The present regime’s economic philosophy is as simple as it is obscene: give five kilogrammes each of free ration to the poor and help a crony take five airports.
We ought not to “lose sleep over inequality”, the newly-appointed chair of the Finance Commission wrote recently. “Let’s not mind the gap”, exhorted the chair of the Economic Advisory Council to the Prime Minister.
The writings of Arvind Panagariya and Bibek Debroy came close on the heels of the publication of the World Inequality Lab’s report on India. Thomas Piketty and his colleagues at the Lab reported that inequality in India is at an all-time high. We did not see this vulgar level of inequality even during British rule. They reported that 1% of our population corners 22% of the national income and owns 40% of the nation’s assets. The income share of India’s top 1% is among the highest in the world. However, Panagariya and Debroy tell us not to worry. They say what should matter is not rising inequality but whether extreme poverty is eliminated. Nobody can quarrel with the need to eliminate extreme poverty. The problem arises, however, when inequality is seen as an unavoidable prerequisite for it.
These mandarins evidently expect that wealth creators — indeed, both of them — will invest and create jobs. As part of the deal, Panagariya even suggested that we should be tolerant of their occasional ostentatious consumption: as if in consonance, video clips of a wealth creator’s extravagant pre-wedding bash dominated the Indian media’s feed recently.
The International Labour Organization has also released its report on unemployment in India. It said that of the total unemployed, 83% are youth. The share of educated youth among the total unemployed population is 66%. India’s chief economic adviser has said that addressing issues such as unemployment is not the remit of the government. He likened leaders who promise to fight unemployment to a fictional prime minister in Cho Ramaswamy’s satirical Tamil film, Muhammad bin Tughluq, in the 1970s. It is unclear if V. Anantha Nageswaran had the prime minister in mind when he said that.
India has one of the highest youth unemployment rates in the world. The headline rate of 23% puts the country in the company of Yemen, Iran, Lebanon, Syria and other such nations that do not boast of being ‘the fastest growing economy’ or the ‘fifth-largest economy’. For our small neighbour, Bangladesh, the figure is 12% — half of that of India’s. Even scarier is the fact that the unemployment rate is 44% among those in the age group of 20 to 24 years in India.
We now know that large numbers of youth are thronging the recruitment centres for jobs offered by the Israeli government in Gaza. Recently, in Hyderabad, we woke up to shocking news. The dead body of a young man was flown back home from Ukraine. Unbeknownst to us, youngsters are being recruited from here to aid Russia’s war effort. A railway recruitment advertisement in January 2022 for 35,000 jobs elicited an incredible 1 crore 25 lakh applications.
When the unemployment situation is so grim, making India’s youth scramble for any job that they come across anywhere in the globe, Sanjeev Sanyal of the PMEAC held forth on “poverty of aspiration” in an interview. He felt our youngsters are not aspirational enough. What was evident in that interview was his insensitivity and his insouciance. He lamented that India’s youth are not aspiring to be like Bill Gates or Mukesh Ambani or Elon Musk. He is disturbed that our youngsters are settling for government jobs (including the civil services); else, they harbour such limited aspirations as becoming “adda intellectuals”, union leaders, or even “local goon politicians”.
The ideological positions of these foremen of our economic policy establishment are not original. They are inappropriately repurposed positions of neoliberal high priests like Friedrich Hayek and Milton Friedman. While Ronald Reagan and Margaret Thatcher were the forceful proponents of these ideas in politics and governance in the West, the creed’s portrayal by Gordon Gekko’s character in the 1987 Hollywood box-office hit, Wall Street, made it seductively attractive to the upwardly mobile classes throughout the world.
It, from then on, became not only morally acceptable but also desirable to be in a single-minded pursuit of profit and wealth. The primary responsibility of businesses, in their book, is to the shareholders. Increasing the value and profit of businesses has been set as the mission of society. How they get increased and to what effect on the rest of the society are of little concern. For them ‘Greed is good’; ‘Inequality is cool’.
In this formulation, inequality is not only cool but also a prerequisite for economic growth and, in the long run, eliminating extreme poverty. Public policy should help the process if it can. Or it should stand aside if it cannot and wait expectantly for the trickle-down to happen. Those who desire equality and distributive justice are scoffed. They are vilified as distributors of poverty, obstructing the creation of wealth.
Economic inequality is unacceptable in any society, even in the medium term. It surely spells catastrophe for a diverse and plural country like India, which already has social inequality in the form of rigid caste/gender/religious hierarchies hardwired into its existence. Political, educational, cultural, economic fortunes and opportunities for upward mobility in our society are largely predicated on the lottery of birth. Economic inequality in the Indian context, therefore, exacerbates every other form of inequality to disgraceful levels.
Telling the poor and the disempowered to settle for five kilos of ration and allowing cronies to grab five airports make every other form of inequality worse. It will turn India into an insufferably unjust society. It will subvert democracy and the rule of law. Large sections of the people will be crippled politically, socially and culturally. They will be at the mercy of a small band of robber-barons who accumulate enormous political and social power.
Such an ideology of ugly disempowerment of the many and foul empowerment of a few is surely the ‘road to serfdom’ for the many. In the bargain, everybody will end up losing sleep and get sucked into the gap.
Parakala Prabhakar is a political economist and the author of The Crooked Timber of New India
