Table Of ContentR. Maria Saleth
S. Galab
E. Revathi Editors
Issues and
Challenges
of Inclusive
Development
Essays in Honor of Prof. R. Radhakrishna
Issues and Challenges of Inclusive Development
R. Maria Saleth S. Galab E. Revathi
(cid:129) (cid:129)
Editors
Issues and Challenges
of Inclusive Development
Essays in Honor of Prof. R. Radhakrishna
123
Editors
R. Maria Saleth S. Galab
Madras Schoolof Economics Institute for Development Studies
Kottur, Chennai, Tamil Nadu,India Visakhapatnam, Andhra Pradesh, India
E. Revathi
Centrefor Economic andSocial Studies
Begumpet, Hyderabad, Telangana,India
ISBN978-981-15-2228-4 ISBN978-981-15-2229-1 (eBook)
https://doi.org/10.1007/978-981-15-2229-1
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Dedicated
to the memory of the following eminent
scholars,
who nurtured Prof. R. Radhakrishna
over the years:
Professors:
P. N. Mathur
D. R. Gadgil
D. T. Lakdawala
G. Rami Reddy
Krishna Bharadwaj
G. S. Bhalla
and
George Rosen
Foreword
Itwasagreatpleasureformetojointhedistinguishedscholarsforpayingtributeto
Prof.R.Radhakrishna,inwhosehonourthepapersinthisvolumewerepresentedat
anInternationalSeminaron‘InclusiveDevelopment:IssuesandChallenges’heldat
the Centre for Economic and Social Studies (CESS), Hyderabad.
Professor Radhakrishna is an eminent economist with social commitment. His
research work on consumption, food security, poverty, growth and inequality and
well-being is well recognized as authentic and credible. Apart from his own
research work, his contributions extend to the development of premier academic
institutions in the country such as CESS, as its Director for nearly a decade in its
formative years and now as its Chairman; Andhra University, Vice Chancellor;
Indira Gandhi Institute of Development Research in Mumbai, Director and Vice
Chancellor; ICSSR, Member Secretary; and Madras Institute of Development
Studies, Chairman. For him, institution-building has meant developing human
resources, as evidenced by the outstanding work of several scholars with his
guidanceandcollaboration.Hiscontributionstowardspolicy-makinginthecountry
areimmensethroughhisparticipationandleadershipinvariousExpertCommittees,
including as Chairman of the National Statistical Commission.
In his recent work, Prof. Radhakrishna has highlighted therising inequalities in
income in India in post-reform period and suggested remedial measures.
Globalizationandinternalliberalizationoftheeconomywithinaninequitablesocial
structureresultinaccentuatingtheexistinginequalitiesinincomeandwealthinthe
society,unlessseriouseffortsaremade simultaneouslytoremovesocialbarriersto
equal opportunity and equip the youth with necessary education and skills.
Risinginequalitiesinwealthandincomeleadtounequalaccesstopower,status
and influence. Democracies may be less prone to such state capture than dictator-
ships, but even democracies have proved to be vulnerable to pressures from the
powerful private interests, particularly when the prevailing social structure is
inequitable.
Policyanalyses,worldwide,highlightrisingincomeinequalitiesastheforemost
concerntoday.RecentOECDevidenceovertheperiod2002–12showedanegative
correlation between income inequalities within a region and region’s growth,
vii
viii Foreword
basically on account of underinvestment in human capital by the lower-income
groups, suggesting that policies should avoid the ‘grow first, distribute later’
assumptionthathascharacterizedtheeconomicparadigmuntilrecently,andinstead
considerfromtheoutsetthewayinwhichthebenefitsofgrowthwillbedistributed
to different income groups.
