Indian Holocaust My Father`s Life and Time, Chapter: Nine Hundred Thirty One
Palash Biswas
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Our well being is linked to growth story to defend the black money economy in India.India`s growth story has not reduced poverty because of exclusion and excommunication of the majority population.The production system is destroyed and rural India is killed while the managers of Indian sensex economy is doing everything to ensure the recle system of black money all on the name of foreign capital inflow which boosts the growth rate, not the production system, mind you.In fact, the corporate government of India has nothing to with poverty reduction. The government expenditure is meant to expand the market only.Poverty is the deprivation of food, shelter, money and clothing that occurs when people cannot satisfy their basic needs. Poverty can be understood simply as a lack of money, or more broadly in terms of barriers to everyday life.Absolute poverty or destitution refers to the state of severe deprivation of basic human needs, which commonly includes food, water, sanitation, clothing, shelter, health care, education and information. Relative poverty is defined contextually as economic inequality in the location or society in which people live.For most of history poverty had been mostly accepted as inevitable as traditional modes of production were insufficient to give an entire population a comfortable standard of living.After the industrial revolution, mass production in factories made wealth increasingly more inexpensive and accessible. Of more importance is the modernization of agriculture, such as fertilizers, in order to provide enough yield to feed the population.The World Bank estimated 1.29 billion people were living in absolute poverty in 2008. Of these, about 400 million people in absolute poverty lived in India and 173 million people in China. In terms of percentage of regional populations, sub-Saharan Africa at 47% had the highest incidence rate of absolute poverty in 2008. Between 1990 and 2010, about 663 million people moved above the absolute poverty level. Still, extreme poverty is a global challenge; it is observed in all parts of the world, including the developed economies.The supply of basic needs can be restricted by constraints on government services such as corruption, debt and loan conditionalities and by the brain drain of health care and educational professionals. Strategies of increasing income to make basic needs more affordable typically include welfare, economic freedom, and providing financial services. Today, poverty reduction is a major goal and issue for many international organizations such as the United Nations and the World Bank.Poverty in India is widespread, with the nation estimated to have a third of the world's poor. In 2010, World Bank stated, 32.7% of the total Indian people fall below the international poverty line of US$ 1.25 per day (PPP) while 68.7% live on less than US$ 2 per day.According to 2010 data from the United Nations Development Programme, an estimated 37.2% of Indians live below the country's national poverty line.[2] A 2010 report by the Oxford Poverty and Human Development Initiative (OPHI) states that 8 Indian states have more poor people than 26 poorest African nations combined which totals to more than 410 million poor in the poorest African countries.The latest UNICEF data shows that one in three malnourished children worldwide are found In India, whilst 42 percent of the nation's children under five years of age are underweight. It also shows that a total of 58 percent of children under five surveyed were stunted. Rohini Mukherjee, of the Naadi foundation-one of the NGO's that published the report-stated India is "doing worse than sub-Saharan Africa,"The latest UNICEF data shows that one in three malnourished children worldwide are found In India, whilst 42 percent of the nation's children under five years of age are underweight. It also shows that a total of 58 percent of children under five surveyed were stunted. Rohini Mukherjee, of the Naadi foundation-one of the NGO's that published the report-stated India is "doing worse than sub-Saharan Africa,"
Now, poverty line in India, along with the other related issues, has almost become a mysterious concept. This is primarily because there are too many people, who know too little about poverty, speaking too much about it.
The reduction in poverty will be slower if the economic growth is not brought back on high growth track, said Planning Commission Deputy Chairman Montek Singh Ahluwalia.On the other hand, digital citizenship is promoted with biometric UID to kill the sovereignty of the citizen. Finance Minister P.Chidambaram on Saturday, described government's ambitious direct cash transfer scheme as "nothing less than magical", saying the move is aimed at plugging the loopholes in the delivery mechanism and ensure that poor get complete benefits of government schemes.Explaining the details of direct cash transfer scheme and its benefits to party workers, Chidamabaram termed the scheme as "nothing less than magical", according to MPCC chief Manikrao Thakre in Mumbai.
Contrarily,US President Barack Obama warned on Friday that Republicans would give Americans a lump of coal for Christmas if they kill his plan to raise $1.6 trillion from higher taxes on the wealthy.
But the most powerful Republican in Washington, House speaker John Boehner, warned that talks on averting a year-end tax and spending crunch, which could tip the economy back into recession, were going nowhere.
Obama traveled to a toy factory in Pennsylvania to press his case for a plan to stop the US economy tipping off a " fiscal cliff" when automatic tax hikes and spending cuts come into force on January 1.
The government is likely to shoot down the Department of Financial Services' (DFS) plan to appoint common banking correspondent (BC) companies for transferring cash to poor people and replace it with a country-wide network of 'micro ATMs', as it seeks to finalise the last mile payment architecture for cash transfers.ET reports.
