
Cable television and foreign films have introduced new standards of
beauty in India. A more voluptuous female standard of beauty is being
replaced by the ultra-thin model currently popular in the USA. Simi-
larly, a fleshier standard of male beauty is being replaced by a more muscled
look. As I noted in Chapter 3, India’s victories in recent beauty contests
have prompted feelings of national pride (John 1998: 379; Munshi 2001c:
89). Raj wants to know if I, too, find that Indian women have become
more beautiful than American women. Yet, Raj makes this judgment
using a new cosmopolitan standard of beauty. “Indian women are more
beautiful and they’re looking more American now,” Raj says. Referring to
the exercise regimes that produce the new bodies, Raj says that Indian
beauties have “gotten smaller from working out, while the heroes are
getting bigger from working out.” The new standards of beauty, which
were introduced through cable television and foreign films and have been
adopted by local media products like Hindi films, end up contributing
to male dominance by intensifying the focus on male strength and female

weakness.
In Chapter 3, I emphasized new standards of beauty that some afflu-
ent women pursue through exercise and dieting. As I noted in Chapter
3, the standards of female beauty in mainstream Hindi films are deeply
influenced by global media’s celebration of female thinness, which is now
everywhere (Munshi 2001c: 83, 86). On the streets of Dehra Dun, hoard-
ings advertising Adidas shoes show Anna Kournikova, while others
advertising music cassettes picture Mariah Carey in a colorful bikini.
A blonde Barbie is prominently featured at Barkat Singh’s downtown
Dehra Dun shop. The heroines of today’s hit Hindi films are as thin as
the stars of the American serial Friends. The taut Karisma Kapoor, Kajol,
Rani Mukherjee, or Aishwarya Rai of the 1990s have replaced the most
popular 1980s heroines like the curvy Sridevi, who fit an older standard
of Hindi beauty.
Indeed, when Madhuri Dixit, the top 1990s heroine,16 came on the
scene in the mid-1980s, she was “summarily dismissed by both the audi-
ences and the industry as being too thin” (as one celebratory fan retro-
spectively recalls [Raheja and Kothari 1996: 139]). By contrast, today’s
fan magazines routinely praise heroines’ weight loss, indicating the rise
of a new regime of female beauty. So, Filmfare praises one heroine for
becoming “yummy-licious” after losing “oodles of weight” with a “Spar-
tan diet and exercise program,” (Filmfare 2001a) and comments that
“the world” is always interested in knowing how another heroine accom-
plished the “weight loss” that was newly apparent when she appeared at
a film event (Filmfare 2001b). Fan magazines routinely question stars
about the diet and exercise regimes that allow them to lose weight (Sai
2001a: 54), questions which support the “low calorie” drinks and other
diet aids which the magazines advertise.
In Chapter 3, I argued that affluent women now seek to meet these
beauty standards, but some non-élite women may do so as well. Even
non-élite women may be influenced by advertising in Hindi-language
film fan magazines which now commonly advertise books that offer a
“ladies slimming course” (English written in Hindi [devnagri script]).17
These Hindi-language film fan magazines, which aim at literate non-
English speakers, have a largely local allegiance. They only rarely carry
advertisements for global products like Nike shoes, or that use foreign
endorsers like Pete Sampras. The fact that the new standard of beauty is
a foreign one is emphasized by the fact that advertisements encouraging

“slimming” uses the English word transliterated into Hindi. But the fact
that a focus on slimming has entered such locally-oriented magazines
shows the widespread influence of the new standard of beauty.
The new emphasis on transnational standards of female beauty has,
of course, been partly driven by industries that want to instill consumer
desires for everything from makeup and fashion to diet drinks and
patronage of health clubs (Ghosh 1999a: 22; Munshi 2001c: 87). But
the effects on women are particularly harmful. As elsewhere, some women
who are influenced by the new standards often end up suffering from
physical problems like bulimia and anorexia (Basu 1997: 2, cited by
Parulekar n.d.). But perhaps more important, the emphasis on thinness
as the new standard of female beauty intensifies the belief that women are
vulnerable and depend on men for protection. A thin woman seems less
able to fight off a brute than a more substantial woman. When one of
Mohabbatein’s young heroines is thrown in a pool, her drenched thin
body can be easily carried out by the young, buff hero. She looks embar-
rassed and vulnerable, but relieved that a hero was nearby to help her.
Perhaps the thinness of the new heroines (coupled with the buffness
of the new heroes) is one reason that the sometimes humorous scenes
showing gender reversals in which women fight strongly, so common in
earlier eras (Derné 2000a: 73–75), appear to have declined as a standard
element of the masala film mix.
Indian feminists’ longstanding protests against the objectification of
women in the mass media (Gandhi and Shah 1992: 68–69, 75; Manushi
1981) have intensified in recent years, with protests against the staging
of the Miss World contest in Bangalore being among the most visible
(John 1998: 368–69), showing that many Indian women recognize how
the new images of beauty harm women’s interests.
The increasingly muscled and strong ideal male body further intensi-
fies the focus on female vulnerability and the need to rely on male strength.
In contrast to the muscular, lean gods of Western art, Hindu imagery has
depicted “rounded masculine gods with incipient breasts (Kakar 1995,
cited by Chodorow 1999: 119). Anuradha Kapur describes the charac-
teristic iconography of Ram, the most-revered Hindu male deity, as “soft,
smooth bodied” and “almost pudgy” (Kapur 1993: 75, cited by Jain 2001:
199). Ram in traditional iconography is “smiling . . ., benign, and above
all gentle and tranquil” (ibid.) One artist for the respected Amar Chitra
Katha mythological comic series said that a god’s body should be “gentle
and beautiful. . . . There won’t be any muscles” (Jain 2001: 203). Through
the 1980s, it was not uncommon for Hindi film heroes (for example,
Rishi Kapoor and Shammi Kapoor) to fit this ideal. The “Five-Year-
Plan” hero was “generally” “smooth,” “fair,” and “romantic”, having more
brains and heart than brawn” (ibid.: 214). One Tamil film hero recounts
that he soon “realized that keeping a muscular body won’t be nice,
particularly for a character like [the Hindu deity] Krishna. The body
must look fine but not muscular” (ibid.: 203).18
Foreign movies and serials introduced a muscled look—notably
through the films of Arnold Schwarzenegger—which has increasingly
become the standard of male beauty. Contemporary analysts note that
recent religious iconography now shows Ram as a muscularized God
(Jain 2001, Kapur 1993; Pinney 1997, as cited by Jain 2001). The new
ideal is clear throughout the Hindi film world. Film stars, fan magazines,
and the popular Indian press all comment on the strong bodies of male
actors. Since the early 1990s, fan magazines have included spreads
featuring heroes’ new strong bodies (Jain 1991: 32; Movie Mag Interna-
tional 2001). The top hero, Salman Khan, is renowned for his broad
chest, which is often featured in fan magazines. One recent issue of a
Hindi-language fan magazine featured four articles on Salman that were
illustrated with five photos of his shirtless chest (Muvi Chitrahaar 2001).
Fan magazines praise heroes for their strength and height, for winning
“muscle contests”, and for working out and dieting to achieve muscular
bodies (D’Souza 2001: 16; Movie Mag International 2001: 46, 49).
In fan magazines, heroes often comment that the need to develop
muscular bodies results from new global standards. The hero Bobby Deol
comments that while “in the past, it wasn’t a big thing,” “today physique
plays a really important part in an actor’s career because audiences have
changed” (quoted by D’Souza 2001: 15). Teenagers, whom Deol says
“form the major chunk of the audience, are greatly influenced by the
West and the West, as you know, has always been into fitness” (quoted
by D’Souza 2001:15). Another hero comments that “15 years ago”
heroes “went around with paunches,” but adds that “today if we don’t
have cuts on our stomach people will spit on us” (Sai, 2001b: 32).
Male filmgoers like the new muscled look (as they have since the early
1990s [Derné 2000a: 133]). Two of the men whom I interviewed said
that Salman Khan was their favorite hero and mentioned his muscled
body as a key attraction. When I asked a 20-year-old construction worker

why Salman was his favorite hero, he replied that, “you’ve seen his bare
body, haven’t you?” One 20-year-old student told me that he especially
enjoyed looking at side heroes,19 who, he said, often have beautiful bod-
ies, too. More than one-third of the men I interviewed who gave reasons
for liking a particular hero focused on body, dancing skills, or fighting
ability.20 More telling, men continue to enjoy watching their favorite heroes
fight and dance on screen (Derné 2000a: 159–60). At screenings of CCCC,
the male audience consistently responded with deafening whistles when
Salman Khan first appeared on the screen in a raucous dance. At screen-
ings of Officer, the mostly male audience drowned out the movie with
screams and whistles whenever the hero engaged in a fight.
Audience preferences and the film magazines’ focus on heroes as
“hunks” (Movie Mag International 2001: 50) are incited by camera
angles which make heroes the object of the gaze. While men exhibit “to-
be-looked-at-ness”, it does not have the same debilitating effect as it does
for women, since what men are exposing is male power (Derné 2000a:
161–64; Derné and Jadwin 2000). While wet saris and form-fitting clothes
expose breasts and legs, men expose “biceps” and “muscles”, to cite the
words often used in fan magazines (Derné 2000a: 163; Filmi Kaliyan
1991; Jain 1991: 32; Kalarikal 1992; Movie Mag International 2001: 50;
Stardust 1991: 61). Heroes use these muscles to defeat villains—and, as
I note below, to protect (and threaten) film heroines.
Hindi-language fan magazine discourse about “muscles” most often
transliterates the English word into Hindi (Derné 2000a; Jain 2001:
203). The Amar Chitra Katha artist who speaks about whether to draw
muscles in gods uses the English word “muscles” in the midst of a Hindi
conversation (Jain 2001: 203). The use of English highlights the foreign
origin of the new standard of beauty. It shows, as Kajri Jain concludes,
the “relatively recent entry of muscularity as we know it into discourses
of the male body” (ibid.: 203).21
While the causes of men’s attachment to male violence is beyond the
scope of this book, it’s worth noting that men are attracted cinematic
emphasis on muscled male bodies, which has been at least partly brought
about by cultural globalization. Men may focus on these new images
precisely because it intensifies the cultural focus on male violence that
makes women vulnerable and dependent on men. The ubiquitous
fight scenes of heroes have more salience, now that they are more muscled.
As in previous eras,22 today’s films (from CCCC and Mohabbatein to

Officer) continue to show rapes and attempted rapes—and some film-
makers see cinematic rapes as essential to a film’s success (Khanzada 1991).
While films criticize the villains who try to force the heroines to be their
lovers, camera angles continue to position the male viewer to see the
imprisoned heroine from the villain’s perspective.
Hints of force continue even in the consenting relationships of the
hero and the heroine (Derné 2000a: 150–54). Fan magazine discourses
about muscled heroes’ violence heighten the connection between desir-
able masculinity and violence against women. Film fan magazines often
repeated the tale of an irate Salman Khan storming the home of his then
girlfriend, heroine Aishwarya Rai, and hurling assaults at her (Filmi
Pariyan 2001; Vijayakar 2001b). Fan magazines repeatedly describe
Salman Khan as successfully demanding that his then girlfriend (and
also a top heroine) not work in films with other heroes (Filmi Pariyan
2001: 43). In an article praising Salman Khan’s emotional fidelity, the
fan magazine Stardust admits that Salman may possess “the unforgiving
quality of physically assaulting his women” (Varde 2001: 24).
In another article, Stardust quotes a heroine who praises the hero Sanjay
Dutt for protecting her by pushing away intruding paparazzi. According
to the heroine, Sanjay Dutt acted as any “gentleman” would by “pushing
away” someone who grabbed her arm—even though security guards
were standing nearby (Samant 2001). The centrality of such stories in
film magazine discourses highlights the centrality of the image of the
muscled man who can use violence to either attack or protect women.
This discourse, of course, highlights women’s vulnerability and reliance
on male protection.
It is difficult to know how much films and film culture push men to
workout to develop muscles. Anand Patwardhan’s 1995 documentary
film shows a young man who says that his bodybuilding was inspired by
watching videocassettes of “Arnold’s movies.” Page and Crawley report
that in one Maharashtra town, the “idolising of film stars” has led to a
“new interest in physical development” which has generated a number of
“health clubs and karate classes . . ., something quite new to the culture
of the town” (Page and Crawley 2001: 161). As in earlier eras, in 2001
film magazines continue to advertise guns and other weapons, judo
and karate lessons, and potions to increase men’s height and strength
(Derné 2000a: 133n. 18). In 2001, 70 percent of the Hindi-language
fan magazines that I examined included such advertising.23 In Dehra

Dun in 2001, street hoardings advertised a “mega mass” supplement to
help men build a “Hercules”-like body of muscles.
While few, if any, of the men whom I interviewed showed signs of
building such bodies, they, too, may be influenced by cinematic mes-
sages that heighten their association of maleness with strength. The
new bodies intensify the association of men with activity and women
with passivity, of men with aggression and of women with the need for
protection.
Women’s Resistance to the

Global Gender Order
Indian feminist groups have, of course, long targeted media portrayals
that use women’s sexuality as a commodity, suggesting the role that these
portrayals play in maintaining male dominance. Even prior to globaliza-
tion, protests of Hindi films and media advertisements were not uncom-
mon (Derné 2000a: 150; Gandhi and Shah 1992: 68–75; Ghosh 1999a:
237; Manushi 1981). Such protests have continued as women’s groups
have petitioned courts and regulators to halt “obscenity and vulgarity” in
film songs which encourage “eve teasing” (sexual harassment) (Ghosh
1999a: 239). On International Women’s Day in 2001, Lucknow Univer-
sity students scraped vulgar movie posters from hostel walls, painting slo-
gans supporting women’s empowerment. The women targeted the posters
because they believed them to be a major source of sexual harassment24
charging that men passed “lewd remarks” “inspired by the posters” (The
Times of India 2001).
More and more, women direct their protests against depictions in the
global media. In 1996, progressive Delhi women’s organizations filed
writ petitions in court, charging that satellite and cable television compa-
nies violated federal law prohibiting the “indecent representation of
women” (Oza 2001: 1072–73; see also Ghosh 1999a: 239 on other peti-
tions). Women’s groups allied with the BJP made similar protests. Pramilla
Nesargi, a BJP Member of Parliament (MP) affiliated with women’s groups,
criticized the government for allowing MTV into India, claiming
that the result had been a 100 percent increase in sex crimes as men who
watched MTV committed rapes and murders. “No woman,” she said,
“is safe in our India” as a consequence of foreign media. Due to foreign

media, she asserts, “eve-teasing is happening every day” (quoted by
Dalrymple 1998: 182).
While some progressive women’s groups that protested India’s 1996
staging of the Miss World pageant focused on how the pageant encour-
aged the entry of multinational corporations into India (Oza 2001: 1079),
they also critiqued the pageant as encouraging the commodification of
women, promoting the “sex trade” (ibid.: 1081), and encouraging sexual
harassment (Ghosh 1999a: 248). Progressive women’s organizations
charged that it was harmful for Indians to be admired for hosting a show
that they described as “almost pornographic” (Oza 2001: 1081). The
women’s organizations allied with the BJP focused, of course, on how
the pageant was a “show of obscenity” “against Indian culture” (ibid.:
1079). Pramilla Nesargi charged, for instance, that “when children see
Miss World they will always be wanting to see all women in swimwear
only” and there will consequently be a “100 percent increase in sex crime”
(quoted by Dalrymple 1998: 182).
Undoubtedly, sexual harassment and rape have long been one of the
primary mechanisms of male dominance in India, but the widespread
protest against the transnational media’s depiction of women by women
activists from both ends of the political spectrum is nonetheless impor-
tant evidence that suggests that cultural globalization often intensifies
women’s oppression.
Conclusion
Globalization has not changed structural realities in ways that improve
women’s position: Job opportunities have not much expanded for non-
élite women and men’s authority in the home remains the norm. Non-
élite men whose limited economic opportunities prevent them from
aspiring to celebrated cosmopolitan lifestyles by hitching their dreams to
the global economy continue to emphasize male privilege as one of the
few privileges available to them. As Appadurai argues, communities of
men who feel embattled are often attracted to fantasies of male domi-
nance that are prevalent in film industries (Appadurai 1996: 45). Films,
Appadurai argues, “reflect and refine gendered violence at home and in
the streets as young men (in particular) are swayed by the macho politics
of self-assertion in contexts where they are frequently denied real agency”

