What’s missing from India’s monetization debate

On August 23, India’s Ministry of Finance launched the National Monetization Channel with the intention of generating around 6 trillion rupees ($ 81 billion) over the next four years. It said it will achieve this goal by leasing some of its main assets, such as roads, pipelines and railways, to non-governmental entities for a fixed period of 25 years.

Politicians in India, as expected, responded to politics according to their political alliances: those in the government field presented it as an efficient way to finance public spending, while those in the opposition framed it as an attempt to sell. public sector units (UPM). .

Undoubtedly, there is much to criticize about politics. But some problematic aspects of political opposition to this policy also require greater scrutiny.

First, opposition leaders oversimplified the implications of the policy, considering it equivalent to the “sale” of these public assets. It can be argued that, in practice, a 25-year lease transfer is very similar to a sale. But most opposition figures, especially those in the Indian National Congress, found themselves unable to present this argument effectively. After all, the current public sector unit leasing scheme is just an expanded version of the neoliberal economic policies adopted and / or proposed by the congressional-led governments of the past. The half-hearted approach in opposing politics is therefore a reflection of his own hypocrisy with regard to neoliberal reforms.

Furthermore, most opposition figures used rhetoric that does not necessarily resonate with the Indian public in their attempts to criticize the policy. In their interviews and social media posts on the subject, they repeatedly emphasized that leasing these public assets would amount to selling the “crown jewels” or “family silver.” In fact, almost all of the leading media outlets published headlines with similar phrases while covering the debates on asset monetization policy.

Perhaps only historians will remember, but the use of the phrase “selling the family silver” in the context of privatization-oriented economic policies has a very specific connection to the Thatcher era in the UK.

In the mid-1980s, former British Prime Minister Harold MacMillan criticized Prime Minister Margaret Thatcher’s privatization policies by likening them to the sale of family silver. That was the first time the phrase came to the fore when it came to the issue of privatization. It is an entirely different matter that MacMillan, a longtime conservative, might not criticize privatization itself as much as he opposed the treatment of capital and rent as equivalents, but regardless of MacMillan’s intentions, the retort of this phrase by Indian politicians and the media in the current context is staggering on multiple levels.

To begin with, it is just another example of how all the other narratives espoused by India’s ruling class elites continue to suffer from a lack of collective imagination, one that should be rooted in the Indian context. Whether in their notion of development or in opposition to it, they continue to draw from the West (and often, the British) as if they were in a perpetual state of colonial hangover, whether on a conscious or subconscious level.

However, the matter is not simply a desperate imitation of narratives. It also reflects how blatantly India’s elites resort to class rhetoric and, more specifically, caste. In a country where more than half of the population belongs to the lower castes and is still beaten by the upper castes for wearing gold jewelry, one can easily imagine why it is unlikely that most Indian families possess any good that can imagine remotely. or metaphorized as “family silver”. That shows precisely how disconnected Indian elites are from the immediate social context in which they are trying to operate.

Furthermore, the use of metaphors such as “family silver” or “crown jewels” when describing a public good also amounts to a misrepresentation of the basic qualities and purpose of that asset. State-owned assets, at least in theory, exist for the use of all citizens, regardless of their socioeconomic status, while family money means private property and, therefore, privileged access. This is not a difficult contradiction to see, but India’s ruling elites seem to be blind to it.

Indian economists responded to politics relatively better than their politicians, as most of them managed to refrain from employing such out-of-touch, colonial-influenced rhetoric. However, like their political counterparts, they failed to engage efficiently with the underlying theoretical framework of the policy.

Of course, in the first place, those who generally favor neoliberal measures or support the BJP government were not expected to express any meaningful criticism. But even those who are generally critical of the policies adopted by the current government have been quite unstable in their opposition to the policy.

Take, for example, the response of Kaushik Basu, former chief economic adviser to the government of India (during the congressional-led alliance government), who is otherwise critical of the current BJP government and most of its members. Economic politics. Basu criticized the National Monetization Pipeline only from the implementation aspects, but did not engage with the theoretical foundations of the widespread neoliberal measure. And it’s not just Basu. It is becoming a defining characteristic of Indian liberals in recent years to oppose government policies on implementation grounds, as if the policies were “good in theory” or well intentioned.

