OCCASIONAL PAPER No.1
AN AGENDA: FOR FHESSTUDY OF
POLITICAL ECONOMY OF MAHARASHTRA
by
RAJENDRA VORA
Prepared under the Special Assistance Programme
Department of Politics and Public Administration
University of Poona
FEBRUARY 1994
PREFACE
The Special Assistance Programme of the Department is conducting various research projects in the thrust. area of Political thought, Political process and Administration in Maharashtra. The papers and monographs based on these projects are now being published as a series of occasional papers and monographs with the financial assistance of the University Grants Commission.
The present paper by Rajendra Vora is the first in the Series. It was read at the
workshop on Political Economy of Maharashtra held under the Special Assistance Programme on Oct 13, 1990.
AN AGENDA FOR THE STUDY OF POLITICAL ECONOMY OF MAHARASHTRA
The political process in Maharashtra has been studied by a number of scholars after the formation of the Marathi speaking State. Their fundamental concern is to analyse the interaction between the caste and politics in the State. They are interested in finding out how ritually higher caste of Brahmans was replaced by the numerically stronger middle caste of Marathas in the politics of the State. The works by Sirsikar (1970), Carras (1972), Carter (1974), Rosenthal (1977) and Lele (1982) are basically influenced by the dominant caste thesis. These scholars have shown how the rich Maratha peasantry has been able to acquire and continue its hold over politics of Maharashtra. Lele’s work should be considered as a departure from the other studies since he identifies high Marathas as a hegemonic class which continues its hegemony through economic relations, cultural tradition and democratic institutions. In this paper, it is proposed to discuss the limitations of these studies and suggest an agenda for a more wider and broader study of the politics of Maharashtra. This alternative framework of study, may be described as a study of politi cal economy of the State. Thereby an attempt would be made to prepare an agenda to. study the exact relationship between the political and economic realities as they are found in the State. If we want to go beyond what the above mentioned studies have done, we will have to identify the economically dominant classes in each sector of the economy of Maharashtra and locate their political dominance in the State. It will also be essential to identify the dominated classes {in these sectors of economy. Apart from knowing the economic and political reality in class terms we will have to understand the caste and communal composition of these classes because they reinforce each other and in many cases also overlap to make the term ’clasteaction’ more meaningful than caste or class.
The political economy studies are not new to India, but most of these studies make macro analysis of Indian economy. Jha (1980), Bagchi (1982), Bardhan (1984), Frankel (1984), Sau (1986), Rudolph and Rudolph (1987) and Prasad (1989) focus their attention on India’s underdevelopment and make generalsations about Indian polity and economy. Bardhan and Sau for instance have shown how surplus is being appropriated by the propertied classes in the rural and urban areas. These macro studies do not take note of the distinctive character of the dominant classes in the various States of India. Secondly, these scholars mainly use the economic data and thereby fail to take into consideration the caste and communal composition of the classes at the regional levels. Kathleen Gough's study (1989) of the Thanjavur district of the Tamil Nadu analyses the developments in the class and caste structures and political relations between 1950's to 1980's. There is a need to do micro. studies on these lines and also make generalisations about the political economy of a particular State.
In case of Maharashtra, some pioneering work has been done by Brahme and Upadhyaya (1979) and Kamat (1983). In the former study, the authors have analysed the politica and economic aspects of Maharashtra while making an analysis of the peasant resistance in the state. Kamat has surveyed the political and economic developments in the “State on the basis of data which was available in the late seventies. Besides these there are studies in Marathi by Garud (1985), Shinde (1987). Desai (1987), Nene and Brahme (1987) and Upadhye (1988), which discuss the problems relating to } distribution of resources and production in the agricultural sector of the State. What needs to be done is a study which is broader in scope and up to date in the data so that we will be able to know the way certain groups in the Maharashtrian society have come to dominate the economy and polity and also the strength of the challenges from the dominated classes and castes which these groups have been able to counteract. It is essential not only to analyse the rural sector but also to. understand the contradictions in the industrial and service sector.
