After the launching of the New Economic Policy (NEP) in India in August 1991, a process of privatisation, deregulation and globalisation has been set in motion. The statist model of rural development characterised by the predominant role of the state in initiating, fostering and directing rural development is likely to be abandoned, giving way to a market-driven and guided model. It has become fashionable once again these days to believe that a greater reliance on market forces and the integration of national eco- nomies within a global economy—that is, globalisation—would reduce the problems of poverty and unemployment through speeding up the pace and level of economic growth. Furthermore, this new faith in market forces has also led to a reorientation of international development policies more in favour of liberal trade than aid as an instrument of development. But despite all this, there is a nagging doubt among the majority of development scholars and practitioners about the relevance of the new model for developing countries like India, where a very large section of population is below the poverty line, and hence, outside the infl uence zone of market forces.
Indian agriculture has been protected from the infl uence of interna tional market forces, mainly through a system of quantitative restrictions on the import of some 800 agricultural commodities. Now that India is a member of the World Trade Organisation (WTO) and a signatory to the Uruguay Round of General Agreement on Trade and Tariffs (GATT), we (Box 6.2 continued)
are under an obligation to replace non-tariff measures (quantitative restrictions/quotas) by reasonable levels of tariffs. Consequently, all quantitative controls on the import of merchandise have been done away with and import tariffs on non-agricultural goods have been reduced from 300 per cent in 1991–92 to 125 per cent in 2006–07. There are apprehen sions that the liberalisation of agricultural imports would hit our farmers and impair the growth prospects of the agricultural sector. According to a study conducted by Chand (1997: 1–6), liberalisation of international trade in agricultural commodities may have the following major impacts on producers and consumers:
1. Removal of quantitative restrictions on international trade is expec ted to promote both imports and exports of agricultural com modities and production inputs. This would speed up the pace of commercialisation and specialisation on the basis of higher comparative advantage in the agricultural sector. Export orientation of agricultural production could necessitate the use of increased quan tities of chemical fertilisers, pesticides and irrigation water, which would adversely affect the quality of the environment, unless ade quate safeguards, such as the use of biofertilisers and biopesticides, provision of recharging of groundwater aquifers in water scarce areas, and of drainage in water-surplus waterlogged areas are taken.
2. Liberalisation of international trade in agricultural commodities would pave the way for the entry of private companies and corporations in the import business, which at present is monopo lised by government organisations, which are the sole canalising agencies for imports of many commodities. Agricultural produc ers and consumers would be affected through changes in prices—producers from higher prices, and consumers from lower and/or better quality—due to increased competition and consequent increased effi ciency.
3. Importers would have an advantage over domestic producers if the agricultural sector is not liberated from internal restrictions. Fur thermore, government controls and intervention in the sector need to be reduced, to encourage greater participation of the private sector in processing, marketing and distribution.
Like any other economic phenomenon, globalisation is based on a set of values, such as competitiveness, effi ciency, wealth accumulation and the free play of market forces.
Globalisation of business and trade with out a global view of the society as a global family would lead to social tensions and economic strife, and this is what is happening today in many developing countries which have adopted the structural adjustment pro grammes.
In the paradigm of globalisation, there is no place for such values as sympathy, kindness, compassion, world-brotherhood, cooper ation, and so on. Because of the relatively easy fl ow of capital internationally as compared to labour, capitalists/portfolio investors would benefi t the most from globalisation. This would aggravate the problem of disparities in income and wealth between the rich and the poor. Further, globalisa tion would also engender corruption, black money and other social evils, as portfolio investors would like to keep the bureaucrats and politicians on their side by bribing them. Besides, the powerful and rich countries defi ne and redefi ne the rules of the game of globalisation to suit their own national interests or the vested interest of their capitalist investors.
This leads to clashes of interest and fi nancial instability, as has been recently experi- enced in several East Asian countries.
It is clear that globalisation is good for only a fraction of Indian society—may be the top 10 per cent of the people. The number of people who are likely to lose—or are already losing—from globalisation, has been increasing, particularly in those poor countries which are outside North America, Europe and the Pacifi c Rim. But the issue is not whether globalisation is good or bad, or whether it is inevitable. We should understand that globalisation is here and that we are unavoidably part of the process of globalisation, which demands a new focus and a restructuring and re-engineering of our polity and economy. The questions to be asked are: What can we do about it? How could we benefi t from it?
