Who are the Indian Labharthis – visible and hidden

While Prime Minister Narendra Modi has disparagingly characterized marginalized people as ‘labharti’, the ruling Bharatiya Janata Party continues to implement ‘labharti’ programs to lure voters.

Following this, the opposition also announced such vote acquisition schemes.

But do we have data on the number of labhartis in India?

Moreover, how to recognize ‘labhartis’ in India?

Other questions arise: Is there anything wrong with such ‘labharti’ programs? Why has this issue become important recently?

The marginalized Labharti

Labharti in its broadest sense means those who benefit from government policies. The Prime Minister had in mind only a subset of the total number of such beneficiaries – those who get something free from the government. Like free ration, bus fare and electricity or farmers receiving Rs 6,000 per year under the Prime Minister’s Kisan Samman Nidhi Scheme. Some of these programs are continuations of earlier programs while others were initiated by the BJP governments at the Center and states.

Some free offers targeted marginalized groups such as farmers, workers, women, the unemployed and small producers. Insufficient resources prevent these groups from accessing basic necessities such as food, water, energy and health care. As market prices for these essential items are unaffordable to marginalized people, the government has stepped in to address this market failure.

Even if prices are subsidized, marginalized people still cannot afford the minimum required for adequate nutrition and quality education. As a result, many of these basic amenities were made available free of charge, turning them into ‘labhartis’. This approach reduces poverty and provides long-term benefits to society.

Alternatively, the system must enable marginalized people to earn a “living wage,” as promised in the Constitution. Many workers are either underemployed, hidden unemployed, or have stopped looking for work altogether. As a result, workers are forced to accept low wages. Due to the lack of adequate employment and low wages, family income remains insufficient for marginalized people.

Political perception: the price of vote

Political perceptions of marginalized people have changed over time. For some time after regaining independence, people were ready to wait until the achievements of development flowed to them. Seventy-five years later, trust in politicians’ promises about future supplies has disappeared. What is offered must be tangible and immediate.

In the vote market, the marginalized evaluate who offers more in the form of free benefits. The change in perception occurs because the promised trickle-down effect was minimal.

The ruling elite eagerly points to the reduction of extreme poverty, the spread of education and greater availability of food for the marginalized. But poverty is specific to space and time, not a fixed and unchanging line. The year 2024 will not be the same as 1962 or 1993. Poverty, mass unemployment, good education, the Internet divide, etc. must be taken into account to determine. Moreover, regardless of the free provision of basic necessities, income is not sufficient to lift marginalized people above the poverty line.

Between 1950–51 and 2022–23, real national income increased 29.76 times. Data from Credit Suisse suggests that most of this growth has gone to wealthy and large companies, which make up the top 1% of the population. So in 2018, they owned 51.5% of the wealth, while the bottom 60% owned only 4.7%. In terms of income, the top 1% earned 22%, while the bottom 50% earned 13%. This is the result of a policy that has had little trickle-down effect.

The rich gained even more from the informal economy, which is not reflected in official data. It was estimated that in 2012–2013 it amounted to 62% of GDP and is constantly growing, concentrated in the hands of 3% of people with the highest incomes. The ruling elite has perpetuated it through a triad of corrupt businessmen, politicians and the executive who share their illicit gains, further marginalizing the marginalized.

All this makes India one of the most unequal societies in the world. The enormous achievements of the elite are visible in their ostentatious lifestyle. Greed is celebrated and wealth is splashed. Marginalized people see this and feel cheated when they compare it with their own daily struggle for clean water, electricity, sewage, etc.

This sets the stage for vote-seeking political parties to immediately offer ground to the marginalized. There is also talk of redistribution.

Veiled wealthy “labhartis”

The blame for adopting trickle-down policies falls squarely on the ruling elite, made up of business interests, the urban elite and the broader wealthy. They were the decision-makers, not marginalized people. They have been the true “labharti” of the system for the last 75 years.

They shaped government policy and the annual budgets of the Center and states, enabling them to leverage the nation’s resources. They present their interests as those of the nation, ignoring the interests of the marginalized. As mentioned above, unemployment helps keep wages low, allowing businesses to generate higher profits. The elite can afford a luxurious lifestyle due to the low wages of servants and chauffeurs.

This process of resource utilization was highlighted in 1991 and then in 2014 in the name of promoting economic growth. For example, during the pandemic in May 2020, the Rs 20 lakh crore ‘Atmanirbhar’ package allocated around Rs 3 lakh crore to the marginalized and the rest went to the affluent in various forms. The marginalized suffered the most, but it was the wealthy who received most of the support. Not surprisingly, while the economy declined, the stock market wealth of wealthy individuals skyrocketed.

The government has announced a PLI scheme for the organized sector with an outlay of Rs 1.97 lakh crore, ostensibly to promote manufacturing. Given its capital intensity, it will not generate much employment. Moreover, in the budget for 2024-25, capital expenditure was directed primarily to modern sectors. Employment generating sectors such as education, rural development and MGNREGS faced real cuts in allocations.

To promote the organized sector, the government introduced structurally flawed GST, demonetization, etc. The demand has shifted from the unorganized sector to the organized sector. Thus, the policy harmed small and micro industries that promoted employment, further marginalizing marginalized people.

In the last government meeting, a one-crore rooftop solar panel installation program was announced with a maximum subsidy of Rs 78,000 per household. But marginalized families have no roof over their heads; only the rich have it.

Moreover, solar panel suppliers have increased prices. Of the total maximum subsidy amount of Rs 78,000 crore, suppliers will contribute Rs 58,000 crore. They, along with the wealthy, are “labharthis”. There are many such examples. This has been India’s political economy since independence.

Therefore, behind the veil of “national welfare” politics, the real “labharthi” was hidden by big business and the elite. How can management not see this, repeatedly pointing the finger at the marginalized? Is this the motivation of authoritarian governments?

Application

The current economic system determines who gets how much. The ruling elite organized it to benefit from both the white and black economies. This led to the concentration of income and wealth in their hands, behind the veil of politics, making them veritable ‘labharti’ since independence. The marginalized, those left far behind, do not trust the long-term promises of political parties and expect immediate increases in the vote market, making them visible “labharthis”.

The real ‘labharti’ since independence often do not acknowledge their role in this development. Their narrow vision prevents them from realizing that equitable growth will benefit everyone. It’s time to hold a mirror up to them.

Arun Kumar is a retired professor at JNU. He was an author The biggest crisis of the Indian economy: the impact of the corona virus and the future (2020).