The Agricultural Sector
The scholars who put forward dominant caste thesis concentrate only on the agricultural sector or the rural] sector. In this context, it must be noted that the contribution of this sector to the State’s income has declined from around thirty three percent to twenty eight percent, while that of industrial sector has increased from twenty four per cent to thirty two between 1955-S6 to 1984-85. The proportion of the contribution of the tertiary sector (transport, communication, trade and Storage) and the service sector (banking, insurance, real estate, ownership of dwellings, business services, public administration and other services) remains the same (around twenty percent) (Directorate of Economics and Statistics, 1982 and 1985). Therefore, a study of Maharashtra polities will) have to cover the non-agricultural] sectors to understand fully the nature of distribution of power in the state.
What is the state of affairs in the rural sector ? Most of the works which locate the relation between caste and politics ultimately revolve around the search of the social background of the power holders in the political, cooperative and educational institutions {n the rural areas, Thereby they fail to take a note of complexity of the economic and political reality of the rural sector. It must be mentioned that the productivity in agriculture except sugarcane is very low in the state compared to the national average. The rate of growth in the productivity per hectare is also very slow. The state has to depend upon other states for almost twenty percent of its total required quantity of food grains. The proportion of irrigated land has increased from 6.5 percent in 1960-61 to only 13 percent in 1988 in the state. It is very low compared to the national average of 31% and 91% and 66% of Punjab and Haryana respectively. Thus, with the exception of Sugarcane production, the agricultural sector of Maharashtra is one of the most backward in the country.
But we will have to go further and: ask the question who has been benefited due to whatever development has taken place in this sector. The data clearly suggest that the development could be observed only with regard to the sugarcane, banana, grapes and such other cash crops which are grown on the irrigated land. It means that the development in agriculture has been limited to the irrigated tract which is only 13% of the total land under cultivation. The farmers who grow these cash crops in this irrigated tract are the beneficiaries. Almost no growth has taken place with regard to Rabbi jowar, cotton, and groundnut. The per hectare productivity in the state has come down to Rs.363/- in 1980-81 from Rs.379/- in 1960-61 (at constant prices). Thus, if we take into account the rise in the cash crop production we would observe that the production per hectare in the dry land has gone down. Therefore, it could be argued that no development has occurred in almost 88% of the cultivated land in last twenty five years (Desai 1987 : 57). The green revolution of the mid-sixties which could increase the rate of agricultural production in Punjab and Haryana could not show similar results in Maharashtra. The green revolution in the state was limited only to the crops for which water was available. Thereby it created islands of prosperity and a class of rich farmers who could use new technology. The farmers from the dry land area and small or marginal farmers lagged behind in the competition.)
The most important reason for the backwardness of agriculture in Maharashtra is the scarcity of water. The Barve Commission (1962) had projected that by 1980, 30% of land would come under irrigation if all the water is used and if it is distributed over larger area. But the government systematically kept aside these recommendations. Rath and Mitra have shown that 60% of canal water is being consumed by the sugarcane which is grown only on 2% of the total cultivated land in the state (Rath and Mitra, 1986 : 131-40). It means that remaining 11% of irrigated land receives only 40 % of total water available. The Dandekar Deuskar Deshmukh ‘Committee (1979) therefore has. recommended that the canal water should be made available only for the eight months so that a larger area could be brought under irrigation. These recommendations of the committee raised a controversy during the drought of 1985 in a major way. The sugar cooperatives and their leaders opposed the move because it went against their material interest. The leaders of agricultural workers and dry land marginal farmers welcomed the move on the ground that it would make water resources available to the drought prone areas of the state (Vora : 1986).