Further, there is a general consensus among these studies on the major factors
driving inequalities and on the agenda for action to reduce inequalities, prominent
amongsuchagendabeingpublicprovisionofeducation,healthcareandnecessary
skills. But these studies rarely ask why countries in general failed to implement
suchagendaeffectively,eventhoughthesemeasureshavebeenarticulatedforover
twodecades—aperiodduringwhichinequalitieshaveinfactreachedunacceptable
proportions. There is thus a major gap in understanding with respect to the rele-
vance of sociopolitical factors beyond the oft-repeated economic policy agenda.
In general, democracy has been regarded as a major political instrument for
achieving inclusive development. But inequalities have been rising even in mature
democracies which had experienced democratic revolutions long ago and have
undergone radical social transformation, as in Europe. In China, feudalism was
abolished in the late 1940s. However, the authoritarian political system of China
with enormous powers for political mobilization and will for action, while suc-
cessful in bringing about high growth, resulted in highly uneven sharing of gains
fromgrowth.India,ontheotherhand,succeededinsustainingdemocracysofarin
a society that is ancient, slow-moving and ridden with various kinds of inequities
withrespecttoclasses,castes,gender,etc.Butinsteadofdemocracybringingabout
radical social change, the long-entrenched and powerful social groups are able to
influence even the popularly elected governments for appropriating dispropor-
tionately large benefits from growth.
Thereseemtobetwomajorsourcesforthefailureofdemocraciesinthisrespect.
Inthe first place, democracieswere expectedtogive rise tolarge middle class that
wouldespousethecauseoflibertyandequality,butexperiencehasshownthatthe
upper sections of the middle class are more interested in reaching the top 10 per
cent or 1 per cent of the income ladder than joining the forces working for wider
sharingofbenefitsfromgrowth.Anothermajorsourcefordistortionofdemocratic
frameworkis‘moneypower’.Itrangesfromtheverywealthyemployingthehighly
paid consultants andlawyers for ‘taxplanning’to financinginterest lobbies towin
overthelawmakers,asoftenobservedintheUSAandeveninotherdemocraciesin
Europe.
Itisnowwidelyrecognizedinsocialscienceresearchthatmuchofthevariation
inpovertyandinequalityacrossrichdemocraciesisduetopoliticsandinstitutions.
For example, there is convincing evidence of a strong relationship between
unionization and higher earnings, and lower inequality and poverty, the indirect
effect of unionization through liberal welfare policies of states becoming more
prominent.Theproportionalrepresentationsystemofdemocracy,wheremultiparty
competitionbecomeseffectiveatdifferentstages,explainswhycountriesinEurope
with the system of proportional representation have much less poverty and
inequality than the countries with majoritarian system like the USA. There is
Foreword ix
evidence that congressional shifts to the Republican Party, diminishing union
membership,lower taxratesandfinancialasset bubblesplayedastrongrole inthe
rise of super-rich in the USA. Political actors, who favour free markets, do not
simply ‘letmarkets dotheirjob’andactively influencehowmarketsworkthrough
their choices regarding whom to tax and what to regulate. One of the emerging
concerns with the dramatically rising inequality in countries like USA is that it
resultsinanunbalanceddistributionofpoliticalpowerwhichreinforcesinequalities
and may by itself have a corrosive effect on the functioning of democracy.
A major casualty of rising income inequality and the increasing role of money
power in policy-making is that those adversely affected start losing interest in the
prevailingdemocraticsystem.Thisisconfirmedbystudieswhichdemonstrate that
increasing income inequality strongly depresses political engagement by people
who feel left out. The decline in voter participation and apathy isexplained by the
declineinthegovernmentexpenditureonsocialdevelopmentandwelfaremeasures
asaproportionofG.D.P.sincethelate1980s,whichhadsteadilyincreasedearlier
in such economies for over two decades on account of unionization and political
pressures.
