LETTERS

Issn 0012-9976
Ever since the first issue in 1966,
EPW has been India’s premier journal for Whatever Happened to the strategies of territorial control, described
comment on current affairs
and research in the social sciences.
Third Alternative in Bengal by political scientist Dwaipayan Bhat-
It succeeded Economic Weekly (1949–1965), tacharya as the “franchisee” phenome-
which was launched and shepherded
by Sachin Chaudhuri,
who was also the founder-editor of EPW.
As editor for 35 years (1969–2004)
Krishna Raj
T he results of the Lok Sabha elections
in West Bengal have yet again rein-
forced the Trinamool Congress (TMC)–
non (“Of Conflict and Collaboration:
Mamata Banerjee and the Making of
‘Franchisee Politics’ in West Bengal” [EPW,
gave EPW the reputation it now enjoys. Bharatiya Janata Party (BJP) binary. The 9 September 2023]). The 2024 results,
Editor ruling TMC bagged 29 out of a total of 42 however, show that except Maldaha Dak-
S Mahendra Dev seats, which is a colossal leap of seven shin, which they won, and the Muslim-
Deputy Editor seats from 2019. The BJP, which had oth- dominated Murshidabad, Jangipur, and
Pyaralal Raghavan erwise pinned high expectations, plum- Baharampur seats where the left and Con-
SENIOR Assistant editors meted to 12 seats only from its earlier gress candidates secured the runner-up po-
INDU K
Nachiket kulkarni tally of 18. While the TMC held on to a sition, the alliance failed to resonate in the
decisive chunk of the women and Muslim rest of the state. While Hindus consolidat-
Assistant editors
Sahba Fatima minority votes, what had perhaps ed behind the BJP in these seats, the Ben-
Ankit Kawade worked quite remarkably in sealing the gali Muslims were predisposed to prefer
Shweta Shetty
BJP’s fate was the support it received TMC over anything else. As the left–Con-
Editorial Coordinator from the beneficiaries of several cash gress combine appears restricted to a pal-
Shilpa Sawant
transfer schemes. Meanwhile, the BJP try 11% vote share, possibilities of progres-
copy editor
jyoti shetty ceded a significant share of its Adivasi sive, emancipatory politics stare into an
vote in the Jungle Mahal region. Al- abyss of confusion. Despite fielding an ul-
production
suneethi nair though the BJP held on to most constitu- tracharged arsenal of popular youth faces
encies dominated by its other core vote as candidates, the left failed to generate
Chief Administrative and Finance Officer
J DENNIS RAJAKUMAR banks—the Nepalis, the Rajbanshis, and any rippling impact in this election.
Advertisement Manager
the Namasudras—it failed to expand its So what is the way out for the left–
Kamal G Fanibanda outreach beyond these social groups. Congress combine from this impasse?
General Manager & Publisher However, what is more striking than that For the first time, the left–Congress ne-
Gauraang Pradhan is the effacing of the left parties from the gotiation fundamentally rests on a coun-
editorial: [email protected] scene. The left could muster a vote share ter-historical bloc of oppressed social
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5% vote and secured the Maldaha Dak- classism. The left has, to a considerable
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EPW Research Foundation, established in 1993, conducts
research on fi nancial and macro-economic issues in India. right. In fact, in quantitative parlance, place in the party programme. The result
Director the surge of the BJP in the 2019 Lok Sabha of Maldaha Dakshin shows that the Con-
J DENNIS RAJAKUMAR and 2021 assembly elections was directly gress still enjoys substantial confidence
C 212, Akurli Industrial Estate
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linked to a decline in the left’s vote. This among a sizeable chunk of Bengali Mus-
Phones: (022) 2887 3038/41 is not to say that the qualitative ardour lims, who persistently lag in almost all
[email protected] of left-progressive politics fizzled out social indicators. While the majority
Sameeksha TrusT completely after 2021. On the streets, the among Bengali Muslims will continue to
(Publishers of Economic & Political Weekly) left collaborated with the Congress and back the TMC on the defensive plank of
Board of Trustees
Deepak Nayyar, Chairman various civil society groups to take on protesting Hindutva forces, the new rad-
Shyam Menon, Managing Trustee both the BJP and the TMC governments icalised avatar of the Congress founded
André Béteille, on equal terms. It attacked the BJP for on the promises of ensuring caste census
Deepak Parekh, Romila Thapar,
Dipankar Gupta, N Jayaram, polarising Hindus and drew upon the and freedom of choice of dress, food,
SUDIPTO MUNDLE ideas of liberal Hindu social reformers and personal laws offers a more credible
Printed and published by Gauraang Pradhan, for and and icons. Moreover, it projected the TMC
on behalf of Sameeksha Trust and printed at
Modern Arts and Industries, 151, A–Z Industrial Estate, as a perniciously corrupt party that ex- NOTICE
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4 june 22, 2024 vol lix no 25 EPW Economic & Political Weekly
 LETTERS
alternative to the TMC’s dole politics. As organisations (NGOs) such as Public Eye be no added sugar in baby food until
the left–Congress combine seeks to and the International Baby Foods Action 12 months, except for the natural sugars
embark on newer sociological experimen- Network (IBFAN) produced a report in fruits, it is alarming that manufacturers
tations through broad-based, emancipa- showing significant differences in sugar are adding sugar to baby food. This indi-
tory social consolidations by tearing into levels in these companies’ baby food, cates a need for stringent food regulatory
the divisive, polarising tactics of the BJP, it especially in low- and middle-income laws both internationally and nationally.
also needs to offer a meaningful alterna- countries compared to developed coun- Every parent should also check the sugar
tive to the TMC’s policy of extending short- tries. In countries like Germany and the content and other details on food pack-
term redistributive measures, no matter United Kingdom, their baby food cereals aging before purchasing any packaged
how empowering they appear to be. for six-month-old infants contain no food for their child.
To that end, it must devise a solution to added sugar and in places like Ethiopia The Food Safety and Standards (Foods
the proletarianisation and emigration of and Thailand, these products have over for Infant Nutrition) Regulations, 2020
the Muslims and lower castes by incorpo- 5 grams per serving. The World Health have issued guidelines relating to food
rating the agricultural workers’ grievanc- Organization has made it clear that early quality for infants, yet the sugar content
es over the allocation of minimum wages exposure to added sugars in baby foods in baby food products in Indian markets
and the smallholding peasant demands can carry long-term health consequences reveals severe shortcomings in their en-
for the fair price of crops. Although the and the potential for unhealthy eating forcement. Moreover, to ensure the safe-
Bengali left has lately responded favoura- habits. Many experts suggest that baby ty and prevention of adulteration of baby
bly to corporate capital, it nevertheless food should contain no added sugar until foods, the union government requires
needs to strike a humane balance between 12 months, except for the natural sugars companies to comply with the Bureau of
large-scale industrialisation and agricul- in fruits. Indian Standards (BIS). The Food Safety
tural improvement. The future success of It is high time that parents be aware of and Standards Authority of India has
the left–Congress negotiation depends on why this sugar-heavy baby food is dan- established that no food product can
its ability to break the existing status quo gerous for their baby’s health. High be sold in India without BIS certification.
of the TMC–BJP binary by laying bare the consumption of sugary foods and drinks Providing parents with clear labelling
determinate banality of both communal- increases the risk of obesity, which can and complete nutritional information
ism and clientelism as ruling stratagems. lead to diseases such as type 2 diabetes, will enable them to make informed deci-
Avik Sarkar etc. Many children, due to high sugar sions about their children’s diets. Public
New Delhi consumption, may suffer from dental awareness campaigns should highlight
problems such as cavities. High sugar the dangers of added sugar and promote
Regulating Baby Food consumption is also linked to behavioural the benefits of traditional nutritious foods.
Manufacturing in India problems, cognitive decline, and poor Advocating for international standards
eating habits, favouring sweet foods over to ensure uniform nutritional recom-

W hen it comes to baby food, every

new parent around the globe has
the same concerns like what to feed
nutritious options.
Inconsistency of sugar content in baby
food raises both serious legal and social
mendations for all baby foods worldwide
will protect the health of children every-
where. These measures can help protect
their baby after six months of breast- concerns. Globally, it has been men- India’s youngest citizens from the poten-
feeding. Generally, medical experts rec- tioned how much sugar can be given to tial long-term health consequences of
ommend introducing solid foods after children of different ages. The double high sugar consumption and promote a
six months of breastfeeding. In ancient standards of these companies between healthy future for all children.
days, before the availability of packaged low- and high-income countries appear Lastly, as a parent, it is best to give
foods, homemade food was given to contradictory and potentially harmful to your child homemade food. In cases of
babies by their parents. One of the com- babies’ health and consumer rights. It emergency, one can opt for packaged
mon traditional dishes that is still given also raises serious legal questions relat- food, but this should not be done regu-
to babies in India is a milk rice pudding ing to children’s right to health and also larly. No packaged food can compete
without sugar. However, packaged foods highlights the shortcomings of laws in with the quality, nutritional value, and
are now readily available for babies and countries where the sugar content in purity of homemade food.
traditional foods have gradually been baby food is currently high. When it is Pyali Chatterjee, Raipur
replaced by them due to the convenience universally accepted that there should Gulyamov Said Saidakhrarovich, Tashkent
and variety offered by these products.
Many of us are probably familiar with
the issues with the baby food produced EPW Engage
by certain multinational companies, where The following articles have been published in the past week in the EPW Engage section (www.epw.in/engage).
they have been criticised for different (1) The Culture of Political Violence and Punishment in Bangladesh: The Role of Political Parties and Civil
Society — Debasish Nandy, Sajal Roy, Oliver Tirtho Sarkar
levels of sugar in baby food products sold
(2) The Competition (Amendment) Bill, 2022: A Review and Critique — Narender Kumar
in different regions. Non-governmental
Economic & Political Weekly EPW june 17,
22, 2023
2024 vol
vol lViii
lix no
no25
24 5
LETTERS
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6 june
june17,
22,2023
2024 vol
vollViii
lix no 24
25 EPW Economic & Political Weekly
 EDITORIALS

From 25 Years Ago infrastructure for bicyclists and pedestrians may dealing with sustainable development for cities
need segregation of road space for bicyclists and always include options for pollution reduction but
pedestrians from motorised traffic or reduction rarely for accident control.
in speeds of vehicles. Both measures could re- In this paper we discuss some of the issues
sult in restricting mobility of car users. concerning public transport, safety and the en-
Vol XXXIV, No 25 JUNE 19, 1999 Similarly, measures to reduce pollution may at vironment. We illustrate that unless the needs of
times conflict with those needed for reduction in non-motorised modes of traffic are met it will be
Sustainable Transport Systems: road accidents. For example, increases in average almost impossible to design any sustainable
Linkages between Environmental vehicle speeds may reduce emissions but they can transportation system for urban areas. We show
Issues, Public Transport, Non- result in an increase in accident rates. But, most that pedestrians, bicyclists and non-motorised
Motorised Transport and Safety public discussions and government policy docu- rickshaws are the most critical elements in
ments dealing with transportation and health fo- mixed traffic. If the infrastructure design does
Dinesh Mohan, Geetam Tiwari cus only on air pollution as the main concern. not meet the requirements of these elements all
A sustainable transport system must provide This is because air pollution is generally visible modes of transport operate in sub-optimal con-
mobility and accessibility to all urban residents and its deleterious effects are palpable. It is easy ditions. However, it is possible to redesign the
in a safe and environment friendly mode of for most people to connect the associations be- existing roads to provide a safer and more con-
transport. This is a complex and difficult task tween quality of motor vehicles, exhaust fumes venient environment for non-motorised modes.
when the needs and demands of people belong- and increased morbidity due to pollution. But This also results in improved efficiency of public
ing to different income groups are not only dif- most individuals are not able to understand the transport vehicles and enhanced capacity of the
ferent but also often conflicting. For example, if complex interaction of factors associated with corridor when measured in number of passen-
a large proportion of the population cannot af- road accidents. Health problems due to pollution gers transported per hour per lane.
ford to use motorised transport – private vehi- are seen as worthy of public action whereas those Decisions regarding mode of transport by indi-
cles or public buses – then they have to either due to injury and death in accidents as due to in- viduals are based on economic criteria, trip time
walk or ride bicycles to work. Provision of safe dividual mistakes. Therefore, policy documents involved, convenience, comfort and safety.

Economic & Political Weekly EPW JUNE 22, 2024 vol lix no 25 9
 EDITORIALS

From 50 Years Ago the coal we have in abundance to its potential us- hysteria. Everyone within reach is being ma-
ers. Engineers and workers in power plants have ligned as a ‘fascist’, a ‘Right reactionary’, a ‘Left
begun to sabotage the plants and the transmission adventurer’, a ‘foreign agent’. The hysteria has
network, just as the economy was recovering from not spared even the tallest Indian in the land —
a massive strike by power engineers and by work- Jayaprakash Narayan. The Indian government
Vol IX, No 25 JUNE 22, 1974 ers in jute and textile industries, employees of the would have us believe that the crisis is primarily
Central government, railwaymen, and others a conspiracy of these agents provocateur and in
India: An Arrangement at Stake once again were to bring the productive apparatus part a result of ‘world-wide phenomena’ (like
to a near-halt. The government’s food procure- rising prices of oil, wheat, fertiliser, steel and
Arun Shourie ment and distribution policies are in disarray. The the like), bad harvests, and the two-and-a-half-
I do not know of any country that has as much public distribution system for essential commodi- year-old influx of refugees from Bangladesh.
unexploited — and immediately exploitable — ties is now completely at the mercy of those very Each of these pseudo-explanations is just an
potential for advancement as India. Nor do I traders whom the government had driven out of alibi. I shall argue that the current crisis is the in-
know of any country in which the masses live in the wheat trade last year and whom it has often evitable consequence of the economic and politi-
as much deprivation and squalor, in which they accused of profiteering and anti-social behaviour. cal system that the Indian elite has engineered for
suffer as much, and in which they do this to as The much-advertised Fifth Five-Year Plan has its own benefits. I shall argue that its inner contra-
little purpose as in India. been buried amidst ignominious bickering even dictions will paralyse this self-serving system,
Today, the country is in the throes of a crisis before its official commencement. The document that the crisis will intensify in the near future, and
much worse than any that has plagued it since In- itself has not been finalised. Violence, arson, po- that the issue will soon be joined. I shall also argue
dependence. The economy has ceased to progress. lice firings have become a daily occurrence and that the issue will be resolved in favour of India’s
Per capita income is probably lower than it was a are fuelling each other. impoverished masses and that it will be resolved
decade ago. Prices are rising by about 30 per cent a The government has watched this mounting at their initiative. The most hopeful feature of the
year. The economy does not have the resources to crisis as a paralytic would view a rising flood. Its current crisis is that the ordinary people of the
import the oil it needs and we are unable to move principal leaders are now betraying signs of country are beginning to stir.

Economic & Political Weekly EPW JUNE 22, 2024 vol lix no 25 9
EDITORIALS

Massive Mismanagement of NEET and NET

Remedial action against massive irregularities in NEET and NET should be offered to all candidates.

O
n 19 June 2024, the Ministry of Education announced NTA announced that it has scrapped the grace marks given to
the cancellation of the University Grants Commission these 1,563 candidates and has provided them with the
(UGC)-National Eligibility Test (NET), which was held option of a retest on 23 June 2024.
nationwide only a day before on 18 June. The ministry pointed Soon after NEET was held on 5 May, there were reports of
out that the UGC received credible information from the National paper leaks from centres in Godhra, Gujarat and Patna, Bihar.
Cybercrime Threat Analytics Unit of the Indian Cybercrime Petitions seeking a high-level investigation into paper leaks were
Coordination Centre (I4C), which falls under the Ministry of soon filed in several high courts and the Supreme Court while
Home Affairs, regarding irregularities in the conduct of the NET more petitions were filed in the Supreme Court after the results
exam. The ministry’s press release did not divulge any specific were announced to cancel the grace marks arbitrarily offered by
details about the information shared by the I4C; however, it point- the NTA to select candidates. On 20 June, the Supreme Court
ed out that this information prima facie indicated that the stayed the proceedings in separate petitions related to NEET in
“integrity” of the NET exam “may have been compromised.” In a the Rajasthan, Calcutta, and Bombay High Courts and transferred
press conference chaired by the union minister of education on these similar petitions to be litigated in the Supreme Court. The
20 June 2024, it was stated that preliminary investigations apex court has preliminarily refused to order a stay on NEET
reveal that the NET question paper was leaked “in the darknet” counselling, scheduled to begin on 6 July, and declined to order
(sic), which was later circulated on a social media platform and an immediate inquiry led by the Central Bureau of Investigation
was found to be matching with the official question paper. in the matter. However, the Court has stated that even “if there
The mysterious and instant cancellation of the UGC-NET exam is 0.001% negligence on the part of anyone” with regard to the
within a day comes on the heels of the ongoing protests against conduct of NEET, it will be thoroughly investigated and noted
the alleged mismanagement and irregularities of the National that one cannot overlook all the efforts expended by children and
Testing Agency (NTA) after the results of the National Eligibility- their parents in preparing for this exam. The next hearing of the
cum-Entrance Test (NEET) were prematurely announced on NTA’s petition in the Supreme Court is scheduled for 8 July 2024.
4 June 2024. The NTA conducts both NEET and NET examina- Along with paper leaks, there were several other complaints
tions throughout the country, and a large section of students, of mismanagement reported by students in the conduct of the
parents, and certain heads of coaching institutions have report- NET exam. Examination centres were situated far from the main
ed several complaints about the conduct of these examinations. cities and towns in several locations with no proper transport
After the results of NEET were announced 10 days before arrangements or infrastructure in place, especially for candi-
schedule, incidentally on the same day as the results of the 2024 dates with disabilities. Some of the centres had no air condition-
general elections, several suspect irregularities were reported ing, storage facilities, adequate drinking water, and even lacked
that put a major question mark on the fair conduct of this exam. something as basic and essential as toilets, causing considerable
As many as 67 students got a perfect score of 720 in 2024, which risk to the health of the candidates, a situation made even worse
is unprecedented for NEET. In the results of NEET 2023, only two by the blazing heat in north India.
candidates secured the perfect score, while in 2022, no candi- Suffice it to say the NTA has come out to be irresponsible and
date could secure a perfect score. Although the number of can- inefficient in the face of these instances of reported mismanage-
didates who appeared for this exam in 2024 (23,33,297) was ment and irregularities—from being unable to stop rampant
around three lakh more than in 2023 (20,38,596), this sudden paper leaks, arbitrarily offering grace marks to select candi-
jump in the number of perfect scores is rather mysterious and dates, to being helpless in ensuring safe and dignified physical
inexplicable. The NTA’s press release of 6 June 2024 states that infrastructure for students appearing for NEET and NET. The
44 out of these 67 candidates got grace marks due to inconsist- Ministry of Education acted on the reports of paper leaks in the
encies in the old and new editions of a physics textbook of the case of NET, cancelled the exam and announced a retest within
National Council of Educational Research and Training, while six a day, while similar reports of paper leaks and even more re-
candidates among these 67 got grace marks as a compensation ports of irregularities in results in the case of NEET have not led
for loss of time. In all, 1,563 students were reportedly given grace to the cancellation of this exam. It is fairly evident that NEET,
marks by the NTA. In a press release issued on 13 June 2024, the which determines undergraduate medical admissions in the
8 JUNE 22, 2024 vol lix no 25 EPW Economic & Political Weekly
 EDITORIALS

country, is also linked with a massive coaching industry and However, with the onset of NET determining PhD admissions,
network of private medical colleges, all of which comprise a one can anticipate a similar trend of commercialisation of NET
highly commercialised system of medical examinations and preparation in India as well.
admissions in India. It is anybody’s guess that the increasing There is now immense popular pressure on the government
instances of paper leaks in NEET and the desperation of certain to plug the problem of paper leaks and stop other instances of
parents in being willing to spend hefty amounts of money for mismanagement reported during the conduct of NEET and NET.
illegally accessing such leaked papers are a glaring symptom of the The government has promised that the officials responsible for
commercialised and ever-competitive nature of medical exam- these alleged irregularities and mismanagement will not be
inations and admissions in India. In other words, paper leaks are spared. However, to what extent these promises would remedy
a way for some candidates to buy their way out of the cut-throat the wasted time, money, and efforts of lakhs of students and
competition and hard work required to pass these exams. console their anxieties regarding the fairness of these examina-
NET determines the eligibility of candidates to become assis- tions in the near future remains to be seen. Students who
tant professors and also decides upon granting junior research devoted their whole and soul in preparation for these examina-
fellowships to students from the humanities background. Start- tions, in the hope of a better future for themselves and their
ing this year, NET has also become the primary entrance test families, feel a definite sense of betrayal at the moment. It is
determining PhD admissions in several universities in the now the government’s responsibility to assuage this feeling
country. This exam is not complimented by the kind of coaching among the students and rebuild an environment of trust and
industry as one witnesses in other competitive examinations. credibility for its examination and testing agencies.

Economic & Political Weekly EPW JUNE 22, 2024 vol lix no 25 9
 JUNE 22, 2024

The Clamour for Special Category Status

Unfair finance commission awards and union government policies deprive poor states of their legitimate dues.

N
ow that the Bharatiya Janata Party-led National Demo- between SCS and GCS. However, this was also disrupted after
cratic Alliance (NDA) government is back in power, the the termination of the Planning Commission and the abolish-
clamour for special category status by the states has re- ment of the distinction between plan and non-plan funds in
surfaced. This is because two major NDA partners, the Telugu 2017–18, which even prompted the union government to claim
Desam Party and the Janata Dal (United), have been demand- that the era of SCS has finally been ended. The launch of the
ing special category state (SCS) status for Andhra Pradesh and goods and services tax in the later years also ended many of the
Bihar for quite some time now. The union government has re- tax concessions in the SCS.
peatedly rejected these demands and the similar demands of Though the tax concessions had generally failed to accelerate
Chhattisgarh, Odisha, Telangana, Jharkhand and Rajasthan. the flow of private investments in the SCS significantly, the
However, the issue is more sensitive now as the NDA cannot Gadgil formula successfully helped them secure a much larger
afford to alienate its allies. share of funds devolving from the union government to the
So, the real question is, why are so many poor and even mid- states. Estimates for 2013–14 show that eight of the SCS financed
dle-income states clamouring for a SCS status? The SCS status nearly two-thirds of their budget expenditure from the de-
was first conferred by the National Development Council on volved funds of the union government.
Jammu and Kashmir, Assam and Nagaland in 1969 when it ap- Though the Fourteenth Finance Commission made no men-
proved the Gadgil formula (named after D R Gadgil, the then tion of the SCS, the estimates show that the share of taxes it de-
vice chairman of the Planning Commission) for the devolution volved to the SCS was much higher than in the previous years.
of funds from the union to the states. Another eight states also More recent numbers for 2022–23 also show that the share of
conferred the SCS status in the later years, including Himachal gross transfers from the union government in the overall budg-
Pradesh (1970–71), Manipur, Meghalaya and Tripura (1971–72), et disbursements of the states is a much-higher 67% in the SCS
Sikkim (1995–96), Arunachal Pradesh and Mizoram (1986–87) and a substantially lower 34% in the GCS. All this makes it am-
and Uttarakhand (2001–02). ply clear that despite discarding the SCS nomenclature, the
An SCS status ensured a larger devolution of funds from the eight north-eastern and three Himalayan states continue to
union government to the smaller far-flung states sharing inter- benefit from a disproportionately larger devolution of funds.
national borders. These states usually had large tribal popula- Certainly, this is one significant factor that makes the SCS status
tions and a low population density. Most of them were economi- a major demand of the poorer states.
cally impaired and needed more resources and infrastructure Another equally important reason why more states are demand-
often making them financially unviable. Moreover, apart from ing SCS status is the unfair finance commission awards in recent
the larger devolution, the SCS also benefited from many tax in- decades. For instance, while the Eleventh Finance Commission
centives like excise duty breaks and income tax holidays, and had given an overwhelming 63% weightage for ensuring equity
various subsidies for extended periods to encourage more pri- by giving greater prominence to income distance criteria for the
vate investments. devolution of funds, the more recent ones have steadily watered
The Gadgil formula helped the SCS to get a disproportionate- it down to a much-lower 45%. Instead, the finance commissions
ly larger share of the normal central assistance (NCA) provided have doubled the share of devolution based on need-based crite-
by the union government. It ensured that loans and grants were ria, like population, area and demographic change, to 43% dur-
distributed between the SCS and general category states (GCS) ing this period. This would generally favour the big states.
in the 30:70 ratio. Moreover, the formula also ensured that the Such adverse changes in the criterion for the devolution of
grant loan ratio for the distribution of NCA, which included the funds by the various finance commissions that tilted the bal-
centrally sponsored schemes (CSS), was a much more favoura- ance in favour of the larger states happened when the state ex-
ble 90:10 for SCS and only 30:70 for GCS. penditures were accelerating. The major fallout of these trends
When the union government stopped giving loans to the is that smaller, poorer states were left in the lurch and deprived
states following the award of the Twelfth Finance Commission, of much-needed funds. So, gaining a SCS status remains the
the NCA was distributed as a block grant in the 56:44 ratio only legitimate option for them to secure more funds.
Economic & Political Weekly EPW JUNE 22, 2024 vol lix no 25 7
EDITORIALS

Moreover, the union government’s machinations that deprive the years has shrunk the share of the divisible tax pool from
the states of a part of the devolving funds have also severely af- 88.6% in 2010–11 to 78.9% in 2021–22. As a result, the fund
fected the poorer states. For instance, while the last two finance flows to the poorest states were further reduced.
commission reports had radically increased the devolution of Thus, it is a double whammy for the poorest states which ensures
taxes to above 40%, the increase in cesses and surcharges over that their demands for an SCS status will not simply fade away.

8 JUNE 22, 2024 vol lix no 25 EPW Economic & Political Weekly
LAW & SOCIETY

State Debt and the Constitution and look for other ways to raise finances
for their spending commitments (Gupta
and James 2023).
Keeping this context in mind, the
Alok Prasanna Kumar Supreme Court’s judgment in Kerala’s
suit will have wider ramifications for

O
The recent legal dispute between n 31 March 2024, a two-judge federalism in India. In the first part of
the Kerala government and the bench of the Supreme Court of this column, I therefore propose to go into
India referred several questions the questions that the Court has posed for
union over finances is not only a
on the interpretation of Article 293 to a itself in the context of Article 293 and to
political tug-of-war between constitution bench of the Supreme Court what extent it might find a constitution-
governments ruled by different (State of Kerala v Union of India).1 This ally acceptable way to harmonise the
parties but also an indication of a case related to a suit filed by the state of needs of macroeconomic stability and
Kerala under Article 131 of the Constitu- fiscal federalism. In the second part of
coming constitutional crisis over
tion asking the Court to direct the union the column, I will look at a larger prob-
the union’s control of subnational government to remove the ceiling on lem that concerns Article 293—one that
debt. A constitutional vacuum the amount of money that the state was first highlighted by the Fourteenth
needs to be addressed through could borrow (Sebastian 2023). Since Finance Commission, though no action
this was the first time that Article 293 has been taken since these concerns
appropriate amendments to
had to be interpreted, the matter was were first articulated.
the Constitution. referred to the constitution bench under
Article 145 to be decided by a bench of Interpreting Article 293
five judges. The litigation was both pre- The origin of the dispute between Kerala
ceded by and continued side by side with and the union has been traced to an
negotiations between the union and Kerala amendment made to the Fiscal Responsi-
(Ananthakrishnan 2024). When the nego- bility and Budget Management Act (FRBM),
tiations did not yield any concrete results, 2003 (Raj 2024). This amendment, made
Kerala pressed for interim relief of being through the Finance Act, 2018, directed
permitted to borrow `26,266 crore imme- the union government to ensure that the
diately. This was denied by the Court while overall public debt did not cross 60% of
making the reference to the larger bench. the gross domestic product and that the
Article 293 empowers the state to fiscal deficit did not cross 3% of GDP
take loans against the consolidated fund (Chakraborty and Chakraborty 2018). The
of the state. The power to take loans is proximate cause for Kerala filing suit
subject to the union’s permission, in its was the union’s denial of permission to
capacity as a creditor to the state. What raise finances through debt based on the
Kerala questioned in its suit is the scope amended FRBM pointing out that Kerala
of the power of the union under the had breached the debt ceiling of 3% of
article and the manner in which it has the gross state domestic product as man-
been used. dated by the FRBM Act. This was calcu-
However, the regulation of subnational lated also on the basis of the debt taken
debt is not only an issue that lies inter se by Kerala’s public sector undertakings
between Kerala and the union. It is only (PSUs), which, the state argued, should
the latest instance where the constitu- not be included in calculating the debt
tional framework for fiscal federalism in ceiling. In its suit, Kerala has challenged
India is coming under strain. The use of the constitutional validity of the amend-
cesses to bypass finance commission rec- ment made to the FRBM Act, as well as
ommendations, the delays in disbursing the specific instructions issued by the
GST revenues, and the drying up of timely union government limiting how much
funding for centrally sponsored schemes the Kerala government can raise and the
Alok Prasanna Kumar (alok.prasanna@ are some of the issues which have put a inclusion of state PSU debt in calculating
vidhilegalpolicy.in) is a senior resident fellow at strain on the budget of state govern- its ceiling.
Vidhi Centre for Legal Policy, and is based in ments. This has pushed states to borrow In referring the suit to the constitu-
Bengaluru.
through their public sector enterprises tion bench, the Supreme Court framed
10 june 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 LAW & SOCIETY

four questions for decision by the larger of the state. A PSU, set up as a company union’s share of states’ loans was 57%.
bench. Of these, two are relevant to the under the company law, would not fall By 2014, this figure had come down to
present article.2 The first question, as within the definition of “state.” The only 6% (RBI 2014). The cause for this drop
framed by the Court, is whether the exception would be companies that are was a number of changes in the manner
state government has a “right” under carrying out some essential governmen- in which the union disbursed funds to
Article 293 to borrow from the union tal function of the government. Such com- the state governments rather than a con-
and other sources and whether the union panies will fall within the same bracket scious effort to reduce the indebtedness
can regulate that right. The second ques- as government entities such as the of states to the union (Sengupta et al
tion asks whether the debts raised by state National Highways Authority of India 2014). The Fourteenth Finance Commis-
government PSUs also fall within the which are considered “state” (Hindustan sion recognises that sometime in the
scope of Article 293 for the purposes of Construction Company v Union of India).5 2020s, certain states will no longer owe
incurring debts by the state government. There is another way to approach this— any money to the union limiting the
The first question frames the issue a government company is not per se union’s ability to control subnational
somewhat incorrectly—a state does not excluded from the scope of the Insolvency debts. Given that the problem was sev-
have a “right” so much as a “power” to and Bankruptcy Code, 2016 and there- eral years away from manifesting, the
raise money through debt.3 Be that as it fore default on any loans taken by it Fourteenth Finance Commission did not
may, the second part of the question is a would have to be resolved in accordance recommend any changes to deal with
valid one—to what extent can the union with that law (Sharma 2022). It will be a the issue.
regulate this power or, to use jurispru- different matter, however, if the state However, this eventuality has perhaps
dential terms, what kind of disabilities government is giving a guarantee for been delayed thanks to the COVID-19
can the union impose on the exercise of the debts of the PSUs—such debts will pandemic’s impact on state finances. As
this power by the state? Kerala has argued squarely fall within the scope of Article per the data compiled by the RBI, loans
in the Court that the union does not 293 and would require the consent of and advances from the union had
have the power to impose restrictions on the union. shrunk to 3% of the total outstanding
a state’s power to raise debt unless it The interpretation of Article 293 not- loans of all states by FY 2020. However,
relates specifically to the money bor- withstanding, there is a larger issue post FY 2021, this number has steadily
rowed from the union. On the second about the future of Article 293 itself. As I risen and is 8.6% as per budget esti-
question, it has argued that the debt discuss in the next section, its relevance mates for FY 2024 (RBI 2023). This uptick
raised by state PSUs would fall outside to the whole scheme of fiscal federalism may, however, be only a temporary
the scope of Article 293. might be called into question. phenomenon and the larger trend iden-
On the first question, a plain reading tified by the Fourteenth Finance Com-
of Article 293 would suggest that the The Coming Constitutional Crisis mission might restart soon.
Kerala government’s stand is on weak As pointed out earlier, the union’s power
footing. Article 293 imposes two separate to regulate state debt in Article 293 is In Conclusion
limitations on the state government’s linked to the loans owed by the state to While Kerala has an arguable case insofar
powers to take loans—clause (1) dictates the union. Article 293 has no provision as the civil suit is concerned, the Supreme
that it cannot exceed the debt ceiling that allows the union to regulate state Court’s interpretation of Article 293 will
imposed by the state legislature and debt in the absence of the state owing the have wide-ranging implications for the
clause (3) requires the state to take con- union any money. The only limitation on future of fiscal federalism in India. An
sent from the union if there is any out- the state’s debt therefore would be the interpretation of Article 293 which loosens
standing loan from the union. Clause (3) limits laid down by the state’s legislative union’s control over subnational debt
would be rendered useless if it is inter- assembly. Unlike in a presidential form may have much larger macroeconomic
preted in the way Kerala seeks to— of government where different parties implications prompting the Court to shy
clause (2) already gives the power to the may control the executive and the legis- away from such an interpretation. That
union to impose conditions on the state lature, in a Westminster parliamentary such concerns will play a role in its inter-
while giving a loan and clause (3) is democracy such as India’s, the same pretation of Article 293 is clear from the
clearly intended to apply to loans taken party effectively controls both the exec- order of referral itself where the Court
from other sources. The constitutional utive and the legislature. This would denies interim relief to Kerala. That
intent was to give control to the union mean that there would be little or no said, the same concerns of macroeco-
over subnational debt raised from “all” effective checks on the state govern- nomic stability might push the Court to
sources and not just the ones being raised ment’s power to take loans. take a wider view on whether Article 293
from the union government itself.4 The possibility of states not owing the applies to state-owned PSUs, maybe per-
On the second question, Kerala stands union any money in the near future was haps even disregarding its own settled
on a firmer legal footing. Article 293(3) first flagged by the Fourteenth Finance precedents on whether these entities
expressly applies only to loans of the Commission.6 The Reserve Bank of India can be considered “state” for the pur-
state secured on the consolidated fund (RBI) data shows that, in 1991, the poses of the Constitution.
Economic & Political Weekly EPW june 22, 2024 vol lIX no 25 11
LAW & SOCIETY

However, whatever the Court’s inter- 3 For the distinction between rights and powers, Raj, Kaleeshwaram (2024): “Why a State Is Suing
see Hohfeld (1917). the Union,” New Indian Express, 3 May, viewed
pretation of Article 293, the article itself 4 For the history of Article 293, see Panuganti (2024). on 19 June 2024, https://www.newindianex-
is at the risk of being rendered constitu- 5 Hindustan Construction Company v Union of press.com/opinions/2024/May/02/why-a-
India AIR 2020 SC 122. state-is-suing-the-union.
tionally irrelevant in the coming decade. RBI (2014): “State Finances: A Study of Budgets of
6 Report of the Fourteenth Finance Commission
The solution perhaps may lie in an of India, para 14,103, page 200, viewed on 2013-14,” Reserve Bank of India, Appendix
Tables 11 and 12, viewed on 19 June 2024,
amendment to the Constitution that 19 June 2024, https://fincomindia.nic.in/asset/
https://rbi.org.in/Scripts/AnnualPublications.
pdf/commission-reports/14thFCReport.pdf.
finds a different and more durable basis aspx?head=State+Finances+%3a+A+Study+
of+Budgets#.
to grant power to the union to regulate
References — (2023): “State Finances: A Study of Budgets of
state debt (Sengupta et al 2014). How- 2023-24,” viewed on 19 June 2024, https://rbi.org.
Ananthakrishnan, G (2024): “Centre–Kerala Talks in/Scripts/AnnualPublications.aspx?head=State
ever, this amendment will also have on Borrowing Limit Make No Headway,” Indian %20Finances%20:%20A%20Study%20of%20
to acknowledge the concerns of feder- Express, 14 March, viewed on 18 June 2024, Budgets#.
https://indianexpress.com/article/india/centre-
alism that have been raised by states in Sebastian, Sheryl (2023): “Kerala Govt Moves
kerala-talks-on-borrowing-limit-make-no-
Supreme Court Against Centre Limiting State’s
the manner in which the union has headway-9213114/. Borrowing Capacity, Alleges Violation of Fiscal
Chakraborty, Pinaki and Lekha Chakraborty Federalism,” Live Law India, 13 December,
exercised its power. In this respect, the (2018): “New FRBM Framework: Time to Recast viewed on 18 June 2024, https://www.livelaw.
Kerala suit may be a signal to the union Union Government Expenditure Needs,” in/top-stories/kerala-govt-files-suit-against-
Economic & Political Weekly, Vol 53, No 9, centre-in-supreme-court-for-imposing-limits-
that entirely untrammelled and unilat- 3 March, p 30. on-the-states-borrowing-capacity-244427.
eral powers in this respect may not be Gupta, Shruti and Kevin James (2023): “The Nature Sengupta, Arghya, Anisha Sharma and Ritwika
the way to go. and Implications of Off-Budget Borrowings in Sharma (2014): “Research Report on Queries
India: Centre and States,” Indian Public Policy Raised by the Fourteenth Finance Commission:
Review, Vol 4, No 3, pp1–42. On Central Control of Sub-national Debt in
Notes Hohfeld, W N (1917): “Fundamental Legal Concep- India,” Vidhi Centre for Legal Policy, October,
1 State of Kerala v Union of India 2024 INSC 253. tions as Applied in Judicial Reasoning,” viewed on 19 June 2024, https://vidhilegalpol-
2 The other questions relate to the scope of Arti- Yale Law Journal, Vol 26, No 8, June, icy.in/wp-content/uploads/2019/05/141010_
cle 131 and whether actions under Article 293 pp 710–70. CentralControlofStateDebt.pdf.
are amenable to judicial review. There are four Panuganti, Aditya (2024): “State of Kerala v Union Sharma, Shradha (2022): “Can Government Com-
other subsidiary questions which the Court has of India: Reshaping Indian Fiscal Federalism,” panies be Brought under the Aegis of the IBC?”
raised in its order of reference but they do not Law and Other Things Blog, 17 May, viewed on India Corp Law Blog, 27 May, viewed on 19 June
specifically relate to the interpretation of Arti- 19 June 2024, https://lawandotherthings.com/ 2024, https://indiacorplaw.in/2022/05/can-gov-
cle 293 and seek to look at fiscal federalism as state-of-kerala-v-union-of-india-reshaping- ernment-companies-be-brought-under-the-aegis-
well as federalism in a wider perspective. indian-fiscal-federalism/. of-the-ibc.html.

