Seven Decades of Independent India

by Vinod Rai

  Policy

  The current politics and policy on land are squarely focused on land acquisition, whereas in the initial years and decades after Independence, the politics and policy were focused on land reform. Land was the primary source of revenue during the colonial rule—more under the pre-1857 Company Raj and less under the later Crown Raj. Land revenue was the primary reason for colonization; not, contrary to popular belief, trade or British industrialization. The revenue was extracted by a variety of agents of expropriation, like zamindars and ‘kings’. After the First World War, there was, for the first time in Indian history, a rapidly rising population and consequent land fragmentation (this was the beginning of the demographic transition in India and its population explosion), expanded tenancy rights that led to exchange rights, a feudal ownership structure with numerous intermediaries and subinfeudation, and informal credit markets run by usurious local moneylenders. After Independence, a few years post the devastating Bengal famine in 1943, four-fifths of the labour force worked in agriculture, under conditions of widespread poverty, exploitation, illiteracy, and landlessness.

  Land reform was one of the most important items on the large and difficult agenda of the newly independent nation. The First, Fourth, and Seventeenth amendments to the Constitution created the legal basis for key land reforms. The abolishment of intermediaries (zamindars, inamdars) was the first reform attempted and its success led to some decrease in inequality in landownership in the first decade after Independence. Tenancy reform had mixed outcomes—it was successful under communist administrations (in Kerala and West Bengal), but far less so under other regimes, especially Congress regimes. Land ceiling reform was generally unsuccessful and very possibly counterproductive (producing outcomes opposite to those desired). All the land reforms together led to the redistribution of less than six per cent of cultivable land. Inequality in landownership remained virtually unchanged from the sixties and may have increased markedly in the last two decades. One must agree with the conclusions of numerous observers of land reforms in India that other than eliminating the zamindari system they failed. To be fair, it is difficult to see how successful they could have been with redistribution even with more sincere efforts given the extreme scarcity and fragmentation of land.

  It may well be that the more important policy/action by the independent Indian state on land was acquisition rather than reform. No new law was created for it. The existing colonial Land Acquisition Act of 1894 was retained, unchanged. This act was vital for enabling the massive industrialization and modernization programme of the Nehruvian state. Over the seventy years after Independence, much agricultural land was acquired for infrastructure and industry. The state took land it deemed necessary for development, using the language of public purpose—for dams, defence, irrigation, factories, townships, power, roads, rails, etc.—this time in the national interest, as opposed to the colonizer’s interest. The geography of modern India was created by the Land Acquisition Act of 1894.

  I have written that ‘the independent Indian state’s policies on land were fundamentally contradictory. It gave (or redistributed) land with one hand, and took (or acquired) land with the other. It took more than it gave, and the giving stopped long ago, whereas the taking intensified in recent years.’6

  No entity has kept track of how much land was acquired or how many people were affected. In the absence of any official data, independent scholars have reconstructed the impacts from sources like government gazettes. Their findings can be treated as reasonably reliable estimates.7 It is possible that as much as 50 million acres, or about six per cent of all the land in the country, was acquired or converted from common use after 1947. It is likely that as many as 50 million people were displaced or adversely affected. The land-losers were paid very little compensation (sometimes none at all) and few were resettled or rehabilitated. Many others, perhaps more in number than the land-losers, were displaced without compensation because they did not own the land. The socially marginalized groups were the worst affected: Dalits, because they lived in but often did not own land in project-affected areas, and Adivasis, because much of their land was community-held rather than privately owned (and could be taken lawfully without compensation).

  There is little doubt that the land- and livelihood-losers ‘effectively subsidized India’s development, or, to be more accurate, its winners—that is, the populations that got power and roads and water . . . This regressive redistribution system lasted well into the 2000s. It was politically sustainable for many reasons, not least because the direct winners outnumbered and were more powerful than the direct losers. Even if the worst accounts of land takings are exaggerated, even if the highest numbers of affected people are overblown, this would have to be considered a deeply inequitable and significant state failure by today’s standards.’8

  This regressive system existed for almost six decades without much resistance. No political party emerged to champion the rights of the displaced. However, in the last ten years, the system broke down. There were well-known cases of very troubled and violent acquisition processes (in Nandigram, Singur, Kalinganagar, land for Posco, Vedanta, and the Yamuna Expressway, for example), plus hundreds of small and large cases of land acquisition processes faced resistance, many in the new economic spaces that were enabled by the Special Economic Zones (SEZ) Act of 2005. The seeds of the resistance may have been sown by the Narmada Bachao Andolan, a social movement that began in the mid-eighties to resist the displacement created by the Sardar Sarovar Dam Project in Gujarat and Madhya Pradesh. But the seeds were able to bloom because of fundamental changes in India’s information system with new media and information agents acting in an environment of increasing political competition. Land acquisition became a wedge issue in Indian politics. And there was a new land market.

