Erosion of rights and marketisation of development

John Samuel; Bobby Kunhu
National Centre for Advocacy Studies (NCAS); Centre for Youth and Social Development (CYSD)

The national development paradigm is a paradox. On the one hand, there is a professed commitment to meeting the Millennium Development Goals by respecting, protecting and fulfilling economic, social and cultural rights. On the other hand, there is clear policy prioritisation towards privatisation of services that affect the basic rights of the most marginalised, such as education, health, water and food distribution. In contrast with the “the language of rights”, policy prescriptions push basic services away from the responsibilities and obligations of the State.

Evidenceof this trend is the glaring gap between policy pronouncements and budgetaryallocation. During the period of economic liberalisation from 1992 onwards, thebudgetary commitment in real terms has decreased. The State’s presence inhealth, education and water—which historically has been overwhelming—hasslowly started to disappear, with the space being filled by private, for-profitinvestment. This is most obvious from an analysis of budget expenditure in thesecore sectors over the last decade as a percentage of GDP. Withdrawal ofsubsidies and state investment in these sectors is another definitive indicator.[1]

Thebasic rights of marginalised groups such as Dalits (commonly calledUntouchables), Adivasis (indigenous communities that make up about 25% of thepopulation), landless labourers, women and poor children are significantlyeroded amidst policy declarations that mask inadequate financial allocation.

Thecost of the State’s withdrawal from education

Indiahas a literacy rate of 65% but only 54% of women are literate.[2]School dropout rates have increased over the last five years, and are higher forgirls. Only 43.6% of girls are enrolled in primary school, and of these, only40.1% go on to middle school. Disparities between girls in rural and urban areasand between Dalits, Adivasis and other minorities are also sharp.[3]Delinquent children and children of prisoners and sex workers are deprived ofelementary education by the precincts.[4]

Overallpublic expenditure on education has dropped from a peak of 4.4% of the GDP in1989 to 2.75% in 1998-99.[5]Primary education is still not free or compulsory despite the Constitution’s93rd Amendment and a 1993 Supreme Court decision, which makeseducation a fundamental right for children between six and fourteen years old.[6]With current expenditure on primary education around 1.5% of GDP, it isestimated that an increase to 2.8% of the GDP can help fulfil constitutionalobligations.[7]

Thelast decade has witnessed the increasing withdrawal of the State from education,especially higher education, which was historically under state control. TheState has left the universities to fend for themselves, and in quite a few casesmade them dependent on private funding. The resultant increase in costs makeshigher education almost wholly inaccessible to marginalised groups despitevarious legislative provisions aimed at improving their access.

Health:the major risk is poverty

Indiais characterised by serious health risks. More than 100,000 women die of anaemiaevery year. In 1991, 87.5% of all pregnant women were found to be anaemic.Nearly 600,000 children die every year because of diarrhoea, while 56% ofchildren under five years of age have iron deficiency anaemia. It is estimatedthat 200 million people are exposed to the risk of iodine deficiency disordersand that 63 million suffer from goitre. About two million cases of malaria arereported yearly, despite the National Malaria Eradication Programme. India has3.86 million HIV/AIDS patients, second after South Africa, despite the NationalAIDS Control Programme.

Thegreatest risk factor for poor health is poverty. The worst health indicators arefound among the most marginalised groups. For instance, the Adivasis have thehighest incidence of infant mortality at 84.2 per 1,000 live births, followed bythe Dalits with 83 and the other less privileged castes with 76 compared to thenational average of 70.[8]

Thereis no law enacted for establishing health services and regulation and planningof private health care is lacking. While there has always been a large presenceof private stakeholders in health services, the new National Health Policy 2001furthers state withdrawal from the health sector, as it focuses on involvingnon-state actors in the primary healthcare sector. However, the policy is acentral government policy and since health is a state matter under theConstitution, it technically has only a persuasive effect on the stategovernments.

TheIndian healthcare system is becoming increasingly commercialised. Nearly 70% ofthe healthcare infrastructure, and over 80% of doctors, are in the privatesector. People directly finance, through user fees and purchase of healthcaregoods, nearly 80% of the total healthcare expenditure.[9]The result is that healthcare spending is the first cause of indebtedness amongpoor households. Aggregate healthcare expenditure is 5.2% of the GDP, of whichonly 14% is from public resources.[10]The trend in India shows a decline in the public financing of health care from1.25% of GDP in 1993-94 to 0.9% in 1999-2000 (against the World HealthOrganisation’s recommendation of 5%).[11]

TheState has historically played a major role in terms of pharmaceutical subsidies,as well as direct and indirect investment in research and development. However,as a direct consequence of the World Trade Organisation’s intellectualproperty rights agreements (TRIPS), state drug subsidies have drasticallydecreased, raising prices. The complete withdrawal of state subsidies andenforcement of a new patent regime, which will prevent reverse engineering—andtherefore affordable production of generic drugs—maybe completed as early as 2005. This would result in bringing drug prices up toUS levels, while wages remain at Indian levels.

Thestate trend of withdrawing from public health spending can be seen in Table 1.

Table1: Expenditure of central and state governments on health


Percentage of GDP at current market prices















Source:CMIE, Public Finance

Thispolicy steers the healthcare system towards urban specialist-based health care,thereby alienating the most marginalised citizens. The current achievements inthe primary health sector pursuant to the National Health Policy of 1983 werepossible only because of direct state investment. Kerala, which has the besthealth indicators in the whole country, has the best state-supported healthinfrastructure. But in this state also, the government has announced theprivatisation of the primary health centres and is planning to introduce a feefor using the state health services.

