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Neo-liberalism, Development and Deprivation in India

Ishan Anand ( teaches economics at Ambedkar University Delhi.

Dispossession, Deprivation and Development: Essays for Utsa Patnaik edited by Arindam Banerjee and C P Chandrasekhar, New Delhi: Tulika Books, 2018; pp x +270, ₹ 750.


In 1960, Joan Robinson wrote in the Economic Weekly: “I am concerned particularly for India and other developing countries whose economic doctrines come to them mainly from England and in English. Is what we are giving them helpful for their development?” (Robinson 1960). She was worried that the economics departments in Britain, which used to attract some of the best minds from the third world, were indoctrinating students with “notions soaked in a prejudice for laissez-faire.” Orthodox teaching led students to distrust their native common sense, submit to the orthodoxy and perpetuate the cycle by going back to the country of origin and disseminating those ideas in the third world. Robinson gives a specific example of teaching theories in support of the free market and free trade in British universities; ideas which were once favourable to Britain and damaging to India’s interest. She hoped that with proper training, a “generation well-educated, resistant to fudging, imbued with the humility and pride of genuine scientists” could make significant contributions to knowledge and the state of affairs. Utsa Patnaik, in honour of whom the book under review is written, is among the few in India to challenge the conventional and self-serving body of economic thought originating in the first world. In her illustrious career, Patnaik has been an inspirational teacher and worked tirelessly towards developing alternative frameworks of analysis that further the interest of the downtrodden and the developing world.

Dispossession, Deprivation and Development: Essays for Utsa Patnaik comprises 10 chapters on themes that are central to the academic work of Patnaik. Chapter 1 by the editors trace her academic contributions. This chapter highlights the contributions of Patnaik in the mode of production debate, developing of the labour exploitation criterion to study agrarian class formation, critique of “neo-populism,” role of income deflation in immiserisation and exposing the conceptual and methodological errors in the official poverty lines. Patnaik has identified distinct mechanisms in the development of capitalism in the North. These include capital accumulation using the drain of wealth from colonies, deindustrialisation of colonies through distortionary trade practices and export of unemployment, and mass outmigration of Europeans to other parts of the world. The pattern of capitalist development in the North, therefore, cannot be replicated across the developing world today. Patnaik’s recent work is a strong critique of the structural adjustment programmes (SAP) pushed by the Bretton Woods organisations that led to income squeeze in countries such as India.

Agrarian Economy

Chapters 2 to 5 deal with different aspects of the agrarian economy. In Chapter 2, Sam Moyo, Paris Yeros and Praveen Jha outline the persistence of agrarian crisis in Sub-Saharan Africa (SSA) and suggest ways to overcome it. Agrarian change in SSA traversed a variety of paths, given the heterogeneity in peasant farms, agroecological and climatic conditions and historic specificity. The peasantry in SSA is faced with high levels of disparity and concentration of landholdings, declining per capita arable land, exploitative labour relations such as bondage in some areas, low productivity driven by limited access to inputs and credits, vagaries of weather and volatility of markets. While peasant farms have shown resilience in dealing with existing challenges, climate change brings a new set of risks, mitigating which will require large-scale public investment in research and development. The authors call for equitable distribution of land and strengthening the capabilities of peasant farms through institutional support.

The next three chapters deal with aspects of India’s agrarian economy in the context of pro-market reforms. Banerjee examines the implications of neo-liberalism on the contemporary agrarian question in India. The study uses Patnaik’s labour exploitation index to study peasant classes using data collected from the states of West Bengal and Andhra Pradesh. The author discusses a high degree of peasant differentiation in the villages studied, with the average labour hiring-in being many times more among the rich peasants in comparison to the poor, small and medium peasantry. The analysis of household assets reveals the concentration of wealth and capital at the top end of the peasant class structure, which leads to further accumulation and control of capital by rich peasants and landlords. An analysis of crop incomes reveals high levels of disparity between poor and rich peasants and the presence of negative incomes across classes owing to outstanding interest payments. Peasant classes are shown to be in a perpetual debt trap, and much of the informal indebtedness is linked to input dealers. The author notes that while peasantry is not homogeneous, neo-liberalism has adversely affected all peasant classes and the agricultural sector as a whole is in a state of crisis.

In the next chapter, Sudipta Bhattacharyya revisits the mode of production debate. This study uses field survey data from West Bengal as well as the National Sample Survey Office (NSSO) data and compliments Banerjee’s study. The empirical exercise does not find evidence for Chayanov’s claim of higher consumer-to-worker ratio being positively related to higher family input. The author rejects the inverse farm size–productivity hypothesis and shows high levels of disparity in land, yield and access to input and output markets. While arguing that class analysis remains relevant, the author concludes that neo-liberal policies have rendered agriculture unviable. Suneet Chopra discusses the crisis in Indian agriculture and suggests solutions to resolve the crisis. He notes that the severity of the agrarian crisis can be seen in the swelling ranks of agricultural labourers. Neo-liberal policies have led to a decline in jobs in agriculture, without creating alternative opportunities elsewhere. Chopra critically discusses the adverse impact of demonetisation on agriculture, transfer of resources to big capital, reversal of land ceiling laws, large-scale dispossession of traditional forest dwellers, worsening food security and cow-vigilantism. The common thread in the chapters on agriculture is the recognition that neo-liberalism has pushed the agrarian economy into crisis, and the worst affected are the agrarian classes at the bottom end of the distribution.