(Appadurai 1996: 45).
Men are attracted to newly-available cosmopolitan celebrations of male
power, privilege, and aggression precisely because they are consistent with
the existing gender hierarchies. Men find the newly-available cultural
meanings appealing because they can be layered on top of existing
gender hierarchies. Dreaming of monopolizing transnational mobility
that is newly valued in India gives men a fresh sense of their privilege as
men. The seemingly realistic portrayals of male strength in cosmopoli-
tan media heighten men’s attraction to the privileges that they already
enjoy, while foreign pornography offers seemingly exciting new dimen-
sions of male privilege. It is for these reasons that women on both ends
of the political spectrum often protest cultural globalization.
Transnational cultural flows sometimes depict new possibilities for
women. But because these new possibilities are inconsistent with struc-
tural opportunities in non-élite families and with the interests of non-
élite men, such men tend to resist the messages that celebrate new
possibilities (Chapter 4). But cosmopolitan cultural flows also provide
fresh celebrations of male dominance and aggression that non-élite men
enthusiastically embrace, because these celebrations are consistent with
existing interests and stable structural realities. Rather than destabilizing
the existing order, then, cultural globalization often merely provides new
cultural resources that already powerful people can use to further advance
their own interests.
As Connell argues, the “emerging global order” is not a “hotbed of
gender progressivism” (Connell 1998: 17). Rather, by challenging men’s
power, global forces often lead men to “reaffirm local gender orthodoxies
and hierarchies” (ibid.: 17, emphasis in original). It appears as well that
cultural globalization also gives men new ideas about how to act out
oppressive gender hierarchies.
Notes
01. See film theorist Laura Mulvey’s 1975 [1988] classic account of the “gaze”. Here, I
only discuss one aspect of the relatively complex gaze induced by Indian cinema.
Films often continue to contrast traditionally Indian heroines who should be pro-
tected from the gaze with the more shameless Westernized women who are legiti-
mately exposed to it. In addition, films also make male bodies the object of the gaze.
Thus, Mulvey’s classic account perhaps focuses too exclusively on gender identity
without recognizing the dynamics associated with national identity. In addition, she
perhaps focuses too much on the unidirectional aspect of the gaze. Nonetheless, the
cinematic encouragement of a controlling male gaze plays an important role in
the maintenance of male dominance in India (Derné 2000a Chapters 7, 8; Derné
and Jadwin 2000).
02. In 1991, half of those who identified a favorite heroine were attracted to her danc-
ing, body, or beauty. In 2001, about one-third of the men who identified a favorite
heroine similarly mentioned a heroine’s beauty or body when explaining what makes
them like their favorite heroines. In 2001, 21 men identified a favorite heroine
(while 11 men would not name a favorite). Of these, seven men mentioned their
attraction to their favorite’s dancing, body, or beauty. (On the 1991 data, see Derné
2000a: 148n. 3).
03. Puri’s interviews with élite middle class women in Delhi show that the harassment
that women face leads them to “distinguish between male roles as sexual aggressors
and protectors” (Puri 1999: 85). Films are one of the cultural products that push
men to take on these roles.
04. Those familiar with Hindi films will recognize these as tropes that are so common
that they hardly need documenting. Films that include honeymoons in Europe run
from Chandni (1989) through Chori Chori Chupke Chupke (2001). Films that refer-
ence Indian men’s business or education in Europe or North America run from Ram
Teri Ganga Maili (1985) and Maine Pyar Kiya (1989) through Dil To Pagal
Hai (1997), Hum Aapke Dil Mein Rehte Hain (1999), and Chori Chori Chupke Chupke
(2001), to name just a few.
05. This focus on how viewers come to see cultural presentations become more real
than actual social realities is, of course, emphasized by Baudrillard (1983) and other
recent social theorists.
06. He says, for instance, that he enjoys horror serials that he watches on cable televi-
sion. His favorite Bollywood films are what he calls “suspense” films like Kasoor,
Dar, Dhundh. One of his favorites—Kasoor—is one of the recent films I discuss
as lacking a true hero. Sanjay’s favorite hero is Shah Rukh Khan—and he especially
likes what he sees as the “negative role” that Shah Rukh played as a villain in
Anjaam.
07. Fewer men mention the ability to fight well as the reason they like particular heroes.
Although love stories were the biggest successes in the film world at the time, 50 percent
of the men whom I interviewed in 1991 identified excellent fighting as an important
reason for liking particular films or particular heroes. In 2001, this percentage de-
clined significantly—only one man mentioned the ability to fight as the reason a
Hindi film hero was his favorite, and several others referred to their attraction to Salman
Khan’s body, which is, of course, characterized by a powerful chest that allows him
to beat up villains. It is possible that this percentage has declined precisely because of
the new attraction to global heroes like Arnold Schwarzenegger: Those who prefer
fighting and killing films may be more attracted to foreign films than to mainstream
Hindi-film love stories, and, so, may be less likely to mention fighting-and-killing
Hindi-film-heroes. But in one way the decline appears a bit anomalous because men
continue to react enthusiastically in theatres when heroes beat up the villains.
08. For the first time in 2002, a thriller which lacked a hero (Raaz) became a genuine
success. The Indian media attributed the film’s success to the integration of hit
music into the formula (Vijayakar 2002c).
09. An example of the low-budget Hollywood film playing to good audiences at Dehra
Dun’s Krishna Palace was Yeh Kaisi Chahat (What Sort of Desire), a dubbed version
of Sexual Intent, an English-language film. Many adolescent men attended, largely
in the cheap seats, which were often more than half full.
10. About one-third of fan magazines include this advertising. Three of the 10 Hindi-
language fan magazines I systematically examined included such advertising, while
two of the six English-language Hindi film fan magazines that I systematically
examined included advertising for phone sex. One half-page ad in the English-
language magazine Showtime (March 2001) promised, for instance, that “lonely”,
“pretty girls” were “waiting for your call now”. On another line, the phone sex user
could hear “secret confessions from naughty girls”.
11. Most of the unmarried men whom I interviewed in Banaras in 1986 and 1987
indicated that they knew little about sex (Derné 2000a: 144). “I have not married,
so what can I say [about married life]?” one man asked me rhetorically. For other
discussions of young men’s limited information about sex in previous decades, see
also Kapur 1987; Sharma and Vanjani 1993: 36.
12. The scene was probably not intended to be provocative for Western audiences. But
in the context of the expectation of a woman existing for a man’s pleasure, the
audience enjoyed the titillation.
13. Women’s response to pornography is not unified. The affluent English-speaking
Delhi women whom Puri (1999: 123–27) interviewed enjoy watching “blue”
pictures on video and cable. Despite their pleasures, pornography may play a role
in inciting men’s public sexual aggression that these women find threatening and
injurious (Puri 1999: 75).
14. Liechty describes “tourists” as a “generic term used for Caucasian Westerners” (Liechty
2001: 46).
15. As Abraham notes, other studies showing the traumatic nature of women’s first
experience of intercourse suggest that they “had not expected penetration as part of
it” (Abraham 2001: 147, citing George 1997; see also Gandhi and Shah 1992: 62;
Kapur 1987; Sharma and Vanjani 1993: 39, 58n. 20.).
16. On Madhuri‘s popularity in the 1990s, see Derné 2000a: 130n. 14
17. This ad, or a similar ad, appeared in the majority of Hindi-language film fan maga-
zines that I examined (Chitralekha 2001, Filmi Pariyaan 2001, Rangbhumi April
2001).
18. Jain rightly sees the 1970s action film hero Amitabh Bachchan as a transitional
figure. He is not the “soft, smooth hero of the Hindi cinema’s ‘social’ melodrama.”
“Tall, angular, with a trademark deep voice,” Bachchan still “cannot be described as
muscular” in the same way as the “muscle-bound, singlet-wearing, body-building
film heroes of the post [economic] liberalisation period” (Jain 2001: 216, 220).
19. Side heroes refer to sidekicks and other associates of the featured hero. The names of
the actors who play these “side heroes” are not usually known by filmgoing audiences.
20. Four men said that they liked their favorite heroes’ bodies. Four men said that they
liked their favorite heroes’ dancing abilities. One man said that he liked his favorite
hero’s fighting ability. Only 25 men gave a reason for liking a favorite hero. (Three
men refused to name a favorite hero, saying that they liked American films. Three
men said they liked all heroes and could not single out any one. Three men gave
unclear reasoning when describing why a particular hero was their favorite. [For
instance, one man replied, “What can I say?” when asked why he liked Akshay
Kumar, who is, incidentally, famed for his muscled body]).
21. Of course, male strength has long been emphasized—but the new body type is
novel. Joseph Alter (1992: 57) shows, for instance, how wrestlers are at pains to
distinguish their bulky bodies from the muscled bodies of body builders and Hindi
film stars (see also Jain 2001: 206). As Jain shows, it is the wrestler image that has
had the most influence on earlier images of male strength (for example, Hanuman)
in religious iconography (Jain 2001: 206).
22. See Derné 2000a: 151; Kakar 1989: 33. Dasgupta and Hegde’s (1988: 211–12)
systematic sample of films from the 1970s and 1980s demonstrated that 70 percent
of Hindi films show “mistreatment” of women, which includes sexual harassment,
physical battery, assault, rape, and homicide (Dasgupta and Hegde 1998: 211–12).
23. Seven of the 10 Hindi-language fan magazine issues that I systematically examined
included such advertising. (Two of the magazines which did not have such advertis-
ing seemed to be mostly aimed at women.) By contrast, only one of the six English-
language Hindi film fan magazines that I examined included such advertising
(although another one of these had an advertisement for a fitness program for the
over-35 male).
24. The article refers to such harassment as “eve-teasing”, the Indo-English term which
Puri (1999: 87) rightly argues is better characterized as “sexual aggression”.
7 Conclusion
Since 1991, India has experienced rapid globalization. With the opening
up of the economy, transnational firms provided new opportunities, and
more production was geared to the global market. For the first time,
transnational consumer goods became widely available. As advertisers
and the global media tried to reach new markets, the media landscape
was radically transformed. Satellite television’s reach expanded exponen-
tially and foreign films became widely available for the first time.
While cultural globalization was largely driven by transnational agents,
local Indians played a role as well. Local Indians set up the network of
cable television operations; local theatre-owners chose to book foreign
films; and local filmmakers and producers of television serials made
indigenous products which were influenced by the newly-available
transnational media.
What have been the effects of globalization on the lives of common
Indians? How has globalization shaped gender and class dynamics in
India? What have we learned about the effects of globalization? How has
our understanding of the effects of globalization improved our theoreti-
cal understanding of culture?
Globalizing Gender Culture

Arjun Appadurai famously suggested that global movements of people
and media allow people to imagine a wider range of possible lives than
they ever did before (Appadurai 1996: 53). This book shows that a
wide range of Indians are attracted to new consumer possibilities. But it
turns out that for most ordinary Indian men, the exposure to alternative
CONCLUSION 201
gender arrangements has often only been a source of anxiety. Unable to

successfully aspire to the utopia of consumption celebrated in the global
media, ordinary middle class men remain attached to gender hierarchy
as one of the few privileges open to them. The global media’s celebration
of alternatives only leads these men to reiterate their attachment to local
gender arrangements.
It appears, moreover, that this local celebration of an oppressive
gender arrangement which is constructed as traditional is a common
response to the new possibilities and anxieties created by globalization.
Zimmer-Tamakoshi reports, for instance, that in Papua New Guinea,
the “nationalist” men who identify with broader notions of nation and
participate in a translocal economy “condemn women for striking out in
modern directions . . . that many have permitted themselves” (Zimmer-
Tamakoshi 1993: 61–62). Although they have embraced city living and
participation in a wider economy, these men celebrate traditional Papuan
women whom they construct as “chaste and selfless”, criticizing women
who live in cities as “sexually promiscuous”, “Westernized”, and “living
in selfish abundance” (ibid.: 1993: 61–62).
Aihwa Ong similarly focuses on how overseas Chinese men handle
the “anxiety engendered” by high divorce rates and the large number of
women in the paid labor force by developing “twinned ideologies of
feminine domesticity and masculine public life” (Ong 1999: 152). Over-
seas Chinese, lacking a territorially-based nationality, yet influenced by
transnational media produced by ethnic Chinese, identify “family and
female self sacrifice” as “symbols of national unity” (ibid.: 154, 162).
Indian men in Fiji (who are the descendants of indentured laborers
and make up more than 40 percent of the population) are attracted to
the transnational media and Western culture and dream of lives abroad.
But they are similarly uneasy about the effects of globalization on Indian
gender arrangements and, therefore, focus on the perpetuation of these
arrangements as an essential aspect of Indianness. Fiji Indian men, whom
I interviewed in 1998 (see Derné 2002), also seem to associate their own
Indianness with women’s adherence to oppressive gender roles. One 50-
year-old Fiji Indian told me, “If we have women’s rights [the woman]
will be on top and the man will be on the bottom. [In] the Indian
community the woman must obey her husband.” This man wanted
male dominance and saw it as a distinctive trait of Indian culture. A
joke published in Pacific Quest, a college yearbook of the Fiji Indian
Students Association similarly associated excessive Westernization with a

reversal of the usual gender hierarchy under the title “Declaration of
Indepencence [sic].” The joke focuses on a couple who “emigrated to
the United States”—a prime symbol of modernity. The joke continues
that they emigrated:
with one dream—to become citizens. [Through] much red tape and years of
study they were patient and hopeful. Then one day the husband rushed into
the kitchen with the long awaited good news, ‘Lizzy!’ he shouted. ‘At last we
are Americans!’ ‘Fine,’ replied the wife, tying her apron around him. ‘Now
you wash the dishes (see Derné 2002: 160).’
As in India, then, Fiji Indian men, wear Western clothes, watch Xena,
and dream of living in the USA, but to remain Indian they focus on their
attraction to traditionally modest women who faithfully meet religious
and family duties. A man only abandons his fundamental Indianness if
his wife makes him do the dishes.
The last chapter suggests, moreover, that the messages from the
transnational media that ordinary men embrace are those that can be
layered on top of existing gender hierarchies. Men are not influenced by
the transnational media’s depictions of women’s independence, but
they enthusiastically enjoy transnational celebrations of male violence.
Attracted to the idea of global movement, men focus on denying such
movements to women. Some find new means of male dominance in
newly available foreign pornography. Rather than destabilizing the
existing order, cultural globalization usually ends up providing new
cultural resources that already powerful men can use to further advance
their own interests.
This may be why so many women have protested globalization—
they believe that gender images in the transnational media only further
their oppression. Mark Liechty (2001) describes how women in
Kathmandu, Nepal, believe that globalization harms women. One woman
described how new ideologies of freedom of choice, which have been
promoted by a new consumer culture, lead women to feel more unsafe
on the street. One woman told Liechty (2001: 35) that she feels unsafe
on the street because boys now think that they are “free” and, so, “think
that to do anything is OK. That’s why the girls have to look out for
ourselves.” For many women, the spread of global culture appears to be
the spread of intensified male dominance.
CONCLUSION 203
Rethinking Class
Ethnographies of class identity in South Asia in the face of globalization
suggest the need to rethink class in order to emphasize that it operates on
a global field, is more and more rooted in consumption, and is associ-
ated with particular gender arrangements. Most theories of class followed
Marx in focusing on a person’s position in a productive system. But my
study, along with other recent ethnographic studies of class in South
Asia (Liechty 2003; Dickey 2002; and Saavala 2001) and Southeast Asia
(Chin 1998), suggests the importance of the Weberian focus on how
class identity is made through cultural practices associated with consump-
tion that middle classes use to define themselves in opposition to class
others. This study compares India’s transnational middle class that aspires
to lifestyles of the consuming classes in rich countries and a locally-
oriented Indian middle class which is still limited by locally-oriented
employment and which defines itself as distinctively Indian.
Middle class efforts to define itself in opposition to class ‘others’ now
takes place on a global field. Affluent Indians whose opportunities for
consumption and employment are now shaped by global markets
increasingly constitute a transnational middle class that holds the space
between the poor in India and the consuming classes in North America
and Europe. Because the locally-oriented middle class is still limited by
local markets for consumption and employment, it focuses on a local
field, defining itself in opposition to the affluent Indians who appear
excessively influenced by foreign culture and poor Indians who live on
day-to-day earnings.
Middle class identity is more and more rooted in consumption.
Certainly, the economic possibilities for consumption are rooted in
employment, but the relation of middle class jobs to the production
process is ambiguous. Uneasy about its status, middle class people use
consumption to advertise taste and discernment. The transnational middle
class embraces cosmopolitan fashion to identify itself with the consum-
ing élites in the rich countries. The locally-oriented Indian middle class
embraces cosmopolitan consumption like men’s fashion, and consumer
goods like televisions, to distinguish itself from the Indian poor, but it
identifies itself in opposition to the vulgar and excessive consumerism
that it associates with affluent Indians, whom it connects with the intru-
sion of foreign cultures.
Distinctive middle class identities are also increasingly rooted in

gender arrangements. Transnational middle class Indians highlight their
cosmopolitanism by embracing cosmopolitan gender arrangements that
ease women’s restrictions outside the home, allowing women freedom
of consumption. But locally-oriented middle class Indians bolster their
Indian identity by rejecting cosmopolitan challenges to local gender
arrangements. Many have protested cosmopolitan practices, such as
Valentine’s Day celebrations and beauty pageants, which they associate
with an unwanted foreign influence in India.
The divergent cultural practices of the middle classes in India reflect
divergent structural positions in the global economy. Affluent Indians
have been influenced by transnational capitalists’ efforts to incite their
consumption. Given new opportunities by globalization and reacting to
new media, affluent Indians have come to see themselves as operating
on a global stage. But since the lives of ordinary middle class Indians
have not been greatly transformed, they continue to work to justify their
status within Indian horizons.
Chin’s (1998) ethnography of the Malaysian middle class, Dickey’s
(2002) ethnography of the Tamil middle class, Saavala’s (2001) ethnogra-
phy of the Telugu middle class, and Liechty’s (2003) ethnography of the
Kathmandu middle class all demonstrate this focus on defining identity
in opposition to class ‘others’ through consuming cosmopolitan goods
and embracing certain gender arrangements. It is significant that this
emerging rethinking of class analysis came out of ethnographic data which
focuses on cultural meanings. None of these accounts appeared to be lim-
ited by theoretical assumptions rooted in traditional Marxist analysis. These
accounts, along with my own, suggest that to understand class dynamics
today, we must direct attention to global dynamics and the importance of
constructing identity in opposition to class ‘others’ by advertising discern-
ment through consumption and embracing particular gender relations.
Globalization on the Ground

As markets opened up and transnational media celebrated consumer
lifestyles, many Indians—of diverse classes—experienced a rising desire
for consumer goods. But, generally, the effects of globalization have
varied by class. Even when it came to consumerism, affluent Indians
CONCLUSION 205
aspired to consumer durables, including automobiles, and wanted fash-

ion produced by the transnational media. Ordinary middle class Indians
aspired to new styles of fashion, but usually relied on local tailors to
produce them. While ordinary middle class Indians might have aspired
to some global products such as Pepsi, they generally lacked the means
to pursue the utopia of consumption.
Indeed, the effects of globalization are largely class-specific. While
affluent Indians may be responding to globalization by altering their
gender arrangements and embracing a more cosmopolitan identity,
ordinary middle class Indian men respond by reemphasizing existing
gender arrangements and re-highlighting their non-cosmopolitan, local
Indian identity.
The divergent effects of globalization on class lines is most clearly
seen when it comes to transformations in gender and family. While Indi-
ans of diverse classes now see global media products, new celebrations of
women’s independence and young couples’ independence from parents
have affected affluent Indians’ imagination of gender and family, but
have had much less effect on ordinary middle class Indians. For the
affluent, challenges to arranged marriages and joint-family living intro-
duced by the transnational media make sense because new institutional
possibilities allow more young couples to support themselves. Given the
new focus on consumption, affluent women now usually move freely
outside the home to shop and pursue a fashionable appearance. Some
affluent women work in the paid labor force when they have the skills to
earn good incomes. But because their institutional possibilities have not
greatly changed, ordinary men’s ideas about family have been unaffected
by newly-available cable television and Hollywood movies (which they
watch in large numbers). Similar percentages of ordinary Indian men
want to have their marriages arranged by their parents and want women
to toil exclusively within the home.
The effect of globalization on identity is similarly class-specific. Some
theorists have argued that with globalization, cosmopolitan identities
are increasingly replacing identities rooted in class or nation. Affluent
Indians with new opportunities that allow them to enter the utopia of
consumption have, indeed, come to see themselves more in terms of
cosmopolitan consumption. They now see themselves as having more in
common with other global consumers around the world than they do
with ordinary Indians.
But ordinary middle class men whose opportunities for employment

and consumption have not greatly changed continue to embrace a strong
Indian identity. The celebration of consumerism that they cannot dream
of reaching leads many men to find status, power, and privilege in exist-
ing gender arrangements that they see as distinctively Indian. For many
ordinary men, globalization appears to introduce anxieties and threats
that lead them to emphasize an Indian identity that is rooted in particu-
lar gender arrangements.
This, of course, suggests that the effects of globalization vary by gen-
der. Certainly, in affluent circles, new thinking about marriage, family,
and gender arrangements appears to be affecting both men and women.
But among ordinary middle class Indians, men are more in control
of global possibilities. Ordinary middle class men have been able to
embrace fashion and limited consumerism, while anxieties caused by
globalization have led them to reemphasize existing gender arrangements
that they see as distinctively Indian.
Thus, women continue to wear local fashion to cinema halls, while
men sport cosmopolitan fashions. Ordinary middle class women are
more often on the receiving end of new global ideas. Men who watch
foreign pornography and foreign action films bring new desires into
the home that may intensify women’s subordination. Some men, indeed,
try to keep women from watching the transnational media that they
believe will encourage women’s independence. Especially in ordinary
middle class circles, globalization may be increasing possibilities and
opportunities for men, while intensifying the limitations that women
face.
Perhaps the most important contribution of this study is to suggest
that the fundamental effects of globalization come more through the
transformation of economic structures than from the introduction of
new cultural possibilities. The Indian media had long highlighted the
desirability of consumerism, but until the Indian economy opened up to
cosmopolitan products, this media celebration had little effect on Indian
desires. Only when globalization changed the structural possibilities did
consumerism take root. The indigenous Indian media had long celebrated
independence from family, but until economic globalization offered new
possibilities for educated, English-speaking men with skills that were
valued in the global economy, Indians tended to reject media celebration
of independence as mere fantasy.
CONCLUSION 207
While cultural globalization makes affluent Indians and ordinary

middle class Indians aware of cosmopolitan family and gender arrange-
ments, globalization’s transformation of the objective possibilities of
affluent Indians is what has led the affluent to be influenced by new
imaginations. Ordinary middle class Indians who lack new job prospects
which would support independence from parents or new consumptive
possibilities for women are not influenced by alternative gender arrange-
ments. Affluent Indians and ordinary middle class Indians are exposed
to celebrations of cosmopolitanism, but the new possibilities that
economic globalization has made available to affluent Indians has led
them to identify more with cosmopolitan consumers around the world,
while ordinary middle class Indians, for whom cosmopolitan possibili-
ties remain limited, continue to emphasize their Indian identity.
Indeed, these identities reflect different structural positions in the
economy: affluent Indians are situated in global employment markets,
while ordinary middle class Indians remain limited to local employment
markets. A locally-oriented class identity reflects ordinary middle class
Indians’ objective situation, while a globally-oriented class identity
reflects the objective location of affluent Indians.
In short, the primary changes introduced by globalization follow not
from cultural globalization—new media and ideas—but from economic
globalization—the new products and employment opportunities that
have flowed into India from abroad. The effect of purely cultural global-
ization—the flow of new media into India from abroad—has been
limited. Indians have only accepted new imaginations introduced by
cultural globalization when actual possibilities have changed in ways that
make these new imaginations workable, or when the new imaginations
can be layered on top of existing social arrangements.
Implications for Culture Theory

