The political economy of UP’s prolonged underdevelopment

Published on Mar 03, 2022 08:14 PM IST

UP’s political economy has been a product of an interplay of demand and supply, starting from colonial times, and whose legacies continue to still linger.

Any analysis of the political economy of UP’s underdevelopment has to begin by considering some broad economic figures. (AFP/Representative Image) PREMIUM
Any analysis of the political economy of UP’s underdevelopment has to begin by considering some broad economic figures. (AFP/Representative Image)

There is a popular narrative that tends to blame Uttar Pradesh (UP)'s political class for the state’s contemporary and past economic underdevelopment. According to such a narrative, while other BIMARU states — Bihar, Madhya Pradesh, Rajasthan, and Uttar Pradesh — were eventually blessed with competent political leadership, UP was not, and continued on its trajectory of poor economic management. This line of reasoning is problematic because it does not see politics as an interplay of demand and supply. UP’s political economy has been a product of such an interplay, starting from colonial times, and whose legacies continue to still linger.

Any analysis of the political economy of UP’s underdevelopment has to begin by considering some broad economic figures. This serves two purposes: How did UP stack up against other provinces at independence and since then, did the state really underperform? In 1938-39, UP’s (then United Provinces) revenue-to-income ratio was 4%, compared to the all-India average of 4.4%. In the same period, the state’s land revenue-to-taxes ratio was 64% compared to the all-India average of 46%. These figures suggest that UP had relatively lesser state capacity and was more agricultural than its counterparts. 

Looking at pre-independence irrigation figures provide a better sense of the state’s agricultural economy. According to figures by the Department of Industries and Labour Public Works, between 1944 and 46, UP’s average irrigation cover stood at 17%, compared to 12% in Madras, 14% in Sind, 0.8% in Bengal, 4% in Bihar and Orissa and 46% in Punjab. UP’s agricultural resources were better than most of its peers, except that of Punjab. However, which sections of society got the largest share of these resources would become the fundamental determinant of the state’s future economic fortunes.  

Post-1947, the data clearly shows sluggish growth patterns in the state. According to data by Organisation for Economic Co-operation and Development (OECD), between 1960 and 1994, the average annual per capita GDP growth in UP was 1.2%, compared to the national average of 1.7%. Moreover, according to estimates by KL Krishna, UP featured the second most volatile per capita growth between 1970 and 1996, only behind Rajasthan. 

What explains this sustained weak performance? The key drivers of UP’s growth patterns can be discerned within the larger national political economy at play, which to begin with was determined by two related factors. 

First, as many scholars have observed, the Indian National Congress (INC) was an umbrella organisation with a genuinely multiclass support base. Second, the British direct rule was very heterogeneously applied throughout India – for instance, through the rampant use of zamindari in UP. Given that this fragmented authority structure continued post-Independence, it resulted in extraordinarily fragmented state authority, characterised by pockets of despotic rule in UP. 

These two factors resulted in what Atul Kohli referred to as India’s multiclass fragmented state authority. As a result, “the INC simultaneously inclined toward populism, making promises to lower classes while quietly protecting the interests of dominant classes,” writes Kohli. This system rested on using patronage — for select elites — and co-option — of the masses — to stay in power. And the fragmented state authority meant that neither the central nor the state government had the state capacity to uniformly implement even a limited number of policies. As recent research shows, districts where the British implemented the zamindari system (as opposed to land-tenure) have shown to have lesser state capacity and worse long-term development outcomes. However, more broadly, this dichotomy between Jawaharlal Nehru’s socialist rhetoric and policies in favour of the rural and urban capitalists was best epitomized by Barrington Moore’s description of Nehru as the “gentle betrayer of the masses”. 

This economic system was predominantly in favour of the rural and select urban capitalists. “As the decades rolled by, course correction became virtually impossible, what with Nehru’s and later Gandhi’s parasitical dependence on the gentry for capital formation. For their socialist five-year plans in no small measure banked on rural accumulation to fund industrial expansion. Keeping rural demand low – that is, poor peasants poor – was, in effect, a macroeconomic priority,” writes Pratinav Anil. 

