Who Are India’s Labharthis– the Visible and the Veiled

Arun Kumar

Is there something wrong with ‘labharthis’ schemes? Why has this issue become important of late?

While Prime Minister Narendra Modi has disparagingly characterised the marginalised as ‘labhartis’, the ruling Bharatiya Janata Party has continued to implement ‘labharti’ schemes to lure voters.

Following suit, the opposition has also announced such schemes to draw votes.

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

Moreover, how do we identify ‘labhartis’ in India?

Other questions arise: Is there something wrong with such ‘labharti’ schemes? Why has this issue become important of late?

The marginalised Labhartis

Labharti in its broadest sense stands for those who benefit from government policy. The prime minister was referring to only a subset of the totality of such beneficiaries – those who get something free from the government. Like free ration, a bus ride and electricity, or farmers getting Rs 6,000 per annum under the PM Kisan Samman Nidhi scheme. Some of these schemes are a continuation of the earlier schemes, while others have been initiated by the BJP governments at the Centre and states.

Some of the free offerings have been targeted at marginalised sections such as farmers, workers, women, the unemployed, and small producers. Inadequate resources prevent these groups from accessing basic necessities like food, water, energy, and healthcare. Since market prices for these essentials are unaffordable for the marginalised, the government has stepped in to address this market failure.

Even when prices are subsidised, the marginalised still cannot afford the minimum required for adequate nutrition and quality education. As a result, many of these basic amenities have been provided for free, turning them into ‘labhartis’. This approach reduces poverty and offers long-term benefits for society.

Alternatively, the system must enable the marginalised to earn a ‘living wage’ as promised under the Constitution. Many workers are either underemployed, working in disguised unemployment, or have stopped looking for work altogether. As a result, workers are forced to accept low wages. Due to the shortage of suitable employment and low wages, family incomes remain inadequate for the marginalised.

Political perception: the price of vote

The political perception of the marginalised has changed over time. Post-Independence, for a while, people were willing to wait for gains of development to trickle down to them. Seventy-five years down the road, the trust in the politicians’ promises of future delivery is gone. What is offered has to be tangible and immediate.

In the market for votes, the marginalised evaluate who offers more in the form of free benefits. The shift in perception arises because the promised trickle-down effect has been minimal.

The ruling elite is happy to point to the reduction in grinding poverty, spread of education, and greater availability of food for the marginalised. But poverty is space and time specific and not a fixed immutable line. In 2024, it is not the same as in 1962 or 1993. For determining poverty, massive unemployment, good education, internet divide, etc. need to be factored in. Further, independent of the free offerings of basics, the incomes are not enough to lift the marginalised above the poverty line.

Real national income has increased by a factor of 29.76 between 1950-51 and 2022-23. Data from Credit Suisse suggests that most of this increase has accrued to the well-off and big business constituting the top 1% of the population. So, they owned 51.5% of the wealth in 2018 while the bottom 60% had only 4.7% of it. In income terms, the top 1% earned 22% while the bottom 50% earned 13%. This is the result of policies that have yielded little trickle-down effect.

The well-off have gained even more through the black economy, which is not taken into account in the official data. It was estimated at 62% of the GDP in 2012-13 and has been growing and is concentrated in the hands of the top 3% of the income earners. The ruling elite has perpetuated it through a triad of corrupt businessmen, politicians, and the executive, who share the illegal gains, thereby further marginalising the marginalised.

All this makes India one of the most unequal societies in the world. The massive gains made by the elite is visible in their ostentatious life styles. Greed is celebrated and wealth is splashed. The marginalised can see this and feel cheated when they compare this with their own daily struggle for clean water, electricity, sanitation, etc.

This sets the stage for the political parties seeking votes to immediately offer basics to the marginalised. There is also talk of redistribution.

The veiled well-off ‘labhartis’

The blame for the adoption of trickle-down policies falls squarely on the ruling elite, consisting of business interests, the urban elite, and broadly the well-off. They have been the policymakers, not the marginalised. They have been the real ‘labhartis’ of the system for the last 75 years.

They have shaped government policies and the annual budgets of the Centre and the states, enabling them to corner the nation’s resources. They present their interests as the nation’s interests, ignoring those of the marginalised. Unemployment, as mentioned above, helps keep wages low, enabling businesses to generate higher profits. The elite can afford their luxurious lifestyles because of the low wages paid to servants and chauffeurs.

This process of cornering resources was accentuated in 1991 and further in 2014 in the name of promoting growth. For instance, during the pandemic in May 2020, the ‘Atmanirbhar’ package of Rs 20 lakh crore allocated about Rs 3 lakh crore to the marginalised, while the rest went to the well-off in various forms. The marginalised suffered the most, but it was the well-off who received the majority of the support. No wonder that while the economy declined, the stock market wealth of the well-off skyrocketed.

The government announced the PLI scheme for the organised sector with an outlay of Rs.1.97 lakh crore ostensibly to promote manufacturing. Given its capital intensity, it will hardly generate much employment. Further, in the budget for 2024-25, the capital expenditure has mostly targeted the modern sectors. Employment generating sectors such as education, rural development, and MGNREGS faced a cut in allocation in real terms.

To promote the organised sector, the government implemented the structurally faulty GST, demonetisation, etc. Demand has shifted from the unorganised to the organised sector. So, policy has damaged the small and micro industries that promote employment, further marginalising the marginalised.

In the government’s last cabinet meeting, a scheme for installing one crore rooftop solar panels with a maximum subsidy of Rs 78,000 per household was announced. But the marginalised families don’t have a pucca roof; only the well-off have it.

Further, the solar panel suppliers have jacked up their prices. Of the total maximum subsidy of Rs 78,000 crore, the suppliers will corner Rs 58,000 crore. They, along with the well-off, are the ‘labharthis’. Such examples can be multiplied. This has been India’s political economy since Independence.

So, behind the veil of policies for ‘national good’, the real ‘labharthi’ has been big business and the elite. How can the leadership not see this when repeatedly pointing a finger at the marginalised? Is that the motivation for an authoritarian rule?

Conclusion

The prevailing economic system determines who gets how much. The ruling elite have structured it to benefit from both the white and black economies. This has resulted in a concentration of income and wealth in their hands, behind the veil of policy, making them the real ‘labhartis’ since Independence. The marginalised, left far behind, do not trust the long-term promises of political parties and look forward to immediate gains in the market for votes, making them the visible ‘labharthis’.

The real ‘labhartis’ since Independence often fail to acknowledge their own role in these developments. Their narrow vision prevents them from realising that equitable growth will benefit everyone. The time has come to hold a mirror to them.

Arun Kumar is a retired professor of JNU. He authored Indian Economy’s Greatest Crisis: Impact of the Coronavirus and the Road Ahead (2020).

This article was first published in The Wire as Who Are India’s Labharthis – the Visible and the Veiled on May 28, 2024.

Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.

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Acknowledgment: This article was posted by Bhaktiba Jadeja, a research intern at IMPRI.

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