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Written by: Vikas Rawal
Type of document: Research Paper
India is a country of vast inequalities. It is important to state it because this fact is often ignored in domestic as well as in international discussions on India’s development experience. In the international literature on economic inequality, India is typically identified as a place with low or moderate levels of inequality. This is a myth that we must reject at the outset. The state in India has mastered the art of producing sophisticated statistics that are bogus, and this has contributed, not in a small way, to creation of this myth.
In this article, I hope to be able to highlight three simple points. First, that India is a country where inequality in contemporary times has been on the rise and has taken incredible proportions. Second, the dividing lines of inequality are drawn between classes, between castes, tribes and communities, and between men and women. And finally, that these dividing lines of class, caste and gender, drawn in thick long-lasting paint, overlap with each other in no insignificant way. As a result, most deprived are the ones that carry the triple burden: of being landless, of belonging to a disadvantaged social group, and of being women.
I shall focus on inequalities in access to land, inequality of incomes, and inequalities in access to employment. For discussing these, I shall use, in addition to official statistics, illustrations and statistics from village surveys I have participated in for about three decades in different States of India. Between 2006 and 2012, V. K. Ramachandran and I jointly coordinated the Project on Agrarian Relations in India, as part of which we surveyed selected villages in one or two States every year. In all, the Project covered nine States and 21 villages. These surveys provided insights on agrarian conditions in different parts of India and have had a fundamental influence on our understanding of the subject [See agrarianstudies.org/category/publications/socio-economic-surveys-series/]
I need to explain at the outset terms that I will use to refer to different social groups. Although commonly used in India, these terms may be unfamiliar to international readers. I will use the term dalit (which roughly translates as oppressed) to refer to castes that have been historically treated as untouchable in the Hindu caste system and are now identified as Scheduled Castes in the Constitution of India for the purposes of affirmative action. The term adivasi refers to persons belonging to indigenous tribes, identified as Scheduled Tribes in the Constitution of India. In addition, in most parts of rural India, Muslims are an economically deprived and socially discriminated group (Sachar et. al., 2006). I will refer to all social groups other than dalits, adivasis and Muslims as « other castes ». These castes include caste Hindus as well as, in a few of the study villages, upper castes from Jain and Sikh religions.
India has the largest number of land reform laws in any country. In most States of India, land reform laws impose a ceiling on the amount of land – between 12 to about 70 acres of land depending on the type of land and the State – that a household can own as well as impose restrictions on unsecured tenancy. These laws have, however, been implemented seriously only in three States – West Bengal, Kerala and Tripura – that have had governments led by the Left for prolonged periods[In West Bengal, a state where the programme of land reforms implemented by the Left was among the most ambitious land reforms that have been implemented anywhere in the world in recent times, gains achieved through land reforms have come under a serious threat after the Left parties lost in the 2009 elections in the State.]. In rest of the States, land reform laws remain only on paper and are routinely violated [Implementation of land reforms in most States was poor mainly on account of lack of political will to do so. Deliberate delays in enactment of land reform laws, loopholes in laws, and disinterest on the part of political, executive and judicial authorities were the main reasons behind lack of serious implementation of land reform laws in most States (see Appu, 1996).]. However, because of existence of these laws in the statute books, ceiling surplus land and incidence of unsecured tenancy are concealed almost entirely in the official surveys and land records. A compilation of ingenuous ways with which this in done could be a subject of an incredibly interesting book.
For various reasons, among which the most important is suppression of information on actual land ownership and tenancy by large landowners, official statistics on land ownership and operation in rural India are extremely poor. They underestimate landlessness, and omit, almost entirely, existence of large of landholdings as well as any cultivation under unsecured tenancy
Estimates of landlessness from official surveys can be corrected through some careful adjustments. When this is done, even the official statistics show that over 40 per cent of rural households in India do not own or operate any agricultural land (Rawal, 2008, 2013). Most of these households depend on on-farm and off-farm manual wage labour.
In contrast, on incidence of large land holdings and on incidence of tenancy, there are no reliable national statistics. Lack of reliable information on these two aspects has often been misinterpreted to make two claims that are false and must be rejected.
The first claim is that, with demographic changes, landholdings have been subdivided to such an extent that there are no large landowners in rural India today.
In villages that we surveyed across eight States of India between 2005 and 2012, the largest landowners had between 33 and 450 acres of land. Three of our study villages had landowners with more than 150 acres of land each. In only two villages – both in the State of West Bengal, a state where large-scale land reforms were implemented by a Left government – we did not find any large landowners. In every village other than these two villages in West Bengal, there were households that had considerably more land than the statutory ceiling on land.