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12 june 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 COMMENTARY

Recognising these issues, this article

Navigating the Dual Challenges examines how India, as a fast-rising
economy with an emphasis on manufac-
of International Trade turing and exports, confronts the com-
bined challenges provided by trade im-
Trade Balance and Competition balances and global market competition.
By analysing these challenges in the Indian
context, we aim to contribute valuable
Krishan Sharma, Nida Rahman insights to the ongoing discourse on trade-
driven economic development. Under-

T
Developing countries face dual he idea of international trade as a standing and addressing these challenges
challenges when participating in catalyst for economic growth is is crucial for growing economies, such
widely recognised, but in recent as India, in a volatile global environment
the international market. First,
times, critics have cast doubt on its effec- where trade dynamics are shifting and
they must generate enough trade tiveness. Nonetheless, trade remains a international competition is fierce. To
balance in supply of goods and tried-and-proven method for fostering balance the necessity for local investment
services while balancing domestic economic development and facilitating against the benefits of export-led devel-
structural changes within economies. opment while managing various trade
investment. And second, they
Over the past few decades, developing restrictions becomes a difficult issue.
struggle to reach their potential nations have drawn inspiration from The article focuses on India’s experienc-
buyers in a cost-effective way global examples and embarked on a path es to shine the spotlight on how develop-
amid intense international towards achieving prosperity through ing nations are facing these challenges
trade-oriented strategies. while aiming for sustainable growth
competition and regulation.
However, as this article argues, these through trade-driven methods.
developing countries face dual challeng-
es of international trade. First is trade The supply side of problem—savings–
surplus which is the balance of national investment gap and trade balance:
saving over investment. The excess of The excess of domestic output over con-
national income over consumption de- sumption determines a country’s invest-
termines investable surplus. This invest- able surplus. In an open economy, this
able surplus can either be invested do- surplus could either be invested domes-
mestically or exported to other coun- tically as capital formation or exported
tries. Although, in their current stage of to other nations as a trade surplus. The
development, these countries need much trade-off between domestic investment
higher investment for progress, the ex- and export is a critical decision-making
ports have their own merits. Therefore, process for a country’s economic growth
the developing countries, in essence, plan. More formally, we can write this
face a critical trade-off that has a bearing trade-off as a relationship between trade
on both their internal and external econ- balance and saving–investment gap.
omies. From the international economy Y ≡ C + I + G + NX … (1)
perspective, this problem reflects the where Y is national income, C is private
supply side of output available for selling consumption expenditure, I is domestic
in the international marketplace. Second is capital investment, G is government
more of a demand-side problem, where spending and NX is net exports, that is,
developing countries compete with each exports minus imports. The above iden-
other to sell their products. This compe- tity can be written as follows:
tition can be intense as multiple countries Y – (C – I – G) ≡ NX … (2)
strive to capture the attention and pur- In particular, the above equation says
chasing power of international buyers. that total production minus domestic
In addition to the competition among consumption equals net exports. We can
Krishan Sharma ([email protected]) is
developing countries, various trade bar- alter our mentioned identity even further,
pursuing PhD at the Centre for Development riers can impede their ability to sell to show that international flow of funds
Studies, Jawaharlal Nehru University. products internationally. These barriers to finance capital formation and cross-
Nida Rahman ([email protected]) include tariffs, non-tariff barriers, and border flow of goods and services are
teaches at the School of Business, University of regulatory standards that products must essentially the same thing.
Petroleum and Energy Studies, Uttarakhand.
meet to enter foreign markets. Y – C – G ≡ I + NX … (3)
Economic & Political Weekly EPW JUNE 22, 2024 vol lIX no 25 17
COMMENTARY

where Y – C – G is national savings. years. The average gross savings rate for be reflective of economic adjustments in
Therefore, the above expression can be the period is 32.18% of GDP, with a coef- the wake of the pandemic and supply-
written as, ficient of variation (CV) of 7.24%. This chain disruptions.
S – I ≡ NX ≡ E – M … (4) moderate CV indicates that, while there It should be emphasised here that,
Equation (4) shows the crucial role of is some volatility, savings behaviour barring 2020–21, India’s savings and
the savings and investment gap in deter- stays rather steady with the rate varying investment gap has been negative throug-
mining trade balance. To be a net ex- within a particular range. In 2010–11, hout the past decade. The average S–I
porter in the global economy, a country India’s gross capital formation, which gap for the period was -1.87% of GDP.
must have a positive saving–investment measures the proportion of national rev- This indicates that India has been in-
gap. For a developing country, the chal- enue invested in capital assets, was vesting more than it has been saving.
lenge is to strike the right balance be- 39.8% of GDP. It went through various ups This fact has three ramifications. First,
tween domestic investment and export. and downs throughout the decade. The the country is continuously running a
While domestic investment contributes average rate of capital formation is trade deficit, that is, importing more
to long-term growth and stability, export around 34.05% of GDP, with a CV of than its exports as visible in Table 1. We
activities can bring in immediate foreign 11.16%. It has a slightly greater fluctua- can see that the E–M gap tends to follow
exchange and stimulate economic activ- tion than the savings rate suggesting the the same trend as the S–I gap, however,
ity. Locating the optimal balance is de- dynamic nature of investment decisions. actual numbers may differ due to the in-
pendent on a country’s unique circum- India’s engagement in international tricacies of trade dynamics. Neverthe-
stances and objectives. It is crucial to re- trade is evident from the export and im- less, the correlation coefficient between
member that domestic investment and port figures (as a proportion of GDP). The them remains statistically significant
export activity are not always mutually export proportion reflects the value of and as high as 0.99. Second, India is not
incompatible. In fact, they frequently goods and services sold abroad, and it creating enough supply for the global
complement one another. A country that witnessed an incremental rise over the market to fully benefit from trade-driv-
invests in enhancing its infrastructure years, reaching its pinnacle at 25.75% in en prosperity. This may be linked to sev-
and technology, for example, may im- 2013–14. This progression suggests India’s eral variables, with the country’s com-
prove its export competitiveness. growing integration into global markets paratively lower savings rate playing a
Table 1 gives information about India’s and its efforts to diversify its export bas- crucial part. This is especially apparent
macroeconomic behaviour during the ket. The dip to 18.87% in 2019–20 might when comparing India to other trade-
previous decade, exhibiting trends in be attributed to global trade disruptions surplus-producing countries such as
savings, investment, exports, and im- and economic uncertainties. In parallel, China. Third, to finance this trade defi-
ports. Moreover, it also provides infor- the proportion of imports as a percent- cit, the country needs to rely on foreign
mation on two vital indicators: the sav- age of GDP, representing the value of capital resulting in the inflow of funds
ing–investment (S–I) gap and the ex- foreign goods and services consumed from the rest of the world. This leads to
port–import (E–M) gap. domestically, demonstrates consistent the appreciation of the real exchange
The gross savings rate, which indi- growth. It surged to its peak at 31.63% in rate resulting in a loss in competitive-
cates the proportion of national income 2012–13, underscoring the rising de- ness in international markets. This has
saved, has changed throughout (Table 1). mand for foreign products and services been the case with India for a large part
Beginning at 36.9% in 2010–11, the per- within India. However, the subsequent of the last decade.
centage has gradually fallen in consecutive moderation to 19.36% in 2020–21 might The trends observed in India’s real ef-
Table 1: India’s Saving–Investment Gap and Export–Import Gap fective exchange rate (REER) over the past
Years India’s Gross India’s Gross Capital S–I Gap India’s Export India’s Import E–M Gap decade are closely intertwined with the
Savings Rate as a Formation as a as a Proportion as a Proportion
Proportion of GDP Proportion of GDP of GDP of GDP
trade-balance challenge (Figure 1, p 19).
2010–11 36.9 39.8 -2.9 22.64 27.15 -4.51 Barring a few years, both the indices of
2011–12 34.6 39 -4.4 24.76 31.36 -6.60 REER have shown appreciation, resulting
2012–13 33.9 38.7 -4.8 24.83 31.63 -6.80 in the loss of competitiveness in the
2013–14 32.1 33.8 -1.7 25.75 28.77 -3.02 global market. The inability to generate
2014–15 32.2 33.5 -1.3 23.24 26.26 -3.02 enough savings to support its capital
2015–16 31.1 32.1 -1 20.05 22.37 -2.32 accumulation leads to trade deficit. To
2016–17 31.3 32 -0.7 19.56 21.36 -1.80 finance this deficit, the country needs
2017–18 32.1 33.9 -1.8 19 22.19 -3.19
external financing, the inflow of which
2018–19 31.7 33.8 -2.1 20.14 23.95 -3.81
leads to the appreciation of the real ex-
2019–20 29.9 30.7 -0.8 18.87 21.48 -2.61
change rate via the rate of interest, po-
2020–21 28.2 27.3 0.9 18.96 19.36 -0.40
Average 32.18 34.05 -1.87 21.62 25.08 -3.46
tentially impacting the international
Std 2.33 3.8 - 2.66 4.22 - competitiveness of Indian exports. Foster-
CV 7.24 11.16 - 12.30 16.83 - ing domestic savings and investment in
Sources: Economic Survey, 2022–23 and RBI database on Indian Economy. the productive sectors can help address
18 JUNE 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 COMMENTARY

the underlying causes of the trade deficit Figure 1: India’s Real Effective Exchange Rate1
in India. 108 8.00
Therefore, at the core of export-driven
growth and prosperity, the country must 6.00
103
produce a sufficient investable surplus 4.00

Percentage chamge
after allocating for domestic investment. 98 2.00
This trade balance powers export endeav-

REER
ours and amplifies a nation’s presence in 93 0.00
the global marketplace. It shapes the sup-
-2.00
ply side of the international trade equa- 88
tion, influencing the balance of goods and -4.00
services available for exchange. This dy- 83 -6.00
namic, while deeply rooted in economics,

2012–13

2013–14

2014–15

2015–16

2016–17

2017–18

2018–19

2019–20

2020–21

2021–22
extends to diplomatic relations, geopoliti-
cal influence, and cross-cultural interac-
PEER (trade weights) PEER (exports’ weights)
tions. Figure 2 depicts the interplay of the
Y-O-Y change on PEER (trade weights) Y-O-Y change on PEER (exports’ weights)
saving–investment gap and trade balance 1 Increase in value of REER implies appreciation of REER.
in detail for a few selected economies. Source: Authors’ own, based on the RBI’s, Handbook of Statistics on the Indian Economy.

Figure 2 demonstrates the fundamen- Figure 2: Saving–Investment Gap and Trade Balance of Selected Economies
tal relationship between investable sur- E-M Gap (as % of GDP)
plus and trade balance. The relationship 23
R² = 0.9684
is close to perfect with the coefficient of
Ireland
determination (R2) being 0.96. Three Germany Slovenia
Bolivia 13
facts are emerging from this relation- Switzerland
Cameroon
S-I Gap (as % of GDP)

China
ship. First, developed countries such as Brazil Denmark
Germany, Switzerland, and Denmark Bangladesh 3 Vietnam Iceland
are saving more than investing, there- -20 -15 -10 -5 0 5 10 15 20
fore, leading their position as the net ex- The Philippines -7 Indonesia

porter in the global market. Second, in Pakistan

Turkey Cambodia
Kenya
contrast, the majority of developing Botswana
-17
countries face the obstacle of generating Namibia Ethiopia Morocco
an ample investable surplus required to
Nepal -27
capitalise on export-driven expansion.
Source: Authors’ own, based on the World Development Indicators (WDI) database.
Consequently, they find themselves as
net importers within the global market. or commodities to capture the market commodity price slump in the last dec-
Finally, the recent economic achieve- share by providing the most attractive ade can be partly attributed to cheap
ments of Asian nations like China, Indo- pricing and quality. As a result, there supplies from these countries, which has
nesia, and Vietnam are primarily attrib- might be a “race-to-the-bottom” when adversely affected agriculture growth as
uted to their adeptness at significantly nations compromise on labour laws or well as the livelihood of local farmers. In
increasing their savings rates. This has, environmental restrictions in order to addition, India’s considerable horticul-
consequently, generated a substantial stay competitive. This dynamic threatens tural produce remains hindered from
pool of surplus funds that can be invest- sustainable growth strategies and push- finding its way into international mar-
ed and then utilised to boost exports. es prices downward, potentially threat- kets due to challenges related to in-
ening the economic viability of some consistent quality and standardisation
The demand side of problem—compe- sectors. This has been clear in several (MOCI 2020).
tition and regulatory issue: The sec- industries where India is attempting to Similarly, India is encountering grow-
ond challenge pertains to the demand expand its presence. For instance, India ing challenges in establishing its position
side of the problem that developing is finding it increasingly difficult to com- within the realm of electronics manu-
countries face in international trade pete with Bangladesh and Vietnam in facturing and assembly exports. China’s
while reaching their potential buyers. the textile and apparel business. These massive manufacturing capabilities ena-
The central facet of this challenge is the countries have significant skills in this ble economies of scale, leading to lower
fierce competition between developing field owing to their low-cost advantages production costs per unit. Furthermore,
nations for the attention and purchasing (Ministry of Textile 2015). Likewise, its active government policies, including
power of foreign buyers. India faces intense competition from Sri tax incentives and a simplified regulato-
Developing nations sometimes specia- Lanka, Thailand, and Vietnam in the ex- ry framework, have been instrumental
lise in manufacturing similar products port of tea, rice, and spices. The global in attracting foreign investment and
Economic & Political Weekly EPW JUNE 22, 2024 vol lIX no 25 19
COMMENTARY

fostering the infusion of advanced techno- Figure 3: Relationship between Export Cost Index and Per Capita Income in 2018
logy. This has indeed granted Chinese 6
R² = 0.1044
Indonesia Malta Japan Portugal
Russia
manufacturers a significant edge over Cyprus
India Latvia Finland
their competitors (Mani 2010). Nonethe- 5
Greece Czech Republic Australia
Brazil Canada Norway
less, recent geopolitical shifts have Croatia
Estonia
Korea Italy Denmark
prompted global companies to consider 4 Bulgaria Lithuania Slovak Republic Switzerland

Average ECI
India as a reliable alternative supplier Mexico Spain
Austria Luxembourg
Turkey
for electronics. The changing geopoliti- 3 Slovenia Belgium
Romania Sweden
France Ireland
cal landscape, along with factors such as China Germany
2 Hungary
rising labour costs in China and con- World
Netherlands United States
Poland
cerns over supply-chain diversification, United Kingdom
1
has motivated companies to explore
manufacturing opportunities in India.
0
India’s growing skilled workforce, ex- 0 20,000 60,000 40,000
80,000 100,000
1,00,000 120,000
1,20,000
panding technology ecosystem, and ef- Per capita income (US$)
Source: Authors’ own, based on the World Trade Organization (WTO) and World Development Indicators (WDI) database.
forts to improve its business environment
have positioned it as an attractive desti- Figure 4: Component-wise Break-up of Trade Cost in Bilateral Trade Flows
35.00
nation for electronics manufacturing.
In addition to competition among de- 30.00 28.80 29.15
veloping countries in global markets,
there is a host of complex barriers that can 25.00
22.23
23.22 23.33
impede the smooth flow of goods and 19.66
20.00 18.78 18.42
services to potential international buyers. 16.34 17.42
%
%

14.83
Of these barriers, regulatory standards 15.00 14.65
13.15 12.21
wield considerable influence. Regulatory 10.98
10.00
standards encompass a gamut of stipula- 7.46
tions that commodities must satisfy to be 5.00 4.71 4.65
eligible for entry into overseas markets.
These benchmarks can span safety norms, 0.00
Transport and travel Information and ICT connectedness Trade policy and Governance quality Other
environmental prerequisites, labelling cost transaction cost regulatory differences
mandates, and certifications, among other Low/Middle to Low/Middle Low/Middle to High High to High
facets. Although these standards are Source: Authors’ own, based on the World Trade Organization (WTO) database.

constructed to safeguard consumers, en- cost of exports for developing countries equipped to navigate and manage the
sure the quality of products, and uphold compared to their developed counter- costs associated with international trade.
public health, they can inadvertently lead parts. This divergence in cost structures This capability allows them to capitalise
to augmented export costs for develop- can, in turn, affect the competitiveness on the advantages of global commerce,
ing countries. In addition, non-tariff of their products in international mar- fostering economic growth, and advance-
barriers (NTBs) serve as an added layer kets and influence their ability to effec- ment. In contrast, nations like India, still
of challenges. It encompasses measures tively compete on a global scale. To bet- in the process of development, confront
like quotas, licensing mandates, techni- ter comprehend this fact, the export cost greater hurdles in optimising their ex-
cal criteria, and import regulations. index (ECI) constructed by the World port-cost dynamics. These challenges
These measures obstruct the free flow of Trade Organization (WTO) becomes a potentially curtail their capacity to fully
trade by introducing complexity, uncer- valuable tool (Rubínová and Sebti 2021). leverage the potential benefits of inter-
tainties, and delays, increasing the cost The construction of the ECI is built upon national trade for bolstering their eco-
of exports, and impeding the movement five fundamental variables, encompass- nomic expansion and prosperity. This
of products and services across borders. ing transportation and travel costs, in- highlights the critical relevance of estab-
For developing nations, the compli- formation and transaction costs, infor- lishing specific policies and initiatives
ance costs associated with meeting these mation and communications technology that might help India and other develop-
standards can be substantial. These costs (ICT) connectedness, trade policy and ing countries overcome these challenges
arise from various factors, including regulatory difference, and governance and improve their global competitiveness.
conducting tests, obtaining certifications, quality. Figure 3 illustrates the associa- A further break-up of external costs in
implementing quality control measures, tion between ECI and the per capita in- bilateral trade flows reveals that bet-
and ensuring adherence to specific pro- come of selected economies. ween low/middle and low/middle nations,
duction processes. Such investments, while The pattern in Figure 3 highlights a trade policy differences (23.33%) and
necessary to access foreign markets, can notable trend where countries with transport costs (22.23%) dominate the
contribute to an increase in the average higher per capita income levels are better expenses (Figure 4). In the bilateral trade
20 JUNE 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 COMMENTARY

flow amid low/middle to high-income and streamline trade processes are cru- complicate their trade landscape. These
countries, other costs lead at 29.15%, cial to mitigate these challenges and en- challenges, though daunting, can be
followed by transport costs (23.22%). sure that developing countries can effec- mitigated through strategic policy initia-
Finally, in the instance of bilateral trade tively reach and appeal to their potential tives, including fostering savings rates,
among high-income economies, trans- buyers while competing in the global harmonisation of trade regulations, and
port costs (28.80%) and trade policy dif- market. The recent proliferation of FTAs in investment in innovation and infra-
ferences (17.42%) play key roles. The sig- India is a good step in this regard, as it structure. India’s experiences serve as a
nificance of trade policy differences assists partners to harmonise regula- testament to the complexities of this
stands out notably in both low/middle- tions, eliminate tariffs, and simplify cus- journey, highlighting the need for tar-
income nations engaging with each toms procedures, thus facilitating smooth- geted solutions to promote economic ad-
other and when they interact with high- er trade, and minimising costs. vancement while addressing global mar-
income countries. This underscores the ket dynamics. As the international trade
distinctive challenges that low/middle- Conclusions landscape continues to evolve, develop-
income economies face in terms of trade To conclude, the complexities and chal- ing countries must adapt and strategise
policy harmonisation. lenges faced by developing nations in effectively to harness the benefits of
The discrepancies in regulations, tar- international trade are multifaceted and trade-driven growth while addressing
iffs, and customs procedures contribute to intertwined, encompassing both supply- the associated hurdles.
elevated trade costs, thus posing a de- and demand-side considerations. The
mand-side challenge and impacting the intricate balance between domestic in- References
potential buyers. The differences in regu- vestment and export promotion under- Mani, S (2010): “Has China and India Become More
Innovative Since the Onset of Reforms in Two
lations, and customs procedures elevate pins the trade-off that developing coun- Countries?” Centre for Development Studies,
trade costs, increasing prices for imported tries like India must navigate. The di- Working Paper 432, May.
goods and decreasing demand elasticity. lemma of managing trade imbalances Ministry of Textile (2015): “Vision, Strategy and Ac-
tion Plan for India Textile and Apparel Sector,”
Moreover, complexities and delays at bor- while fostering domestic investment for New Delhi.
ders and other administrative burdens long-term growth is pivotal for sustaina- MoCI (2020): “Agriculture Export Policy,” Depart-
ment of Commerce, Ministry of Commerce and
create uncertainty and reduce the availa- ble development. Simultaneously, the Industy, .
bility of goods, making it harder for po- competition among developing coun- Rubínová, S and M Sebti (2021): “The WTO Trade
Cost Index and Its Determinants,” Economic
tential buyers to plan purchases. Several tries for market share and the influence Research and Statistics Division, Staff Working
coordinated efforts to align regulations of regulatory standards on trade further Paper ESRD-2021-6, February.

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Economic & Political Weekly EPW JUNE 22, 2024 vol lIX no 25 21
COMMENTARY

sociopolitical dynamic of Manipur ne-

Making Sense of Separate cessitates acknowledging the significant
influence of ethnic affiliations. This in-
Administration Demand fluence traces back to colonial times when
a distinct administrative structure was
amid Manipur Violence conceptualised for both hill and valley
communities (Hausing 2023). Subse-
quently, this system has been largely re-
P Kham Sian Muan Zou tained by the post-independent Indian
state without undergoing fundamental

T
The cycle of violence in Manipur he ongoing violence in Manipur, changes. Consequently, a shared sense
that erupted on 3 May 2023 which commenced on 3 May 2023, of identity or symbiotic relation is absent,
involving the Meiteis and Zo-Kuki leading to the perception that the inter-
remains unabated. Despite the
tribes, displays no signs of immediate ests of one community are viewed as a
massive deployment of central closure. This violence has thus far re- zero-sum game by other communities.
security forces, the arming of sulted in the loss of over 200 lives and A preliminary examination of the
civilians impedes the attainment the displacement of 70,000 people (Ali grievances expressed by the tribal com-
2023). Over the past few decades, Ma- munities reveals that asymmetrical power,
of peace. A thorough examination
nipur has witnessed episodes of violence coupled with structural inequality be-
of the situation reveals a among diverse communities. For instance, tween the valley and hills, and the negli-
convergence of various issues, during the 1990s, the state witnessed gence of their rightful political represen-
including ethno-religious clashes between Naga and Kuki (1992–95), tation have exacerbated the hill–valley
Meitei and Meitei Pangal (1993), and divide. This perception of “injustice” en-
tensions, insurgency, and
Kuki/Thadou and Zomi/Paite (1997–98). compassing political, social, and econo-
homeland politics. Due to the However, the ongoing violence stands mic disparities has significantly intensi-
intricate overlap of these issues out due to its unprecedented intensity fied since Manipur achieved statehood in
and the alleged partisan role of and magnitude of hatred. Regrettably, it 1972. Despite the provisions in the Indian
has exacerbated ethnic divisions to the Constitution envisioning “separate dis-
the state government, decisive
point where Zo-Kuki tribes perceive “total trict councils and Hill Areas Committee
intervention by the union separation” as the only viable solution.1 (HAC) under Article 371C … to accommo-
government is essential to disarm As the violence intermittently esca- date the distinctive rights of the tribals
civilians and facilitate a viable lates, a ripple effect is discernible in the on land and identities” (Hausing 2023: 1),
neighbouring state of Mizoram. A note- these safeguards have often been sus-
political resolution.
worthy consequence of this escalation ceptible to manipulation by the domi-
is the influx of over 12,000 displaced nant Meitei political elites. Consequent-
Zo-Kuki tribes from Manipur, seeking ly, a substantial disparity is evident be-
refuge in Mizoram alone. This influx has tween the valley and hills regarding budg-
not only heightened the burden of refu- et allocation, employment benefits, and
gees but has also induced a shift in the infrastructure development (Table 1).
political landscape of Mizoram, culminat- Many scholars have highlighted the
ing in the establishment of “Zo United.” existence of structural injustice between
Indeed, this development epitomises the the valley and the hills in Manipur. For
hill–valley divide in Manipur. Against instance, within the state’s 14 departments,
this backdrop, this article contends that tribal quotas experienced shortages of
land stands at the core of the conflict,
and issues such as the politicisation of Table 1: Manipur Budget, 2017–21
Year In Crore Valley (in Crore) Hills (in Crore)
violence, ethno-religious dynamics, insur-
The author is indebted to the anonymous 2017–18 `5,000 `4,892 `108
gency, and homeland politics revolve
referee for detailed and thoughtful suggestions 2018–19 `4,900 `4,750 `150
on an earlier version of this article. The author around this central theme. 2019–20 `5,000 `4,880 `120
is also thankful to Kham Khan Suan Hausing 2020–21 `7,000 `6,959 `41
and P Thongkhanthang for their assistance in Structural Inequality and Total `21,900 `21,481 `414
proofreading. Homeland Politics Valley Districts Hill Districts

Manipur is a state characterised by Land distribution 10% 90%

P Kham Sian Muan Zou (ksmuanzou@gmail.
com) is a doctoral candidate at the School profound diversity, with three major Population 60% 40%
of Law, Governance and Citizenship, Number of MLA 40 MLAs 20 MLAs
communities identifiable—Meiteis, Nagas representation
Dr B R Ambedkar University, New Delhi.
and Zo-Kuki tribes. Understanding the Source: Alfred Arthur as cited in ZSF (2023: 15).

26 JUNE 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 COMMENTARY

26% in the veterinary and animal hus- hill districts, which encompass 90% of government attempted to address the
bandry department, 23% in the educa- the state’s geography. However, only 10% “land imbalance” by introducing three
tion department, 21% in the power de- of these hill districts are habitable. Many controversial bills in the state assem-
partment and 17% in gazetted posts, re- Meiteis have long perceived the constitu- bly—the Protection of Manipur People’s
spectively (Suan 2009). The concentra- tional prohibition on individual land ac- Bill, Manipur Land Reforms Bill, and
tion of development in the Imphal Valley quisition in the hill districts as “unjust” Manipur Shops and Establishment Bill.
and the government’s failure to address and in need of “rectification” through The tribals, notably the Zo-Kuki, per-
tribal interests have contributed to the the implementation of the Manipur Land ceived these bills as “anti-tribal” and a
widening trust deficit. This structural Reforms and Land Revenue Act (MLR & LR) deliberate effort by the Meiteis to usurp
injustice has, to a large extent, given rise across the entirety of Manipur. their land rights (ZSF 2023). Opposition
to land consciousness, the politics of The extension of MLR & LR to the hill to these bills was intense, resulting in
othering, homeland politics, and insur- districts has consistently been a conten- the loss of nine lives during clashes be-
gency, particularly among the Zo-Kuki tious topic. Over the past few decades, tween protesters from Churachandpur
tribes. The perfunctory implementation certain valley-based social activists have district and the Manipur police. Follow-
of Article 371c has served as the genesis been eager to address the “land imbal- ing the lapse of the bills, certain sections
of dismay and insecurity, thereby rein- ance” in a manner that aligns with their of the Meitei community developed a
forcing homeland politics and insurgency interests (Piang 2023). Kipgen (2018: 120) more hostile attitude towards the tribal
in the hills. also highlighted that the MLR & LR De- community in general, particularly the
Since the inception of the Autono- mand Committee was established “sole- Zo-Kuki tribes. Any government initia-
mous District Council’s first election in ly to press the state for the implementa- tive, therefore, is viewed with suspicion
1972, it has become ineffectual in terms tion of the law.” During a public meeting as potentially undermining tribal inter-
of its functions and powers. This situa- organised by the committee, on 22 Octo- ests and land rights.
tion has fostered a sentiment of “deliber- ber 2011, various valley-based intellectu- Consequently, some Meiteis find it
ate negligence” among the hill tribes. As als, government servants, bureaucrats, logical to revive traditional practices
early as 1974, the HAC advocated for an and civil society groups, such as the and circumvent legal obstacles by seek-
upgrade under the provision of the Sixth United Committee Manipur (UCM), vehe- ing Scheduled Tribe (ST) status. Organi-
Schedule (Ngaihte 2022). However, the mently advocated for the implementa- sations such as the Arambai Tenggol and
dominant valley political elites remained tion of the law (Kipgen 2018). However, Meetei Leepun in the valley have been
unconvinced, leading to the boycott of as political power and major infrastruc- actively engaged in the efforts to revive
the council by the All Manipur Tribal tural projects are concentrated in the Sanamahi religion and traditional prac-
Students’ Union and its suspension from Imphal Valley, any attempt to rectify tices in recent years. In various inci-
1988 to 2010 (Hausing 2015). landholding patterns becomes contro- dents, the sacralisation of religious sites
It was only with the passage of the versial (Piang 2023). Whenever the state in Zo-Kuki-dominated areas by mem-
Manipur (Hill Areas) District Councils government endeavours to alter the sta- bers of Arambai Tenggol has led to di-
(Third Amendment) Act, 2008 by the tus quo on land rights and holding pat- rect confrontations with local villagers.
Manipur Legislative Assembly that a fresh terns, strong opposition arises from the These organisations have notably influ-
election took place in 2010. Subsequent hill tribes. enced Biren Singh’s policies regarding
elections occurred in 2015, but a new In 2015, despite staunch opposition land eviction drives and the declaration
election has been overdue since 2020. from the hill districts, the then Congress of a “war on drugs” (ZSF 2023).
Despite the amendment in 2008, the
tribal leaders have persistently complained
about the undermining of the powers of
the HAC. In August 2021, the HAC submit- Permission for Reproduction of
ted a draft bill to the state government,
but it made little progress (Paul 2022).
Articles Published in EPW
‘Land Pressure’ and Revival No article published in EPW or part thereof should be reproduced
of Sanamahi in any form without prior permission of the author(s).
For those familiar with Manipur’s diversi-
ty, it is a well-established fact that the A soft/hard copy of the author(s)’s approval should be sent
state is characterised by two distinct land to EPW.
masses: the valley, predominantly popu-
lated by Meiteis and Pangals, and the hills, In cases where the email address of the author has not been
inhabited by Nagas and Zo-Kuki tribes. published along with the articles, EPW can be contacted for help.
In spatial terms, valley districts constitute
a mere 10% of the area compared to the
Economic & Political Weekly EPW JUNE 22, 2024 vol lIX no 25 27
COMMENTARY

This politicisation of religion and cul- The demand for political autonomy in Zo-Kuki-dominated districts. A careful
ture serves as a strategic manoeuvre to Manipur has a long-standing history, but analysis of unfolding events suggests that
portray the Meiteis as an “indigenous the notion of “separate administration” the current deadlock largely stems from
tribe” who, they perceived, have been involves the politicisation of the reac- the politicisation of violence, the Manipur
denied of ST status and access to tribal tions of valley Meiteis to the violence government’s complicity in the violence,
lands. Obtaining the ST tag is perceived and the narrative presented by valley- and the inaction of the union government
as the simplest means to address the is- based media outlets.2 In a memorandum to bring about an amicable solution.
sue of land pressure. Tensions escalated submitted to the union home minister, In the absence of proactive measures
when a single bench judge of the Manipur the Zo United leaders justified their call from the union government, the situation
High Court, on 19 April 2023, directed for a separate administration in the becomes more precarious. The establish-
the Manipur government to expedite the following manner: ment of “Zo United” indicates that the
Meitei’s demand for inclusion in the ST The Zo people have been tolerating excesses
violence has gradually spread to neigh-
list. This directive faced vehement oppo- of Meitei majoritarianism for decades. This bouring states. Convened by the Mizo-
sition from the tribals (Nagas and Zo- injustice has accumulated and has now ram’s NGO Coordination Committee, on
Kukis) and eventually triggered the on- prompted the Zo people to demand a sepa- 7 September, an agreement was reached
rate administration in the form of a Union
going violence on 3 May 2023. for the formation of “Zo United” (Habib
Territory with a Legislature. (ZSF 2024: 1)
2023). In essence, this echoes the Mizo
Politicisation of the Violence Since the outbreak of violence, Zo-Kuki National Front party’s long-standing de-
In the initial stages, the violence seemed tribes have alleged that state forces and mand for Greater Mizoram. The new
to possess a religious manifestation, evi- organisations such as Arambai Tenggol body, represented by one leader from
denced by multiple instances where are collaborating closely (ZSF 2023). each tribe, selected its leaders on 20
places of worship were targeted. How- Furthermore, the involvement of Meira September 2023. Given the gravity of
ever, it soon became evident that the na- Paibis in disrupting free movements and hatred and the deep divide exacerbated
ture of the violence was predominantly declaring a “war against narco-terrorists” by the violence, achieving peace seems
ethnic. As the violence escalated, con- by the Coordinating Committee on unlikely without a political solution.
tinuous efforts were made to label the Manipur Integrity (COCOMI) is deemed While the proposition of “separate
Zo-Kuki tribes as “outsiders” (ZSF 2023). detrimental to the fabric of Manipur’s in- administration” (union territory with a
For instance, in various interviews, Pramot tegrity. Indeed, these developments in legislature) or “Greater Mizoram” is sup-
Singh, the chief of Meetei Leepun, ac- the valley districts have prompted the ported by the Zo-Kuki tribes, it brings
cused the majority of the Zo-Kuki tribes Zo-Kuki tribes to politicise the violence forth significant political ramifications
of being “outsiders” who have “infiltrated” and advocate for “total separation” from and challenges. Despite facing numer-
on an alarming scale to “disintegrate” Manipur. Influenced by these unfolding ous challenges, the demand for a “sepa-
the state. Nevertheless, there is limited events, elected leaders from the Zo-Kuki rate administration” has prompted some
official data to substantiate such claims. tribes have declared that living together Meitei political elites to reconsider their
In fact, between 2001 and 2011, the dec- with the Meiteis again is “as good as stand on tribal autonomy in Manipur.
adal growth rate (DGR) of Manipur was death,” emphasising that living peace- According to a statement made to the
24.49%, but Zo-Kuki districts (Chura- fully as neighbours is the only viable Indian Express (Tiwary 2023) by a close
chandpur/Pherzawl and Chandel/Teng- solution (Singh and Lakshman 2023). associate of Manipur chief minister:
noupal) accounted for 19.91% and 17.92%, Separate administration, in whatever form
respectively (Piang 2023). The politics of Complexity in ‘Separate the Kukis are demanding, is not acceptable
branding Zo-Kuki tribes as “outsiders” or Administration’ Demand ... We have proposed that the autonomy
“infiltrators” serves to justify the partial Violence is not a new phenomenon in of the hill councils can be increased ... We
hope Kukis will accept the offer and end
actions of state forces as “counter-insur- Manipur, but the unprecedented magni-
the conflict.
gency measures.” The chief minister of tude of hatred, emotions, and trust
Manipur, has, on multiple occasions and deficit evident in the ongoing violence The demand for “separate administra-
without hesitation, declared that the vi- sets it apart. The outcome, marked by tion” or “Greater Mizoram” not only
olence is between “outside forces” and the complete ghettoisation, is undeniable. complicates the peace process but can
“Indian state.” He justified his actions as a Amid the current political stalemate, on also potentially involve the Nagas.3 Until
“war against drugs” and as an effort to 12 May 2023, all 10 Zo-Kuki members now, the Nagas have maintained a neu-
save Manipur from “Myanmar insurgents” of legislative assembly (MLAs) issued a tral position in the ongoing violence,
attempting to disintegrate the state. demand for “separate administration” and any change in their stance could
Conversely, the Zo-Kuki perceive all de- (Baruah and Leivon 2023). Again, on 16 additionally complicate the situation.
velopments in the valley districts as evi- August 2023, all 10 MLAs urged the un- Furthermore, other states in the North
dence of “majoritarian politics,” “subjuga- ion government to appoint a separate East, such as Assam and Tripura, are un-
tion of the minority,” and a compelling chief secretary and director general of likely to welcome alterations to their ter-
reason for an “inevitable split” (ZSF 2023). police (DGP) and chief secretary for ritorial integrity. Hence, the ripple effect
28 JUNE 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 COMMENTARY

of violence in Manipur extends beyond the Constitution to address the issue of Hausing, Kham Khan Suan (2015): “From Opposi-
tion to Acquiescence: The 2015 district Council
Mizoram alone, affecting other states “land imbalance.” Elections in Manipur,” Economic & Political
too. A prompt intervention by the union Initiating the peace process necessi- Weekly, Vol 50, Nos 46 and 47, pp 79–83.
government is crucial to prevent the sit- tates the temporary imposition of Presi- — (2023): “Manipur—a Tale of Institutionalised
Violence Repeating Itself but with a Catch,”
uation from escalating further. It is note- dent’s rule to recover all looted arms. It Quint, 6 May.
worthy that the revival of the Mizo is imperative to avoid further politicisation Habib, A (2023): “Manipur: Kuki-Zomi-Mizo-Hmar
Community Agrees to come under Zo United
National Front movement, after decades of the violence or engaging in whatabou-
Umbrella,” India Today NE, 8 September.
of peace in Mizoram, could have far- tery, as such actions will only prolong Kipgen, Ngamjahao (2018): “Land Laws, Ownership
reaching consequences not only on the the conflict. Achieving lasting peace and Tribal Identity: The Manipur Experience,”
Marginalities in India: Themes and Perspectives,
peace and tranquility of North East India hinges on fostering symbiotic relations Asmita Bhattacharyya and Sudeep Basu (eds),
but also on national security. among diverse communities. Otherwise, Singapore: Springer Nature.
the politics of othering will persist, and Ngaihte, Thangkhanlal (2022): “The Working of
the Autonomous District Councils in Manipur
Conclusions peace will remain an elusive goal. in Theory and Practice,” Autonomy and Demo-
The situation in Manipur is fraught with cratic Governance in Northeast India, M Amar-
notes jeet Singh (ed), New York: Routledge.
complexity and speculation. A meticu- Paul, Haizerangbe (2022): “The Deadlock over
lous examination of the unfolding events 1 Press release by the Kuki National Assembly on
ADC Election in Manipur,” Imphal Free Press,
19 September 2023.
suggests that tribal communities har- 14 August.
2 Editors Guild on its report, 2 September 2023,
pointed out that valley-based Medias in Manipur Piang, L Lam Kham (2023): “The Hard Evidence
bour a long history of grievances rooted against Labelling Manipur’s Hill Tribes as Ille-
were “one-sided” in their reports about the vio-
in the asymmetrical power-sharing dy- lence, https://editorsguild.in/wp-content/up- gal Immigrants,” Quint, 7 June.
loads/2023/09/EGI-report-on-Manipur.pdf Singh, Bikash (2023): “Mizoram Government to
namics between the hills and the valley, Raise Funds for Displaced People of Manipur,”
(viewed on 7 September 2023).
coupled with long-standing neglect of 3 The Naga People’s Organisation Kangpokpi Economic Times, 3 July.
their rightful entitlements. Simultane- District (NPOK) in its press release dated Singh, Vijaita and Abhinay Lakshman (2023): “Ten
5 August 2023 has strongly opposed a memo- Kuki MLAs from Manipur Demand ‘Separate
ously, the Meiteis in the valley have con- randum submitted by 10 Zo Kuki MLAs to the Administration,’” Hindu, 12 May.
sistently sought opportunities to alter Prime Minister of India demanding the ap- Suan, H Kham Khan (2009): “Hill Valley Divide as
pointment of a separate chief secretary and a Site of Conflict: Emerging Dialogic Space in
the land use patterns in the hill districts, DGP for five hill districts of Zo-Kuki-dominated Manipur,” Beyond Counter-insurgency: Break-
rendering the state a precarious tinder- areas. The Nagas and Kukis have overlapping ing the Impasse in Northeast India, Sanjib Ba-
territorial claims over Tengnoupal, Kangpokpi ruah (ed), New Delhi: Oxford University Press.
box. Once the sociopolitical fabric’s and Kamjong districts.
Tiwary, Deetiman (2023): “To Assuage Kukis,
status quo was disrupted after the state Manipur Govt Plans Greater Autonomy for Hill
high court’s judgment, restoring normal- References Area Councils,” Indian Express, 28 August.
cy became a formidable challenge. In- Ali, Yaqut (2023): “Manipur: Another Person ZSF (2023): The Inevitable Split, Zomi Students’
Killed as Ethnic Violence Continues,” Wire, 31 Federation, Lamka (Churachandpur).
stead of pursuing dialogue, both con- December. — (2024): “Zo United Submits Memorandum to
flicting parties are engaged in a compet- Baruah, Sukrita and Jimmy Leivon (2023): “Kuki Union Home Minister Demanding Union Terri-
MLAs Demand Separate Administration: tory with Legislature for Zo Community,”
itive and politicised zero-sum game. The Manipur State ‘Miserably Failed’ to Protect Us,” Fieldnotes, Zomi Students’ Federation,
Zo-Kuki tribes’ call for “total separation” Indian Express, 13 May. 9 February.
and certain Meitei factions’ attempts to
“dehumanize” them contribute little to
resolving the issues at hand.
Despite the deep-seated divisions and
the trust deficit exacerbated by the vio-
lence, disarming civilians, ensuring the
unimpeded flow of essential commodities,
and deploying neutral or central forces
in buffer zones are foundational steps
towards fostering dialogue and peace.
With the Zo-Kuki tribes losing faith in
the state government, it becomes the
responsibility of the union government
to transcend party interests and facili-
tate an amicable solution. Addressing the
long-standing tribal grievances requires
acknowledging and accommodating
their political demand within the frame-
work of constitutional provisions that
safeguard tribal rights and cultures.
Simultaneously, it demands the union
government’s discernment in interpreting
Economic & Political Weekly EPW JUNE 22, 2024 vol lIX no 25 29
COMMENTARY

to receiving 80% of their entitlement as

Eliminating Leakages from even this amount used to be considered
unattainable until very recently.
UP’s Public Distribution System The government has implemented
several grievance redressal mechanisms
for beneficiaries, including a toll-free
Sarthak Agarwal helpline number (1800 1800 150). How-
ever, many kotedars choose not to display

