Sunday, August 24, 2014

"Neo-liberals,” "Neo-leftists" and Intelectual vested interests


       In an article in this paper (Indian Express, August 22, 2014) Prof Ashutosh Varshney of Brown University asserts:  “It is Amartya Sen, the nemesis of neo-liberals, who would emphasize toilets as much as growth.”  This is perhaps a true perception in the exalted World of Western Academia and among the many academic followers of Prof Sen in India. However what happens in the trenches of Yojna Bhavan, North and South block where many of these and related issues were decided is starkly different. It is the followers (neo-communist/neo left?) of Prof Sen who emphasized increased “private health spending” on middle class diseases over “public health” spending on sewers and sanitation. It is the “neo-leftists” who emphasized “right to food” as a means of eliminating malnutrition as against, sewers sanitation and toilets, that “market liberal” like me showed was the main cause of child malnutrition.[i] It is these neo-leftists who emphasized doubling and tripling the money allocated (inputs) on standard inefficient, corrupt, leaking food, education and health programs (mostly States subjects), ignoring or downplaying arguments on the vital need to achieve better outcomes/results by first improving their effectiveness by addressing governance issues(including that of corruption).

Market Liberal Analysis

  A Planning Commission paper Virmani (2006)[ii] analysed poverty, hunger, education and health indicators (in a comparative framework) and their linkage to government policy and programs and argued that, “The broad theme that emerges is that the failures on this front, apart from the indirect effects of growth, are linked directly to the failure of governance.   This failure has many dimensions; the misallocation of government resources, the failure to follow norms of social benefit-cost analysis that were the reason-de-tar for the introduction of national planning, the neglect of public and quasi-public goods that are the most fundamental justification for the existence of government and a gradual (over decades) but progressive deterioration in the quality of governance. This conclusion differs radically from the conventional wisdom (national and international) about India’s poverty, social indicators and income distribution.  Even if treated as a hypothesis it merits debate and further analysis.” 

The paper concluded that, “It can be argued that the ideal (most efficient) social welfare policy is a direct transfer of income to the poor through a negative income tax.  In a developed country this would be very easy.  How can we transfer these amounts directly to the poor, the needy and the disadvantaged in a poor country?  The answer, by setting up an Indian version using a modern smart card system that delivers cash and/or subsidies to the poor based on their entitlements as per specified parameters and norms.  Such a smart card could be programmed with identity (photo & biometric fingerprint), and have information on social (SC/ST) and personal/household characteristics.  Each person/ households’ entitlements could be in the form of specified subsidies for the purchase of each of a set of items.  The set of items could include food/cereals, kerosene, midday meals, nutrition supplements, drinking water, toilet/ sanitation services, basic drugs, schooling (primary/secondary), internet access, electricity and a host of other items reflecting the dozens of subsidies and programs currently in existence.  The entitlement could be varied with and dependent on various economic and social handicaps such as SC-ST, age (infant or aged), mental handicap, physical disability, female head of household, lactating mother, chronic illness.   In this way all the current stakeholders, special interest groups and social policies could be accommodated within a single integrated system.”

“Figure .. shows clearly that the access of our population to sanitation services is much worse than is to be expected at our level of per capita GDP.  Further 89% of the countries for which data is available perform better on this indicator than India.  This is rank is worse than our rank on the mortality indicators and life expectancy indicators”
“Where we have failed as a nation is in improving our basic social indicators like literacy and mortality rates.  Much of the failure is a legacy of the three decades of Indian socialism (till 1979-80).  The rate of improvement of most indicators has accelerated during the market period (starting 1980-81).  The gap between our level and that of global benchmarks is still wide and our global ranking on most of these social parameters remains very poor.  This is the result of government failure. Government overstretch, misplaced priorities and deteriorating quality (corruption) has resulted in a failure to fulfil the traditional, accepted functions of government like public safety & security, universal literacy and primary education, public health education (superstition & quackery), provision of drinkable water, sanitation drains & sewage facilities, public health (infectious & epidemic diseases), building roads and creating & disseminating  agricultural technology.  Consequently the improvement in social indicators has not kept pace with economic growth and poverty decline and has led to increasing interstate disparities in growth and poverty.”

Neo-leftist Sabotage

    A presentation of this paper to Planning Commission Members and their Advisors was scheduled and cancelled several times because of the unavailability of ‘certain’ Planning commission members and never took place because of their active discouragement. Apparently the neo-leftists thought it was too dangerous to even present the comparative data on hunger, health & education, or discuss the conclusions reached.
The idea of “eliminating” poverty was perhaps too explosive for the “neo-leftists” and “neo-communists” who were comfortable with “alleviating” poverty for another half century. Even the fact that “sanitation” was a more important problem in India than general health, education, hunger and poverty was too dirty a thought for the “Brahmins of  Poverty”.  Not surprisingly, the analysis and recommendations relating to sanitation and malnutrition the next year, were similarly ignored.[iii]


A version of this article was published in the Indian Express of August 25, 2014, under the banner, “Wrong End of The Right Debate: The Neo-Liberals emphasise Sanitation, Sewers and Toilets, not neo-communists,”

[i] Arvind Virmani, “The Sudoku of Growth, Poverty and Malnutrition: Lessons For Lagging States,” Working Paper No. 2/2007-PC, Planning Commission, July  2007
[ii] Arvind Virmani, “Poverty And Hunger In India: What is needed To Eliminate Them,” Working Paper No. 1/2006-PC, Planning Commission, February 2006
[iii] Virmani (2007) op cit,  fn i

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