There cannot be ‘inclusive growth’ in a capitalist society

While economic pundits of the bourgeoisie are chanting the mantra of “inclusive growth”, millions of working people in India are becoming poorer, thousands of peasants are committing suicide and tribal people are being evicted from their natural habitat.

One of the important measures of living standards is the monthly consumer expenditure of families. The recently released results of a survey done in 2004-05 by the National Sample Survey Organisation has confirmed that in spite of very high rates of GDP growth, the working people of India have continued to remain poor and the condition of many of them has actually deteriorated. This survey covered nearly 80,000 villages and 4,600 urban blocks. Around 125,000 households were studied.

The survey has pointed out that about 10% of the rural population spend less than Rs 9 per day per person – an amount less than one-eighth of the official minimum wages. In the urban areas, the poorest 10% of the population spend less than Rs 13 per day per person.

Out of every rupee spent in 2004-05 by the average rural Indian on articles of consumption, 55 paise was spent on food – on items such as cereals, milk, vegetables, edible oil, sugar, salt, beverages and refreshments. Of this, 18 paise was spent on cereals and cereal substitutes. This meant that the poorest 10% of the rural population spent less than Rs 1.6 per day per person on cereals and cereal substitutes. This amount is so ridiculously low – literally one can count the grains that one would get for this money!

The average monthly per capita consumer expenditure was Rs.559 in rural India and Rs.1052 in urban India at 2004-05 prices. But, even this abysmal figure is only an average. The average consumption expenditures vary from Rs 399 in rural Orissa to Rs 1013 in rural Kerala – more than two and a half times. In the case of urban areas, they vary from Rs 696 in Bihar to Rs 1326 in Punjab. So much for the “growth with equity” slogan that the bourgeoisie trumpets.

Generally in more prosperous societies, expenditure on food, and particularly cereals, form a very small portion of the total consumption expenditure. The fact that people in rural India spend more than 50% of their income on food alone shows the extreme poverty in the countryside. The masses of people in rural areas are undernourished. Even here, there are vast differences in consumption patterns between the states. What this means is that capitalism has created islands of extreme poverty in the vast sea of general poverty in the rural areas. For example, in rural areas of Haryana and Punjab, expenditure on cereals formed only 9% of total consumer expenditure. But in rural areas of West Bengal and Assam, cereals contributed 23% or more to total consumer expenditure, and in rural areas of Orissa, Chhattisgarh, Jharkhand and Bihar, they formed 27-28% of consumer expenditure. This shows that the people living in the rural parts of these states spent more than a quarter of their meager income in just cereals alone, leaving very little money for expenditures on other food items, education, health care, clothing, shelter, and so on.

The NSSO survey findings reveal that the quantity of cereals consumed per person per month has declined between the period 1993-94 and 2004-05, from 13.4 kg to 12.1 kg in rural India and from 10.6 kg to 9.9 kg in urban India. The table below shows the huge magnitude of malnutrition in the country compared to other regions of the world.

Source: World Bank, UNDP

All these data confirm that in a capitalist society economic growth does not mean prosperity for all. The fruits of economic growth are cornered by a privileged few. The plethora of schemes and programmes of the Indian government, which allegedly “target” the most needy and raise them above the poverty line, have all been an eyewash. They have, in fact, served to divert development funds further away from the poor. The fact that poverty, unemployment and malnourishment are still rampant in both the towns and countryside, and the fact that growth is extremely uneven, shows that in a capitalist society growth cannot be inclusive. The law of capitalism is that the rich will get richer and the poor poorer. Only when society is fundamentally transformed and socialism becomes the driver of the economy, can economic growth reduce disparities and contribute to prosperity for all.