AN important feature of the neoliberal campaign in India today is the showcasing of Gujarat as a developmental miracle. A section of the media, leaders of India Inc. and economists wedded to the free-market paradigm have joined hands to argue that economic growth in Gujarat has brought in wide-ranging progress.
In the midst of this well-rehearsed chorus, two well-known economists —Jagdish Bhagwati and Arvind Panagariya—have written a book titled India’s Tryst with Destiny , where they try to counterpose “public action” to the “market” and make a case for the latter. They employ two “metaphors” for their purpose: the “Kerala Model” and the “Gujarat Model”. While the Kerala Model refers to redistributive and state-driven development, the Gujarat Model refers to growth and private-entrepreneurship-driven development. A major section in the book is devoted to arguing that Kerala’s developmental achievements are due neither to redistributive policies nor to state intervention. In a rather heroic effort to rewrite history, Bhagwati and Panagariya argue that Kerala’s achievements are due, primarily, to economic growth.
While neoliberal economists are well known for their disrespect for history, the complete absence of historical grasp in the book is rather remarkable. In this brief article, my intention is not to analyse Gujarat’s performance vis-a-vis Kerala’s but to question the authors’ construction of a series of myths on Kerala’s developmental record.
The faulty premise The whole of the discussion on Kerala and Gujarat in the book rests on a faulty premise. According to the authors, Kerala’s claim to fame is its reduction of income-poverty, even at low levels of per capita income. They then proceed to demolish the claim by showing that “Kerala has consistently ranked among the top five… States by per capita GSDP [Gross State Domestic Product] since 1980-81”. They conclude: “… high achievements of Kerala in poverty alleviation …are associated with high, not low, per capita incomes and expenditures.”
One wishes the authors knew why Kerala is famous. Kerala was never famous for reducing income-poverty at low per capita incomes. On the contrary, it was famous for achieving superior educational, health and demographic indicators at low per capita incomes. Kerala’s achievements were in literacy, school enrolment, infant/maternal mortality, birth and death rates, life expectancy, female survival and child nutrition.
Until the early 1980s, Kerala’s income-poverty did not perceptibly fall, nor did its economy begin to recover from the economic stagnation of the 1960s and 1970s. It was from the 1980s that income-poverty began to fall and GSDP growth rates began to rise. Given that poverty decline and growth revival occurred after the 1980s, the authors’ effort is to argue a cause-effect relationship between economic growth and their definition of “Kerala Model”. As the straw man lies dead, what is ignored is the elephant in the room. Almost all of Kerala’s achievements in education, health and demography pre-dated the 1980s.
Early start? If the premise is faulty, the authors’ historical sojourn is uninformed. They make two claims: first, Kerala’s social indicators are better because it enjoyed “a huge advantage” over the rest of India at Independence; secondly, since Independence, “it is hard to find anything spectacular or unique in outcomes in Kerala”. While the first claim completely lacks nuance, the second claim is backed up by appalling statistics.
First, in pitching Kerala ahead of India in the 1950s, the authors miss important historical features of Kerala’s development. Kerala’s literacy rates in the 1950s were indeed higher than in India. However, at their absolute levels, these literacy rates gave no reason to celebrate. Even in 1961, the literacy rate among Dalits in Kerala was only 24.4 per cent. Among Dalit women, the literacy rate in 1961 was only 19.1 per cent. Among Adivasis, the literacy rate in 1961 was 17.3 per cent. If we consider Malabar, the backward northern region of Kerala (after Travancore and Cochin), the female literacy rate was just 21.7 per cent in 1951. The spread of mass literacy in Kerala, as the economist V.K. Ramachandran has pointed out, was primarily a post-1957 phenomenon. It was in this period that land reforms were implemented across the State and public investment in school education sharply increased. The most fascinating story of this period is how Malabar caught up with the rest of Kerala.
Take the case of infant mortality rates (IMR). In the early-1950s, the IMR per 1,000 live births in Kerala was 120, while that in India was 140. If we consider an approximate figure for 1930, the life expectancy at birth in Kerala was 30 years for men and 33 years for women. The corresponding figures for India were 27 and 26 years, respectively. In other words, the figures of IMR and life expectancy in Kerala were not superior in any absolute sense. Here too, Kerala leaped ahead of other Indian States only after 1957.
Flawed use of data The authors’ second claim is that Kerala’s achievements in education, health and demography after 1957 are nothing spectacular. With respect to literacy rates, they argue: “Maharashtra began with a 20-percentage-points disadvantage vis-a-vis Kerala in 1951. By 2011, the disadvantage had been reduced to 11 percentage points. Gujarat began with a 25-percentage-points gap, but narrowed it to 15 percentage points.” With respect to IMR, they argue: “the gap of more than 45 deaths per 1,000 live births vis-a-vis Kerala in Maharashtra and Tamil Nadu in 1971 is reduced to less than 20 in 2009 in each case”.
Such irresponsible use of statistics is shocking. According to the authors, if Kerala has to be considered successful, the absolute difference between the literacy rates of Kerala and Gujarat/Maharashtra/Tamil Nadu should either increase or at least remain constant! And they say it too: “[T]here is no compelling reason why the going should get rougher as the level of an indicator rises…. If the ‘Kerala Model’ is that much more effective, it should be able to overcome a higher barrier and still deliver a superior outcome.”
