Inclusive growth

Industrys responsibility

It is not just politicians or activists who jump on bandwagons. Even professionals are prone to this failing. Perhaps this is why the Confederation of Indian Industries (CII) had chosen ‘inclusive growth’ as the focus for its national conference 2011, instead of the more mundane theme of how to substantially raise the share of industry in our GDP.
Ah yes, ‘inclusive growth’  has a silken seductiveness as a topic of discussion in a country like ours, where 50 per cent of the population scrounges for the bare necessities. It soothes the defensive guilt of the well-heeled elite who have benefited disproportionately from the past two decades of strong economic growth. It provides a cutting edge to the perorations of the argumentative intellectual who sneers at the growth numbers, quite ignoring the fact that without such growth, perhaps three-fourths of our population would have been below that infamous Poverty Line. And, of course, for the  bureaucrat and politico, it provides the notes with which to weave another siren song of subsidy which ultimately lines their own pockets.

The cynic may be forgiven for ascribing Indian industry’s newfound anxiety for inclusiveness in growth to the dictates of simmering resentment and even revolt in a countryside which till now was meek in its response to exploitation. The fact that the entry of industry is being vehemently opposed by the inhabitants of backward areas, despite the promise of such investment being a panacea for endemic regional poverty, must be agitating the minds of industry bigwigs. It has certainly thrown a spanner in the grand plans for industrial growth in the country. Hence, perhaps, the navel-gazing by associations like the CII about winning over the hearts and minds of the bottom half by promoting inclusive growth.

About time too, since the record shows that, barring honourable exceptions, most of Indian industry has tended to operate in the return-on-investment cocoon that brooks no digression into such offline anxieties as socio-economic upheavals, habitation displacement, environmental fallout and the like. In fact, so high has been the level of indifference of Indian industry to reaching out to the surrounding community that if one were to draw contours of development around any industrialised area, one would notice a precipitous fall beyond a few tens of kilometres from the centre.

One can come across countless examples of this in and around industrial pockets all over the country, such as the deep backwardness of the countryside surrounding the metallurgical industrial towns of Orissa, the conversion of the Jamuna near Delhi from a river into a sewer due to discharge of effluents from nearby industries, the blatant disregard to safety and the Child Labour Act in the fireworks units of Sivakasi, etc. This writer is not an opponent of small-scale industries but it is also, unfortunately, true that perhaps because of being totally preoccupied in trying to stay afloat, small industries are the least concerned about inclusive growth.

Govt’s role

Industrialists will, of course, argue that their primary responsibility is to run their industries efficiently and it is the government’s job to ensure that the corporate taxes industry pays are utilised for inclusive growth. It is not the onus of industries to develop and care for social infrastructure, provide for the deprived in society, create physical assets needed by the community in general and the like.

To an extent, this is true. By insisting on industry undertaking corporate social responsibility, the government is only passing on the burden of what it should be doing on the shoulders of industry. It has to be also acknowledged, that the skills that industry possesses   to undertake its manufacturing goals, are not necessarily the same that suit civil society’s goals. For example, it is one thing to run a machine shop and quite another to run a primary school. Therefore, to expect industry to take up what the government or civil society  is geared to do, is unfair on industry and places a tremendous burden on it.
On the other hand, it must be acknowledged that industry draws its assets from society and doing its bit to strengthen society benefits it in the end. Industry has a vested interest in inclusive growth since that expands its market base. The rapid expansion of India’s  manufacturing sector during the last two decades is precisely because of a growing middle class which came about due to the benefits of growth gradually encompassing a larger percentage of the population. Just imagine how strong and prosperous our industry could become if the size of the middle class doubled from the present 200 million in the next two decades.

The question then arises: how best can industry do its bit for promoting inclusive growth? The best way to start, perhaps, is by undertaking projects which lie in their knowledge domain. For example, they can undertake education programmes in their hinterland which will enhance the skills of the rural population to meet the demands of new types of employment opportunities that follow industrial investment — such as masonry, carpentry, driving, welding and a host of others.

Another thing that could be undertaken is enhancing primary infrastructure, such as road connectivity to the interior, over and above what the state does. Industries could also exploit their marketing clout to channel products made by self-help groups in villages to urban markets. There is no dearth of possibilities. The will has to be there. There are several large and medium scale manufacturing companies which have successfully launched such outreach programmes. The CII should use its internal network to pass on their experience to other companies who want to undertake such activities and thus create a national movement.