In a meeting on Monday evening, Rural Development Minister Jairam Ramesh, UIDAI chairman Nandan Nilekani, and Planning Commission officials met Finance Minister P Chidambaram to share their reservations about the common banking correspondent model. An official who attended the meeting told ET that it was agreed in-principle to junk this model but a final decision will be taken by the Finance Minister.
In a SMS to ET, Ramesh confirmed the development. "The DFS model is now history. Women SHG, Ashas, anganwadi workers, post offices, teachers, kirana stores, fertiliser shops, etc, can now be BCs," he said. Banking correspondents are individuals who work as banks agents in areas that don't have branches. A banking correspondent company manages these agents.
Republicans have rejected Obama's first offer to end the stalemate as "ridiculous" and negotiations between the two sides have hit a roadblock with just a month to go, punctuated by the holiday season, until the deadline.
"The sooner Congress gets this done, the sooner our economy will get a boost," Obama said, pushing his plan to extend tax cuts for the middle class but to raise rates on American families earning $250,000 or more.
"If Congress does nothing, every family in America will see their income taxes automatically go up on January 1," Obama said.
"That's sort of like the lump of coal you get for Christmas. That's a Scrooge Christmas."
Republicans have complained that Obama's offer -- presented to Boehner by Treasury Secretary Timothy Geithner -- was a rehash of his previous budget request.
"It was not a serious proposal. So right now we're almost nowhere," Boehner told reporters on Friday, complaining that Obama's offer would not shave off sufficient government spending.
Republicans had said the Obama plan would only cut an extra $400 billion in government spending, but an administration official who described the plan to AFP said the figure would be $600 billion over 10 years.
The savings would be accrued by saving $350 billion on the Medicare health program for the elderly and $250 billion in savings on non-health mandatory programs, the official said.
Republicans say they are ready to raise more revenue from wealthy Americans, but want to do so by closing tax loopholes and limiting deductions rather than raising income tax rates.
"Increasing tax rates draws money away from our economy that needs to be invested in our economy to put the American people back to work," Boehner said.
"It's the wrong approach."
In an interview with the Wall Street Journal Friday, the top Republican in the Senate, Mitch McConnell, proposed higher Medicare premiums for the wealthy, a rise in the Medicare eligibility age and a slowing of cost of living increases for programs like Social Security, the national pension program for the elderly.
"Those are the kinds of things that would get Republicans interested in new revenue," he said, but insisted that tax rates could not be raised, but that extra funding must be found by closing loopholes.
Obama said such an approach would not raise sufficient money to make a meaningful dent in the deficit.
The White House and the Republicans must reach an agreement by the end of the year that lowers the ballooning US deficit by $1.2 trillion over 10 years, as mandated in a poison pill deal agreed last year.
If they don't, tax cuts in place since the presidency of George W. Bush will expire and $500 billion in across-the-board spending cuts would kick in, possibly sending the economy slumping into another recession.
Obama warned that if no deal is done, the average family would pay $2,000 in extra taxes next year.
"It's not acceptable to me, and I don't think it's acceptable to you, for just a handful of Republicans in Congress to hold middle-class tax cuts hostage simply because they don't want tax rates on upper-income folks to go up," Obama told a crowd of 350 people at the factory.
Besides resisting tax hikes on families earning over $250,000 a year, Republicans want action on reform of entitlement programs such as Social Security.
The White House proposal also features new stimulus spending and a permanent end to congressional control over federal borrowing limits -- the issue at the heart of last year's spending fight.
Obama campaigned on the basis of making wealthy Americans pay more of their "fair share" in taxes, and appears to believe his re-election win gives him something approaching a mandate.
Nancy Pelosi, leader of House Democrats, said that "elections have consequences."
"The president campaigned, he made it very clear that he was supporting tax cuts to the middle class, that he wanted the expiration of the tax cuts for the high end and the American people know that debate, they voted for him."
A usual suspect is our everyday TV news anchor, who feigns gross outrage at the insensitivity of the poverty estimates, irrespective of the number in question. This fake outrage – and it is fake because no one seems to have taken the trouble to understand why at all do we have poverty estimates and how do we calculate them- on the part of media routinely misinforms and misguides the readers about this very important issue.
One big casualty, for example, is the reputation of Late Prof. Suresh Tendulkar, one of the most important scholars on poverty in the world. The way Tendulkar Committee's efforts are manhandled in casual chats, it appears as if the legendary economist had an ulterior interest in keeping India poor! But, I wonder if people know that before Tendulkar revised them upwards,India's poverty line was Rs 12 for rural areas and Rs 17 for urban areas.
Read more: http://forbesindia.com/blog/economy-policy/indias-poverty-estimates-dont-just-get-outraged-understand-them/#ixzz2DouYVpYc
Several pending issues got resolved in last week and most important among them was the successful conclusion of the Greece bail out talks.Economic Times reports.