The second claim that is often made but is false is that the incidence of tenancy – in particular, landless sharecroppers cultivating land owned by large landowners – has declined to insignificant levels. And this is explained on account of the previous point I made, that since there are no large landowners, those who own land, all cultivate it themselves. Few observations about agrarian conditions in contemporary India could be farther from reality than these. The real explanation is that, since there are laws against unsecured tenancy, large landowners who lease out land to sharecroppers, and under their instructions, the sharecroppers, do not register sharecropping in official records or surveys.
In reality, incidence of unsecured tenancy is substantial, and that such tenancy contracts are completely unregulated and extremely oppressive. In eleven of the villages that we studied between 2005 and 2010, on average about 20 per cent of the operational holding of households was cultivated under tenancy. Let me give you a few illustrations from some of these villages. In Ananthavaram, a village in coastal Andhra Pradesh, 65 per cent cultivators were tenants, all cultivating land leased from other landowners in the village under informal contracts, and they paid up to 85 per cent of the produce in the main rice paddy crop they cultivated as rent (Ramachandran et. al., 2010). In Harevli, a village in the northern State of Uttar Pradesh, about 26.9 per cent of land was cultivated under informal tenancy contracts sometime during the years. Sharecroppers who cultivated paddy rice in the wet season had to provide unpaid labour services to landowners for obtaining land to cultivate (Rawal, 2009). In Birdhana, a village in Haryana, sharecropper-cum-farm servants called siris got only a tiny part of the produce (between one fifth and one twelfth) from the land they cultivated, they were kept under bondage, often physically confined, and subjected to worst forms of violence, sexual assault and abuse (Rawal, 2006).
A special feature of land relations in India is that persons belonging to untouchable castes (henceforth referred to as dalit, meaning oppressed, castes) have historically been denied a right to own land under the Hindu customary law. Although illegal under the constitution, discrimination in land markets against dalits and other backward social groups continue to be widespread. Official statistics as well as data from all village surveys show a continued disparity in ownership of land between dalits and caste Hindus. To give a few illustrations: In Ananthavaram (coastal Andhra Pradesh), 24 per cent of dalit households owned some agricultural land while among caste Hindus, this proportion was 58 per cent. In Gulabewala (Rajasthan), only 3 per cent of dalit households owned some agricultural land while, among Jat Sikh households, this proportion was 85 per cent. In Warwat Khanderao, 58 per cent of dalit households owned some agricultural land, while among caste Hindus, this proportion was 78 per cent (Bakshi, 2018; Ramachandran and Swaminathan). This disparity is seen in almost every village. I would like to specially point to writings of Sukhdeo Thorat on the issue of origins and continuation of caste discrimination in various aspects of economic life in India (see, for example, Thorat, 2009; Thorat and Neuman, 2012).
Finally, other than a few exceptions, land is owned, controlled and inherited by men (see, for example,Agarwal, 1988, 1994; Rao, 2008; Rao and Rürup, 1997). It is only in states that have had Left-led governments that a serious attempt has been made to use land redistribution programmes to give land titles in name of women, individually or jointly with their husbands.
Land continues to be the most important source of economic and political power in rural India. Economic inequalities are rooted in ownership and control over land. Landlords, whose character varies considerably across the country, also continue to be the bulwork of State power in the countryside. They mobilise votes, control village-level public institutions (for example, panchayats, cooperatives, schools, libraries), are often the first point of contact in implementation of state programmes (and, of course, corner a disproportionate share of benefits from them) and often continue to hold quasi-judicial powers in the village.
There are no official statistics on incomes in India. For good statistical reasons, official measurement of poverty in India has been based on data on consumption rather than on incomes. However, this has been problematic from the perspective of studying inequality since the same statistics are often used to talk about income inequalities. Since higher incomes are associated with a greater savings ratio, consumption inequality is expected to be considerably lower than income inequality.
Estimating household incomes in peasant economies is not easy. Since household-based self-employment or informal wage employment are the most important sources of income in such economies, most households do not have any records of either their incomes or expenses they incur in their owned enterprises (including their farms). Given that a large part of what these households produce is self-consumed, and a large part of what they use in production is self-produced in turn, accounting of their incomes is a challenging task. The most careful attempt at developing a consistent framework for accounting of incomes and estimating them was done as part of the Project on Agrarian Relations in India.
In a paper that used data from eight of our survey villages, we showed that top ten per cent households accounted for over 54 per cent of income in these villages, while bottom half of the households accounted for only 11 per cent of the income. For these villages together, the Gini coefficient, a ratio that rises from 0 to 1 as inequality rises, was 0.59 (Swaminathan and Rawal, 2011). This compares with the worst national-level Gini coefficients that we can find for any country in the world. Given that these are just a few villages, and we are not taking into account rural urban disparities, points to the likelihood that we are talking of the highest levels of inequality that exist anywhere.
