Waking up from the Gandhian dream

India should radically refocus its development efforts from small farmers to building an urban-oriented modern economy with reduced labour participation in agriculture

Jeremy Carl Delhi

The unfortunate thing about even the most wonderful dreams is that eventually one has to wake up. Led by the inspirational example of Mahatma Gandhi, India has dreamt of rural prosperity since independence, but it is becoming increasingly clear that this dream, however worthy, could turn into a modern budgetary and social nightmare. If India wishes to avoid this fate, it will have to awaken and begin to confront its rural realities shorn of easy slogans and socialist rhetoric of early Indian nationalism.

As the rural employment guarantee bill goes before the Lok Sabha, the newspapers are filled with commentators debating the problems of rural India. Foremost among the questions is whether India has chosen a sustainable path for rural development. Currently, agricultural labour is in surplus and wages have plunged to the degree that the government needs to enact massive employment schemes in order to provide even basic livelihoods for rural Indians. This crisis would seem to be at odds with a Gandhian dream that scorned the city and looked to India's villages and small farmers as the source of future prosperity.

But after more than 50-years of independence and 14 of sustained economic growth, this dream must be re-examined in a critical light. Is the rural crisis in agriculture a passing problem that will disappear with continuing economic expansion or is it rather a deep-seated trend that will require a fundamentally new vision?  The latter scenario seems to be the case, inescapably so.

One area that needs focus is land reform. Although there are potentially good reasons for it, even a radical land reform, one that goes far beyond anything being contemplated by politicians, cannot pave the path to rural prosperity.

With more than 80 per cent of India's agricultural landholdings measuring less than two hectares, almost half of agricultural workers landless, and a burgeoning rural population, India must make significant changes in the agriculture sector to achieve economic efficiency and sustainability. While classical economic theory would suggest land consolidation and economies of scale are the way to achieve higher productivity and more agricultural wealth, it is not clear that such a situation applies to India. But regardless, as an ever-growing landless population looks to work on less and less land more and more will inevitably be forced onto the government dole. This phenomenon, which is exemplified by the dramatic growth of the Targeted Public Distribution System over the past decade, cannot be sustainable in the long run.

But India's strategies for land reform do not just affect agricultural labour. They will have a profound impact on energy and water consumption. Smaller farms simply cannot support a large degree of mechanisation and energy usage, as small farmers cannot afford the large capital costs, given their modest profits. Even more important, it is very difficult for small farms to sort and transport their goods in an efficient manner.