The market across the world rejoiced at this event and the Sensex too zoomed by 305 points on Tuesday.
However, the wrangling on the US fiscal cliff and EU budget still continues and therefore, the investors need to keep a close watch on these developments.
After several days of washout, the Parliament logjam was ended after govt agreed to discuss the FDI issue "with voting at the end of discussion". The hope that govt will be able to "manage" this vote helped to improve the market sentiments. As of now, the discussion and voting is expected on Dec 4-5 and the market may get nervous at that time once again.
Short covering triggered by the futures & options (F&O) cycle ending on Nov 29 was another factor that helped the bullish sentiments.
The bullish fervour continued despite a weak GDP growth (ie as expected, Indian GDP for Jul-Sep period has grown at 5.3% compared to 5.5% growth in the Apr-June period) and the new F&O series has also started well on Nov 30.
Since the market is "riding on hopes" now, it may continue its bullish bias and hit new highs in this week. On a domestic front, it is a relatively data light week, However, the sales volume figures of automobile companies, subscription details of telecom companies, etc may induce sector/stock specific volatility.
The Bharatiya Janata Party (BJP) will complain to the Election Commission against the United Progressive Alliance (UPA) government's announcement on direct cash subsidy transfer scheme, saying it violates the code of conduct in view of the Gujarat elections.
The Communist Party of India (Marxist), too, has criticised the Congress for the "blatant misuse" of the party symbol in announcing the scheme.
Union Finance Minister P. Chidambaram and Rural Development Minister Jairam Ramesh had announced the scheme for issue of scholarships and pensions by using Aadhar-enabled bank accounts for below poverty line families. To be implemented in 51 districts across 16 States from January 1, 2013, fertilizer and food subsidies have not been included in the list of cash transfers for now.
"If we don't bring the GDP growth back (on track) up, the rate of poverty reduction will go down," Ahluwalia said during panel discussion here.
He further said that the GDP growth in the first half of the year (2012-13) is 5.4 per cent and if this would continue then we would have a very poor performance (this fiscal)."
This rate was lower than the 7.3 per cent clocked in April-September period in 2011-12.
According to the Planning Commission estimates, the rate of poverty reduction was 0.8 percentage point per year during 10 years till 2004. This shot up to two percentage point per year during the seven year till 2011.
"If you look at the last seven years, between since 2004 and 2011, percentage of people below the poverty line declined by two percentage point per year. In the 10 years before 2004-05, the poverty was declining at the rate of 0.8 percentage point every year," he said.
According to Ahluwalia, higher growth has resulted in a quantum jump in the real wages during the 11th Five Year Plan spanning from 2007 to 2012.
"In the period after 2007, real wages have gone four times faster than in the previous period. It is simply not correct that nobody is benefiting (because of high economic growth)," he said.
He said that in the last seven years, the government has done a good job as rate of poverty reduction has been high amid good growth in GDP.
Inclusive growth in India would be possible only when people have higher income levels and as a result they will get social justice, Ahluwalia said.
He also underlined the need for upgrading skills of people so that they can get higher income jobs in non-agriculture areas in rural areas.
From a high over 9 per cent GDP growth for many years prior to the 2008 crisis, the economy grew 6.5 per cent last year and is projected by analysts to slow down further to a decadal low of 5.5 per cent or even lower this fiscal.
The Prime Minister's Office (PMO) has taken quick follow-up action to implement the decisions on direct cash transfers announced earlier this week, making it clear that it was on the government's priority list.
Principal Secretary to the Prime Minister Pulok Chatterji has written to nine secretaries of the Union government asking them to "get down to the immediate task of operationalising direct cash transfers in the identified schemes in your Department."
The ambitious scheme, which is scheduled for an initial launch in 51 districts on January 1, 2013, aims to shift the state's social entitlements — including fuel, food and fertilizer subsidies — into a cash format. To begin with, people entitled to subsidised LPG cylinders will be given money to cover the difference from the market price. The scheme is expected to be a major feature on the Congress' poll plank in the 2014 general election.
Mr. Chatterji's letter comes just days after the first meeting of the National Committee on Direct Cash Transfers chaired by the Prime Minister on November 26, which thrashed out the details of the scheme. "The emphasis should be on having a seamless and trouble free rollout of the programme, first in 51 districts and subsequently as per the agreed rollout plan," said the letter.
One of the two key pillars of the scheme is the Aadhaar programme, whose unique identification systems will be used to authenticate beneficiaries of the cash transfer, and Ministry teams will meet weekly to complete the necessary digitisation. "The main issue which you need to focus on is ensuring that you have a complete list of beneficiaries in digitised form seeded with Aadhaar numbers for your schemes. Digitisation of beneficiaries' database is critical for rolling out direct cash transfers and maximum effort on this needs to be put in at the state and district levels," the letter said.