R
Proposing a series of policy esearchers at the Indian Council this toll-free number, along with the phone
and administrative reforms to for Research on International numbers of officials (such as the supply
Economic Relations (ICIRIER) re- inspector’s), outside their shops, despite
capitalise on reduced public
ported a staggering 48% pilferage in being mandatory to do so. In some cases,
distribution system leakages Uttar Pradesh’s (UP) public distribution calling the helpline does not yield a
and further curb them, this system (PDS) in 2011–12 (Gulati and Saini response. Moreover, field officials of the
article suggests launching a 2015). This was 1 percentage point high- food and distribution department are
er than the national average cited by the often perceived as being in collusion with
high frequency citizen feedback
authors. The magnitude of this diver- corrupt kotedars. Thus, even when these
system expedite and enhance sion figure raised significant concerns giv- mechanisms are accessible, aggrieved
transparency in it while ensuring en UP’s size and beneficiary base. How- citizens hesitate to complain.
that field officials are adequately ever, based on my experience serving in
Prayagraj, UP, and conversations with Policy Reforms
empowered and trained to
field officers from other districts, it ap- To address these problems, the Govern-
effectively implement the various pears that leakage has now decreased to ment of UP can consider implementing
provisions of the law. under 20%. While inspections some- specific policy reforms aimed at further
times reveal complaints of beneficiaries reducing pilferage in the PDS by proac-
receiving 1 kilogram (kg) less for every tively addressing the power imbalance
5 kg of entitlement, this issue is not between ordinary citizens and influen-
pervasive. Many people report receiving tial ration shop dealers.
the full amount. During the fortnightly A prominent concern is that some kote-
Tehsil Diwas, where senior officials ad- dars have held their licences for several
dress grievances, complaints related to decades. This entrenches their political
the PDS are rare—a notable improvement power and social clout and inhibits ordi-
compared to a few years ago. A senior nary citizens from voicing concerns against
officer confided in me that district supply them. This situation persists because
officers are now finding it difficult to there are no time limits for holding a
arrange funds for emergency events at ration shop licence. Additionally, the
short notice, indicating a reduction in government’s mritak aashrat (compas-
corruption within the system. These sionate appointment) policy complicates
positive changes can be attributed to the matters even further. Under this policy,
implementation of the Aadhaar-enabled the family of a deceased kotedar has the
PDS and other reforms. However, there first right to the licence, provided they
is still room for progress. apply for it within 45 days of the licence
Ration shop owners in UP continue to holder’s death and meet certain other
hold significant power in local village easy conditions. This policy limits the
politics, often in opposition to the gram frequency of licence changes, limiting the
pradhan. This power dynamic is rooted opportunities for others to participate in
partly in historical reasons and partly delivering PDS services to the poor.
because kotedars (fair price shop dealers) The above policy also has implications
still play a critical role in ensuring food for citizens’ access to the benefits of an
security for many residents. Consequently, expansive reservation policy outlined in
ordinary cardholders are reluctant to the government order dated 5 August 2019
The author thanks S Jagannathan, William raise concerns when they receive less (Verma 2019c). According to this order,
Joe, Pratyush Pandey, and Vivek Shukla for
grain from these dealers, fearing possible specific percentages of ration shops in
helpful feedback. Views remain of the author’s.
retaliation in the future. Furthermore, each block are reserved for individuals
Sarthak Agarwal ([email protected]) is due to the history of pilferage in the PDS, belonging to different categories: 21%
an Indian Administrative Service officer.
beneficiaries have become accustomed for Scheduled Castes (SCs), 2% for
22 JUNE 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 COMMENTARY

Scheduled Tribes (STs), 27% for Other In the same spirit, the government can panchayat exceeds 4,000 or people face
Backward Classes (OBCs), and 10% for consider revisiting certain other govern- severe difficulties reaching the ration
the economically weaker sections (EWS). ment orders that currently enhance the shop due to geographical reasons. How-
Additionally, within these vertical reser- clout of kotedars. One major concern is ever, currently, many smaller panchayats
vation categories, provisions for 33% hori- the difficulty in suspending or cancelling have more than one shop, leading to some
zontal reservation in each of the reserved licences held by corrupt ration shop level of competition in their operations.
categories have been made for women, owners. For instance, the procedure for While the new policy aims to enhance
families of martyrs and freedom fighters, initiating an enquiry against a fair price the viability of ration shops, it inadvert-
and the specially abled. These provisions shop owner, as specified in the government ently curtails healthy competition bet-
aim to provide equitable opportunities order dated 5 August 2019 (Verma 2019a), ween kotedars and consolidates their
to various sections of society, particularly is lengthy and complicated. Even if a power, resulting in an entrenchment of
the marginalised, to run fair price shops. complaint is received from a public rep- their monopoly.
However, Verma (2019c) specifies that resentative, the official must revert and Instead of relying solely on this policy,
existing shop allocations will not be dis- confirm that the complaint was indeed it may be more beneficial for the govern-
turbed to implement the new reservation made by the said representative. Addition- ment to support kotedars’ financial sustain-
norms. This means that unless a licence ally, a preliminary enquiry must be con- ability through other proactive measures.
terminates and does not pass on to the ducted when complaints are brought to For instance, as per the government order
kotedar’s family members, a new contract the authorities’ notice by a registered card- dated 24 May 2023 (Lal 2023a), fair price
will not be needed. As a result, there has holder of a certain shop. Furthermore, shop owners are now allowed to sell
not been much churn on the ground. applications from any other person will 35 additional household items and four
Eliminating the compassionate allot- be rejected unless accompanied by an health-related items in addition to the
ment policy or imposing time limits on a affidavit. Considering the implementation smaller list of permissible items speci-
kotedar’s licence is desirable but may of the new One Nation One Ration Card fied under a government order dated
prove challenging to implement due to (ONORC) system, where citizens have the 11 November 2019. This expansion of
the political influence of shop owners. freedom to choose their shops, the latter permissible items is a welcome develop-
Nevertheless, the government has recently regulation seems discriminatory. ment. The kotedars face significant fixed
taken significant steps to limit their power. Verma (2019a) also specifies that the costs in running a fair price shop, includ-
For example, through its government subdivisional magistrate (SDM) will need ing the opportunity cost of land and
order dated 7 July 2020 (Kumari 2020), the approval of the district magistrate to expenses involved in employing labour.
self-help groups (SHGs)1 have been given suspend or cancel a fair price shop dealer’s Moreover, distribution occurs on only a
the first preference in the allocation of licence. The SDM can take such actions few days each month, leaving them with
ration shops. This proactive measure when irregularities in ration distribution little activity for the rest of the month.
aligns with national best practices. How- are alleged or proven, respectively. How- By providing greater flexibility in the
ever, individual shop owners are still re- ever, the process involves multiple stages, items, kotedars can sell them and explor-
ceiving licences, possibly because infor- with the file passing through the district ing additional support mechanisms, the
mation regarding these new norms has supply officer (DSO) and the additional government can create a more conducive
not percolated adequately within the district magistrate (ADM) in charge of civil environment for the sustained viability
system and partly because the SHG net- supplies, making it lengthy, unwieldy, of ration shops while also ensuring fair
work remains weak. and susceptible to rent-seeking.2 competition and transparency in the PDS.
As per another government order Moreover, there is a limitation on the
dated 16 June 2023 (Lal 2023b), the gov- maximum amount of fine that can be Administrative Reforms
ernment has directed district authorities imposed on the dealer, restricted to their Besides the policy reforms mentioned
to establish 75 new ration shops in each security amount of `10,000. However, earlier, several administrative measures
district using funds from the Mahatma provisions in the Essential Commodities can be taken to address the power asym-
Gandhi National Rural Employment Act, 1955, and the Uttar Pradesh Essential metry between kotedars and PDS benefi-
Guarantee Act and on public land. The Commodities (Regulation of Sale and ciaries. To begin with, an effective citizen
kotedars managing these new shops will Distribution Control) Order, 2016—Con-
be authorised to collect electricity dues trol Order 2016 hereafter—allow for a
and provide common service centre fa- first information report (FIR) to be lodged
cilities, as well as broadband services, against a kotedar indulging in black mar- available at
all aimed at enhancing their viability. keting of foodgrains.3 Gyan Deep
These shops offer an ideal opportunity The norms outlined in another govern- Near Firayalal Chowk,
for SHGs to manage them, as they will ment order dated 5 August 2019 (Verma Ranchi 834 001
have access to ready-to-use infrastructure, 2019c) suggest that each gram panchayat Jharkhand
further promoting efficiency and trans- should ideally have only one ration shop, Ph: 09470564686
parency in the PDS. except when the number of units in the
Economic & Political Weekly EPW JUNE 22, 2024 vol lIX no 25 23
COMMENTARY

outreach mechanism is crucial to encour- To improve the monitoring, the food government has to send a report annually
age individuals who have been short- and civil supplies department can consider to the central government on the func-
changed by their ration shop dealers to creating a mobile application similar to tioning of vigilance committees as per a
share such information with the govern- the basic education department’s Prerna predefined format. District and tehsil
ment promptly and honestly. To achieve app, enabling digital capture of inspec- authorities should ensure that the com-
this, I propose the establishment of a call tion reports, GPS coordinates, and pho- mittees functioning under them have been
centre at the district level from where tographs from the inspection site. More- constituted and are meeting regularly.
callers will proactively reach out to PDS over, officials from other departments, On the other side of the table, ensuring
beneficiaries, collecting anonymised in- like rural development and education, timely commission payments to kotedars
formation on pilferage and leakage.4 A can be assigned responsibilities to monitor is crucial. Recently, the UP government
stratified random sample of consumers and report on the PDS in their respective cleared all dues to its fair price shops
from the roster of all PDS beneficiaries jurisdictions. This is similar to what the and introduced a digital portal to ensure
linked to a shop can be chosen every mid-day meal task force does for primary quick and transparent payments to own-
month according to a set protocol. When schools. Under the Control Order 2016, ers, which is a welcome development. In
contacted, beneficiaries will be asked even assistant development officers (pan- addition, field officers should make sure
about the quantity of grains received by chayat) are empowered to inspect fair that fair price shops get the full quantity
them versus their entitlements under the price shops and demand information as of grains from the Food Corporation of
National Food Security Act, 2013. This needed from their owners. India godowns and that there are no
process ensures unbiased data collection Quarterly training sessions should be leakages or alternations in the quality of
as shop owners will have no prior knowl- organised for SDMs, AROs, and supply in- foodstuffs during transportation.
edge of which buyers will be called, spectors to enhance the understanding of Finally, to encourage competition be-
eliminating their ability to manipulate their responsibilities under various rules tween shops and expand choices for bene-
the system. Moreover, the calls should and orders. They should be trained by ficiaries, efforts should be made to pro-
be conducted in a private setting, en- experienced officers to conduct rigorous mote and further popularise the ONORC.
couraging honest feedback. enquiries that can withstand scrutiny in Since the women of the household are
Using the data so collected, we can higher courts. For example, proper sealing the ones who often queue up to collect
estimate the approximate percentage of of ration shops with prima facie evidence grains from ration shops, and they lack
diversion at each ration shop and use of diversion should be encouraged to pre- mobility in general, it is harder for PDS
this information in multiple ways. For vent any ex post manipulation in stocks. beneficiaries to vote with their feet against
instance, the worst-performing shops Under the Uttar Pradesh Food Security corrupt kotedars. Nevertheless, widely
can face potential enquiry and licence Rules, 2015, vigilance committees have disseminating information regarding the
cancellation. This approach reduces bias been set up at the state, district, block, and enhanced choices available to citizens
and ensures that complaints reaching FPS levels to regularly supervise the func- under the ONORC regime is essential be-
authorities are less likely to be motivated tioning of the PDS. At the fair price shop cause its uptake remains limited (Agrawal
by feuds between the gram pradhan and level, they must include the following me- and Agnihotri 2022).
the kotedar. The data can also be used mbers: gram pradhan, senior-most mem-
to evaluate and hold accountable field ber of the administrative committee of the Conclusions
officials such as area rationing officers gram sabha, headmaster of a primary The UP government is currently in the
(AROs) and supply inspectors. school, anganwadi worker, accredited so- process of procuring weighing scales that
To further enhance transparency, of- cial health activist (ASHA), gram panchayat will be digitally linked with electronic
ficials should follow a detailed 27-point secretary, and three members of the gram point of sale (EPoS) machines. While
inspection checklist outlined in various sabha nominated by the block develop- this introduction of modern technology
government orders (Verma 2019b; Mishra ment officer. These vigilance committees may further improve the PDS, address-
2022). These orders also contain inspec- are supposed to meet at least once in every ing the power imbalance between buy-
tion frequencies for different officers. quarter. Under the Control Order 2016, ers and sellers is essential to effectively
Among other things, the inspection the food commissioner through the state eliminate corruption at the grassroots.
check list includes cross-checking the ac-
curacy of weighing scales, ensuring kot-
edars have no ration cards in their pos-
session, maintaining up-to-date regis-
ters, and prominently displaying phone available at
numbers of concerned officials and the Delhi Magazine Distributors Pvt Ltd
toll-free helpline in front of the shop. 110, Bangla Sahib Marg
During inspections, officials should also New Delhi 110 001
verify stocks and compare them with Ph: 41561062/63
official records.
24 JUNE 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 COMMENTARY

Modifying some government orders order that allowed SDMs to proceed indepen- through Allowing Sale of Additional Items,” Uttar
dently within their tehsils. However, as per a Pradesh Government Order (Food and Civil Sup-
that entrench the monopoly power of 2018 government order (Singh 2018), it is up to plies Department – 6), No.-1/2023/975/29-6-2023-
kotedars can be relooked at. If possible, the district magistrate whether to get an ap- 135सा0/2015, 24 May, http://shasanadesh.
proval/opinion from the DSO. up.gov.in/GO/ViewGOPDF_list_user.aspx?
compassionate allotment of ration shops 3 This power can be used effectively in practice. id1=MSMzOCM2IzIwMjM=
should be phased out and five-year time During one of my field inspections, I encountered — (2023b): “Construction of Fair Price Shops under
a kotedar who had 31 quintals less of rice and the PDS,” Uttar Pradesh Government Order (Food
limits can be imposed on the holder of 15 quintals less of wheat compared to official and Civil Supplies Department – 6), No.-4/2023/
a fair price licence. Moreover, there records, resulting in a 20% leakage. The kote- 1035/29-6-2023-ई-6099/2641/2020, 16 June,
dar tried to explain that the grains were divert- http://shasanadesh.up.gov.in/GO/ViewGOP-
should be few restrictions on competi- ed to cover urgent medical expenses for their DF_list_user.aspx?id1=NCMzOCM2IzIwMjM=
tion between different kotedars operat- family. Not satisfied with this explanation, we Mishra, Durga Shankar (2022): “Verification of Food
lodged a first information report against him Grains under the PDS,” Uttar Pradesh Govern-
ing in the same village; their viability under Sections 3/7 of the Essential Commodi- ment Order (Food and Civil Supplies Depart-
can be ensured through other measures ties Act and initiated the formal process of can- ment – 6), No-5/2022/2105 /29-6-2022e29-
celling his licence.
as described in the article. Enquiry pro- 4 These callers can be data entry operators al-
6099/28/2021, 24 September, http://shasan-
adesh.up.gov.in/GO/ViewGOPDF_list_user.
cedures should be further simplified and ready working in tehsils or sanitation workers aspx?id1=NSMzOCM2IzIwMjI=
officials closer to the ground should be deputed from nagar panchayats or develop- Singh, Abhishek (2018): “Determination of Proce-
ment blocks for this purpose. The cost of run- dure in Relation to Suspension, Cancellation,
given the independent authority to take ning this call centre, therefore, is likely to be
and Attachment of Fair Price Shops in Rural,”
action against demonstrably corrupt fair quite small.
Uttar Pradesh Government Order (Food and
price shop owners. Civil Supplies Department – 6), No.-05/2018/
References 1912/29-6-2018-300सा0/03टीसी, 6 September,
The establishment of a call centre to http://shasanadesh.up.gov.in/GO/ViewGOP-
Agrawal, Sarthak and Archana Agnihotri (2022): DF_list_user.aspx?id1=NSMzOCM2IzIwMTg=
proactively reach out to citizens and “Food Security for Interstate Migrants: An Em- Verma, Om Prakash (2019a): “Determination of
compile information on pilferage will pirical Analysis of the ONORC,” Economic & Procedure in Relation to Suspension, Cancellation,
provide valuable ground-level information Political Weekly, Vol 57, No 51, 17 December. and Attachment of Fair Price Shops in Rural and
Gulati, Ashok and Shweta Saini (2015): “Leakages Urban Areas,” Uttar Pradesh Government Order
on the performance of kotedars. Currently, from Public Distribution System (PDS) and the (Food and Civil Supplies Department – 6), No.-4/
such information reaches the authorities Way Forward,” ICRIER Working Papers No 294. 2019/1206/29-6-2019-300सा/03ट ीस ी, 5 August,
Harishchandra (2017): “Determination of Procedure http://shasanadesh.up.gov.in/GO/ViewGOP-
through supply inspectors and AROs, in Relation to Suspension, Cancellation, and DF_list_user.aspx?id1=NCMzOCM2IzIwMTk=
who might lack the incentive to provide Attachment of Fair Price Shops in Rural and — (2019b): “Procedure Regarding Lifting and Dis-
Urban Areas,” Uttar Pradesh Government Order tribution of Grains in Rural and Urban Areas
truthful reports. People too are reluctant (Food and Civil Supplies Department – 6), No.- under the PDS,” Uttar Pradesh Government Or-
to use pre-existing grievance redressal 1/2017/ 607/29-6-2017-300सा/03टीसी, 13 April, der (Food and Civil Supplies Department – 6),
http://shasanadesh.up.gov.in/GO/ViewGOP- No-5/2019/1207 /29-6-2019-121सा/98, 5 August,
systems. By introducing a new channel, DF_list_user.aspx?id1=MSMzOCM2IzIwMTc= http://shasanadesh.up.gov.in/GO/ViewGOP-
using which the government actively Kumari, Veena (2020): “Providing Preference to DF_list_user.aspx?id1=NSMzOCM2IzIwMTk=
tries to listen to citizens, some of these Self-help Groups in the Allocation of Fair Price — (2019c): “Vacancy, Identification, Reservation,
Shops under the PDS,” Uttar Pradesh Government and Allotment of Fair Price Shops in Rural Areas
issues can be mitigated. It will also Order (Food and Civil Supplies Department – 6), under the PDS,” Uttar Pradesh Government Order
allow for a more accurate evaluation of No.-2/2020/ 775/29-6-2020-162सा/2001, 7 July, (Food and Civil Supplies Department – 6), No.-6/
http://shasanadesh.up.gov.in/GO/ViewGOP- 2019/1358/29-6-2019-162सा0/2001, 5 August,
both kotedars’ performance and that of DF_list_user.aspx?id1=MiMzOCM2IzIwMjA= http://shasanadesh.up.gov.in/GO/ViewGOP-
its officials. Lal, Sant (2023a): “Increasing Income of FPS Owners DF_list_user.aspx?id1=NiMzOCM2IzIwMTk=
Launching a mobile application to
capture inspection reports digitally and
setting up a task force to closely monitor
the PDS comprising officers from differ-
ent departments is something that can be
looked at closely. Better training of offi-
cials at all levels and regular monitoring of
field officers should be prioritised as
well. Finally, reviving vigilance commit-
tees set up under the UP Food Security
Rules, 2015 will help exert pressure on
kotedars from the ground up. This will
also complement the various top-down
interventions proposed in this article.

Notes
1 Giving SHGs the first preference in allotment
of fair price shops is consistent with the reser-
vation policy outlined in Verma (2019c) be-
cause Kumari (2020) makes it clear that the
SHG’s category will be considered same as that
of the majority of its members.
2 This change was brought about by a govern-
ment order dated 13 April 2017 which modified
the provisions laid out in a 2004 government

Economic & Political Weekly EPW JUNE 22, 2024 vol lIX no 25 25
COMMENTARY

educational institutions in the current

From Theory to Praxis political landscape.

Students’ Role in Reshaping Political Contextualising the Protests

In light of the increased military actions
Discourse through Gaza Solidarity Protests of Israel in Gaza and the glaring racist
and Islamophobic responses by global
powers, Columbia University’s campus
became a hotbed of dissent and solidarity,
Stuti Shah with various forms of peaceful protest
emerging among students—some chose

I
During Israel’s continued and n the late hours of 30 April 2024, quiet but powerful gestures, donning
disproportionate military Columbia University’s Morningside keffiyehs in classrooms, while others
campus was flooded by officers from formed collectives to raise funds for Pal-
actions in Gaza following the
the New York Police Department (NYPD), estinians in Gaza between classes. Stu-
7 October attack by Hamas, armed with zip ties and riot gear. Their dents punctuated their class schedules
Columbia University’s campus target: peaceful pro-Palestinian protest- by organising teach-ins and panel discus-
became a focal point for ers occupying a university building, the sions, where experts dissected the com-
majority of whom were students. plexities of the conflict and its historical
dissent and solidarity. These
What unfolded was not just a clash of roots, and the complicity of the United
events, which soon spread to ideologies but a stark betrayal of trust States (US) and other former colonial
other universities, reveal the for the Columbia community. The actions powers in furthering harm. These actions
entrenched connections between of the administration led to the use of stood in direct contradiction to the re-
brute force on and arrest of student body marks recently made by figures like
academia and geopolitical
members, the creation of a chilling eff- Hillary Clinton (currently a professor at
interests, challenging the claims ect and bystander trauma on Columbia Columbia’s School of International and
of neutrality made by university community members, and the under- Public Affairs) dismissing the students’
administrations and emphasising mining of the legitimacy of democratic understanding of the issues they were
protests more broadly. Many members protesting against (Albeck-Ripka 2024).
the need for strong academic
of the Faculty of Arts and Sciences, in- On 17 April 2024, as anticipation grew
freedom and education that cluding those who had not been part of for President Shafik’s appearance before
supports critical thinking the protests, recently passed a no-confi- Congress to address concerns of anti-
and activism. dence resolution against University semitism on Columbia’s campus, hun-
President Nemat (Minouche) Shafik for dreds of students took bold action. They
the securitisation of safety, stating that erected tents on the South Lawn of the
she had falsely cited “clear and present Morningside campus, establishing the
danger to the substantial functioning of “Gaza Solidarity Encampment” to pro-
the University” to call upon law enforce- test the institution’s ties to and invest-
ment, which violated “the fundamental ment in Israel amid ongoing military
requirements of academic freedom and operations in Gaza. However, the uni-
shared governance,” and “endangered versity administration quickly responded
students’ welfare,” while “her draconian by authorising the NYPD to arrest over a
and disproportionate punishments en- hundred students for refusing to leave
dangered their futures” (Touré 2024). the encampment, in what would become
The clampdown from the administra- the largest mass arrest on Columbia’s
tion and the police was, however, short- campus since 1968. Hundreds of stu-
sighted. The unique form of protests and dents watched in shock as their peers
demonstrations that started at Columbia were arrested, and cohesively chanted
through the powerful symbolism of en- “shame on you” at the police officers.
campments became a trending form of The remaining students from the encamp-
activism and solidarity that spread to ment instinctively regrouped on the
Stuti Shah ([email protected]) is a educational campuses globally, igniting west side of the South Lawn, undeterred,
doctoral candidate of law at Columbia Law a broader conversation about the roles of setting up a new encampment where
School, New York.
student activism, pedagogical tools, and they remained for a fortnight.
Economic & Political Weekly EPW JUNE 22, 2024 vol lIX no 25 13
COMMENTARY

The resilience and courage of the stu- organising students exemplified radical such as “NYPD go back home, Columbia
dents and their pursuit of justice shone compassion, distributing sunscreen, water, is our home,” and “Say it clear, say it
through, despite the fear of failing ex- masks, and medical assistance, as we cir- loud, students you make us proud.”
ams, losing job offers, and being sus- cled the campus in protests, chanting Once inside the campus, the police forc-
pended, arrested, or doxed. Community slogans such as “Free, free Palestine;” ed everyone, including the media (who
guidelines that governed the encamp- “Disclose, divest! We will not stop, we were primarily journalism students), into
ment included disavowing all forms of will not rest;” “NYPD, KKK, IOF, they’re nearby buildings to prevent them from
hate, which was in stark contrast to how all the same;” “Brick by brick, wall by recording their invasion into Hind’s Hall.
the encampment was sensationalised by wall, Zionism will fall.” The offensive, which was initiated by a
the media and politicians as being run The protest soon escalated, as a group call from President Shafik, culminated
by violent extremists (Heydari 2024). primarily of students, but also comprising in the dismantling of the Gaza solidarity
People of different faiths participated in staff, faculty, alumni, and community encampment and the arrest of more than
the encampment, and protected each members occupied (or as they termed it, a hundred individuals on charges, includ-
other during prayers, showcasing a vi- “liberated”) a university building, Ham- ing criminal trespassing, criminal mis-
sionary form of unity. It was heartening ilton Hall, in the early hours of the chief, and burglary (Hogan et al 2024).
to see many Jewish students organising following morning.1 They renamed The actions of the NYPD, including the
and supporting the protests, emphasis- Hamilton Hall as “Hind’s Hall,” in mem- unintentional firing of a gun, was dis-
ing that the protests were targeted at ory of Hind Rajab, a six-year-old Pales- tinctly militaristic and disproportionate
the right-wing Israeli government, not tinian girl from Gaza murdered by Israe- (Columbia College Student Council 2024).
at Jewish people, with one Jewish stu- li forces (Williamson 2024). They engaged in performative govern-
dent protestor stating, “Judaism means ance, which Ding (2022) defined as the
standing for the liberation of all people” The Night of the Police Sweep state shaping public perceptions through
(Closson and Betts 2024). This distinc- Within hours, the administration imposed the theatrical deployment of language,
tion was crucial in maintaining the a campus-wide lockdown and barricad- symbols, and gestures of good govern-
integrity of the movement and avoiding ed many streets close to the Morning- ance. I saw a few of the student protes-
conflations that could lead to anti- side campus. In the odd hours that night, tors closest to the battalion of police offic-
semitic sentiments. hundreds of NYPD officers descended ers stationed at the university gate to
Notwithstanding the adversity and upon the campus. prevent our entry, ask them, “How do
anxiety they experienced, there was joy At every barricade Columbia affili- you sleep at night? Don’t you have a con-
and camaraderie in the encampment, as ates stood their ground, forming human science?” I wondered how many of them
students danced, sang, studied, learnt, chains to prevent the NYPD from going were made to confront and reflect deeply
and created art together (BWOG Staff into Hind’s Hall, with the students right about their roles in the lives of these stu-
2024). Slogans of “Azaadi” were carried outside Hind’s Hall linking arms and dents and, more broadly, about their
to the encampment, and some South singing a haunting rendition of “We roles in this moment of historic struggle.
Asians even put on a dandiya raas show shall not be moved.”2 I was a part of the Despite the inhumane actions of the
(Al Jazeera Staff 2024; Chen and Merri- group of students protesting outside the NYPD, President Shafik, in an email the
lees 2024). As tensions escalated, class- university gates on Amsterdam Avenue, subsequent morning, thanked and appre-
es and final exams shifted to hybrid or from where the police entered the cam- ciated them for their “professionalism”
remote formats for the remainder of the pus. The NYPD threw several protesting (Douglas 2024).
semester, reflecting the seismic impact students aside, causing many of us to be Law and its agencies in the pretense of
of the protests on university operations. injured, yet we resiliently chanted slogans protecting all people are structurally
On 29 April, amid mounting pressure,
President Shafik announced that Colum-
bia would not divest from Israel, citing EPW Index
failed negotiations with student organis-
ers. Dissatisfied with this response, dem- An author-title index for EPW has been prepared for the years from 1968
onstrators defiantly voted to prolong to 2012. The PDFs of the Index have been uploaded, year-wise, on the EPW
their encampment beyond the imposed website. Visitors can download the Index for all the years from the site.
deadline, braving suspension notices. I
(The Index for a few years is yet to be prepared and will be uploaded
joined hundreds of other students at the
sundial on campus for a spontaneous when ready.)
rally, standing in solidarity with the stu-
EPW would like to acknowledge the help of the staff of the library of the
dents in the encampment, while many
faculty members formed a human chain Indira Gandhi Institute of Development Research, Mumbai, in preparing the
surrounding the encampment to protect index under a project supported by the RD Tata Trust.
their students. As temperatures soared,
14 JUNE 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 COMMENTARY

geared to protect and preserve skewed discrimination throughout US history, thinking. Schools and universities often
power relations and an unequal status further emphasising that “Government reinforce hierarchical structures, both
quo. In the US, this bifurcation is even policies regarding wars has not always architecturally and through their rules
clearer, as the legacy of the police is been right. In fact, in recent history, it (Foucault 1995). Breaking away from
attached to slave patrols, further in- has mostly been wrong.”3 traditional teaching methods and incor-
creasing the distrust that many histori- The recent wave of protests across porating more seminars, practicums,
cally marginalised communities have universities globally reaffirms the his- and experiential courses that foster criti-
towards them. torical role of students as catalysts for cal discussions are essential for nurtur-
Witnessing the resilience of students sociopolitical change, often stepping in ing aware citizens in a democracy, who
in the last few months has been both tre- where politicians have failed. The cour- are unafraid to ask questions.
mendously inspiring and devastating for age and defiance exhibited by this gen- We have therefore seen a rise in “scho-
me, especially because the students pro- eration of students and the way in which lactivism,” a bridging of academia and
testing were acutely aware of the possi- they have peacefully furthered open di- activism seen through the metaphor of
bility of being arrested, with many of alogue and civic engagement demands encampments, where students truly
them having prepared themselves by our attention and respect, whether we believe that they have a role to play in
writing their emergency contact number agree with them or not. actualising their academic knowledge
on their arms with permanent markers The utilisation of heavy-handed tac- through social movements. The encamp-
(Hollingsworth 2024). “I’ve known for a tics by many university administrations ments in universities radically change
while that this is something I would be and law enforcement agencies suggests the spatial dynamics of the elite univer-
willing to be arrested for,” a 19-year-old a troubling alignment with state mecha- sity, democratising it. There is an alter-
Columbia student protester said, while nisms prioritising control over dialogue native world-making in place, and stu-
echoing the sentiment of several stu- and democratic engagement. As univer- dents are leading it. Of particular inter-
dents (Closson and Betts 2024). They sities navigate responses to student acti- est is the decentralised nature of these
had thought through the consequences vism, they must ensure that they do not protests, characterised by non-hierarchi-
of their protest, and persisted anyway, compromise the core principles of aca- cal structures and horizontal mass mobili-
as they were confident that they were on demic freedom and free speech that un- sation. This model of protests challenges
the right side of history. derpin their educational mission. the traditional notions of leadership and
Moreover, this article extends beyond highlights the diversity of motivations
Universities as Custodians the US context, highlighting the need, among participants. Each individual’s
of Democracy more than ever, for countries across the voice and reason for participation are
In the wake of widespread college pro- world to prioritise academic freedom to considered valid within this framework,
tests across the nation, students have protect their democracy. This is especially emphasising the importance of inclusivity
emerged as champions not only of their true for India, where the current regime and community governance.4
broader First Amendment rights to free seeks to stifle academic freedom and Many of the students were involved in
speech (with political speech being the discourage critical inquiry among stu- these protests out of a sense of helpless-
most protected and valued category of dents, and we can see the impact this ness towards politicians’ inaction and
speech) but also as watchdogs holding has had on democratic rigour and citi- frustration with their tuition fees sup-
their universities accountable for contin- zen participation in the polity. porting the terror in Gaza. For them,
ued investments in Israel. These demon- participation in these protests reflected
strations not only spotlight the complici- Broader Lessons their acute awareness and empathy for
ty of elite US institutions in the violence The recent events in Gaza have triggered the suffering of others, for which they
in Gaza but also echo broader concerns profound reflections on the validity of were willing to put their futures on the
about the state of higher education and international human rights law and the line. Furthermore, the enduring nature
politics in the country. credibility of institutions like the United of these protests, despite substantial
A handful of senators, notably Ilhan Nations. For law students, navigating the pushback, underscores the moral clarity
Omar and Bernie Sanders, have con- stark power imbalances between nations that guided these students.
demned the disproportionate responses has become increasingly perplexing,
to the protests. Sanders, a Jewish senator especially considering the glaring hypo- Conclusions
whose parents were Holocaust survivors, crisy in the differential responses to con- The actions and demands of student pro-
invoked the First Amendment in support flicts like Russia’s intervention in Ukraine testors were reflective of university pro-
of the student protesters, highlighting compared to Israel’s actions in Palestine. tests in 1968, which similarly involved
the role of universities in serving as crit- The protests also reflect the impor- the “liberation” of university buildings,
ical sites for affirming democracy through tance of the pedagogical methodologies including Hamilton Hall, to resist the
the mode of protests. He underscored employed by US colleges and the impor- Vietnam War and the university’s raci-
the instrumental role of dissent guarante- tance they place on interdisciplinary in- alised policies. Those events establish-
ed by the First Amendment in challenging quiry, rigorous discourse, and critical ed Columbia students’ reputation as
Economic & Political Weekly EPW JUNE 22, 2024 vol lIX no 25 15
COMMENTARY

trendsetters for unique forms of student 4 Illustratively, participants in the encampment Ding Iza Yue (2022): The Performative State: Public
were afforded a democratic vote on whether to Scrutiny and Environmental Governance in
activism, and Columbia as a leading in- continue after the first set-of arrests, rather China, Ithaca: Cornell University Press.
stitution in research and conversation than a single leader determining group strate- Douglas, Madeline (2024): “President Shafik
gy (Ramirez et al 2024). Thanks NYPD for “Professionalism,” Hoping
on police brutality, empowering stu- Columbia Will “Heal” Together,” BWOG, https://
5 Columbia News (2018): “A New Perspective on
dents with the theoretical frameworks 1968,” https://news.columbia.edu/content/new- bwog.com/2024/05/president-shafik-thanks-
perspective-1968#:~:text=After%20a%20 nypd-for-professionalism-hoping-columbia-
and tools to critique empire and rac- will-heal-together/.
weeklong%20standoff%2C%20New,bodies%20
ism. Words condemning the then Presi- among%20its%20peer%20institution. Foucault, Michel (1995): Discipline & Punish: The
dent’s actions continue to adorn Colum- 6 Statement was passed in the Columbia College Birth of the Prison, New York City: Vintage
Student Council by a margin of 22-4-2. Books.
bia’s website along with the following Heydari, Aubtin (2024): “The Grotesque Slander of
sentencing, “The fallout dogged Colum- Comparing Gaza Protesters to Neo-Nazis,” New
References Republic, https://newrepublic.com/article/
bia for years. It took decades for the Uni- Albeck-Ripka, Livia (2024): “Hillary Clinton Acc- 180989/charlottesville-comparison-gaza-stu-
versity to recover from those turbulent uses Protesters of Ignorance of Mideast History,” dent-protest.
New York Times, https://www.nytimes.com/ Hogan, Gwynne, Harry Siegel and Claudia Irizarry
times.”5 President Shafik made a fateful Aponte (2024): “NYPD Officer Fired Gun Inside
2024/05/09/us/hillary-clinton-morning-joe-
decision to replay history with her ill- israel-history.html. Columbia’s Hamilton Hall, Manhattan DA’s Of-
fice Confirms,” City, https://www.thecity.nyc/
thought-out actions. With Congress being Al Jazeera Staff (2024): “Pro-Palestine Chants for
2024/05/02/nypd-officer-fired-gun-columbia-
‘Azaadi’ at Columbia University Provokes Debate,”
able to influence university presidents’ Al Jazeera, https://www.aljazeera.com/pro-
hamilton-hall-raid/.
Hollingsworth, Heather (2024): “Columbia Univer-
decisions, much more needs to be done gram/newsfeed/2024/4/22/pro-palestine- sity Student Journalists Had an Up-close View for
to keep universities insulated from po- chants-for-azaadi-at-columbia-university-pro- Days of Drama,” AP News, https://apnews.com/
vokes-debate. article/israel-palestinian-campus-student-pro-
litical pressures (Perkins 2024). BWOG Staff (2024): “Live Updates: Gaza Solidarity tests-war-beb2c274c0960eee48c82485ca9b3f96.
While Columbia students have gar- Encampment Day Eight,” BWOG, https://bwog. Perkins, Tom (2024): “Revealed: Congress Backers
com/2024/04/live-updates-gaza-solidarity- of Gaza War Received Most from Pro-Israel
nered significant media attention for
encampment-day-eight/. Donors,” Guardian, https://www.theguardian.
their protests, they urge us not to lose Columbia College Student Council (2024): “We com/us-news/2024/jan/10/congress-member-
sight of the broader context—the devas- Columbia University Students Urge You to Listen pro-israel-donations-military-support#:~:-
to Our Voices,” Guardian, https://www.theguardi- text=About%2082%25%20of%20Congress%20
tating destruction of all 12 universities an.com/commentisfree/article/2024/may/04/ members,remainder%20had%20%E2%80%9-
in Gaza, and the continued attack on columbia-university-student-protest-gaza. Cmixed%E2%80%9D%20views.
Chen, Emily and Kristin Merrilees (2024): “Stu- Ramirez, Isabella et al (2024): “Our Campus. Our
civilians across Gaza. I want to end this Crisis,” New York Magazine, https://nymag.com/
dents Perform Cultural Dances on South Lawn
piece with a quote from a statement re- intelligencer/article/columbia-university-pro-
at ‘Gaza Solidarity Encampment’,” Columbia
tests-israel-gaza-campus.html.
leased by the Columbia College Student Spectator, https://www.columbiaspectator.com/
Touré, Madina (2024): “Columbia University Faculty
arts-and-culture/2024/04/20/students-per-
Council (2024), which calls for global form-cultural-dances-on-south-lawn-at-gaza-
Pass Vote of No Confidence in President,” Politico,
https://www.politico.com/news/2024/05/16/
awareness and action, reminding us that solidarity-encampment/. columbia-university-faculty-pass-vote-of-no-
the struggle for justice and education Closson, Troy and Anna Betts (2024): “Columbia confidence-in-president-00158393.
Students Arrested Over Campus Rally May Face Williamson, Lucy (2024): “Hind Rajab, 6, Found
extends far beyond our own campuses:6 Other Consequences,” New York Times, https:// Dead in Gaza Days after Phone Calls for Help,”
We urge you to listen to us—not political www.nytimes.com/2024/04/20/nyregion/ar- BBC, https://www.bbc.com/news/world-mid-
rested-columbia-students-suspended.html. dle-east-68261286.
figures, not the radical fringes and not mis-
guided media. Across the country, non-vio-
lent protests and encampments on college
campuses have been touted by administra-
tions, media and bad-faith actors to be hate-
ful without proper investigative journalism.
While this has been a major topic in the news
cycle recently, rarely do we see any student
perspective represented other than a few to-
ken quotes … We now ask you to give us, the
students, our voices back. Not to turn atten-
tion towards ourselves, but towards where it
rightfully belongs: the Middle East.

