Economic Liberalization in India – Is It for the Poor?

Economic Policies Not for Us

According to the planning commission estimates, in 1987-88, 40% population lived below poverty line and 83 million children were malnourished in 1991. The latest declared poverty line of 32 and 26 rupees in the urban and poor areas respectively, acknowledges 407.4 million people as poor. It is of course an underestimation and the reality is far worst.

After the new set of economic policies was adopted in the early 1990s, the philosophy of agricultural planning got changed. The emphasis was no longer solely on attaining self-sufficiency in food grain production or to keep hunger and starvation at bay. Farmers were asked to diversify, produce crops that were suitable for export and to compete in the international market. With the promise of cheap food available off the shelf in the global market, the focus shifted from agriculture to industry, trade, and commerce, from the small and marginal farmers to the agro-processing companies.

Nandigram, West Bengal – Mass Eviction to Create a SEZ

The West Bengal government signed an agreement with an MNC, Salim group of Indonesia for several projects, including a mega chemical industrial estate as a Special Economic Zone (SEZ). This will affect the livelihood of over 1 lakh people, who are mainly small and marginal farmers and agricultural laborers. They have been organizing protests and dozens of lives have been lost already.

Cultivation of staple food began to be replaced by cash crops, tomatoes in place of wheat, durum wheat (for bakery purposes) replaced wheat as a staple diet in Punjab and Haryana, flowers in place of rice, and so on.

Cuddalore, Tamil Nadu – Pollution from Chemical Industrial Estate

SIPCOT chemical industrial estate is causing pollution of the surrounding agricultural land. This has jeopardized the livelihood of 20,000 people of the surrounding area who depend on farming and fishing. Inaction of the state agencies and inefficient implementation of rules have left them victimized.

In the coastal areas, private enterprises took away the fish catch depriving the local communities of a livelihood and the only nutrition source. In Kerala, for instance, vast tracts of forests and paddy fields have been converted into rubber, coffee, and coconut plantations. Commercial crops are eating into the fertile land tracts meant for growing essential food grains.

There is strong link between farmers’ suicides and trade liberalization in India. The 1990’s witnessed the rising costs of production and the falling prices of farm commodities. The late 1990’s reported some of the first farmers’ suicides mainly due to indebtedness. In 1998, the World Bank’s structural adjustment policies forced India to open up its seed sector to global corporations. The global corporations changed the input economy overnight. Farm saved seeds were replaced by corporate seeds, which needed fertilizers and pesticides and could not be saved.

Patents prevent saving seeds and seeds are engineered with non-renewable traits. This means that these expensive seeds have to be bought every year before planting. Failed BT-cotton crops in Vidarbha, Maharashtra led to increased poverty and indebtedness and forced scores of farmers to commit suicide. More than 25,000 peasants in India have taken their lives since 1997.


Unfortunately, the rural India is only seen as a supplier of food grains, land, minerals and other natural resources to the urbanites. Rural poor are forced to migrate towards the cities for search of livelihood. It not only disrupts their lifestyle but also puts tremendous pressure on the resources of the cities. Industrialization and urbanization might be OK in the West where population size is significantly smaller and everything is mechanized. However, it does not suit the ground realities of India where most people survive on agrarian activities.

A detailed report on how poor tribals are being displaced for sake “development” of the rich and city dwellers: Poor Tribal: Victim of Development Projects

About Goodpal

I am a firm believer in healthy people (mind and body both), healthy societies and healthy environment. Please feel free to comment, share and broadcast your views -- I like rational and intellectual discussions. Thanks for stopping by. Have a Good Day!
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