Go for inclusive growth

As much as the government works to formalise the Indian economy, conditions force people into illegal and informal business

By Sunita Narain
Published: Saturday 02 March 2019
Growth economy
Image: Getty Images Image: Getty Images

I asked a few fortnights ago if countries like India could afford to take the beaten path to economic growth and sustainability or do we have to reinvent? I also said that there is little appetite to do growth differently, but it has to be.

Take the agrarian crisis, which is on our head today. For once, the face of the farmer is in the news. It is clear that whatever governments — past and current — have done is not working. Indian farmers are caught in a pincer — food they grow is costing more to produce because of the higher expenses of inputs; including resource depletion like water or soil and also due to increased risk of variable and extreme weather. Plus, governments want cheaper food to keep down inflation and they also need to procure vast quantities to supply under the public distribution system. They need costs in control. There is little investment in the infrastructure to provide marketing support or benefits to producers. In all this, the risk to the business of farming has grown because of climate change and variable weather.

There is also the strong belief — coming from the well-established economic lexicon — that farming is now under- or un-productive and that it needs to be pushed back. There are too many Indians involved with this unproductive business, it is said. It cannot be made to work. This is where there are no answers. If farming—the business of growing food—will not be the business that will provide employment, then what will? The formal economy that we want to adopt so desperately is good for everything but employment. We know that.

What we must also recognise is the urban face of this farm crisis. Today, if land, water or forests have no livelihood future, then people have no alternative but to migrate. This migration will bring them to cities, where the crisis of services and pollution will grow. The fact is that today’s urban growth is not in the “legal” areas — where housing and commercial establishments are in the light of governance. What is clear is that cities are imploding in the illegal areas, where business and housing is all without official sanction — or at least on the books. The irony is that as much as the government works to formalise the Indian economy, conditions force people into illegal and informal business.

The same happens with the protection of the environment. In our case we cannot export our environmental cost to another country. But we do export it out of the formal business, working in the formal industrial area to the unauthorised and out of bounds residential area. Now business pollutes but it is out of the ambit of the regulators. It gets dark. The cost of regulation is what makes governance expensive. Unaffordable for a country like India. So, pollution grows. Bad health grows.

But what is also clear is that the backyard of the poor is enjoined to the front-yard of the rich. If business moves to the illegal, then regulation of its emissions become a greater challenge, this then means that the airshed is polluted. It affects the rich and the poor. It is the same with sewage and industrial effluent—the illegal discharge of the poor, when mixed with the treated effluents of the rich, still kills rivers. The pollution of our waterbodies adds to the contamination challenge and health burden. It is the same with garbage—the “illegal” settlements with virtually no services will burn their waste, adding to toxins in the same air we all need to secure our right to clean air.

This is why the model of globalisation, which shifted emissions but did not reduce consumption, will not work for us. We can move the pollution to our backyard, where the poor live, we can even discount the costs of environment and labour, but we will face the brunt of this. Nobody else. There is no escaping this fact. Today, as China closes its doors to plastic and other waste of the western world, these countries are learning the pain of its disposal.

There are now more and more protests, in poorer regions of the US, for instance, where waste incinerators are being set up. People do not want emissions in their backyard. Who would? This then is the challenge. It is for this reason I keep saying that middle-class environmentalism will not work in India—for us sustainability is about inclusive and affordable growth. But maybe, just maybe, it is time that the age of middle-class environmentalism, which advocated technocratic solutions and pushed the problem to another region or another day, must die in the world. There is no other planet that can take our waste. It is time we understood this.

(This piece was first published in Down To Earth's 1-15 March, 2019 print edition)

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