Creating temples of modern India versus finding God in poverty

Amidst the charged debate on the land acquisition amendment bill and the state of agriculture in the country all political parties are jostling to claim the farmer friendly mantle. All parties to the debate on the land acquisition bill – political groups, civil society activists, and industry chambers, seem to be taking diametrically opposite views. It is either pro farmers or anti farmers - no meeting ground at all.

A key opposition leader suggested to the Prime Minister that he was choosing the wrong constituency by bringing this land acquisition amendment bill as 65% of voters are dependent on agriculture.

In my opinion the Prime Minister is actually making a very astute political choice. Let me tell you how.

Unfortunately no one seems to be seriously making the argument that this land bill in conjunction with the ‘Make in India’ campaign could unlock unprecedented economic opportunities for the country. It could help us obtain the elusive double digit GDP growth.

A basic understanding of the theory of modern economic growth will tell you that an economy with some 50% of labour force still involved in agriculture is far from eliminating poverty of its people. From 70% of labour in agriculture at the time of independence in 1947 to 50% now some 68 years hence is a reflection of the failure of our economic policies. It is also representative of the reasons of our continued poverty. A significant chunk of the labour force involved in agriculture is actually disguised unemployment. Disguised unemployment is an important reason for the continued poverty of this labour force – a small pie is shared with far too many people to make it sufficient even for one.

India needs, to take off, lots of jobs. To create jobs we need an enabling environment where it is easy to do business and where factors of production are abundantly accessible.

With this land bill if infrastructure can get a boost, and manufacturing gets a shot in arm it will create a virtuous cycle of economic growth.

Manufacturing is to be a very important component of India’s economic growth. The rise of manufacturing’s contribution to India’s growth is essential for it benefit from the so called demographic dividend. By creating jobs the Prime Minister is creating loyal voters. These jobs are not only going to prevent social unrest but are going to take the country out of this abject poverty. Our manufacturing prowess will strengthen our defense industrial complex and aid India’s world power aspirations.

Development of infrastructure will allow large sections of the society to access a better quality of life – better healthcare, better housing and education. This in itself will have a far reaching multiplier effect – creating jobs, increasing disposable income and improving standards of living.

However we must guard against a shoddy implementation of the proposed provisions. Crony capitalism will put paid to any creation of virtuous cycle of growth. Adequate safeguards for environment protection is also very important for the sustainability of any economic transformation. After all ‘We do not inherit the earth from our ancestors; we borrow it from our children’

So let us get going with the land acquisition bill and start work to get labour reforms in place.