Ruralareas and those regions that already have poor health infrastructure, willsuffer directly because of state withdrawal from the health sector.Traditionally, it has been the state role in the health sector that providedhealth services for women from the marginalised communities, ranging fromcontraception to hysterectomies.

Plunderingthe most contested natural resource:water

Onethird of India is drought prone. Water is the country’s most contested naturalresource, having significant impact on rights to livelihood of people ingeneral, and the marginalised in particular. There is increasing disparity inaccess to water and inter- and intra-regional conflict over water is increasing.[12] In many cases, water isbeing brought from Adivasi and rural areas to feed the growing water needs inurban areas. For example, drinking water for Bombay is obtained from the Adivasiareas in Thane. Coca Cola has started a plant in an Adivasi area in the Palakkaddistrict of Kerala and their tube wells have resulted in a sharp decline in thewater table there.

TheState has shifted its stand from the National Water Policy of 1982, with itsemphasis on community-owned water resources, to the New Water Policy, declaredin 2002, which focuses on encouraging private sector participation in water:

“Privatesector participation should be encouraged in planning, development andmanagement of water resources projects for diverse uses, wherever feasible...Depending upon the specific situations, various combinations of private sectorparticipation in building, owning, operating, leasing and transferring waterresource facilities, may be considered.”[13]

Thispolicy has also been adopted by many of the state governments, and waterprivatisation has begun in several states. The government of Chattisgarh hasleased out the River Sheonath in the Durg region for a period of 22 years on aBuild Own Operate Transfer (BOOT) scheme to the private corporation Radius WaterLimited, despite protests from civil society and local communities. Forcenturies this river has provided water for the villagers living by its banksfor irrigation, fishing, drinking, washing and bathing. Now the corporationregulates these activities, banning fishing and the diverting of water forirrigation within the 18-kilometre radius it controls. The contract also coversground water and meters have been installed on tube wells supplying water tolocal industries. The corporation sells water at USD 0.26 per cubic metre. At asupply rate of four million litres of water per day it is thus expected togenerate revenues of USD 127 million in 20 years. There are other waterprivatisation schemes in the offing including a USD 340 million project inTirupur, Tamil Nadu, Burgaon, Madhya Pradesh and Vishakapatnam in AndhraPradesh.[14]

Waterin India has traditionally been community owned property. Dependence on water isquite high, given that many people depend on small agricultural holdings andfisheries for their livelihood. The privatisation of water, by giving privateinterests control over these important sectors, is paving the way for largeagriculture multinationals to take over these sectors completely.


Themost significant effect of a decade of moving toward privatisation is theerosion of human capability caused by a lack of access to basic services, whichare becoming increasingly unavailable or unaffordable. The privatisation ofbasic services essentially excludes a large number of marginalised peoples frommaking a living and attaining empowerment. Limited access to water, thestagnation of agriculture[15]and layoffs from enterprises once in the public sector, have led to reduction injobs. This has contributed to an increased migration to the urban areas, wherethe unemployed and alienated provide a fertile breeding ground for extremistinterests.

Deprivingpeople of water and basic services leads to poverty and social exclusion, whichcan in turn lead to social conflicts. When this trend is coupled with a crisisin governance, there is accelerated erosion of civil and political rights andshrinking tolerance of dissent.

NationalCentre for Advocacy Studies (NCAS); Centre for Youth and Social Development(CYSD)


[1] We do not have exact figures for the withdrawal of state subsidies. Since these sectors are controlled by individual states, there are no national figures currently available. But we have evidence that the State has withdrawn subsidies in education for specific educational institutions. The budget for the University Grants Commission (the umbrella organisation for Indian Universities which provides the grants and funds required for the universities and government fellowships for students) has also been decreasing continuously. There has been similar withdrawal of public funding from primary health care.

[2] Government of India. Provisional Census Report. New Delhi: Department of Census, 2001.

[3] R. Govinda Ed., Indian Education Report. New Delhi: Oxford University Press, 2002.

[4] Ibid.

[5] Jean Dreze and Amartya Sen. Indian Development and Participation. New Delhi: Oxford University Press, 2002.

[6] Unnikrishnan v. Union of India, 1993.

[7] Kirit S. Parikh and R. Radhakrishna Eds., India Development Report 2002, New Delhi: Oxford University Press, p. 107.

[8] Voluntary Health Association of India (VHAI), report on the Draft National Health Policy 2001.

[9] Prakasam Gnana et al., Advocacy Update. Campaign for Peoples Right to Health, Pune: NCAS, October-December 2001.

[10] Ibid.

[11] Centre for Monitoring Indian Economy (CMIE), Public Finance.

[12] The ongoing stalemate between Karnataka and Tamil Nadu over the sharing of Cauvery waters is a good example.

[13] National Water Policy, 2002, para. 13.

[14] Outlook, 23 September 2002.

[15] Also because of the fall in prices of agricultural products due to the lifting of tariff barriers on imports.

John Samuel is the Executive Director of the National Centre for Advocacy Studies (NCAS), Pune, and a visiting fellow at IDS Sussex. Bobby Kunhu is a human rights lawyer working with the NCAS.