Open Forum

New Delhi, 1 November 2011

Widening Disparity

NEED REALISTIC APPROACH

By Dhurjati Mukherjee

The issue of widening disparity between the rich and the poor is gaining credence globally. Protests such as ‘Occupy Wall Street’ in America and in other parts of Europe against neo-liberal policies and corruption, a manifestation of people’s anger at the predatory roles of big banks and financial capital, are hitting the headlines. Can India remain isolated? Indications are it may not be so for long.   

India has the 12^th largest millionaire population in the world according to 2010 figures and has for the first time entered the top 12 league of high net worth individuals (HNI). The recent World Wealth Report, prepared by Merrill Lynch Wealth Management and Capgemini, states that the number of HNIs in the country soared to 153,000 from 126,000 in 2009. In fact, India took over Spain, which dropped to the 14^th position.

Earlier a report by Kotak Wealth, the wealth management arm of Kotak Mahindra Bank and Crisil Research projected that ultra high net worth households (UHNHs) is going to triple to 219,000 by 2015-16. The UNHN is defined as a household with a minimum net worth of Rs 25 crores as of 2009-10 which translates to a minimum income of Rs 3.5-Rs 4 crores per annum. Moreover, their total net worth is expected to reach Rs 235 trillion in 2015-16 from an estimated Rs 45 trillion in 2010-11.

Thus, while the super rich continue to grow, the condition of the poor and economically weaker sections is distressingly more or less static. Obviously, planning has not been geared in the right direction and implementation of various schemes has been far below the desired goals. The high growth rate has not percolated down to the benefit of the poor and disadvantaged sections, specially in rural and semi-urban areas. There has been very little effort, despite endeavours, to tackle the problem of poverty eradication. Whatever done has been thoroughly inadequate.  

Take, for example, the role of the Planning Commission. It needed to take up the issue of ending poverty through effective and realistic action plans. Instead, it picked on a bizarre controversy drawing up a poverty line and defended this with undue zeal. The illusion of targeting became more pronounced than achievement of the real objectives of poverty eradication.

In the social sector, the Commission did not quite evolve any innovative scheme whether in areas of food, health, employment or education. Instead of taking the lead on how socially desirable objectives could be tackled, its entire approach was academic and that too arrogant and somewhat divorced from reality. 

The schemes formulated by the Government have not been effective or have not reached the intended beneficiaries. Though the NREGS has been somewhat successful in some States, there are reports of wages being lower than the Government’s minimum wage or not being implemented properly in some States. Six States, Andhra Pradesh, Rajasthan, Kerala, Goa and Mizoram (all Congress-ruled) and Karnataka (BJP-ruled) have been giving lower wages. However, it is heartening to note that the Rural Development Ministry has decided that NREGS will be added to the Minimum Wages Act as directed by the Karnataka High Court. Also the involvement of panchayats in monitoring rural development schemes has not been up to the desired level and lack of sincerity and dedication, in most cases, is clearly manifest.

However, the Ministry has decided to spend Rs 2 lakh crore on two major schemes – Pradhan Mantri Gram Sadak Yojana (PMGSY) and Swarna Jayanti Gramin Swarozgar Yojana (SGSY) – during the 12^th Plan period to upgrade rural habitats. But what is significant is that National Rural Livelihoods Mission (NRLM) plans to train and place about one crore youth living below the poverty line at an estimated investment of Rs 24,000 crores. This scheme skill development initiative would go a long way in bringing rural youth from the poorer sections into the mainstream.

Compared to rural habitations, the situation in towns and semi-urban areas is no better where slums and squatter settlements have been increasing at a rapid pace. Sadly, the maximum funds under JNNURM are used for widening roads, highways and beautifying cities and there is very little money available for slum upgradation.

This apart, India’s food security continues to be ‘alarming’, according to the International Food Policy Research Institute’s Global Hunger Index (GHI), 2011. It ranks 67 of the 81 countries of the world with the worst food security status and has the ignominy of being among the least improved in the last decade. Sadly, the Food Security Bill is yet to be finalized because of pulls and counter pulls. 

Add the price factor to this dismal scenario and as rightly pointed out by Klaus von Grebnor, lead author of another recent report -- titled State of Food Security in the World 2011 – “the poorest and most vulnerable people bear the heaviest burden when food prices spike or swing unpredictably”. In India, food inflation has jumped 11.43 cent and there are no prospects of it declining. Moreover, with railways raising freight charges by six per cent, this will further increase prices of essentials like foodgrains, coal, fertilizer etc.

Indeed, inequality is increasing as is well-known to both national and international leaders. Way back in 2005 the Human Development Report pointed to the grim situation of inequality occurring in as many as 53 countries, including India -- having more than 80 per cent of the world population -- where one billion have no access to safe water, survive on less than $ one per day and 2.6 billion lack access to improved sanitation. It was further pointed out that overcoming the legacy of decades of under investment in human development and the deep-rooted gender inequalities posed immediate challenges.

In this situation, sincere efforts need to be made by the Government by giving thrust on the social sector--not just allocation of adequate funds but ensuring effective implementation of schemes to the beneficiaries. This would ensure that people at the bottom of the ladder get an opportunity to become self-reliant and earn a sustainable livelihood. It is only through a new development approach, aimed at transforming the conditions of the poor and the backward sections that disparity would narrow down. Deeper and more sustainable inclusion will be needed from extensive opportunities for all people to participate in the creation of growth, not through uncertain trickle down approach.

Sociologists and a major section of economists believe that a proper developmental pro-poor strategy will lead to decrease of violent activities and ensure greater social cohesion. Simultaneously, while greed has to be controlled, both the industrial and business class should be asked to spend on effective social welfare schemes. It is distressing that in Mahatma Gandhi’s country the rich-poor disparity is not being controlled. Let us at least make sincere efforts that it should not widen. ---INFA

(Copyright, India News and Feature Alliance)