Wednesday, July 29, 2015

Rural Economy in West Bengal: What does the SECC 2011 show?

Shantanu De Roy

The data of Socio Economic and Caste Census 2011 (SECC 2011) was partially published by the Union Rural Development Ministry on July 3, 2015. Already, it has created a lot of controversy and debate both within the political establishment and academia. Abhijit Sen (2015) has argued that the SECC 2011 data is robust and consistent with those available from other sources up to the state level.[1] Bhalla (2015), though, has argued the opposite. According to him, there is wide divergence on several indicators in data of the SECC 2011 as compared to the Consumption Expenditure and Employment-Unemployment Surveys of the NSSO.[2]

Be that as it may, a total of 17.91 crore households were surveyed in rural India. Data released from SECC 2011 shows dismal economic condition of rural economy in India. Substantial sections of population in rural areas are leading a life of acute distress, misery and economic insecurity. Almost 56 per cent of households in Indian villages are landless, in that they do not own cultivable land; about 51.14 per cent of households receive major portion of income from manual casual labour; 44.52 per cent of households live in Kuccha houses; only 9.68 per cent of households are employed in salaried jobs and almost three fourth of total number of households (74.49 per cent) has a monthly income of less than Rs 5000. These figures have shown not only acute destitution in Indian villages but have also exposed the hollowness of claims of policy makers in India regarding improvement in living standards through higher growth rates that the Indian economy had witnessed in recent past.

This article discusses data of Socio Economic Caste Census 2011 for the state of West Bengal. West Bengal is one of the few states in India that had successfully implemented land reform that had brought relief to the rural poor, particularly manual labourers, and small and marginal peasants. Notwithstanding successful implementation of land reform, implementation of structural adjustment programmes since the nineties had detrimental impact on the rural economy of West Bengal. It analyses some basic indicators of development to assess levels of living of population in rural areas in West Bengal.

Landlessness

SECC 2011 shows that 70 per cent of households in the rural areas of West Bengal did not own land.[3] This is much higher than the all India figure of 56 per cent. Historically, landlessness is high in West Bengal. There was and still is high demographic pressure on land largely due to lack of modern organised industry that could have absorbed surplus labour from agriculture. Also, high growth rates of state domestic product since the 1990s did not lead to commensurate rise in labour demand in non-agricultural sectors that could have reduced pressure of population on land. As a result, in 1987-88, even at the peak of land reform in West Bengal, about 39.6 per cent of households did not cultivate land.[4] Ownership over agricultural land provides livelihood security to households, especially to the lower income groups. It is also a source of power in rural areas since land is the fundamental means of production in agrarian society. A component of land reform in West Bengal was redistribution of ceiling surplus agricultural land from the landed classes to landless and small and marginal peasants-sections of rural poor-without any compensation being given to the former. The idea was not only to break monopoly power over ownership of land but also to provide livelihood security to the rural poor. Thus, incidence of high proportion of landlessness does not augur well for the levels of living of poor people in rural areas in West Bengal who were the main beneficiaries of land reform.

Such high incidence of landlessness in West Bengal comes in the backdrop of increasing landlessness as shown by the successive surveys of Employment and Unemployment of the NSSO. According to 68th round of the Employment and Unemployment Survey of the NSSO, about 65 per cent of households in the rural areas of West Bengal did not cultivate land in 2011-12; corresponding figure in 1987-88 was 39.6 per cent. In other words, according to the NSSO, proportion of households that did not cultivate land in West Bengal had increased sharply between 1987-88 and 2011-12.

High landlessness in West Bengal can be traced to the deepening of agrarian crisis in the state. West Bengal had achieved a high growth rate of 5.6 per cent in agriculture in the 1980s, following the initiation of land reform in the state. However, with the implementation of structural adjustment programmes in the 1990s, the initial momentum gained from land reform was eroded. Average annual growth rates in agriculture had gone down to 2.3 per cent in the 1990s and further declined to 2 per cent between 2004-05 and 2011-12.[5] Sharp decline in agricultural growth rate implies that within a period of three decades, income generation from agriculture had declined quite substantially. Hence, the importance of agriculture as a source of livelihood security in rural West Bengal had diminished. Since, agriculture is a land based activity, declining importance of agriculture means that the importance of land as a source of income and employment in the rural areas had declined as well.