In fact, the issue of distribution of water equitably and the drought are connected with each other. The severe most drought after the formation of the state was that of 1972. Sukhtankar committee (1973) formed after the drought pointed out that 87 tehsils from 12 districts of the state are permanently drought prone. Thereby the committee found that 1/3 of the agriculture sector and people dependent on that sector are condemned to live in a drought situation. By 1978, it was argued on the floor of the Assembly that the number of the drought prone tehsils has gone up to 113 (Upadhye : 1988 : 104). It is estimated that in 1986-87 around 38% of the rural population. of the state was affected by the drought (Desai : 1987 : 29). Thus, we have on the one hand around 100 drought affected tehsils, and on the other a small irrigated tract. The gap between the two is maintained by those who benefit from the water provided at a low rate by the government and all moves to bridge the gap are: countered by them with their political might. The inequality is found not only in ‘the availability of the water resources but also. in the ownership of the land. The proportion of agricultural workers to the total population dependent on agriculture is 45% and that of farmers is 55%. Out of these farmers 24% own 62% of the land and out of these big landowners 7% own 31% of the land. Out of remaining farmers 30% own 27% of the land and “AG% have only 11% of the land available for cultivation (Desai, 1987 : 86). They could be -regarded as small and marginal farmers for whom it is difficult to subsist on the produce of their land. , The laws that impose ceiling on land holding were passed in the state by early sixties. The ceiling was again reduced in 1975. . Under these Acts 2.81 lakhs hectars land out of the total of 2 crores il lakhs and 80 thousand hectars was declared as excess. Out of the total excess land 2.23 lakh hectares were acquired by the government and 1.83 lakh hectares were distributed. If we take into account the land transferred from sugar farmers to the Farming Corporation, the land acquired from the big landholders accounts to only 1.50 lakh hectares or 1/2 % of the total cultivated land in the state. The rich farmers could take the advantage of the loopholes in the legislation and the corrupt bureaucracy to retain ownership rights over the larger size of the land (Surana, 1985 : 90). The majority of those who depend upon agriculture for their bread and butter, thus are either small and marginal farmers or agricultural workers. And their proportion to the total agricultural population has increased over. a period of time. The total number of the agricultural workers in the state was 45 lakhs in 1961 and according to the 1981 census it is 65 lakhs. The study of the Tanjavur district of Tamil Nadu has shown that the rise in the proportion of agricultural labourers is not due to the growth in population. It must be attributed to the eviction of tenants, ruin of small farmer owners, decline of pre-industrial craft and services and to the fact that the industry is too limited and capital intensive (Gough, 1989 : 138). If a systematic study is made in Maharashtra on similar lines, we will find that these observations would be supported by the findings in Maharashtra also. It is argued that the ownership of the land is being transferred to the big land owners, traders, industrialists, film actors and professionals from the smalland marginal farmers making them join the = even growing class of agricultural workers. It has been found that the proportion of the tribal lands which have gone under the control of the high caste and rich farmers is high and the laws to restore these lands to the tribals have not been properly implemented. In this growing labour force in the rural sector we will have to include the workers who are employed to cut the sugarcane and carry it to the sugar factories. It is estimated that around 3 lakhs of such workers migrate to the sugar belt from the drought stricken tehsils for eight months in a year (Pandare, 1988 : 109). In this category we should also bring in the labourers who migrate from Beed, Nagar, Raigad and Thane districts to work on coal production units in Ratnagiri and Sindhudurg districts. Along with these migratory labourers we find that there is another group which works in the forest and cuts the trees for the forest contractors.
The classes which emerge from this picture of the agricultural sector are (1) the rich and middle peasants who own more than seven hectres in the irrigated tract. Apart. from the canal water the methods/sources of irrigation such as well and lift also should be taken into account when we decide to _ include or exclude a particular peasant from the category. These rich peasants come mostly from the traditional peasant castes and communities, such as Maratha--Kunbis, Malis and Dhanagars. In the Dhulia and Jalgaon districts we find that the Lewa-Patils and Gujar-Patils and in the north Konkan Agaris have been able to acquire large agricultural] wealth. Within these castes the most dominant both in economy and polity are of course the Marathas. The studies listed in the beginning have amply substantiated this fact.