A vast majority of households in rural India have dismal levels of incomes. A comparative study of income from ten villages showed that the median level of income varied between $0.28 per capita per day and $0.95 per capita per day. Average income of poorest twenty households varied between $-0.12 per capita per day (that is, they had negative incomes) and $0.26 per capita per day. Incomes from agriculture were particularly meagre for a vast majority of peasants. With exception of only one village, in every village we studied, a substantial proportion (between 5 and 42 per cent, looking at nine of these villages) of cultivators actually incurred a loss in agriculture in the survey year.
In contrast, the topmost households in almost every village had substantial incomes. In nine of the villages we studied, the highest income varied from about $9 per capita per day to a whopping $97 per capita per day.
Inequality of income is associated with stark disparities in incomes of different classes and castes. In every village that we surveyed, landlords, big capitalist farmers and rich peasants had the highest incomes while poor peasants and hired manual workers had the lowest. In every village, dalit, adivasi and Muslim households have substantially lower incomes than caste Hindu households (Swaminathan and Rawal, 2014).
Let me illustrate this using examples from some of the villages we have studied. In Ananthavaram (Andhra Pradesh, 2005-06), average annual income was Rs. 30690 for dalit households, Rs. 17728 for Muslim households and Rs. 93727 for caste Hindu households. In Harevli (Western Uttar Pradesh, 2005-06), average annual income was Rs. 27540 for dalit households, Rs. 34251 for Muslim households and Rs. 109557 for caste Hindu households \(Ramachandran et. al., 2010)[Between 2006 and 2009, exchange rate was approximately Rs. 45 to one US dollar.]. Similar disparities are seen in every village that we have surveyed.
A class-wise analysis for Gulabewala (Rajasthan, 2007-08) shows that average annual income of a hired manual worker household was Rs. 26059 while that of the richest class, the Big capitalist farmers, was over Rs. 2 million. In Rewasi (Rajasthan, 2009-10) average annual income of hired manual workers was Rs. 74027 and average income of the poorest class of hired manual workers was Rs. 76990 while average annual income landlords and rural rich households was Rs. 809273 (Rawal and Ramachandran, 2013).
Similar disparities are seen in every village that we surveyed between 2005 and 2012.
Income disparities arise from disparities in access to land and other forms of productive capital, and disparities in access to different sources of non-agricultural employment. Landlords and capitalist farmers belonging to « other castes » not only have higher and more productive land, they also own non-agricultural businesses and capture formal-sector salaried employment. On the other hand, casual manual wage labour is the main source of non-agricultural income for dalits, adivasis and Muslims.
Segmentation in the labour market – between those who are able to corner lucrative salaried employment in the organised sector (including government jobs) and those who can only find work in manual jobs in the unorganised sector (usually casual, and both on-farm and off-farm) – is an important source of economic disparities. Wages for casual manual labour are low, and typically below even the statutory minimum wages (Jose, 2013; Usami, 2011). Rural workers dependent on casual manual employment face massive underemployment (Dhar, 2013;Rawal, 2006).
In casual labour market, the most important line that divides access to employment is of gender. An average male worker receives substantially higher days of employment and substantially higher wages than an average woman worker.
For example, in Ananthavaram (Andhra Pradesh, 2005-06), an average male hired worker worked for 106 days while an average female hired worker worked for only 65 days. In Rewasi (Rajasthan, 2009-10), an average male hired worker worked for 105 days while an average female hired worker worked for 73 days (Dhar, 2013). Male workers find greater employment in non-agriculture casual labour, most of which is located outside the village, while women workers, for most of whom mobility is restricted within the village, work primarily in agriculture. This is the most important factor that accounts for disparity between levels of employment and earnings of men and women wage workers in rural India.
Wages in casual labour market vary by the task for which workers are hired. Agricultural tasks for which women workers are hired have lower wages than tasks for which male workers are hired. It is also not uncommon to pay a lower wage for a woman worker than a man for the same task. For example, in Ananthavaram (Andhra Pradesh, 2005-06), daily wage for weeding in paddy fields was Rs. 30-35 for women workers but Rs. 50-70 for men workers (Ramachandran et. al., 2010). In every village we studied, average daily earning in agriculture was lower for women than for men. In seven out of eleven of our study villages, average daily wage in agriculture for women was less than 70 per cent of the corresponding average for men.
An important change that has taken place in the agricultural wage labour markets over the last twenty years is the shift from time-rated work to casual piece-rated work. This is particularly the case in tasks where women workers are hired. Tasks such as land preparation, sowing and transplanting, weeding, application of plant protection chemicals, harvesting, picking and threshing are increasingly done on piece-rates. Shift from time-rates to piece-rates has been facilitated by increasing mechanisation, which makes quality of work primarily machine dependent rather than dependent on quality of the work done by workers. The shift to piece-rates breaks the solidarity among workers, fragments human labour and helps keep wages under check.