Bhattacharya and Bhattacharya (2007) and Khasnabis (2008) had argued that the initiation of economic reforms in India under the guidance of IMF and World Bank led to drastic reduction in food and fertiliser subsidy and rural credit for priority sector lending. In addition, import liberalization had resulted in the import of food grains from abroad. Price support policies of the government were by and large dismantled. Thus, while on the one hand, cost of production in agriculture had increased, on the other, peasantry was denied remunerative prices from agricultural production. Thus, peasantry has to face adverse price shocks in output and input markets with the initiation of structural adjustment programmes. As a result, the agrarian economy in West Bengal has been facing a deceleration and is in a crisis. Thus, farming has become a less attractive avenue for economic activity in West Bengal and had led to voluntary land alienation by small and marginal peasants. According to the West Bengal Human Development Report (2004), “Most of these processes are the result of neo-liberal macroeconomic policies and processes which are outside the control of state government, but there are those, such as agricultural extension services, which can be improved through state government intervention.”[6]

West Bengal has been consistently experiencing growth rates of 7-8 per cent between 2006-07 and 2011-12. Average annual growth rate of state’s domestic product was 6.2 per cent between 1991 and 2006, higher than the growth rate of 4.7 per cent between 1981 and 1990. Services sector were the vehicle of growth process in West Bengal since the 1990s.[7] In 2011-12, annual growth of GSDP at constant prices in service sector for 2011-12 was 8.07 per cent; corresponding figure for agriculture and allied sector was 0.81 per cent.[8]

The pattern of changes in sectoral shares in West Bengal is consistent with the pattern observed for India as a whole. The share of services in output has increased over time; however, this did not lead to corresponding increases in employment. West Bengal had experienced decline in the share of agriculture in NSDP between 1991 and 2011-12. It had declined from 30 per cent in 1991 to 18.8 per cent in 2011-12. On the other hand, the share of services in NSDP had increased from 41.8 per cent to 66.2 per cent during this period.[9] Agriculture has been the main source of employment during this period even though its contribution in total output has decline. Thus, a higher percentage of labour was engaged in agriculture than its contribution to the state domestic production which implies lower labour productivity in agriculture as compared to non-agriculture sector. It also implies low per capita income in agriculture and an increasing inequality in the economy.  

Economic development in the developed countries of the world was associated with shifting of workforce from agriculture to organised industry and modern tertiary activities. In West Bengal, however, the shifting of workforce from agriculture has been associated with the growth of activities in the unorganised sector that does not provide a decent standard of living to the people employed in it. According to 68th round (2011-12) data on Informal Sector and Conditions of Employment in India of the NSSO, about 82.7 per cent of rural males employed in non-agricultural occupations are in un-organised sector in West Bengal. Across industries, about 92 per cent of rural males employed in manufacturing sector and almost 74 per cent in construction sector are un-organised workers in West Bengal. For rural females, almost 81 per cent of workers in non-agriculture sector are unorganised workers. Almost the entire workforce (97.7 per cent) employed in manufacturing, the biggest source of female employment in rural West Bengal in 2011-12, were in unorganised sector. The Report mentions that there was no social security benefit for 85 per cent of rural males and 86 per cent of females employed in unorganised sector.

Thus, landlessness and decline in income generation in agriculture did not lead to (a) commensurate increase in employment opportunities in non-agriculture sectors of the economy and (b) did not provide a decent standard of living in occupations outside agriculture. All of these meant that the rural economy in West Bengal is in acute distress.

