Co-Written by Dr Bhabani Shankar Nayak and Dr Gopabandhu Das

The pandemic of Coronavirus has exposed all limitations of free market economies and anomalies in capitalist global economy. The world economy is in shambles. The unprecedented restrictive and unavoidable lockdown measures by governments across the world has led to the loss of livelihoods, growth of unemployment, economic stagnation and crisis. It is one of the biggest challenges in world history. In this context, Indian economy looks gloomy. The pandemic has crippled the manufacturing and service sectors in Indian economy. It shattered the urban economy in India, which led to reverse migration from urban areas to rural areas. So, it is time to revisit the role of state and planning to invest in rural economy, which can absorb migrant labourers for a sustainable future.

The authoritarian, neoliberal, market economy free from state planning is no longer an option to revive agrarian and rural economy in India. It is important for the state planners to shift their focus from economic growth led capital formation to labour empowerment. The investment in rural workforce, environment and agricultural land are three areas on which the governments need to focus for the revival of Indian economy. The unbridle privatisation of natural resources must stop. The governments must use natural resources in the rural areas to generate revenue to invest in rural development. The availability of sustainable livelihoods, investment in rural infrastructure in health, education and healthcare facilities can help to reduce rural to urban migration. It can reduce urban biased development programmes. It can reduce population and other pressures on urban areas. It can help in accelerating national economic development in long run. There is no alternative to public welfare driven states and governments. The recovery from the pandemic led economic crisis depends on revival of state planning for rural development.

The rural development in India was in disarray before the outbreak of Coronavirus. The state planning was considered obsolete and completely abandoned in search of economic growth. The market forces were given free hand to decide. The practice of neoliberal capitalism and its technocratic approach with the help of analytical development tools destroyed rural economy and reinforced agrarian crisis in India. Poverty, hunger, and unemployment are the net outcome of the withdrawal of state from planning for rural development. The decline of rural agriculture and economy led to mass migration of rural labour and agricultural workers to urban areas and cities in India. These migrants were treated as disposables during the outbreak of Coronavirus pandemic. The majority of migrants were left to their own fate. Many migrants survived the ordeal by walking thousands of miles from Indian cities to their rural hamlets. Their citizenship rights and human dignities were taken away by the very system that profits from their labour.  The progressive states like Kerala and Odisha are two beacons of hope for the migrant population. These two states have taken enormous steps in bringing back their own migrants and sending back migrants from other states. It is time for the return of the state for planning and development of rural India by developing an abiding partnership between migrant citizens and the state.

The Odisha Model of Crisis Management

The state of Odisha is an agrarian economy, which continue to face challenges of natural calamities in regular intervals. The regular natural calamities like floods and cyclones destroy the economy and cause deaths and destitutions in the state. It is because of state planning for last two decades, the Government of Odisha has managed to reduced human casualties to single digit and sometimes to zero causality due to natural calamities. The Odisha way of disaster management can be emulated by other states in India and countries across the globe.

In spite of limited resources and apathy of the central government, the state and government in Odisha is making remarkable progress under the leadership of Chief Minister Mr Naveen Patnaik. He worked relentlessly for the welfare and rehabilitation both Odia and non-Odia migrants in the state during this Coronavirus led pandemic. The Government of Odisha has announced a package of seventeen thousand crores for sustaining livelihoods in the rural areas. This is going to have a positive impact on the overall economy. The focus of the government is on developing rural economy through various government sponsored programs. The idea is to engage the migrants in different rural livelihood programmes by developing sustainable infrastructure such as roads, school buildings, agriculture land, irrigation facilities etc. The government provides incentives for the people to engage in the handlooms and handicrafts sectors. The handloom producers and workers are provided economic stimulus to carry forward their production activities so that the rural economic chain continues without any disruption.

The Government of Odisha has developed citizenship and the state partnership model to empower the women and rural poor with the help of the Self-Help Groups. It is an important policy platform of praxis, where seventy lakhs of women are directly involved. It gives an edge to Odisha over other states in India. The Self-Help Groups are the biggest institutional asset of the government for the implementation of rural development policies for the revival of rural economy in the state. These groups help in creating local livelihoods through production of daily needs and using locally available raw materials. This can help in immediate crisis management with long term positive returns.

More than seventy-five percent of Odisha’s population is directly or indirectly related to agriculture and the farm sector. The agricultural sector continues to be the dominant sector in Odisha economy. It provides employment to majority of population in the state. The crisis is an opportunity to diversify agriculture in Odisha to absorb more people and increase the per capita income in agriculture. The revival of farmers led agricultural marketing, storage and distribution cooperatives are important in long run. The small-scale agriculture-based industries with focus on food processing can provide livelihoods to a large number of people. People returning from other states with skills can be employed in these industries with little training and skill development. The contribution of farm sector to Odisha’s economy is about thirty percent, which can grow in these difficult times with the help of government interventions. The returned migrants are not going back to the cities outside the state of Odisha. It is important to create facilities to engage their skills and labour for the development of rural economy. The state government is planning to small and medium-term financial assistance for setting up of new rural enterprises and businesses. The state of Odisha is in a good position as a fast mover under the leadership of Chief Minister Mr Naveen Patnaik.

The coastal line in Odisha connects seven big districts in the state. It is important to accelerate coastal economy under the guidance and leadership of the Coastal Development Councils. The fisheries, tourism and agriculture are the three areas the Coastal Development Councils need to focus for the growth of rural employment and economy. The state is also gifted with large rivers like the Mahanadi, the Brahmani, the Budhabalanga, the Subarnarekha, the Baitarani, and the Rushikulya. The river basin covers large parts of Odisha from north to south. The fertile river deltas need to be utilised properly for the further growth of agriculture.

The state of Odisha dominates the mineral map of India. Odisha is endowed with mineral resources. The mining sector contributes immensely to the state’s economy but the poorest of the poor live in the resource rich regions of the state. It is time to make the indigenous and rural communities as the shareholders of mineral resources of the state. However, the sector’s potential for the growth and development of Odisha is restricted by the successive central governments. Therefore, the Government of Odisha is demanding greater financial federalism and greater control over its mineral resources for the development of Odisha, Jharkhand and other mineral resource rich regions of India. The centralisation of power by the government of India is destroying the framework of cooperative federalism for economic growth and development of rural population in India. The Government of Odisha is committed to the democratic decentralisation of development and empowerment of rural poor. The experience of Odisha reveals that it is the only alternative to manage all crisis in future.

This is a crisis and so resource constraint theory is an alternative. It is a product of neoliberal capitalist logic to control the state and its abilities for public welfare. Such an argument needs to be discarded. Austerity is not an economic policy but a religious philosophy. It has no place in economic planning for development.  The pandemic has revealed that the prevailing free market economy with capitalist system has failed to manage the crisis it produces. It failed in developing an egalitarian system with distributive justice for the marginalised, urban and rural poor. It failed to provide permanent employment and safe working place to the majority of population. The history is the witness to the positive role of a people’s state. It is only democratic state and governments can manage the crisis for the greater common good. The sustainable future depends on the abilities of the states and governments led planning for economic growth and development in India.

Dr Bhabani Shankar Nayak, Coventry University, UK.

Dr Gopabandhu Dash, OSD to the Chief Minister of Odisha.


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