[Dec 2007, Volume 4 Quarterly Issue] Pdf File size - The IIPM Think ...
[Dec 2007, Volume 4 Quarterly Issue] Pdf File size - The IIPM Think ...
[Dec 2007, Volume 4 Quarterly Issue] Pdf File size - The IIPM Think ...
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Nilanjan Banik,<br />
Associate Professor, Institute for<br />
Financial Management and<br />
Research (IFMR),Chennai<br />
<strong>The</strong> Economics Of Social Unrest –<br />
Its Causes And Cure<br />
"Injustice anywhere is a threat<br />
to justice everywhere."<br />
-Martin Luther King Jr.<br />
"Naxalite faction vows to avenge Nandigram<br />
killings"<br />
26 May <strong>2007</strong>, Times of India.<br />
Newspaper headlines, such as these,<br />
are not hard to find these days.<br />
<strong>The</strong> Naxalite movement takes its<br />
name from a peasant uprising which took<br />
place in May 1967 at Naxalbari – a place on<br />
the north-eastern tip of India situated in the<br />
state of West Bengal. Many believe that<br />
these fearsome Naxals are now in Nandigram.<br />
Although to a layman what is happening<br />
in Nandigram carries more political<br />
connotation there are some economics behind<br />
it. <strong>The</strong> purpose of this article is to examine<br />
the economics of social unrest.<br />
Nandigram is a case in point but the following<br />
arguments in general will have a broader<br />
implication for India as a whole. As is<br />
known, recently the Naxals have also expanded<br />
their area of operations (from their<br />
old pockets in West Bengal, Bihar and Andhra<br />
Pradesh in the 1970s) to new guerilla<br />
zones in other states like Orissa, Maharashtra,<br />
Chhattisgarh, Jharkhand, Madhya<br />
Pradesh and Uttar Pradesh. So what goes<br />
into making a militant? Actually, it is the<br />
socially deprived group of people who takes<br />
arm against the administration. Does the<br />
people are more socially deprived now than<br />
what they were before? We are considering<br />
the period before and after reforms. This<br />
benchmark is because of less militant activities<br />
during the period before reforms.<br />
Although there were few reforms during<br />
early 1980s, the all encompassing process<br />
of reforms started during 1991. We are defining<br />
reforms in terms of globalization and<br />
liberalization. Surprisingly, incidence of<br />
anti-government activities was less during<br />
the period before reforms. Surprising because<br />
then the average Indian in terms of<br />
economic well-being was worse off compared<br />
to what the people are now. For example,<br />
India’s GDP grew at an average rate<br />
of 3.5 percent until mid-1970s; it increased<br />
to 5.5 percent during the 1980s; and further<br />
to around six percent during the 1990s.<br />
During the last three years, Indian economy<br />
has recorded a growth rate of around nine<br />
percent per annum.<br />
42 THE <strong>IIPM</strong> THINK TANK