Manual casual labour and household incomes

Distress in the countryside in West Bengal is evident from the data given in SECC 2011. Data show that 58.4 per cent of households in rural areas in West Bengal are mainly dependent on manual casual labour. This is higher than the all-India figure and 4th highest among the 15 major states in India. The loss of viability of small and marginal peasants based agriculture with the initiation of market led reforms since the 1990s, had forced these sections to participate as manual wage labour in agriculture and non-agriculture sectors for subsistence. Also, increasing landlessness had resulted in such a high proportion of households to seek employment as manual casual labour in agricultural and non-agricultural occupations. Data from Employment and Unemployment Surveys of the NSSO shows that 91 per cent of households in West Bengal were either landless or cultivated on small plots of land (not more than 0.5 acre) in 2011-12.[10] This is largely due to successful acquisition of ceiling surplus land by the state that had led to fragmentation of large holdings. Also, with the economy opened up for global market, the crisis of agrarian economy deepened and the economy of small and marginal peasants lost viability. The share of cultivation of agricultural crops in total household income is one of the lowest in West Bengal among the 15 major states in India. Data from SECC 2011 shows that only 18.9 of income were from cultivation of agricultural crops which is lower than the all-India figure of 30.1 per cent. 

An indicator of level of living is given by household incomes. There is no secondary source of data in India that derives household incomes. SECC 2011 did not derive household incomes that could have been used to assess the level of living in rural areas. However, it shows that for 82.5 per cent of households in rural areas of West Bengal, monthly income of highest earning household member was less than Rs 5000 which is almost 8 percentage points higher than the all-India figure. In this respect, West Bengal ranks third among the 15 major states in India behind Orissa and Madhya Pradesh. This is not an indicator of decent standard of living. Moreover, with a substantial proportion of rural males and females participating in informal sector jobs with very low wages and agriculture in a state of crisis, it can be safely concluded that a large proportion of households in rural areas will fail to maintain a decent standard of living even if more household members (assuming an average household size of 5) participated in work. A clearer picture, though, could have emerged if SECC 2011 data published household incomes.      
 
Conclusions

Analysis of SECC 2011 shows that rural economy of West Bengal is in acute crisis. Implementation of land reform that had brought some relief to substantial sections of rural poor in the 1980s has lost its vitality by the 1990s. Implementation of neo-liberal policies by successive Central governments in India since the 1990s has taken a huge toll on the livelihood security of poor people in India and West Bengal is no exception. Agriculture has become un-remunerative and people have moved out of agriculture. However, employment has been created mainly in the informal sector with very low wages and minimum social security benefits that can hardly provide a decent standard of living. Also, employment generation in non-agriculture sector has been much less than the demand for jobs created due to lowering of growth rate in agriculture. It is high time that both the State and Union governments respond to this situation in utter seriousness and mitigate the sufferings of poor people in West Bengal. In this context, the recent policy proposals of the NDA government at the Centre in terms of reducing expenditures on MGNREGA and Food Security Act are a sure recipe for disaster. The rural economy of West Bengal is in tatters and has the potential to create anarchy and destroy the social fabric of the state. 


References

Bhattacharya, M and Bhattacharya, S (2007): ‘Agrarian Impasse in West Bengal in the Liberalisation Era’, Economic and Political Weekly, 42(52), December/January, pp.65-71.
Khasnabis, R (2008): ‘The Economy of West Bengal’, Economic and Political Weekly, 43(52), December, pp. 103-115.





[1] See Indian Express, July 22, 2015.
[2] See Indian Express, July 23, 2015.
[3] SECC 2011 definition did not consider homestead land of households.
[4] See the 43rd round NSSO survey on Employment and Unemployment in India.
[5] Growth rates in the 1980s and 1990s were computed by Bhattacharya and Bhattacharya (2007). Growth rate between 2004-05 and 2011-12 were estimated from Economic Review-2011-12 of the Government of West Bengal.
[6] See West Bengal Human Development Report (2004) for a detailed discussion.
[7] See West Bengal Development Report of the Planning Commission (2010) for a detailed discussion. It is available at http://planningcommission.nic.in/plans/stateplan/sdr/sdr_wb1909.pdf.
[8] These are provisional estimates of the Bureau of Applied Economics and Statistics of Government of West Bengal (2013-14).
[9] The figures for 2011-12 are provisional estimates of the Bureau of Applied Economics and Statistics of the Government of West Bengal (2013-14). The figures for 1991 are in West Bengal Development Report of the Planning Commission of India (2010).  
[10] Estimated from unit level data of the NSSO.



 Shantanu De Roy is Assistant Professor at  Ambedkar University, Delhi.

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