The current opposition of farmers, workers, women and environmen talists to glob- alisation in both developed and developing countries is increasing, as more and more people are questioning the drive for glob alisation and profi t-seeking competition. In a nutshell, the current state of affairs suggests that we are in the process of redefi ning/
remapping global economic and political relations to refl ect a diversity of positions, as well as shared concerns and tensions. If the process is pursued to its logical conclusion, it could expose the hypocrisy of the old order and create a new political environment where the powerful hegemony of the transnational, commercial and fi nancial institutions can be challenged through cooperative action by the losers. Acting individually, developing countries are unable to protect their people and natural resources from the havocs of globalisation and transnational companies, which are tak ing over life-supporting industries. But acting collectively/cooperatively, they could face the challenges posed by globalisation and benefi t from the opportunities that it opens up. Similarly, within a country, rural producers’ cooperatives could protect the small and marginal farmers from the adverse effects of globalisation, and also enable them to benefi t from it. What is needed most in the rural sector now is to liberate the rural producers and their organisations from the shackles of unnecessary government controls and archaic laws.
Consequent upon dismantling of Quantitative Restrictions (QRs) on imports as per the WTO Agreement on Agriculture (AoA), commodity-wise strategies and arrangements for protecting the grower from the adverse impact of undue price fl uctuations in world markets and for promoting exports will need to be formulated. Apart from price com- petition, other aspects of marketing, such as quality, choice, health and bio-safety will be promoted. Exports of horticultural produce and marine products will receive particular emphasis. A two-fold long-term strategy of diversifi cation of agricultural produce and value addition, enabling the production system to respond to external environment, and creating export demand for the commodities produced in the country, will be evolved with a view to providing the farmers incremental income from export earnings. A favourable economic environment and supportive public management system will be created for promotion of agricultural exports. Quarantine, both of exports and imports, will be given particular attention so that Indian agriculture is protected from the ingress of exotic pests and diseases.
In order to protect the interest of farmers in context of removal of QRs, continuous monitoring of international prices will be undertaken and appropriate tariffs protection
will be provided. Import duties on manufactured commodities used in agriculture will be rationalised. The domestic agricultural market will be liberalized, and all con- trols and regulations hindering an increase in farmers’ income will be reviewed and abolished to ensure that agriculturists receive prices commensurate with their efforts and investment. Restrictions on the movement of agricultural commodities throughout the country will be progressively dismantled.
MAIN POINTS
1. The term ‘Policy’ may be defi ned as a defi nite course of action selected (as by gov- ernment, an institution, a group or an individual) from among alternatives and in light of given conditions to guide and usually to determine present and future decisions.The most common social and political usage of the term refers to a course of action or intended course of action conceived of as deliberately adopted after a review of possible alternatives and pursued or oriented to be pursued. Rural development policy implies the actions taken by the government in pursuit of certain objectives of rural development.
2. Public policy is a form of social control. A farmer accepting a production loan from a nationalised bank and a subsidy from the government is restricted in the manner in which he can spend the borrowed money and subsidy, but his freedom to expand his output, improve his income and standard of living and develop his individual talents is enhanced.
3. The farther we move away from simple, small-scale handicraft industry and self- contained and subsistence agriculture, a greater need develops for public policy in the economic fi eld. The individual, as a producer and as a consumer, depends more and more upon the general conditions of the market, of employment, output and production effi ciency of the nation as a whole, and upon the way income is distributed among the people; in short, upon the economic welfare of the country.
4. Some specifi c reasons favouring government intervention in the rural sector are:
India’s commitment to set up a ‘socialist pattern of society’; violent fl uctuations in agricultural production, prices and incomes; rural poverty and income inequality;
small, scattered and unorganised rural enterprises; and inadequate and poor basic infrastructure in rural areas.
5. Rural development policies are designed to improve the conditions under which rural people work and live. The goals of policies are governed by what people desire, and the measures of policies by what people think the government can and ought to do to bring about the desired change. This is the theory of public policy. Changes are desired only when people do not like the way things are going. Pressure for public action arises when people feel that they, individually, cannot bring about the desired adjustments. From the ‘Directive Principles of State Policy’ enshrined in India’s Constitution, one could derive two dominant goals
of economic policy: fi rst, increasing the national income; and second, improving the distribution of national income among the members of the society. These and other goals are refl ected in India’s economic policies that are enunciated in its fi ve year plans.
6. Given the multiplicity of policy goals, it is necessary to study the relationships among them and see that they converge towards public interest, or at least do not militate against it. This can be done if various policy goals and programme objectives are arranged in the form of a pyramid. At the top of the pyramid is the master goal of economic policy. At the next level, we have the objectives of specifi c government programmes; and at the lowest level, relatively simple and clear-cut objectives of most specifi c level of programme units are listed.
7. India has a long history of government intervention in the rural sector of its economy. In the pre-independence era, the British government intervention was aimed at promoting the export of food and raw materials to the Great Britain.
There was no state policy for the development of resources of India for the welfare of its people. Introduction of land tenure system, opening up of road and rail communications, and promotion of export trade in certain agricultural com- modities were the important measures taken by the British government.
