[Dec 2007, Volume 4 Quarterly Issue] Pdf File size - The IIPM Think ...

MORE MARKETS, LESS GOVERNMENT
mate contention of millions of marginalized
citizens of the country – regarding
their right to work, and
particularly the right to avail of work
of a suitable and gainful nature, in
keeping with the directive of the constitution
of India (Article 41; Directive
Principles of State Policy) calling upon
the State to make effective provisions,
within the limits of its economic capacity
and development, for securing
the right to work. In a country where
the rate of growth of the size of labour
force exceeds the rate of growth of employment,
and where over ninety percent
of the workforce is employed in
the unorganized sector, the challenge
of creating gainful employment opportunities
for a large segment of socially
and economically disadvantaged citizens
remains the greatest trial of relevance
of our welfare state. The performance
of the State with respect to
its duties towards the poorest of the
poor people might have been inadequate
and often inefficient, but it has
undoubtedly been critical. No other
agency has the scale and depth of presence
amongst the poor like agencies of
the State. There are important policies
favouring affirmative action for the
socially marginalized, employment
guarantees, relief from disasters, decentralized
governance, right to information,
provisions against atrocities
and social security benefits for especially-challenged
people and affordable
basic services. However, bureaucracies
managing a State’s performance
have often failed to administer the
pro-poor provisions effectively and
have eluded any kind of accountability
to the people. In many states, they
have also undermined the status and
potential of Panchayati Raj institutions
by assuming sweeping powers over decisions
relating to local development.
Holding functionaries of the State accountable
is the greatest need of the
hour, not reducing the role of
the State.
The Way Forward
For poverty reduction to be effective
and viable in the long run, the State
needs to play a far more efficient and
accountable role than it is today, without
withdrawing itself from the obligation
of poverty reduction. Markets can
be made a supportive channel towards
creation of more development opportunities
for the people, through regulations
that bring about a level playing
field. A two-pronged strategy, where
the State assumes full responsibility
for efficient and accountable delivery
of crucial basic services and entitlements,
and also enables poor communities
to effectively engage with markets
can significantly contribute to the
wellbeing of the poor. Facilitating
meaningful participation of the poor
in contemporary markets would call
for support towards value addition and
sale of economic products of the poor;
storage of goods; establishment of efficient
institutions for managing procurements,
forward movements and
linkages; price control and equitable
incentives, amongst other things. Local
institutions of governance need to
be freed from the control of bureaucracy
and capacitated to play an effective
regulatory role towards safeguarding
the strategic needs of the poor,
based on principles of equity and
social justice.
Markets, unless regulated with a
pro-poor orientation, can eliminate
the poor rather than contributing to
poverty reduction, given the inherent
tendencies of supply-side domination
and profit maximization. The poor
have little say in the functioning of
market forces, but have some stake and
control in the governments they elect.
The only way in which the poor can
safeguard their interests in a market is
by electing pro-poor governments that
eliminate anti-poor market forces and
regulate supplies of essential goods
and services in order that they remain
accessible and affordable to the poor.
Good governance is the right of every
citizen, and ensuring the same through
effective mechanisms of accountability
of government functionaries is the
greatest need of the hour.
End Notes
1
‘Dalit’ literally means ‘oppressed’
and refers to socially marginalized
communities living in India.
2
Evaluation undertaken by The Independent
Evaluation Group of the
World Bank, titled “Assessment
of the Bank’s assistance to agricultural
development in Sub-Saharan
Africa during FY 1991-06”
3
Ref. report titled ‘World Bank Neglects
African Farming, Study Says’,
published in the New York
Times, October 15 2007
4
Ref. ‘The Poverty Puzzle’ by C.P.
Chandrasekhar and Jayati Ghosh,
Macroscan, February 22, 2000
5
Ref. ‘Hunger amidst Plenty’ by Jean
Drèze, India Together, December 3,
2007
THE INDIA ECONOMY REVIEW
73