  Resistance to land acquisition became so widespread that some called it India’s ‘biggest problem’. It became a major issue in state-level politics. In West Bengal, the thirty-four-year rule of the communists was upended by Mamata Banerjee and the Trinamool Congress over this issue. It could have been one of the reasons behind the defeat of the Mayawati-led Bahujan Samaj Party (BSP) government in the Uttar Pradesh assembly elections in 2012. So important was this issue that the Congress-led UPA government made the subject and the new land acquisition law framed in terms of the rights of land-losers just before the elections, a major plank of their re-election campaign in 2014.9 The law has five important elements: (a) increased compensation—market prices are doubled in urban and quadrupled in rural areas; (b) expanded coverage—non-owners facing livelihood loss are compensated; (c) rehabilitation and resettlement—compulsory above certain thresholds with minimum set standards; (d) informed consent of land-losers—using referenda, specifically when the acquisition has any private sector involvement; and (e) a new process—involving social impact assessments and a new multilayered bureaucracy. All major parties voted for the new law, including the BJP.

  But within months of coming to power in the 2014 Lok Sabha elections, the BJP tried to amend the law, specifically by diluting the ‘informed consent’ and ‘social impact assessment’ elements. This was done initially through ordinances and later by making an unsuccessful attempt to change the law in the Parliament. The main goal surely was to make land acquisition easier in what appears to be the BJP’s primary development thrust—the creation of industrial corridors near and between key cities. In their view, this is where the investment action is concentrated, and this is how urbanization and the economy are likely to grow. It would be a mistake, however, to see the failure of the BJP amendment as the end of the legal story. This is a long-running epic and India is nowhere near the end of the story.

  Market

  In the meantime, while the resistance to land acquisition was growing, fundamental changes were taking place in India’s land markets. Land prices more than quintupled between 2000 and 2013 (and stabilized after that in many places), so much so that India now has argu
ably the highest land prices in the world. The global peak prices—as in central Hong Kong, Shinjuku and Shibuya in Tokyo, or midtown Manhattan in New York—are not reached in India yet, though south-central Mumbai comes very close (at around Rs 250 crore/acre). But everywhere else—from near-suburban, to far-suburban, to peri-metropolitan, to midsized and small towns, to prosperous well-connected rural regions, to struggling poorly-connected rural regions—land prices in India appear to be unmatched anywhere (with the possible exception of China, which does not, however, have an individualized agricultural land market like India).

  In peri-urban regions (around all the megacities and most major cities) and prosperous rural regions in states like Punjab and Haryana, farmland prices are easily one crore rupees per acre; often they are much higher. Almost nowhere in the country is it possible to find farmland that costs less than Rs 10 lakh per acre today. To put these prices in context, consider that the price of farmland in the US state of Kansas is about USD 1300 (less than Rs 1 lakh) per acre. This is what highly productive land should cost if the price were based only on productivity. Therefore, one must conclude that the price of farmland in India is a dozen to a hundred times more (or higher) than can be justified by agricultural productivity.

  Part of the explanation for this unprecedented rise comes from a mismatch between supply and demand. The supply is more or less fixed, whereas the demand from all parties (industrial users, the service sector, farmers, homebuyers) is increasing. There is a lot more money in the system. Home mortgage loans alone grew forty-fold (in nominal terms) in 2001–13, bringing millions more homebuyers into the market, not to mention the unquantified growth in NRI, black, and criminal money in the system. Land was always an important status good; its status value has probably increased further with scarcity. In addition, rising income and wealth inequality has enabled India’s upper- and proto-upper-class families to drive up prices for everyone else. This is a new condition, and seems to be not a bubble but a structural transformation (that has lasted for close to two decades through a global economic recession and a radical demonetization).

  This new land market has very serious implications for growth, development and justice. It provides opportunities for urban revenue generation in ways and volumes that simply never existed (but appear to be largely mishandled so far). Important policy initiatives like ‘Make in India’ and ‘Smart Cities’, and major budget allocations on road, rail and irrigation will both influence and be influenced by these land markets. Acquisition prices under the new law are likely to reach levels that are simply unaffordable in all but distant rural regions, which means that the new law will either have to be rewritten or land use change will have to happen without acquisition. These prices have already constrained the supply of some public goods (like housing and open space) and will squeeze them even more. Finally, the land and property markets are now the pillars of the Indian economy: new housing creates demand (for consumer durables) that spurs manufacturing, creates jobs (construction is the single largest urban job sector), and serves as the principal instrument for savings (and status-seeking). It is vital to understand the extent to which India’s development trajectory is tied to the land market.

  XIII

  Healthcare in India: Looking back, looking ahead

  A.K. Shiva Kumar

  India’s most notable achievement over the past twenty-five years has been the country’s impressive economic growth record. After 1991, its per capita income grew nearly two-and-a-half times faster in real terms compared to the preceding three-and-a-half decades.1 By 2014, India’s contribution to global economic growth (in Purchase Power Parity terms) stood at 14.4 per cent, and its share in the world GDP was around 7 per cent.2 Medium- and long-term prospects of further economic expansion remain bright.