Ordinary middle class Indians’ response to cultural globalization con-
firms much of what we know about the dynamics of media reception. As
is well known, social location shapes media reception (Derné 2000a; Press
1991; Shively 1992). Thus, affluent Indians are more likely to be attracted
to global celebrations of alternative gender arrangements and cosmopoli-
tan identities than ordinary middle class Indians. The study similarly
confirms that broadbased social discourses have an important effect on
popular-culture reception (see Derné 2000a: 172–73; Press 1994; Shively
1992: 727; Walters 1995). Ordinary middle class Indian men are
exposed to a wide range of discourses cautioning against love marriages
and, therefore, tend to reject cinematic celebrations of love marriages.
Moving in more cosmopolitan circles with access to more cosmopolitan
media, affluent Indians are more likely to be attracted to celebrations of
love matches. The study confirms that broad cultural judgments about
the respectability of cultural products influence viewer reception (Ang
1985; Derné 2000a: 173; Press 1994). Foreign films’ male violence or
sexual titillation may have more influence on ordinary middle class men
because foreign films are more respected than the Hindi films which have
long celebrated male violence and engaged in sexual titillation.
But the primary contribution of this study is to emphasize that shared
culture arises more from a shared structural situation than from shared
cultural inculcation. Appadurai is wrong to suggest that because of
transnational cultural flows, culture has become “less what Pierre Bourdieu
would have called a habitus (a tacit realm of reproducible practices
and dispositions) and more an arena for conscious choice, justification,
and representation” (Appadurai 1996: 44). While cultural globalization
made people aware of a “wider set of possible lives” (ibid.: 52), because
the social structures most Indians faced remained relatively stable,
most Indians did not consider experimenting with new lifestyles.
The transformations in culture that have accompanied globalization
have been driven more by altered structural possibilities than by new
cultural imaginations.
Chapter 2 reviews how recent social theory sees culture and structure
as making each other up. For Shweder, “psyche and culture, person
and context . . . live together, require each other, and dynamically, dialec-
tically and jointly make each other up” (Shweder 1991: 73). Bourdieu
(1992) sees structures as having a material existence that is also internal-
ized in the thought and judgments of individuals. Giddens (1984) and
Fligstein (2001) see cultural rules as making up social institutions. Collins’
(1981) insight that all social structures are made up of the actions of
individuals is, of course, correct. But recent theories emphasizing how
structure and culture make each other up have sidestepped the problem
of assigning causal priority.
CONCLUSION 209
Ann Swidler (2001), and Claudia Strauss and Naomi Quinn (1997)
are among those who have addressed the relative causal influence of cul-
ture (shared meanings) and structure (objective situations). While Strauss
and Quinn (1997) argue that it is ideas about love that shape institutions
of marriage, Swidler concludes that institutions of marriage create situa-
tions that generate ideas about love. Thus, for Swidler the social struc-
ture of marriage in the USA is what makes the idea of a lasting love for a
special person plausible. It is not, Strauss and Quinn argue, that this idea
of love structures the institution of marriage. For Swidler, Americans
recognize that their cultural view of love as permanent and aimed at a
special person “poorly describes the uncertainty, ambiguity and imper-
manence of their own experiences of love,” but they continually return
to this cultural view because it fits with the strategies the Americans
build around the institution of marriage, which is certain, unambiguous
and lasting. This book supports Swidler’s conclusion that cultural
“consistencies across individuals come less from common inculcation by
cultural authorities than from the common dilemmas institutional life
poses in a given society” (Swidler 2001: 176).
Thus, the imaginative possibilities introduced by cultural globaliza-
tion have not changed ordinary middle class Indian men’s orientation to
consumerism, marriage and family. Ordinary middle class men watch
global media celebrations of consumerism, but their economic opportu-
nities have not changed in ways that support thoroughgoing consumer
orientation. They watch the global media celebrating individualism
but do not fully embrace individualism because it is inconsistent with
their need for family support in the early years of adulthood. They watch
media celebrations of cosmopolitanism, but because their lives remain
restricted to local employment markets and local circles, their identity
remains firmly Indian.
They watch and enjoy media celebrations of love marriages, but reject
these celebrations as unrealistic guides to action. Given their limited
economic opportunities, they need family support to their marriages.
The family structures that limit interactions between unmarried men
and women similarly make celebrations of love as a basis of marriage
seem impossible.
Yet, ordinary middle class men are, in fact, attracted to new global
celebrations of male dominance precisely because these new cultural mean-
ings are consistent with their attachment to existing gender arrangements
that they like. The fact that ordinary middle class men have not been
influenced by new meanings that are inconsistent with existing struc-
tural realities highlights that the shared culture of ordinary middle class
men comes more from shared institutional lives than from shared indoc-
trination by a common culture.
Likewise, the changes that have been introduced by globalization
come more from changed structural realities than from newly-available
cultural resources. The global media certainly celebrates consumerism,
but the opening of markets which brought new products to India has
been more important in driving the growth of consumerism in Indian
society. In earlier decades, Indian films celebrated cosmopolitan prod-
ucts, but because they were unavailable, this cultural highlighting
did not give rise to consumerism in many Indians. Only today, with
global products being widely available, has consumerism spread. Global
media celebrations of consumerism have not had as big an effect on
ordinary middle class Indians, whose opportunities have not greatly
changed, as they have with regard to affluent Indians. The affluent Indi-
ans’ new opportunities for income—rather than new imaginations of
consumption—have been the primary reason for their greater attraction
to consumerism.
Similarly, Indians with skills and connections that allow them to tie
into global employment markets have embraced new gender arrange-
ments more because of the opportunities brought about by economic
globalization than the new imaginations tied to transnational media flows.
Affluent Indians embrace women’s greater public role as consumers
more because of new possibilities for consumption than because of new
celebrations of women’s independence. Affluent Indians sometimes
embrace women’s paid labor more because they have opportunities that
can help usher in the utopia of consumption than because of global
media presentations of women in the public sphere.
Some affluent Indians embrace love marriages and nuclear-family liv-
ing more because of new opportunities for economic independence than
because of newly-available cultural imaginations. Hindi films have, of
course, for years celebrated love marriages without causing many Indians
to depart from arranged marriages. Affluent Indians come to embrace
cosmopolitan identities over Indianness more because new opportuni-
ties actually locate them in the global arena than because of media cel-
ebrations of cosmopolitanism.
CONCLUSION 211
The local media have long celebrated consumerism, women’s inde-

pendence, and love marriages. Only when their structural opportunities
changed did affluent Indians embrace these possibilities. Ordinary middle
class Indians are exposed to the same global celebrations of consumer-
ism, women’s public freedoms, love marriages, and cosmopolitan iden-
tity. But because globalization has not changed ordinary middle class
Indians’ structural realities, they have tended to reject the meanings of
cultural globalization.
The divergent cultural practices of ordinary middle class Indians and
transnational middle class Indians reflect structural realities more than
cultural choices. Affluent Indians, who are, in fact, situated on a global
stage, constitute a transnational middle class oriented toward cosmo-
politan consumption which locates itself between the Indian poor and
the consuming classes in Europe and North America. Ordinary middle
class Indians embrace Indianness and define themselves in opposition to
both the Indian poor and affluent Indians precisely because their field of
employment and consumption is, in fact, rooted in India. In that sense,
class identity, too, is rooted more in structural realities than in cultural
imaginations.
A fit tends to develop between social structures, cultural orientations,
and psychic tendencies. The divergent responses of ordinary middle
class Indians and Indians with the skills and connections that have
allowed them to hitch their dreams to the global economy highlight
that structural realities are the cornerstone of this relationship and are
fundamental in shaping cultural imaginations.
Epilogue
The Effects of Economic and
Cultural Changes, 2001–07
In the fall of 2007, as this book was going to press, I was in Dehra Dun
doing interviews to understand Indians’ conceptions of wellbeing. These
interviews were not aimed at replicating my 1991 and 2001 studies, but
at the time of this writing, I had interviewed 17 men aged 18–26—a
group that parallels the bulk of film-goers whom I had interviewed in
1991 and 2001. With the aim of reflecting on the changes since 2001, I
also did at least one participant-observation session in five of the seven
theatres operating in Dehra Dun in 2007. In this epilogue, I consider
the ongoing impact of the economic and cultural changes in Dehra Dun.
This consideration of subsequent changes and continuities, 2001–07
confirms the primary significance of structural factors in rooting culture,
class, and gender.
The largest structural change between 2001 and 2007 is the improv-
ing economic position of the local middle class in Dehra Dun. At the
national level, India has experienced robust economic growth and a surg-
ing stock market. Credit, nearly impossible for the local middle class to
obtain in 1991, has greatly expanded. At the local level, in 2001 Dehra
Dun was made the (temporary) capital of the newly-formed state of
Uttarakhand, introducing more economic prosperity and growth into
the region. The effect of this economic growth has been to improve
the situation of the local middle class. With credit available, the age
of homeownership has declined from the higher 40s to the mid-30s
(Pioneer 2007a), and purchases of motorcycles and even automobiles has
EPILOGUE 213
entered the possibilities of the local middle class. Thus, local middle
class people may feel increasingly secure.
For instance, my Dehra Dun research assistant, now working for a
satellite news channel, is comfortable with his position in the Indian
economy. Of the men whom I interviewed who had jobs tied to the local
economy, only one retired individual expressed a lack of wellbeing
stemming from his economic position (and his discontent stemmed more,
I think, from having gifted his wealth to an ungrateful family).
But the position of the poor has not changed much. Citing govern-
ment reports, Uttarakhand’s Chief Minister B.C. Khanduri (2007) says
that for the bottom 30 percent of the population, there has been no
perceptible improvement in cereal and nutrient intake in both urban
and rural areas. The improvement of middle class status has reached
relatively few. Only 14 percent of India’s population earns more than
Rs 8,000 per month (Indian Express 2007a). Only 24 people in 1,000
have personal computers and fewer than three in 1,000 have a broad-
band connection (Newsweek 2007). Especially significant is that infra-
structural improvements have not reached many poor and rural Indians:
40 percent of India’s population still lacks access to electricity (Indian
Express 2007b: 1) and two-thirds still lack access to toilets (Aiyar 2007).
It appears to me that one effect of the improving position of the local
middle class in India has been an acceleration of the sidelining of the
producing classes in the cultural imagination of India. With the improv-
ing condition of the local middle class, theatre prices continue to in-
crease and mainstream, big-money Hindi films increasingly present
the situation of the more affluent classes and aim at audiences of more
affluent Indians, especially in the metropoles and the diaspora. In Dehra
Dun, audiences arrive on motorcycles or cars to openings of big-budget
films like Om Shanti Om, sometimes paying up to Rs 1,000 for a black
market ticket. Students at prestigious academies, often arriving on
motorcycles, are the main audiences for youth-oriented films such as
Goal and Jab We Met.
There is less and less in the Hindi film world for less affluent Indians:
while the Orient theatre has reopened, it has not been very successful
attracting audiences to its main fare of low-budget Hollywood films
dubbed in Hindi or low-budget Hindi films. Kanak theatre, with a bud-
get price of Rs 20, was most successful in attracting poor filmgoers
by showing low-budget old-style masala films (for example, Jang) or
revivals of Amitabh Bachchan classics (for example, Sholay). The Sunday

afternoon all-male audience that I observed watching the low-budget
Mithun-starrer Jang still escaped the realities of day-to-day life: laughing
at humor, cheering at fights, whistling as the heroine was tied up, clap-
ping as women beat up men and, as they were beaten up, laughing
and talking at onscreen banter, especially as an onscreen speaker took
someone else down—participation that I rarely observed at films cater-
ing to middle class Indians or aspiring students. Nonetheless, poor or
laboring Indians are increasingly absent in theatres—both on and off the
screen—especially at screenings of the most popular Bollywood films.
Pankaj Mishra (2006: 175) rightly observes that “small town audi-
ences with their cut-price tickets and queues of eager young fans don’t
matter as much as they used to” now that “bit profits come from . . .
multiplexes of the big cities . . . and the NRI circuit.” Previously, Hindi
films had to appeal to a broad, diverse audience (see Derné 2000a:
45–49) and filmmakers tried to reach the “masses” and the “classes”
simultaneously (Ghai 1991: 6). Today, films appeal to narrower segments,
and the number of cinema halls is declining (Indian Express 2007c).1
The declining breadth of Bollywood films’ appeal means there is one less
thing to integrate less affluent Indians into the broader culture. With the
improving position of the local middle class, the producing classes are
less apparent in Hindi films and in Hindi film audiences, accelerating
their marginalization in the popular imagination, which I described in
chapter 3.
Nor has there been much improvement in the structural conditions
that disadvantage women in India. Indian women’s participation in the
labor force remains low at just 36 percent, compared to 84 percent of
men. Thus, the World Economic Forum ranks India as one of the 10
worst countries in the world in terms of the gender gap in economic
participation and opportunity (Ramasubbu 2007). A UN agency reports
that because of prenatal sex selection and aborting of female fetuses, the
sex ratio increasingly favors men: in 2001, 108 boys were born per 100
girls; in 2007, 120 boys were born per 100 girls—a problem that is worse
in the urban areas (Pioneer 2007b).
As a result, perhaps, I did not observe very much that suggested
substantial changes in gender arrangements between 2001 and 2007.
Systematic counts in markets showed roughly 10 times as many men
as women in public places, and that roughly 10 times as many women
EPILOGUE 215
wear saris and salwar-kameezes rather than jeans and pants (although
jeans and pants are now prevalent at some cinema hall screenings). A
local middle- and upper-middle class housewarming party I attended
had an exclusively male guest list and was gender-segregated: women
were inside the home, while men remained outside, eating snacks, in a
tented enclosure—a space not one woman entered during my several
hours there. I heard preachers in gurudwaras railing against “micro-minis”
and jeans for young women. While there are many women in the bal-
cony seats in cinema halls that screen movies aimed at attracting large
numbers of dating couples (for example, Jab We Met) or attracting middle
class audiences (for example, Om Shanti Om), cheaper seats are still over-
whelmingly filled with men. While I observed more young couples
dating in cinema halls, and two of the men whom I interviewed (as of
this date) were in, or had been in, a dating relationship with a woman,
more often young people were having their marriages arranged.
The largely working class audience at the Kanak theatre still responded
enthusiastically to male violence, whistling as a heroine was tied up, or
clapping as women were slapped or a villain displayed a revealing photo
that he was using to blackmail a woman. More than 150 cases of eve-
teasing—public sexual harassment of and threats to women—are reported
each month in Dehra Dun, and few of the perpetrators are brought to
justice (Shukla 2007). While all the 52 men—whom I approached in
public places or workplaces—agreed to be interviewed, only nine of the
18 women I asked were willing to be interviewed, perhaps reflecting the
continuing threat to their reputation that could arise from being seen
with unrelated men, a lack of ease in interacting with unrelated men
due to often segregated schools and workplaces, and/or the continuing
pressure of women’s disproportionate housework responsibilities.
Finally, perhaps because economic opportunities for children of the
local middle class remain uncertain (even as the economic position of
those with local middle class jobs improve), and because joint-family
living remains common, the sociocentric cultural orientation that I
described in chapter 2 appears firm. As of this date (25 November 2007),
I have interviewed 17 men aged 18–26 years in connection with a study
of Indian conceptions of wellbeing. Eleven of them were raised largely in
families that included more than one couple of their parents’ generation,
or older. Five men in this age group were laborers or in jobs below local
middle class status (for example, jaggery-seller, cook). While the other
12 men in this age group were of local middle class background, a large
number were students who had not yet themselves obtained middle class
jobs. Perhaps because of their common joint-family background and the
continued existence of economic insecurity, all but two of these men
expressed views consistent with a cultural focus on group over individual
that I described in chapter 2.2
Thus, a 19-year-old male Punjabi student, living in Dehra Dun for
his studies, speaks English well, sports cosmopolitan fashion, and rides a
motorcycle. Although embracing a consumer lifestyle, his discussion of
wellbeing shows a strong sociocentric focus on others: when I asked him
his purpose in life, he described his motto as to “enjoy living for others.
Even while you do your own work, the taste in doing another person’s
work is the best taste.” Snapping his fingers, he described how he imme-
diately helps out his friends, even if they called him at 2 am. Growing up
in a joint family that included his parents and his grandparents, and
describing his family as facing economic insecurity despite his prosper-
ity, this young man was living with the family and economic structures
that support a sociocentric cultural focus, a connection I described in
chapter 2.
A 21-year-old working in Dehra Dun as a news reporter and pursu-
ing a college degree, hails from a large family that he describes as fully
joint. While he takes pride in his news reporting—and especially aims
to combat premodern superstitions—his main purpose, he says, is to
always help others: “I should never do any work that causes unhappiness
to anyone. Any work I do should be selfless. I am not concerned about
my own happiness. But whatever I am doing must deliver happiness to
the person standing next to me.”
An 18-year-old Scheduled Caste student from a large joint family with
30 members has come to Dehra Dun to study. While he describes the
recognition of his personal academic achievement at an assembly as a
source of wellbeing, his main cultural orientation is clearly sociocentric:
when I ask him about his aim in life, he says that it would be easy to
“enjoy the money sent by the parents, to be self-centered, and think about
myself. But real happiness lies in fulfilling the dreams of my parents.”
An 18-year-old who sells jaggery outside a theatre came to Dehra
Dun at the age of 13, having only passed the 5th standard. His orienta-
tion to wellbeing also focuses on society rather than the self. When I ask
him what wellbeing means, he says that he is only happy if everyone is
EPILOGUE 217
happy. “When people talk well to each other, I gain happiness,” he says.
He describes the festival period as good for sales, but still connects his
happiness during this period to the joys of others: “A festival is associated
with being happy with each other and greeting the customers with cheer.
This leads me to experience happiness.”
A 22-year-old student, in Dehra Dun for studies, lives in such a large
joint family that he has to pause to count its members on his fingers. He
describes watching Bollywood films as his hobby, yet doesn’t focus on
individualistic joys, saying that “the meaning of wellbeing for me is to
see my parents happy and make them happy because they’ve done a lot
of things for me until now.” Continuities in structures of family living
and economic opportunity militate against fundamental change in the
sociocentric orientation I described in chapter 2.
The Hindustan Times calls Dehra Dun one of India’s “new boom towns”
(Parashar 2007). The seat of the state capital and possessing élite educa-
tional institutions, Dehra Dun has experienced more economic prosper-
ity than other cities, rising with India’s economic growth. Still, even in
this city, placed well to benefit from globalization and India’s economic
growth, there are nonetheless significant continuities in the cultural
orientation and gender culture of the young laborers and local middle
class men whom I interviewed in the fall of 2007—continuities rooted
in persistent economic and family structures that include gender arrange-
ments that disadvantage women.
This consideration of changes in Dehra Dun (2001–07) confirms
this book’s focus on how changes only follow from globalization if social
structures are transformed. The improving structural position of the lo-
cal middle class has accelerated the cultural sidelining of the producing
classes described in chapter 3, while perhaps decreasing some of the ten-
sion in local middle class men described in chapter 4. But the main
feature I observed in 2007 was cultural continuity rooted in persistent
structural realities. Thus, women’s limited economic opportunities,
coupled with the static condition of the poor and the continuing eco-
nomic uncertainty of the children of the local middle class, contribute
to men’s embrace of a culture of male dominance despite contrary mes-
sages in the global media. Moreover, as long as economic opportunities
remain limited and joint-family structures remain solid, the cultural
orientation of most Indian men remains sociocentric, despite new media
that celebrate individualism.
Notes
01. While the number of cinema halls in Dehra Dun was stable between 1991 and 2007,
the population has grown from about 2,00,000 to about 6,00,000 (Parashar 2007).
02. The two who did not express a sociocentric orientation also didn’t express a clear
individualistic orientation. The interviews were not designed to capture the person’s
cultural orientation.
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Index
A films. See Pornographic films about perceived changes in gender