notes
1 People’s University for a Liberated Palestine
(2024): Tweet: Gaza Solidarity Protestors Take
Columbia’s Hamilton Hall on 206th Day of Gen-
ocide after Columbia Refuses to Divest from Is-
rael, 30 April, https://twitter.com/Columbi-
aBDS/status/1785189196141113478/photo/1.
2 The National Desk (2024): Video: Protestors form
Human Chains as Swarm of NYPD Officers Near
Columbia Campus; Shelter-in Place Issued; htt-
ps://www.youtube.com/shorts/YTJT5EL3wnA.
3 Bernie Sanders (2024): Video: Yes to Free
Speech and Protest under the 1st Amendment,
8 May, https://www.youtube.com/watch?v=
hH6tG5oluuI.

16 JUNE 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 BOOK REVIEW

for the author, who takes this ill-fated

Rahul Gandhi and the Dilemmas beginning as the entry point for
his writing.
of the Congress Party The book begins by peeling back layers
of this defeat to understand how this
contest has reached this level of antipa-
Rashmi Singh thy between the two national rivals. The
author traces back to moments of opti-

S
trange Burdens: The Politics and mism when Gandhi was admitted to the
Strange Burdens: The Politics and Predicaments
Predicaments of Rahul Gandhi, as of Rahul Gandhi by Sugata Srinivasaraju, Penguin role of the party’s vice president in 2013,
stated by the author, is not a biog- Random House India, 2023; pp xxii + 311, `699. to moments of confusion when, for in-
raphy of Rahul Gandhi but a set of con- stance, Gandhi tore into his own party’s
sidered ruminations over Gandhi’s pre- The book is able to traverse key setbacks ordinance in the same year, to his resig-
dicament at this particular moment in and personal shortcomings of its subject nation as the party president in 2019.
India’s history and politics. It is not a over 11 chapters, alongside punctuated The turns in this personal story appear
straightforward character study or an remarks on the post-independent politi- more tormenting as the BJP tries and
exposition of Gandhi’s personality or cal history of the Congress and occasion- succeeds to a large extent—to make
thought process alone, but reads as a al reflections on the international retreat Gandhi into a construct of a failed prince
careful and deliberate appraisal of him of liberal politics. As the author admits, (or shehzada) of Indian politics. The fail-
as a politician and that of the Congress the idea started as a New Yorker-style ures in the electoral arena are of less im-
party in its diminished present state to journalistic profile of Gandhi, but the ex- portance to the author than the failure
understand both the possibilities and limi- tensive reflections take the shape of a of not being seen as a credible democrat-
tations of the current impasse. In this seasoned journalist’s portrayal of the ic alternative. This is tied to a failure of
sense, it is a refreshing dive into the iro- man and his tribulations in the shifting leadership, and here Srinivasaraju is
nies and shocks of Indian politics since terrain of Indian politics. most incisive. He interrogates the inabil-
2014 and the effects of these developments ity of Gandhi to see the larger picture
on the Congress party. It uses Gandhi A ‘Two-character Play’ and understand the political legacy he
and his party as a pivot to understand Sugata Srinivasaraju is careful to deci- has inherited from a position of strength
and reflect on how the meanings, utter- pher the presence and personality of and responsibility. Instead, Gandhi is
ances and symbolism of politics have Gandhi through a subtle comparative seen relating to the Indian story largely
changed registers since the ascendance framework that is measured against through his childhood trauma and his
of the Bharatiya Janata Party (BJP) in 2014, Narendra Modi and the BJP. As he notes, personal memories. Though these are
and how some of these changes have the current story is incomplete without sincere expressions in many of his public
been swift and irremediable for the opp- the reference to the other. This is appro- appearances, they are inadequate for
osition and for Gandhi’s position himself priate given that both personalities have countering the BJP. His related deficiency
as the inheritor of the Congress legacy. become inextricably pitted against each in understanding the historical and in-
What stands out in the book foremost other in a polarising contest, and there is stitutional trajectory of the Congress
is the writing style. The author writes as a steady industry that has worked over- party is also brought forth through an
a dedicated and watchful observer of the time to denigrate and belittle Gandhi in examination of his public speeches at
twists of Indian politics, juxtaposing criti- this competition. What emerges in this different occasions where he fails to
cal events (and some crucial tweets) scenario is a competition not just between articulate a clear summation of the party’s
with his critique of the Congress party’s two opposition rivals but competition ideology or its historical contribution as
stance and preparation in the face of that has become emblematic of two dif- well as its shortcomings.
mounting defeat across state and nation- ferent visions of India and historical Most crucially, the author points to the
al polls. It manages to put together a starting points. Gandhi’s entry on the failure of Gandhi to understand that the
steady narrative in contrast to the loud scene as a young dynast of India’s most emerging electoral discourse has identi-
and unforgiving stream of headline bait- prominent political family was displaced fied him as the establishment and the
ing that has been the nature of national swiftly by the overwhelming power shift more he tries to distance himself from
politics, since the capture of mainstream under the BJP, with Modi riding the crest this narrative, the less convincing the
media space by the BJP. From the public of successive electoral majorities. This act seems to a watchful electorate that
appearances to critical slips of the electoral surge has circumscribed Gandhi has been primed by the ruling party to
tongue, and the numerous controversies and reduced Congress to a small and see him as the problem. In the face of the
that have dogged Gandhi, the author insecure space on the national stage. overconfident and persistent attacks of
keeps pace with his critical interpreta- The irony of being displaced at the time the BJP, Gandhi has been unable to offer a
tion of these events and their related of one’s confirmed ascendance in national comprehensive vision of a future that
fallouts for the politician and his party. politics is what animates the puzzle ties him, his party and India’s future
Economic & Political Weekly EPW june 22, 2024 vol lix no 25 33
BOOK REVIEW

together as a compelling alternative to impediments in forging a workable elec- its narrow embrace of the Gandhi–
the BJP. What has been recorded here toral strategy. This has led to numerous Nehru luminaries to the exclusion of
is the inconsistency in vision and effort opinions in the media from both aca- some of its other tall leaders (many of
from the beginning of this political demics and analysts who have routinely whom now have been appropriated by
journey and Gandhi’s seeming reti- debated and offered alternative solutions the BJP), and its exclusive courting of a
cence in chasing power with the single- to what the party could do to cross this technocratic elite who lack both cultural
mindedness that BJP and Modi have hurdle. There has also been extreme and political familiarity with the coun-
done in comparison. frustration with the party’s inability to try’s complex social landscape. In this
What the book identifies so clearly is stand up to the challenge or make way for sense, the party’s choices are perceived
that both the dynamics and the language other possible challengers, as expressed, to be responsible for having risked the
of power-seeking have changed, and how- for instance, by Yogendra Yadav (2022) rise of a contender like Modi.
ever sincere a candidate one may be in in his tweet on why the “Congress must
this reckoning, there is a reinvention of die.” 1 It is here that the author could In Conclusion
political grammar that has been put have offered a more serious critique of The book has been written at the right
into place by Modi that cannot be easily recent Congress history with a closer time to make sense of the momentous
countered by such platitudes. This is look at the internal politics of the party. shift in Indian politics. It looks at the fig-
accompanied by a confused narrative of The dissent by G-23 party leaders in ure of Gandhi without proportioning
showcasing one’s gotra, or performative 2020 for example is mentioned, but their blame or praise on the leader but by
temple visits, to more recently, calls for a calls for an “honest introspection” and placing him delicately at the juncture of
caste census as a “life mission,” or impro- demands for full-time active leadership the current scenario and judging the
mptu interactions with working men and and the reception of these demands are possibilities of the moment. As the title
women in the fields and on highways— not included in the narrative. The slow conceives, there is a significant histori-
all of it appears as a belated response to but steady co-option of some of these cal weight on the person of Gandhi, and
the terms set by the BJP, rather than a leaders by the high command into vari- his trajectory will partly if not compre-
confident leading narrative that can win ous committees and positions to defuse hensively determine the trajectory of the
votes and offer a strong alternative. the rebellion or the prominent exits by party as well. The largely positive re-
Congress leaders into the BJP and other sponse that Gandhi received in his two
A Party Losing Momentum? regional parties could have also been yatras is an indication that there is a
What the book also delves upon is the critically analysed by the author to un- space for his message of love and social
diminishing chances of the Congress derstand what, if anything, has changed welfarism, but, as the author rightly
party in national politics. Srinivasaraju in the Congress organisation. notes, there is also a historical amnesia
takes up issue with the Congress high The same can be said for related epi- and evasiveness that needs to be con-
command having consistently pushed sodes such as the drama surrounding fronted more openly or strategically to
the nature of politics in a technocratic the Congress president election in 2022. overcome the stand-off with BJP. The
direction and of having deliberately The fatigued reception of the process, depths of discourse that the 2024 elec-
avowed a deeper engagement with poli- the deflated expectations beforehand tion has reached make Gandhi’s sincerity
tics over the last few decades. Whether it that a “puppet president” would be in- and approachability appear refreshing
is retreat from a clear-cut ideological stalled through “backseat driving” (as in his public interactions. In contrast,
positioning, to its inability to rebuild a stated by Prithviraj Chavan) and the Modi’s magisterial appearances and his
mass organisation, there is an identity claims of neutrality by the Gandhi family continuous jibes appear out of touch
rebuilding strategy missing from the pic- eventually giving away tacit support for and repetitive, and Gandhi seems to be
ture. The author picks up issues with vari- Mallikarjun Kharge—the theatrical pro- facing them with greater fortitude than
ous aspects of this problem, including duction of this supposedly democratic before. As the book states at the outset,
taking a closer look at the party’s consti- process added to the pessimism on the however, there can be no finality yet,
tution which serves as an ironic reminder future of the party. These half-hearted and perhaps a sequel will be required
of its outdated mode of functioning. The attempts at reform are coupled with the to narrate the full unravelling of this
book tries to weave this critique through inability to retain young or promising segment of political theatre.
different chapters, looking in turn at the leaders or be more electorally prepared
relationship Congress has with regional through creating a stronger cadre base Rashmi Singh ([email protected]) teaches at
the Jindal School of Liberal Arts,
parties, the position of the party on fed- in crucial states. The book does not
O P Jindal Global University, Sonipat.
eral issues, secularism and many others. wade closer to the trifecta of power at
That the Congress is unable to step the centre or try to interrogate the high Reference
away from its presumed role as the un- command culture that maintains a civil Yadav, Yogendra (2022): “‘Congress Must Die’, I Said in
questioned leader of all other opposition and stately control over the organisation. 2019. What I Meant Then, and What’s Changed
parties and offer itself in a more sup- The author instead looks at the party Now,” Print, https://theprint.in/opinion/
congress-must-die-i-said-in-2019-what-i-meant-
porting role is of course one of the key through a more distant lens and questions then-and-whats-changed-now/1146194/.

34 june 22, 2024 vol lix no 25 EPW Economic & Political Weekly
Gender and Labour in Bengal’s While the data provided by the authors
also includes Karnataka and mentions it

Past and Present to be one of the rice-cultivating states of

India, its examination is missing from
the analysis. Their analysis with regard
to landholding inequality and women’s
Sarika Chaudhary participation in the labour force fails to
explain the case of Karnataka, where

W
ives and Widows at Work: book reviewS the inequality is lower at 0.7221 com-
Women’s Labour in Agrarian pared to West Bengal at 0.7361. Further,
Bengal, Then and Now (2023) is Wives and Widows at Work: Women’s Labour landlessness rates are lower than in West
a timely addition to the literature on in Agrarian Bengal, Then and Now by Deepita Bengal at 30.76% and participation of
women’s labour and life choices. The book Chakravarty and Ishita Chakravarty, Hyderabad: Orient women in agricultural labour is also higher
BlackSwan, 2023; pp xxv + 262, `1,290.
traces the relationship between women’s at 128.4 per 1,000. Thus, the authors’
participation in the workforce and marri- argument overlooks the fact that it is not
age practices in West Bengal from the and life choices have been influenced by only inequality but also the nature of
colonial era to contemporary times. economic opportunities, which in turn that inequality that matters in explain-
Besides the introductory chapter, out- are influenced by landholding patterns. ing the relationship between WPR and
lining an overview and scope of the book’s the landholding pattern. The chapter
subject matter, the book comprises five An Economic Explanation would have greatly benefited had the au-
independent yet interconnected chap- of Women’s Life Choices thors either acknowledged this as a limi-
ters. Chapter 2 attempts to establish a The chapter “Landholding Pattern and tation or provided an analysis for the same.
link between landholding patterns and Nature of Work” begins with the asser- Further, while explaining the higher
women’s employment in contemporary tion that women’s workforce participa- participation of women as cultivators in
times. Chapters 3 and 4 delve into the tion rate is generally higher in rice-culti- Odisha’s workforce when compared to
connection between women’s partici- vating regions. However, an exception to other eastern states, the authors explain
pation in wage employment and mar- this is West Bengal, especially in rural the same by citing a higher proportion of
riage practices like child marriage and areas. Therefore, the chapter examines the Scheduled Tribe (ST) population in
widowhood. Chapter 5 examines the the relationship between landholding Odisha. It has been noted that the WPR
feminisation of paid domestic service. patterns and women’s workforce partici- is generally higher for Scheduled Caste
The concluding chapter analyses the dis- pation rate to explain the lower rate of (SC) and ST women as extreme poverty
courses in the late colonial period sur- participation in West Bengal in compari- leaves them with no choice but to enter
rounding women’s work and life choices. son to other rice-cultivating states with the workforce (Srivastava and Srivastava
The authors point towards three main a similar level of technological use. 2010). However, the authors’ failure to
indicators of women’s well-being, namely While the National Sample Survey (NSS) explore social group distributions in
low workforce participation rate, high rate data for 2003–04 is used to examine landholding patterns leaves unanswered
of underage marriage, and high incidence landholding patterns and inequality in questions regarding the relationship be-
of widowhood in West Bengal. The access to land, Census data for 2011–12 is tween landholding patterns and the higher
authors, through their study, note that used to investigate women’s workforce participation of SC and ST women in the
these indicators have remained relatively participation. The NSS data suggests that labour market.
stagnant despite the historical transfor- the proportion of households in the land- The authors then move to find a con-
mations since 1911. According to the au- less category is higher for southern states nection between women’s participation in
thors, colonial perspectives have resorted like Tamil Nadu and Andhra Pradesh, wage employment and marriage practices
to cultural explanations, including un- being 55.43% and 48.75%, respectively, in like child marriage and widowhood.
changing and rigid social norms to ex- comparison with West Bengal at 34.69%. Analysing the contemporary data on child
plain the persistence of high levels of In contrast, the workforce participation marriage in the chapter, “Work Opportu-
widowhood and child marriage in South rate (WPR) for women in agricultural nities and Marriage,” the authors observe
Asian societies, particularly Bengal. How- labour was much higher for Tamil Nadu a decline in underage marriages for all
ever, the arguments presented by the au- and Andhra Pradesh at 162.4 and 218.3 states in India. However, the decline for
thors in this book question the sufficien- per 1,000, while it was only 29.5 per West Bengal is not as sharp as other states
cy of cultural explanations. They pro- 1,000 for West Bengal. Thus, the authors such as Rajasthan and Uttar Pradesh.
vide economic explanations for these argue that women tend to work predom- According to the 2015–16 National Family
phenomena, with the authors’ primary inantly as agricultural labourers in a region Health Survey (NFHS) data, the incidence
argument being that women’s marriage with high inequality in landholding. of underage marriages is the highest in
30 june 22, 2024 vol lix no 25 EPW Economic & Political Weekly
 BOOK REVIEW

West Bengal at around 40%. Comparing highest for Bengal followed by Madras. workforce. An analysis into the earn-
this with Tamil Nadu, with a low inci- The authors explain the higher inci- ings of widows would have elucidated
dence of underage marriage, the authors dence of widowhood in Madras by sim- more on women’s well-being and agency.
argue that the incidence of underage ply mentioning the higher female–male It should be noted here that the authors
marriage declines with an increase in in- ratio and higher economic independ- have reassessed the questions raised in
dustrial employment. Drawing from ence, which according to them led to this chapter in a research article else-
studies on the garment manufacturing better agency for women. However, for where, which tackles these questions
units of Bangladesh and the textile in- Bengal, they engage in a much more with a more nuanced argument while
dustry of Tamil Nadu, the authors argue detailed analysis. Their study finds that keeping the presentation more articu-
that such employment opportunities the incidence of widowhood in the age late and focused (Chakravarty and
can act as a deterrent to underage mar- group of 12–40 years was much higher Chakravarty 2022).
riage. Their argument is based on an ob- among the cultivating peasant castes
servation that such opportunities in in- in comparison to both upper castes and Financial Compulsion
dustries generally require formal educa- labouring castes. The authors thus con- The economic compulsion of women
tion and skill training, which increases clude that widows’ labour was crucial working as paid domestic help is explored
the schooling years. However, they also for cultivating households, whether as in the chapter on “From Field to the
argue that employment opportunities a part of the in-laws’ family or the natal City.” The authors posit that the femini-
that do not require formal training family. They assert that remarriage sation of domestic labour in the city of
might not have any impact on the inci- would have jeopardised “the exploita- Kolkata gained impetus subsequent to
dence of child marriage. It is clear from tion of the most vulnerable, controlla- the mass migration from East Pakistan.
the example of Andhra Pradesh, where ble, and unpaid workforce” for cultivat- Using the census data, they showed that a
despite women’s higher participation in ing castes. Thus, they suggest that a majority of domestic workers in 1921 were
the agricultural workforce as well as higher incidence of widowhood among from the neighbouring states of Bihar,
manufacturing units like bidi produc- cultivating castes can be better ex- Odisha, and the United Provinces. These
tion, the incidence of child marriage is plained through the need for unpaid earlier migrations were characterised by
high, standing at the fourth position in family labour rather than cultural ex- single male migrants. They further sug-
2015–16. Therefore, rather than stating planations of upper-caste marriage prac- gested that an influx of migrants from
the obvious that industrialisation trans- tices percolating downwards. While the East Pakistan between the 1950s and
forms social norms, an in-depth analy- discussions around cultivating castes of 1970s included women and children,
sis into the causes behind the decline in Bengal are well explored, further inves- thereby reshaping the gender composi-
child marriage in the other states of India tigation could have been undertaken for tion of domestic workers. Further, they
would have helped the study. Data pro- other social groups. Also, the claim argue that decreasing incomes from
vided by the authors shows that the in- regarding the economic independence agriculture within West Bengal also
cidence of underage marriage in Uttar of women in Madras, particularly dur- pushed women from rural areas to urban
Pradesh has declined from 64.3% in ing the colonial period, needs more sub- centres. Finally, by 1981, the representa-
1998–99 to 21.2%, taking it from the stantiation rather than a mere reference tion of female domestic workers had
fourth position to the 10th position in the to their higher participation in the surpassed their male counterparts. The
list. Therefore, the causes behind such a
decline, which has taken place without EPW E-books
any parallel increase in the industriali-
sation level, would have helped further Select EPW books are now available as e-books in Kindle and iBook (Apple) formats.
our understanding of this issue. The titles are
The authors shift their focus back to
the colonial period in the chapter “Work
1. Village Society (ED. SURINDER JODHKA)
and Widowhood” to examine the corre- (http://www.amazon.com/dp/B00CS62AAW ;
lation between the nature of women’s https://itunes.apple.com/us/book/village-society/id640486715?mt=11)
work participation and widowhood in 2. Environment, Technology and Development (ED. ROHAN D’SOUZA)
the first half of the 20th century. They (http://www.amazon.com/dp/B00CS624E4 ;
have majorly relied on the censuses https://itunes.apple.com/us/book/environment-technology-development/
conducted between 1901 and 1951. id641419331?mt=11)
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3. Windows of Opportunity: Memoirs of an Economic Adviser (BY K S KRISHNASWAMY)
that period, participation as agricultural (http://www.amazon.com/dp/B00CS622GY ;
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Economic & Political Weekly EPW june 22, 2024 vol lix no 25 31
BOOK REVIEW

chapter uses newspaper advertisements Bangla periodicals released during the to explore further. While some chapters
to indicate that widowed women were first half of the 20th century to study the were historical, others were based on
preferred as domestic workers because discourse on women’s work and their contemporary data. Although the au-
of their willingness to accept nominal life choices. While some periodicals thors tried to explain the contemporary
wages. Often termed as “pocket money,” published articles around progressive through the past, the majority of the
nominal wage was acceptable to the changes to empower women, it was late 20th century is missing from the
refugee women in exchange for lodg- common for them to endorse conserva- analysis, a major drawback in the evi-
ing, which was a critical consideration tive views on women’s issues. Apart dence on which the book’s arguments
for them. from publishing articles that promoted are based. But despite all its limitations,
The authors have also conducted in- women’s role as a homemaker, Hindu the book provides a powerful counter-
depth interviews to understand the lives women were commonly portrayed as argument against cultural narratives
of female domestic workers. They first victims of communal violence and injus- regarding the lower participation of
categorise domestic workers into three tice at the hands of Muslims. Further, women in the workforce.
categories of city-dwellers, daily com- an image of the helpless widow was pro-
muters, and full-time maids. Through moted. The authors show that an ideol- Sarika Chaudhary ([email protected])
is a doctoral candidate at the Centre for the
their interaction with these domestic ogy was constructed in these periodicals, Study of Regional Development, Jawaharlal
workers, they discuss the earning situa- where women’s labour was devalued Nehru University.
tions in their families, their aspirations, and attached to the idea of male bread-
particularly for their children, and the winners. The underlying argument of References
difficulties faced by them. However, a this chapter is that despite all the eco- Chakravarty, D and I Chakravarty (2023): “Wives
and Widows at Work: Women’s Labour in
discussion about the discrimination nomic reasoning behind women’s low- Agrarian Bengal, Then and Now,” Hyderabad:
faced by domestic workers owing to er participation in the workforce, an Orient BlackSwan.
Srivastava, N and R Srivastava (2010): “Women,
their class and caste position is missing ideological and cultural hegemony is Work, and Employment Outcomes in Rural
from the analysis. necessary to keep the status quo. India,” Economic & Political Weekly, Vol 45,
No 28, pp 49–63.
In the final chapter, “When Should a Overall, the book provides a deep Chakravarty, I and D Chakravarty (2022): “Widow-
Woman Strive to Earn? Discourses on insight into women’s life choices like hood Revisited: Nature of Landholding and
Women’s Work in Colonial Agrarian Bengal,”
Widowhood and Work in Late Colonial marriage and widowhood and raises Indian Economic and Social History Review,
Bengal,” the authors focused on popular several questions in front of the reader Vol 59, No 3, pp 373–400.

The EPWRF ITS has 37 modules covering a wide range of India s macroeconomic, financial and social sector indicators.

32 june 22, 2024 vol lix no 25 EPW Economic & Political Weekly
PERSPECTIVES

Import Surge in the Indian Kumar and Dhar (2023) that enables us
to estimate the extent to which liberali-

Manufacturing Sector during sation of imports had impacted the

nature of import dependence in India

the Trade Liberalisation Phase for industries at a very disaggregated

level. We identify industries that experi-
enced import surge using a multipronged
approach to detect and differentiate im-
Ramaa Arun Kumar port rise from that of import surge. The
impact of increased import dependence

T
The emphasis on aatmanirbharta he recent emphasis of the policy- is explored by studying the behaviour
(self-reliance) has changed the makers on a self-reliant India of employment in industries that were
speaks volumes of the underlying opened up for tariff-free imports and
perspective to target our trade
dependence of the Indian economy on thereby, witnessed an import surge.
as well as industrial policy imports. The COVID-19 pandemic has ad- Subsequently, the article also helps us to
to come out of the excessive versely affected supply chains all over identify industries using the use-based
reliance on imports and build up the world. India’s dependence on China classification, where the current indus-
for imports has grown manifold in many trial and trade policies should focus.
a domestic manufacturing base.
crucial sectors, such as pharmaceuticals,
In this context, the article analyses electronics, electrical equipment, etc. Review of Literature
the nature of import dependence One of the important landmarks in The high imports were the result of a slew
from the lens of the effect that India’s economic reforms was the usher- of import liberalisation measures that
ing in of the trade liberalisation process India followed even before the World
import liberalisation had on
in 1991 as a part of the major economic Trade Organization (WTO) came into
various industries leading to an reforms that took place after the twin being. Trade liberalisation measures have
import surge. The subsequent deficits (trade and fiscal) in the late 1980s. been in place since the late 1980s. As a
impact on select industries Subsequently, trade liberalisation not only result of these measures, many trade
deteriorated the trade deficit situation barriers were brought down. For example,
identified with the import surge
further but the lack of foresight in open- India’s peak tariffs were reduced to
indicates that liberalisation did ing up sectors was also detrimental for 150% and over time, they have been
adversely impact the prospects of the industrialisation process in India brought down to 10%. In fact, Singh
employment in these sectors. (Chaudhuri 2015). (2017) identified that India is a country
The growth rate of imports as a percent- with very low weighted average tariffs,
age of GDP was much higher than that of comparable to “now” low tariff econo-
exports (Appendix Figure 1, p 41) after mies such as the United States (US).
2000. India’s trade in manufactured Thus, the level of import liberalisation
products showed a different pattern as followed by India was quite impressive.
compared to its overall trade, especially However, there were other import meas-
in the early 2000s. During 2000–01 to ures that India set forth on a voluntary
2003–04, India had a favourable trade basis, even though under WTO norms, it
balance in manufactured goods’ trade. was plurilateral in nature and not multi-
Thereafter, imports expanded sharply until lateral (Chaudhuri 2015; Goldar 2005). A
the onset of the recession, and exports major example of this was WTO’s Infor-
expanded at a much slower pace, result- mation Technology (IT) Agreement that
ing in a $53 billion trade deficit by 2008. India signed in 1997 and revised in 2000
Trade in manufactured products expanded and 2005, wherein import duty was elimi-
after the recession and imports increased nated for 96 products between 1997 and
much faster than exports (Chaudhuri 2015; 2000 and in 121 products between 2000
The author acknowledges Sudip Chaudhuri, Kumar and Dhar 2023). and 2005. The rise in imports between
Abhijit Das and an anonymous reviewer for the It is, therefore, important to study the these periods for the IT products was
comments.
nature of import dependence during the close to an 18% annual growth rate for
Ramaa Arun Kumar ([email protected]) teaches trade liberalisation years at the industry the former period, while for the latter,
at the Institute for Studies in Industrial level. This article uses the concordance it was a 38% rise in imports (Kallummal
Development, New Delhi.
of trade and industry classification from 2012; Ernst 2013).
Economic & Political Weekly EPW june 22, 2024 vol lIX no 25 35
PERSPECTIVES

Other liberalising measures such as and incense sticks industry (Chatuurvedi goods sectors. The information on the
the signing of bilateral/regional trade and Wali 2022). use-based classification has been adopted
deal with several countries in a very short Due to the lack of comparable data on from the index of industrial production
span of time, which also entailed tariff trade and industry at a disaggregated (IIP) manual with base 2011–121 that pro-
reductions on a voluntary basis, duty-free level, many studies have depended on vides the use-based nature of industries
imports of power and construction equip- analysing the impact on industry from a at the NIC 5-digit level.
ment required for mega-power projects broad perspective. This study overcomes
and the National Highway Development the lacuna in the data and uses the Methodology: An elaborate analysis of
Project and unregulated imports of sec- Harmonised System (HS)-National Indus- imports would require a multipronged
ond-hand machinery (Chaudhuri 2015) trial Classification (NIC) concordance approach to identifying the nature of the
were some of the factors that contribut- from Kumar and Dhar (2023) to build a import surge in the Indian manufacturing
ed to India’s high import dependence and database for NIC 4-digit level trade and sector and relate it to the factors that led to
slow path of industrialisation. compare the domestic production and this surge. There are no straightforward
On the non-tariff barrier front, the EXIM analyse the nature of import dependence reasons for the import surge which uni-
Policy of 2000–01 announced the removal of India. formly pertain to all sectors across time.
of quantitative restrictions on 1,429 items Hence, detailed analyses using a few
(Chaudhuri 2015; Mehta 2000), which Data and Methodology indicators for identifying the import surge
India was allowed under the WTO provi- have been undertaken and related to the
sions following a case filed by the US Data sources: The study employed a com- sectoral issues as well. The measurement
against India. In the absence of a strate- parative analysis for industry and trade of the import surge varies from one study
gic trade and industrial policy in place at data at the NIC 4-digit level. As already to another. It is important to clarify that
that time, India’s manufacturing sector discussed, using the concordance of NIC higher imports are different from the
failed to enhance the industrial capability 4-digit with HS 6-digit level products, the import surge. Economies that are indus-
of the Indian manufacturing sector and matching trade data would enable com- trialising would reveal trends of higher
reduced India to a mere market for foreign parisons and impact analyses for the imports. However, when such a rise in
goods. Mehta (2000) and Krishna (2000) import dependence. Comparable trade imports leads to an injury to the domestic
indicated that the industry-wise strate- data would be constructed using the HS-NIC industries in the form of loss of employ-
gies could have given a cushion to the concordance from Kumar and Dhar (2023). ment, reduced local production, etc, there
industries to face the import competition. For HS 6-digit trade data, figures from is a need to identify such injuries and take
The effects of trade liberalisation the Directorate General of Commercial corrective actions.
measures on industrial employment were Intelligence and Statistics (DGCIS) Export The WTO Agreement on Safeguards that
found to be adverse as per many studies. Import database have been sourced while sets forth the application rules of safe-
Nambiar et al (1999) found that the capital industry-level output, input and employ- guard methods under Article XIX of GATT,
and intermediate goods industries were ment have been taken from the Annual 1994 defines serious injury caused by the
the most adversely affected due to the Survey of Industries pertaining to the import of a product as “significant impair-
import liberalisation that took place in organised manufacturing sector. Other ment in the position of the domestic
the post-1991 reforms period. In a study sources of factors like tariffs have been industry” and enables countries to investi-
by Banga (2005) for the period 1991–97, sourced from the WTO Tariff Database. gate and evaluate all relevant factors.
a similar effect of imports of capital Trade data is captured at the product The rules allow temporary suspension
goods was found on 78 manufacturing level classified under the harmonised of concessions or imposition of higher
sector industries at the 3-digit level. system at the HS 6-digit level comparable tariff barriers.
India’s economic growth path had at the 6-digit level globally. The DGCI&S Although there is no established metho-
missed the bus to industrialisation with collects import and export data for India dology to identify the import surge,
premature deindustrialisation (Rodrik annually and monthly in both rupees various studies have followed different
2016; Amirapu and Subramaniam 2015; and dollars. However, production data approaches, mostly multipronged, to
Chaudhuri 2015). Opening up of trade which is constructed taking total output demonstrate the import surge in an indus-
through plurilateral import liberalisation of NIC 4-digit level industries from ASI try or a product (Pearson and Ellyne 1985;
measures hit the industrialisation pro- are given in rupees. Thus, the trade– Rakotoarisoa et al 2011; Chatuurvedi and
cess in India (Chaudhuri 2015). Some output ratios constructed have used the Wali 2022).
sectoral studies have also pointed out the same unit of currency measurement for In our study, an import surge has been
adverse impact of import liberalisation comparison (rupees). identified in the following ways: (i) We
and rising import dependence of indus- To study the nature of the NIC 4-digit consider a period of five years to compare
tries on employment and overall sectoral industries based on their end use, we di- the rise in import values for all industries
manufacturing growth in sectors such vided the industries into primary, interme- at the NIC 4-digit level. The trigger point
as toys (Anand et al 2023; Sycom 2014), diate, consumer durables/non-durables, for an import surge would be a doubling,
pharmaceutical (Joseph and Kumar 2021), capital, and infrastructure/construction or more than doubling of imports with a
36 june 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 PERSPECTIVES

persistent rise thereafter. (ii) Among the Figure 2: Import Share as per Use-based Classification for India’s Manufacturing Sector
industries so identified, those with high 30 27.8
Intermediate goods
imports-to-domestic production ratios 26.1
24.9 24.3
have been identified that are highly 25
24.0 23.7
import-oriented in recent years. A high Consumer durables/non-durables
import–output ratio is considered to be 20 18.3 18.5
17.7
above 0.5 and implies that imports are

Import share (%)

16.6
15.2
more than half of the domestic production 14.3
15 13.4
supply in that particular sector. 12.8 Capital goods
11.9
10.2
11.7 9.3
Nature of Import Dependence 10
7.5 Primary goods
6.3
A country’s dependence on imports is 4.6 4.3
5 3.9 3.9
not an issue per se; however, if it leads to Infrastructure/construction
creating an imbalance in the industrial 0.3 0.3 0.4 0.5 0.6 0.5
structure leading to deindustrialisation 0
within the economy and wiping out the 1996–97 2000–01 2005–06 2010–11 2015–16 2019–20
Source: Author’s calculations based on data compiled from the DGCIS EXIM database.
existing domestic production capacities,
it is a sign of unhealthy economic policy. of NIC 4-digit industries where imports goods retained a stable share, hovering
The process of trade liberalisation in were reported. Out of these, 107 sectors around 24%–25% of India’s total imports
many phases brought about a similar ef- witnessed an import surge following the throughout the period starting from the
fect in India after the major economic methodology explained above. From the mid-1990s till 2020. The share of capital
reforms of 1991. figure, one can note that it was the con- goods fell initially from 13% in 1996–97
Consequent to many policies that led sumer durables/non-durables that pre- to 7.8% in 2000–01 but rose to reach the
to an import surge in many sectors, we dominantly accounted for the major same level of 12%–13% throughout the
have identified industries that witnessed surge in imports. Capital and intermedi- period. The rise in import dependence
a surge in imports since the 1990s. As a ate goods followed the surge. escalated in the consumer goods sector
beginning, we have compiled the trade In terms of values, imports of inter- whereby the sector captured a bigger
data from the DGCIS, Government of India mediate goods rose sharply followed by share in the rising total imports of India
from the mid-1990s till 2019–20. Using consumer goods quinqennially (Table 1). (Figure 2), from 11.7% in 1996–97 to
the methodology described above, we There was a steep jump in imports of almost 19% in 2019–20.
find that out of the 124 sectors at the NIC intermediate goods from `547 billion in While it is true that there was a rise
4-digit level, there was a surge in imports 2000–01 to `1,647 billion in 2005–06. in total imports in the early 2000s, the
in 107 sectors. Similarly, consumer durables/non-dura- increase in sectoral imports was not uni-
Figure 1 provides the number of sectors bles also registered a staggering three form across time periods. In order to
classified as per the use-based classification times increase in imports from `330 billion identify the time period during which
Figure 1: Structure of Overall Imports according to Use-based to `1,093 billion between most sectors experienced a rise in imports,
Classification 2000–01 and 2005–06. This we consider the various time points when
0 10 20 30 40 50 60 70 rise continued for the next 10 imports more than doubled within five
Primary
years to reach `6,230 billion years. From this, we identified that the
by 2019–20. Capital goods trigger in most of the cases was reached
Intermediate imports also rose sharply in 2005–06 (Table 2). This trend can be
Sectors

by five times during this pe- related to various trade policy changes
Consumer durables/non-durables
riod from `172 billion to `883 that took place in India as a part of the
Capital billion within a span of five liberalisation process. The late 1990s
years from 2000–01. Table 2: Year of Surge in Total Imports at
Infrastructure/construction
What is interesting is that the Industry Level
All sectors Sectors with import surge in terms of the shares in total Year of Import Surge Number of Sectors
Source: Export–Import Databank, TRADESTAT, Ministry of Commerce. imports of India, intermediate 1997–98 2
2000–01 9
Table 1: India’s Imports as per Use-based Classification (values in ` billion)
Use-based Classification 1996–97 2000–01 2005–06 2010–11 2015–16 2019–20 2005–06 70
Primary goods 211 106 414 716 966 1,313 2008–09 23
2009–10 1
Intermediate goods 333 547 1,647 4,398 6,915 8,165
2011–12 2
Consumer durables/non-durables 162 330 1,094 3,086 4,406 6,230
Gradual rise 10
Capital goods 177 172 883 1,570 2,552 3,998
No trend 6
Infrastructure/construction 4 7 27 92 146 161 Source: Author’s calculations based on the DGCIS EXIM
Source: Author’s calculations based on data compiled from the DGCIS EXIM database. database.

