Accept the changing realities, patronise agriculture and promote reverse migration

Three reports have come out in quick succession in the past 10 days that calls for rethinking economics.

A working paper from the World Inequality Lab titled: “Income and wealth inequality in India, 1922-2023: The Rise of the Billionaire Raj,” has been co-authored by Nitin Kumar Bharti, Lucas Chancel, Thomas Piketty and Anmol Samanchi.

The 2024 Hurun Global Rich List giving a ranking of the billionaires in the world. Mumbai emerges as Asia’s billionaire capital.

The India Employment Report 2024 has been prepared by the Institute for Human Development and the International Labour Organisation (ILO).

There is no denying that the three reports require a lot of analysis, understanding and explanation to come to grips where the world is intended to move towards. But certainly, these reports require those who want to understand rising inequality, the triumph of billionaires in the light of growing unemployment, to first wear the thinking cap. Lost in the set of statistics and data mapping, the three reports, if seen in continuity, makes you sit back and ponder whether this is what the economic growth model that India follows has led us to.

Before we begin, let’s first take note of the growing inequality that Oxfam had presented in its “Survival of the Richest: The India story” report that was presented at the time of the World Economic Forum in January 2023. The report had clearly said that India’s richest 21 billionaires had more wealth than 700 million Indians. The concentration of wealth at the top was further explained when the report added that India’s 100 richest could fund the entire Indian budget for 18 months.

The Hurun Global Rich List 2024 simplifies it further, and tells us that the recent years have seen the emergence of the Richie Rich class to such an extent that Mumbai has now become Asia’s billionaire capital. With 26 more billionaires added from Mumbai alone in 2023, India now has 94 new billionaires. It is, however, another case that many of the high net-worth-individuals are escaping to foreign countries. Anyway, the combined wealth of India’s billionaires comes to US $1 trillion.

The “Rise of the Billionaire Raj” working paper coming from the Paris-based World Inequality Lab states that India’s richest one per cent possess 40 per cent of its wealth.

These startling figures have to be seen in the light of the projections that the India Employment Report 2024 makes. With informal employment rising, the report says, employment among the educated youth is on a decline, falling from 30.8 per cent in the pre-pandemic year of 2019 to 18.4 per cent in 2022. It further says that the share of unemployed youth in the total population of unemployed stood at a staggering 83 per cent. Interestingly, while acknowledging that India faced jobless growth, the report did say that reverse migration to farm sector is happening at a time when industrial growth continues to be sluggish.

With growth in manufacturing remaining stagnant, there is a pull back from the rural areas. It began after Lockdown 0.1 was imposed, with the country witnessing workers exodus from the cities to villages. Lack of adequate employment opportunities in the cities made a sizeable workers population stay back in the villages once the pandemic period was over. Subsequently, more workers returned to villages in 2022 and 2023. Put together, 56 million workers have joined back agriculture in the past three years, says a report in Down to Earth magazine (March 28, 2024).

Whatever be the reasons, a sizeable chunk of the labour force has therefore returned to agriculture. Even if agriculture is not as economically productive as the jobs in construction, services and manufacturing are, at least villages ensured food security. That is why more and more workforce returned to villages. While the rise in employment in agriculture is being seen as ‘worrying’, and ‘cause for concern’ by many economists and economic writers, but at a time when industry is moving in the direction of “capital intensive and labour-saving” approaches, and with the advent of Artificial Intelligence (AI) further expected to lay-off a sizeable proportion of employed workforce, the time has come for an economic rethinking.

The same flawed economic prescription that relied on moving a large share of the population from the rural to the urban areas needs to be relooked at. Under the changed circumstances when jobless growth stares ahead, the effort should be to rebuild agriculture so as to not only confront the employment challenge but, as I have said often, to convert agriculture into a powerhouse of growth.

Although, the slow transition to non-farm sectors over the years seeing a reverse, the report did mention: “This pattern of growth is rather unique for a lower middle-income country like India”. This should not deter policy makers to look for a change. After all, as is quite well known, any idea for change draws resistance. It will happen here also.

I am of the firm opinion that reverse migration to villages that the country is witnessing is a pointer to the right kind of economic direction that the country must move towards. Looking beyond the ideological position that has been inculcated among the educated over the decades, it is time to acknowledge the changing ground realities, and to accept the new challenges.

Whether we like it or not, the economic growth model has been cast and recast to usher in economic policies that back big business, as a result of which the small and medium sector are gradually losing out. An increase in the number of billionaires is not a sign of high growth; it reflects the inherent flaws in the economic design. Counting the billionaires is not a sign of triumph but shows how the world’s resources are being gobbled up by a tiny section of the society – helping to make the rich stinking rich and keep the majority population at the margins.

Imagine a significant proportion of the workforce back in agriculture when an OECD report shows that farming has been incurring losses continuously since the year 2000. If only agriculture was economically viable, sustainable and profitable (and not sacrificed by an economic design), India would see a massive and fast reverse migration to the villages. There is nothing to be ashamed of such a transition to farming. In fact, herein lies the future.

(The author is a noted food policy analyst and an expert on issues related to the agriculture sector. He writes on food, agriculture and hunger)