Opinion So who’s afraid of growth?

The psychological transformations that growth brings should not be underestimated. There is a world of difference between societies where per capita incomes double every eight years or so,versus a society where per capita incomes double in twice that time. Look at some of the underlying dynamics growth has unleashed. Even as recently as a decade ago,we used to have endless debates about the demand for education. That debate is now over,in part because nothing gives education more of a fillip than actually seeing returns to education. Of course,there are massive quality failures in our system,but the underlying demand dynamics are nothing short of a social revolution.

There are other good signs in the offing. Rural wages are rising. The shift to non-agricultural occupations in rural India is growing. As the increasing number of strikes are showing,the bargaining power of labour may be returning. The Indian middle class keeps cribbing about the increasing costs of household services,which is a good thing. In short,there is some evidence that even marginalised labour has more choices than before. Consumption of the bottom decile is rising. But more importantly,in large parts of the country,people are seeing actual pathways of economic change. One of the great blind spots of social science in India is that it focuses only on an abstract idea of poverty at the bottom,or the depredations of elites at the top. There is almost no documentation of pathways of change in the middle: the driver who comes to the city,and becomes the owner of a fleet of several taxis within a decade,the lower middle class entrepreneur in education who goes from virtually zero capital to a turnover of hundreds of crores in a decade,the rise of Dalit entrepreneurship,the increasing number of children of domestic servants making it to lower middle class or middle class status within a decade,the increasing dissociation of caste and occupation and so forth. One need not be Panglossian about this social change,but the way in which we are ignoring a silent revolution for formulaic genuflections on poverty is scandalous.

Growth also hides a revolution in governance. Eight per cent growth,without increasing tax rates,translates into more than 15-20 per cent growth in government revenue. In short,growth is what allows you to build government. The fact is that the Indian state is now capable of doing a lot more things than it was more than a decade ago; that it does not do half the things as well as it might is a failure of our politics,not the limits of growth. All the things we want from a state will be enabled only by growth. You cannot have a sustainable welfare state without growth. There is no doubt that we are over-regulated and under-governed in so many areas,from environment to safety,but there is also the blunt truth that building a state in these areas requires massive resources.

There is no doubt that the pattern of growth,particularly in five or six sectors,has enabled increased rent-seeking. However,we should not elide the fact that in so many other areas,the state now touches the lives of citizens more deeply than it did a decade ago. If you were thinking dialectically rather than polemically,you could argue that it is precisely this increase in the state’s presence that is now sowing the seeds of an accountability revolution,where old principles of governance are no longer tenable.

In an inchoate way,growth mitigated some of our worst anxieties. To put matters in historical perspective,Indian nationalism became much less anxious than it was from the 1970s to the ’90s. There was the sense that we could make it. Despite massive problems,with the exception of Maoist violence,the degree to which social peace has been held in the last decade has been impressive. It is largely because people at all levels feel they have something to lose by disruption. In some ways,the deeply disfiguring warts of our society are also becoming more visible,because growth makes it impossible to sequester and segregate. The so-called Indian tolerance was often founded on a social fixity: each community in its place. You will see more discussion around discrimination,gender,because growth has enabled a kind of mobility where people are knocking at closed spaces.

The spectre of misery and cruelty in India is still too overwhelming to be complacent. But for the very same reason,it is unconscionable to minimise the importance of the single most important driver of social change in India: growth. A GDP number is the harbinger of a social revolution: a sense of expanded opportunity,rising wages,greater mobility,pathways to social change,an altered sense of the self,a massive change in the scale and scope of government operations. The limits to growth are no excuse for blinding us to its possibilities. You cannot help thinking that the skittishness about growth stems from a fear of the genuine social revolution that growth will unleash,that will undermine the noblesse oblige of what now masquerades as social conscience.

The writer is president,Centre for Policy Research,Delhi,express@expressindia.com