Economic & Political Weekly EPW june 22, 2024 vol lIX no 25 37
PERSPECTIVES

and early 2000s were marked by tariff to identify sectors where import–output jumped very high from a ratio of almost
cuts that India undertook voluntarily as a ratios are high. 5 in 2008–09 to 27 in 2017–18.
part of the WTO’s IT Agreement, whereby Table 3 shows the 4-digit classification- Likewise, office machinery and equip-
the import duty was removed for 96 wise sectors under the capital goods, ment also have a high share in terms of
products between 1997 and 2000 and in consumer durables, and intermediate imports in India vis-à-vis, domestic pro-
121 products between 2000 and 2005. The goods calculated for 2008–09 and 2017– duction to the extent of 11–12 times at
resulting effect was an annual rise in 18 enabled due to the availability of data both time points over the decade. Parts of
imports of these products by 18% in the on sectoral production. We have consid- printers/copying machines, cash registers,
former period and 38% in the latter period. ered only those sectors where the im- address plates embossing machines, vari-
Similarly, as a result of the Dispute port–output ratio is equal to or more ous types of printing machinery, etc, are
Settlement case filed by the US against than 0.5. In capital goods sector, for ex- some of the top products being imported
India in 1997 which the latter lost, India’s ample, optical instrument and photo- under this sector identified under the
EXIM Policy 2000–01 announced the graphic equipment imports are 27 times HS 6-digit level.
removal of quantitative restrictions on of the domestic output production. The Under the consumer durables, the
1,429 items from 2001. In addition, there products falling under this sector identi- games and toys sector is predominantly
were a number of free trade agreements fied at the HS 6-digit level like digital dependent on imports. The import–out-
that India was signing in the earlier years cameras, optical fibres, camera lenses, put ratio which was low at 0.8 in 2008–
that also lowered trade barriers enabling and spectacle lenses are some of the prod- 09 has risen manifold to about 2.7 which
imports to surge. ucts being heavily imported2 under this means that imports are overwhelmingly
The question remains whether this sector. The dependence in this sector higher than domestic toy production.
import surge had any impact on the Table 3: Import Penetration in Domestic Market Production by Use-based Classification
domestic production being replaced by NIC 2008 Description Import Market Competition Compared to
the foreign production. This aspect will Domestic Market Production (DMP)
2008–09 2017–18
be investigated in the next section.
Capital goods
2670 Manufacture of optical instruments and photographic equipment 4.9 times DMP 27 times DMP
Import Surge and Impact on
3030 Manufacture of air and spacecraft and related machinery 22.6 times 11.6 times
Domestic Production 2817 Manufacture of office machinery and equipment 12 times 11 times
The surge in imports had effects that 3011 Building of ships and floating structures 2.7 times 4.7 times
varied across sectors and industries. In 2826 Manufacture of machinery for textile, apparel, and leather
order to gauge the extent of import com- production 1.7 times 1.2 times
petition, we have calculated the import– 3250 Manufacture of medical and dental instruments and supplies 1.15 times 1.12 times
2818 Manufacture of power-driven hand tools 0.95 times 1.03 times
output ratio using the NIC 4-digit level
2823 Manufacture of machinery for metallurgy 1.98 times 0.97 times
import and output data. The import–
2822 Manufacture of metal-forming machinery and machine tools 1.7 times 0.9 times
output ratios are used to calculate the
2813 Manufacture of other pumps, compressors, taps, and valves 0.78 times 0.6 times
extent of import competition that an in- 2815 Manufacture of ovens, furnaces, and furnace burners 1.03 times 0.58 times
dustry faces. The 107 industries identi- 2819 Manufacture of other general-purpose machinery 0.33 times (<0.5) 0.5 times
fied under step one as having an import Consumer durables
surge using the first threshold of doubling 3240 Manufacture of games and toys 0.8 times DMP 2.7 times DMP
or more than doubling of quinquennial 2651 Manufacture of measuring, testing, navigating, and control 1.7 times 1.7 times
equipment
imports have further been investigated
2620 Manufacture of computers and peripheral equipment 1.5 times 1.7 times
using the import–output ratio for 2017–
3220 Manufacture of musical instruments 2.4 times 1.6 times
18 to establish that these industries sus-
2640 Manufacture of consumer electronics 0.27 times 1.3 times
tained the rise in imports over the years.
2660 Manufacture of irradiation, electromedical, and
Following this, we identify the sectors electrotherapeutic equipment 3.1 times 1.3 times
within the use-based classification at 2630 Manufacture of communication equipment 0.8 times 0.9 times
NIC 4-digit where the import-to-output 2593 Manufacture of cutlery, hand tools, and general hardware 0.6 times 0.83 times
ratio was more than 0.5. A ratio of 0.5 3230 Manufacture of sports goods 0.6 times 0.67 times
would imply that imports account for 3290 Other manufacturing nec 1.12 times 0.65 times
half of the market that domestic produc- 3211 Manufacture of jewellery and related articles 0.8 times 0.63 times
tion is catering to. Any ratio greater than Intermediate goods
2610 Manufacture of electronic components and boards 1.8 times DMP 3.5 times DMP
this would imply greater import compe-
1610 Sawmilling and planing of wood 0.14 times 1.2 times
tition. From the perspective of imports, 2420 Manufacture of basic precious and other non-ferrous metals 1.8 times 1.1 times
primary goods can be construed as an 2011 Manufacture of basic chemicals 1.1 times 0.87 times
essential input to any industry and thus, 2013 Manufacture of plastics and synthetic rubber in primary forms 0.37 times 0.71 times
we consider only the consumer durables, 2814 Manufacture of bearings, gears, gearing, and driving elements 0.6 times 0.5 times
capital, and intermediate goods sectors Source: Author’s calculations based on data compiled from the DGCIS EXIM database and Annual Survey of Industries, 2017–18.

38 june 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 PERSPECTIVES

The major products being imported are Figure 3: Share in Total Manufacturing Employment—Consumer Goods
wheeled toys, dolls, model cars, etc, 5 27

which fall under HS 9503. Kumar (2023)

Employment share in high import industries (%)

26
noted that in the case of toys industries,
4
the sector was, in fact, under a trade 25

Total employment share (%)

surplus before 1997. The study also notes
that the domestic production ratio was 24
3
also stronger in the early 2000s with
23
85%–90% of the local demand being
met by domestic production. This ratio 2
22
fell to 20% by 2013 when the Indian toy
21
market demand was mostly captured by 1
Chinese toy imports. The sector suffered 20
due to the unilateral reduction in tariff
and non-tariff barriers in the early 2000s 0 19
(Chaudhuri 2015; Mehta 2000). 2008–09 2009–10 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18 2018–19
Consumer durables high M Consumer durables total
Sectors such as measuring and testing
equipment, computer and peripheral Figure 4: Share in Total Manufacturing Employment—Intermediate Goods
equipment, musical instruments, con- 3.8 27.0
sumer electronics and electrometrical 26.5
Employment share in high import industries (%)

equipment have remained highly import- 3.7

26.0
dependent with high and stable import-

Total employment share (%)

3.6 25.5
output ratios throughout the 10-year
period from 2008–09 to 2017–18 in the 25.0
3.5
consumer durable goods category. 24.5
Under the intermediate goods, the 3.4
24.0
highest import–output ratio belongs to
the electronic components and boards 3.3 23.5

industry where imports were 3.5 times that 23.0

of domestically produced output in 3.2
22.5
2017–18 compared to 1.8 in 2008–09.
3.1 22.0
Machines for reception and transmission
2008–09 2009–10 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18 2018–19
of voice, electronic integrated circuits and Consumer durables high M Consumer durables total
light-emitting diodes are some of the
products at the HS 6-digit level that are reduction in domestic supply by producers For the intermediate goods, we observe
heavily imported into India. Sawmilling to maintain profitability. Reduction in sup- a declining employment share (refer to
and planing of the wood sector also has ply thus puts pressure on employment to Figure 4) for the overall sector from 27%
seen a recent rise in imports with the go down, leading to unemployment and in 2008–09 to 24% in 2018–19. For the
import–output ratio around 1.2 times a lack of further investments (Baggs and high-import industries, there was a stag-
that of the domestic production. Wood Brander 2006; Malgouyres 2017). There- nation in employment share of about
sawn, chipped length-wise or sliced, with fore, the impact of reduced prices of 3.3%–3.6% across the 10-year period.
all types of lumber are imported under goods entering the country through the For the capital goods, Figure 5 (p 40)
this sector. liberalised trade channels translates into shows that there was a declining
reduced production as well as unemploy- employment share overall till 2015–16,
Impact on Employment ment, and thus, de-industrialisation. and then onwards, there was a consistent
One of the visible impacts was in terms In order to understand the long-term rise. However, for high import sectors,
of loss of employment during the trade trend in employment in use-based indus- employment share remained stagnant
liberalising years. The fall in employ- tries, we have considered those indus- since 2008–09.
ment of some sectors such as consumer tries that were identified with an import
electronics, musical instruments, meas- surge. Figure 3 for consumer goods Industry-wise Employment Trends
uring and control equipment, communi- shows that though the overall sectoral At the aggregate, the employment trend in
cation equipment, toys and games, etc, employment share in the total organised the import competing industries reveals
faced a severe import surge. manufacturing sector rose from 22% to a stagnation in employment across all
The impact of reduced tariffs and non- 26%, however, the high import sectors industry groups, namely consumer goods,
tariff barriers translates into reduction witnessed a fall in 2010 and stagnation intermediates, and capital goods. A fur-
of prices of goods that further lead to then onwards at almost 3.5%. ther analysis of the individual industry
Economic & Political Weekly EPW june 22, 2024 vol lIX no 25 39
PERSPECTIVES
Figure 5: Share in Total Manufacturing Employment—Capital Goods Table 4 shows that industries like opti-
3.5 10.5 cal instruments, ships/floating structures,
computers and peripherals, musical in-
3.0
struments, consumer electronics, saw-
10.0
milling/planing of wood, etc, registered
2.5

Total employment share

negative growth rates over the 10-year
2.0
9.5 period. While industries such as other
general-purpose machinery, hand tools
1.5 and electronic components had a very
9.0
sluggish growth in employment between
1.0 1%–2% over the 10-year period.
8.5 Table 4 also reveals that growth rates
0.5
were statistically significantly lower till
2014–15 (after which import tariffs were
0.0 8.0
2008–09 2009–10
2009–10 2010–11
2010–11 2011–
2011–12 2012–132013–14
12 2012–13 2013–14 2014–15
2014–152015–16
2015–162016–17
2016–172017–18
2017–182018–19
2018–19 raised for many industries) compared
to that of the entire time period of
Capital goods high M Capital goods total
10 years. The industries that witnessed
numbers reveals that many industries individual industries at the NIC 4-digit negative growth rates as compared
displayed negative compounded growth level, which have been identified to have to 2008–18 were optical instruments,
rates from 2008–09 to 2018–19. Table 1 witnessed a very high import surge and machinery for metallurgy, general pur-
shows the employment growth rates of sustained high import shares. pose machinery, games and toys, musical
instruments, consumer electronics, bear-
Table 4: Employment Growth Rates at NIC 4-digit Level Industries
ings/gears, etc.
Nature of Sectors NIC Industry Description Employment Growth
2008–14 2008–18
Clearly, there were adverse after-effects
Capital goods 2670 Manufacture of optical instruments and photographic equipment -9.6 -2.5 of the trade liberalisation process when
3030 Manufacture of air and spacecraft and related machinery 9.8 14.8 it was at its peak during the early 2000s.
2817 Manufacture of office machinery and equipment (except 17.3 14.7 The highly import-dependent industries
computers and peripheral equipment) were not able to generate enough em-
3011 Building of ships and floating structures 3.5 -5.1
ployment while some industries even
2826 Manufacture of machinery for textile, apparel and leather production 2.2 2.0
witnessed a reduction in employment
3250 Manufacture of medical and dental instruments and supplies 8.0 9.6
over the decade.
2818 Manufacture of power-driven hand tools 3.1 3.9
2823 Manufacture of machinery for metallurgy -9.4 3.1
This difference in the employment
2822 Manufacture of metal-forming machinery and machine tools 4.1 6.5 growth rates can be explained by the
2813 Manufacture of other pumps, compressors, taps, and valves 4.5 7.4 recent impetus given to industrialisation
2815 Manufacture of ovens, furnaces, and furnace burners 8.1 4.2 and trade policy under the initiatives
2819 Manufacture of other general-purpose machinery -7.0 1.4 like the Make in India policy and the
Capital goods subtotal 0.9 4.5 various measures introduced under the
Consumer 3240 Manufacture of games and toys -9.9 8.0 ambit of industrial policy in India. Meas-
durables 2651 Manufacture of measuring, testing, navigating and control 0.4 3.4 ures such as tightening the FTA norms—
equipment
for example ensuring that the goods
2620 Manufacture of computers and peripheral equipment 3.8 -1.0
3220 Manufacture of musical instruments -10.6 -7.3
entering India are checked under the
2640 Manufacture of consumer electronics -0.4 -6.1 Rules of Origin under various FTAs—
2660 Manufacture of irradiation, electromedical and electrotherapeutic 10.2 9.4 have helped India to counter the routing
equipment of Chinese products into India using the
2630 Manufacture of communication equipment 1.3 4.9 FTAs with other Asian partners.
2593 Manufacture of cutlery, hand tools and general hardware 6.7 1.9 In addition, there has been a strength-
3230 Manufacture of sports goods 1.9 4.8
ening of standards (Bureau of Indian
3290 Other manufacturing nec 3.7 9.8
Standards [BIS]) on imports to ensure that
3211 Manufacture of jewellery and related articles 2.4 3.9
substandard quality imports do not enter
Consumer durables subtotal 2.8 4.2
Intermediate 2610 Manufacture of electronic components and boards 1.4 1.9
the border. Simultaneously, a targeted
goods 1610 Sawmilling and planing of wood -2.1 -3.1 approach towards certain sectors, like the
2420 Manufacture of basic precious and other non-ferrous metals 3.7 4.7 toys and mobile manufacturing industries,
2011 Manufacture of basic chemicals 3.5 5.3 by encouraging domestic production,
2013 Manufacture of plastics and synthetic rubber in primary forms 3.2 5.6 allowing FDI and creating an infrastruc-
2814 Manufacture of bearings, gears, gearing and driving elements -0.5 4.8 tural ecosystem for these industries to
Intermediate goods subtotal 2.5 4.4 lower import dependence, especially on
40 june 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 PERSPECTIVES

China, while boosting domestic manu- is a need to have a selective approach to- Working Paper No 172, Indian Council for Re-
search on International Economic Relations.
facturing has been adopted. wards boosting domestic production. Joseph, R K and R A Kumar (2021): “Reducing Import
Dependence on APIs in the Indian Pharmaceu-
Notes ticals Sector: An Analysis of Early ISID,” Work-
Conclusions
1 The new IIP series based on the 2011–12 base year ing Paper Series, WP 239, December.
This article indicates that a majority of compiled data at the NIC 3-digit level. Weights Kallummal, Murali (2012): “Process of Trade Liberali-
the escalation in imports occurred in the have been provided at the NIC 5-digit level and zation under Information Technology Agree-
the corresponding use-based classification has ment (ITA): The Indian Experience,” New Del-
consumer goods sector in the manufac- also been provided. Using the list of 407 items hi: Centre for WTO Studies, Working Paper No
turing sector. The period of the manifold included in the IIP, the study identified the broad CWS/WP/200/3, April.
use-based classification for the NIC 4-digit level. Krishna, Sridhar (2001) “Phasing Out of Import
rise in imports occurred during 2005–06 2 The list of HS 6-digit codes falling under each Licensing: Impact on Small-scale Industries,”
which was coinciding with various trade NIC 4-digit code and the respective imports Working Paper No 60, Indian Council for Re-
can be shared by the author on demand. Due to search on International Economic Relations.
policy changes such as tariff reductions, the high volume of data, only the observed Kumar, Ramaa Arun (2023): “Toys and Games Sector:
the removal of quantitative restrictions trends have been shared. An Analysis of Trade and Industry Dynamics,”
Conference Volume, Eleventh National Seminar
following the WTO dispute settlement, References on Industrial Statistics, Government of India,
signing of FTAs, and unilateral tariff re- Amirapu, Amrit and Arvind Subramanian (2015): MOSPI, DPD, Kolkata.
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of a Development Dilemma,” CGD Working “Trade liberalisation and Export Competitive-
At the industry disaggregated level, the Paper 409, Washington, DC: Center for Global ness of Indian Manufacturing Industries: Some
effect of some of these policy changes on Development, http://www.cgdev.org/publica- Explanations,” Journal of the Asia Pacific Econ-
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Surge and Domestic Competitiveness: The Case Marianna Paschali (2011): “Why Has Africa Become
in India cannot be undermined. of Indian Incense Sticks Industry,” Economic & a Net Food Importer?” Trade and Markets Division,
The recent policy shifts towards taking Political Weekly, Vol 57, No 52, pp 56–63. Food and Agriculture Organization, Italy.
Chaudhuri, Sudip (2015): “Import Liberalisation and Rakotoarisoa, Manitra A, Ramesh P Sharma and David
steps to boost the self-reliance process in Premature Deindustrialisation in India,” Eco- Hallam (2011): “Agricultural Import Surges in
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Goldar, Biswanath (2005): “Impact on India of Tariff tions,” submitted to the National Small Indus-
Specifically, as the article observes, and Quantitative Restrictions under WTO,” tries Corporation.
there is a need for steering the trade as
well as industrial policy towards provid- Appendix Figure 1: Trend in Imports and Exports as a Percentage of GDP
ing a boost to the consumer goods indus- 35
tries such as toys and games, computer
30
equipment, communication equipment,
Imports of goods and services (% of GDP)
sports goods, jewellery, etc. As is the case
Import/export as % of GDP

25
in some sectors, like toys (IIM 2024) and
mobile phone production in India, specific 20
trade and industrial policies have helped
15
revive the industries which are on the Exports of goods and services (% of GDP)
path to attaining self-sufficiency. Many 10
of the industries identified in this article
5
have a significant presence in the micro,
small and medium enterprises segment 0
operating at smaller scales and capable of 1980 1990 1991 2000 2004 2007 2008 2012 2016 2019 2020
generating employment. Therefore, there Source: World Development Indicators.

Economic & Political Weekly EPW june 22, 2024 vol lIX no 25 41
special article

Neo-liberal Economy and Middle-class Patidar

Agitation for Reservations in Gujarat

Ghanshyam Shah

G
The dominant-caste Patidars, once opponents of lobalised neo-liberalism thrives on an informal political
reservations, launched an agitation in 2015–16 economy, promoting the expansion of the new aspira-
tional middle class in India. Simultaneously, it perpet-
demanding reservation in educational institutions and
uates socio-economic insecurity in society, leading the middle
government jobs. An examination of the historical rise of class to reinvent its primordial bonds in search of security and
Patidars as the dominant caste in Gujarat and their social support. The recent caste-centric agitations of the dominant
capital in reinforcing social bonds, nevertheless, reveals castes—demanding reservations for government employment
and admission to elite professional educational institutions—
its discontents in the educated youth reeling under
are by-products of the present political economy. In the past,
neo-liberal economic growth. The agitation was led, they opposed reservations for historically oppressed commu-
organised and mobilised by capitalising on the nities in the name of “merit.” Since the mid-1990s, some of
community’s social capital. The movement succeeded them—Marathas in Maharashtra, Jats and Gujjars in Haryana
and Rajasthan, and Patidars in Gujarat—had launched agita-
in getting 10% reservation, although on “secular”
tions demanding their inclusion in the caste-based, “reserved”
criteria, as an economically weaker section, and not as Other Backward Classes (OBCs) category. On 25 August 2015,
a backward caste. the first such statewide rally of Patidars was mammoth and
unprecedented in Gujarat’s political history. It was spearheaded
by the Patidar Anamat Andolan Samiti (PAAS), formed in early
July. The organisers called it a kranti (revolution), carrying
placards and shouting slogans, such as Jai Patidar (hail Patidars)
and Jai Sardar (hail Sardar Vallabhbhai Patel, a caste community
icon). Most participants of the rally were Patidar youth from
Saurashtra, Surat city, and north Gujarat.
Earlier in 1980–81, the Patidars of central Gujarat had agitated
against reservations for Dalits (Desai 1981; Shah 1987). Later,
in 1985, they joined the upper castes in protesting the hike in
reservation quotas for OBCs. They then opposed the reservation
system altogether in all spheres. The agitation was then skilfully
diverted by upper-caste politicians and political parties against
“others,” that is, Muslims, leading to a series of communal clashes
in the state (Dave 1990; Shani 2007). In 2015–16, the PAAS
demanded the inclusion of Patidars in the OBC category to secure a
share in its reserved quota.1 This paper is an endeavour to study
the Patidar agitation for reservations in the context of the prob-
lems they face in the contemporary economy and their strength
in influencing the ruling class. The paper is divided into two
parts. The first provides a brief background on the community
and explores the possible factors in the unrest among Patidar
middle class and their power. The second discusses the mobili-
sations, their scale, modus operandi and the state’s response.
The author thanks Kantibhai Parmar and Kiran Desai for their help
in providing specific information and the anonymous reviewer for Accumulation of Social Capital
valuable comments.
Patidars constitute a caste cluster of several endogamous/
Ghanshyam Shah ([email protected]) was formerly hypergamous social groups. According to the 1931 Census, they
with Jawaharlal Nehru University, New Delhi.
form nearly 12% of Gujarat’s population. Social anthropologist
42 june 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 special article

David Pocock (1972: 1) observed, “Patidar society is intensely was a part of Bombay then had the ryotwari land system since
hierarchical and competitive.” During the colonial period, the mid-19th century. It was marked by rich absentee farmers,
they were known as Kanbi (tiller). The Mughal and Maratha mostly Patidars, whose lands were cultivated by tenants, mostly
rulers appointed some local dominant individual families/ Kolis and Adivasis. The Congress government of Bombay,
lineages among cultivators as village heads for the collection of dominated by Patidars, protected the Patidar landed class by
revenue and to perform police functions, designated as “Patel.” sabotaging the implementation of land reforms by way of
In return for their services, they were given land. Some of tenancy and ceiling legislations (Shah 2002a). Besides this,
these lineages in central Gujarat designated themselves they cornered the benefits of the Community Development
as Kanbi–Patidar, pati means strip and dar, holder of land. Programme, 1962 as well as the green revolution. Among Gujarati
The British state encouraged Kanbis of central and south non-resident Indians (NRIs), Patidars of mainland Gujarat
Gujarat to cultivate forestland and wasteland, occupied by (excluding Saurashtra and Kutch) constitute the single largest
subaltern communities to increase agricultural production community. They invest in land and property in their native
and meet the needs of a growing textile industry in Europe. areas and support their relatives in different ways.
The process of expansion of agricultural land was so fast in In the past, Patidars used to claim themselves as Kshatriyas
central Gujarat that 80% of the cultivable land in Kheda dis- in the caste social order. Now, their business elite asserts
trict had come under the plough by 1857 (Divekar 1982: 334). themselves as a business community akin to the upper-caste
So was the case in south Gujarat, between 1850 and 1929 Vanias.3 With their increased prosperity since the 1980s, a few
(Hardiman 1987: 72). of their elite have also started essentialising themselves as
By the mid-19th century, with the introduction of the ryotwari “modern,” “progressive,” “hard-working,” and able to manage
land system that eliminated intermediaries between cultivators their affairs “rationally” and “intelligently” (Gidwani 2008: 36).
and, later, modern technical know-how, infrastructure, and Since the 1970s, young Patidars of central Gujarat began to con-
credit provided by the state, capitalist agriculture developed sider manual labour as infra dig, opting for supervisory farm
(Chaturvedi 2007). Some of the rich and middle farmers began work and preferably white-collar jobs (Patel 1992). This trend
to invest their agricultural surplus in trade and industry and has spread in the community over a period of time. Besides
also provided modern education to their children so as to get supporting each other in economic activities as several other
into the non-farm sector. The second textile mill was started communities do, Patidars have formed and accumulated
by a Patidar of a farmer-cum-moneylending family in the modern social capital in the form of caste associations at
1860s (Patel 1988). A diversification of occupations and im- different levels to support caste members in educational and
provement in economic conditions led their elite to reinvent economic spheres. In the process of electoral politics and
their origins in the Brahminic caste hierarchy. By the turn of neo-liberal economy, some of these organisations try to cultivate
the 19th century, they made presentations to the census unity across social divisions of Patidars for mutual support as
commission to be designated as Patidar instead of Kanbi in well as to maintain the hegemony of their socio-economic
the census, which materialised in the 1931 Census. upper strata over the community. The Shree Khodaldham
In the early 20th century, middle-peasant-Kanbis participated Trust, an organisation of Leuva Patidars of Saurashtra, has as
in the Kheda and Bardoli satyagrahas under the leadership its slogan “unity is strength,” aiming to inculcate “brotherhood”
of M K Gandhi and Vallabhbhai Patel opposing the govern- among caste members.
ment’s hike in land revenue. They dominated the freedom
struggle and Congress party in Gujarat. During this period, Growth and Its Discontents
some of the educated Patidar political leaders took the initia- Gujarat witnessed high urban growth in the last six decades,
tive to form caste associations of Kanbi–Patidar jatis (castes) rising from 25% in 1961 to 43% in 2011 as per census figures.
at the local level and of the caste cluster at the regional level.2 However, in comparison to other states, Gujarat lags behind in
Their immediate objective was to introduce some “social agricultural growth (Shah et al 2009). Roughly speaking,
reforms,” including encouraging modern education among around 60% of Patidars partly or fully depend on agriculture.
the jati-brethren and also “mobilizing and cultivating public Over a period of time, the proportion of small and marginal
opinion for protecting the interests of Khedut, that is, farmers” farmers among Patidars has increased, from 43% in 1970–71 to
(Bhatt 1970: 302). 69% in 2004–05. Their condition remains vulnerable, despite
There is a class dimension among farmers of Saurashtra and “miraculous” agricultural growth after 2000, when the Sardar
the rest of Gujarat. Saurashtra was a stand-alone princely state Sarovar Dam increased the irrigation and electricity coverage
unlike the rest of Gujarat, which was part of the prosperous (Shah et al 2009). In 2012–13, more than 50% of farmers
Bombay Presidency. Post-independence, Gujarat continued as reported in Gujarat that their economic condition had not
part of the Bombay Presidency that became the Bombay state changed in the last five years, while 10% reported that their
in 1956, from which the present-day Gujarat was culled in 1960. condition had worsened (CSDS-Lokniti 2024).
In Saurashtra, the Rajputs comprised the feudal landlords. In urban areas, Patidars own nearly one-fifth of all small
Their lands were tilled by the Kanbi–Patidar tenants, who and micro-factories.4 These self-employed small factory own-
became beneficiaries of land reforms under the Congress ers with limited capital continue to face frequent ups and
government. However, the rest of present-day Gujarat that downs. The number of sick micro, small, and medium units
Economic & Political Weekly EPW june 22, 2024 vol lIX no 25 43
speciAl article
Figure 1: Annual Per Capita Mean Income across Caste Groups, 2004–05 and Though Patidars along with other upper castes have pocketed
2011–12
the largest share of economic growth pre- and post-liberalisation,
51,045

some sections of OBCs and Dalits have also improved their

44,144 income. This has become more glaring since the 1990s. According

40,385
to the Indian Human Development Survey (IHDS, cited in

30,981
Jaffrelot and Kalaiyarasan 2020: 140), the average annual per

27,348
capita income of Patidars increased from `17,470 to `51,045,

23,692
20,528

that is, by almost 292 percentage points between 2005–06 and

17,470

14,633

2011–12. At the same time, the per capita income of OBCs also

11,821
9,964
8,422

7,536
increased from `7,979 to `27,336, up to 343% during the same

4,101
period (Figure 1). A visible increase in the income of a section
of lower castes irritates the upwardly mobile Patidars. They
Patel Brahmin Forward Koli* SC OBC ST perceive the economic improvement of OBCs and Dalits as a
2004–05 2011–12 challenge to their social status.
*Kolis are included in the OBC category.
Source: Jaffrelot and Kalaiyarasan (2020: 140).
Education
increased from 20,615 in 2012–13 to 49,003 in 2014–15. Out- Formal education in general and higher education in particu-
standing loans of these enterprises trebled in two years from lar is an important source of status and upward mobility in
`836 crore in 2012–13 to `2,601 crore in 2014–15. Gujarat. Since independence, educational institutions as well
Figure 1 does not include the diamond cutting and polishing as students have increased manifold, as the state has given
industry, which also falls in micro and macro industries. The priority to higher education over primary schooling. At the end
Patidars of Saurashtra have controlled this industry in Surat of the first decade post-independence, 1960–61, the number of
since the 1970s. They provide employment to more than 10 primary schools increased by less than double, whereas the
lakh workers, mostly migrant Patidars from Saurashtra. With growth in the number of colleges was threefold (Government
trade liberalisation, exports of finished (cut and polished) dia- of Gujarat [GoG] 2018). This trend has continued thereafter.
monds increased from $751.1 crore in 1999–2000 to $1,966.7 Formal education has gradually reached almost all social
crore in 2007–08 (Hirway 2009). This has also changed the groups, though in different proportions at different levels
structure of the diamond industry in Surat. According to one (Table 1). The proportion of upper-caste college students has
guesstimate, there are more than one lakh diamond cutting continued to be higher than others. In 2014, it had been nearly
and polishing units in Surat. The industry is dominated by a 50% as against their population of 24%.
few—less than 0.5%—large factories owned by the Patidars
Table 1: Students in Gujarat by Social Class in 2014 (%)
with modern equipment that came up in the late 1980s. More General SC ST OBC Muslim
than 70% of diamond workers are from Saurashtra, mostly Population 24 7 15 42 10
Patidars. More than 50% of workers get their wages at piece Primary 14.8 7.4 18.9 50.3 8.6
rates. Others get fixed salaries varying from `2,500 to over Upper primary 17.2 8 17 49.8 8
`1,00,000 per month. Secondary 32.2 8.2 14.4 45.1 6.5
The industry experiences a crisis almost every seven to eight Higher secondary 38.9 7.8 13.7 39.5 5.2
years in the market. After the recession of 2008, it again faced Higher 49.8* 7.4** 7.3** 32* 4*
a slump in early 2015, as overseas demand for polishing Sources: NUEPA (2014); *GoI (2013); ** The figures are guesstimates based on these
two surveys.
diamonds declined. The production declined to 50% in less
than six months.5 More than 25 units went bankrupt, three Since the early 1990s, the quantum of higher education in-
units employing more than a thousand workers closed down, stitutions and students has taken a significant leap. Between
and others reduced the number of workers and/or wages. In 1991 and 2012, students in higher education increased nearly
the early phase of the industry, a majority of the first genera- fourfold from 3,45,000 to 11,75,000 (GoG 2018). The students
tion of diamond workers were school dropouts at the primary of upper castes (non-reserved/general Hindus) continue to
level. Some of them have managed to give secondary and constitute the single largest social group in higher education.
higher education to their children in Surat with the hope of Of the upper castes, Patidars have been late joiners in taking
having better social status. Over time, the level of education higher education because of their agricultural occupation
of the second generation has increased. Having experienced (Shah 2002b). In 1960–61, 76% of college students were from
not only low income and social status as “workers” but also upper castes. Of them, 26% were Brahmins, 35% Vanias, and
insecurity with the periodic cycles of recession, diamond 15% Patidars (Vashi 1961: 388). In the mid-1980s, about 7% of
workers wish for secure employment for their wards. Thus, by Patidars as against 19% Vania and 14% Brahmin households
the early 2010s, their second generation constituted a sizeable in rural Gujarat, and 42% of Patidars as against 68% Vania,
section of higher-educated youth in the age group of 22–30 63% Brahmin families had someone with a college education
years, who aspire to regular white-collar employment in in urban areas (Table 2, p 45). Some Patidar leaders feel troubled
the public sector. that despite constituting 50% of the forward castes, they were
44 june 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 special article
Table 2: Highest Educational Attainment in Family, by Caste in Gujarat, 1986–87 launch their own enterprise. Between 2004
Castes Rural Urban and 2010, growth in employment in Gujarat
Illiterate Primary Secondary College Total Illiterate Primary Secondary College Total had been stagnant at around 0.1% as against
Brahmin 8 39 38 14 100 0 5 32 63 100 2.4% during 1999–2000 to 2004–05 (Unni
Vania 8 34 39 19 100 1 2 29 68 100 and Naik 2014: 275). The situation has not
Rajput 15 52 28 5 100 1 38 34 27 100 improved in subsequent years. A number of
Other upper castes 4 41 43 12 100 1 10 38 51 100 government positions are sinking. Many sanc-
Patidar 6 46 41 7 100 1 14 43 42 100
tioned posts remain vacant for years. The
Artisan castes 11 52 30 7 100 2 19 45 34 100
employment growth is largely (84%) in the
Koli (OBC) 35 44 19 2 100 10 27 44 19 100
informal sector without social security and
Other OBC 46 42 10 2 100 10 49 29 12 100
SC 27 48 19 6 100 12 34 36 19 100
salaries (Table 4).
ST 47 38 13 2 100 11 33 41 15 100 Regular employment both in the formal
Muslims 24 47 26 3 100 5 29 38 29 100 and informal sectors has declined. Further,
Others 12 34 48 6 100 4 26 42 29 100 it does not give social security to all. Even
Rural N = 15,674; Urban N = 2,504. in the formal sector, more often than not,
Source: Shah (2002b).
employment is casual or contractual. Only a
not able to secure a 50% share of the non-reserved seats in negligible number get the so-called “permanent” position
professional courses like medicine and engineering (Vanani offering regular increments in salary, leave benefits, old-age
2017: 78–79). pensions, chances for promotion, etc. The remaining workers
According to IHDS, in 2011–12, 10% of Patidars against nearly are self-employed, casual, and/or part-time, getting monthly
30% of Brahmins and other forward castes were graduates. or weekly salaries. Further, wages in Gujarat are lower than in
The proportion of graduates among the OBCs had only been most states (Unni and Naik 2014). Insecurity in the private in-
3%. As against that, graduates among the Dalits constitute nearly formal sector haunts most young employees today. In such a
5% (Table 3). The rise of Dalits and OBCs in higher education situation, agitated Patidar youth, like all others, perceive gov-
hurts the ego of the upper castes, thanks to their Brahminic ernment employment as the only secure and dignified means
mindset. This is reflected in the increased instances of dis- to live by.
crimination against Dalits and Adivasis in elite professional Over and above, the upper castes aspire for a white-collar
institutions and also rising cases of atrocities in these commu- job accompanied by status and power rather than a lower-rank
nities (Sukumar 2013; Shah 2017). position. They generally do not even apply for the Class IV
positions, considering them below their status. In upper-caste
Decent Employment  job aspirants’ perception, they must have the privilege to get
Of the educated youth, a minuscule number join a family- or office jobs given their social status. Hence, they resent it when
relative-owned business or factory. Most of them have no such OBCs, Dalits or Adivasis get preference through reservations.
advantage nor the adequate skill, experience, and capital to During the agitation, then Chief Minister Anandiben Patel
Table 3: Education Completed (by Caste) in Gujarat, 2011–12 said, “Patidars are not interested in becoming constable, eve-
Caste Group Illiterate Primary Secondary Graduate and Above Total ryone wants to become Superintendent of Police … We [the
Brahmin 7.3 43.8 29.8 19.1 100 state government] advertised for 8,500 posts for constables,
Forward 13.5 49.7 25.1 11.7 100 and only 1.5% of those Patidars applied.”6 Against this back-
Patel 9.8 47.6 32.8 9.8 100 drop, let us turn to the narrative of the PAAS agitation.
Koli 24.3 58.7 15.9 1.2 100
OBCs 26.9 56 14.7 2.4 100 Mobilisation
SCs 22.4 57.1 15.7 4.8 100 Before the August rally, Patidar youth of different local organi-
STs 37.7 50.3 10.8 1.2 100 sations organised face-to-face meetings and social media
Gujarat 22.9 53.3 18.4 5.4 100 WhatsApp groups to unite Patidars. They organised processions
Source: Jaffrelot and Kalaiyarasan (2020: 144).
and submitted memoranda to respective authorities, express-
Table 4: Growth in Employment, 1999–2010 ing their grievance against the existing reservation policy for
Share in Total Employment Growth of Employment SCs, STs, and OBCs. The central argument in their petitions was
1999–2000 2004–05 2009–10 1999–2000 2004–05 2009–10
that “meritorious” Patidars were being deprived of govern-
Formal/informal sector (enterprise)
ment employment and access to higher education. Hence, they
Informal 76.8 77.4 82.8 4.4 3.6 4
should get included in the government OBC list so as to get
Formal 23.2 22.6 17.2 3.7 3.2 0.3
benefits under the reserved category.
Total 100 100 100 4.3 2.3 3.3
Formal/informal employment (lack of social benefits)
The 2015 Ahmedabad gathering was a culmination of more
Informal jobs 80.2 82.1 84.1 4.7 2.8 3.8
than 120 small and large processions and meetings in less than
Formal jobs 19.8 17.9 15.9 2.2 0.1 2.5 two months in different parts of the state. A few of the proces-
Total 100 100 100 4.3 2.3 3.3 sions were without the banner of PAAS. Some carried a banner
Source: Unni and Naik (2014: 283). of Sardar Patel Group (SPG) or local Patidar organisations such
Economic & Political Weekly EPW june 22, 2024 vol lIX no 25 45
speciAl article

