By Sharoze Tariq Raza
Jul 07, 2012
Ever wondered what happened to the UPA’s talk about “inclusive growth”? If you are a Muslim in India, the chances are you are too hungry and focused on survival to think about such polemics — the bottom line is that you’ve been had
Through the 2000s, when India’s economy was on a roll clocking an average of 8 per cent growth per year, India’s Muslims watched from the sidelines. Economically impoverished and educationally backward, the masses of India’s 11 per cent Muslims failed to avail the benefits of prosperity which remained concentrated in India’s cities, among the majority Hindus.
Now, with India back on the slow trail, the world’s second largest Muslim population awaits darker days. Through five straight years of over 8 per cent growth in 2007, economists were projecting an annual expansion rate of 11 per cent from 2011 on. But in the last week of June, the Governor of Reserve Bank of India, D Subbarao, admitted for the first time that the “potential” for India’s economic growth has “come down”.
Mr Subbarao was not exaggerating. In the post-2008 era, India’s economy experienced rapid deceleration. Last month, the government confirmed it had slumped to just 6.5 per cent growth in the period between April 2011 and March 2012 as compared to 8.4 per cent in the previous 12-month period. Between January and March, normally a period of high growth, the economic lagged at just 5.3 per cent, compared to 9.4 per cent last year. What’s worse, the industrial sector, regarded as the biggest generator of jobs, reported negative growth.
Mr Subbarao’s statement, read in conjunction with those coming from the finance ministry, reflects the serious setback that India has received in its dream of being a global economic power. The government’s chief economic advisor, Dr Kaushik Basu, A window of six months is all that we have now for putting much-needed, investment attractive economic reforms into motion.
The government has put into motion a large number of austerity measures. A freeze has been ordered on all forms of spending deemed unnecessary and no new jobs will be created in government till the situation improves.
Austerity always hits the poorest of the poor. And repeated government-sponsored studies have shown that India’s Muslims belong to that bracket. Even without austerity they suffered poor representation in organised sector jobs, and their traditional occupations were hit hard by competition from Chinese imports. It is no exaggeration that India’s Muslims face the danger of slipping into a dark age if the government does not come out with firm economic bailouts for the community.
Undoubtedly neo-liberal economists will advise the government to cut back on public financial projects especially attuned to minority needs. Muslims make up more than 80 per cent of the minority population and the way out of their backwardness was much indexed to soft loans, grants and microfinance given by different government agencies and financial institutions. In an austerity situation, this may be hit.
In effect, the austerity announcement is a double whammy for India’s Muslims. The decision comes close on the heels of a judgment overruling a policy decision to reserve 4.5 per cent of government jobs and the same proportion of seats in government educational institutions.
Last month, India’s Supreme Court admitted a case challenging its policy decision to reserve 4.5 per cent of jobs in government and seats in elite government educational institutions for economically backward Muslims. The High Court of Andhra Pradesh had earlier ruled the religion-based reservation policy decision un-Constitutional as India’s reservations policy was only for the lower castes among Hindus (Although in OBC and ST categories, Muslims are listed; but not in SC).
This judgment will exacerbate the Hindu-Muslim divide because of the flawed premise that only Hindu lower castes are poor. The Manmohan Singh government failed to implement the Sachar Committee’s recommendations in time and now we are bracing for the bad effects of inaction.
In 2005, in his second year in power, Singh had asked former Judge, Mr Rajendra Sachar, to present empirical evidence of the economic deprivation of Muslims. When the committee’s report came out with the finding that Muslims, who make up about 11 per cent of the population, hold less than 5 per cent of all government jobs, the government decided to take urgent action.
The global economic slowdown, compounded by the Eurozone crisis, will hit India’s export sector hard. Muslims make up a sizeable chunk of the export sector’s workforce, and if these firms lose markets abroad, Muslims will lose jobs.
We have seen a large number of Muslim-controlled professions vanish since the process of globalisation began in the early 2000s. Under WTO, quantitative restrictions on imports were lifted, which led to numerous small products being rendered uncompetitive. The victims were Hindus as well as Muslims, but because of their general backwardness the Muslims suffered more.
The lock manufacturers of Aligarh in Uttar Pradesh had been in the trade for centuries. Their products couldn’t compete with cheaper Chinese imports. Similarly toy makers, brass pot makers, silk weavers, kitchen utensil makers, hand-made decorative makers, etc. were bombed out of the economy.
Last month, Hillary Clinton, the US Secretary of State, called on West Bengal Chief Minister Mamata Banerjee and requested her to lift her veto on the government’s plan to allow US retail giant Walmart from opening shop in India. Mamata Banerjee’s position is based on the understanding that poor and small farmers, who are mostly Muslims in her state, would not be able to survive corporate intervention which is based on high quality standards.
For India’s 160 million Muslims, the biggest issue is how to survive the global economic slowdown which has hit India of late. This government believes the only panacea is liberalisation. But without state oversight of the economy, the Muslim has no chance.