The economic transformation through castewol

(GS MAINS 1: Salient features of Indian Society, Diversity of India.)

Context: 

• The ongoing protests against the Agnipath programme, agitations against farm laws a year before, and agitation for reservation by agriculture castes are all arguably an outcome simmering discontent due to this jobless economic growth. 

A structural factor :

• India has been in a phase of jobless growth for at least two decades now, coupled with rising poverty and discontent in rural areas. 
• It is argued that India could not generate a pattern of growth that produces jobs and inclusive development in the way most of the East Asian countries have done.
• Many sociologists believe that caste, which is mostly confined to politics, could be among the answers, a structural factor that impedes economic transformation in India.

Caste as crucial factor:

• Indeed, there is a link between economic transformation and caste in India, which is often missed by academics. 
• In contemporary literature too, caste enters as a post-facto category in understanding inequalities in economic and social outcomes when the fact is that caste is central to economic transformation itself. 
• Caste through its rigid social control and networks facilitates economic mobility for some and erects barriers for others by mounting disadvantages on them. 
• Caste also shapes the ownership pattern of land and capital and simultaneously regulates access to political, social, and economic capital too.

Caste impedes the economic transformation:

• Caste impedes the economic transformation in India in ways like ownership and land inequality related to productivity failure within the farm sector; elite bias in higher education and historical neglect of mass education, and caste-based entry barriers and exclusive networks in the modern sector.
• Hence, the divergent outcomes in structural transformation between countries in the global South, particularly India, China and South East Asia, is due to these factors. 
• All the nations which succeeded in achieving inclusive growth in the Global South had land reforms combined with human capital, invested in infrastructure by promoting capitalism from below and began industrialisation in the rural sector. 

Colonial intervention:

• India has one of the highest land inequalities in the world and this unequal distribution of land was perpetuated by British colonial intervention that legalised a traditional disparity. 
• Some castes were assigned land ownership at the expense of others by the British for its administrative practices and further the British inscribed caste in land governance categories and procedures that still underpin post-colonial land ownership pattern in India. 
• They made an artificial distinction between proper cultivators who belong to certain castes and those labourers — lower caste subjects who cultivated granted/gifted lands (Panchami, etc.) that have institutionalised caste within the land revenue bureaucracy. 
• The prescribed categories and practices have entrenched caste inequality in land ownership which emboldened and empowered mainly intermediate castes at the expense of others in rural India.

Role of green revolution:

• The Green Revolution that brought changes in the farm sector also did not alter land inequality as it was mostly achieved through technological intervention. 
• Though India has certainly seen surplus food production since then, the castes that were associated with this land pattern and benefited from the Green Revolution tightened their social control over others in rural India. 

Economic reform:

• While land has lost its productive capacity since the 1990s, thanks to the real estate and construction turn in the Indian economy, it still works as a source of inheritance, family lineage and speculative capital. 
• In that sense, the economic reforms of the 1990s were a watershed moment where the farm lobby lost its power. 
• Even those who made surplus in farm sectors could not transform their status from cultivators to capitalist entrepreneurs in the modern sectors, except a few castes in western and southern India. 
• Those castes that had a stake in agriculture did not benefit from the economic reforms because of historical neglect of education and the entry barriers erected by the upper castes in modern sectors. 
• The recent agitations by the Jats in Haryana and Punjab, the Marathas in Maharashtra and the Patels in Gujarat, demanding, among other things, reservation for their castes in higher education and formal jobs exemplify this new trend.

Required educated workforce:

• If strong growth in productivity within the farm sector is crucial for sustained economic growth, an educated workforce is equally necessary to move to the modern sectors. India failed on both accounts. 
• The Indian education system has been suffering from an elite bias since colonial times as British colonialists educated tiny groups of elites, largely from upper castes, for their own administrative purpose.
• Although the Indian Constitution guaranteed free and compulsory education under its directive principles, it was hardly translated into practice, instead, attention was given to higher education for the elites. 
• Hence, inequality in access to education got translated into inequality in other economic domains including wage differentials in India.
• In fact Indian elites sustained their position at the top by denying education to a substantial proportion of the population till positive-discrimination policies were implemented in higher education. 

Comparison with other countries:

• In contrast to India, Chinese and other East Asian countries invested in basic education and gradually shifted towards higher education. 
• Their success in manufacturing is a direct outcome of the investment in human capital which reflects in the contemporary global labour market mirroring this skill spectrum; as South East Asia and China captured low-end manufacturing jobs, India largely concentrated in high-end technology jobs. 
• China taking over India in manufacturing is due to this neglect in human capital formation as rural India, hampered by a poor endowment of human capital, could not start entrepreneurial ventures even remotely on the scale of the Chinese.

Barrier to entrepreneurship:

• Caste shaped policy outcomes, including India’s highly unequal land reform and lack of public provision of education and health, which in turn erected barriers to economic diversification. 
• Caste also worked in building social networks, for example, castes that were already in control of trading and industrial spaces resisted the entry of others. 
• Even those who had economic surplus in farm sectors could not invest in non-farm modern sectors as social inequalities have mounted barriers for economic transition. 
• Even the relative success in South India is being attributed to the ‘Vaishya vacuum’ — an absence of traditional merchant castes. 
• In contrast such a transition took place in South East Asia, where diversification into urban enterprises by agrarian capitalists was possible.

Conclusion:

• India has been in a phase of jobless growth for at least two decades now, coupled with rising poverty and discontent in rural areas.
• Thus current transformation which is partly an outcome of the  interface between caste and economy needs to transformed into opportunity for all to realized real growth potential of India.