Abraham, Leena, 29, 66, 135–37, arrangements, 69–70, 73,
158–59n4, 159n5, 185, 187–88 148–49, 152–58, 200–02
Advertising, 33, 38, 39, 93, 102, Appadurai, Arjun, 11, 17, 19–21, 26,
104–06, 185 29, 195–96, 200, 208
and normalization of élite experience, Arranged marriages
38–40, 81, 92–97 and collectivist framework for
and consumerism, 27, 105–06, 115, understanding action, 80
165 and male dominance, 69
and fashion, 105–06, 115 as institution or social structure,
and female beauty, 102, 189–90 62, 63
and male violence, 193–94 attitudes toward, 9, 66–68, 72–76,
and movement, 124n10 86, 111–12, 134–36, 138, 153
Advertisements in fan magazines, 100, class and, 66–68
124n10, 125n13, 140, 193–94, heroines preference for, 147–48
198n10, 199n23 in fan magazines, 138
Advice columns in fan magazines, 138, perceived threat from media, 153
159n9 prevalence of, 111–12
Affect. See Emotion See also Love marriages
Affluent in India. See Élites in India
Age of respondents, 37 BBC, 32
Alley McBeal, 103, 115 Bachchan, Amitabh, 94, 96, 142, 149,
Attitudes toward, 115 198n18
Alter, Joseph, 199n21 Bajaj, 31, 39, 104–05
Amar Chitra Katha, 190–92 Banaras, 7–8
Angry Young Man Hero, 94, 98, 180 Bangalore, 65, 153
Anxieties: Barbie Dolls, 7, 9, 25, 96
about arranged marriages, 138–39 Baudrillard, Jean, 25–26, 197n5
about economy, 66 Beauty
about globalization, 69–70, 148–49, Transnational standards of, 103–05,
157–58, 200–02 111, 113, 175, 188–94
about joint-family living, 139 Cosmetics, etc., 101–02, 111, 189–90
INDEX 233
See also Bodies, Heroes, Heroines, Chori Chori Chupke Chupke [CCCC],
Fashion 53n2, 56n32, 95, 97, 107–10,
Beauty Pageants, 93, 103–04, 153–54, 125n12, 125n21, 127, 132, 134,
160n16, 188 139, 141–42, 144–45, 169,
Bellah, Robert, 75, 77 177–78, 180–81, 186, 188
Benetton, 7, 44, 100 Chin, Chrisine, 102, 109, 126–27n28,
Berreman, Gerald D., 42 204
Beynon, John, 26, 27 China, 201
Bharatiya Janata Party (BJP), 10, 34, Cinema halls, 47
153, 154, 161n24, 194–95 Class, 38–47, 90–158, 203–04, 212–14
Bijapurkar, Rama, 104 and family, 66–68
Bodies, 101–02, 175, 188–94 and film preferences, 50, 55n27
changes in ideal male body, in films, 93–97
190–94 and globalization, 16, 18, 25–26, 28,
changes in ideal female body, 64–66, 90–123, 203–04, 207–08
101–02, 104, 188–90 in India, 34, 38–47
of wrestlers, 199n21 defined by consumption, 18, 92–99,
thin female body and women’s 99–105, 119–20, 123, 203–04
vulnerability, 190 defined transnationally, 18, 97–99,
strong male body and male 120–23, 203–04
dominance, 190–94 defined by gender, 18, 105–113,
working out, dieting, etc., 101–02, 120–23, 127–29, 133–39,
111, 188–90. 203–04
See also gaze, Sexy scenes defined by media, 123
Bold and the Beautiful, 33, 113, 140, defined by structural position, 122,
153 128–29, 203–04
Broacha, Cyrus, 112 locals’ understandings of, 44–46
Bourdieu, Pierre, 17, 61, 81, 208 of respondents, 43–47
Butcher, Melissa, 112, 138, 152 sidelining of poor in popular
imagination, 38–40, 81, 92–97,
CNN 7, 21 213–14
Cable Television theories of, 18, 118–24
See Satellite Television See Transnational Middle Class,
Capitalism, 24–25, 27, 31–32, 88n3, Locally-oriented Middle Class
99, 105–06, 118 Clifford, James, 24
See also Multinational Corporations Clinton, Bill, 24
Carey, Mariah, 8, 189 Clothes. See Fashion
Caste, 78 Coca Cola, 31, 165
Castells, Manuel, 23–24 Collectivism
Chakraborty, Mithun, 53n3, 124n7, and emotions, 81–84
132, 184 and family structure, 79–80
Chan, Jackie, 53n7, 182 in Indian culture, 9, 74–76, 163,
Chandni, 53n2 169–70, 215–17
Channel V, 10, 34, 114, 128, 153 ongoing importance of, 169–70,
Chaudhury, Mahima, 146 215–17
Chayadeep, 97 rejection of, 76–78
Collectivist Framework for Understanding See Popular Culture

Action. See Collectivism Cultural Globalization, 17, 20–21,
Collins, Randall, 61, 208 25–27, 32–35, 87, 115–16
Condoms, 39 Limited effect of, 134–38, 158,
Conference on South Asia, 9 162, 171, 206–11
Congress Party, 34, 161n24 Cultural Repertoire, 71
See also Gandhi, Rajiv; Rao,
P.V. Narasimha; Nehru, Jawharlal DKNY, 140
Consumerism, 10, 16, 25–27, 99–109, 165 Das, Gurcharan, 15
and class, 151–52 Dating, 9, 111
and gender, 100–11, 120–21 Class and, 66–68, 125n23
and globalization, 17, 25–27, 97–109, Dehra Dun
118–19, 123–24 advertisements for beauty aids, 102,
and identity, 25–27, 29, 91, 99–109, 111, 194
119–20 boutiques in, 111
in India today, 92–93, 99–109 cinema halls in, 8, 47, 218n1
economic changes and, 115–16, 118 compared with other Indian cities,
capitalism and, 21, 24–27, 31–33, 50–51
100, 118–19 filmgoing in, 47
media and, 91, 93–97, 99–109, 119, globalization and, 8–9, 16, 48–50
140–41, 145–48 Hollywood films playing in, 48, 56n32
Consumption. See Consumerism in 2007, 212–17
Content Analysis, 36 interviews in, 36–37, 46–47
Connell, R.W., 26, 196 participant observation in, 36
Cosmopolitan, 90 Satellite TV in, 49–50
Crawley, William, 103, 104, 111, 115, Deol, Bobby, 191
116, 135, 193 Devgan, Ajay, 164
Culture, 58–59, 70–80 Dickey, Sara, 45, 204
and globalization, 17, 20–21, 25–27, Dieting, 101–02
32–35 Dil To Pagal Hai, 95, 99, 106–08,
and individual actions, 71 110, 125n12, 132, 133, 143–44,
and normalization of élite experience, 150, 176
38–40, 81, 92–97 Dilwale Dulhania Le Jayenge [DDLJ],
as inconsistent and divided, 70–71, 73 52n1, 125n11, 145–46, 159n10, 170
aspects of, 71–72 Directors. See Filmmakers
causal effects of, 58–59, 80, 87–88, Doordarshan, 32, 49, 115
115–16, 158, 162, 171 Dixit, Madhuri, 95, 106, 108, 143–44,
defined, 70–71 150, 160n19, 176, 189
interests and, 72–74, 76 Dunkerley, David, 26, 27
relation to psyche and social structure, Durkheim, Emile, 71, 79
17, 58–59, 61–62, 78–84, 87–88, Dutt, Sanjay, 148, 193
208–09, 211 Dwyer, Rachel, 95
sidelining of poor in popular
imagination, 38–40, 81, 92–97, Economic Liberalization, 7–8, 15–16,
213–14 30–32, 38–40, 48, 54n16, 64–66,
theories of, 58–62, 70–72, 207–11 115–16, 118
INDEX 235
Economy anxieties about, 138–39

defined, 60 as social structure, 138
in India, 15–16, 30–32, 39–46, changes in, 111–13, 120–22
64–70, 115–16 alternative approaches to, 74, 78–80,
Egocentric orientation. See individualism 116–17
Élites in India, 38–42, 44 defined, 60
Bias in research, 38–43 See also Joint Families, Arranged
Cultural emphasis on, 38–42 Marriages, Love Marriages
Globalization effect on, 65 Fan magazines, 36, 138, 140, 147–48,
Status as dependent on Indian poor, 190–93
41–42, 68 Fashion, 10, 39, 91, 95, 99–108, 111,
See Transnational Middle Class. 113, 115, 127, 140–141, 146,
See also Class 151–52, 160n20, 161n21
Emotions, 81–87 and class, 151–52
attitudes toward, 72–74 and gender, 206
relations to culture and social protests against, 153
structure, 17, 81–87 See also Consumerism, Modesty,
theoretical approaches to, 81–82 Heroines
See also fear, love, love marriages Fashion Television, 128
English Language Father, Son, Holy War, 182–83
and effects of globalization, 64–65 Fear
and transnational middle class, 90–91, in Ifaluk culture, 81
97, 115 in Indian culture, 81–84
and methodological bias, 42–43 Featherstone, Mike, 27
competence in, 40–41, 44–45, 97, Female Identity, 104
54n18 Femininity
Enloe, Cynthia, 29, 181 Transnational standards of, 104–05
Ethnography. See Participant See also Female Identity, 178–79
Observation, Methodology Feminist opposition to films
European Union (EU), 21 Fernandes, Leela, 92–93, 99, 54n16,
Eve teasing. See Sexual Harassment 124n3
Extended Family. See Joint Famiy Fieldwork. See Participant Observation
Exposure, 148–51 Fiji, 201–02
Film. See Hindi film
Family duty: Film magazines. See Fan magazines
as connected to women’s modesty, 154 Film reviews
as symbolized by women’s rejection of Filmi Kaliyan
cosmopolitan fashion, 154 Fire, 10
attitudes toward, 134–38, 141–48, Filmgoing, 130–33, 136–37, 140–41,
154, 169–70 163–64, 177–78
in Hindi film, 141–48 Filmmakers, 113, 146–48
See also Collectivism “First languages”, 75–76
Family, 64–70, 72–74, 78–88 Five-Year Plan Hero, 94, 98, 180
and emotions, 81–88 Fligstein, Neil, 61
and frameworks for understanding Frameworks for Understanding Action,
action, 78–80 71–72, 74–78
And family structure, 79–80 Identity, Masculinity, Violence

Friends, 101, 189 against Women, Housewifization
Gender Culture, 18, 72–74
Gandhi, Mohandas K., 31 See also Gender
Gandhi, Rajiv, 15, 31, 54n16 Geertz, Clifford, 71
Gaze, 177–78, 196–97n1 Ghosh, Shohini, 125n22
Gender, 66–68, 173–96, 200–02 Giddens, Anthony, 61, 88n2, 208
and alternative approaches to family, Globalization
74, 77–80 and class, 18, 25–26, 28, 64–65,
and class, 66–68 90–158, 203–05, 207–08
and consumerism, 91, 95, 100–11, and consumerism, 17, 25–27, 97–109,
120–21 118–19, 123–24, 165, 204–06
and frameworks for understanding and culture, 17, 20–21, 25–27,
action, 78–80 32–35,
and Hindi filmgoing, 131–32, 136 and gender, 17–18, 20–21, 26,
and Indian Identity, 127–29, 133–39, 28–29, 68–70, 104–05, 120–21,
149–52, 160n16, 160n17 180–96, 200–02, 206
and mobility, 28–29 and identity, 25–26, 29, 67, 103–06,
and male dominance in the home, 205–06
66–68, 136–38 and individualism, 104, 162–71
anxieties about equality of, 69–70, and intensification of male
73, 200–02 dominance, 173–75, 180–96
arrangements, 17–18 and mass media, 20–21
as defined by mobility and lack of and new meanings, 162–71, 173–75,
mobility, 173–74, 180–81 180–96, 202
as focus of anxieties about and power, 28
globalization, 152–55 anxieties about, 69–70, 89n5, 129
changes in, 105–13 anxieties about effects on male
changing presentation of in Hindi dominance, 69–70, 128
film, 100–02, 106–11 anxieties about threat to Indian
construction of in Hindi film, 175–79 culture, 152–54
continuities in, 129–30, 134–39, aspects of, 17, 19–24
152–55, 214–15 causes of, 24–25
globalization and, 17–18, 20–21, defined, 19–24
26, 28–29, 68–70, 91, 104–05, effects of, 7–8, 17, 25–29, 34–35,
120–22, 123–24, 152–55, 97–109, 118–19, 123–24, 162,
173–96, 200–02, 205–06 180–96, 203–11, 217
media and, 91, 99–110, 173–96 in Banaras, 7–8
perceived threat to arrangements from in Dehra Dun, 8–9, 16, 48–50,
media, 152–53 212–15, 217
pornography and construction of, 29, in India, 15–16, 30–35, 48–50
174, 185–88 limited effect of, 134–38
See also Bodies, Women, Restrictions local influences on, 27–28, 33–34,
on Women’s Movement’s, Female 113–14, 123
Identity, Femininity, Gender resistance to, 10, 34, 128, 130,
Culture Male Dominance, Male 152–55, 161n24, 194–95
INDEX 237
structural changes caused by, 165 and preference for arranged

theories of, 10, 19–30 marriages, 147–48
See also Cultural Globalization, and preference for male priority,
Economic Liberalization, 147–48
Satellite Television and preference for male protection,
Goal, 213 148
Godzilla, 49 as balancing Indianness and
Gore, Neelam, 186 modernity, 141–48
Group Guidance. See collectivism as balancing modernity and family
Gupta, Akhil, 53n11 duty, 141–48
Gupta, Dipankar, 39, 41–42, 44, 55n21, as committed to modesty, 149–50
55n24, 66, 68, 92 as objects of gaze, 177–78
Gupta, Nilanjana, 114 attraction to balance of Indianness
and modernity, 144–45
Harassment of Women. See Sexual attraction to bodies of, 133, 197n2
Harassment attraction to beauty of, 133, 177,
Harvey, David, 23 197n2
Hebdige, Dick, 26 attraction to dancing of, 133, 177,
Heinz, 27, 119 197n2
Held, David, 19, 22–23 attraction to modesty of, 148–51
Heroes attraction to self sacrifice of, 137–38
and male strength, 127, 184, 199n21 attraction to respect for family duty,
Angry Young Man Hero, 94, 98, 137–38, 144–48, 150–51, 169
180 bodies of, 188–90
as balancing modernity and family changes in, 101–02, 188–90
duty, 141–42 fans’ favorites, 109, 133, 137–38,
as balancing modernity and 177, 197n2
Indianness, 141–42 See also Bodies
as balancing modernity and sober Hey Ram, 10
sexuality, 141–42 Hindi film
attraction to bodies of, 164, 191–92, as addressing anxieties about
198–99n20 family life, 67, 138–39, 147–48
attraction to fashion of, 165 as addressing anxieties about arranged
attraction to fighting of, 197n7 marriages, 138–39, 147–48
attraction to self sacrifice of, 146 as addressing anxieties about
attraction to special qualities of, globalization, 140–51
164 as addressing anxieties about
attraction to respect for family duty joint-family life, 139
of, 142, 145–48, 169 as balancing modernity with
bodies of, 190–94 attachment to family duties,
changes in, 93–95, 190–94 140–48
fans’ favorites, 142, 164, 197n7 as combining consumerism with
Five-Year Plan Heroes, 94, 98, 180 attachment to family duties,
Transnational Heroes, 180–81 145–48, 169–70
Heroines, as escape from day-to-day realities,
and consumerism, 106–08 131–33
and alternative approaches to family, continuities in, 34, 129–51, 163–64,

74, 116–17 173, 175–79
and association of élite with love stories in, 131, 142–48
transnational movement, 91, 123 modesty in, 100–02, 106–09, 148–51
and construction of sexuality, 186 method of content analysis of, 36
and idealized bodies, 188–94 protests against, 161n22, 193
and imagination of class, 91, 123 See also Filmgoing, Heroes, Heroines
and consumerism, 94–97, 99–109, Hindi film magazines. See Fan magazines
145–48, 164 Hit Man, 182–83
and fashion, 95, 99–109, 127, Hollywood films
140–47, 164 attitudes toward, 9–10, 16, 48–50,
and gender, 173–81 57n37, 164–65
and imagination of élite life, 91, and intensification of male violence,
95–98, 115 174, 182–84, 195–96
and Indian identity, 130, 133–39, class of viewers, 50
149–52 defined, 53n7
and individualism, 77, 116–17, 132, growth of, 7–8, 15–16, 20–21,
163–64 33–35, 48–50, 56n32, 56n34,
and male dominance, 135–38, 56n35, 57n30
175–82, 184–85, 188–96 Homosociality, 136–37
and male violence, 174, 184–85, Honda, 31
191–96 Honor, 72–74
and sexual harassment, 176, 177, Housewifization, 105–09, 121
215, 199n22 Housework, 9, 67
and normalization of élite experience, Hum Aapke Hain Kaun! (HAHK), 94–95,
38–40, 81, 92–97 124n4, 150n1, 170
and Valentine’s Day, 153 Hum Saath Saath Hain, 110, 127–28, 169
and women’s independence, 74 Hyderabad, 45, 65
attitudes toward, 9–10, 152
attraction to cosmopolitan lifestyles Iconography, 190–91
in, 140 Identity, 25–26, 29
attraction to family duty in, 141–48, See also Locally-Oriented Middle
150–51, 169 Class, Transnational Middle Class,
attraction to fighting and killing in, Female Identity, Male Identity,
110, 131–32, 124n7 Consumerism and Identity
attraction to men’s homosociality in, Ifaluk, 81–82
136–37 India Today, 36, 38, 39, 97, 104–05
attraction to reversals in, 131–33 Indian film. See Hindi film
attraction to rebellions in, 132–33 Indian film industry. See Hindi film
attraction to sexy songs in, 132–33 industry
audiences, 46, 66, 131, 136, 161n21 Indian identity
images of women in, 100–02, and beauty pageants, 103–04
142–48 and gender, 127–30, 133–39,
changes in, 9–10, 32–34, 38–39, 141–52
93–97, 99–102, 106–10, 113, and family duty, 141–52, 160n16,
133, 188–94, 213–14 160n17
INDEX 239
and Transnational Middle Class, Kathmandu. See Nepal