8. In January 1946, the then Government of India (GoI) issued a ‘Statement of Agriculture and Food Policy in India’, which spelt out the objectives to be achieved, the measures to be taken, and the respective roles of the centre and the provinces.
According to the Statement, the all-India policy was to promote the welfare of the people and to secure a progressive improvement of their standard of living.
9. India did not have a unifi ed national policy for rural development until the year 2000, when the fi rst National Agricultural Policy was announced. What existed until then was a National Forest Policy (NFP), an Agricultural Price Policy (APP), a Rural Credit Policy, a National Water Policy (NWP), some semblance of a land reforms policy and an assortment of agricultural and rural development programmes not integrated with one another and coordinated properly. The main objectives of the National Agriculture Policy include, inter alia, the promotion of technically sound, economically viable, environmentally non-degrading, and socially acceptable use of country’s natural resources—land, water and genetic endowment—to promote sustainable development of agriculture.
10. Besides the National Agriculture Policy, India now has a National Policy on Cooperatives (2002), a National Policy for Farmers (2006) and a Marine Fishing Policy (2004). All these policies are designed to ultimately improve the well-being of rural people. But the intensions of the public policies in India are hardly realised, thanks to their lax and lackadaisical implementation.
11. In August 1991, the GoI launched a New Economic Policy (NEP), which is char- acterised by privatisation, deregulation and globalisation. The statist model of rural development characterised by the predominant role of the state in initiating, fostering and directing rural development is likely to be abandoned giving way to a market-driven and guided model. It has become fashionable once again these days to believe that a greater reliance on market forces and the integration of national
economies within a global economy—that is, globalisation—would reduce the problems of poverty and unemployment through speeding up the pace and level of economic growth.
NOTES
1. URP consumption = Uniform Recall Period consumption in which the consumer expenditure data for all the items are collected from a 30-day recall period.
2. http://dacnet.nic.in/agStat06-07.htm
3. See Singh and Shishodia (2007: Ch.10) for the details of a new system of FRA.
QUESTIONS FOR DISCUSSION
6.1. Does India need to have a separate national policy for rural development? Yes/No.
If yes, why; if no, why not?
6.2. Illustrate with an example, the concept of hierarchy of policy goals.
6.3. In a democratic country like India, who should determine the goals and measures of public policies and how?
6.4. Write a critique of the National Agriculture Policy 2000, with special reference to its objectives and the measures stipulated to achieve them.
6.5. Write an essay on why India’s rural sector continues to be relatively backward and underdeveloped despite the fact the so many policies and programmes for its development have been launched by the government from time to time over the last 60 years or so.
6.6. In what ways will the present economic policy of the Government of India (GoI) characterised by privatisation, deregulation and globalisation affect the rural people, especially marginal and small farmers and rural artisans?
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7 Strategies for Sustainable Development
L E A R N I N G O U T C O M E S
After having gone through this chapter, students should be able to
z defi ne and illustrate the term ‘strategy’ in the context of development;
z defi ne the concept of sustainability and differentiate between ‘strong sustainability’
and ‘weak sustainability’;
z defi ne the term ‘sustainable development’, and explain why it should be the supreme goal of public policy;
z identify the major indicators of non-sustainable development;
z describe India’s major strategies of rural development followed in the past and their merits and demerits and
z illustrate the basic elements of an ideal strategy of sustainable development.
INTRODUCTION
According to Wikipedia, the free encyclopaedia, a strategy is a long-term plan of action designed to achieve a particular ‘goal’, most often ‘winning’.
Strategy is differentiated from ‘tactics’ or immediate actions with resources
at hand by its nature of being extensively premeditated, and often practically rehearsed.
The word derives from the Greek word strate-gos, which derives from two words: stratos (army) and ago (ancient Greek for ‘leading’). Strate-gos referred to a ‘military commander’
during the age of Athenian democracy. This chapter deals with strategies for sustainable development.
Sustainable development has recently risen to the top of international economic and political agenda. The report of the World Commission on Environment and Development (WCED 1987), ‘Our Common Future’, was the fi rst major international initiative that enhanced the awareness of policy makers about sustainable development and the complexity of relationship between environmental problems, economic growth and needs of people, rich and poor. One of the follow-up actions initiated by the United Nations to implement the recommendations of WCED culminated into the United Nations Conference on Environment and Development (UNCED) held in Rio in June 1992. The UNCED has further heightened the global concern over deteriorating environment and the interest in the search for practisable strategies for sustainable development.
This chapter fi rst presents the basic concepts and connotations of sustainability and sustainable development, and then a few indicators of non-sustainable development. This is followed by a critical review of India’s strategies of rural development, and fi nally, the presentation of basic elements of a new strategy of sustainable development.