It is essential to do a survey of land ownership in villages from various districts belonging to different sub-regions of the state. In one of our study of 6 villages from the districts of Satara and Nashik, we have. found that in all the six villages, most of the land which is of good quality is owned by one or two. Maratha families and that’ the political arena at the village level is also controlled by these families. In this limited study we have thus found that caste and class are overlapping categories and also that those who belong to the high caste and high class control the politics. It is also necessary to go through the land records and find out how ownership of the land is transferred from small or marginal farmers to the rich from the sixties to this date. It is also necessary to point out how the dominance of the Marathas has been challenged in the present decade and the ways in which the Maratha rich peasantry has contained the discontent. The growing significance of the non-Maratha rich peasants in the politics of the state was perceived in the 1989 and especially in the 1990 elections. The other backward castes seem to have got the large representation in the Assembly of the state. The Congress party, the main political vehicle for the rich Maratha peasantry had to concede number of constituencies . to these castes. The sudden growth of the Shiv-sena fin Marathwada should also be seen as an indication of the rising expectations of the non-Maratha rich groups. “The Bharatiya Janata Party has consistently found support among the other backward castes. This is why its state unit has not been able to oppose the réservation for the OBCs in the government services, when its north Indian units” and especially its front organisations appeared to have come out violently against this policy. As have pointed out elsewhere, the decline at the peasants and workers party in western Maharashtra as a party of the rich Maratha peasantry also could be interpreted from this angle. It is interesting to note that the PWP retains its hold in the north Konkan’ through the Agari leadership which has always protested against the Maratha power (Vora, 1990). : Besides using the political parties such as the Congress, Janata, B.J.P., P.W.P. and Shivsena the class of the rich middie castes peasantry also avails other means to influence the political decision making and the distribution of the resources. In these means we could include the peasant organisations, sugar cane, grape or cotton growers associations, “the caste associates like Maratha Mahasangha and the neo-Hinduist organisations of the Hindu Ekta Andolan type. In some of these associations we also find middle and small}peasants. [In the Shetkari Sanghatana’s agitations for instance, thousands of middle and small peasants have participated for the last almost ten years. The slogan of the remunerative prices does have a real appeal for these peasants and the Bharat vs. India (i.e. rural vs. urban) type simplistic formula unites al] the peasantry under one banner held high by a populist leader (Pendse 1990).
The second and the’ largest class in the rural area as seen earlier is that of the agricultural workers. They come mainly from scheduled castes, tribes, nomadic communities, other backward castes and poor middle castes. It has been said that the majority of the agricultural workers belong to the scheduled castes and tribes or backward castes (Brahme and Nene, 1683). These workers whose number is ever increasing are dispersed over thousands of villages of the state and are poor in means. Therefore, majority of them are not organised into trade unions. Thanks to the Employment Guarantee Scheme the landless workers are being brought together at different places. The agricultural workers are . Organised by the left parties of the state, The CPI (M) has successfully organised the tribal workers in the Dhulia and Thane districts. The CPI and Lal Nishan Party and the socialists have also organised the agricultural workers. The organisations and _ federal] bodies of the agricultural workers and the EGS workers have been able to bring pressure on the government to enhance their wages and improve the working conditions. In our discussion of agricultural] sector we should also take into account the processing industries or agro industries which produce sugar, oil, rice or cotton yarn. These industries are organised on a cooperative basis mainly by the rich peasants. The sugar cooperative factories have been the most successful of them. The oil seeds processing and cotton yarn producing cooperatives have failed in making any impact probably because they could not face the competition of the powerful private sector. The number of the ‘sugar factories has increased from 13 in 1960 to 116 in 1989 (Dastane 90 : 109). In this regard it is necessary to know why certain sugar factories are facing problems and being closed down or why permits are given to open factories in particular areas. It is also necessary to know who control these factories and the nature and extent of the corruption in them. These factories are substantially supported by the Government and the financial institutions ‘(only 10% of the capital comes from the sugar-cane growers). Those who control these factories in fact use public resources for their power and economic interests. A recent study of the sugar cane workers and their unions is also important to take note of when we want to know the politics of the sugar cooperatives (Guru 1989). It is a matter of common knowledge that the sugar cooperatives is one of the most influential economic and political groups in rural economy. The cooperative sector which is an important part of the rural sector includes besides processing industries the milk, credit, marketing and number of other cooperatives. The studies on these cooperatives will have to be used for our specific purpose. The rich peasantry especially the high caste have been able to gain almost total control over all the cooperatives.
There is another factor which has not been taken into account by the dominant caste thesis i.e. the growing significance of the traders, money tenders, commission agents, sellers of the agricultural implements, fertilizers and pesticides in the rural and semiurban economy and thereby polity. This is a business class of Gujaratis, Marwaris, who have come to control at some places market committees and cooperative banks. In the semi-urban areas they have also entered into the political arena via _ local government bodies. Shahs, Jains and Dhariwals are now interested not only in financing politics and thereby indirectly controlling it but also” actually hold power at the semi-urban level such as Sangamner, Baramati, or Shirur. ‘The data will reveal that at 3 number of such places an alliance between the rich middle caste peasantry and the trading communities has been arrived at.