97–99, 120–22 Kaun Banega Crorepati, 34, 114
and Locally-Oriented Middle Class Kapoor, Karisma, 95, 100, 101, 106,
and women’s adherence to restrictive 108, 110, 143, 146, 150, 189
gender roles, 148–52 Kapur, Anuradha, 190–91
Indianness. See Indian identity Kentucky Fried Chicken, 31, 154
Individualism Khan, Salman, 107, 149, 152, 164,
among Indian women, 78–80 191–93
among lower caste people, 78 Khan, Shah Rukh, 95, 106, 134, 142–44,
and family structure, 79–80 146, 149–50
globalization and, 162–71 Khanduri, B.C., 213
growth of, 104, 162–71 Khilani, Sunil, 169–70
in Indian culture, 76–78, 116–17 Koirala, Manisha, 147–48
in American culture, 75, 77 Kournikova, Anna, 8, 189
media and, 104, 162–71 Krishna, 191
Institutions. See Social Structure Kuch Kuch Hota Hai, 110, 142, 146, 170
International Monetary Fund (IMF), 15, Krishna Palace (Dehra Dun), 198n9
21, 31 Kumar, Dilip, 142
Interviews, 11, 16, 36–38, 212
respondents’ characteristics, 37, Lamb, Sarah, 79
46–47, 56n28, 56n29 Languages, 75–78
See also Collectivism, Culture,
Jackson, Michael, 8 Individualism, “First Languages”,
Jain, Kajri, 192, 198n18, 199n21 “Second Languages”, English
John, Mary, 39, 102, 103–06 Language
Joint families Lewinsky, Monica, 24
and collectivist framework for Liberalization. See Economic
understanding action, 80 Liberalization
and emotions, 81–87 Liechty, Mark, 25–26, 29, 55n26,
and male dominance, 68–69 105, 119–24, 156–57, 186–87,
anxieties about, 139 202
attitudes toward, 9, 66–69, 73–74, LiPuma, Edward, 37
80–87 Locally-Oriented Middle Class, 18, 43–46,
class and, 66–68 65–68, 122, 127–71, 203–04
prevalence of, 66–68, 112, 126n25 as defined by consumption, 155–57,
Jab We Met, 213 203–04
Jang, 213–14 as defined by gender arrangements,
Jurassic Park, 33, 49 127–30, 133–52, 155–58,
203–04
Kaho Na Pyar Hai, 48, 52n1, 95, 99, as defined by Indianness, 129–30,
110, 125n11, 127, 132, 134 133–51, 156, 157, 203–06
Kajol, 101, 137, 150, 189 as defined on global scale, 155–57,
Kakar, Sudhir, 77 203–04
Kanak (Dehra Dun), 213 And consumerism, 145–48
Kanpur, 10, 153 Structural position of, 129–31, 155,
Kasoor, 184 157
Love Marriage. See Arranged marriages;

in India, 72–74, 82–87, 106, 110–11 Family relationships; Love marriages,
in USA, 209 Joint families
Love marriages Marx, Karl, 118–19, 203
attitudes toward, 66–68, 72–75, 86, Masala Film, 110
111–12, 128–29, 134–36, 166–69 Massey, Doreen, 28
growth of, 111–12, 125n23, 125n24 Mathews, Gordon, 26, 29, 103
in Hindi film, 110–11 Mauj-Masti, 130–31, 159n6
institutional possibility, 63–64 Media
Lutz, Catherine, 81 and construction of class, 91
and constructions of gender, 99–110,
MTV, 7, 10, 21, 34, 112–14, 128, 153, 174–94
194–95 and consumerism, 91, 99–109,
MacKinnon, Catharine, 185–86 118–19, 145–48
Macho Man, 183 and globalization, 20–21
Madison, Wisconsin, 9 and normalization of élite experience,
Madonna, 8, 26, 101 38–40, 81, 92–97
Madurai, 45 protests against, 153–54, 194–95
Magazines. See Fan Magazines See also Hindi film, Television,
Maine Pyar Kiya, 53n2, 94, 125n12, Satellite Television
132, 143, 186 Methodology, 11–12, 16, 35–48, 50–51
Malaysia, 102, 109, 126–27n28, 204 Middle Class, 25–26, 29, 38–47,
Male dominance 90–158, 203–04
and joint-family living, 68–69 Discourses about, 38–42
and ideal male and female bodies, Bias in Research, 38–43
188–94 Multiple middle classes, 122, 203–04
and Indian identity, 135–39 See also Class, Locally-oriented
construction of in Hindi film, 175–82, Middle Class, Transnational
184–85, 188–96 Middle Class
globalization as threatening, 68–70 Mies, Maria, 105, 121
globalization and new methods of, Mills, C. Wright, 71
173–96 Mishra, Pankaj, 214
men’s attachment to, 9, 68–70, Miss World Pageant, 93, 153–55,
137–39, 148–49, 152–58, 159n24, 190, 194–95
173–74 Mission Impossible, 2, 49, 152
the gaze and, 177–78 Mobility
See also Gender, Sexuality, Rape, and class, 91, 97–98
Sexual harassment; Male Violence and gender, 29, 173–74, 180–81
Male gaze. See gaze and globalization, 19–27
Male violence as male privilege, 173–74, 180–81
Attraction to in media, 174, 182–85 global media and, 91
Media and, 188–96 Mohabbatein, 48, 96, 101, 110, 134,
Manchester United Football, 26 149–50, 160n18, 176, 178–79, 190
Mangeshkar, Lata, 179 Modesty in Hindi film, 100–02, 106–09,
Mankekar, Purnima, 99, 138, 145, 148–51, 160n18
152–54, 160n17, 165, 179–81 Morley, David, 28–29
INDEX 241
Movie Houses. See Cinema Halls Pornography, 29, 165, 185–88

Mukherjee, Rani, 101–02, 107, and construction of sexuality, 185–88
144–46, 189 and objectification of women, 174,
Multinational Corporations, 21, 24–27, 185–88
31–33, 118 audiences for, 185
Mulvey, Laura, 196–97n1 reception of, 185–88, 198n13
Munshi, Shoma, 40, 54n15, 102, 103, Prabhat, Dehra Dun
105–06, 111, 126n26, 146, 160n16 Pretty Woman, 33
Murdoch, Rupert, 32, 113 Producers. See Filmmakers
Psyche, 80–87
Nandy, Ashis, 183 Puri, Jyoti, 40–41, 112, 125–26n24,
National Basketball Association, 25, 127 177, 197n3
National identity, 25–29 Prem Qaidi, 150
See also Indian identity Psyche, 58–59
Nehru, Jawaharlal, 15, 31 See emotions, love, love marriages
Nepal, 25, 29, 119, 156–57, 186–87, 202 Protests
Nesargi, Pramilla, 194–95 against fashion, 153
Nike, 44, 45, 103, 140, 165, 189 against globalization, 10, 34, 111–12,
Non-resident Indians (NRI) 128, 130, 152–55, 161n24,
Hindi films about, 20, 29, 95, 98, 194–95
145–47, 180–81 against Hindi Film, 194, 161n22
North American Free Trade Agreement against media, 152–54, 194–95
(NAFTA), 21 against Satellite, TV, 152–154, 194–95
Nuclear families against objectification of women,
growth of, 112 190, 194–95
Officer, 131–32, 136, 177–78 Quinn, Naomi, 59, 209

Om Shanti Om, 213
Ong, Ahiwa, 201 Ram Teri Ganga Maili, 94, 99–100, 106,
Orient Theatre (Dehra Dun), 47, 96, 125n12, 143
213 Rai, Aishwarya, 137, 149, 189, 193
Overseas Chinese, 201 Raja Hindustani, 146
Oza, Rupal, 93, 154–55 Ram, 190–91
Ramayana, 7
Page, David, 103, 104, 111, 115, 116, Rao, P.V. Narasimha, 15
135, 193 Rape:
Papua New Guinea, 201 and male protection in film, 178–79
Parameswaran, Radhika, 178 in film, 193
Pardes, 52n1, 125n11, 146 perceived connection to global media,
Participant Observation, 36–37 152, 194
Parulekar, Susan, 102, 105, 111 perceived connection to cosmopolitan
Patwardhan, Anand, 182–83, 193 fashion, 153
Pepsi, 31, 103, 143 See also Male Violence
Pizza Hut, 31, 44, 45, 154–55 Ray, Lisa, 184
Popular Culture Reagan, Ronald, 31
reception of, 27–28, 116, 133, 207–11 Reception, 27–28, 116, 133, 207–11
Reebok, 8, 140 Sen, Sushmita, 148

Religion of respondents, 37, 54n13 Sewell, William, 61, 88n
Religious Iconography, 190–91 Sexual Harassment
Representativeness, 37–38, 43, 47, films’ role in prompting, 176, 177–78,
50–51, 53n12 199n22, 215
Research Assistants, 42–43, 54n20, prevalence of, 177, 215
55n22, 55n23 Sexuality, 198n11, 198n15
Respondents. See Interviews Hindi films and construction of, 185
Restrictions on women’s movements pornography and construction of,
attitudes toward, 9, 66–68, 73, 185–88
136–38 Sharma, Miriam, 42
changes in, 112–13, 126n26 Sharma, Satya, 31, 54n15, 125n23,
class and, 66–68, 112–13, 126n26 126n26
in Hindi-film world, 147–48 Shetty, Shamita, 101–02, 149–50
Richards, Michael, 26 Shetty, Shilpa, 147
Romance. See Love; Love Stories Shroff, Jackie, 90
Romance Novels, 40–41, 74 Shurmer-Smith, Pamela, 41–42, 44,
Roshan, Hrithik, 90, 95, 127, 164 54n18, 54n19, 96, 111–12
Shweder, Richard, 58, 208
STAR TV, 12, 32, 34, 113 Sklair, Leslie, 25, 27, 100, 118–19
Sampras, Pete, 8, 100, 189 Social Films, 94–95, 127–28
Santa Barbara, 27 Social Structure, 58–70
Saavala, Minna, 47, 204 and class, 122
Satellite Television and changing gender arrangements,
and fashion, 100, 113–14, 140–41 114–18
and gender, 115 and constraint, 63
and imagination of class, 91, 123 and consumerism, 99, 114–18
and intensification of male violence, and globalization, 165
182–84, 195–96 causal effects of, 58–59, 115–16, 118,
and local operators, 33, 53n8, 53n9, 158, 206–12, 217
113–14 defined, 59–60
and new standards of beauty, 188–89 interests and, 68–70, 84–87, 138
and normalization of élite experience, micro-level interactions and, 61,
38–40, 81, 92–97 68–70
attitudes toward, 9, 16, 34–35, 116, relation to culture and psyche, 17,
152–53 61–62, 78–81, 84–88, 208–09, 211
growth of, 7, 15, 20–21, 32–35, theories of, 59–63
49–50, 57n39 Sociocentric Orientation.
perceived threat to Indian culture, 153 See Collectivism
reception of, 116 Spears, Britney, 25
resistance to, 152–54, 194–95 Spillman, Lynn, 62
Savage, Randy, 183 Sridevi, 101, 189
Schwarzenegger, Arnold, 48, 127, 182, Srivastava, Sanjay, 94, 166, 179
191, 193 Stardust, 38, 97, 140, 148, 149, 193
Second Languages, 76–78, 116–17, 163 Strauss, Claudia, 59, 209
See Languages Structure. See Social Structure
INDEX 243
Sunder, Nandini, 111 Valentine’s Day, 10, 34, 111–12,

Swidler, Ann, 58–59, 209 153–55, 161n24
Vamp
Talent shows, 112 decline of in Hindi film, 106–08,
Technology, 24 113, 125n22
Television, 7, 8, 27, 53n6, 57n38 Vertical Limit, 48
See also Satellite Television Violence against women.
and normalization of élite experience, See Male violence, Rape
38–40, 81, 92–97 Voice, men’s and women’s in Hindi film,
and consumerism, 118–19 179
Textual analysis. See Content analysis Voyeurism. See Gaze
Theatre. See Cinema halls
Ticket Prices, 47 Weber, Max, 18, 62, 119, 88n3
Thackeray, Bal, 10, 24, 161n24 Westoxicated, 55n24
Thums Up, 31, 103 Who Wants to be a Millionaire, 34
Times of India, 38 Women. See Gender, Housewifization,
Tinseltown, 140 Male dominance, Male Violence,
Tradition, 72–75 Sexual harassment, Restrictions on
Transnational Capitalist Class, 118–19, 121 Women’s Movements
Transnational Heroes, 180–81 World Trade Organization (WTO), 21,
Transnational Middle Class, 18, 90–123, 154
203–04 World Wrestling Federation,
and consumerism, 92–93, 99–109, 182–84
119–20, 203–04 Wrestlers, Indian, 199n21
and fashion, 91, 100–09, 111
and English language, 91, 115 X-rated films. See Pornographic Films
and gender arrangements, 91, 109–13, Xena, 10
120–22, 203–04
and pursuit of beautiful bodies, 102–04 Yeh Kaisi Chahat, 48, 198n9
and structural position, 122, 203–04
transnational situation, 18, 97–99, Zahareela, 96, 131–32, 178, 184, 53n3,
120–22, 203–04 124n7
Zee TV, 32, 35, 112, 113–14, 152
Uberoi, J.P.S., 111 Zimmer-Tamakoshi, Laura, 201
Uberoi, Patricia, 94–95, 145–46 Zinta, Priety, 107–09, 144–45
About the Author
Steve Derné is Professor of Sociology at SUNY-Geneseo. His Culture

in Action (1995) explores the interconnections between cultural orienta-
tions, family structures, and emotions in North India. His Movies,
Masculinity and Modernity: An Ethnography of Men’s Filmgoing in India
(2000) considers how film viewing shapes family, emotion, sexuality,
and male dominance. He has just begun a study of conceptions of well
being in India. He is the winner of the 1991 Stirling Award for outstand-
ing paper in psychological anthropology. He is the winner of a 2004
Chancellor’s Award for Scholarly and Creative Activity. He has received
fellowships from the National Endowment for the Humanities, the
Rockefeller Foundation, the U.S. Department of Education, the Fulbright
Program, and the American Institute of Indian Studies.
Media Watch 6 (2)
© Media Watch 6 (2) 255-268, 2015

ISSN 0976-0911 e-ISSN 2249-8818
DOI: 10.15655/mw/2015/v6i2/65672
Indian Television in the Eras of Pre-Liberalisation

and Liberalisation
SHANTHI MATHAI
Jagran Lakecity University, India
India witnessed a revolution in the television communication landscape following the

shift in the economic policies in 1991. This analytical study looks into the changes and
additions in the functions performed by mass communication using television medium
before and after the implementation of liberalization policies in India. Tables are
included to provide overviews of the historical developments at different periods and to
distinguish the functions performed by television communication. In addition to
information, education, entertainment, correlation and mobilization functions,
empowerment and need satisfaction are also accounted as functions added in the due
course of mass communication progression in the transnational and digitized era.
Keywords: Pre-liberalisation era, liberalization, broadcasting, Doordarshan, Prasar Bharati,

digitization
The new economic policies launched in India in 1991 brought in considerable reforms in the
world of industry and trade by opening up the capital market to private enterprises and providing
operational freedom to private sector. It was a turnaround from the ‘strategy of self-reliance’ that
was followed for more than forty years in the independent India to wide-ranging policy reforms
and deregulations to “promote the growth of a more efficient and competitive industrial economy”.
(Rashmi & Das, 2012, p. x) The globalization and liberalization of economy included flow of
technology and flow of foreign capital in terms of investment with relaxed norms and regulations
than those before 1991. Transnational and domestic private corporations, especially media
enterprises have thereafter become decisive factors in the economic growth of the nation. The
changes in the media policies coupled with the massive expansion of the electronic media and
technological advancements drastically changed the media landscape in the country. A very
significant impact of the new policies was the beginning of ‘transnational communication’—the
communication that transcends the geographical borders of countries using satellite broadcasting
technology. These changes resulted in the tremendous growth of television industry in India from
one television channel, the Doordarshan, in 1991 to over 800 channels in 2012 providing television
programmes to about 740 million viewers (Kohli-Khandekar, 2013, p. xxv).
The two important periods in the history of television broadcasting in India are: (i) the
pre-liberalisation era which refers to the years before 1991 and (ii) the liberalization era which
refers to the years of liberalization, globalisation and privatization and transnational
communication beginning from 1991. The field of mass communication in India had been distinct
in its ownership pattern till 1991, with the print industry enjoying the freedom of private ownership
from the beginning whereas the broadcast media of radio and television under the complete
control of the Government. The only radio was Akashvani or All India radio (AIR) and the only
Correspondence to: Shanthi Mathai, School of Media and Communication, Jagran Lakecity
University, Bhopal-462 011, India. E-mail: shanthimathai@gmail.com
255
Indian Television: S Mathai
television, Doordarshan. This monopoly of the government in the broadcast media ended in 1991
with Cable News Network (CNN) bringing live coverage of Gulf War via the cable operators and
Star TV broadcasting five channels from Hong Kong using the satellite, ASIASAT-1. The following
years witnessed many changes in the media policies and in September 2007 the Indian Public
Broadcaster, Prasar Bharati, an autonomous statutory corporation comprising of All India Radio
and Doordarshan was established under the Prasar Bharti (Broadcasting Corporation of India)
Act, 1990. On the other side, the private media enterprises (both domestic and foreign) proliferated
in the media market. By 2010, every major foreign transnational media investor was in India
(Kohli-Khandekar, p. xv).
With the implementation of liberalization policies, the mass communication in India
which was thus far only a government functionary as public broadcasting system turned into the
huge media and entertainment industry. This paper examines the mass communication process in
India with special reference to the broadcasting medium of television in the pre-liberalization
and liberalization eras, focusing on the functions that it performs in society.
Mass Communication in India