Unfortunately, neither is true. On the theoretical side, only a few economists have so far pointed out where politics falls short.

Sonali Ranade, for example, argued that the current policy will not lead to any kind of inclusive infrastructure development, nor will it solve any existing economic challenges facing the Indian government.

Zico Dasgupta explained that the policy is grossly inadequate to address the “impossible trilemma of stabilizing the debt-to-GDP ratio, increasing public spending to invoke recovery, and maintaining the existing revenue-generating structure.” Prabhat Patnaik, meanwhile, argued that it will “put more wealth in the hands of the rich” while increasing existing pressures on ordinary citizens.

However, in their criticisms of politics, even Ranade, Dasgupta and Patnaik did not touch one aspect: caste. While they all made compelling arguments as to why asset monetization policy is essentially “anti-poor,” they failed to emphasize that even among the poor, the policy would harm lower castes the most.

Let’s look at the two sectors that are supposed to generate 52 percent of the revenue from the entire monetization plan: railways (25 percent) and highways (27 percent).

The Indian rail ecosystem, while not without discrimination, is nevertheless the largest public sector in which Dalits, Muslims and Tribes have gained some prominence as economic actors. The 2020 data suggests that about 25 percent of all Indian railroad employees are from Castes and Scheduled Tribes. This was achieved only because Ferrocarriles is an equal opportunity employer and is obliged to follow the reservation policy in the hiring process.

Private actors, on the other hand, are not obliged to follow the reserve policy in hiring and thus the representation of marginalized caste groups in this sector is bound to stagnate under monetization policy.

And the impact will not be limited to the direct and organized workforce either; Lower castes participating in the informal economy are also likely to lose out as a result of this policy.

The overwhelming majority of street vendors and vendors selling goods or catering to train passengers are also from lower castes and tribes. The specific guidelines that Indian Railways establishes in its commercial code, provides, at least in theory, space for small businesses run by Dalits and Tribes: “… in the case of small stations and on the roadside, preference will be given to the scheduled Breeds / Scheduled Candidates of the tribe “. Will these small businesses prosper after asset monetization? Will Dalit street vendors have the same access to privately run platforms or will they be allowed to board privately owned trains? The answer is no. “With the private sector preparing to take over the 25-year lease to manage a portion of the Railways operations, one should wonder about the fate of India’s constitutional promise to elevate its groups further. marginalized.

India’s national highway system has also never been free from caste-based discrimination. But there are reasons to believe that monetization will exacerbate some of the existing foreclosure practices.

Even with the government in charge, the construction of new roads or highways in India often results in the forced acquisition of land from the Dalits, and not from their wealthier upper-caste neighbors. Even when Dalits try to resist this injustice with protests lasting several days, their pleas fall on deaf ears. Once built, most of these highways serve four-wheelers and prohibit the movement of two-wheelers. This is despite the fact that marginalized groups are much more likely to own two-wheelers, while the majority of four-wheelers belong to the advanced castes. Thus, roads built on Dalit lands with Dalit labor are used in a way that leads to further socio-economic exclusion of the Dalits themselves. Rather than rectify these disparate treatments, the government is now transferring responsibility for building, maintaining and managing the country’s highways to the private sector. If anything, the very logic of investment and profit will now ensure that exclusion increases, as vehicle ownership and land tenure patterns already tilt in favor of the upper castes.

The situation is the same, to varying degrees, in other public sectors, leading to an undeniable conclusion: India’s new privatization campaign, through the National Monetization Channel, will hurt the poor, and especially the castes. and lower tribes.

The failure of the Indian government to understand this is worrying. But what is even more worrying is that opposition leaders view India’s main public assets simply as “family silver” and do not even mention how the move will affect the most marginalized communities in the country.

And the majority of Indian economists, it seems, are also making the same mistake. It is simply not enough to use caste as a control variable in regression equations. Economists, and especially those in the upper castes, need to step out of their comfort zones to learn the ways in which their thought processes are tainted by the caste society in which we all live.

Only then, perhaps, will we learn as a nation to always consider and speak of caste when we support or criticize an economic policy, since in the Indian context the latter remains inseparable from the former.

The opinions expressed in this article are the author’s own and do not necessarily reflect the editorial position of Al Jazeera.


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