Mr. Chatterji also wrote to Unique Identification Authority of India chairman Nandan Nilekani — who runs the Aadhaar programme — asking him to supply dedicated personnel to assist each of the nine implementing Ministries in the task of database digitisation.
The other key pillar is the banking infrastructure needed to implement direct cash transfers. On this, the PMO wrote to the Department of Financial Services, whose Secretary heads the Financial Inclusion Committee. A meeting will be immediately held to oversee the smooth opening of bank accounts by the beneficiaries, the linking of these accounts with Aadhaar numbers and facilitating the post office network and business correspondents who will dispense the cash at the grass-roots level.
According to Thakre, Chidambaram also said the the cash subsidy move is aimed at ensuring that the benefits of government programmes reach the masses.
Through the cash transfer scheme the government plans to transfer cash benefits of over two dozen central schemes directly to beneficiary accounts.
The scheme will be launched in 51 districts on January 1.
"The current high fiscal and current account deficits, coupled with low investment, have forced us to take some stringent measures," Chidambaram told a closed-door election workshop held here for the 2014 Lok Sabha and Maharashtra assembly elections, according to Thakre.
Thakre said the Finance Minister also expressed the confidence that these measures will help the economy come out of the present tough phase and that the next two years would see the economy, led by the Congress government, marching ahead with speed.
"Chidambaram informed the participants about the dire present economic situation and issues like inflation, apart from the problems arising out of the high fiscal and current account deficits," Thakre said.
Thakre was briefing the media about the deliberations at the workshop organised by the state Congress unit.
Chidambaram told the partymen that the country maintained a growth rate of over 9 per cent during 2004-08 under the UPA-I tenure, despite global recession.
During the NDA regime, the situation was exactly the opposite, Chidambaram said.
At present, there is a need to give an impetus to capital investment in the country and for taking hard fiscal decisions, Chidambaram said.
The period of reduced expenditure would remain till March, 2013, the Finance Minister said.
Addressing the workshop, External Affairs Minister Salman Khurshid said the Opposition parties have so far opposed the government policies "just for the sake of opposing them".
Citing an example, he said when Rajiv Gandhi sowed the seeds of the "computer revolution", the Opposition ridiculed him. "However, India now occupies pride of place on the global map owing to Rajiv's decision," Khurshid said.
"Congress is also under attack over 2G and coal allocation issues. It is said that there was a loss to the national exchequer due to the Congress leadership. But this is not true," he said.
The government has given impetus to social and industrial development by ensuring the mobile phone reaches every hand, Khurshid said.
Union Minister of Minority Affairs K.Rahman informed the workshop participants about the measures taken by Congress to resolve issues faced by minorities.
"We won't budge from our resolve despite the numerous allegations against Congress. We know that our decisions are in the national interest," the minister said.
Around 200 office-bearers at the event included Maharashtra Congress ministers, MPs and legislators.
Chief Minister Prithviraj Chavan, who also addressed the day-long conclave, explained the link between foreign investment and economy. "There is a close link between foreign investment and strengthening of the economy," Chavan said.
Justifying the decision on FDI in retail, Chavan said it is a misconception that small shops will face closure due to the decision. "Nowhere in the world has this happened," he said. The decision would benefit farmers and end-consumers, he added.
The workshop was organised in view of party president Sonia Gandhi's directive that Congress should effectively counter "false allegations" levelled by the Opposition.
Addressing reporters in New Delhi on Thursday, BJP spokesperson Ravi Shankar Prasad said two senior Ministers had announced the scheme at the Congress headquarters on Monday even though Parliament was in session. He claimed that the party had been told that the scheme would now be implemented from April 1, next year, instead of January 1 as announced earlier.
"This only shows how hurriedly the whole exercise was done and without home work," he said, adding that the BJP would totally oppose the scheme if it were to replace PDS.
Earlier in the day, senior CPI(M) leader Sitaram Yechury said the Congress had used its party office and symbol to announce the scheme — it was a blatant misuse of the party symbol and could fall under corrupt practices.
According to Mr. Yechury, the announcement had come when the election process in Gujarat and Himachal Pradesh was on. He referred to the Election Commission rules relating to offences and corrupt practices.
He said the direct cash transfer was being proposed to be carried out under the 'Aadhar' or Unique Identification (UID) card scheme but the Bill to give UID legal sanctity was yet to be passed by Parliament.
"The Parliamentary Standing Committee has rejected the UID Bill and asked the government to come up with a fresh one…When the Bill has not been approved, the announcement about it in the cash transfer scheme is more in the nature of propaganda. Without legal sanctity to this Bill, any such scheme will not be legal," Mr. Yechury said.
Mr. Yechury said when inflation was high, the cash being transferred would actually cut subsidies and fetch lesser and lesser amounts of food grains or other essential items meant under the scheme.
The rules "are weighted against the poor, in favour of the UPA-II Government's obsessive commitment to cut subsidies to the working people," Mr. Yechury said, adding that it would ultimately reduce subsidy and dismantle the public distribution system.