The history of mass communication in India can be traced back to the start of the first newspaper
in 1780, first moving picture in 1895, private radio broadcasting from the early 1920s leading to
the then government bringing them under Indian State Broadcasting Services in 1930 which later
in 1936 got renamed as All India Radio and additionally known as Akashvani from 1957 (Dwivedi,
2008, pp. 21-2), limited duration television programming of an hour in a week from Delhi Akashvani
Bhavan (AIR station) in 1959 and regular broadcasting in 1965 (Pande, 2012, p. 29).
The growth of television communication in India was tremendous. The mere 41 television
sets in the country in 1962, rose to 2,75,424 in 1974 and leaped with a 173 per cent growth to
4,76,026 in 1976. In 1984 it was recorded as 3,632,328 and in 2002, it was 74.71 million. Similarly
the increase in the number of TV channels became phenomenal after the opening up of the sky for
private media companies – about 80 in 2002 and over 800 in 2012. Simultaneously it was
measured that the reach of television which was only 28 per cent in 1984, rose to 53 per cent in
1985, to 62 per cent by 1988 and to 90 per cent by 2002. (Kapil Desai, 2002). The number of TV
viewers increased from 408 million in 2002 to 740 million in 2012. The Census 2011 of this
second largest populated country reveals that five-sixths of the Indian population owns a transistor,
TV, mobile or computer or a combination of these (Indian Express, 2012). Another notable change
is the revenues generated through the media industry – an increase from 96 billion rupees in 2002
to 400 billion rupees in 2012 (Kohli-Khandekar, p.xxv).
Amidst all these changes and growth, the communication through mass media performs
certain important functions in society through their existence as systems comprising of different
components and also through the programmes disseminated to the audience.
Theoretical Framework
The functionalist theories connect the purposes of the media communication and the needs or
uses for the society at large (McQuail, 2005, p. 24). Harold Lasswell explained the functions as
surveillance of the environment, correlation of different components of society and cultural
transmission to generations. His studies of propaganda communications concluded the
behavioural changes on soldiers and new recruits due to war time communications and also the
changes in food habits of housewives as a result of media communication. (Huff K. W., 2008). C.
R. Wright (1974) added ‘entertainment’ as another key function of mass communication.
Mendelsohn (1966) further elaborated this function as the provider of individual reward giving
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Media Watch 6 (2)
relaxation and reduction of tension that ultimately result in helping people to effectively deal
with real-life problems and thus benefitting societies to avoid breakdown. He also added the
function ‘mobilisation’ indicating the application of media communication by political and
commercial propagandists. Summarising all these and explaining in detail, Denis McQuail
categorises the functions as information, correlation, continuity, entertainment and mobilization.
Information has three aspects: firstly, rendering information about events and conditions in
society and the world, secondly, indicating relations of power and thirdly, facilitating innovation,
adaptation and progress. Correlation includes explaining, interpreting and clarifying with
illustrations on the meaning of events and information, adding support for authority and norms,
paving way for interaction, consensus building and socialisation, coordinating separate activities,
and, prioritization of topics of discussions and signaling relative status. Continuity refers to that
of culture and values through “expressing the dominant culture and recognizing subcultures and
new cultural developments and forging and maintaining commonality of values”. Lastly,
mobilization, points to “campaigning and reviewing for social objectives in the sphere of politics,
war, economic development, and sometimes religion”. (McQuail, pp. 96-99)
Methodology
Television has been existing in India as a mass medium that transmit different types of programme
content to the people from 1959 – about 32 years in the pre-libealisation era and about 25 years
as in 2015 in the liberalization era. The research problem that led this study was: how the
functions of mass communication through television in India are different in the two periods – the
pre-liberalisation (before 1991) and the liberalization era (from 1991) in India. The objectives set
for this study were: (i) to examine the growth of television and the programmes broadcasted
during specific time periods in India and thereby study the overall changes in the programme
content disseminated from time to time (ii) to identify the different policy decisions that paved the
way for significant changes in the functioning of television in India and (iii) to analyse and
compare the different functions performed by the television media in the pre-liberalisation and
liberalization eras as a mass medium that has huge reach. This study is based on the facts and
data available on television communication in the pre-liberalisation and liberalization or
transnational communication eras. The relevant information for the study was collected from
recorded observations and studies on the broadcast television and communication in India
including reports, texts and documents, and online materials. Thematic analysis and summary of
discussions were used as the methods of analysis. The liberalisation era means the period of
deregulated, free market-oriented economy where the government policies allow for the liberaslised
norms and codes for private media industries and foreign communication content (Seetha, 2012,
p. 7)
Television in Pre-Liberalisation and Liberalization Era

The take-off of television era got a delay in India due to economic reasons as well as because of
the skeptic attitude of authorities on the impact of such a medium. At last television started in
India in 1959 with the aims “to train personnel and partly to discover what TV could achieve in
community development and formal education” (Kumar, 2012, p. 296). In independent India, the
Ministry of Information and Broadcasting (MIB) form and develop policies and regulations related
to information, broadcasting and that of film sector in the country from time to time. Table 1 & 2
provides an overview of the milestones in the growth and development of television broadcasting
in India. .
257
The general classification of television era falls into three periods: (i) 1959–1980: the
experimental and developmental period, (ii) 1981-1990: the expansion period and (iii) 1991
onwards: the period of satellite communication and technological revolution. The first two of
these periods can be catalogued in the pre-liberalisation era and the third, in the liberalization
era.
Television in pre-liberalisation era (1959 – 1982)

Two clearly identifiable stages in the period between 1959 and 1982 marked the growth of Indian
television—the experimental stage (1959–1965) and growth or developmental stage (1966–1982).
The initial six years were a testing period with an hour telecast per week comprising of three
twenty minutes programme from the Delhi AIR station with signal strength to reach 40 kilometers
around. Regular programmes were started from 1965 with gradual increase in the duration of
telecasts thereafter.
Television carried out its educational function through the following programmes in the
first period. (i) The media-oriented school education experimented in collaboration with Ford
Foundation in 1961 in 150 schools in Delhi for an audience of 20,000 higher secondary School
children which continued till 1965. Understanding the usefulness, it was later resumed after one
year as a one hour daily pogramme based on school curriculum. (ii) Increase in agricultural
production was a necessity and ‘Krishidarshan’ was started in 1967 and has been continuing for
educating the farmers on new methods of farming (iii) India experimented with the potentials of
television in a biggest manner through the SITE (Satellite Instructional Television Experiment) - a
one-year plan (1975-76) to carry out transmission of educational programmes for children and
instructional programmes for general audience to 2400 villages spread over six States in India
viz. Bihar, Madhya Pradesh, Rajasthan, Orissa, Andhra Pradesh and Karnataka. This huge-scale
experiment was materialized in collaboration with NASA, USA using the American Technology
Satellite (ATS-6). The formative, process and summative years of this proramme spread across a
decade (1967 -1977). The sociological and technical criteria used for the selection of the SITE
cluster—backwardness, potential to continue the television service, availability of basic
infrastructure and size of the population ranging from 500 to 5000 (Rani, 2006, p. 15) and the
content of the different programmes transmitted themselves highlight the objectives and functions
of TV of the time. The television programmes of four hours duration daily included the themes
such as agriculture, health and nutrition, family planning, adult literacy and science education.
Meanwhile, Doordarshan performed the function as a disseminator of information in
various ways. News bulletins of five minutes duration became an integral part of the regular one-
hour telecast from 1965 (Kohli-Khandekar, p. 80). As the hours of broadcast increased, the number
of news bulletins and the time allotted for them also increased. ‘News’ as an account of an event
or situation, at the very outset, gives information about the event/situation or updated information
on it. In addition, all the educational programmes contained important information in them
regarding the subject covered, viz. health, hygiene, agriculture, family planning, benefits of literacy
and so on.
Feedback collected from audience about the shows were seriously considered in the
production of new programmes and in the decisions taken related to the modification in the
transmission system. TV was seen as a medium of instruction and social education. Researches
on the agricultural transmissions, although criticized for the adoption model used, revealed that
they enhanced the idea of community television for rural development (Agrawal, 2000, pp. 130-
32). It also explains the role television communication played in the community building process.
The 2011 census data showing the literacy rate of the population in Kheda (the SITE area) as above
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Media Watch 6 (2)
70 per cent (more than the national average) can be understood as a long term impact and
achievement of the concept planned and conducted forty years ago. However, it has been observed
that India could not make profitable utilization of such a crucial and wide use of satellite
technology for transmission implemented as early as in 1970s. The reasons cited note that the
significant experiment of SITE took place during the time of emergency, a period of relentless
political control that imposed strict restrictions for the media which was again succeeded by
years which lacked political vision to utilize such huge and efficient medium (Rani, p. 5).
Entertainment programmes got their entry in the television during this period through
film songs, nukkad natak, educational dramas etc. Pro-governmental programmes telecasted
portraying government as the “chief architect” of development in the country (Sharma A. K., p. 130)
and a few election campaigns by political parties during election times can be categorized in the
publicity and propaganda functions of mass media (Shodhganga, p. 57). For administrative
purposes of a quickly growing medium, the television broadcasting was separated from AIR with
the name Doordarshan and thereafter both of them functioned as two wings under Ministry of
Information and Broadcasting (Sharma A. K., 2012, p. 130). Thus the first period was a successful
experiment with the technology to find out the potentials of TV as a medium to reach the masses
at large, and to prove the effectiveness of employing mass communication and television as tools
for nation’s development and for achieving desired changes and growth in people’s lives. It was
also a successful demonstration of the optimisation of media facilities and potentials of media/
creative communication through different programmes for bringing out social changes and
community building. These years also revealed how people would receive and use the new medium
of television, and how the television messages can influence changes in the lifestyles and conduct
of the vast number of people. In addition, news bulletins and other publicity contents assisted the
government and authorities to be connected with the masses in the process of nation building.
Expansion period (1982 – 1991)

The Delhi Asian Games of 1982 (Asiad) was a landmark in the growth of television communication
in India. Two important technological advancements happened: India going for colour television
and live telecasting of Asian Games events. The number of houses with colour TV increased hugely
providing a viewership of about 12 million to Doordarshan. This Large scale expansion was
achieved with the help of INSAT (Indian National Satellite) and establishment of 355 terrestrial
transmitters, nationwide (Rani, pp. 6, 27). No private enterprises were allowed to enter the sector
– either to set up television stations or to transmit television signals.
It can be observed that the need to keep the social agenda, demand for entertainment
content and the interest to generate revenue through advertisements were the factors that
determined the functions as well as the kind of programmes televised in these years. Although
television communication remained as the sole privilege and property of Doordarsahn, the
authorities tried to cater to the needs of different audience with DD1- the national network, DD2
– the metropolitan entertainment channel and DD-Regional language channels. The first soap
opera of 1984, Hum Log was a family story with an underlying theme that could educate the
viewers with the message of family planning. It is recorded that of the 3.6 million television sets
in India at that time, more than eighty percentage used to be tuned to that soap opera every week
(Kohli-Khandekar, p. 82). According to Table 6, the number of households with television sets rose
from 1.1 million in 1979 to 22.5 million in 1989 and the revenue from advertising on TV alone
increased during this period from 61.6 m in 1979 to 1612.6 million rupees in 1989. The gross
revenue from commercial advertisements rose to 2538.5 million during 1990-91. The single largest
advertisement-earner during the decade was the television serial Mahabharat (574.2m) followed
259
by Ramayan (244.0 m) and then by serial Buniyad (88.7m). (Agrawal S. , 1993, p. 40) In 1990-91,
70 per cent of Doordarshan’s annual expenditure was met with the advertisement revenue (Sharma
A. K., 2012, p. 131).
The cable television, which was essentially evolved to enhance reception in remote and
hilly areas where poor terrestrial signals hindered the reception, heightened the expansion of
television communication. The emergence of cable network era in the metropolitan cities granted
a new option for enjoying more entertainment schedules with their TV sets. The cable network
also flourished with the advertisement sponsored entertainment genres. (Kumar, pp. 301-404)
Surveys revealed that the educational transmission by University Grants Commission,
‘Country-Wide Class Room’ began in 1984, which targeted students as its primary audience grew
into a well accepted programme consumed by a high percentage of housewives and senior citizens.
Understanding the high demand for educational schedules, UGC invested enormous amount of
money for the production and transmission of academic and tutorial compositions. For example,
an amount of one billion rupees was spent for high quality audiovisual production equipment
(Rani, 2006). However, the monopoly of the government machineries in broadcasting resulted in
Doordarshan’s position as “an insipid propaganda machine” used by the influential and powerful
persons (Mitra and Kaul 1982 quoted in Mehta, p. 7).
The highlights of the second period can be summed up as:
(i) The first half of 1980s witnessed two important technological advancements, the
transition from black and white to colour Television through which a more closer-
to-reality representation of the events became possible and the starting of live
telecasts bringing national and international events to the drawing rooms as and
when it happened.
(ii) Programmes in regional languages and familiar content of religious serials
provided a leap in the popularity of television with heavy rise in connections and
viewership. Television became a national phenomenon during this period.
(iii) The scope and potential of television to take messages to vast number of people
invited the attraction of advertisers to use the medium to promote their products.
(iv) Commercialisation of television escalated the quantity of entertainment genres
like soap operas, situational comedies, dramas, musical programmes, quiz shows,
feature films etc. Cable network coupled with the video cassette business brought
in a unique direction to the television viewing.
In brief, by the beginning of the second period, television had established its role in
society as a medium for effective dissemination of messages. Unlike the previous period that was
testing the usability of the technology and adaptability of people to the medium from the
Government’s side, the second period showed a shift of demand from the people’s side which
resulted in huge increase in number of homes with television sets and adaptation to the medium
and its genres. Another transition was that of the ‘entertainment’ function securing the centre-
stage along with the ‘information’ function. In addition, ‘advertising’ became an inseparable
component of television function as part of the revenue generation approach. Moreover,
government, authorities and political party in power could make use of it for publicity and public
relations and religious serials helped in uniting people accordingly. Hence television
communication played the function of ‘mobilization’ on the basis of political and ideological
grounds. Analysis reveals that this period also saw the efforts taken by Doordarshan to balance
the original goals and objectives of television communication in India and its commercial
compulsions.
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Media Watch 6 (2)
Television in Liberalisation Era—Satellite Communication and Technological Revolution

