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Rural Vs Urban India: RICH-POOR DIVIDE WIDENS, by Dhurjati Mukherjee, 29 August, 2012 Print E-mail

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New Delhi, 29 August 2012

Rural Vs Urban India


By Dhurjati Mukherjee


The India story is getting mired in corruption scandals, with the political class having little or no time to spare for equally critical issues. One of these being that the gap between the rich and the poor is widening. Worse, the benefits from the boost to the economy were cornered by the upper crust while the poorest sections continued to languish in squalor and destitution.


The above is not political bickering but based on the findings of the recently-released 68th National Sample Survey Organization (NSSO) survey, which has failed to get the attention it deserves. The poorest living in rural India spends on an average only Rs 16.78 per day to survive and half the rural population in the country spends less than Rs 35 per day, notes the survey. The monthly per capita expenditure covers the money spent by a household on the entire gamut of life – from food, education, medicines to durable consumer goods and also entertainment.


Development economists believe that irrespective of the so-called massive surge in economic activity over the past several years, the fiscal divide is clearly discernible as revealed by the startling figures where 90 per cent of rural India spends less than Rs 68.47 per day per person. For urban India, 90 per cent spend much more--Rs 142.70 where costs of living are exponentially higher.


Two years ago, the spending in rural India was Rs 55 per day per person and Rs 122 in cities. Given the average inflation levels prevalent over the past two years, a comparison suggests a majority continue to live with stagnant or reduced spending power. Clearly, the gap between the poorest in villages and the richest in cities has widened further. The poorest 10 per cent in villages spends on an average 15 times less than the top 10 per cent in cities. Even the affluent in rural areas are no match for the richest in urban centres. In fact, the monthly expenditure of the creamy layer in urban India, i.e. top 10 per cent of the population, is 221 per cent that of the rich in the countryside.


Importantly, the survey has again highlighted not just the existing state of the poor and the impoverished sections but also that development has been imbalanced and rural sector continues to be neglected. While the urban bias in Indian planning has been checked in recent years the focus should now concentrate on developing proper physical and social infrastructure in rural areas to bring about tangible improvement in the standards of living of the village community.


Consequently, an expert panel under eminent economist Dr. C. Rangarajan has been constituted to reassess the methodology that had earlier been used to define poverty. This was after the Planning Commission findings that a person spending over Rs 32 a day in urban areas and Rs 28 a day in rural areas could not be counted as poor had created a storm in the country. The panel’s report, however, is expected to take a couple of months.


However, as the process of poverty estimation goes on, the big question will be how to tackle the basic element of poverty. The focus obviously has to be on the development needs of the rural areas and to rehabilitate the poor and half-starved farmer and his family. More resources need to be allocated. In recent years, some headway was made by allocating increased resources for infrastructure development and social services sector.


The Rs 72,000 loan waiver, announced in the 2008 Budget, was no doubt a great help but something needs to be done for those who had taken money from moneylenders and fallen into a debt trap. Given that the demand for food is growing, there is need to put strong emphasis on modernizing agriculture and increasing foodgrains production. This would entail ensuring three crops per year, encouraging horticulture and floriculture production and keeping an eye on productivity increase. Since land holdings have become smaller gradually over the years, some form of cooperatives should be formed to cultivate a few holdings together and then share the produce equitably. The output would need to increase considerably to benefit the poor farmer.


For this, the panchayats will have to come forward and ensure that the land yields optimum and value-based products on the one hand and on the other inputs have to be made available free of cost to these cooperatives. The process of economic decentralization – that is, more authority and power to the panchayat bodies – has to be a reality. Moreover, the Government has to ensure that agricultural land should not be used for industrial/township development under any circumstances.


The Eleventh Plan emphasized on certain measures for taking agriculture to a higher trajectory of 4 per cent annual growth for tackling poverty. Apart from making low-cost technology available to the small farmer at the grass-root level, some of the specific measures outlined are very relevant today. These include: improving water management, rainwater harvesting and watershed development; reclaiming degraded land for cultivation and focusing on soil quality; bridging the gap through effective extension at the grass-root level; diversifying into high-value outputs, fruits, flowers, medicinal plants, bio-diesel etc; providing easy access to credit at affordable rates; and improving the incentive structure and functioning of markets.


Recall that well-known economist, Ignacy Sachs, had urged the need for a second green revolution, which has been reiterated by Dr. A.P. J. Abdul Kalam and Dr Manmohan Singh on several occasions. According to them, while the share of agriculture in national income has been falling rapidly, the population dependent on it is more or less static. It is therefore, imperative that science and technology must look into agricultural productivity, affordable technologies, energy and water techniques and efficient and relevant farm and non-farm technologies.


However, for over past three years the Government has given a thrust towards agricultural production in the Eastern region through allocation of special resources as the benefits of the green revolution did not have any effect here. The talk of a second green revolution is expected to encompass all categories of farmers and incorporate the whole of the agricultural sector unlike the regionalized success achieved during the first green revolution (for only 5 crops).


Obviously, requisite agricultural reforms have to be brought about for efficient use of resources and conservation of soil, water and ecology on a substantive basis along with introduction of newer technologies, encouraging production and use of bio-fertilizers and application of bio-genetics for improved plant and horticultural products. This strategy if implemented into practice will go a long way in rural regeneration which, in turn, will reduce poverty. One may conclude with an estimate by Dr Rangarajan as early as in 1982, that a mere one per cent increase in agricultural output led to a 0.7 increase in national income and it may be added that most part of this enhanced income obviously reached the grass-root levels of rural India and benefited the farming community. ----INFA


(Copyright, India News and Feature Alliance)


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