1 Dec, 2012, 08.57AM IST, Soma Banerjee & Shruti Choudhury,ET Bureau
Aadhaar: The challenges being faced by Nandan Nilekani
At 57, Nandan Nilekani has a lot to his credit: a bluechip career, a billion-dollarplus net worth, a star-adviser tag... But no assignment has been bigger than the one he is currently handling, rolling out Aadhaar. The final assessment on him will be hugely influenced by the success, or failure, of this crucial scheme. ET list the challenges:
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Poverty in India
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| Poverty Headcount Ratio (2010)[1] | ||
| Poverty Trend | World Bank | |
| Live less than $1.25 a day | 32.7% (400 million) | |
| Live less than $2 a day | 68.7% (841 million) | |
| Live less than $2.5 a day | 81.1% (992 million) | |
| Live less than $4 a day | 93.7% (1,148 million) | |
| Live less than $5 a day | 96.3% (1,179 million) |
*
Map of world poverty by country, showing percentage of population living on less than $1.75 per day. Based on 2009 UN Human Development Report.
Map of world poverty by country, showing percentage of population living on less than $2 per day. Based on 2009 UN Human Development Report.
Poverty in India is widespread, with the nation estimated to have a third of the world's poor. In 2010, World Bank stated, 32.7% of the total Indian people fall below the international poverty line of US$ 1.25 per day (PPP) while 68.7% live on less than US$ 2 per day.[1]
According to 2010 data from the United Nations Development Programme, an estimated 37.2% of Indians live below the country's national poverty line.[2] A 2010 report by the Oxford Poverty and Human Development Initiative (OPHI) states that 8 Indian states have more poor people than 26 poorest African nations combined which totals to more than 410 million poor in the poorest African countries.[3][4]
According to a new poverty Development Goals Report, as many as 320 million people in India and China are expected to come out of extreme poverty in the next four years, while India's poverty rate is projected to drop to 22% in 2015.[5] The report also indicates that in Southern Asia, however, only India, where the poverty rate is projected to fall from 51% in 1990 to about 22% in 2015, is on track to cut poverty in half by the 2015 target date.[5]
The latest UNICEF data shows that one in three malnourished children worldwide are found In India, whilst 42 percent of the nation's children under five years of age are underweight. It also shows that a total of 58 percent of children under five surveyed were stunted. Rohini Mukherjee, of the Naadi foundation-one of the NGO's that published the report-stated India is "doing worse than sub-Saharan Africa,".[6]
The 2011 Global Hunger Index (GHI) Report places India amongst the three countries where the GHI between 1996 and 2011 went up from 22.9 to 23.7, while 78 out of the 81 developing countries studied, including Pakistan, Nepal, Bangladesh, Vietnam, Kenya, Nigeria, Myanmar, Uganda, Zimbabwe and Malawi, succeeded in improving hunger condition.[7]
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Poverty estimates
There has been no uniform measure of poverty in India.[8][9] The Planning Commission of India has accepted the Tendulkar Committee report which says that 37% of people in India live below the poverty line(BPL).[10]The Arjun Sengupta Report (from National Commission for Enterprises in the Unorganised Sector), based on data between the period 1993-94 and 2004–05, states that 77% of Indians live on less than
20 a day (about $0.50 per day).[11] The N.C. Saxena Committee report states, on account of calorific intake apart from nominal income, that 50% of Indians live below the poverty line.[12]A study by the Oxford Poverty and Human Development Initiative using a Multi-dimensional Poverty Index (MPI) found that there were 650 million people (53.7% of population) living in poverty in India, of which 340 million people (28.6% of the population) were living in severe poverty, and that a further 198 million people (16.4% of the population) were vulnerable to poverty.[13] 421 million of the poor are concentrated in eight North Indian and East Indian states of Bihar, Chattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh and West Bengal. This number is higher than the 410 million poor living in the 26 poorest African nations.[14] The states are listed below in increasing order of poverty based on the Multi-dimensional Poverty Index.[15]
[show]MPI rank | States | Population (in millions) 2007 | MPI | Proportion of poor | Average intensity | Contribution to overall poverty | Number of MPI poor (in millions) |
Estimates by NCAER (National Council of Applied Economic Research) show that 48% of the Indian households earn more than
90,000 (US$1,638) annually (or more than US$ 3 PPP per person). According to NCAER, in 2009, of the 222 million households in India, the absolutely poor households (annual incomes below 
45,000) accounted for only 15.6% of them or about 35 million (about 200 million Indians). Another 80 million households are in income levels of 
45,000– 90,000 per year. These numbers also are more or less in line with the latest World Bank estimates of the "below-the-poverty-line" households that may total about 100 million (or about 456 million individuals)[16]Impact of poverty