The liberalisation era of television communication in India is alloyed with the “economic,
technological and political factors” of the time (Mehta, p. 7). It is the era of transnational
communication through cable and satellite television that began with the flow of global content
to Indian viewers in 1991. India switched its position from as a State of highly regulated media
policies and that with a monopoly of government in the sector, to a deregulated open broadcasting
market (Kishan-Thussu, 2011, p. 74) ending the single channel era and entering the multi channel
era of “stiff competition” (Vijayalakshmi, 2005, p. 25). This was followed by unforeseen growth of
cable network, and availability and accessibility to foreign television programmes and
multichannel televisions. While the number of cable operators in India in 1985 was merely 100,
the number rose to 10,000 by the end of first quarter of 1991 and to about 70,000 by 1996. The
growth of satellite channels rose to a stunning 500 per cent in the first year (Vijayalakshmi, 2005,
pp. 53, 19). The magnitude of diversified discussions on news and events has been a peculiarity
of Indian channels and by 2010 India had “70 dedicated news networks” (Kishan-Thussu, 2011, p.
74)
The sudden changes emerged in the communication industry got reflected in the
broadcasting style, the kind of content made available to the TV viewers and the style of distribution.
The media market has changed. The transnational channels that had been already experimenting
with and profiting from the media industry prospects in Western and other open-economy countries
could utilize the consumer (audience) market with varied and niche contents. Subsequently, there
emerged special interest programming channels for sports, movies, news, cartoons like ESPN,
Discovery channel, National Geographic channel, Star News, NDTV 24x7 etc. to mention a few.
Channels like Star Plus providing syndicated programmes of American shows, regional language
channels catering to the language diversity of India and niche programmes of audience of different
demography. The highlights of the new era of free communication through satellite channels
include the availability of 24 hour News channels that feeds off, and into, India’s long dialogic
and argumentative tradition of heterogeneous debate (Mehta, 2008, p. 7).
The media scenario witnessed two parallel situations of broadcasting during the post
liberalization years – Doordarshan as the public broadcasting television in India with specified
social objectives regarding its content and working, and the private satellite channels without
any such bindings of social development on programme content but need only to follow the
general codes of self regulation issued by the government from time to time. Doordarshan under
Prasar Bharati Corporation is bound to follow the objectives of Prasar Bharati Act 1990 that goes
along the same line with those before liberalization era (Prasar Bharati, 2011):
(i) Upholding the unity and integrity of the country and the value enshrined in the
Constitution
(ii) Promoting national integration, safeguarding citizen’s rights and to be informed
on all matters and presenting fair and balanced flow of information
(iii) Paying attention to the fields of education and spread of literacy, rural development,
health and family welfare and science and technology
(iv) Creating awareness about women’s issues and taking special steps to protect the
interests of children, the aged, and other vulnerable sectors of society
(v) Providing adequate coverage of the diverse cultures, sports and games and the
youth affairs
(vi) Promoting social justice, safeguarding the rights of working classes, minorities
and tribal communities
(vii) Expanding broadcasting facilities and promoting research and development in
broadcast technology
261
The satellite channels have to regulate their contents in compliance to the general
restrictions imposed to all media through statutes, codes or self-regulation and guidelines by the
government, and the Cable Television Networks (Regulation) Act, 1995. Accordingly, the ‘Code of
Ethics and Broadcasting Standards’ of the News Broadcasters Association that represents the
private news television broadcasters (NBA) and the ‘Self-Regulatory Content Guidelines for Non-
News and Current Affairs Television Channels’ of Indian Broadcasting Foundation describe their
principles and guidelines of self-regulation.
The transmissions from the sky threatened the Doordarshan by taking away its audience
providing more attractive content and formats. Doordarshan’s endeavours to handle the situation
during 1994-95 included forming one more national channel by networking the second channels
of Delhi, Bombay, Madras and Calcutta stations, modifying the contents offered and extending the
reach to 18 more metro cities, launching a Development Channel and an International Channel
(Sinha, 1996, pp. 218-19). As it became mandatory for Doordarshan in 1994 to raise revenues
through advertisements, the advertisers’ interests gained preference in determining the programme
content. This led to the situation of reduction in importance to educational and extensional
programmes. For example, the well received educational programmes of UGC-CWCR had to be
moved to unimportant telecast timings and reduction of duration of the programme. The afternoon
slot of UGC programme was sold in 1998 to a soap opera and the former was pushed to the early
hours of 5.30 am and the time of one hour to half an hour. That means, the educational programmes
got sidelined as they could not compete with the entertainment/infotainment genres like soap
operas, news, music videos, reality shows, film-based programmes etc, in attracting advertisers.
In order to overcome this, the new idea of telecasting educational programmes in regional languages
was launched by AVRC Mysore achieving huge success by attaining a reach of 70.1 per cent and
accessibility to 76.2 per cent of population (Rani, pp. 27-31). In 2004 UGC started its 24 hour
educational channel, Vyas, in order to continue catering its huge audience.
News networks grant a new ‘publicness’ to older cultures of debate and dissent, mediating
them to a larger audience (Mehta, p. 7). Indian audiences’ preference for information content and
democratic debate accelerated the number of news channels by 2010 to more than seventy
incomparably higher than that in any other country. At the same time, proliferation of infotainment
trends, as in many other parts of the world, entered all genres including news such as domination
of cinema, sports and celebrity culture (Kishan-Thussu, 2011, p. 74).
Moreover, the various programmes offered by the channels incorporate the latest
technologies that make the audience active and interactive such as SMS messages, audience
polls, live public debates, phone-in-debates etc. (Mehta, p. 7). Audience began more active partakers
of television viewing through their participation as ‘voters’ for finalising the winners of reality
shows, phone-in prgrammes etc. This led to a very important dimension of ‘mobilisation’ function
of media which can be illustrated based on the impact of reality show, Indian Idol on the people of
Northeast India. In Meghalaya, a region where distrust and rivalry prevailed due to community
tensions related to tribal-nontribal divide, the TV programme acted as a catalyst for mobilizing
the people for unity. The reality show ‘Indian Idol’ in which two young men from Northeast India
qualifying as the finalists in 2007 exposed the enormous possibility of satellite television for
“identity formation and political mobilization in a land divided across various registers: caste,
ethnicity, religion, language, and sharp income divides”. The national and local politicians used
the occasion as an opportunity for unifying people encouraging them to vote for the finalists from
their region. Nalin Mehta quotes the study by Jaideep Mazumdar (2007) on Politics of Meghalaya,
“When the history of Meghalaya is written, it could well be divided into two distinct phases: one
before the third Indian Idol contest and another after it. The agent of change: Amit Paul, the
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Media Watch 6 (2)
finalist of the musical talent-hunt on a TV channel.” (p. 2). This brings up another dimension of the
mobilization function of mass communication happening through the new types of entertainment
programmes broadcasted across cultures and regions. The demand for entertainment content
and immense growth of channels followed flourishing of cultural industries and mass media
related businesses.
There have been many discourses on the impact of globalised media on people of India.
To mention a few: the economic, cultural, moral and identity of the middle class (Ganguly-Scrase
& Scrase, 2009), the empowering or disempowering of the rise of popular culture on women
(Gokulsing & Dissanayake, 2009), influences of exposure to Foreign Television Programmes
(Vijayalakshmi, 2005) and effect of advertisements on Indian youth and children (Veerkumar &
Jaiswal, 2015). If the function of ‘transmission of culture’ through mass media in the pre-
liberalisation era meant that of the dominant class, caste, religion or political ideology in the
country affecting the smaller cultures and subcultures, the case is different in the satellite
communication era. In many studies related to the impact on culture, the main criticism is the
possible submersion of local culture and spread of foreign or western culture. Channels like
France’s Fashion Channel, MTV etc. and programmes like Big Boss are still subjects of concern
and research (Rampal, 2001, pp. 115-16). Holden and Scrase argue that the growing trend of
commercialized culture in the everyday life of the people visibly announces the global
commercialized media’s influence on them. In addition, exposure to television programmes is
culturally significant as it has a ‘globalizing influence’ – the liberal-minded urban and rural
middle class accepting the cultural changes and moving to a homogenized ‘modernity’ with the
other parts of the modern world. This is followed by a new cultural identity leading to “loss of
one’s language, customs and traditions”. (Holden & Scrase, 2006, pp. 56-57)
Another dominant function emerging is the empowering function of television
communication. The middleclass sections, women, the sections of society who have been treated
as ‘low’ castes are increasingly reconsidering their lifestyles and practices in the contemporary
India. The stage for change has been set with opportunities and advancements in education. The
exposure obtained through global media is opening doors to the culture of freedom and
empowerment to them. The digitization of the consumption-end is providing the power to the
audience to select and choose the channels and programmes and watch them at their convenience,
though the devices can convert the audience automatically as samples studied by media research
companies to check the viewing habits.
Thus it can be summarized that the liberalization era witnessed revolutionary changes
in the field of television communication in India with an emphasis to market-driven objectives
and functions. The function of providing information took a deviation by intertwining it with the
entertainment function in order to get the continuous attraction of the audience leading to the
evolution of the new function ‘infotainment’ and more than seventy 24-hour News channels
‘entertain’ the audience with news content using various genres. During this period the media
industry flourished as one of the most profit making industries and saw a huge rise in the number
of players in the media market. Commercialization led to immense outpour of foreign programmes
or their Indian imitations or replicas that are sponsored by advertisements. The television industry
played an important role in the expansion of entertainment industry in the country. In turn, gave
its part to the economic growth of the country also.
The public service broadcaster Prasar Barati and its television Doordarshan also had to
compete with the private entertainment channels in two ways - providing matching content in
quality and formats for capturing the audience and thereby keep the audience rating points high
to attract the advertisers. Hence the intended social and educational objectives got sidelined in
263
many ways. However, the educational channel Vyas and the UGC programmes being broadcasted
tried to manage this insufficiency.
Another area of significant change was that of the media ownership. The liberalization
period has seen the shift of monopoly of the government in the broadcasting to market of competition
with many private and transnational players. The technological developments are yet another
area that assists the changes in the functions of mass media. The entire scenario of media
production, distribution and consumption patterns also shifted due to the huge advancements in
the communication technologies. Digitisation facilitates the growth of individual consumption
patterns and media consolidation. Individuals can access and consume specific programmes or
genres of their choice on devices such as laptops, smart phones etc.
The pre-liberalisation era focus was on extension and developmental messages. The
programmes were hence educational, instructional and informational in nature and the medium
performed the same functions. But it can also be seen that with the inclusion of entertainment
programmes and commercials, story started changing. During the second stage of pre-liberalisation
period (about ten years in the 1980s), the television broadcast system in India passed through
certain important changes—technologically, programme-wise and with respect to
commercialization and revenue generation.
In the pre-liberalisation era, the functions were determined by the government and the
message content was decided, planned and implemented by the government and authorities.
Business motives were comparatively lesser in this period than the latter period of liberalization
as mass communication and television were viewed as tools for social development and social
reforms, although Doordarshan got commercialized in the 1980s.
The drastic changes in functions in the liberalization era included providing international
content, pattern and quality of programmes. Business and market functions that are inseparable
part of industrialization led television communication perform paramount economic functions
in the society as revenue generator, provider of job opportunities, and provider of communication
content according to the interests of the audience in addition to the historical functions as
provider of information, education, entertainment, facilitator of mobilization and as a promotional
platform for advertisers. Digitization and availability of television contents on laptops and
mobile phones maximize the opportunities for individual consumption, therein leading to the
function of satisfying personal needs.
In the liberalization era, the media contents or programmes are conceived, edited and
produced with the global ideology of entertainment. The demand/choices of audiences are given
preference and programme contents and programme formats are changed from time to time
accordingly. Along with that they are also impacted by foreign contents and formats. The period
also saw a prominent role of advertisers in determining the media content based on target audience,
market, profit etc.
In general can be seen that there have been additions of functions happening in each
stage of mass communication and not any removal or replacement of old functions though the
order of dominance shifted in different periods. The ownership and objectives have important
roles in determining the functions performed by media in society.
Conclusion
The developments and changes in the Indian broadcast media landscape have direct relationships
with the government policies from time to time than the technological advancements in the field
that happened at the international level. The analysis points towards the peculiarity of Indian
history of television – implementation of the technology by the government and bringing policies
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Media Watch 6 (2)
along with or before the implementation of every stage of its development. Whereas, in the
Western world it was the private companies that initiated the development of technologies first
and government intervened with regulations later.
It is brought forth that there has been a progressive development in the functions performed
by television communication from the start of television era in India. The functions got added up
from time to time in each stage and era and they have been an integral part of the social, political,
economic and cultural changes in independent India.
Another important conclusion emerged is the television communication’s empowering
function performed through providing exposure to other cultures, helping in identity building and
providing sense of powerfulness to the audience who belong to different strata of society. Further,
niche programmes and option to choose and demand; record and watch/consume at convenience;
interact while viewing etc. calls to define another function of need satisfaction through mass
media consumption. More exploration and researches are required to assert the extent of these
functions by mass media though these have been proved as the power of the active media user in
‘Uses and Gratification’ studies.
Many questions can be asked with a critical perspective - whether television is creating
a cultural crisis by submerging or destructing the rural and minor cultures through bringing the
global and dominant cultures, whether the market functions performed such as facilitating
economic growth, job opportunities etc. can justify the shifts in the objectives as a mass medium,
and what impacts and influences would be there on a country like India with the huge population
of youth in the long run and so on. These elaborate the scope for further research.
Table 1. Chronological development of Indian television broadcasting

Year Important Events
1959 TV introduced in Delhi as part of AIR’s services on September 15 as an experimental service
1965 Daily broadcast of an hour was set as a regular service
1966 Verghese Committee recommended autonomous National Broadcast Trust
1968 Increase in the duration of television service
1969 Agreement for SITE experiment with NASA, USA
1972 Second TV Station in Bombay on October 2, 1972
1973 TV Stations in Srinagar and Amritsar on January 26, 1973
1975 New stations named as Doordarshan Kendra in Calcutta (August 9, 1975), Madras (August 15, 1975), and
Lucknow (November 27, 1975); SITE was launched in 2400 villages of six States for a year
1976 Doordarshan was constituted and television broadcasting separated from All India Radio
1980 Sponsored programmes began with commercial telecasted
1982 INSAT-1A launched, Beginning of colour TV era, Doordarshan established national network linking all DD
stations through INSAT-1A. Satellite stop functioning for a month. National telecast of Asiad games
1983 INSAT-1B launched followed by linking of Doordarshan stations again
1984 Doordarshan with its largest number of transmitters became the public service broadcaster with the largest
terrestrial network in the world; First sponsored serial ‘Hum Log’ telecast, UGC’s educational programme,
Country Wide Classroom Project began from August 15, 1984
1985 Limited decentralization of broadcasting with the start of regional television network in Maharashtra;
formation of two separate departments for Posts and Telecommunications, Creation of VSNL for running
international telecommunications
1987/89 Beginning of morning and afternoon transmission
1990 Prasar Bharati Bill was passed by Indian Parliament after many amendments
1991 CNN’s war coverage available through cable networks, STAR beamed its satellite channels to India in May
1992 Zee started Hindi channel as a part of STAR network
1993 Four additional satellite channels and regional channels in 10 languages by Doordarshan
1994 Doordarshan was ordered to raise its own revenues for future expansion
1995 DD launched international channel, Supreme Court’s landmark judgment on ‘air wave as public property, not
the monopoly of the government’, Ram Vilas Paswan Committee on National Media Policy, Cable (Television
Network) Regulation Act promulgated
265
1996 Draft Bill for the establishment of an independent authority for broadcasting communication Broadcast
Regulatory authority of India, the joint industry body of advertisers, ad agencies and channels chose the
television audience measurement as the audience rating method
1997 Broadcast Bill was notified as Prasar Bharati (Broadcasting Corporation of India) Act, 1990, Prasar Bharati
Board (Broadcasting Corporation of India) the statutory autonomous authority was constituted on
September 23, 1997 converting AIR and DD as government corporations under the MIB
1999 New Telecom Policy, 1999 – mobile and internet services at low price
2000 Cable TV Networks Amendment Bill making it mandatory to carry three DD channels in the prime band,
permission to all broadcasters to uplink from India adhering to the advertising and broadcast codes
2001 Communication Convergence Bill of Department of Telecommunication was introduced in Lok Sabha
proposing for an independent Communication Commission of India but being not passed on time, got lapsed,
Direct-to-Home (DTH) Broadcasting services launched
2002 Doordarshan has 1242 TV transmitters; 40 million of the 75 million TV households have Cable and Satellite
connection.
2004 TRAI becomes broadcast regulator, a map audience rating system was set up
2006 Draft Bill – Broadcasting Service Regulation Bill lapsed as it was not passed by Parliament in 2007
2007 Broadcast Audience Research Council was established
2008 Self regulation guidelines for the broadcasting sector, 2008 by the Ministry of Information and Broadcasting.
The Ministry amended the downlinking guidelines to enable IPTV (Internet Protocol TV) services and issued
policy guidelines for the provision of IPTV services in India
2009 Ministry of Information and Broadcasting issued policy guidelines for head-end in the sky
2011 Legislation making cable digitization mandatory by the end of 2014
2013 TRAI enforced the Cable Act on advertising time and certain norms of advertising code on TV channels
2014 Digitisation of consumption-end. Set-Top-Boxes became compulsory for cable users
Table 2. Growth of television in India

Revenue Streams (Million Rupees) Total
Year Total TV C & S Homes DTH Homes Revenues
Homes (Million) Cable/local (Million
(Million) Advertising Advertising Subscription Rupees)
1959 0.000021 None None None NA None NA

1969 0.012303 None None None NA None NA
1979 1.1 None None 61.6 NA None 61.6
1989 22.5 None None 1612.6 NA None 1612.6
1992 34.9 1.2 None 3950 NA 1008 4958
1993 40.3 3 None 4960 NA 2520 7480
1994 45.7 11.8 None 8480 NA 9912 18392
1995 52.3 15 None 13450 NA 18000 31450
1996 57.7 18 None 19750 NA 21600 41350
1997 63.2 Na None 25840 NA NA NA
1998 69.1 29 None 33670 NA 34800 68470
2000 70 33 None 44390 NA 39600 83990
2001 79 40 None 47940 NA 48000 95940
2002 81.57 40.49 None 47170 NA 48588 95758
2003 NA 49 NA 50940 5000 88200 144140
2004 100 55 NA 58020 5500 99000 162520
2005 108 61 3.75 67460 6050 111600 185110
2006 112 68 5.2 60500 6655 131760 198915
2007 117 72 8 71100 7320 144000 22420
2008 123 83 15 82000 8052 167400 249400
2009 123 91 20 88000 8857 199800 296657
2010 134 103 24 103000 9742 228600 341342
2011 141 116 40 116000 9742 253800 379542
2012 148 120 51 124800 9742 266400 400942
266
Media Watch 6 (2)
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Vijayalakshmi, P. (2005). Foreign Television and Indian Youth: Changing attitudes . New delhi: Concept
Publishing Company.
Wells, W. D., Burnet, J., & Sandra, M. (2006). Advertising: Principles and Prac tice. New Delhi: Pearson
Prentice Hall.
Wright, C. R. (1974). Functional Analysis and Mass Communication Revisited. In B. J. G, & K. E., The
Uses of Mass Communication (pp. 197 - 212). Beverly Hills: SAGE Punblications, Inc. Retrived
from http://repository.upenn.edu/asc/8_papers
Shanthi Mathai teaches communication in the School of Media and Communication at Jagran
Lakecity University, Bhopal, India. Her areas of research interest include communication theories
and Indian media
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SOCIO-CULTURAL IMPACT OF GLOBALIZATION IN INDIA
RAJEEV KUMAR UPADHYAY*
Abstract: This paper is analysing and summarising the impact of globalisation on social and cultural values of
India. For this, a number of research papers have been reviewed, presented and corroborated in this paper. In
this paper social and cultural issues like gender inequality, equal opportunities, family structure and values,
social security net, life style, administration, education, technology, healthcare system, festivals, language,
music, literature, cinema, television and drugs and trafficking been discussed on the basis of prior research
works. The findings from those works have been summarized and presented in this paper.
Keywords: Globalisation, India, Value, Globalisation and Socio-cultural Change in India.

JEL Classification Codes:F2, F6, I00, O3, Z1.
INTRODUCTION
Globalization is the process of integration of economies and societies; and the intermingling of different cultures.
In other words, globalisation is the process of the mobilisation and distribution of resources (tangible and intangible)
from one geographic boundary to another. It leads to interdependence. Since the term globalization has been coined,
it has been popularly used in the narrow context of economics mainly but it is not limited to economics alone.Social
and cultural integration and intermingling is an important aspect and result of globalization.
From the social point of view, globalization seems to have significantly impacted the national life of countries such
as life style, attitude, identity, work culture, family structure and values and eating habits etc. As far as the culture is
concerned, globalization is expected to have impact on popular culture, festivals, literature, music and cinema and
television etc. The aspects like equal opportunities, gender inequality, drugs and trafficking and other social and
* Author is research scholar at Department of Commerce, Delhi School of Economics, University of Delhi.
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Journal of Centre for Reforms, 2014
Development and Justice Vol.2 No.3
political values are some other important aspects that get affected in the process of globalization of economies and
societies and India is not immune to these changes.
Literature Review
There have been a number of studies covering vast areas of social and cultural changes in India that have crept
in due to globalisation of economy. Since liberalisation of Indian economy globalisation has been increasing as
suggested KOF index for globalisation (see chart-1).
EDUCATION
Globalization has not only impacted the Indian economy and society as whole but also the whole education and
knowledge system as well.How knowledge is produced, used and transferred in India is witnessing significant
irreversible shift. For a society like India that had been knowledge based society and is turning out to become a
knowledge-based economy, the scientific research in all the field of life and business is the most important driver of
innovation and development. Under the effects of the process of the globalisation, the whole education system is
undergoing an unending and continuous change to adjust with the new realities in international education system;
mainly in higher education (Kellner, 2000). The rapid change in communication technologies along with the
globalisation is changing the relationship between the students and teachers within school and university system. The
whole system is being based on ideas, values and knowledge building producing a shift in society from
industrialisation towards an information-based society. It reflects the effect on culture and brings about a new form
of cultural imperialism (Chinnammai, 2005).
TECHNOLOGICAL ADVANCEMENT
As a result of liberalisation and globalisation of Indian economy and huge foreign direct investment as well as
entry of many global technology firms in India along with manufacturers and service providers, the overall
technological profile of India has drastically changed in last two decades. New technologies such as internet and
information and communication technologies are available in India to everyone at the cheapest prices in the world. In
fact in field of information technology India is one of the most advanced countries in the world. These technological
capabilities are equipping Indians with a lot soft power and opportunities to interact and exposed to the other parts
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THE DISCUSSANT
of world. This is not only helping in economic integration but also in social integration as well. But at the same time
the whole process is bringing drastic attitudinal shift towards a number of social values, issues as well as taboos.
HEALTH CARE IMPROVEMENT

There are huge improvements in the overall healthcare system in India because of globalisation of Indian economy
and interaction with the international organizations and foreign investments in healthcare system such medicines and
equipments etc. Also this has increased bilateral and multilateral relationships in healthcare sectors. The Increased
transnational activities demand for new national and transnational regulations and policies, some of which impact
upon the healthcare arena in new ways opening doors new developments and cooperation. Indian healthcare economy
is associated with a number of new developments in specific marketable niches of practice, therapy, technologies or
research and developments. But at the same time there are the potential tensions between adherence to international
agreements and achievement of national health goals (Bisht, Pitchforth, & Murray, 2012).
CHANGING SOCIAL VALUES

The possible impact of globalization on the society is a controversial issue. Some normative economist find it to be
beneficial while other contest the whole idea of globalization as they find globalisation as a cause for weakening of the social
values mainly in India. Studies show that the process of globalisation of Indian economy and the society is causing permanent
damages to social structure and economic system of India (Jindal, 2013). It is not that globalisation tends to damage the social
values only but it has helped in bringing some positive social changes in Indian society such as providing employment
opportunities in organized sector to down trodden section of society and Dalits(Mishra & Nayak, 2010).
GENDER INEQUALITY
In India, earlier male members were sole bread earners and have been the sole face of family to outside world and
women were restricted to four walls of their home. But the process of liberalisation and global integration of Indian
economy has made Indian women more aware about their rights and in result has struck a fatal blow to this established
practice. This has resulted in expanded freedom of women in Indian society.Today the participation of women in economic
and social activities has increased manifold in comparison to 1990s. The participation of women in industries likes
manufacturing and exports has increased significantly over time. Even in armed and police forces, the participation of
Indian women is increasing.Situation has come that today in normal circumstances men cannot take any family decision
alone ignoring women's wishes as earlier(Jindal, 2013).It has to some extent decreased the inequality of gender
discrimination in India but still there remains huge gender discrimination at large. Despite the increase in female
participation rates, women still remain economically disempowered not only in India but across the world. Indeed, one of
the reasons for the increase in female participation in economic activities in India and other countries is mainly the wages
as women accept lower wages for the same task in comparison to men(Chambers, 2000). This tendency of employers as
well as women is in some way increasing the gender inequality.
EQUAL OPPORTUNITIES
The concept of equal opportunities in each and every sphere of life is granted by the Constitution of India since it
came into force through a number laws and provision but in practice there was/is huge discrimination on the basis
caste, religion, region and gender. Although it has been decreasing since independence of Indian state but the process
of globalisation has increased the process social integration by providing equal opportunities to Dalits, women and
other down trodden sections of society (Mishra & Nayak, 2010).
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CHILD LABOUR
The impact of globalization on child labour has mixed results. In some ways it has increased the child labour but
with some economic benefits while in some ways it has decreased the child labour. It has been seen that in many
developing countries, child labour has shifted from the informal home and family employment to more visible and
formal employment. Though, it has increased the earning and income of poor families. In some developing countries
many stringent and restrictive laws have been put in place to stop child labour as result from the pressure from
developed countries. But according to White (1996) the aim of child labour laws should better concentrate on
protection from exploitation than exclusion from labour market(White, 1996).Child labour in India is serious problem
as for many it is not an issue at all in India. Even well educated and intellectuals are found to be violating child rights
by employing them in their household as domestic help(Basu, 2002). More than 80% of the total child labourers are
engaged in agriculture and rest of engaged in manufacturing sector and unorganized sectors such food stalls and
domestic help. The elimination of child labour for government is a priority and thousands of national and international
agencies and non-governmental organisations are working towards this goal but these efforts seems to be not
sufficient(Bhattacharya, 2007).
GLOBAL AND SOCIAL INSECURITY

