India over the years has had its fair share of economic slumps. People may still call it a promising developing economy but the nation’s GDP has a very story to tell. Even after the rapid push to the ‘Make in India’ campaign and business summits being held in every state the amount of investment coming in or economic growth for that matter is much less compared to the cost at which such events are held. From pumping in funds to tourism festivals to hosting foreign delegations, India tried everything she could but nothing much concrete has been achieved by it so far. Additionally, the CAA ruckus closely followed by the coronavirus pandemic has brought the nation to a standstill. Many MSMEs, small businesses, cottage industries, startups have been forced to shut their engines in wake of the lockdowns. Not only this, the pandemic also brought to light the sorry affair of laborers and marginalized workers who were left to fend for themselves on highways and roads with minimum or no support from the government machinery.
Having said this many believe that the country’s GDP, which is on a stark downward trend, to be the prime reason for the same. There is also a common misconception that the rising GDP of a nation would help eradicate poverty. However, in the words of Marx, “As productive capital grows, the forest of uplifted arms demanding work becomes ever thicker, while the arms themselves become ever thinner.” The Indian experience bears this out. Piketty and Chancel, two French economists, who have estimated the share of the top 1% of the population in national income from income tax data, show that this share was the highest ever 22% in 2013 in the period after the income tax was introduced in India (in 1922); this share, by contrast, had been only 6% in 1982.
Growth produces an accentuation of poverty because, as we have seen, the petty producers and peasants are pauperized. Even when they do not experience a primitive accumulation of capital in terms of loss of land or other assets, they suffer a squeeze on their incomes. The cessation of growth does not mean that the average income of a peasant or petty producer increases; on the contrary, it decreases further for a different reason. Likewise, if the real income of a working person is the product of two terms, the real return to work for a working day and the number of days for which work is available. The cessation of growth does not raise the real return per working day, but it reduces the number of days of work. NSS’s large sample survey for 2017-18 shows that per capita rural consumption expenditure in real terms has declined by 9% between 2011-12 and 2017-18. Since the precipitate real consumption expenditure of the rural rich would have increased rather than declined, that of the large mass of the rural population must have declined to an even greater extent. This is so remarkable a finding that the government decided to withdraw the NSS sample survey results from the public domain. Moreover, chronic unemployment, which, even before the pandemic set in, had reached 6% which is an extremely significant number and underscores the magnitude of recession-caused accentuation of poverty.