Neo-liberal Reforms

The chapter by Smita Gupta is an analysis of the debates surrounding the concept of primitive accumulation in Marxian theory, and the process of dispossession and displacement in India. In the first part of the chapter, Gupta contests Harvey’s theorisation of “accumulation by dispossession” as a spatio-temporal fix adopted by capitalism, and also argues against the formulation that primitive accumulation precedes capitalism and is in that sense a relic of history. She contends that primitive accumulation is a “premise of existence” for capital, and separating the masses from the means of production is an intrinsic process to the logic of capital accumulation and concentration.

Following this formulation, the author argues that neo-liberal reforms in India have continued to dispossess people of land through legislations and extra-economic coercion by the state, actively working on behalf of global capital. Coercive land evictions for development projects, reversal of land reforms and creation of slums in urban areas have resulted in a large number of displaced and disposed people. Robert Pollin and Shouvik Chakraborty explore the possibility of a growth strategy for India which generates employment opportunities while curbing carbon dioxide emissions. Their estimates show that with an economic growth of 6.5% per year and investment of 1.5% of the gross domestic product (GDP) on clean renewable, and energy efficiency for an investment cycle of 20 years, the emission per capita in India can be reduced drastically. This would require changing India’s energy mix by reducing reliance on coal and fossil fuels, and increasing the share of low-emission bioenergy and other sources. The authors are also able to show that the move towards a clean energy programme would require significantly more labour inputs than the current energy mix, thereby creating millions of jobs while reducing emissions.

Vikas Rawal and Partha Saha analyse the trends in women’s employment patterns in India. Arguing that the existing explanations for declining the labour force participation rate (LFPR) are inadequate, they explore the NSSO employment–unemployment surveys for 1999–2000, 2009–10, and 2011–12 to find satisfactory explanations. They show that the low and declining trends in women’s LFPR are largely driven by a fall in agricultural employment, which is directly linked to the rise in landlessness in India. Increasing concentration of land and labour-displacing mechanisation has drastically reduced female labour absorption in agriculture. At the same time, women have not been able to migrate or commute to access construction and other alternative jobs due to hurdles in physical mobility. With dismal levels of education and technical training, women are further denied employment opportunities. The authors show that among women who are principally engaged in housework, a substantial number engage in care work and obtain various items for household use. It is argued that these women should be considered a part of the labour force.

The paper by Chandrasekhar traces the evolution of macroeconomic policy in India in the post-liberalisation era and studies its effect on employment generation. The author argues that the macroeconomic policies in the post-liberalisation era in India were not effective for labour market outcomes, and employment and work conditions were adversely affected even with high economic growth. He calls for a proactive fiscal policy and state investment in areas of physical and social infrastructure. It is also argued that monetary policy must not be restricted to inflation targeting, but should be part of the overall development strategy and focus on employment generation and poverty reduction. Malini Bhattacharya then discusses the process of communalisation in society, in the context of rise of right-wing political forces in India. The author notes that even though secularism in India evolved through the anti-colonial struggles, the state has time and again jeopardised its secular credentials. The author discusses the role of the ruling classes in stoking communal passions when it suits their class interests. The rise of Rashtriya Swayamsevak Sangh (RSS) and Bharatiya Janata Party (BJP) is discussed in the context of growing anti-democratic tendencies under the neo-liberal regime, which the Indian state has been embracing to be able to serve the interests of global finance capital. The author urges the left forces to go beyond the liberal agenda of tolerance and actively intervene in educational, cultural and social spheres to challenge the deeply entrenched caste and communal prejudices in society.

The chapters in the book are based around the academic work of Patnaik and are also connected in contesting neo-liberal economic reforms in different areas. The neo-liberal regime has brought upon us a crisis of agricultural growth, but also a much deeper agrarian crisis which is devastating people’s livelihoods, creating and perpetuating economic disparities, dispossession and social oppression. While India’s “transformation” has been much celebrated across the world showcasing high growth and decline in poverty based on a botched methodology, it is important that voices of reason stand up to the dominant orthodoxy in the world of academics and policy. At the same time, it is important that we understand the changes in the sphere of economy and society that has led to a discernible rightward shift in recent times. This book is a testimony to the work that Patnaik did and inspired others to do, maintaining methodological rigour, understanding history, and seeking truth from facts, even if it upsets the conventional wisdom.


Robinson, J (1960): “Teaching Economics,” Economic Weekly, Vol 12, January, pp 173–75.

Updated On : 30th Aug, 2019


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