There are two kinds of tasks where piece-rated work is particularly advantageous to employers. In tasks like cotton picking, where work is easily fragmented and payments measured on the basis of picking done by a worker, it helps mobilise women workers who, given their domestic and other responsibilities, cannot work full time. Given that there is a vast surplus reserve army of such labour, piece-rates provide the flexibility to tap it at minimal cost. Women can work for a few hours every day, combining it with their domestic work, and be paid for the amount of picking that they do. And since this is an « additional income » of the family, being brought in by a member not considered a full-time worker, even low payments are acceptable. Secondly, in tasks where working-age men are employed under piece-rated contracts overwork, additional unpaid labour of elderly, women and children from their families is deployed to finish the work. In such cases, capacity to mobilise such unpaid labour is the most critical qualification for a male worker to obtain such employment (Rawal, 2006).
5. Neo-liberal Globalisation and Rising Economic Disparities
India progressively adopted policies of liberalisation and globalisation from 1991. In rural India, the period since 1991 has been associated with a progressive decline in state support in the form of investment, credit, subsidies and extension. In addition, international trade was liberalised considerably after India joined WTO in 1995.
A number of scholars have discussed the impact of these policies on the rural economy1. Given the large number of issues involved, I will not discuss these issues in any detail. However, by way of concluding this discussion, I would like to briefly discuss two specific questions.
What has been the impact of policies of liberalisation and globalisation on economic disparities?
What lessons does this hold for the movements that are opposed to neo-liberal globalisation?
Limited official statistics that are available on rural India show that there has been a distinct and significant rise in inequality in access to agricultural land, in ownership of assets and in consumption expenditure of rural households during the period of economic reforms (Jayadev et. al., 2007; Mahendra Dev and Ravi, 2007; Rawal, 2008, 2013, 2014;Saha, 2010). In all these aspects of economic life, disparities across caste, class and gender have widened.
There are two kinds of political-economy processes that have contributed to rising disparities in rural India.
First, withdrawal of state support to agriculture and rural economy is selective, and disproportionately affects the poor. The balance between interests of dominant agrarian classes and the neoliberal agenda is struck by maintaining (and sometimes even strengthening) support to these dominant rural classes while cutting back protection provided to rural poor. Contraction of formal-sector credit provided to agriculture is associated with increasing inequality in disbursement of credit, with a larger share of credit going to big farmers (Chavan, 2007; Ramachandran and Swaminathan, 2005; Ramakumar and Chavan, 2007). Overall levels of state support in terms of provision of subsidised inputs, machinery and technical knowhow have declined. But of what remains, these services are grabbed even more by the landlords and big capitalist farmers, while poorer sections of the peasantry are increasingly marginalised. Liberalisation of rural markets – in particular, declining state intervention in pricing of fertilisers and diesel – have affected resource poor farmers particularly dearly. Price support and public procurement are not only provided selectively to politically dominant agrarian classes, in years when government accumulates large stocks of foodgrain, they even serve to depress prices in the open market where poorer sections of the peasantry are forced to sell their produce. As a result of disproportionate access to state support and their dominant control on land and other resources (like irrigation water), dominant rural classes are able to get substantial incomes from agriculture even when agricultural incomes of most peasants have plummeted.
Secondly, economic liberalisation has opened opportunities for the rich in the urban economy, and rural rich have taken advantages of them. Over the last two decades, landlords and big capitalist farmers have created new bases in urban economy, with parts of their families migrating to urban areas and setting up businesses there. Building on their rural land base, accumulated capital in various forms, and political power, they have entered into businesses like civil contracts, construction, real estate, transport and agricultural trade. Usurious moneylending by landlords and other rural rich has expanded to fill the vacuum left by withdrawal of social and development banking.
The evidence from rural India does not support the thesis that neo-liberal globalisation uniformly dispossesses peasantry in less-developed economies. In addition to creating a more unequal global world order, neo-liberal globalisation also sharpens economic contradictions within less-developed economies. The struggle against neo-liberal globalisation in less developed countries has to take this into account and must, thus, be combined with a struggle against all forms of exploitation, including landlordism, caste discrimination and gender discrimination of the kind that we see in rural India today. Unless these struggles are combined in less developed countries, anti-globalisation movements run the risk of being subverted under the influence of landlords and domestic bourgeoisie, whose class-interests are not necessarily in contradiction with the forces that these movements aim to struggle against.
1 A summary of these debates can be seen in Ramachandran and Rawal (2010). On impact of trade liberalisation on Indian agriculture, see Ghosh (2005).
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