as Amreli District Patidar Samaj. In the course of these events, Some of the resourceful middle-aged and elderly Patidars
there were a few incidents in which the Patidar youth harassed supported the rally by providing resources. They looked after
some OBCs, forcing them to chant “Jay Sardar” and wear caps the management of the demonstration’s logistics, transport,
bearing the slogan, “I am a Patidar.”7 The first rally was on food, water, sanitation, and other facilities. The rally received
6 July 2015 in north Gujarat under the banner of PAAS and SPG, the support of several non-Patidar upper-caste individuals and
based in Mehsana, a city in north Gujarat. The largest proces- organisations with moral and material support. Some industry
sion, estimated at over four lakh participants, was in Surat, and business entrepreneurs as well as NRI Patidars supported
predominantly of Saurashtra Patidars on 17 August. It led to a the agitation. However, except for the Surat-based Samasta
virtual closedown of the city, akin to a general strike. Besides Patidar Samaj (SPS, the only organisation claiming to represent
reservations, some of the participants demanded “a formation all Patidars controlled by the Saurashtra Leuva Patels), other
of Sardar Patel Board with a minimum budget of `500 crore major state-level Patidar caste religious organisations such as
for the development of Patel community; build Sardar Bhavan Umiya Mata Sansthan (UMS [Kadava]), the temple trusts of
in Delhi for Patel youth to prepare for UPSC (Union Public Umiyadham (Unjha) and Sidsar (Kadava), and Shri Khodaldham
Service Commission).”8 Trust (Leuva), were merely onlookers. In fact, some of them
The Patidars of central Gujarat, who spearheaded the 1980–81 declared that they had nothing to do with the agitation, partly
anti-reservation agitations, were by and large kept away from because they did not want to antagonise the government. Later,
organising any programme in support of the PAAS demands. these organisations offered to be mediators between PAAS
Some of them were also critical of the agitation, which could and the government, which was ignored by PAAS. The agitated
have two potential reasons: as the top tier of the Patidar social youth did not want any obligation from these elders.
hierarchy, they would not like to accept the leadership of As middle-class Patidars’ support for the demands emerged,
Patidars from Saurashtra and/or they would not like to be several Patidar members of the legislative assembly (MLAs),
clubbed with OBCs. They formed the Maha Gujarat Vishwa both of the ruling BJP and opposition Congress party, began
Yuva Patidar organisation, arguing that in the given constitu- supporting the demands of PAAS. The BJP MLAs were, however,
tional provisions, demands for reservation for Patidars were not in favour of the agitation as it was confronting their
difficult to attain. A few of them also burned an effigy of government. The BJP state president, Ranchhod Faldu, a Patidar
Hardik Patel accusing him of discrediting the Patidars. from Saurashtra, said that he had told the government about
Hardik Patel, 20 years old in 2016, son of a middle peasant- “the difficulties faced not only by the children of Patidars, but
cum-small businessman, and a Kadava Patidar from Suren- also by the children of economically backward families of
dranagar, Saurashtra, emerged as a leader of this movement. other upper castes.”13 In the second week of August, the gov-
During his college days, he was involved in Vishva Hindu ernment constituted a seven-member panel headed by then
Parishad and Bajrang Dal, both Hindu right-wing outfits, health minister Nitin Patel to negotiate with the agitators. Ne-
activities. He had also worked briefly with the SPG in Mehsana, gotiations offering scholarships and other concessions did not
campaigning against female foeticide in the community. work, as PAAS did not want anything less than reservation.
Before launching the agitation, Hardik had attended the Akhil During August, the government frequently issued advertise-
Bharatiya Kurmi Sardar Patel Mahasabha in Barabanki, Uttar ments about Gujarat being number one in development with
Pradesh, along with Gordhan Zadafia, a Bharatiya Janata Par- the best employment situation, achievements in the field of
ty (BJP) leader. During the conference, he realised the strength education, welfare schemes, and so on. A day before the
of his community at the national level.9 He found that in some proposed rally, a government advertisement explained the
states, Patels (aka Kurmis) enjoyed reservations. That led him constitutional limitations for granting the demands of PAAS
to demand reservations for Patidars in Gujarat. He claimed for reservations under the OBC category. The chief minister
that he had the support of 52 lakh Patidars. reiterated the government’s focus on development as the only
As a flamboyant youth, he had a knack for throwing names answer for jobs. Development, according to the government,
of known political figures to show off his politics. He frequently was the panacea for all problems.
announced that he was from Sardar Patel’s lineage, and was
inspired by him. He declared that non-violence was not a Agitation in Ahmedabad
taboo, violence was also an option to attain a goal.10 On Having failed in its attempts to dissuade the organisers from
the issue related to quota, he asserted that the courts and the calling off the rally, the government treated the protesters as
government could change the Constitution and laws for the baratis (special guests), so that the event passed peacefully.
development of the Patidars of Gujarat.11 He was against the The government permitted the use of the Gujarat Mineral
prevalent reservation system for SCs, STs, OBCs and declared Development Corporation grounds in Ahmedabad for a token
that because of the reservation system, the country had charge of `1 as against the usual charge of `50,000 for 24 hours.
gone back 60 years. “If you have to give reservation, give to During the rally, all toll booths in the state allowed vehicles to
everyone. Those who get good marks and still do not get jobs, pass through for free. Hardik said,
they need a reservation, so give it to them.”12 A majority of our forefathers had given their lands to the government to build
the participants of the Ahmedabad rally were in the age roads … that is why no Patel should pay toll tax while passing
group of 15–25 years. through any gate.14

46 june 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 special article

It was reported that the police were instructed to cooperate method and style of the agitation. There were also isolated
with the rally and not use force.15 Several young leaders ad- public voices of young Patidars who asserted that “by any
dressed the meeting expressing their anger over their predica- standard” Patidars were not backward at all.
ment and determination to attain reservation. The day mostly The different Patidar groups involved in mobilisations were
passed without any untoward incident. not organically linked with PAAS. All of them shared the
However, by the end of the day, the PAAS leaders became ar- demand for reservation and were angry with the government.
rogant, insisting that the chief minister herself should come to There was, however, very little coordination among them
meet them at the venue. They then refused to follow protocols regarding programmes and strategies. The momentum of the
and vacate the grounds. The administration lost its patience, agitation continued with frequent localised demonstrations,
resulting in clashes between the police and demonstrators. incidents of stone-pelting on the police and public property,
The police resorted to lathicharge and firing. The students’ and clashes between the Patidars and OBCs. The Patidars of
crowd spread to the city shouting slogans and pelting stones some villages decided that they would not pay electricity bills
on public property. Eight Patidar youth died in police firing, a to the government. In some places, Patidar women came to
few were injured, and several agitators were detained. On the the streets in large numbers, beating empty plates in support
same night, a mob torched the residence of the minister of of the PAAS. The agitation intermittently continued at different
home affairs, a Patidar by caste, in Mehsana. intensities. Its momentum had slowed down by mid-2016
These events had a chain effect, and continued over a month and fizzled out as a force for street-level mobilisation by the
in different parts of the state, leading to clashes between end of the year. During the different phases of the agitation
Patidar agitators and the police, as well as Patidars and OBC between 2015 and 2019, around nine persons died, more than
youth on streets. PAAS announced that they had nothing 27 citizens and 203 police personnel were injured, and more
against OBCs but it did not pacify the agitated Patidars or OBCs than 200 public and private vehicles were damaged, causing
from street confrontations. Some of the youth were detained a loss of over `650 crore in the state.
and jailed. For a few days, internet networks were banned. Pri-
vate and public properties worth approximately `1,700 crore Government’s Response
in six cities were damaged. Two youth activists of PAAS, one The Patidar caste organisations as well as BJP MLA s were
from Rajkot and another from Surat, died by suicide in support building pressure on the government to find a solution to
of the demand and against police atrocities. Umesh Patel, in the problem. In the last week of September 2015, the govern-
his suicide note, wrote, ment announced the Mukhya Mantri Yuva Swavalamban
I do not have land, no house, no capital and when I ask for reservation, Yojana (MMYSY, chief minister’s youth self-dependence plan)
I get beaten. Why? Am I not a son of Gujarat? ... so long as the govern- with a fund allocation of `1,000 crore. This included conces-
ment does not accept the demand of poor Patidars, you have to lose sions in higher education tuition fees based on merit,
such sons.16
financial assistance to engineering and medical students,
The Patidar caste organisations that so far maintained increase in the number of UPSC training courses, subsidies
distance from the agitation came to the rescue of the families to medical and engineering students to purchase textbooks,
of the deceased agitators. The Khodaldam Patidar Trust etc. The age limit for government jobs was relaxed from
announced `1 lakh for immediate relief to the families of 28 to 33 years. The government promised to increase the
eight Patidars who died in police firing. It also declared its number of seats in medical colleges. The agitators rejected
support for PAAS’s demand for reservations. By late Septem- this as mere sops.
ber, all the major five Patidar organisations decided to back Meanwhile, Hardik Patel and several other leaders were
the movement and assured financial and legal support to arrested in early September. Hardik was in jail intermittently
those who died in the agitation. They asked the government for nine months and exiled for six months between 2015 and
for the formation of an Economically Backward Class (EBC) 2017. After the initial phase of the agitation, some caste elders
instead of OBC status to provide benefits to poor Patidar fami- tried to persuade their youth to compromise with the govern-
lies.17 The trustee of the UMS and sitting BJP MLA, Narayan ment by accepting its offer. But the defiant youth continued with
Patel, said that the trust has also decided to “negotiate with protests and occasional clashes with OBC youth. In early April
the state government and (will) demand over `1,000 crore 2016, the PAAS gave a call for jail bharo (court arrest) and total
package to give benefits to all economically poor students bandh (general strike) in major cities of Ahmedabad, Mehsana,
who are admitted in colleges.”18 The Sardar Patel Seva Chari- Surat, and Rajkot. The leaders of the caste organisations and
table Trust of Patidar doctors from Gujarat (7,000 in num- Patidar BJP MLA s put pressure on the government to accept the
ber) and abroad (3,000 in number) announced that they demand of the students for reservation.
would give `1 crore as financial help to the kin of each Patel After consultations with BJP president Amit Shah, the
community member who had died in the recent quota stir vi- government announced a 10% reservation for EBCs, with an
olence and financial aid to those who were injured. Many annual income of up to `6 lakh. To legalise this, the government
Patidar NRIs extended support to the agitation, while some issued an ordinance on Gujarat foundation day, 1 May 2016.
offered financial help to needy Patidar students for their The chief minister also announced that the earlier-declared
studies. There were, however, a few who objected to the MMYSY would also benefit poor meritorious students who
Economic & Political Weekly EPW june 22, 2024 vol lIX no 25 47
speciAl article

fail to get the benefit of 10% EBC quota. The government granting a maximum 10% reservation to the economically
spokesperson also announced that if the high court nullify weaker sections (EWS) in January 2019. The Gujarat govern-
this, “we will fight in Supreme Court.”19 To expedite the ment immediately implemented the reservation for EWS,
implementation of the ordinance, the chief minister directed which contributed to the BJP’s sweeping victory in all 26 seats
the administration to prepare procedures and rules for the of Lok Sabha in Gujarat. Later, the Supreme Court’s 3:2 verdict
EBC reservation on the lines of the OBC quota within a week. also upheld the provisions of the constitutional amendment in
Gujarat University immediately accepted this for admissions, 2022. Hence, not only political parties but also state institu-
which were upcoming. However, the PAAS rejected the govern- tions have endorsed the demands of Patidars, that is upper
ment’s announcement, tagging it as yet another sop to silence castes. Along with providing reservation in public employment
the Patidar community. On the contrary, the SPG welcomed and educational institutions, the Gujarat government spent
the government’s proposal and said that they would assess 79% for these “non-reserved” upper-caste economically back-
how it helps their community. Meanwhile, the Gujarat High ward segments under GUEEDC, out of the total amount of
Court quashed the government ordinance on EBC reservation `1,727 crore for the welfare of all the social communities
in August 2016. The government approached the Supreme between 2020–21 and 2022–23. It provides education loans,
Court, which gave an interim direction for not allowing fresh foreign studies scholarships, food bill scheme, tuition, coach-
admissions or recruitment under the EBC Reservation Act. The ing assistance, training and self-employment schemes. Of
Gujarat government’s ordinance for EBC reservation lapsed the total beneficiaries of the different schemes for different
on 4 October 2016. communities, 80% of the beneficiaries were of the non-
The Patidar agitation continued, though intermittently and reserved upper castes subject to a family income limit of
less intensively than earlier. It made some impact on the local `8 lakh per annum (Table 5). According to Reddy et al (2019),
government elections in 2015 and the assembly elections in in 2016–17, there were already 28% students of general
2017 (Shah 2020). The Congress declared that it would amend category in the premier education institutions who belonged
the Constitution to give EBC reservations to Patidars. This to EWS.
caused the exhausted leaders of PAAS to split. Hardik joined Over and above, the various Patidar caste organisations
the Congress, while some others joined the BJP. Thus, in the expanded their investment and social capital by increasing the
2017 assembly elections, a majority of Patidars continued their numbers of hostels, scholarships, and other facilities to Patidar
support to the BJP, with around 15% shifting their votes in youth in the field of education. Moreover, the first business
favour of the Congress under Hardik’s leadership.20 summit of the Global Patidar Trade and Industries Organisa-
After the 2017 assembly elections and before the 2019 tion that met in 2018 aimed “to provide a networking plat-
Lok Sabha elections, the Gujarat government announced the form to the owners of small and medium enterprises, create
formation of the Gujarat Unreserved Educational & Economical new Patidar entrepreneurs and jobs for youths” (Indian Express,
Development Corporation (GUEEDC) with a `600 crore grant 5 January 2018). It also declared a mission of providing employ-
in August 2018.21 Further, the BJP central government also ment up to one lakh jobs to Patidar youth “after giving them
passed the bill carrying the 103rd constitutional amendment, training.” The summit also signed memoranda of understand-
Table 5: Expenditure by Different State Corporations for Development of ing with several Patidar organisations to establish coaching
Communities, 2020–23 centres for UPSC aspirants, industrial training centres, legal
Commission/Board Provision Expenditure Beneficiaries guidance centres and more. The summit was attended by
(` in crore) (` in crore)
prominent BJP and Congress leaders.
Gujarat Unreserved Educational & 1,500 1,366.75 1,06,784
The chief minister praised the Patidar summit for “doing
Economical Development Corporation
(GUEEDC) what the state government is supposed to do. It is the govern-
Most Backward Caste Development 42.91 59.87 3,610 ment’s responsibility to create jobs. I am glad the community
Corporation has taken up that responsibility. This initiative would surely
Gujarat Thakore and Koli Development 91.24 67.52 6,586 motivate other communities to work in this direction”
Corporation
Gujarat Minority Finance and Development 41.91 43.03 2,256
Corporation
Gujarat Nomadic and Denotified Tribes 30.29 45.72 3,969
Development Corporation
available at
Gujarat Gopalak Development Corporation 32.16 41.62 3,101
Gujarat Tribal Development Corporation 73.15 52.22 1,314 Skandaa Distributors
Gujarat Safai Kamdar Development Corporation 61.39 41.13 1,025 30-265/25/19, Flat No. S-1,
Dr Ambedkar Antyodaya Development 22.15 7.87 798 Sai Enclave, Geetha Nagar,
Corporation Near Sai Vidya Vihar,
Gujarat State Handicap (Divyang) Finance and 4.5 1.35 135 RK Puram Post, Malkajgiri,
Development Corporation Hyderabad 500 056, Telangana
Total (in crore) 1,899.7 1,727.08 1,29,578 9908074973
Source: Sandesh, 6 May 2023.

48 june 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 special article

(Nair 2018). Other BJP leaders, including Prime Minister in the private formal sector labour market (Deshpande and
Narendra Modi, as in the past, asked OBCs to have Patidars as Newman 2010).
their model for development. The deprived communities are
made to feel guilty and blame themselves for the lack of rich In Conclusion
elite who could finance such activities and strengthen their As a consequence of the Patidar agitation, the upper castes not
social capital to help caste brethren. With such guilt, Thakore only got reservation under the “secular” income criteria but also
Kshatriyas (OBC) launched an agitation in 2014–15 for the gained sizeable financial provisions under the state welfare
strict implementation of prohibition policy in Gujarat (Shah schemes, empowering their weaker sections in improving their
2024). Not only political leaders but also some liberal intel- educational opportunities. And, the trustees of the caste social
lectuals of civil society who otherwise articulate an opposi- capital have also enhanced their investment to support their
tion to the caste system also uncritically praised the Patidar needy caste fellows and thus strengthen caste unity as well as
business summit for helping their caste fellows. Such a posi- their influence on the government. Nonetheless, decent secured
tion legitimises and reinforces the prevalent widespread dis- employment continues to be a distant dream for the majority
crimination against the traditionally deprived communities of educated youth irrespective of caste background.

Notes Chaturvedi, Vinayak (2007): Peasant Pasts: History Patel, Mangubhai (1988): Raobhadur Bechardas
1 A major social division among the Patidars is that and Memory in Western India, Berkeley: Ambai­das Laskari, Ahmedabad: Gujarat University.
of Leuva and Kadava, which is a caste differen- University of California Press. Patel, Ambalal S (1992): Badaltu Gam, Centre for
tiation further subdivided into a variety of clans. CSDS-Lokniti (2024): State of Indian Farmers: A Social Studies, Surat.
There are also Anjana/Chaudhary and Matia Report, Centre for the Study of Developing Pocock, David (1972): Kanbi and Patidar: A Study of
Patidars, who are lower in status to the Leuvas Societies, Delhi. Patidar Community of Gujarat, London: Oxford
and Kadavas. The Anjana Patidars fall in the Dave, V S (1990): “Report of the Commission of University Press.
OBC category, but not the Matias. The Patidars Inquiry into the Incidents of Violence and Reddy, B, S Jose, P Ambedkar, V S Reddy and
of central and south Gujarat were early benefi- Disturbances Which Took Place in the State of V S Nishikanth (2019): “New Reservation Policy:
ciaries of colonial rule and have been upwardly Gujarat since February 1985,” Government of Is It Empirically Justifiable?” Economic & Political
mobile ever since, following the process of Gujarat, Gandhinagar. Weekly, Vol 54, No 23, pp 12–14.
sanskritisation. The OBC cluster in the state Desai, I P (1981): “Anti-Reservation Agitation and Shah, Ghanshyam (1987): “Middle Class Politics:
comprises 145 very heterogeneous communi- Structure of Gujarat Society,” Economic & Case of Anti-Reservation Agitation in Gujarat,”
ties, constituting 40% of the population who Political Weekly, Vol 16, No 18, pp 819, 821–23. Economic & Political Weekly, Vol 22, Nos 19–21,
are eligible for 27% reservations since 1979. Deshpande, Ashwini and Katherine Newman (2010): pp AN155–AN161 + AN163 + AN165 + AN167 +
2 The Kanbis now identify as Patidar, irrespective “Where the Path Leads: The Role of Caste in AN169 – AN172.
of their caste status within the Patidar caste cluster. Post-University Employment Expectations,” — (2002a): “Caste and Land Reforms in Gujarat,”
Hence, they are referred to as Patidars here. Blocked by Caste: Economic Discrimination in Land Reforms in India: Performance and Challenges
3 In varna hierarchy, the Kshatriya Rajputs are Modern India, Sukhdeo Thorat and Katherine in Gujarat and Maharashtra, Ghanshyam Shah and
above Vaishya Vanias. But in modern Gujarat, Newman (eds), New Delhi: Oxford University D C Sah (eds), Delhi: Sage Publications, pp 127–43.
even before the colonial period, the business Press, pp 88–120. — (2002b): “Education and Backward Castes in
community occupies a higher social status in Divekar, V D (1982): “Western India,” The Cam- Gujarat,” Education and the Disprivileged: Nine-
everyday life. The power elite are thus referred bridge Economic History of India, Vol 2, Dharma teenth and Twentieth Century India, Sabyasachi
to as the Vania–Brahmin order, not vice versa. Kumar and Meghnad Desai (eds), Hyderabad: Bhattacharya (ed), Hyderabad: Orient Longman,
4 Times of India, 21 March 2018. Orient Longman, pp 332–51. pp 255–69.
5 Indian Express, 9 July 2015. Gidwani, Vinay (2008): Capital Interrupted: Agrar- — (2017): “Neo-liberal Political Economy and Social
6 Divya Bhaskar, 25 September 2015. ian Development and the Politics of Work In Tensions: Simmering Dalit Unrest and Compet-
India, Minnesota: University of Minnesota. ing Castes in Gujarat,” Economic and Political
7 Divya Bhaskar, 25 August 2015.
GoG (2018): Compendium of Selected Indicators, Weekly, Vol 52, No 35, pp 62–70.
8 Times of India, 8 August 2015. Gujarat State (1960–61 to 2016–17), Gandhinagar: — (2020): “Gujarati Voters’ Faith and Pride,” India’s
9 Indian Express, 30 August 2015. Directorate of Economics and Statistics, Gov- 2019 Elections: The Hindutva Wave and Indian
10 DNA, 25 August 2015. ernment of Gujarat. Nationalism, Paul Wallace (ed), Delhi: Sage
11 Indian Express, 25 August 2015. GoI (2013): “All India Survey on Higher Education Publications, pp 199–219.
12 Indian Express, 31 August 2015. 2011–12 (Provisional),” Department of Higher Shah, T, A Gulati, P Hemant, G Shreedhar and
13 Indian Express, 17 August 2015. Education, Ministry of Human and Resource R C Jain (2009): “Secret of Gujarat’s Agrarian
14 DNA, 25 August 2015. Development, New Delhi. Miracle after 2000,” Economic & Political Weekly,
15 Divya Bhaskar, 25 August 2015. Hardiman, David (1987): The Coming of the Devi: Vol 44, No 52, pp 45–55.
16 Divya Bhaskar, 27 September 2015. Adivasi Assertion in Western India, New Delhi: Shani, Ornit (2007): Communalism, Caste and
Oxford University Press. Hindu Nationalism, Cambridge: Cambridge
17 Here, EBC implicitly covers families belonging
Hirway, Indira (2009): Losing the Sparkle: Impact University Press.
to the General or unreserved category.
of the Global Crisis on the Diamond Cutting and Sukumar, N (2013): “Quota’s Children: The Perils
18 Times of India, 25 September 2015.
Polishing Industry, in India, United Nations of Getting Educated,” Beyond Inclusion: The
19 Times of India, 30 April 2016. Development Programme, New Delhi. Practice of Equal Excess in Higher Education,
20 Hardik Patel joined BJP on the eve of the 2022 Jaffrelot, Christopher and A Kalaiyarasan (2020): Satish Deshpande and Usha Zacharias (eds),
assembly elections (Shah 2020). “Dominant Castes: From Bullock Capitalists to New Delhi: Routledge, pp 205–21.
21 Under the Right to Information Act, 2005, the OBCs,” Interpreting Politics, Situated Knowledge, Unni, Jeemol and Ravikiran Naik (2014): “Gujarat’s
author asked the GoG to provide a breakdown India and the Rudolph Legacy, Echeverri-Gent Employment Story: Growth with Informality,”
of the listed beneficiary castes (out of 58 gen- John and Sadiq Kamal (eds), Delhi: Oxford Growth or Development: Which Way Is Gujarat
eral castes in the state) under the GUEEDC. University Press, pp 125–55. Going? Indira Hirway, Amita Shah and Ghan-
The government replied that it does not main- Nair, Rahul (2018): “Patidars Unite to Generate Busi- shyam Shah (eds), New Delhi: Oxford Univer-
tain such information. ness and Jobs for Community,” Quint, 9 January, sity Press, pp 270–300.
https://www.thequint.com/news/india/patel- Vanani, Nanubhai (2017): Anamat Andolan 2015–16:
businessmen-organise-three-day-summit-in- Ek Chintan, Rajkot: Pravin Prakashan.
References gujarat. Vashi, Dinkarbhai (1961): “Vishwavidhyalayona Vid-
Bhatt, Anil (1970): “Caste and Political Mobilisation NUEPA (2014): “Secondary Education in India: hyarthio ni Shthiti,” Gujarat Parichay, Parikh
in a Gujarat District,” Caste in Indian Politics, Progress towards Universalization,” National Ramlal (ed), President Reception Committee of
Rajni Kothari (ed), Hyderabad: Orient Longman, University of Educational Planning and Ad- Bhartiya Rashtriya Congress 66th Adhiveshan,
pp 283–322. ministration, Delhi. Bhavnagar, pp 386–88.

Economic & Political Weekly EPW june 22, 2024 vol lIX no 25 49
SPECIAL ARTICLE

Rhetoric of Collective Action in North East India

Lessons from GIN-FED, Karbi Anglong, Assam

Rajib Sutradhar

I
In North East India, governments see cooperatives as a n the highlands of North East India, identities and livelihoods
new mode of engagement with indigenous growers to of indigenous communities are intertwined, regulated by
customary laws (Kamei 2018) which are constitutionally
overcome the challenges of integrating the region into
recognised under the Sixth Schedule of the Constitution. Unlike
market-led development. The Ginger Growers Cooperative other parts of India, property rights over land and forests are
Federation was set up in Karbi Anglong, Assam in the under the formal ownership of community institutions. These
late 2000s to bring together ginger growers from institutions, such as village councils headed by village chiefs,
serve as custodians of cultural practices and norms which are
different communities to facilitate better connections
embedded in the collective ethos that guides the community
with the organic ginger market. After a decade, the management of resources for livelihoods. Many communities
cooperative has been sourcing the bulk of its produce continue to practise shifting cultivation, moving from one
only via traders—the agent it was supposed to replace. place to the other, without any notion of individual ownership.
Such community-centric subsistence livelihoods have come
Thus, GIN-FED represents only a rhetoric of collective
under strain in recent decades due to development interven-
action, reminiscent of earlier development interventions tions of the state and other development agencies, which en-
that undermine traditional community institutions, tail active discouragement of shifting cultivation and a move-
without which cooperation among indigenous growers ment away from subsistence agriculture towards commercial
agriculture, horticulture, and plantation crops under the
is not feasible.
framework of formal laws.
However, the integration process has been far from smooth
due to the mismatch between institutional requirements of a
market-driven strategy and those that regulate the indigenous
society. The state and the market interact with community
institutions in complex and multiple ways, shaping the specific
ways in which such institutions have evolved over time.
Mostly, such interactions have undermined the institutional
foundations of community institutions, weakening the collec-
tive control over land and other resources, which has increas-
ingly been commodified over time (Mishra 2018). The result
has been an increasing differentiation of indigenous society as
the local elites serve their own interests, taking advantage of
ambiguities emerging due to the overlapping jurisdiction of
state and non-state actors. The scarcity of livelihood options
has resulted in an intensification of tensions between different
ethnic communities (Oinam 2003).
However, the governments at the centre and the state continue
to persist with such a developmental approach. In fact, in the
past two decades, low-intensity resource use in the region, such
as chemicals and pesticides, have been encouraged as a façade
to deepen the commercialisation process (Yadav et al 2004).
In the mid-2010s, in response to the growing demand for pro-
duce with organic attributes among high-income consumers
Rajib Sutradhar ([email protected]) teaches at the Department (Hansmann et al 2020), the Ministry of Agriculture and
of Economics, North-Eastern Hill University, Shillong Campus, Farmers Welfare promoted the region as the “Organic Capital
Meghalaya.
of India” under the Mission Organic Value Chain Development
Economic & Political Weekly EPW June 22, 2024 vol lIX no 25 57
SPECIAL ARTICLE

for North Eastern Region (MOVCD-NER) (PIB 2016). The govern- land and forests in the region. In doing so, we also attempt to
ment has been actively involved in promoting cooperatives as explore the role of merchant capital and its persistent control
a new mode of engagement with indigenous growers from over the indigenous economy, which has altered the livelihood
different communities and facilitating their participation in outcomes in the region.
the organic markets on better terms and conditions. We organise the remaining portion of the paper as follows.
Known as new-generation cooperatives (Singh 2008), farmer- We discuss about the weakening of traditional institutions and
producer organisations (FPOs) are used in MOVCD-NER as a key the emergence of local elites within the indigenous society in
element of functional infrastructure to promote commercial Karbi Anglong to understand the context of GIN-FED’s entry.
agriculture, including organic farming in the region. Apart from We then discuss the findings of primary survey results, focus-
serving as channels to provide input, technology, credit, and ing primarily on the control of traders and the failure of GIN-
better market access to indigenous farmers (Tula and Goswami FED. We conclude with policy suggestions.
2023), FPOs are expected to facilitate value addition while
resolving differentiation that may emerge at the inter- and Weakening of Traditional Institutions
intra-community levels. By the end of 2022, the number of FPOs Marx (1937) observed long ago that people make their own
promoted in the region by several state agencies such as the decisions and create their own history, but they do so under
Small Farmers’ Agri-Business Consortium (SFAC) and the Nation- the influences of external forces and desires. The livelihood
al Bank for Agriculture and Rural Development (NABARD) crisis in Karbi Anglong bears testimony to this fact. Located in
stands at 103 (SFAC nd). In this context, we have raised the Barai hill region, Karbi Anglong is home to many indigenous
question as to whether collective action is feasible among in- communities, including Karbi, Dimasa Kachari, Kuki and Naga
digenous growers in an environment where community insti- and other non-tribal communities such as Nepali and Bihari.
tutions that regulate their economic and social lives are under- Karbi is the most dominant community in the district. They
mined. More specifically, we ask the question as to whether a typify social and economic lives of indigenous communities in
top-down structure of a development model that overlooks the North East India, which are regulated by customary laws.
institutional specificity of indigenous communities can achieve Such laws empower Karbi to protect the long-held notion of
cooperation among indigenous growers. having common resources under the custody of the village
Against this background, we study the case of the Ginger council, headed by the village chief known as sarthe or me
Growers Cooperative Federation (GIN-FED), a cooperative from (Lyall 1908). The village chief is a position held on a heredi-
Karbi Anglong district, Assam, which received significant me- tary basis. He is expected to be a reservoir of local customs and
dia coverage in national dailies in late 2010 (Talukdar 2008a; rituals, which are preserved orally. Such practices recognise
Roy 2008). Amid ethnic clashes, the district administration set the rights of indigenous communities to protect age-old tradi-
up GIN-FED in 2007 to bring ginger farmers from different in- tions of having common resources such as land, rivers, forests
digenous communities on one platform. In terms of govern- and other resources. Embedded in customary arrangements
ment involvement in the provision of facilities in input and are communal owning and sharing of resources, which form
output markets, GIN-FED has many parallels with the present- both the identities and livelihoods of indigenous communities
day FPOs in the region. The expectation from GIN-FED was that such as the Karbi.
collective efforts initiated by the district administration would Many among them continue to practise jhum or shifting culti-
pave the way for indigenous communities, enmeshed in ethnic vation as part of their subsistence livelihoods within the realm
violence, onto the road to high growth and prosperity by facili- of customary practices. At the beginning of the jhum season,
tating their participation in the organic market on better terms the village chief allots lands to farmer households as per their
and conditions, bypassing the local traders (District Adminis- needs, after which the plot is handed back to the sarthe (Tula and
tration, Karbi Anglong nd). Goswami 2023). Typically, a large family gets more land allotted
Soon after, GIN-FED was held up in the national and regional as per the customary rule. Livelihoods of the Karbi, like any
media as a model of development to be replicated in other indigenous community, follow an integrated system with a wide
parts of North East India. However, a decade later, when this range of activities. While they mostly grow summer rice, they
author undertook a visit to GIN-FED, the cooperative was a pale also rear cattle, pigs, and fowls to supplement their livelihoods.
shadow of its former self, wearing a deserted look even during Many of them are also into crafts such as blacksmiths, handi-
the peak ginger season. There was little farmer presence in the crafts, etc, which contribute towards their subsistence livelihoods
farmer “cooperative,” as the organisation has now been sourcing (Bathari 2008). For daily needs, they also depend heavily on
ginger via traders, the same agent it was supposed to replace. forests, which provide them with food and feeds for livestock,
Why did GIN-FED fail to replace the traders in the ginger medicinal herbs, and ensure the preservation of the culture of
economy? What lessons does GIN-FED hold for FPOs making the people. The use of land and other common resources on a
an entry into the region as a new developmental genie? We communitarian basis is embedded in customary laws.
combine insights from primary surveys conducted in Karbi However, the lives of the Karbi community changed signifi-
Anglong district during 2017–18 with secondary literature to cantly due to repeated interventions by the colonial and, later,
understand the livelihood crisis by focusing on the political post-independence governments. The British brought the region
economy of the transformation in the community rights over under the “provisions of Excluded and Partially excluded Area,”
58 June 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 SPECIAL ARTICLE

ostensibly to protect the distinctive identities of indigenous among indigenous societies. Most indigenous communities
communities, but their interest in an accumulation drive meant that have some prominent positions, including warriors, councillors,
forests and biodiversity were designated as “state property” clan elders, village chiefs and council members. Such social
(Sarma 2022). Post-independence, the Indian state introduced hierarchies serve societal purposes rooted in the history and
the Sixth Schedule to provide indigenous communities with geography of the community (Wouters 2020). Over time,
political autonomy, exclusive belonging and recognition of external forces such as urbanisation and education gave rise to
customary laws over general laws passed by the state legislation. middle and elite classes, which changed the power dynamics
However, the postcolonial state also introduced a clause of within the communities.
exceptions that undermined the spirit of the Sixth Schedule. The spread of Christianity in the region also brought, in its
For example, the schedule permits the transfer of land from wake, a new belief system that broke the spiritual connection
tribals to non-tribal people with the prior approval of the with traditional customs and rituals governing the use of the
district deputy commissioner. Over time, such loopholes facili- commons (Maaker 2018). As per the latest census record,
tated waves of migration of other indigenous and non-indige- Christians account for 17% of the total population in the
nous communities, such as Nepali and Bihari, into the district. district of Karbi Anglong (Office of the Registrar General and
During 1951–61, the population growth in Karbi Anglong was Census Commissioner 2011). The new elites emerging from
a staggering 67%, much higher than anywhere in the state the confluences of various factors include local politicians,
(Fernandes 2016). bussinesspersons, the trading class and large landowners.
The immigration of Kukis fleeing the conflicts in Manipur They barely connect with their traditional past, evacuating
during the 1990s further reduced the share of the Karbi popu- themselves from the moral order of the customary practices
lation in the district by early 2000. The share of indigenous that foster the notion of shared prosperity in an indigenous
population in the district changed from over 70% in the 1970s society (Wouters 2020).
to only 55% by the early 2000s, but the share of the Karbi fell Though there is a provision for the election of representa-
even more sharply (Bathari 2008). Other indigenous commu- tives every five years, the DAC is dominated by local elites, who
nities such as Kuki and Dimasa follow similar customary prac- took advantage of the autonomy granted under the Sixth
tices to regulate the management of commons, including land, Schedule to serve their own interests at the expense of the com-
based on the transmission of oral history and traditions passed munity by undermining customary rules and practices. Under
over generations. However, such shared practices by different the Sixth Schedule, the DAC set up the office of the village
indigenous groups mean that they also frequently engage in leader or gaonburah (who is referred to as sarkari gaonburah),
conflicts due to their contested claims over the commons. creating two power centres, which undermined the traditional
As per the provision introduced in the Sixth Schedule, the role of the sarthe, despite the latter’s status as a custodian of
district autonomous council (DAC) was created ostensibly to village affairs. The DAC appoints one of the sarthes as sarkari
empower indigenous communities with provisions to regulate gaonburah, who serves as a mediator between the DAC and
their own state of affairs under customary laws, giving them the people. He functions independently of other sarthes
exclusive control over the territories. In reality, the schedule (Ingti 2014). Given that his appointment comes from the DAC,
undermines the rights of indigenous communities by bestowing the sarkari gaonburah is answerable to the elites managing
land administration on DAC. The traditional decision-maker DAC rather than the village community.
village headman does not have the same role in the new adminis- The state’s intervention in the region takes the form of
tration (Bathari 2008; Ingti 2014). The state, the district ad- “neo-liberal developmentalism” (Bhattacharya 2019), with
ministration and their local partners, the DAC, still carry the many of these interventions entailing the expansion of roads
colonial myth of treating common land as “wasteland” that and connectivity and the promotion of developmental activities
could be better utilised through commercial use (Sarma 2022). under the framework of formal laws. The DAC serves as an
For example, the Land Acquisition Act, 1894 extends the extended arm of the state, undermining the interests of the
right of acquiring land to tribal areas under the Sixth Schedule. communities they were supposed to represent. The elites use
Policies followed by the central government have actively the DAC to successfully craft new legality to legitimise their
discouraged agricultural practices of indigenous communi- accumulation drive. Developmental interventions undertaken
ties in favour of plantation and cash crops within the frame- by the central and state bodies encourage the DAC to promote
work of formal laws, which view land as an individual asset private ownership of land in lieu of community ownership un-
(Darlong 2004). The DAC facilitates such intervention at the der the village council. A case in point is the coffee and rubber
village level, patronising the privatisation of land instead of boards which have long been involved in the promotion of
regarding it as common property under the jurisdiction of the plantation crops in the region, with subsidies tied to one hav-
village council. ing a land title in their name (Fernandes 2016).
Under the present arrangement, the sarkari gaonburah is
Emergence of New Elites treated as the owner of community land rather than its
The DACs’ intervention at the village level has the effect of custodian. He issues a no objection certificate (NOC), which has
increasing differentiation within the indigenous society. How- become the root cause of privatisation of land in the region.
ever, this is not to say that social hierarchies did not exist The DAC vetoes the NOC document as land patta, giving its
Economic & Political Weekly EPW June 22, 2024 vol lIX no 25 59
SPECIAL ARTICLE