There is broad consensus among researchers is that the process of globalization has increased economic, social
and political insecurity. It has increased job insecurity, decreased social protections, food insecurity and most
important the fear of terrorism. International trade and movement of employees from one part of world to another
have increased social insecurity. The combination of increased insecurity and increased inequality is so widespread
that it threatens the sustainability of the current globalization process(Kaplinsky, 2001). The same trend is being
witnessed in India also. The whole social security net available to the people of all ages and groups. The social
security net available to old age people India has been broken in Indian cities and is breaking in villages that earlier
provided huge social and moral authority to old people in Indian society and families (Pais, 2005).
FAMILY STRUCTURE AND VALUES

Globalisation in India has resulted into impact not at large but has intrusion in the Indian families as well. Family
values and structure has been affected by the globalisation of India. The Indian family values and structure are giving
way to western family structure and values (Pais, 2005). Joint families are breaking and being replaced by nuclear
families. This is having negative impact on old age people and children at large. The traditional support available to
them by the immediate and extended families is eroding (Jindal, 2013). Also the acceptance of love marriages and
inter caste marriage is in rise. Besides the benefits, the globalisation has tended to impact families negatively affecting
stability of families. There is rise in number of divorces in India in recent times (Derne, The Effect of Cultural
Globalisation in India: the Implications for Cultural Theory, 2005).
LIFE STYLE
There are quite significant differences between the Indian and western life styles and similarly Indian urban and
rural life style. But the process of globalisation is changing the whole way of life in India as whole (Pais, 2005). The
difference between western and Indian urban lifestyle is diminishing with every passing day and rural India is
following the same direction of the urban India. The whole dressing sense in whole India is changing at very high pace
and the acceptance of western cloths and life style is increasing in every nook and corner of India. Traditional Dhoti-
Kurta and Sari is becoming a rare thing in India that was a common outfit of Indians in late 1980s and 1990s(Derne,
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Culture, Family Structure and Psyche in Hindu India: the 'Fit' and 'Inconsistencies', 2000). These are being placed by
denim jeans, T-shirt and tops and other western outfits. There is increase in consumerism in India and Indians are
looking more options to consume and spend (Fernandes, 2000).
ATTITUDE AND IDENTITY

Liberalisation of economy has increased India's cultural and social contacts with other societies and cultures. This
is having huge impact on the overall attitude of people of India towards their identity and self image. Indian society
had been following collectivist attitude and identities of people were collective.Rather than be an individual, people
used to identify themselves through groups, so interests were often collective. But off late the attitude of Indian
society is changing and individualism is on rise. Rather than associating with any group or interests, now people are
more concerned with their respective individual identities and interests.This has also impacted the accommodative
nature of Indian society that often used to accommodate people by sacrificing its needs. Now people are becoming
more and more demanding and rather than sacrificing they are ready grab others rights as well to ensure their well
being.
EATING HABITS
Indian earlier preferred eating at home and alcohol was not seen to be good but the influence of western culture
affecting everything. Dining outside home is increasing with every passing day and drinking alcohol is not a taboo as
it was a decade ago. In urban India, dining outside home and drinking is common phenomenon. Rural India still lags
in this regard but is catching as drinking and dining outside home is increasing in rural areas also (Sinha, 2012).
LANGUAGE AND LITERATURE

Many languages such as French, Chinese and Japanese are becoming popular as demand and supplying is
increasing with every passing while English has turned out to be national language of country. This is having impact
on the literature as well. English literature has become very rich in India and Indian English has been accepted as
language. The way novels and poetry is written in India is also getting westernised. Earlier most of the writers were
writing happy ending stories but now realistic grey shaded stories and poetry is being written and read by readers
across all the Indian languages (Khilnani, 2004)
FESTIVALS
India is a multi culture society and has a long history of co-existence and cohesiveness. In comparison to other
societies and nations, India has larger numbers of festivals and Indians are found to generous in celebrating these
festivals together of all religions. But with the globalisation of Indian economy and society a lot of new types of
festivals like friendship day, fathers and mother's day and Valentine's Day etc have got acceptance of young
generation of India in last two decades. Also the celebration of these festivals has got westernized over time. This has
attracted huge reservations and opposition from some sections of society (Parameswaran, 2008).
MUSIC
The whole spectra of music have been hit by the process of globalisation. Indian listeners have got huge exposure
to western music and it has been instant hit in India. This can be verified with help of increasing demand for western
music. This has impact Indian artists and they are westernising the music.
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CINEMA AND TELEVISION

Indian cinema and television industry has also been affected by the process of globalisation and liberalisation of
Indian economy. This industry has changed in multiple dimensions from technology to content(Ranganathan &
Rodrigues, 2010). Huge foreign money and advanced technologies have come to Indian cinema and television
industry. This has changed the whole experience of Indian audience. Prior to liberalisation of Indian economy,
Doordarshan was the only television channel in India but after globalisation process started, a number of new
television channels came in the market and today that there are hundreds of channels that a viewer can choose from.
The process of globalisation has not resulted into advancement in technology but also in content and presentation of
content. The content and presentation of content has been westernised to huge extent eroding Indian way of content
and presentation (Butcher, 1999). This development in cinema and television is being opposed by many critics as they
claim that technology, nudity and objectification of women are taking place of the art and Indian sensuality.
DRUGS AND TRAFFICKING

A negative result of globalisation is expanding network of drugs and trafficking across the world and India has
been hit hard. Consumption of drugs has significantly increased after liberalisation of Indian. Also incidents of
trafficking are on rise.
ADMINISTRATION
Liberalisation of Indian economy had led to liberalisation of Indian administrative setup. It has brought in greater
transparency and a sense of some responsibility as introduction of new technologies such internet and e-governance
in administrative setup and Right to Information Act 2005 has enforced more transparency, responsiveness,
productivity, ethical values and efficiency. The hierarchal structure is getting flatter emphasising on stakeholders'
satisfaction and pro-economic policies removing multiplicity of organizations. This has resulted into increased
interaction between business and administration (Meenu, 2013). These developments in the Indian economy and
administration are in line with international experiences(Gunter & Hoeven, 2004). But at the same time these pro-
business developments might have negative impact on overall well being of people.
POLICY RESPONSES
The policy responses from the governments across the world have been very varied and different for the same
problems relating social and cultural issues and problems encountered. Some countries have tried to benefit from the
process of globalization and had been successful to some extent while others have turned to protectionism(Fischer,
2003).India has been following the strategy of protectionism in some areas of business, culture and society while
allowing globalisation and liberalisation process in remaining sectors. For example India has liberalised most of
sectors of its economy and culture but has been following protectionist approach in media and agriculture sector etc.
SUMMARY AND CONCLUSION

The impact of the globalization on India has been positive as well as negative. Some areas have benefited while
others have suffered in socio-cultural context and this has forced policy makers to put efforts to decrease and contain
the negative impacts.
Globalisation has brought huge improvement in fields of technology, education and healthcare. Research and
advance education institutions can play important role in the process of globalization. Advanced economies in world
have for long been working together with the universities and other educational and research institutions for the
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development of new knowledge and skills to improve their operations and functioning. Emerging economies like India
and China have also started investing in collective and collaborative studies and research with the business houses
and educational institutions. Such studies and developments can help nations and societies to make globalization
process more sustainable and beneficial for the society by remedying the loopholes and distortions caused only profit
seeking market oriented elements.
At the same time it has helped to bring down gender inequality and establish the concept of equal opportunities
to everyone irrespective gender and caste. This has improved the position of women and Dalits in society. Festivals,
music, cinema, television, literature and languages well as eating habits have been largely affected by western values
in terms of expression and celebration etc. Also the process of globalization has reduced the autonomy of states in
matters of economic activities. But it has brought transparency, higher efficiency and sense of responsibility in
administrators. These changes can be said to be beneficial in one way or other. But in some areas like family structure
and values, attitude and identity and social security, globalisation has made irreversible damage. Also the case of
drugs and trafficking is on rise in India.
Although there are some changes in whole country at social as well as cultural level because of the process of
globalisation but globalisation cannot be sole factor of changes; whether beneficial or non-beneficial. There must be
some other factors that also might be responsible for multi facet change in socio-cultural changes in India.
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PDF compression, OCR, web optimization using a watermarked evaluation copy of CVISION PDFCompressor
Impact of liberalization and globalization on
society and culture in India
• Life Style
• Eating Habits
• Rise of consumer culture

• Festivals
• Changing Social Values (Family Structure)
• Gender (In)Equality
• Social Insecurity
• Child Labour
• Changing occupations, opportunities and values

• Income inequality
• Digital divide
• Attitude and Identity

Impact of liberalization on elementary education
in India
National Education Policy 2020
• Education is fundamental for achieving full human potential,

developing an equitable and just society, and promoting national
development.
• Providing universal access to quality education is the key to India’s

continued ascent, and leadership on the global stage in terms of
economic growth, social justice and equality, scientific advancement,
national integration, and cultural preservation.
• Universal high-quality education is the best way forward for
developing and maximizing our country's rich talents and resources for
the good of the individual, the society, the country, and the world.
• India will have the highest population of young people in the world
over the next decade, and our ability to provide high-quality
educational opportunities to them will determine the future of our
country.
• The Kothari Commission (1966) felt that one of the important social
objectives of education is to equalize opportunity, enabling the
backward or underprivileged classes and individuals to use education
as a lever for improvement of their conditions.
• The global education development agenda reflected in the Goal 4
(SDG4) of the 2030 Agenda for Sustainable Development, adopted by
India in 2015 - seeks to “ensure inclusive and equitable quality
education and promote lifelong learning opportunities for all” by 2030.
Constitutional mandate on education
• Articles 15(4), 41, 45, and 46.

• 15(4): [empowers the State to make] any special provision for the
advancement of any socially and educationally backward classes of
citizens or for the Scheduled Castes and the Scheduled Tribes.
• 41: The State shall …. make effective provision for securing the right
to work, to education and to public assistance in [certain] cases of
unemployment, old age, sickness and disablement…
• 45: Provision for free and compulsory education for children
• The State shall endeavour to provide, within a period of ten years
from the commencement of this Constitution, for free and
compulsory education for all children until they complete the age of
fourteen years.
• 46: Promotion of educational and economic interests of SCs, STs and
other weaker sections
• The State shall promote with special care the educational and
economic interests of the weaker sections of the people, and, in
particular, of the Scheduled Castes and the Scheduled Tribes, and
shall protect them from social injustice and all forms of exploitation.
• The Right to Education has now been made a Fundamental Right
under Art 21A by the Constitution (Eighty-sixth Amendment) Act,
2002.
• (21A: The State shall provide free and compulsory education to all
children of the age of six to fourteen years in such manner as the
State may, by law, determine).
• Art. 45 substituted by the Constitution (Eighty-sixth Amendment) Act,
2002, as —
• “45: Provision for early childhood care and education to children
below the age of six years.—The State shall endeavour to provide
early childhood care and education for all children until they
complete the age of six years.”.
• After 7 years of the Eighty-Sixth Amendment (2002) to Indian
Constitution, the Right of Children to Free and Compulsory Education
Act or Right to Education Act (RTE) was passed by the Indian
Parliament on August 4, 2009.
• Despite the provisions, there is wide gap in terms of percentage of
literacy between STs and general population
• 2011: Total % of literacy – 73, among STs – 59.
Public expenditure on education
• India needs to spend 6% of its GDP (gross domestic product) on

education, every national education policy since 1968 (Kothari Commission).
• i.e., Kothari Commission (1966) recommended for 6% share of the
national income for education.
• The state was spending only around 4% of GDP till 2015
(Venkatanarayanan 2015).
• The country spent only 3.1% of its GDP on education in 2019-2020
against the 6% recommended by every national policy since 1968 (52
years since that recommendation).
• Within this, only half of the investment goes to the elementary
education sector, the remaining being for secondary, higher, and
technical sectors of education and some other special schemes.
(Venkatanarayanan 2015)
• One of the results of this underspending on public education is that
over 10 lakh government schools, where over half of India’s (nearly
24.8 crore) children study, have remained poorly funded. This is
among the reasons why learning outcomes in India have been so
poor, say experts.
• Annual Status of Education Report (ASER)

Main causes of low literacy in tribal areas
• Poverty of the parents
• Inadequate infrastructure and supporting services
• Poverty of the parents
• For poverty-ridden parents, children’s education is a luxury, which can
hardly be afforded.
• Grown-up children assist parents in earning livelihood; they look after
younger children.
• Absence of childcare centres (Creches, Balwadis) in tribal areas
• Inadequate infrastructure and supporting services
• Inadequacy of education institutions, boarding and lodging facilities.
• Supporting services – incentives in terms of scholarships and book
banks are insignificant to attract the children.
• To improve infrastructure and supporting services
• Priority for opening of educational institutions, and construction of
school buildings under NREGS
• Residential (hostel) facilities to all (who walk more than 4 km) to
attend the schools.
• Childcare centres (Creches, Balwadis) in tribal areas
• Suitable nutritional programmes in such centres.
Television in Neoliberal India
• From a single television channel, Doordarshan to
satellite channels
• India switched its position from as a State of highly regulated
media policies and that with a monopoly of government in
the sector, to a deregulated open broadcasting market
ending the single channel era and entering the multi channel
era of “stiff competition”.
• This was followed by unforeseen growth of cable
network, and availability and accessibility to foreign
television programmes and multichannel televisions.
• The media scenario witnessed two parallel situations of
broadcasting during the post liberalization years –
• Doordarshan as the public broadcasting television in India with
specified social objectives regarding its content and working, and
• the private satellite channels without any such bindings of social
development on programme content but need only to follow the
general codes of self regulation issued by the government from
time to time.
Objectives of Prasar Bharati:
• (i) Upholding the unity and integrity of the country and the value enshrined
in the Constitution
• (ii) Promoting national integration, safeguarding citizen’s rights and to be
informed on all matters and presenting fair and balanced flow of
information
• (iii) Paying attention to the fields of education and spread of literacy, rural
development, health and family welfare and science and technology
• (iv) Creating awareness about women’s issues and taking special steps to
protect the interests of children, the aged, and other vulnerable sectors of
society
• (v) Providing adequate coverage of the diverse cultures, sports and games
and the youth affairs
• (vi) Promoting social justice, safeguarding the rights of working classes,
minorities and tribal communities
• (vii) Expanding broadcasting facilities and promoting research and
development in broadcast technology
• The emergence/rise of private satellite channels marked a
sharp break with the past and shattered the barriers of state
control.
• It made India the world’s third largest television market, just
behind China and the United States.
Impact of television on Indian society
• The rise of private satellite television, after decades of state

monopoly over the medium, has engendered a
transformation in Indian society and culture.
• availability of 24 hour News channels

Suggested Readings:
• Mehta, Nalin. 2008. India on Television. New Delhi: HarperCollins. (Chapter 1)
• Mathai, Shanthi. 2015. “Indian Television in the Eras of Pre-Liberalisation and

Liberalisation”. Media Watch 6 (2) 255-268.

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Unit 1: Basic Concepts

• Relaxation (of laws and rules)

• Deregulation of the Industrial Sector

state—all backward or underdeveloped in comparison to the ‘‘modern’’

The Zippies of ‘‘India Rising’’

. . . a young city or suburban resident, between 15 and 25 years of age, with a

‘‘older generation’’ has idealized ‘‘Gandhian poverty’’ and socialism,

metropolitan, upper-caste elite indexed by the category ‘‘zippie.’’Ω This

Scholars have drawn attention to shifting articulations between con-

than see consumer citizenship as simply displacing older notions of

increasingly feel that many of the questions proper to citizenship—where

Engendering Youth and Globalization

culture. A crucial node in the crisis-ridden narratives about Kerala in the

wider commodity culture. While femininity is often equated with ‘‘di√er-

sometimes three, to attend college there. The college is one of a large

college, and generally participating in the everyday activities of a college

of consumption among young people (through fashion, movies, and the

older narratives of Nehruvian nationalism tied to service to the nation are

impinge on the highly demarcated zone of commodiﬁed youth culture

India’s Economic Reforms: Achievements and

Key words: economic reforms, employment, inclusive growth, India, poverty

JEL codes: N00, E01, I31

Accepted: 11 July 2018

2. The Reforms of 1991

46 © 2018 Japan Center for Economic Research

2.1. Stabilization and reforms

© 2018 Japan Center for Economic Research 47

48 © 2018 Japan Center for Economic Research

8 Financial sector reforms were seen as an essential accompaniment to industrial liber-

© 2018 Japan Center for Economic Research 49

2.2. Gradualism and continuity over time

50 © 2018 Japan Center for Economic Research

© 2018 Japan Center for Economic Research 51

52 © 2018 Japan Center for Economic Research

3. Impact of the Reforms on Growth

We now present an assessment of the impact of the reforms on different aspects of

3.1. Impact on growth

© 2018 Japan Center for Economic Research 53

Table 1 India’s GDP growth compared to other countries/groups of countries

1980–1991 1992–2002 2003–2017 2018–2023

Advanced economies 3.0 2.7 1.7 1.9

Source: IMF (2017).

54 © 2018 Japan Center for Economic Research

Figure 1 Growth rates of GDP.

3.2. Were the reforms inclusive?

© 2018 Japan Center for Economic Research 55

Table 2 Growth and poverty in India

Annual growth of GDP (%) Population in poverty

Economy Agriculture % in poverty Millions

1993–1994 — — 45.3 403.7

3.3. Employment generation

56 © 2018 Japan Center for Economic Research

© 2018 Japan Center for Economic Research 57

3.4. Education, health services, clean drinking water, and sanitation

58 © 2018 Japan Center for Economic Research

3.5. Inequality of income and wealth

3.6. Environmental sustainability

4. Prospects for the Future

© 2018 Japan Center for Economic Research 59

1 Macroeconomic stability is a precondition for successful growth in an open econ-

60 © 2018 Japan Center for Economic Research

© 2018 Japan Center for Economic Research 61

62 © 2018 Japan Center for Economic Research

• The objectives/purpose of disinvestment