Harish Damodaran writes: Why aspiration is dead in India

Take business, which historically was an occupational silo in India’s varna system and the domain of certain traditional Vaishya mercantile communities. The entrepreneurial spirit permeating large sections of society is a phenomenon of not more than the last few decades. For most, doing dhanda was neither in their blood nor the most honourable vocation. So is the desire, even among slum-dwellers, to invest in their children’s education and “make them IAS, IPS, doctor, engineer”. Breaking the shackles — wanting them not to follow in the footsteps of their fathers and those before them — is something that is relatively new as a generalised sentiment. The overwhelming tendency, probably till the turn of the last century, was not to seek advancement but to maintain one’s station, even if it meant being stuck in the same groove.

The widespread craving for upward mobility comes only with episodes of optimism about the future. That’s when risk-taking becomes pervasive and virtually everybody feels emboldened to place big bets, whether in dhanda or changing the course of their life. One indicator of this is migration — the movement of people from rural areas to cities in search of better work opportunities for themselves and education for their children. When individuals find it worthwhile to move with their families and live in overcrowded chawls or jhuggis, they are basically making a leap of faith into the future.

That unalloyed optimism — the hope of scaling a higher economic and social position at a mass scale — is clearly missing today. It’s borne out by a simple statistic that can be a proxy for migration: The number of passengers carried by the Indian Railways. That peaked at 8,439 million in 2018-19 and collapsed to 1,250 million in 2020-21 (when Covid struck), before recovering to 3,519 million in 2021-22, 6,396 million in 2022-23 and 6,730 million in 2023-24. The last figure is still lower than even the 6,920 million of 2008-09.

But this isn’t the only gauge of a dialling down of aspirations among the general masses.

Equally revealing is the share of India’s workforce engaged in agriculture, which fell from 64.6 per cent in 1993-94 to 58.5 per cent in 2004-05 and then sharply to 48.9 per cent in 2011-12. The latter decline took place in absolute terms, too, from 268.6 million to 231.9 million. The farm sector’s share in the country’s employed labour force continued to drop, albeit at a slower pace, to 42.5 per cent by 2018-19. But there’s been a reversal since, with the ratio rising to 46.5 per cent in 2020-21 and hovering at 46.1 per cent for 2023-24, even after the full restoration of economic activity post the pandemic.

The data on falling railway passenger numbers and agriculture turning into an “employment sink” — absorbing surplus labour, rather than releasing it to other more productive and paying sectors of the economy — tells us two things.

First, while aiming for an ever-rising standard of living may be considered an inherent human urge, its manifestation isn’t inevitable for all times or universal across classes. The natural tendency, when the future doesn’t seem so inviting, is for people to temper expectations and stay where they are.

Second, there is an economic cost to such inertia and risk aversion beyond the individuals concerned. The 17th-century English economist Sir William Petty wondered at the proclivity of cloth workers to reduce their hours in the factory when wages went up. Instead of responding to higher wages by working harder, they simply took more time off: “So licentious are they who labour only to eat, or rather to drink… A day of two hours labour… [is] sufficient to make men to live after their present fashion… [and] in a condition little above that of animals”.

What Petty said about cloth workers in England during his time is no less applicable to the current situation in India. My colleague Parthasarathi Biswas did a story on farm labour shortages in Maharashtra — how the state government’s Ladki Bahin Yojana scheme, providing Rs 1,500 per month to women from families with annual income below Rs 2.5 lakh, has led many agricultural workers to go less to the fields (‘Maharashtra govt’s Ladki Bahin scheme throws a curveball for farmers’, IE, October 12). For them, the Rs 1,500 amount isn’t additional income, but something that enables a reduction in their number of working days and frees up time to do other things.

There’s been a lot of talk in recent times about how free foodgrains, electricity, water, bus travel and cash transfer schemes (like Ladki Bahin) have promoted all-round indolence. While these may partly be an expression of bourgeois disdain, what they miss is asking why people are content with receiving money and revdis (freebies) just sufficient to support existence at low levels of material comfort. Does this apparent satisfaction also, perhaps, reflect the death of aspiration?

If going back to farms, pulling children out of private schools, adopting a chalta hai (letting things be, which the Chinese alternatively call tang ping or “lying flat”) attitude and non-aversion to living off revdis is indicative of a general pessimism about the future, it has implications for consumer sentiment and spending. Two-wheeler sales are a barometer of mass-segment consumer confidence. These, interestingly again, peaked at 21.2 million in 2018-19 and have barely recovered to 18 million in 2023-24, after plunging to a 10-year-low of 13.6 million in 2021-22. Risk-return tradeoffs are different when one looks to the future either with trepidation or sanguineness.

India is not alone here. A recent survey of Chinese people revealed only 47 per cent to be hopeful about their prospects over the next five years. That ratio was 73 per cent, 68.8 per cent and 60 per cent respectively in the previous surveys for 2014, 2009 and 2004 conducted by the same researchers at Harvard and Stanford universities. Furthermore, over 60 per cent of respondents in 2004, 2009 and 2014 believed that “effort is always rewarded”. But in 2023, a mere 28.3 per cent agreed that hard work would pay off.

The difference, however, is that tang ping is happening in an economy with an annual per capita GDP of $12,600, whereas India’s $2,500 is too small to afford chalta hai. A fresh episode of optimism is required to revive the aspirations and animal spirits of the millions who are, in Prime Minister Narendra Modi’s words, India’s “neo-middle class”.

harish.damodaran@expressindia.com