holder de facto control over the plot. Such interventions in a hub of organic ginger. Official records of the district agricul-
daily life also influence what counts as legal in an indigenous ture office (DAO) report an increase in ginger production from
society. After all, people actively acquire what they encounter 7,000 metric tonnes (MT) in the early 2000s to 30,000 MT in the
daily, influencing their interpretation of legalities in favour of 2010s, with more than 10,000 farmers from different indigenous
formal laws (Maaker 2020). Over time, even the customary groups growing the crop either solo or intercropping with other
village chiefs have started issuing NOCs in Karbi Anglong crops such as turmeric and tapioca in a jhum field, devoid of any
(Sarma 2022). Such arrangements primarily work to the synthetic inputs (Sutradhar 2018). Coincidentally, in the early
advantage of local elites, better endowed with physical and 2000s, the region witnessed ethnic clashes escalating to a new
social capital. Typically, households possessing larger plots high that claimed the lives of over 200 people, besides injuring
of land and enjoying proximity to sarthes are more proactive another 200 and displacing over 60,000 (Talukdar 2008a).
in registering their landholdings with the DAC, even as lands However, as ethnic conflicts reached a tipping point, the clashes
possessed by the less-endowed households remain undocu- spread to the ginger field.
mented. Elites treat the acquisition of land as a pathway out of Typically, the dispossessed or marginalised within the indig-
marginality based on traditional, agrarian society, as such enous communities are the first ones to join armed struggles
land is increasingly used for large-scale plantations of coffee as foot soldiers against other communities, demanding exclu-
and rubber (Wouters 2020). sive rights over territories. For example, Kukis, who account
While the DAC remains an active agent of the state, interfer- for only 1.32% of the population in the district, produce the
ing with the legal fabric that regulates economic lives of the bulk of the ginger produced in Singhasan Hills of the region.1
indigenous communities, it is, in reality, underfunded to make Karbi, still the most dominant community in the region,
any meaningful intervention to promote the sustainable diver- consider ginger cultivation by Kukis not only an infringement
sification of livelihoods. For example, the state still controls on their dominance but also a threat to their livelihoods.
crucial departments such as education, health and rural develop- Militant groups—United People’s Democratic Solidarity and
ment. The DAC usurped whatever limited power was delegated Kuki Revolutionary Army, with claims of representing the
from the state without passing it down to the village council. Karbis and the Kukis, respectively—frequently get involved in
Most basic developmental problems, such as education, rural armed conflicts in the ginger fields, with extortion demands on
electrification, rural roads, and mobile network, remain unad- traders and diktats to stop the cultivation of ginger altogether
dressed (Ingti 2014). The district lags behind in most develop- (Talukdar 2008b).
mental indicators. At 27.5%, the district has one of the highest Simplistically, the district administration saw a high demand
percentages of children of schoolgoing age with never enrolled for ginger grown in the region as a pathway out of ethnic
status (AHDR 2014). Rural industries are conspicuously absent violence and poverty to rural development. Towards that vision,
in the region to provide alternative sources of livelihood. The the administrative body utilised the seed money of `2 crore
employment and livelihood index prepared by the latest Assam available under the Rashtriya Shram Vikas Yojana to set up
Human Development Report shows the district of Karbi Anglong GIN-FED under the State Cooperative Act known as Societies
in a very poor light with a score of 0.12 compared with the Registration Act, 1886 to promote solidarities among ginger
average score of 0.34 in the state and the score of 1 reported by growers from different communities while connecting them with
Kamrup district (AHDR 2014). the organic markets on better terms and conditions. The coop-
erative was federated, with an apex governing body at the top,
The Context of GIN-FED’s Entry comprising farmers, bankers, and district agricultural officers.
Typical of the highlands of the North East, Karbi Anglong has a The seed money offered by the district administration was
long history of ethnic conflicts that originate in the exclusivist complemented with `100 as a share contribution from each of
approach adopted by indigenous communities over the question the 3,500-odd member farmers (Talukdar 2008b). The Inter-
of who came first to the region, but such conflicts intensified in national Fund for Agricultural Development also stepped in,
the wake of the livelihood crisis. While the Karbis already got partnering with the cooperative management to set up a net-
their autonomous bodies, similar demands from Kukis upset work of collection centres to source ginger produced by the
the former, often triggering ethnic clashes between the two farmers in remote locations. The collection centres are linked
communities (Damzen 2008). These communities frequently in a hub-and-spoke format to a distribution centre, which is
clash over land which is becoming an increasingly scarce endowed with processing and drying facilities, to enable the
source of subsistence livelihood. As noted in Manipur, ethnic members to move higher up the value chain.
clashes intensified as cash crops made deep inroads into the GIN-FED’s most talked about intervention in the region’s
region’s economy (Oinam 2003). The region has a long history ginger economy was the introduction of G-Card, India’s first
of the cultivation of ginger and is considered especially suita- commodity-based credit-cum-debit card, to free its member
ble for growing varieties of ginger such as Nadia and Aizol, farmers from the clutches of traders and middlemen, who exploit
which command higher premiums due to the high content of them through interlocking credit arrangements (Talukdar
dry rhizome and a high recovery of oleoresin oil. 2008a). The district administration partnered with the State
The period beginning in 2000 saw an intensification of Bank of India to introduce the card entailing a credit provision
efforts by the district administration to promote the region as of `5,000 per bigha,2 with a maximum cap of `10,000 for two
60 June 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 SPECIAL ARTICLE

bighas. To ensure that the farmers, once freed from the clutches into ghost members, maintaining little contact with the coop-
of traders, could take advantage of the market, GIN-FED inter- erative management. Few among them reported ever attend-
vened in the price-setting process too. The cooperative’s ing any meeting organised by GIN-FED. All of them continue to
management would fix the procurement prices for a period of sell their ginger harvest to the traders like before, prompting
one or two weeks, drawing on information collected about us to question what explains the traders’ control over the
prices from major wholesale markets across India. region’s ginger economy.
Acting on behalf of farmers, the cooperative would also
bargain and secure deals from bulk buyers such as Kishan Dominance of Merchant Capital
Network, Sheel Biotech, and Shrestha Natural Products with Marwari traders and their local agents have a ubiquitous
good payment norms. The district administration also part- presence in the district’s economy since long. However, their
nered with the Northeast Frontier Railway to facilitate the stranglehold in the region has increased over time due to the
transportation of the ginger produce sourced through the co- livelihood crisis. Despite growing ginger as a commercial crop,
operative at reduced transportation costs. The immediate ef- to support their subsistence livelihoods, more than 80% of the
fect of GIN-FED’s elaborate intervention was a rise in ginger sample households rely on off-farm jobs, which are casual in
prices to `10– `12 per kilogram (kg) from `4– `6 per kg that nature and are hardly available in the village. Most house-
farmers had received earlier. Ten years later, despite having holds report members commuting to Diphu, Manza and near-
such an elaborate structure and a supportive district adminis- by urban centres to work as drivers, wage workers in restau-
tration on its side, GIN-FED has hardly any presence in the re- rants and other petty employments. Outmigration from the
gion’s ginger economy, procuring much of the ginger harvest region in search of casual livelihood is commonly reported.
from the traders it was supposed to replace. The pertinent In Gangjan village, a cohort of 30–40 youths regularly travel
question in this context is why GIN-FED failed to displace the to the southern state of Kerala during the lean season to
traders in the region’s ginger economy. make ends meet.
Such a trend is also incipient in other villages in the region.
The Survey Basic public entitlement programmes such as fair price shops and
To understand GIN-FED’s failure, we undertook a field survey the Mahatma Gandhi National Rural Employment Guarantee
that was implemented during 2017–18, preceded by a pilot Programme are also poorly implemented, if not missing alto-
survey and key informant interviews conducted with stake- gether, accentuating the livelihood crisis due to the lack of a
holders which include farmer households, traders, district social safety net. Few households reported having below
agriculture officers and the management of GIN-FED, includ- poverty line cards, let alone using them to access entitlements.
ing its chief executive officer (CEO). Drawing on the informa- With opportunities for subsistence livelihoods drying up in the
tion thus collected, we identified ginger-growing pockets that region, most indigenous farmers find themselves perennially
were used by GIN-FED to source ginger from farmers directly. in need of cash, which creates an entry point for traders. The
The villages selected for the survey include Julian, Gangjan, provision of the Sixth Schedule that restricts trade between
Katlen, Phaifleng, Nailalung, Dilangi, Lang Soliet, and Khuti indigenous communities and traders from outside the region is
Colony. A sample of 250 farmer households belonging to found to be ineffective.
different indigenous communities, including half of those in Traders play an active role in facilitating the transition
the roster of GIN-FED, were enumerated to get detailed infor- from a subsistence to a market-based economy as they take
mation on their socio-economic characteristics and their advantage of the farmers’ cash needs by combining money-
relations with the agents active in the economy, including lending with trade to fill the gap in the rural ecosystem.
GIN-FED and traders. Traders provide a one-point solution to everything that the
Ginger growers from Karbi (22.7%), Kuki (23%), Dimasa indigenous farmers need in a moment of crisis. The network
(29%) and Nepali (18.21%) communities account for the bulk of traders, involving local agents, has spread deep into
of our respondents, with Garoh and Harijan constituting the the region, delivering money and goods in advance. Local
remaining sample respondents.3 Most farmer households are handicrafts and other locally produced goods lost out in
poorly endowed in terms of human capital, with approxi- competition with manufactured goods brought to the villages
mately 40% of them reporting education below primary. A by the traders. Short on cash, most indigenous growers
typical Kuki household is more involved in ginger production, would settle transactions later with interest rates as high
with the average farmland used for ginger cultivation being as 3% per month.
3.5 bigha compared with 2 bighas reported by other house- The traders saw cash crops like ginger as a new avenue for
holds. Most Kukis live in Sighasan region, which produces a accumulating surplus by controlling the local economy. They
higher share of ginger sourced from the region. We also com- dictate farmers with loans and advances to produce ginger
plement the primary survey with secondary data and a review and other cash crops such as tapioca, red pepper, turmeric,
of extensive literature. maize, castor oil, etc. Farmers increasingly rely on such crops
The official register maintained by GIN-FED reports 7,011 as the only means to secure subsistence livelihood. More than
members, up from 3,000 recorded in the first year of its 40% of the sampled households report receiving cash of
establishment. However, most member farmers have turned `5,000 and higher from the traders, while most others take

Economic & Political Weekly EPW June 22, 2024 vol lIX no 25 61
SPECIAL ARTICLE

advances in kind such as rations of essential goods. When surprisingly, ginger trade finds itself under attack from differ-
goods are supplied in credit, the payment is settled after har- ent militant groups representing various indigenous groups.
vests with high interest rates. Traders exercise absolute control
over the terms of exchange through interlocking arrange- Failure of GIN-FED
ments,4 manipulating the prices of cash crops sourced from The district administration viewed ethnic clashes in ginger
the farmers and the final goods sold to them. Like the neigh- fields as resulting from fights over potential riches from the
bouring North Cachar Hills (Barbora 2002), the prices of most cultivation of the crop, much of which was being appropriated
essential goods in the valley are higher than those available in by the traders. In response, the administration set up GIN-FED
nearby Diphu and Manza town centres. However, traders as a collective organisation to build a vision of shared prosperity
would pay much lower prices for ginger (`10– `12 per kg), which entails promoting solidarity among the member farmers
when the same was traded for `80– `90 per kg in Guwahati from different indigenous groups by bringing them on one
(Telegraph 2014). Bir Bahadur Thapa, gaonburah of Langsoliet platform and facilitating their better connection with the
and himself a ginger grower, noted, market, bypassing traders and middlemen.
Gone are the days when we used to get `20– `25 per kg of ginger, However, a cooperative, imbued with the vision of shared
which lasted for one or two seasons. We are now getting the same or prosperity, has to be embedded in the local context and cater to
even lower price of ginger than a decade before while everything that local needs and aspirations. A salient feature of such a collec-
we are buying now has become more expensive. tive organisation is internal democracy that drives horizontal
Frequent fluctuations in market prices mean that the decision-making rather than a vertical one (Ashique and Sarma
Karbi people undergo substantial hardships when the market 2021). Even a cursory look at the management structure shows
does not perform well for them. The ecosystem dominated that GIN-FED is anything but that. GIN-FED’s management is
by merchant capital is one of high indebtedness and a rising heavily dominated by outsiders, which include district agricul-
incidence of landlessness and tenancy. Debt is the reason ture officers, non-governmental organisation officials and bank
for the loss of land. While traders would not insist on legal managers, who have little stake in the local economy. Its modus
land transfer upon failure to settle debts, which is not allowed operandi was never designed to appeal to the collective values
under the Sixth Schedule, there is nothing in the schedule and norms that form the identities and livelihoods of indige-
to stop the intra-community transfer of land. The elites nous communities. Sarthe or the village council has no role
within the community would settle the debt in exchange for in the management, with only five farmers from the region
getting land transferred from the indebted households to figuring in the management. Among them, one Karbi being
their name. appointed as the CEO did little to enthuse Kukis, who produce
Thus, the dual process of exploitation by traders and the the bulk of the ginger.
appropriation of land by the local elites squeeze the liveli- In reality, the modus operandi of GIN-FED reminds one of an
hoods of indigenous growers. Landlessness and land aliena- earlier neo-liberal intervention in the region. How G-Card, the
tion, on the one hand, and the concentration of landholdings cooperative’s most notable intervention, operated is instruc-
among the few elites, on the other, have emerged as a new tive in this regard. The credit provision introduced through
feature of indigenous society in the district. Forms of tenancy G-Card is tied with one having land titles in their name. The
such as paika, bandhaki, and mena have become common in rationale behind making a credit provision is that it would
the district (Bathari 2008). Among the sampled households, free member farmers from the control of merchant traders,
Nepalis, who live in low-lying areas and mostly rear livestock thereby enabling them to sell their harvest at better prices.
for livelihood, take land on lease from the Karbi or the Dimasa. Such an intervention, however, betrays a lack of understand-
Practices of leasing land even within a community are also ing on the part of the district administration as to why farmers
noted in the survey region. The district has as many as 27.8% depended on traders for cash and other essentials. The trigger
of the households that do not have any cultivable land and point for the interlocking arrangement involving traders is
approximately 1.2% of the households do not even have the livelihood crisis, caused by a decline in access to land
any homestead (AHDR 2014). Thus, the merchant capital and forest as commons for securing subsistence livelihoods.
binds the ginger growers to the suppliers of input, finance The crisis is further accentuated by a non-functioning social
and consumption goods and then acts as a purchaser of safety network.
goods produced by the growers, in the process altering the As livelihood issues remained unresolved, merchant capital
indigenous economy. continued to hold its sway in the region. Farmers’ dependence
The surplus accumulated by merchant capital often finds its on traders for credit and other advances, such as rations, con-
way into ethnic politics as traders spend money on local tinued. More than half of the sampled households have report-
politics to maintain their control over the region’s economy. ed indebtedness to traders. Tied with the obligation to pay
Candidates from different parties contesting elections to DAC back advances, most farmers continue to sell their harvest to
rely on the same dominant Marwari ginger trader for dona- the local agents employed by the traders. Unsurprisingly, most
tions to meet the election expenses.5 Merchant capital, thus, of them, short on cash, defaulted on the credit obtained
entered the subsistence peasant economy of Karbi Anglong through the G-Card. The district administration could do
as a comprador, aligning its interest with local elites. Not little to recover the loans due to the quasi-legal status of
62 June 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
 SPECIAL ARTICLE

landholdings and discontinued the credit programme the resources from non-capitalist spaces, and squeezing out liveli-
following year. hoods of peasants/petty producers. The resultant livelihood
Traders continue to control the region’s ginger economy crisis also has the effect of strengthening the control of trad-
through a network of local agents, using the interlocking ar- ers, who exploit the farmers using interlocking arrangements.
rangement of credit and rations. After a decade, GIN-FED has a Disruptions to local livelihoods also manifest in the intensifi-
marginal presence in the district’s ginger economy. The pro- cation of ethnic clashes among indigenous communities.
duce sourced by the cooperative stands at only 600 MT as The course correction in development interventions in high-
compared to the total production of 32,000 MT.6 Much of the land North East requires a set of comprehensive policies to rec-
ginger procurement done by GIN-FED involves only traders, ognise and safeguard the collective rights of the indigenous
ironically the same agent that the cooperative was supposed to people over land and forests, as part of overarching policies to
replace. The processing and drying facilities at the distribution protect their identities and livelihoods. Towards that goal, the
centre set up at Manza have mostly remained underutilised, traditional institutions of indigenous communities should be
and members have little stake in the limited value addition protected. Development interventions should be anchored
that happens in the centre. around and not bypass the community institutions which
To begin with, the livelihood crisis in the district was accen- serve as custodians of cultural practices and norms embedded
tuated by a decline in access to land as a community resource in collective ethos that regulate the community management
for subsistence livelihoods. GIN-FED’s intervention was never of resources for subsistence livelihoods.
meant to do any course correction. For most members, the However, both the colonial regime and the post-independ-
conditions attached for accessing credit through the G-Card ence government have systematically undermined traditional
was a throwback to earlier development interventions of the village institutions as inimical to modernisation and develop-
rubber and coffee boards, which linked subsidised credit and ment. In this context, GIN-FED entails only the rhetoric of col-
other facilities with private land ownership titles. Unsurpris- lective action as its top-down approach followed the same mo-
ingly, most members fail to see any shared material interest dus operandi that characterises earlier neo-liberal interven-
being realised through GIN-FED. tions in the region. Set up as a “cooperative,” the organisation
Soon after, the cooperative found itself under attack by dis- lacks any serious engagement with the values, culture, and
gruntled elements, with some of them even trying to set fire to norms of indigenous communities preserved and protected
its office complex.7 More than a decade later, the cooperative is by community institutions. For any collective action to be
now living on borrowed time, with its continuing dependence successful, development interventions in the region should
on the district agriculture department for financial assistance. actively involve community institutions.
Ironically, as the central government has been pursuing poli- In fact, such institutions should serve as a platform for inter-
cies to expand FPOs in the North East to promote organic agri- ventions designed to improve the well-being of the indigenous
culture, the GIN-FED office hosts one of them under the title communities. For example, village councils can serve as collec-
Jirsong Agro Producer Company (JAPC). Now, only time will tion centres to source produce from indigenous farmers while
tell whether JAPC is old wine in a new bottle, waiting for the protecting the collective property rights regime. A revitalised
same fate as GIN-FED. community institution can also enable a bottom-up develop-
ment approach by making such interventions more accounta-
Conclusions and the Way Forward ble to the public. Such an approach can ameliorate the liveli-
It is ironic that despite active support from the district admin- hood crisis and reduce the influence of merchant capital in
istration, policies to promote collective action among indigenous dictating the terms of trade with the indigenous communities.
communities have failed, though the latter have a long history In GIN-FED’s failure lies the lessons to be learned for develop-
of communal sharing. The lessons to be learned from the fail- ment agencies such as SFAC and North Eastern Development
ure of the GIN-FED experiment are sober. Its failure epitomises Finance Corporation Limited, entrusted with promoting FPOs
the epistemological crisis in how “development” is viewed and in the region. The number of FPOs in the region is set to increase if
interpreted by government agencies and their partners in the the central government goes ahead with its target of forming
development sector. Most of these bodies internalise the capi- another 10,000 FPOs by 2027–28 (PIB 2021). These FPOs are
talist notion of development inherited from the colonial days. rolled out with a one-size-fits-all approach, without any recog-
The result so far has been the undermining of traditional nition of the institutional specificities of economies of indige-
community institutions and the creation of a local elite, who nous communities in the region. The stakeholders in the FPO
serves as a local “proto capitalist,” facilitating the process of movement in the region will do well to learn from what went
primitive accumulation by mediating the integration of land and wrong with GIN-FED to avoid repeating the same mistakes.

Notes of the communities in the ginger economy of the region, with a network of over 100 local agents
1 This is as communicated by the local traders region. Some villages listed for the survey could expanding into almost every corner of the dis-
and GIN-FED officials. not be accessed due to logistical problems. trict. Farmers frequently mention him as being
2 1 bigha = 0.33 acres. 4 For a detailed discussion on interlocking factors close to DAC members across party affiliations.
3 The share of respondents from different indige- market, see Bardhan (1980). 6 As communicated by the CEO of GIN-FED.
nous communities does not reflect the importance 5 Ram Avtar Singh is the biggest trader in the 7 As communicated by the CEO of GIN-FED.

Economic & Political Weekly EPW June 22, 2024 vol lIX no 25 63
SPECIAL ARTICLE
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Perspectives, Diphu Campus, Assam University,
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creasing Organic Food Consumption: An Inte- September 02-14, 2024
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The Institute for Studies in Industrial Development (ISID), New Delhi invites applications
for a two-week Capacity Building Programme, being organised with support from Indian
10.1016/j.jclepro.2020.123058.
Council of Social Science Research (ICSSR), focused on the theme “Industrial Development
Hariss-White, Barbara (2016): “From Analysing and Policies for Realising Viksit Bharat@2047” to be conducted physically during
‘Filieres Vivrieres’ to Understanding Capital September 02-14, 2024 at ISID, New Delhi.
and Petty Production in Rural South India,”
The programme aims to enhance knowledge and research capabilities of the young
Journal of Agrarian Change, Vol 16, No 3, social science faculties/teachers in industrial development and policy research. The
pp 478–500. curriculum includes lectures by eminent experts on topic like industrialisation, potential
Ingti, Atul Kiri (2014): “Status of Traditional Village of manufacturing sector in achieving inclusive growth, MSMEs, competitiveness, R&D,
Institutions of the Karbis in the Context of the innovation, industry 4.0, e-commerce, and green industrialisation as well as technical
Sixth Schedule and Panchayat Raj Institutions sessions on big data analytics, machine learning, game theory, geographic information
in Assam,” Journal of North East Indian Cultures, system, industrial databases and academic writing.
Vol 1, No 2, pp 43–50. Applications are to be submitted online at https://forms.gle /ZQkvQ9a9RMX7mugp7.
Kamei, Richard (2018): “Tribal Land, Customary The last date for applying for the course is July 15, 2024. Selected candidates will be
Law and the Manipur Land Revenue and Land informed through email by July 20, 2024.
Reforms Act,” Economic & Political Weekly, For further details, please visit https://isid.org.in/short_term_programme /two-week-
Vol 53, No 19, pp 52–56. capacity-building-programme-september-2024/
Lyall, Sir Charles (1908): The Mikirs, Guwahati: Queries may be directed to: [email protected]
United Publishers.

64 June 22, 2024 vol lIX no 25 EPW Economic & Political Weekly
SPECIAL ARTICLE

Balancing Self-sufficiency and Health Risks

Should India Commercialise Genetically Modified Mustard Crop?

Sthanu R Nair, Pooja Bhatia

R
The need for genetically modified mustard in India is apeseed-mustard is the world’s third and India’s second
examined in light of making India self-sufficient in largest produced oilseed crop (RBI 2018). India accounts
for 16.22% of the global area for rapeseed-mustard
rapeseed-mustard oil production. Despite a domestic
cultivation and 9.55% of the crop’s global production (NMOOP
shortage, imports of rapeseed-mustard oil have not nd). India ranks fourth in both area and production of rape-
increased since the early 1990s due to the blending of seed-mustard crops after the European Union, Canada, and
the oil with other imported edible oils. Adopting the China. After palm and soybean oils, rapeseed-mustard oil is
the third largest edible oil consumed in India.
indigenously developed GM mustard crop could reduce
Although India started the commercial cultivation of a
import dependency, but the high levels of erucic acid genetically modified (GM) crop, namely Bacillus thuringiensis
levels in India’s GM mustard crop make it harmful for (Bt) cotton in 2002, disagreements regarding the need to
human consumption. From a public health point of view, adopt GM crops are ongoing among stakeholders (Qaim 2003;
Scoones 2008; Bhargava 2016). Those who oppose GM
India should continue oilseed plant breeding
crops in India have successfully resisted the government’s
programmes to develop an indigenous GM mustard efforts to extend the application of GM technology to other
crop variety with lower erucic acid levels that meet crops such as brinjal and mustard (Alam 2011; CEE 2010).
health standards. Nonetheless, in May 2017, the Genetic Engineering Appraisal
Committee (GEAC), India’s apex biosafety regulator, approved
the commercial cultivation of an indigenous GM Indian mus-
tard (botanical name, Brassica juncea) seed variety named
Dhara Mustard Hybrid 11 (DMH-11) (CGMCP 2016; Mayee 2017).
However, the union ministry of environment, forest and climate
change vetoed the GEAC approval and asked the regulator to
hold additional tests/studies on the GM crop (Hindu 2022a;
Prakash 2022). Five years later, as a precursor to the commer-
cial cultivation of the crop, on 25 October 2022, the GEAC yet
again approved the environmental release of DMH-11 for testing,
seed production, and cultivation (Hindu 2022a, 2022b; Koshy
2022). In contrast to its position in 2017, this time around, the
central government had come in defence of the GEAC decision
(Koshy 2022, 2023).
The reactions to these developments are on the expected
lines. The opponents have come down heavily against the
GEAC’s decision due to their familiar concerns about GM crops,1
while the advocates argue that the cultivation of high-yielding
GM mustard would make India self-reliant on edible oil pro-
duction by reducing huge importation of edible oils,2 save
foreign exchange, ensure disease resistance, and enhance
farmer’s income (Chakraborty et al 2023; Hindu 2022c).
The authors are thankful to an anonymous referee for the valuable The Supreme Court has accepted a number of petitions chal-
comments that helped improve the paper. lenging the commercial production of GM mustard and open
Sthanu R Nair ([email protected]) teaches economics and public field trials (Hindu 2017; Koshy 2023). The Court has indicated
policy at the Indian Institute of Management Kozhikode. that a government decision favouring the commercial use of
Pooja Bhatia ([email protected]) is a doctoral student in GM mustard seeds would be subject to judicial scrutiny. While
economics at IIM Kozhikode.
asking the “compelling reason” for the release of GM mustard,
50 June 22, 2024 vol Lix no 25 EPW Economic & Political Weekly
 SPECIAL ARTICLE
Figure 1: Imports of Edible Oils (tonnes) Figure 2: Proportion of Imported Edible Oils in Total Availability of Edible Oils
1,60,10,000 70
1,40,10,000 60
1,20,10,000
50
1,00,10,000
40
80,10,000
30
60,10,000
20
40,10,000
20,10,000 10

10,000 0
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017

1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
Source: FAOSTAT. Source: FAOSTAT.

the Supreme Court has told the government to make a well- rate of the area, production, and yield of total oilseeds de-
informed and well-intentioned decision about the issue and clined significantly between 1994–95 and 2018–19 (Table 1).
put more safeguards and consultative measures (Mittal 2017; This outcome is attributed to two factors (Sharma 2014; Reddy
Rajagopal 2022). 2009). First, starting from the early 1990s, edible oil imports
Given this scenario, we seek to examine the need to com- were gradually liberalised in India due to economic liberalisation
mercially cultivate GM mustard in India in order to achieve policies adopted since 1991 and India’s commitments under
self-sufficiency in rapeseed-mustard oil production and reduce the World Trade Organization (WTO). Import liberalisation
India’s dependency on edible oil imports.3 measures consisted of lowering import tariffs (from 1994), the
removal of quantitative restrictions on imports (from 2001),
Performance of India’s Edible Oil Economy and the reduction of state agencies’ monopoly of agricultural
India was nearly self-sufficient in edible oil production till the imports (from 1994) (Nair and Eapen 2015). These measures
mid-1960s. However, due to stagnation in the production and significantly increased the import of edible oils from the late
yield of oilseeds, and a rising demand for edible oils, the sup- 1990s onwards (Figures 1 and 2). In particular, the increase in
ply of edible oils fell far short of demand during the 1970s edible oil imports has been phenomenal since the early 2000s,
(Sharma 2014). This has necessitated a huge importation of which is attributed largely to the removal of quantitative re-
edible oils (Figures 1 and 2). The package of initiatives in the strictions on agricultural imports from 2001 onwards. Though
green revolution programme, which was launched in the mid- consumers benefited from the liberal import of edible oils
1960s, did not focus on the oilseeds sector, but rather on im- because of lowered prices, the farmers suffered as they were
proving the outputs and yields of wheat and rice. By the 1980s, unable to compete with the prices of imported oils (Reddy
India’s import of edible oils had reached a very high level. The 2009). As a result, farmers have reduced their allocation of
proportion of imported oils in the total availability (domesti- area to oilseed cultivation over time, thereby adversely affecting
cally produced plus imports) increased from 2.24% in the 1960s to India’s edible oil output.
10.79% in the 1970s to 27.57% in the 1980s (Figure 2). Second, the price support offered for oilseeds in the form
The Indian government launched various policy initiatives of minimum support prices (MSP) has become ineffective in
over time to achieve self-sufficiency in the production of edible incentivising farmers to expand oilseed cultivation areas
oils. These initiatives primarily included the development of (Srinivasan 2005; Dohlman et al 2003; Jha et al 2012). This
superior oilseed varieties, the improvement of cropping prac- is because—except for rapeseed-mustard—the MSP offered
tices and oilseed processing technology, the dissemination of for oilseeds in relation to their cost of production became
crop technology, the supply of extension services and subsi- inadequate compared to the MSP offered for paddy and
dised agriculture inputs, price, storage, and marketing sup- wheat (Table 2, p 52). The procurement of oilseeds by
port, encouragement for oil palm cultivation, and import re- state agencies has also been reduced due to the scattered
striction (Aneja et al 1995; World Bank 1999; Chand 2018). The distribution of oilseed-producing areas and the public food
impact of these initiatives was encouraging. The growth rate of management system’s relative bias against the procurement
the oilseed area, production and yield of total oilseeds increased of oilseeds.
significantly between 1985–86 and 1993–94 (Table 1, p 52).
The increase in oilseed output resulted in a decrease in edible A Different Scenario
oils imports, making India almost self-sufficient in edible oils Interestingly, the narrative presented so far on India’s overall
by the early 1990s (Figures 1 and 2). The proportion of imported edible oil sector holds only partially true for the rapeseed-mus-
edible oils in the total of available edible oils declined from tard oil sector. Like edible oils in general, the growth rate of
28.76% in 1985 to 2.1% in 1993. This policy outcome is popu- rapeseed-mustard oilseed’s area, production, and yield and of
larly known as the yellow revolution (Reddy 2009). rapeseed-mustard oil production increased significantly from
However, the growth momentum in the edible oils sector 1985 to 1994 than in previous years (Table 1 and Table 3, p 52).
could not be sustained in the 1990s and 2000s. The growth This has resulted in a decrease in rapeseed-mustard oil imports
Economic & Political Weekly EPW June 22, 2024 vol Lix no 25 51
SPECIAL ARTICLE
Figure 3: Import of Rapeseed/Mustard Oil (tonnes) Figure 4: Proportion of Import of Rapeseed-mustard Oil in Their Total
Availability (Domestic Production + Imports)
5,00,000
45
4,00,000 40
35
3,00,000 30
25
2,00,000 20
15
1,00,000 10
5
0
0
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016

1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
Source: FAOSTAT.
Source: FAOSTAT.

during approximately the same period (Figures 3 and 4). Subse- Figure 5: Import of Rapeseed-mustard Oil as a Percentage of Total Edible
Oil Import
quently, the performance of the rapeseed-mustard oilseeds
30
sector deteriorated from 1994–95 (Tables 1 and 3). However,
the aforementioned reasons such as increased imports of edible 25
oils and inadequate MSP for the poor performance of the 20
overall edible oils sector from the mid-1990s are not relevant
15
to the case of rapeseed-mustard oil.
Table 1: Compound Annual Growth Rate (CAGR) of Area, Production, 10
and Yield of Oilseeds
5
Total Oilseeds Rapeseed and Mustard
Period Area Production Yield Area Production Yield 0
1960–61 to 1.11 2.29 1.16 1.36 3.09 1.72
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
1984–85
1985–86 to 4.95 9.20 4.04 7.32 10.20 2.67 Source: FAOSTAT.
1993–94
Though the MSP for oilseeds such as groundnut (in Gujarat)
1994–95 to 0.13 1.87 1.70 0.05 1.98 1.93
2018–19 and soybean (in Madhya Pradesh) was generally lower than
Source: Authors’ calculations from the Handbook of Statistics on Indian Economy (HSIE), the cost of production, the MSP for rapeseed-mustard (in
Reserve Bank of India.
Rajasthan) was between 10.71% and 85.4% higher than the
Table 2: Minimum Support Prices over Cost (C2 Revised) of Production (%)
Year Paddy Wheat Groundnut Rapeseed-mustard Soybean (Yellow) cost of production during 1998–2017 (Table 2). Interestingly,
(Uttar Pradesh) (Uttar Pradesh) (Gujarat) (Rajasthan) (Madhya Pradesh) that range was larger than the range of paddy and wheat. This
1992–93 NA NA –9.86 32.17 –8.06 indicates that unlike the MSP for other oilseeds, the MSP for
1993–94 NA NA –26.61 38.46 –1.86
rapeseed-mustard was adequate in relation to the cost of pro-
1994–95 NA NA 9.00 39.26 –2.11
1995–96 NA NA –25.56 33.33 –1.88 duction. Hence, the plausible reason for the deterioration in
1996–97 22.90 26.56 –7.82 13.38 –23.08 the performance of the rapeseed-mustard seed oil sector since
1997–98 14.18 38.71 –4.58 –13.28 –8.20 the mid-1990s could be insufficient procurement by the official
1998–99 13.72 40.08 –5.20 20.77 –6.36 agencies, which in turn discouraged the cultivation of the crop
1998–99 13.72 40.08 –5.20 20.77 –6.36
(Down to Earth 2005).
1999–2000 20.04 34.22 –27.18 21.55 0.84
Unlike overall edible oil imports, barring a few spikes, India’s
2000–01 22.94 34.56 –38.94 24.48 –13.93
2001–02 18.47 33.27 46.61 44.44 –6.65 rapeseed-mustard oil imports have not witnessed an upward
2002–03 -4.94 20.74 –16.77 14.82 –47.73 movement after import liberalisation from the early 1990s
2003–04 20.34 29.32 34.49 68.42 –9.62 (Figure 3). Except for the period from 1973 to 1988, rapeseed-
2004–05 –3.28 6.39 –2.22 85.39 –7.41 mustard oil imports have constituted a negligible portion of
2005–06 0.44 –1.85 18.20 69.80 1.51
total edible oil imports and the total of available rapeseed-
2006–07 –5.75 31.39 –10.06 70.99 0.49
2007–08 24.02 51.57 –1.08 35.03 –0.94
mustard oil (Figures 4 and 5). Interestingly, the share was lowest
2008–09 15.23 37.99 9.33 34.74 3.37 after the removal of quantitative restrictions on agricultural
2009–10 25.40 30.54 –15.78 34.52 –3.83 imports in 2001.
2010–11 23.94 42.94 12.96 46.97 3.09 It is logical to expect that when a commodity is in short
2011–12 12.34 35.74 –8.01 11.66 –0.24 supply in the domestic market, imports of that commodity
2012–13 22.62 27.48 –24.56 27.30 5.76
are likely to rise. However, despite a domestic shortage of
2013–14 27.03 30.28 39.90 27.32 –14.47
2014–15 –8.10 –4.56 17.16 15.74 –3.82 Table 3: Production of Total Edible Oils and Rapeseed-mustard Oil (CAGR) (%)
2015–16 –8.50 5.95 22.53 10.71 –55.52 Period Total Edible Oils Rapeseed-mustard Oil
2016–17 –0.40 27.86 31.38 53.38 10.16 1961 to 1985 2.14 3.25
Sources: HSIE, RBI (2018) (for MSP); Dohlman et al (2003) and Directorate of Economics 1985 to 1994 7.35 8.23
and Statistics, Department of Agriculture and Cooperation, Ministry of Agriculture, 1994 to 2014 1.66 2.02
Government of India (for the cost of production). Source: Authors’ calculations from FAOSTAT, Food and Agriculture Organization.