What would it take for Kerala to meet the standards set by the authors? If Kerala had to maintain the same absolute lead of 1951 over Gujarat in 2011, its literacy rate should have been more than 100 per cent (about 104.31 per cent). Similarly, Kerala’s IMR in 2011 should have been a negative number (about -17) to maintain the same absolute lead of 1971 over Tamil Nadu and Maharashtra.
It is often said that there are two kinds of statistics, the kind you look up, and the kind you make up. No prizes for guessing where the authors’ statistics belong.
“Private” schooling Finally, the authors reject the role of state intervention in Kerala’s social sector. They argue that “Kerala as a state-led success in the post-Independence era simply does not stand up to a careful empirical investigation”. There are three reasons cited. One, about 53 per cent of children in Kerala between ages 7 and 16 study in “private schools”. Two, public expenditure on health in Kerala is barely 1 per cent of its GSDP. Three, private expenditure on health care in Kerala far exceeds public expenditure on health care. One only wishes that the authors were less economical with facts and figures.
First, their argument about “private schools” in Kerala arises from an ignorance of the State’s school system. About 96 per cent of schools in Kerala are publicly funded. The Government of Kerala funds two types of schools. The first are schools established, owned and run solely by the government. Together, they constitute around 36 per cent of all schools in Kerala. The second type is “aided” schools, which are owned and managed by private agencies. However, the government meets the major component of their annual expenditure, namely, salaries. This category covers 60 per cent of schools in the State and predominates at all levels of schooling. Private schools cover only about 4 per cent of all schools.
The authors’ attempt is to portray government-aided schools also as private schools. That is, at best, disingenuous. There is little in substance that distinguishes government schools and aided schools in Kerala. The salaries of teachers are uniform; the curriculum and textbooks used are identical; and the government regulates the activities of aided schools. Aided schools also receive grants-in-aid from the government for buildings and establishment, teaching and instructional material (including libraries and laboratories), and recreational facilities. Even in recognised unaided schools, the curriculum and textbooks used are identical to the government schools.
Aided schools are a legacy of the role of social and religious movements in Kerala’s educational history. Before 1957, a major proportion of these schools were owned and managed by educationally privileged communities like Nairs and Christians; socially backward communities were largely under-represented in the educational system.
After 1957, the communist government of Kerala led by E.M.S. Namboodiripad tried to reform the educational system in two ways: by opening new government schools and trying to socially regulate the activities of private schools. While the former measure was successfully implemented, the latter has had only partial success. There was strong resistance against the reform from privileged communities, which even led to the dismissal of the Namboodiripad government in 1959. Over the years, Left governments have fought legal and political battles with aided-school managements. The current classification of schools into government/aided/private is a product, however imbalanced, of this arduous political history. Yet, the State’s efforts to socially regulate the school system have ameliorated much of the damaging consequences of unfettered privatisation.
Health expenditure It is intriguing that the authors deride Kerala’s public expenditure on health at 1 per cent of GSDP, even while they admit it to be the second highest in India. What they leave unsaid is that Kerala had significantly expanded its public health network by the 1970s itself. By the 1980s, about 70 per cent of all hospitals and dispensaries and about 52 per cent of all hospital beds in the State were in rural areas. Kerala was the only State where the share of hospital beds in the rural areas was above 50 per cent. Such a phenomenal expansion of health care and services would have been unthinkable without adequate public expenditure.
The higher share of population in Kerala choosing private hospitals over public hospitals is a more recent trend and is indeed worrisome. However, even here, the authors’ arguments are hopelessly out of context.
It is no surprise that in any society where public health has historically focussed on primary health care, more people will chose the private sector for secondary and tertiary health care. In the initial phases of public health expansion in Kerala, there was no significant difference between the growth of private and public expenditures. Between the early 1960s and mid-1970s, while public per capita health expenditure grew at 1.4 per cent, private per capita health expenditure grew at 1.9 per cent.
It was after the mid-1970s that the public-private differential began to widen. Between the mid-1970s and mid-1980s, while public per capita health expenditure grew at 2.5 per cent, private per capita health expenditure grew at 4.9 per cent. The differential has further widened in recent years, and this appears to have excited the authors.
In fact, what the authors posit as a positive feature—the expansion of private health care—is what is precisely wrong with Kerala’s health care system today. In the 1990s and 2000s, out-of-pocket health spending of households rose sharply. What is urgently required is an extension of public health institutions into the secondary and tertiary spheres. The constraint to the State’s capacity to do so is the policy stress on fiscal austerity. As a result, funds allocated for the salaries of health care staff, purchase of drugs and creation of infrastructure have been forced to be cut. A reversal of the neoliberal fiscal austerity is a necessary condition for reviving Kerala’s public health sector.
To sum up After an official visit in 1948, the Congress Agrarian Reforms Committee (headed by J.C. Kumarappa) described the conditions of agricultural labourers of Malabar thus: “Their frail and bony bodies, their emaciated and worn-out looks, their tattered clothes, all bore testimony to the most extreme form of exploitation. They indeed looked subhuman.” On the one hand, this description is illustrative of the conditions of life in Kerala’s most backward region at Independence. On the other hand, it is also a benchmark to assess the distance Kerala has since travelled. Here, the role of state intervention and redistribution has been central. Bhagwati and Panagariya’s attempt is to discredit this historic process of change as a “left-wing populist fallacy”. The end result, however, is rather embarrassing for the authors.
R. Ramakumar is Associate Professor, Tata Institute of Social Sciences, Mumbai.
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