India’s Hardly a Land of Opportunity

(Bloomberg Opinion) -- India has never been the most egalitarian of societies. But because it's a democracy, governments have at least tried to expand opportunities for its most deprived citizens: After all, their votes count as much as anyone else's. New data suggests those efforts may be failing.

One way to judge progress in creating opportunities is to measure intergenerational mobility — the chances that you will do better than your parents have. Indians have long assumed that such mobility has been increasing over time. People from formerly disconnected areas, as well as from formerly disadvantaged social groups or castes, seem able to find ways to make better lives for themselves. India may be politically divided and socially stratified, but in theory, Indians of all creeds and colors can now get ahead by dint of individual enterprise.  

Recent research from economists at the World Bank, Dartmouth University and the Massachusetts Institute of Technology calls those comfortable assumptions into question. The study's authors used a new way of calculating social mobility — the expected income at adulthood of a child born to parents in the bottom half of the income distribution — that makes up for gaps and flaws in the data. The results show that, by and large, intergenerational mobility has remained stagnant for Indians since the economy was liberalized in 1991.

That's bad enough; liberalization was supposed to have increased opportunities, not frozen them in place. Closer examination reveals an even more worrying picture. Geographically, large parts of India are doing particularly badly — more rural areas, those in the underdeveloped north, and those with fewer good high schools. Prime Minister Narendra Modi ran in 2014 on his record as chief minister of Gujarat. Researchers single out that state by name as one “with very high income growth but relatively low mobility.”

Demographically, the picture is even worse. It turns out that for one group mobility is actually declining: Indian Muslims. Their prospects are awful even when compared to historically disadvantaged groups elsewhere: For example, Indian Muslim children born into the bottom half of the income distribution are likely to wind up at a far lower position as adults than African-American children born into equivalent circumstances. For upper-caste Hindus, meanwhile, income mobility is already relatively high and has been increasing over time.

In some sense, this shouldn't be news. More than a decade ago, the left-leaning Congress government in India commissioned an investigation into the economic status of Indian Muslims, led by a former chief justice of the Delhi High Court. The Sachar Committee report discovered that Muslims had much lower expenditure per capita than other communities, that Muslim men had fewer employment opportunities, that they were hired at a far lower rate for government jobs, and so on.

The extraordinary range of disadvantages, and the poorer outcomes, suffered by Indian Muslims came as a shock to liberal Indians. In response, then-Prime Minister Manmohan Singh ordered the government to develop programs targeted at Muslims and decreed that those plans should have first call on scarce government resources.

What is legitimately shocking is the hysteria this statement continues to produce. It's viewed as definitive proof that some political parties care only about Muslims — which is clearly untrue, given that no party would commit electoral suicide by focusing only on 14 percent of the population. Modi still brings up Singh's words as evidence for his claim that “Congress is a party of Muslim men.”

For Indian Muslims, there seems no way out of this bind. Structural discrimination means that they can't access many opportunities that the market economy opened up for other groups. Some studies by economists have found that Muslims get called for job interviews at one-third the rate of upper-caste Hindus with the same qualifications. Sociologists have delineated how Muslims are ghettoized in the older parts of cities, losing out on opportunities in a growing economy.

Meanwhile, any social schemes targeted at improving the lot of Muslims are politically toxic, as they expose politicians to the charge that they're seeking to “appease” Muslim voters.

India's relatively free and open democracy means that, in spite of all this, Indian Muslims haven't yet succumbed to frustration and violent radicalization. But Indians can't afford to comfort themselves that things are inexorably headed in the right direction. The country doesn't just need jobs; it need jobs that are open to all, especially those that are at the bottom of the social pyramid. Without equality of opportunity, India could well become a tinderbox.

To contact the editor responsible for this story: Nisid Hajari at nhajari@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Mihir Sharma is a Bloomberg Opinion columnist. He was a columnist for the Indian Express and the Business Standard, and he is the author of “Restart: The Last Chance for the Indian Economy.”

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