  India’s performance in health, however, has not kept pace with the country’s remarkable economic expansion.3 Policies have failed to effectively convert economic growth into better health for its people. In 1990, for instance, India’s life expectancy at birth (sixty-six years) was lower than that of Sri Lanka and the Maldives, but higher than the rest of the neighbouring South Asian countries. Today, India’s life expectancy at birth (sixty-eight years) is still lower than that of Sri Lanka (seventy-five years) and the Maldives (seventy-seven years), but has fallen behind that of Bangladesh (seventy-two years), Nepal and Bhutan (both seventy years). This is in spite of India’s per capita gross national income in 2015 (PPP USD 6030) being significantly higher than that of Bangladesh (PPP USD 3560) and Nepal (PPP USD 2500). And over the period 1990–2014, India’s GDP per capita grew, on average, by 5 per cent every year—much faster than the corresponding rates of 3.6 per cent for Bangladesh and 2.6 per cent for Nepal.4

  This is not to undermine in any way India’s achievements in health over the past seventy years. Life expectancy at birth has more than doubled since Independence—from thirty-two years in 1950–51 to sixty-eight years in 2015. In 2015, the infant mortality rate was thirty-seven per 1000 live births—down from 139 in 1976. From 556 in 1990, India’s Maternal Mortality Ratio (MMR) fell to 167 per 100,000 births by 2011–13. The spread of HIV/AIDS has been successfully contained. The World Health Organization (WHO) officially declared India polio-free in March 2014 and free of maternal and neonatal tetanus in August 2015.

  Despite these gains, India’s health burden is still huge. Non-communicable diseases contribute to 60 per cent of the entire disease burden, while communicable diseases contribute 28 per cent and injuries 12 per cent.5 A large burden of infectious diseases, reproductive and child health problems, and nutritional deficiencies coexists with a number of chronic diseases. The increasing Multi-Drug Resistant tuberculosis, the resistant strains of malaria, and the rise of viral encephalitis, dengue and chikungunya, particularly in urban areas, are matters of concern. In addition, occupational health needs of both the formal and informal sector, adolescent health, mental health, geriatric care and palliative care remain neglected. Unchecked pollution, unplanned urbanization, insufficient access to safe drinking water, inadequate food security and poor sanitation pose additional health burdens on India’s population.

  Unhealthy Healthcare: The Key Factors

  Health outcomes in India are also far from equitable. Caste, class, gender and geography continue to account for large differences in morbidity, mortality and nutritional status. The neglect of women’s health in particular is striking. For instance, in 2015–16, over half (53 per cent) of the women aged fifteen to forty-nine years were anaemic. Much of this neglect stems from the subordinate position of women and the strong anti-female biases that characterize Indian society. Men continue to outnumber women in India. Even more disturbing has been the decline in the female-to-male ratio among children aged zero–six years from 927 in 2001 to 914 in 2011, signalling the widespread prevalence of anti-female biases and discrimination against girls and women, including daughter aversion in Indian society.

  Clearly, the healthcare system, as it has evolved in India, over the past seventy years has not been able to effectively meet the health needs of the people. There are many reasons why this is so.

  One, nearly every country in the world that has achieved anything like universal health coverage has done it through the public assurance of primary healthcare. The basis of almost every successful health transition in the history of the world from Britain to Japan, China to Brazil, South Korea to Costa Rica has been the support of basic public health facilities.6

  Unfortunately, the public sector in health has not grown to play a vital role in providing healthcare in India. The public sector has expanded enormously since Independence to include thousands of health sub-centres, primary healthcare centres, and community hospitals. However, the reach of the public sector even for primary healthcare remains grossly inadequate. For instance, in 2015–16, less than two-thirds (63 per cent) of children aged twelve to twenty-three months were fully immunized, and only 21 per cent of mothers had received full antenatal care
.

  The reasons for the underperformance of the public sector in health are not difficult to guess. Most public sector facilities tend to be under-staffed, under-resourced, over-crowded and poorly managed. Rural areas are especially poorly served. Location at a distance, inconvenient timings, poor quality of services, high absenteeism, inadequate supervision and the callous attitude of healthcare providers tend to discourage people from accessing public facilities even for outpatient care.

  The extremely low level of public spending on health is a cause of and an exacerbating factor in the challenges of health inequity, inadequate availability and reach, unequal access, and poor-quality and costly healthcare services. In 2011, at USD 19 per capita, India’s public expenditure on health was half of that of Sri Lanka’s (USD 39) and significantly lower than that of China (USD 153) and Thailand (USD 166). A consequence of the low levels of public spending on health has been the high, private, out-of-pocket expenditures in India—69 per cent in 2011—among the highest in the world and much higher than in Thailand (22 per cent), China (44 per cent) and Sri Lanka (58 per cent).7 Such an unusually high burden of private health expenditure has been pushing over 63 million persons into poverty every year due to healthcare costs.8

  A second reason for poor health outcomes is the extraordinary dependence of Indians on the private sector. Given the shortage of public sector facilities, most Indians have had no option but to access healthcare from a rapidly expanding private sector that has remained, by and large, unregulated. From 8 per cent in 1947, the private sector now accounts for 93 per cent of all hospitals, 64 per cent of all beds, and 80–85 per cent of all doctors. Between 2002 and 2010, the private sector contributed to 70 per cent of the increase in total hospital beds across the country.9