The. trading communities and castes of the semiurban are no more interested only in trade and money lending. They are extending their control over the semi-urban economy via small scale industries. When rich Maratha peasantry was busy capturing petty cooperatives, the Gujarati and Marwari businessmen were acquiring control over the sheds in industrial estates and producing commodities with the help of lot of concessions given by the government, thereby making huge profit. By their control over trade, money-lending and small scale industries, the business communities have increased their bargaining power vis-a-vis the rich peasantry in the semi-urban areas of the state.
The Industrial Sector
But these small scale industries are a small part of the industrial sector. The state has acquired a leading position in the industrial sector compared to that of the agriculture. Out of the total industrial output of the country, around 25 % comes” from Maharashtra as against 10 * and it % from Gujarat and West Bengal respectively (Kamat 1973.63). The per capita value added due to the industries is Rs.870/in Maharashtra, while the Indian average is only Rs.308/- (Dastane 1990 : 21). The share of the industrial sector, (Manufacturing, construction, electricity, gas and water supply), as has been seen earlier has increased from 24 *% to 32 %. The proportion of urbanisation in the State is 10 % higher than the all India average. The industries in the State used to produce mainly the consumer goods in 1960. By the end of this decade they have entered into” the production of capital goods in a major — way. all these factors have increased _ the significance of the industrial sector in the ‘economy of the State. The private sector is dominant in the industries of the State. Besides, the State Government has also entered into production and has started its own companies and corporations. The Government has supported the process of industrialization consistently and steadily by establishing Maharashtra Industrial Development Corporation (MIDC), state Industrial and Investment Corporation of Maharashtra (SICOM), Maharashtra State Finance Corporation (MSFC), Maharashtra Small Scale Industries Development Corporation (MSSIDC), Regional Development Corporations, District Industries Centres etc. These corporations have helped the big, medium and small capitalists to begin, develop and expand their concerns in the last forty years. They have been provided with all the facilities, infrastructure, finance and such other things b, these corporations of the Government.
As is found at all India level the industries in the State are also controlled by a small number of business houses. The proportion of factories employing more than 500 workers is only 2.3 % and they have under their control 54 % of the capital 42 % of the employment and 48 * of the total industrial production in the State. The factories having more than one crore capital are only 6.5 %® but they produce 68 % of the total industrial production (Dastane 1990 : 118-9). The industrial sector in the state suffers from a number of problems, the most important one being the problem of sick units. In 1989, 11000 small and 238 big units were sick (Dastane 1990 : 130). The Government of Maharashtra has been quite considerate about these units and has helped them in a number of ways. One of the ways has been to nationalise these units and relieve the private owners from the problem. The textile mills which were facing the problem because of the outdated machinery were made sick by the owners and were taken over by the Government in the name of the workers who otherwise would have lost their jobs. :
It is not difficult to identify the classes in the industrial sector of the State. They are the capitalist and the factory workers. Among the capitalist one can make a distinction between the big and small or medium. Number of studies are available on the capitalist class and its control over the ‘policy-making at the national level. What is not properly investigated into is the place private capital occupies in the State economy and polity. The dominant caste thesis by concentrating on the rural areas that too on the agriculture sector has not taken proper note of the importance at the growing strength of the capitalist class in Maharashtra. It is necessary to understand how an alliance between this class and the rich peasantly is arrived at. It is also essential to study the policies of the State Government towards the industries. As noted earlier the Government has helped the private businessmen in a number of ways. The disproportionate growth of the Greater Bombay, twin city project, backbay reclamation (Kamat 1983 : O44) taking over of the sick units, and the industrial relation acts and policies sympathetic to the factory owners are some of the instances when the rich peasantry controlling the Cabinet of the State has favoured the big business.