UP’s socio-economic composition, especially the one represented in the UP-Congress Committee (UPCC) and government from the 1950s to 80s, made it an ideal state to implement such an economic doctrine. Barring a couple of years, the Congress was in power in the state from 1952 to 1989. This Congress power was undergirded by an umbrella coalition, which would include Upper Castes, Backwards, Schedule Castes (SC), and Muslims. However, the power lay first with the big landlords until the 60s, and then with the “Bullock Capitalists” – middle gentry, who owned 2.5 to 15 acres of land – through the 70s and 80s. 

This intra-Congress balance of power in UP was evident in the caste composition of successive UP governments, which featured a disproportionate representation of Upper Castes such as Brahmins and Baniyas, and near-complete exclusion of Backwards, SCs and Muslims. Similarly, while the late-60s onwards, the UPCC had a proportionate distribution of power between the Upper Castes and Backwards, often the more powerful district-level units were controlled by Upper Castes. This power structure underpinned UP’s economic policies, which were pro-landlord and bullock capitalist, and did little to nothing for the rest. 

UP back then, and to a large degree even today, comprises a majority of landless or very small landowning farmers. Thus, much like South Korea or China — and considering the kind of economic ideas at play during the time — the primary policy choice in UP should have been towards facilitating large-scale land reforms and investments in primary infrastructure. In stark contrast, successive UP governments back then, decided to block any meaningful land reforms, and continued to support the rural interests. 

Let’s consider two distinct examples that help clarify the UP government’s policy preferences. 

First, according to data by OECD, from 1970 to 1994, in terms of physical, social and economic infrastructure (per capita), UP does better than the national average in agriculture, irrigation, and roads. These are the kind of infrastructure demands that one would expect the rich landlords and bullock capitalists to make. Meanwhile, the state lagged behind the national average in electricity consumption, literacy levels, infant mortality, and bank deposits. These are indicators of more public-centric infrastructure, which didn’t seem to be prioritised by the state. 

Second, let's review UP’s farcical attempt at implementing land ceilings. The state had already abolished zamindari and large landholdings in the 1950s, and now the big Nehruvian idea was to implement land ceilings, redistribute the expropriated land, and finally facilitate the pooling of small landholdings for collective farming. But the UP government, representing key rural interests, ensured that any meaningful attempt at implementing land ceilings would be blocked. As a consequence, by 1972 only 0.4% of the land had been redistributed – of which, about 70% was in peripheral and less fertile areas. Moreover, even this wasn’t the biggest issue with land ceilings. As Richard S. Newell argued, “Even if all of the surplus land were distributable, the per capita share of the landless would be only about 0.04 acre." 

Hence, land ceilings as an economic idea was a non-starter in UP. However, this doesn’t mean that leaders of the UP Congress didn’t publicly praise the policy. They made major public commitments and hailed it as the transformative idea for the state’s rural economy. But the execution and its very economic rationale was a different story altogether. This dichotomy between socialist rhetoric and pro-rural elite policies was the fundamental impediment of UP’s prolonged underdevelopment.

In the overarching Nehruvian and Gandhi’s national political economy, a state’s economic orientation was determined by a trade-off between “central transfers and regional reelection chances”, according to Aseema Sinha. On the one hand, in states with a robust sub-nationalism and an anti-centre sentiment, its politicians choose reelection via anti-centre politics. On the other hand, in states with no sub-nationalism, there was no such tradeoff, which led to its political elite bargaining with the centre for more investments. 

UP and its political class fell squarely into the second category and it successfully bargained with the centre. Never mind the political leaders of the state were only representing the narrow interests of the landlords and bullock capitalists, as opposed to the population at large. 

Srijan Shukla studies international politics and business at NYU and is managing editor of NYU’s Journal of Political Inquiry

The views expressed are personal

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