At the edge of a village in IndiaSince the 1950s, the Indian government and non-governmental organizations have initiated several programs to alleviate poverty, including subsidizing food and other necessities, increased access to loans, improving agricultural techniques and price supports, and promoting education and family planning. These measures have helped eliminate famines, cut absolute poverty levels by more than half, and reduced illiteracy and malnutrition.[17]
Presence of a massive parallel economy in the form of black (hidden) money stashed in overseas tax havens and underutilisation of foreign aid have also contributed to the slow pace of poverty alleviation in India.[18][19][20]
Although the Indian economy has grown steadily over the last two decades, its growth has been uneven when comparing different social groups, economic groups, geographic regions, and rural and urban areas.[17][21] Between 1999 and 2008, the annualized growth rates for Gujarat, Haryana, or Delhi were much higher than for Bihar, Uttar Pradesh, or Madhya Pradesh.[22] Poverty rates in rural Orissa (43%) and rural Bihar (41%) are among the world's most extreme.[23]
Despite significant economic progress, one quarter of the nation's population earns less than the government-specified poverty threshold of 32 rupees per day (approximately US$ 0.6).[24]
According to a recently released World Bank report, India is on track to meet its poverty reduction goals. However by 2015, an estimated 53 million people will still live in extreme poverty and 23.6% of the population will still live under US$1.25 per day. This number is expected to reduce to 20.3% or 268 million people by 2020.[25] However, at the same time, the effects of the worldwide recession in 2009 have plunged 100 million more Indians into poverty than there were in 2004, increasing the effective poverty rate from 27.5% to 37.2%.[26]
As per the 2001 census, 35.5% of Indian households availed of banking services, 35.1% owned a radio or transistor, 31.6% a television, 9.1% a phone, 43.7% a bicycle, 11.7% a scooter, motorcycle or a moped, and 2.5% a car, jeep or van; 34.5% of the households had none of these assets.[27] According to Department of Telecommunications of India the phone density has reached 33.23% by December 2008 and has an annual growth of 40%.[28] This tallies with the fact that a family of four with an annual income of 1.37 lakh rupees could afford some of these luxury items.
Causes
Lack of a market economy & over government regulation and red tape, known as License Raj is the main cause of poverty in India. While other Asian countries like China, Singapore and South Korea started with the same poverty level as India after independence, India adopted a socialist centrally planned, closed economy. Fortunately India has started to open its markets since the economic reforms in 1991 which has cut the poverty rate in half since then. Another cause is a high population growth rate, although demographers generally agree that this is a symptom rather than cause of poverty. While services and industry have grown at double digit figures, agriculture growth rate has dropped from 4.8% to 2%. About sixty percent of the population depends on agriculture whereas the contribution of agriculture to the GDP is about eighteen percent.[29] The surplus of labour in agriculture has caused many people to not have jobs. Farmers are a large vote bank and use their votes to resist reallocation of land for higher-income industrial projects.Caste system
Further information: Caste system in IndiaAccording to S. M. Michael, Dalits constitute the bulk of poor and unemployed.[30] According to William A. Haviland, casteism is widespread in rural areas, and continues to segregate Dalits.[31] Others, however, have noted the steady rise and empowerment of the Dalits through social reforms and the implementation of reservations in employment and benefits.[32][33]
Caste explanations of poverty fail to account for the urban/rural divide. Using the UN definition of poverty, 65% of rural forward castes are below the poverty line.[citation needed]
India's economic policies
A rural worker drying cow dung in Bihar.In 1947, the average annual income in India was US$619, compared with US$439 for China, US$770 for South Korea, and US$936 for Taiwan. By 1999, the numbers were US$1,818; US$3,259; US$13,317; and US$15,720, respectively.[34] (numbers are in 1990 international Maddison dollars) In other words, the average income in India was not much different from South Korea in 1947, but South Korea became a developed country by 2000s. At the same time, India was left as one of the world's poorer countries.
License Raj refers to the elaborate licenses, regulations and the accompanying red tape that were required to set up and run business in India between 1947 and 1990.[35] The License Raj was a result of India's decision to have a planned economy, where all aspects of the economy are controlled by the state and licenses were given to a select few. Corruption flourished under this system.[36]
The labyrinthine bureaucracy often led to absurd restrictions - up to 80 agencies had to be satisfied before a firm could be granted a licence to produce and the state would decide what was produced, how much, at what price and what sources of capital were used.
—BBC[37]
India had started out in the 1950s with:[38] high growth rates, openness to trade and investment, a promotional state, social expenditure awareness and macro stability but ended the 1980s with:[38] low growth rates, closure to trade and investment, a license-obsessed, restrictive state (License Raj), inability to sustain social expenditures and macro instability, indeed crisis.
