Three lessons from the history of rationing and welfare

 

Times of crises demand adequate relief answers, and these historical junctures in turn shape social support policies for decades. Crucial elemental designs of rationing and welfare policies put in place today were laid out during the Second World War. Can it explain some of the failures in the response to the Covid-19 impasse?

1) Timing and locality matters

It is often said that out of all the industrial centres, Ahmedabad emerged as the friendliest one in terms of labour relations, because there was a nationalist consensus that bound workers and employers together against a common colonial enemy – which also happened to be the greatest competitor of the mill-owners in Ahmedabad. Matters of food were fought over in court rather than in strikes such as in Bombay or Kolkata. Those cases put in places many agreements around the matter that labour leaders from the city such as Gulzarilal Nanda and Khandubhai Desai only had to carry on into the executive of the independent government to make nation-wide laws out of it.

After the Bengal famine 1943, the Government of Bombay and the Ahmedabad mill-owners had an argument whether ration shops should be owned by the companies or by the municpality. By the time municipal ration shops opened, so-called “fair price shops” already existed on mill premises and eventually these shut down when the government took over the provision of rations. The cards, however, were still distributed by the mill managers. But this was contested by Kasturbhai Lalbhai, who for the sake of maintaining production, would have preferred if they had been able to maintain their own shops. There was surely an element of paternalistic pride in the demand to provide for their own workers without state interference, but this was mostly an insurance that people actually turned up for work. Similarly, mill-owners were hesitant to allow the calculation of rations on a monthly basis because they were worried that during such a long period, people would return to their villages and abandon the mills. For people who would receive those rations it was better to get them on a monthly basis so they knew they would be secure for that period.

Rather than employing a piecemeal strategy containing of surprises of when and how much informal workers could get, it could be worthwhile to re-open those debates about which places and which time intervals could ensure a greater accessibility of food to all various sections of the population.

2) Cash vs. Cooked Food

In 1944 there was a debate between the Government of Bombay and the textile mill owners whether to open workers’ canteens. The Government almost urged them to establish these canteens because they thought it would make sure that workers would not run away to their villages. But neither the Ahmedabad mill-owners nor the workers were in favour of it. The mill-owners themselves were aware that they would not be able to produce the quality and nutrition which would have been required to ensure people worked hard enough. 

From the beginning of the Second World War, the trade union stated that they would prefer cash, the mill-owners ration shops, and in the end they drew up a list of which goods should be provided by shops and for which there should be a dearness allowance in cash (there were several court cases fought around this during the same year).

Plus, it also mattered which food one could get. The Government of Bombay already recognized in 1923 that tobacco, paan, tea with sugar were something that could not be denied in the composition of an essential budget. However progressive those household budget calculations may have been, it should not be forgotten that women were not always represented as a “full” consumption unit but often only 80% as much as the male breadwinner.

It seems that even today people would actually prefer rations or money compensation rather than access to relief kitchens, if only they have a ration card and a kitchen of their own – which may not always be the case under the present circumstances.   

3) Relief and tax

When the government announced that the construction of fair price shops and the wage increases handed out as dearness allowance were deductible from the Excess Profit Tax, the whole scheme saw a boost and employers declared voluntarily in 1944 that they would increase the dearness allowance more than the trade union had asked them to (so that it would amount to a compensation of the rise of the cost of living index of 96% per cent instead of 76%).

Similarly, the Ministry of Commerce has now announced that any ex-gratia relief payments to their employees can now be counted as CSR spending, even if donations to the PM CARES fund are not. This is just an expression how the state still in some way assumes that the main responsibility of providing welfare lies with the company and thereby indirectly links productivity, work, food – and survival. On the other hand, all informal working conditions become suddenly clubbed together as those in need of state charity like the dubious PM CARES fund.

The government’s policy response to the COVID-19 crisis surely wears a hat of Hindu-nationalism. But the underlying legal foundations were already laid earlier. However, the great difference between the Second World War (and in fact, the Plague as well as the First World War) and today is that welfare policy during these moments emerged out of an attempt to keep people tied to their workplaces, to maintain production as much as possible. Today, the opposite is the case: The virus does not allow economic activity, it does not allow the presence at conventional worksites. This is why it is difficult to keep the survival of workers relevant to employers under the current situation. But not only for them – because it seemed necessary for production during the Second World War, the state forged a strong union between access to food, welfare and work hierarchies bound by labour law. Even the discovery of law makers that informal labour would not suddenly disappear with economic development, and even the active process of informalisation during liberalisation, could not disentangle that. If the current deadly crisis should bring any long-term improvement to workers that needs to change.


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