What is the caste and communal composition of this class. It is known that historically the Parsees, Gujarathi, and Marwaris have been in control of the big business in the State. Along with these non~Marathi industrialists, we find that number of Marathi business ‘houses have come to grow their own industrial empires though only a few of them like Kirloskars and Garwares have been able to enter among the top few in the country. These Marathi brahman business houses have been able to establish a very good rapport with the rich peasantry of the State and use that connection to expand their empires. Y.B.Chavan and V.P.Naik, the first two Chief Ministers were mainly responsible to arrive at an alliance with the business interests. These factory owners of the State form a highly organised class having three important chambers i.e. Indian Merchants Chambers, Maharashtra Chamber of Commerce and Maratha Chamber of Commerce and Industries. They are affiliated to the Federation of Indian Chambers of Commerce and Industry. The tension between Marathi and non-Marathi members does. exist in these chambers. The Indian Merchants Chamber of Bombay is traditionally dominated by Gujarathi speaking members while Maratha Chamber of Poona is dominated by Marathi businessmen _ (Kochanek 1974 :; 141-151). The relationship between rich peasants leaders and the industrialists was also coloured by this tension.
The city of Bombay which is recognised as the industrial capital of the country occupies significant position in the politics of the State. The city had an independent provincial congress committee which was basically controlled by the representatives of nonMarathi business interests. During the emergency the Bombay Pradesh Congress Committee was merged with the Maharashtra Pradesh Congress Committee. This merger could be seen as an attempt by Indira Gandhi to diminish the dominance of the Maratha leaders in the MPCC and thereby in the politics of the State. The rise of Rajani Patel as the main fund collector from the Bombay business could also be interpreted as a sign of increasing importance of the industrial capital and therefore of New Delhi during the seventies. The Shiv Sena which began its political career as protagonist of the Marathi interests in the city of Bombay and the rich Maratha peasants vis-a-vis New Delhi and the non-Maratha industrial capital converted itself into a mercenary organization of the Bombay capital during this period and supported the emergency.
The emergence of the peasant movement of Sharad Joshi during the eighties was an expression of the contradiction between the city and village, between the industrial capital and the rich peasants interests.
The class of factory workers is organized into the trade unions. These unions are affiliated to the left parties, the Congress party and the rightist parties. Generally speaking it is observed that the hold of the left unions and their leaders has declined over the period of time, while that of the independent leaders like Datta Samanat and the Shiv Sena’s Bharatiya Kamgar Sena has _ increased. In the well known strike of the. textile workers in the eighties their leader Datta Samant played into the hands of the mill owners who wanted to close down the mills on account of outdated machinery. A decline in the number of days of the strikes and the number of workers on strike is observed in the last few years compared to the late seventies and early eighties (Maharashtrachi Arthik Pahani 1989-90 : 118). The growing trend o f automation and dispersal of industries has enhanced unemployment on the one hand and has. decreased the strength of working class vis-a-vis the capitalists. What is noteworthy is the disorientation and demoralisation among the workers especially of the city of Bombay which was one time an important centre of trade unionism if not left politics. Resides these factory workers who are comparatively well organized we will have to take into account increasing number of building construction workers, film industry workers, mathadi workers and other semi-organized or unorganized workers of the urban areas especially of the big cities. They have not been able to develop the working class consciousness and have tended to side with political organizations interested in creating false identity. Other Items On The Agenda The contribution of the tertiary and the service sectors to the State income has been around forty per cent as observed earlier. The capital invested in these sectors and the classes formed could be analysed as the parts of the urban or semi-urban economy which we have described above. The interests of the commercial capital and the industrial capital overlap most of the times though occasional tensions could also be observed. There is an increasing tendency to invest the surplus produced in these sectors in the share market. The transport fleet owners, big traders and real estate business has traditionally supported the congress party and now they are shifting their allegiance at the upcoming Bharatiya Janata Party. The educated middle class of the professionals and the white © collar workers are also supporters largely of the status-quo. They come from higher castes and oppose egalitarianism.
Much is being said about the black money, the lumpen capital, the parallel and the underground economy. Their growing strength is influencing the process of class formation and the distribution of power in the cities and towns. Therefore, a close scrutiny of this informal aspect of the political economy is necessary. The feminists have argued that place of women in the production process needs to be located and studied. It has been argued that the women are at _ the receiving end and do not possess the property in the true sense of the term. They are being exploited as women at the place of work both in the urban and rural economy. This kind of growing consciousness in certain sections of the women has given rise to a social movement to create awareness about the status of women. The student of political economy of the State of Maharashtra will have to place women question on his agenda.
References
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