52 June 22, 2024 vol Lix no 25 EPW Economic & Political Weekly
 SPECIAL ARTICLE

rapeseed-mustard oil, imports of the oil have been relatively stability of output growth has not helped India to meet its
low. This is in sharp contrast to the trend of the overall edible domestic requirement for rapeseed-mustard oil since the
oil sector. Within this context, the interesting question that mid-1990s.
emerges is: How did India manage to meet its demand for Finally, the last possibility for the decline in the import of
rapeseed-mustard oil after 1994–95, despite a decline in the rapeseed-mustard oil is the blending of this oil with other edi-
growth of the production of rapeseed-mustard oilseed and oil, ble oils to make up for its shortage. Indian food safety laws
and the import of the oil? Three possibilities were explored to such as the Prevention of Food Adulteration Act, 1954, Food
answer this question. Safety and Standards (Prohibition and Restrictions on Sales)
First, the possibility of lower consumption of rapeseed- Regulations, 2011, and the Bureau of Indian Standards permit
mustard oil was considered. Available data reveals that rela- the manufacture and selling of blended edible oils, subject to
tive to the compound annual growth rate (CAGR) of the per conditions. As a result, blending oils has become a common
capita production of rapeseed-mustard oil (0.05%), consump- practice in the Indian edible oil industry (Sunitha et al 1997).
tion growth was significantly larger both in rural (3.33%) In the absence of other possibilities that have been considered,
and urban (2.71%) areas during 1993–2010.4 Table 4 presents a blending seems to be the most plausible explanation for how
composition of the actual and forecast sales (in volume) of India has been able to meet its demand for mustard oil.
various edible oils during 2012–17 and 2018–22, respectively. According to edible oil industry sources and analysts, ap-
Treating sales figures as a proxy for consumption indicates proximately 60% to 85% of the mustard oil sold in the Indian
that rapeseed oil (the nearest equivalent to mustard oil) was market is estimated to be blended with cheaper oils such as
the only oil for which the share of actual sales increased over palm oil, rice bran oil, soybean oil, and used cooking oils.5 The
time as a percentage of total edible oil sales. proportion of other oils blended with mustard oil could range
Table 4: Sales of Various Edible Oil Categories as a Percentage of Total Edible Oil Sales from 5% to 50%. The key reasons pro-
Category Actual Sales Forecast Sales vided by the industry for blending mus-
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 tard oil with other oils are a demand–
Olive oil 0.12 0.15 0.17 0.16 0.15 0.14 0.14 0.13 0.13 0.13 0.13 supply mismatch in mustard oil, the
Palm oil 40.30 40.25 40.26 40.20 39.67 39.31 38.93 38.48 37.99 37.54 37.12
unaffordability of pure mustard oil by
Rapeseed oil 8.51 9.63 10.87 12.24 13.85 15.60 17.00 18.47 19.88 21.13 22.21
Soybean oil 19.05 18.91 18.72 18.37 18.03 17.67 17.17 16.78 16.37 15.99 15.60
price-sensitive rural consumers, and the
Sunflower oil 10.23 10.66 10.86 11.03 11.21 11.29 11.25 11.18 11.11 11.02 10.97 need to subsume the unpleasant smell
Other oil 21.79 20.40 19.13 18.01 17.08 15.99 15.51 14.95 14.52 14.19 13.97 of mustard oils.6
Source: Euromonitor International. Apart from these reasons, in the ex-
Between 2012 and 2017, the share of sales for rapeseed oil tant literature on food and nutrition science, several scientific
increased by 7.09 percentage points and this was expected to justifications are provided for blending edible oils for culinary
increase by 6.61 percentage points in the next five years. In purposes. First, most edible oils are not suitable for culinary
contrast, except for sunflower oil, the share of all the other purposes in an unmixed form due to their low physical, chemi-
edible oils in total edible oil sales declined during 2012–17. cal, and nutritional properties, and poor oxidative stability.7
Interestingly, the sales of all the other edible oils were fore- This can be overcome by blending any two oils with varied
casted to fall for five years, starting in 2017. In terms of CAGR, properties (Hashempour-Baltork et al 2016; Reyes-Hernandez
rapeseed oil recorded the highest actual sales during 2012–17, et al 2007; Gulla and Waghray 2011; Choudhary et al 2015).
and this trend was expected to continue for the next five years Second, imported edible oils, which do not meet the taste pref-
(Table 5). Notably, both the actual and forecasted sales growth erence of consumers of a domestic market, can be made more
of rapeseed oil are significantly higher than that of all other palatable by blending them with locally available or preferred
edible oils and total edible oils (Table 5). According to these oils (Murthi et al 1987; Chopra et al 2004; Choudhary et al
trends, it is clear that the lower importation of rapeseed-mus- 2013). Third, the consumption of blended edible oils has many
tard oil after 1994–95 was not caused by reduced consumption. positive health effects (Hashempour-Baltork et al 2016). For in-
Second, the stability of the growth of rapeseed-mustard stance, unsaturated fatty acid is proven to be higher, and cho-
seed and oil production was examined. It was found to deteri- lesterol level is found to be lower, in mustard oil blended with
orate after 1994–95, as compared to the period from 1985–86 rice bran oil (Choudhary and Grover 2013).8 Fourth, and most
to 1993–94 (Table 6), implying that the improvement in the
Table 6: Stability (Standard Deviation) of Production of Oilseeds and Edible Oils
Table 5: CAGR of Sales (in Volume) of Various Edible Oil Categories (%) Period Oilseeds Period Edible Oil
Category Actual Sales (2012–17) Forecast Sales (2018–22) Total Edible Rapeseed- Total Edible Rapeseed–
Oils mustard Oil Oils mustard Oil
Olive oil 21.34 7.50
1960–61 to 17.56 24.62 1961 to 1985 14.69 26.81
Palm oil 17.43 8.40
1984–85
Rapeseed oil 33.19 17.31
1985–86 to 16.11 18.57 1985 to 1994 13.52 16.22
Soybean oil 16.20 7.12 1993–94
Sunflower oil 20.25 9.00 1994–95 to 21.33 21.04 1994 to 2014 10.38 21.89
Other edible oil 11.00 6.88 2018–19
Total edible oil 18.00 9.71 Source: Authors’ calculations from HSIE (for production of oilseeds) and FAOSTAT (for
Source: Authors’ calculations from Euromonitor International. production of oil).

Economic & Political Weekly EPW June 22, 2024 vol Lix no 25 53
SPECIAL ARTICLE

importantly, edible oil extracted from the Indian mustard to expand the application of GM technology to other crops
crop,9 which is a traditional rapeseed-mustard cultivar, con- have not yielded the desired results. This paper examines the
tains high levels (40%–54% of total fatty acid) of a unique fat- need for India to cultivate GM mustard in order to achieve self-
ty acid, namely erucic acid (Kumar et al 2009; Thomas et al sufficiency in rapeseed-mustard oil production.
2012; Przybylski and Eskin 2011; Dorni et al 2018). India overcame an acute domestic demand–supply shortage
The rapeseed-mustard oil with a high erucic acid concen- in edible oils during the 1970s through various public policy
tration has been widely considered undesirable for human initiatives. The key outcomes of the initiatives were the im-
consumption, particularly in advanced countries (Foster et al proved production of oilseeds and a decrease in India’s de-
2009; World Bank 1999). This is because of the proven ad- pendency on edible oil imports. However, these achievements
verse health effects of high erucic acid rapeseed-mustard oil could not be sustained after the mid-1990s due to import liber-
in experimental animals. Rodents, cattle, piglets, and poultry alisation and an ineffective government price support system.
who were fed with traditional rapeseed oil and foods having The output growth of total oilseeds declined and the import of
high levels of erucic acid have been found to develop heart, edible oils increased. Although the output growth of rapeseed-
liver, and kidney diseases, and witness retarded growth and mustard oilseeds and oil has followed a similar trajectory, the
adverse changes to skeletal muscle and adrenal glands import of rapeseed-mustard oil did not increase after the liber-
(Thomasson and Boldingh 1955; Abdellatif and Vles 1970; alisation of edible oil imports, which began in the early 1990s.
McCutcheon et al 1976; Bremer and Norum 1982; Chien et al This may be due to the predominance of relatively expensive
1983). A simple and best way to reduce the high erucic acid and non-traditional canola-grade rapeseed oil in the world
content in mustard oil used for culinary purposes is to blend export market and the practice of blending rapeseed-mustard
it with other conventional edible oils. It is found that the oil with other edible oils. Blending has enabled India to meet
blending of mustard oil and other edible oils lowers the its domestic consumption demand for mustard oil. Between
presence/concentration of erucic acid in the mustard oil more 60% and 85% of the mustard oil sold in the Indian market is of
or less in proportion to the other oils blended with mustard the blended variety. The practice of edible oil blending is desir-
oil (Choudhary and Grover 2013; Chugh and Dhawan 2014; able for various reasons. Most importantly, it helps to reduce
Ali et al 2005; Ghafoorunissa 1994). the high level of erucic acid content in Indian mustard oil.
However, the health hazards associated with the high From a policy perspective, our findings suggest that India
presence of erucic acid in traditional mustard oil have not does not require GM mustard to reduce its mustard oil import
received serious attention in India so far. On the contrary, bill. Contrary to popular belief, the import of mustard oil does
advanced countries have strict controls over erucic acid content not put pressure on foreign exchange. India has been able to
in rapeseed-mustard oil through the use of canola-quality meet its domestic demand for mustard oil by blending mustard
rapeseed-mustard oil for culinary purposes (World Bank oil with other edible oils, which are predominantly imported,
1999; Dorni et al 2018). The high levels of erucic acid in tradi- and consist primarily of palm oil.13 Therefore, India’s mustard
tional rapeseed-mustard crops have motivated the advanced oil sector is indirectly import-dependent to the extent that other
countries to develop a new rapeseed crop variety, namely (imported) edible oils are blended with mustard oil. In other
canola,10 from 1974 to 1986, through plant-breeding pro- words, India is heavily import-dependent on overall edible
grammes and genetic modifications (Eskin and Przybylski oils, in particular palm oil, not mustard oil.
2003; Patterson 2011; Aukema and Campbell 2011; Przybylski T he import dependency would be reduced on account of
and Eskin 2011; Barthet 2016; Ghazani and Marangoni 2016). India’s cultivation of the indigenous GM mustard crop variety
The canola crop contains very low levels (less than 2% of total named DMH-11, which has a higher yield. Field trials have re-
fatty acid) of erucic acid, and is therefore, considered safe for vealed that the yield of DMH-11 is 50% to 55% higher than the
human consumption. The rapeseed oil extracted from the yield of existing mustard varieties (Pental and Pradhan nd).14
canola crop is known as canola quality or double low/zero oil, Another important advantage of the DMH-11 seed variety is
which is majorly produced by Canada and Europe (Ghazani that it has a lower erucic acid content (30% to 35%) than the
and Marangoni 2016). After the advent of the canola crop in traditional Indian mustard seed varieties (40% to 54%).15
the 1980s, traditional rapeseed oil was replaced by canola Therefore, an increase in mustard oil production due to the
quality oil in the international market (Foster et al 2009; cultivation of DMH-11 displaces some imports of other edible
Patterson 2011). Since canola oil has a premium price (Kumar oils, thereby saving precious foreign exchange. At the same
et al 2009) and does not suit Indian taste sensibilities (Przyb- time, to reduce the level of erucic acid, a relatively smaller
ylski and Eskin 2011),11 the import demand for it has been low amount of import of other edible oils is also required to blend
in India.12 This could be another possible reason for the lower with mustard oil. This is because the erucic acid content in
import of rapeseed-mustard oil in India. the oil extracted from DMH-11 is approximately 30%–35%,
which is far higher than the internationally accepted level of
Summary and Policy Conclusions <5% (Downey 1983; Dorni et al 2018). A s a result, like the
Over time, the adoption of GM crops has become a contentious traditional Indian mustard oil, the ideal way to consume the
issue in India. Although GM cotton was introduced for com- mustard oil ex tracted from DMH-11 is by blending it with
mercial cultivation in 2002, efforts by successive governments other oils.
54 June 22, 2024 vol Lix no 25 EPW Economic & Political Weekly
 SPECIAL ARTICLE

Therefore, from a public health point of view, India should needs to be advanced in order to reach the goal of reducing
continue its oilseed plant breeding programmes to develop the erucic acid content in the Indian mustard crop to the in-
an indigenous GM mustard seed variety that contains erucic ternationally accepted level.
acid levels that meet human health standards. If GM mustard Finally, India stands to gain significantly in the internation-
oil does not meet the internationally acceptable level of al export market for mustard oil if it succeeds in developing
erucic acid content, the consumption of the oil in raw form an indigenous GM mustard seed variety with an internation-
would be detrimental to human health. It is important ally accepted level of erucic acid. At present, Indian mustard
to note that due to years of a plant breeding programme, oil has limited acceptability in the international market due
Europe succeeded in introducing the low-erucic acid trait to its high erucic acid content, especially in Western countries
into its rapeseed cultivar (Przybylski and Eskin 2011). Hence, (Choudhary and Grover 2013; Kumar et al 2009). The situa-
India has to utilise genetic breeding programmes funded by tion will be no different with the cultivation of DMH-11. Unlike
either the public sector or private seed companies to seriously Bt cotton, the export potential of the mustard oil extracted
attempt to develop mustard crop varieties with low erucic from DMH-11 seed is limited because of its high erucic acid
acid content (Kumar et al 2016; Vemuri et al 2018). In this content. Therefore, to fully realise the export potential of GM
context, the development of the DMH-11 seed variety with a mustard oil, India would need to develop an indigenous GM
lower erucic acid content than the traditional Indian mustard mustard seed variety that contains erucic acid levels that
seed varieties is a notable achievement. This development meet human health standards.

notes 7 The oxidative stability (that is, the resistance Ahlawat, I P S (2008): “Rapeseed and Mustard,”
1 The concerns mainly include misguided claims to oxidation of edible oils) plays an important Agronomy: Rabi Crops, Head, Division of
on yield benefits of genetically modified (GM) role in determining the shelf life of edible oils. Agronomy, Indian Agricultural Research Insti-
crops; mixed scientific evidence about the eco- Oil oxidation is a series of chemical reactions tute, New Delhi.
nomic and ecological benefits, and health safe- involving oxygen that degrade the quality of edible Alam, F (2011): “Scientific Expertise in a Represent-
ty of GM crops; a decline in the diversity of in- oils (Griffiths no date; Hooper et al 2006). ative Democracy: Bt Brinjal,” Economic & Political
digenous seed choices and the consequent de- 8 For more evidence on the positive health benefits Weekly, Vol 46, No 35, pp 106–11.
pendence on a few multinational seeds compa- of blended edible oils, see Hashempour‐ Ali, S, H N Khan, A Khan and J S Khan (2005):
nies; higher production risks for small and Baltork et al (2016). “Development of Rice Bran Oil Based Vegetable
marginal farmers; a lack of transparent scien- 9 On the Indian subcontinent, six species of rape- Oil Blend With Improved Fatty Acid Composition
tific tests to assess the impacts of the GM crops; seed-mustard are available (Ahlawat 2008; and Oxidative Stability,” Proceedings of 8th
and a lack of transparency in the regulatory Chauhan et al 2012). Indian mustard accounts National Seminar on Rice Bran Oil, New Delhi,
process related to the adoption of GM techno- for 75% to 80% of India’s total rapeseed pp 74–76.
logy (Gruère and Sengupta 2011; Herring 2007; cultivation area. Aneja, R P, K V S M Krishna, S J Phansalkar and
Herring and Rao 2012; Kouser and Qaim 2011; 10 Canola is a registered trade mark representing V P Gulati (1995): “Oilseed and Vegetable Oil
Alam 2011; Glover 2010; Hindu 2022a). the quality standard of the rapeseed oil Economy of India: Sectoral Policy Issues,”
2 At present, 70% of India’s domestic demand for produced under the Canadian Oil Association Occasional Publications, Institute for Rural
edible oil is met through imports (Business and not a biological classification (Kumar et al Management Anand.
Standard 2017; Sharma 2014). 2009; Barthet 2016; Przybylski and Eskin 2011). Aukema, H and L Campbell (2011): “Oil Nutrition
3 We examined the inter-temporal changes in In- 11 Canola-quality oil does not have a very pungent and Utilization,” Canola: Chemistry, Production,
dia’s overall edible oil and rapeseed-mustard aroma, which Indian consumers prefer. Processing, and Utilization, J K Duan, N A M Eskin
oil import dependency in relation to a single 12 Between 2008 and 2018, India bought only and D Hickling (eds), AOCS Press, Urbana, IL,
factor, namely the output of oilseeds and edible 0.23% of the total canola oil exported by Canada. pp 245–80.
oils. This simple framework overlooks the in- In contrast, the figures for the US and China Awad, A, F M Arshad, M N Shamsudin and Z Yusof
fluence of several other economic and non-eco- were 59.59% and 28.79%, respectively (https:// (2007): “The Palm Oil Import Demand in
nomic factors such as population size, national www.canolacouncil.org/markets-stats/statis- Middle East and North African (MENA)
and disposable income, the shift in consumer tics/historic-oil-exports/). Countries,” Journal of International Food &
tastes and preferences, import price, prices of 13 Palm oil constitutes around 80% of the edible Agribusiness Marketing, Vol 19, Nos 2–3,
substitute edible oils, foreign exchange rate, oil imported by India (Sharma 2014) and is pp 143–69.
and trade liberalisation that could influence considered an imperfect substitute for domesti- Barthet, V J (2016): “Canola: Overview,” Reference
the import demand for edible oils. This is a ma- cally produced edible oils such as mustard oil. Module in Food Science, Elsevier, https://doi.
jor limitation of our analysis. Incorporating Because of its effective frying properties, low org/10.1016/B978-0-08-100596-5.00029-9.
various factors into the import demand analy- polymer content, and colourless and odourless Bhargava, P M (2016): “Genetically Modified Mus-
sis requires applying quantitative techniques, qualities, palm oil is extensively blended with tard and India’s Future,” Economic & Political
which is beyond the scope of the descriptive other edible oils (Foster et al 2009). According Weekly, Vol 51, Nos 44 and 45, pp 40–43.
method of research employed in this paper. An to one estimate, 30% of the palm oil consumed
application of multifactor import demand anal- Bremer, J and K R Norum (1982): “Metabolism of
by India in 2001–02 was blended with other
ysis of edible oils using appropriate quantita- Very Long-Chain Monounsaturated Fatty Acids
edible oils (Dohlman 2003 et al).
tive techniques can be found in Lordkipanidze (22:1) and the Adaptation to Their Presence in
14 However, according to the recent media reports
et al (1998); Awad et al (2007); Hameed (2016); the Diet,” Journal of Lipid Research, Vol 23, No 2,
based on the results of the field trials conducted
and Hassan et al (2023). pp 243–56.
during the 2022 rabi season, the potential yield
4 The growth calculation is based on the of DMH-11 as against the next best variety has Bu siness Standard (2017): “Slipping on Edible Oil,”
data available in FAOSTAT (for production), not been clearly established (Mukherjee 2023). 27 October.
HSIE (for population) and Jha et al (2012) (for 15 The authors thank Akshay K Pradhan (Depart- CEE (2010): “National Consultations on Bt Brinjal:
consumption). ment of Genetics University, Delhi) for provid- A Primer on Concerns, Issues and Prospects,”
5 Discussions were held with select corporate ing the information about erucic acid content Centre for Environment Education.
and small-scale manufacturers of mustard oil in DHM-11. CGMCP (2016): “Assessment of Food and Environ-
to understand the mustard oil market in India. mental Safety of GE Mustard,” Centre for
Considering the sensitivity of the issue, the Genetic Manipulation of Crop Plants.
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56 June 22, 2024 vol Lix no 25 EPW Economic & Political Weekly
CURRENT STATISTICS EPW Research Foundation

Wholesale Price Index Foreign Trade

The year-on-year WPI-infl ation rate increased to 2.6% in May 2024 from The trade deficit widened to $23.8 bn in May 2024 from $22.5 bn reported
-3.6% reported a year ago and 1.3% a month ago. The index for primary a year ago. Exports increased by 9.1% to $38.1 bn and imports by 7.7% to
articles rose by 7.2% against -1.9% registered a year ago and 5.2% a month $61.9 bn against $35.0 bn and $57.5 bn, respectively. Oil imports stood at $19.9
ago. The rate of infl ation for food articles increased to 9.8% from 1.6% bn compared to $15.6 bn registered a year ago and non-oil imports at $42.0 bn
recorded a year ago and 7.7% a month ago. The index for fuel and power against $41.9 bn. During April–May 2023–24, cumulative exports rose by
was up by 1.4% compared to -9.2% a year ago and that for manufactured 5.1% to $73.1 bn and imports by 8.9% to $116.0 bn from their respective values of
products went up by 0.8% against -3.0%. $69.6 bn and $106.5 bn during the corresponding period of the previous year.

Consumer Price Index Index for Industrial Production

The CPI-inflation rate increased to 4.8% in May 2024 from 4.3% registered The IIP increased by 5.0% in April 2024 compared to 4.6% reported a year ago.
a year ago. The consumer food price index grew substantially by 8.7% Production in manufacturing sector grew by 3.9% against 5.5% a year ago. Growth
compared to 3.0% a year ago. The CPI-rural inflation rate stood at 5.3% and rate of mining segment rose to 6.7% and of electricity generation to 10.2% from 5.1%
urban inflation rate at 4.2% against 4.2% and 4.3%, respectively. According and -1.1%, respectively. As per use-based classification, production in the capital goods
to Labour Bureau data, the CPI for agricultural labourers (CPI–AL) stood segment grew by 3.1% and infrastructure goods segment by 8.0% compared to 4.4%
at 7.0% in April 2024 compared to 6.5% a year ago and that for industrial and 13.4%, respectively. Growth rate of the consumer durables segment stood at 9.8%
workers (CPI–IW) at 3.9% against 5.1%. and of the non-durables segment at -2.4% against 2.3% and 11.4%, respectively.

Movement of WPI Inflation January–May Merchandise Trade May 2024

May 2024 Over Month Over Year April–May
Year-on-year WPI Inflation in % ($ bn) (%) (%) (2023–24 over 2022–23) (%)
5.0 Exports 38.1 8.9 9.1 5.1
2023
Imports 61.9 14.4 7.7 8.9
2.6%
2.5 Trade balance -23.8 24.5 5.6 16.0
Data is provisional. Source: Ministry of Commerce and Industry.
0.0
2024 Components of Trade May 2023 and May 2024
-2.5 $41.9 billion
Non-oil Imports $42.0 billion
$35.0 billion $38.1 billion
-3.6% 40
Exports
-5.0
Jan Feb Mar Apr* May*

* Data is provisional; Base: 2011–12 = 100. $15.6 billion $19.9 billion

Oil Imports

Trends in WPI and Its Components May 2024* (%) 0

Financial Year (Averages)
Weights Over Month Over Year 2021–22 2022–23 2023–24
All commodities 100 0.2 2.6 13.0 9.4 -0.7
Primary articles 22.6 0.5 7.2 10.2 10.0 3.5 $22.5 billion $23.8 billion
-27 Trade Balance
Food articles 15.3 1.5 9.8 4.1 7.3 6.6
2023 MAY 2024 MAY
Fuel and power 13.2 -2.7 1.4 32.5 28.1 -4.5
Manufactured products 64.2 0.6 0.8 11.1 5.6 -1.7 Oil refers to crude petroleum and petroleum products, while non-oil refers to all other commodities.
* Data is provisional; Base: 2011–12=100. Source: Ministry of Commerce and Industry.
Movement of IIP January–April
IIP Index Value
Movement of CPI Inflation January 2023–May 2024
160
Year-on-year CPI Inflation in %
2024
9 147.7
150

Rural
140
140.7
5.3% 2023
6
130

CPI (Combined) Urban 4.8% 120

4.2% Jan Feb Mar Apr
3
* April 2024 are quick estimates; Base: 2011–12=100.

Industrial Growth: Sector-wise April 2024* (%)

0
Weights Over Over Financial Year (Avgs)
Jan F M A M J J A S O N D Jan F M A May* Month Year 2022–23 2023–24
2023 2024
General index 100 -7.6 5.0 5.2 5.8
* May 2024 is provisional.
Source: National Statistical Office (NSO); Base: 2012=100. Mining 14.4 -16.3 6.7 5.8 7.5
Manufacturing 77.6 -7.6 3.9 4.7 5.5
Inflation in CPI and Its Components May 2024* (%) Electricity 8.0 3.8 10.2 8.9 7.1
Latest Month Over Over Financial Year (Avgs) Industrial Growth: Use-based
Weights Index Month Year 2022–23 2023–24
Primary goods 34.0 -6.7 7.0 7.5 6.0
CPI combined 100 187.6 0.5 4.8 6.7 5.4
Consumer food 39.1 192.6 0.7 8.7 6.6 7.5 Capital goods 8.2 -27.3 3.1 13.1 6.2
Miscellaneous 28.3 181.7 0.3 3.4 6.3 4.5 Intermediate goods 17.2 -6.7 3.2 3.8 5.2
Infrastructure/Construction goods 12.3 -6.1 8.0 8.4 9.6
CPI: Occupation-wise@ 2022–23 2023–24
Industrial workers (2016 = 100) 139.4 0.4 3.9 6.1 5.2 Consumer durables 12.8 -8.6 9.8 0.6 3.6
Agricultural labourers (1986–87 = 100) 1263 0.3 7.0 6.8 7.1 Consumer non-durables 15.3 -2.8 -2.4 0.7 4.0
* Provisional; @ April 2024; *April 2024 are quick estimates; Base: 2011–12=100.
Source: NSO (rural and urban); Labour Bureau (IW and AL). Source: NSO, Ministry of Statistics and Programme Implementation.
Comprehensive current economic statistics with regular weekly updates are available at: http://www.epwrf.in/currentstat.aspx.

Economic & Political Weekly EPW june 22, 2024 vol lix no 25 65
 CURRENT STATISTICS EPW Research Foundation
India’s Quarterly Estimates of Final Expenditures on GDP
2021–22 2022–23 2023–24
` Crore | At 2011–12 Prices Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Private final consumption expenditure 1828296 (18.0) 2109196 (13.6) 2429098 (11.0) 2365983 (6.1) 2166248 (18.5) 2282920 (8.2) 2473262 (1.8) 2401395 (1.5) 2281433 (5.3) 2338416 (2.4) 2560203 (3.5)
Government final consumption expenditure 379485 (-8.0) 325630 (5.0) 329449 (-0.6) 445830 (5.1) 416509 (9.8) 336707 (3.4) 352789 (7.1) 507720 (13.9) 415961 (-0.1) 383289 (13.8) 341625 (-3.2)
Gross fixed capital formation 1144395 (71.0) 1227684 (14.1) 1220749 (4.8) 1421436 (5.6) 1303951 (13.9) 1285349 (4.7) 1282287 (5.0) 1474836 (3.8) 1414766 (8.5) 1434931 (11.6) 1418043 (10.6)
Change in stocks 37314 (1287.8) 40524 (875.4) 38513 (826.0) 43852 (821.6) 44647 (19.6) 44039 (8.7) 42943 (11.5) 51836 (18.2) 45367 (1.6) 48734 (10.7) 46352 (7.9)
Valuables 22378 (490.3) 136471 (160.6) 74741 (46.8) 49510 (-50.9) 35436 (58.4) 109678 (-19.6) 46214 (-38.2) 37839 (-23.6) 27921 (-21.2) 108460 (-1.1) 74773 (61.8)
Net trade (Export–Import) 25120 -37031 -82715 -56012 -23414 -80422 -28286 60844 -230608 -152046 -75920
Exports 785791 (50.0) 848922 (28.5) 847632 (31.1) 910763 (25.5) 935660 (19.1) 948378 (11.7) 939984 (10.9) 1023721 (12.4) 874885 (-6.5) 999043 (5.3) 972383 (3.4)
Less imports 760671 (46.9) 885953 (28.5) 930346 (21.4) 966775 (8.2) 959074 (26.1) 1028800 (16.1) 968270 (4.1) 962877 (-0.4) 1105493 (15.3) 1151090 (11.9) 1048303 (8.3)
Discrepancies -86257 (-207.1) -130034 (-272.3) -139727 (-443.8) -142030 (-849.0) -163422 (89.5) -105414 (-18.9) -134318 (-3.9) -150742 (6.1) 135705 (-183.0) 23853 (-122.6) 6935 (-105.2)
Gross domestic product (GDP) 3350730 (23.0) 3672438 (9.7) 3870108 (5.7) 4128570 (4.4) 3779954 (12.8) 3872858 (5.5) 4034890 (4.3) 4383726 (6.2) 4090545 (8.2) 4185636 (8.1) 4372011 (8.4)

India’s Overall Balance of Payments (Net): Quarterly

2022–23 ($ mn) 2023–24 ($ mn) 2022–23 (` bn) 2023–24 (` bn)
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Current account -17964 -30902 -16832 -1356 -9120 -11420 -10519 -1387 [-2.1] -2466 [-3.8] -1384 [-2.0] -111.6 [-0.2] -750 [-1.1] -944 [-1.3] -876 [-1.2]
Merchandise -63054 -78313 -71337 -52587 -56703 -64526 -71603 -4867 -6249 -5864 -4326.1 -4661 -5334 -5962
Invisibles 45090 47411 54505 51231 47583 53106 61084 3480 3783 4481 4214.5 3911 4390 5087
Services 31069 34426 38713 39075 35121 39941 45020 2398 2747 3182 3214.5 2887 3302 3749
of which: Software services 30692 32681 33541 34370 33928 35237 36267 2369 2608 2757 2827.4 2789 2913 3020
Transfers 22874 24773 28467 24762 22838 24926 29302 1766 1977 2340 2037.1 1877 2060 2440
of which: Private 23065 24991 28641 25080 23073 25170 29438 1780 1994 2354 2063.2 1897 2081 2451
Income -8853 -11788 -12675 -12606 -10377 -11761 -13238 -683 -941 -1042 -1037.1 -853 -972 -1102
Capital account 22055 1461 28887 6540 34318 13042 17358 1702 [2.6] 117 [0.2] 2375 [3.4] 538.0 [0.7] 2821 [4.0] 1078 [1.5] 1445 [1.9]
of which: Foreign investment -1238 12741 6641 4691 20666 4318 16189 -96 1017 546 385.9 1699 357 1348
Overall balance 4595 -30379 11069 5579 24432 2519 5998 355 [0.5] -2424 [-3.7] 910 [1.3] 459.0 [0.6] 2008 [2.8] 208 [0.3] 499 [0.7]
Figures in square brackets are percentage to GDP.

Foreign Exchange Reserves Variation

7June 9 June 31 March Month Year Financial Year So Far Financial Year
Excluding gold but including revaluation effects 2024 2023 2024 Ago Ago 2023–24 2024–25 2019–20 2020–21 2021–22 2022–23 2023–24
` crore 4957132 4479819 4913067 82970 477312 139523 44064 668976 590416 302585 102680 572770
$ mn 594498 543260 589082 10794 51238 15177 5416 56831 94535 21435 -31532 60999

Monetary Aggregates Variation

Outstanding Over Month Over Year Financial Year So Far Financial Year
` Crore 2024 2023–24 2024–25 2021–22 2022–23 2023–24
Money supply (M3) as on 31 May 25609908 148934 (0.6) 2601258 (11.3) 664889 (3.0) 670281 (2.7) 1649151 (8.8) 1850031 (9.0) 2594773 (11.6)
Components
Currency with public 3468225 -1401 (-0.0) 185444 (5.6) 6345 (0.2) 58183 (1.7) 283860 (10.3) 240748 (7.9) 142226 (4.3)
Demand deposits 2651323 69507 (2.7) 327587 (14.1) 3138 (0.1) 64435 (2.5) 217871 (10.9) 107606 (4.9) 266291 (11.5)
Time deposits 19399192 78706 (0.4) 2066227 (11.9) 663999 (4.0) 551032 (2.9) 1136327 (8.1) 1482361 (9.8) 2179195 (13.1)
Other deposits with RBI 91169 2124 (2.4) 22000 (31.8) -8593 (-11.1) -3368 (-3.6) 11093 (23.4) 19318 (33.1) 7060 (9.1)
Sources
Net bank credit to government 7454665 -209104 (-2.7) 140084 (1.9) 149048 (2.1) -148906 (-2.0) 627255 (10.7) 687904 (10.6) 239219 (3.3)
Bank credit to commercial sector 17545858 150245 (0.9) 2798276 (19.0) 317946 (2.2) 343026 (2.0) 948054 (8.1) 1813116 (14.4) 2770661 (19.2)
Net foreign exchange assets 5588617 85713 (1.6) 532589 (10.5) 144262 (2.9) 48236 (0.9) 275216 (6.0) 57704 (1.2) 572749 (11.7)
Banking sector’s net non-monetary liabilities 5012863 -121880 (-2.4) 872632 (21.1) -53228 (-1.3) -427725 (-7.9) 202475 (6.2) 710964 (20.4) 990769 (23.6)
Reserve money as on 7 June 4712247 25443 (0.5) 326936 (7.5) -1448 (0.0) 80801 (1.7) 468905 (13.0) 317872 (7.8) 295589 (6.7)
Components
Currency in circulation 3587572 -2962 (-0.1) 178716 (5.2) 30335 (0.9) 76111 (2.2) 279954 (9.8) 244803 (7.8) 137245 (4.1)
Bankers’ deposits with RBI 1034930 26653 (2.6) 126821 (14.0) -22368 (-2.4) 9481 (0.9) 177859 (25.4) 53751 (6.1) 143369 (15.4)
Other deposits with RBI 89745 1753 (2.0) 21399 (31.3) -9415 (-12.1) -4791 (-5.1) 11094 (23.4) 19316 (33.0) 14975 (19.3)
Sources
Net RBI credit to Government 1000814 -96216 (-8.8) -321493 -128819 -192399 350911 (31.9) 529 (0.0) -316524 (-21.8)
of which: Centre 972652 -112836 (-10.4) -331429 -146295 -214003 352626 (32.2) 1405 (0.1) -318032 (-21.9)
RBI credit to banks & commercial sector 12536 -112810 (-90.0) 171421 -64442 58683 -174345 (47.2) 449259 (-82.6) 158782 (-168.1)
Net foreign exchange assets of RBI 5319452 90101 (1.7) 589129 (12.5) 142967 (3.1) 78628 (1.5) 243079 (5.8) 144877 (3.3) 646408 (14.1)
Govt’s currency liabilities to the public 33858 226 (0.7) 3166 (10.3) 406 (1.3) 426 (1.3) 1101 (4.1) 2272 (8.1) 3146 (10.4)
Net non-monetary liabilities of RBI 1654412 -144143 (-8.0) 115287 (7.5) -48440 (-3.1) -135463 (-7.6) -48160 (-3.5) 279066 (21.3) 196224 (12.4)

Scheduled Commercial Banks’ Indicators ( ` Crore) Variation

Outstanding Over Month Over Year Financial Year So Far Financial Year
(As on 31 May) 2024 2023–24 2024–25 2021–22 2022–23 2023–24
Aggregate deposits 20992417 158913 (0.8) 2288982 (12.2) 659521 (3.2) 612369 (3.0) 1351801 (8.9) 1578601 (9.6) 2431312 (13.5)
Demand 2506347 70869 (2.9) 322784 (14.8) 3132 (0.1) 62494 (2.6) 211554 (11.4) 107684 (5.2) 263422 (12.1)
Time 18581248 80584 (0.4) 2061377 (12.5) 656388 (3.7) 549875 (3.0) 1140246 (8.6) 1470917 (10.2) 2167890 (13.7)
Cash in hand 90921 1473 (1.6) -28969 (-24.2) 29627 (48.3) 1488 (1.7) -4823 (-5.3) 4338 (5.0) -830 (-0.9)
Balance with RBI 951109 -10608 (-1.1) 98866 (11.6) 42336 (4.7) 19627 (2.1) 140745 (25.9) 126470 (18.5) 121575 (15.0)
Investments 6098378 -36452 (-0.6) 490626 (8.7) 192604 (3.3) 76703 (1.3) 266422 (6.0) 686201 (14.5) 691409 (12.8)
of which: Government securities 6182231 -36842 (-0.6) 575293 (10.3) 192616 (3.2) 76622 (1.3) 266547 (6.0) 686143 (14.5) 691287 (12.8)
Bank credit 16270342 156269 (1.0) 2260647 (16.1) 334460 (2.1) 349257 (2.2) 1044026 (9.6) 1783921 (15.0) 2756928 (20.2)
of which: Non-food credit 16741162 147751 (0.9) 2768220 (19.8) 317612 (1.9) 332079 (2.0) 1050269 (9.7) 1819026 (15.4) 2753754 (20.2)

Capital Markets 14 June Month Year Financial Year So Far 2023–24 End of Financial Year
2024 Ago Ago Trough Peak Trough Peak 2021-22 2022-23 2023–24
S&P BSE SENSEX (Base: 1978-79 = 100) 76992.77 (21.8) 73104.61 63228.51 (20.0) 72079.05 76992.77 59106.44 74119.39 57362 (18.4) 58992 (0.7) 73651 (27.8)
S&P BSE-100 (Base: 1983–84 = 100) 24920.12 (29.9) 23438.95 19177.33 (19.8) 23063.21 24920.12 17644.91 23408.17 17423 (20.1) 17602 (-0.7) 23294 (35.6)
S&P BSE-200 (1989–90 = 100) 10939.03 (29.7) 10237.92 8433.42 (23.9) 10049.61 10939.03 7406.09 10158.44 7412 (20.9) 7389 (-2.0) 10100 (40.0)
CNX Nifty-50 (Base: 3 November 1995 = 1000) 23465.60 (25.1) 22217.85 18755.90 (19.2) 21884.50 23465.60 17398.05 22493.55 17153 (19.7) 17360 (-0.6) 22327 (31.7)
CNX Nifty-500 22214.30 (38.1) 20683.80 16084.05 (20.1) 20323.85 22214.30 14601.95 20434.80 14652 (22.2) 14558 (-2.3) 20255 (42.5)
Figures in brackets are percentage variations over the specified or over the comparable period of the previous year. | (-) = not relevant | - = not available | NS = new series | PE = provisional estimates
Comprehensive current economic statistics with regular weekly updates are available at: http://www.epwrf.in/currentstat.aspx.

66 june 22, 2024 vol lix no 25 EPW Economic & Political Weekly