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Terms of Trade | A fine imbalance
The large Indian city today epitomises the perfect toxic relationship between the rich and poor, making the city more chaotic and unlivable by the day
Rohinton Mistry’s A Fine Balance, in this fiction philistine’s view, is one of the best English language novels on independent India written for its time. The plot revolves around socio-economically oppressive structures in rural India and how they trigger migration to cities where the market and the state, along with its political underlings, are the chief oppressors rather than feudalism. The excesses of Emergency and communal riots following Indira Gandhi’s assassination figure in the novel as well, which was published in 1995, not very far from the events in 1975 and 1984.
More than three decades after Mistry published his most critically acclaimed work, one could argue that his plot held a more pessimistic view of things. India has avoided the kind of political disruption and violence common in the 1970s and 1980s. Migration continues to be an engine of upward mobility for blue-collar rural workers, even though feudal oppression has been economically if not socially defanged to a large extent in villages. For every worker who meets the kind of misfortune Mistry’s characters did, there are millions who have made a small fortune via migration-driven higher incomes.
A true Emergency today would not be government officials forcing hapless workers into poorly managed sterilisation camps, as happened during Indira Gandhi’s version of it, and what befalls the two main characters in Mistry’s novel. It would be the government putting blue-collar workers inside villages and not allowing them to come to cities. Indians might think of it as unimaginable. But restrictions on rural-urban mobility are pretty much the norm in a number of East Asian countries, most importantly China. In many advanced economies, what the state has not done by diktat, the market has. It is impossible for even a normal salaried person, let alone the poor, to survive in most big cities in western countries. New York’s rebellion against this oppressive urban economics is its new mayor, whom the pink papers see as the biggest communist threat of the 21st century.
India, of course, has not done any of this. Our cities, including the biggest ones, continue to attract migrants of all shades of blue-collar. Every opulent locality in a big city has an adjacent slum or its equivalent, which supplies cheap domestic labour to the well-off. India’s rich households perhaps have a greater employment elasticity than most of its factories.
Last-mile connectivity transport offered by (mostly) migrant workers on cabs, bikes, e-rickshaws etc. has seen an explosion which would put some of the worst instances of inflation in the world to shame. Workers like these live in deplorable conditions, face continuous exploitation by the market and the state, and increasingly, the climate, but also violate rules with impunity.
The large Indian city today epitomises the perfect toxic relationship between the rich and poor, making the city more chaotic and unlivable by the day. The contract is held together by the promise of some extra income for the migrant poor and extra comfort for the rich via cheap labour.
The magnitude of this migration is perhaps much larger than what official sources such as the census tell us, as was pointed out in an excellent analysis of railway ticket data in the 2016-17 Economic Survey when Arvind Subramanian was the Chief Economic Advisor.
Why is this edition of the column talking about these not-so-new things suddenly? Earlier this week, the government released a first-of-its-kind report which offers insights on employment and the informal sector in India’s million-plus cities using 2011 census numbers. The summary findings of the reports – we covered them here and here – offer an interesting insight into what drives India’s migration.
The biggest monetary premium in moving from a small city to a million-plus city is not in finding a salaried job. It is in self-employment. The biggest advantage an informal sector enterprise in a million-plus city has vis-à-vis all of urban India is in the Gross Value Added (GVA) of the firm rather than GVA per worker or wages per worker. Even salaried wages thrive in cities which tend to have a lower share of manufacturing. All of this put together with a bit of government sanctioned leap of faith – academics should perhaps carefully weigh whether breaking down survey data at the city levels preserves its statistical sanctity – raises a troubling question India must ask itself.
Have we achieved our political economy peace – unlike a lot of anxious commentators, I believe India is remarkably peaceful for its economic inequalities and social diversities – by creating what can only be called a modern-day serfdom around an economic pyramid which is extremely skewed at the top? Are our big cities primarily about delivery boys, vendors, drivers, domestic helps, security guards etc. serving the rich, alongside a large concentric low-income economy that serves the second-order demand from this underclass? Do most workers move to the city not because it will bestow on them a skill set of higher order but because it offers a larger market for the same skill set? Have a bike and know how to ride it? You can make reels in a village, but deliver biryani in a city and make some money.
Do not get me wrong. Migration, as long as it leads to some increase in incomes and consumption, is always good. But the more important question we need to ask is whether what is good at the current juncture will also be good for posterity?
What does an economy, where the young worker is getting disenchanted by farming, disheartened by manufacturing, given the poorly paid and overworked norm, and engaged in the services version of digging holes and filling them up without any improvement in his skill sets or professional growth, say about India’s economic future? Is the economic stability which we have achieved by doing all this tantamount to winning the political peace but losing the economic (transformation and strategic prowess) war?
Let me end by making a claim beyond my skill set. Capturing the tensions described here in a novel would be far more difficult than telling the story of India of the 1970s and 1980s for even an acclaimed storyteller. The consequences of India’s existing fine imbalance are yet to fully manifest themselves. I am happy to plead guilty to showing pessimism regarding the task of doing intellectual or aesthetic justice to describing this problem, like Mistry was accused of for A Fine Balance.
(Roshan Kishore, HT’s Data and Political Economy Editor, writes a weekly column on the state of the country’s economy and its political fall out, and vice-versa)