Liberalization policies and their effects
Other points of view hold that the economic reforms[clarification needed] initiated in the early 1990s are responsible for the collapse of rural economies and the agrarian crisis currently underway. As journalist and the Rural Affairs editor for The Hindu, P Sainath describes in his reports on the rural economy in India, the level of inequality has risen to extraordinary levels, when at the same time, hunger in India has reached its highest level in decades. He also points out that rural economies across India have collapsed, or on the verge of collapse due to the neo-liberal policies of the government of India since the 1990s.[39] The human cost of the "liberalisation" has been very high.[clarification needed] The huge wave of farm suicides in Indian rural population from 1997 to 2007 totaled close to 200,000, according to official statistics.[40] That number remains disputed, with some saying the true number is much higher. Commentators have faulted the policies pursued by the government which, according to Sainath, resulted in a very high portion of rural households getting into the debt cycle, resulting in a very high number of farm suicides. As professor Utsa Patnaik, India's top economist on agriculture, has pointed out, the average poor family in 2007 has about 100 kg less food per year than it did in 1997.[40]Government policies encouraging farmers to switch to cash crops, in place of traditional food crops, has resulted in an extraordinary increase in farm input costs, while market forces determined the price of the cash crop.[41] Sainath points out that a disproportionately large number of affected farm suicides have occurred with cash crops, because with food crops such as rice, even if the price falls, there is food left to survive on. He also points out that inequality has reached one of the highest rates India has ever seen. In a report by Chetan Ahya, Executive Director at Morgan Stanley, it is pointed out that there has been a wealth increase of close to US$1 Trillion in the time frame of 2003-2007 in the Indian stock market, while only 4-7% of the Indian population hold any equity.[42] During the time when Public investment in agriculture shrank to 2% of the GDP, the nation suffered the worst agrarian crisis in decades, the same time as India became the nation of second highest number of dollar billionaires.[43] Sainath argues that
The per capita food availability has declined every five years without exception from 1992-2010 whereas from 1972-1991 it had risen every five-year period without exception.
Farm incomes have collapsed. Hunger has grown very fast. Public investment in agriculture shrank to nothing a long time ago. Employment has collapsed. Non-farm employment has stagnated. (Only the National Rural Employment Guarantee Act has brought some limited relief in recent times.) Millions move towards towns and cities where, too, there are few jobs to be found.
In one estimate, over 85 per cent of rural households are either landless, sub-marginal, marginal or small farmers. Nothing has happened in 15 years that has changed that situation for the better. Much has happened to make it a lot worse.
Those who have taken their lives were deep in debt – peasant households in debt doubled in the first decade of the neoliberal "economic reforms," from 26 per cent of farm households to 48.6 per cent. Meanwhile, all along, India kept reducing investment in agriculture (standard neoliberal procedure). Life was being made more and more impossible for small farmers.
As of 2006, the government spends less than 0.2% of GDP on agriculture and less than 3% of GDP on education.[44] However, some government schemes such as the mid-day meal scheme, and the NREGA have been partially successful in providing a lifeline for the rural economy and curbing the further rise of poverty.
Reduction in poverty
Despite all the causes, India currently adds 40 million people to its middle class every year.[citation needed] Analysts such as the founder of "Forecasting International", Marvin J. Cetron writes that an estimated 300 million Indians now belong to the middle class; one-third of them have emerged from poverty in the last ten years. However this has to be seen in perspective as the population of india has also increased by 370 million from 1991 and 190 million from 2001 so the absolute number of poor have actually increased.Despite government initiatives, corporate social responsibility (CSR) remains low on the agenda of corporate sector.[citation needed] Only 10 percent of funding comes from individuals and corporates,[citation needed] and "a large part of CSR initiatives are artfully masqueraded and make it back to the balancesheet"[citation needed]. The widening income gap between the rich and the poor over the years, has raised fears of a social backlash.[45] n
Efforts to alleviate poverty
Since the early 1950s, govt has initiated, sustained, and refined various planning schemes to help the poor attain self-sufficiency in food production. Probably the most important initiative has been the supply of basic commodities, particularly food at controlled prices, available throughout the country as poor spend about 80 percent of their income on food. The schemes have however not been very successful because the rate of poverty reduction lags behind the rapid population growth rate.[46]Outlook for poverty alleviation
Eradication of poverty in India is generally only considered to be a long-term goal. Poverty alleviation is expected to make better progress in the next 50 years than in the past, as a trickle-down effect of the growing middle class. Increasing stress on education, reservation of seats in government jobs and the increasing empowerment of women and the economically weaker sections of society, are also expected to contribute to the alleviation of poverty. It is incorrect to say that all poverty reduction programmes have failed. The growth of the middle class (which was virtually non-existent when India became a free nation in August 1947) indicates that economic prosperity has indeed been very impressive in India, but the distribution of wealth is not at all even.Controversy over extent of poverty reduction