All this shows that formulating a good policy agenda for achieving inclusive
growth is not enough. There is a need for a debate on the efficacy of the existing
framework of democracy and necessary modifications so as to enable it to more
adequatelyrepresentthelong-termsocietalaspirationsforjusticeandfairplay.Itis
alsonecessarytoexplorethepossibilitiesofstrengtheningcivilsocietyactivismby
combating the prevailing apathy. This is a formidable challenge at the political
level. But intellectuals can contribute to this effort through their investigations and
thinking.Thisrequiresindividualaswellasjointeffortfromdifferentscholarssuch
as political scientists, sociologists, historians, economists and others.
C. H. Hanumantha Rao
Honorary Professor
Centre for Economic and Social Studies
Hyderabad, India
Preface
This volume is published in honour of Prof. Rokkam Radhakrishna. Professor
Radhakrishna is recognized as one of the most influential applied economists of
India. Known both nationally and internationally for his immense contributions to
the literature and policy in the areas of development economics and welfare anal-
ysis, Prof. Radhakrishna is a prolific researcher, respected teacher, able academic
administratorandnotableinstitutionbuilder.Heledanumberofinstitutionsintheir
formative years, including the Department of Economics of the Central University
ofHyderabadandtheCentreforEconomicandSocialStudies(CESS),Hyderabad,
and Indira Gandhi Institute of Development Research, Mumbai. He has also held
manydistinguishedpositions,andnotableamongtheminclude:Chairman,National
Statistical Commission; Member Secretary, ICSSR; and Vice Chancellor, Andhra
University. Over the years, he has also been bestowed with several academic and
public awards.
We are conscious of the fact that bringing this volume in honour of Prof.
Radhakrishna should not be a usual ritual but should be a real testimony truly
proportionate to his immense contributions to the literature and professional
standingwith theacademic community.Inthis sense, weconsidered it appropriate
to organize an international seminar participated by leading scholars and experts
around the world, who have been associated with Prof. Radhakrishna during his
longanddistinguishedcareer.Asaresult,aninternationalseminaronhisfavourite
theme‘InclusiveDevelopment:IssuesandChallenges’hasbeenorganizedatCESS
during 8–10 October 2018.
The present volume includes a set of papers presented in this international
seminar, which have been selected through careful process of peer review. They
cover some of the key issues and challenges of inclusive development largely
within the Indian context, though international experiences are also covered in
relevantcontexts.Thethemeofinclusivedevelopment isexplorednotonlyfroma
historical and overall macro-perspective but also with a particular attention to
sector-specific contexts such as agriculture, industry and health. Similarly, the
coverage ranges from the intersection of inclusive development with poverty
measurement and social sector issues to the inclusionary implications of
xi
xii Preface
international dimensions such as trade, outsourcing and global financial crisis.
Overall, this volume resembles a compact canvass of issues and challenges of
inclusive development with latest information from a multiple perspective.
Wewouldliketotakethisopportunitytoformallyrecordoursincerethanksand
appreciationtoanumberofpeopleandorganizationsformakingthepublicationof
thisvolumeareality.Firstofall,weareindeedgratefultoallthecontributorstothis
volumefortheircommitment,supportandpatienceduringthelengthyprocess.We
are also grateful to Prof. C. H. Hanumantha Rao for providing a thoughtful and
fitting foreword for this volume. We thank Dr. Brajaraja Mishra for his excellent
editorialandcommunicationsupport.OurthanksarealsoduetoProf.R.K.Mishra,
Prof. K. N. Murty, Prof. Venkata Reddy and Dr. G. Swaroopa Rani, for their
multifarious support during the preparation of this volume. We also thank the
faculty and staff of CESS for their cooperation and support. Finally, but impor-
tantly, we thank Springer Nature, particularly Ms. Sagarika Ghosh, Ms. Nupoor
Singhandtheirstaff,fortheirexcellentsupportinbringingoutthisvolumeinsuch
a nice quality and within such a short time. We do hope this volume deserves the
attention and support of researchers and policy-makers alike.
CESS, Hyderabad, India R. Maria Saleth
October 2019 S. Galab
E. Revathi