The definition of poverty in India has been called into question by the UN World Food Programme. In its report on global hunger index, it questioned the government of India's definition of poverty saying:The fact that calorie deprivation is increasing during a period when the proportion of rural population below the poverty line is said to be declining rapidly, highlights the increasing disconnect between official poverty estimates and calorie deprivation.[47]
While total overall poverty in India has declined, the extent of poverty reduction is often debated. While there is a consensus that there has not been increase in poverty between 1993–94 and 2004–05, the picture is not so clear if one considers other non-pecuniary dimensions (such as health, education, crime and access to infrastructure). With the rapid economic growth that India is experiencing, it is likely that a significant fraction of the rural population will continue to migrate toward cities, making the issue of urban poverty more significant in the long run.[48]
Some, like journalist P Sainath, hold the view that while absolute poverty may not have increased, India remains at an abysmal rank in the UN Human Development Index. India is positioned at 132ond place in the 2007-08 UN HDI index. It is the lowest rank for the country in over 10 years. In 1992, India was at 122ond place in the same index. It can even be argued that the situation has become worse on critical indicators of overall well-being such as the number of people who are undernourished (India has the highest number of malnourished people, at 230 million, and is 94th of 119 in the world hunger index), and the number of malnourished children (43% of India's children under 5 are underweight (BMI<18.5), the highest in the world) as of 2008.[47]
A 2007 report by the state-run National Commission for Enterprises in the Unorganised Sector (NCEUS) found that 77% of Indians, or 836 million people, lived on less than 20 rupees per day (USD 0.50 nominal, USD 2.0 in PPP), with most working in "informal labour sector with no job or social security, living in abject poverty."[49][50] However, a new report from the UN disputes this, finding that the number of people living on US$1.25 a day is expected to go down from 435 million or 51.3 percent in 1990 to 295 million or 23.6 percent by 2015 and 268 million or 20.3 percent by 2020.[51]
Persistence of malnutrition among children
According to the New York Times, is estimated that about 42.5% of the children in India suffer from malnutrition.[52] The World Bank, citing estimates made by the World Health Organization, states that "About 49 percent of the world's underweight children, 34 percent of the world's stunted children and 46 percent of the world's wasted children, live in India." The World Bank also noted that "while poverty is often the underlying cause of malnutrition in children, the superior economic growth experienced by South Asian countries compared to those in Sub-Saharan Africa, has not translated into superior nutritional status for the South Asian child."[53]A special commission to the Indian Supreme court has noted that the child malnutrition rate in India is twice as great as sub-Saharan Africa [54]
Data from The World Bank shows that the percentage of underweight children in sub-Saharan Africa is 24% while India has almost twice the amount at 47%. Out of the 47%, 50% were from rural areas, 38% from urban areas, 48.9% of the underweight are girls and 45.5% are boys.[55]
Malnutrition is often associated with diseases like diarrhea, malaria and measles due to the lack of access in health care which are also linked to the problem of poverty. The United Nations had estimated that "2.1 million Indian children die before reaching the age of 5 every year – four every minute".[56]
The Indian government had come up with the Integrated Childhood Development Service (ICDS) in 1975 to combat the problem of malnutrition in the country. ICDS is the world's largest child development program but its effects on the problem in India are limited.[57] This is because the program failed to focus on children under 3, the group that should receive the most help from the ICDS. This is due to the fact that most growth retardation would have developed during the age of 2 and are mostly irreversible.[58] With the lack of help, the chances that newborn babies are unable to develop fully would be higher. The quality of ICDS centers also varies from states to states and often, the barbies with the most serious problem of malnutrition have the lowest amount of help given.[57] Examples are "Rajasthan, Uttar Pradesh, Bihar, Orissa and Madhya Pradesh, all rank in the bottom ten in terms of ICDS coverage".[58] Despite the poor distribution of help, the ICDS is still considered to be efficient in improving the health of the children in the country.[59] Statistics from UNICEF shows that the mortality rate of children under 5 has improved from 118 per 1000 live births in 1990 to 66 in the year 2009.[60]
However, malnutrition is still a problem for India; it has been found that "micronutrient deficiencies alone may cost India US$2.5 billion annually".[61] Malnutrition can lead to children not being able to attend school or perform to their fullest potential, which in turn leads to a decrease in labor productivity, affecting India's economic growth as a whole.
See also
 * | Wikimedia Commons has media related to: Poverty in India |
- Socio-economic issues in India
- Malnutrition in India
- Overpopulation in india
- India State Hunger Index
- Street children in India
- Income in India
- Family planning in India
- Economy of India
- Slums in India
- Pavement dwellers
- Housing in India
- Electricity sector in India
- Water supply and sanitation in India
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Further reading
- Poverty in India, World Bank
- "Can India eradicate poverty? Will India's economic boom help the poor?"
- Deaton, A. & Kozel, V. (2005): Data and Dogma: The Great Indian Poverty Debate. The World Bank Research Observer, Vo. 20, No. 2.
- "World Hunger - India"
- George, Abraham, Wharton Business School Publications - Why the Fight Against Poverty is Failing: A Contrarian View
- Poverty and riches in booming India
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