Economic Highlights

New Delhi, 9 May, 2016 

Modiji Redefine Poverty

VITAL FOR RESHSHAPING INDIA

By Shivaji Sarkar

Poverty is the issue. Prime Minister Modi struck the right chord at his meeting in eastern UP’s Ballia district, a region with one of the highest number of people below the poverty line. 

Undeniably, this is an opportunity to reshape India’s economy and kick start the process for ending disparity and inequality to achieve development of the country.

True, the abysmal state of affairs can be ascribed to historical reasons but that does not justify a national under-performance for 69 years. Indicating that our political masters, professional economists and planners have been unable to tackle the issue and suggest the right course to ensure equilibrium and equal opportunities.

Indeed, poverty is beyond lack of income. It is multi-dimensional, encompassing economic, social and governance perspectives. The poor are not only deprived of income and resources, but of opportunities. Markets and jobs are often difficult to access, because of low capabilities, geographical and social exclusion. Alongside, the poor have a fragile position with inadequate nutrition, health care and education.  

Notably, the Prime Minister has taken many initiatives including Jan Dhan, Beti Bachao, Beti Padhao Sukanya smariddhi yojana, Kisan Bima Yojna, Atal pension plan, PM Jeevan Jyoti Jeevan Bima Yojana, Atal mission for rejuvenation and urban transformation (AMRUT), PM Awas Yojana, Heritage City Development and Augmentation Yojana (HRIDAYA).

There are also schemes which are long term like Make in India, Start Up India, Stand Up India and Skill India. As these take shape, it would help the poor eventually. But we need to understand Modi was talking about those who are at bottom of the poverty line.

Certainly, there are many categories of poor and thanks to various policies in the last decade from 2004-14, many middle class families too have slipped to the edge of the poverty line. Yet those at the bottom of the poverty pyramid need a sympathetic approach. Given that a BPL card is now considered a status symbol in rural areas, and those who have it are considered better off.

Besides, the erstwhile Planning Commission’s definition of poverty as people with per capita monthly expenditure of Rs 26 in rural areas and Rs 32 in urban areas cannot be the yardstick. Nor can the calculation at calorific values be.

Significantly, the official numbers of the poor are staggering --- 240 million rural and 72 million urban poor --- but they do not tell the full story of change. For instance, social indicators of well-being record a history of progress that has, like the decline of poverty itself, been slow.

While economic inequality as measured by the Gini coefficient within regions varies little from the poorest regions to the more fortunate, but it does not capture the gender and social inequalities which persist in India. These disparities severely constrain the extent to which certain groups are able to participate in and benefit from the process of economic growth.

This requires a thorough study. And a break from the past in definition, approach and action is the need of the hour. The Modi Government is credited with innovative ideas but it has to make the process of studying poverty not as a mere statistical data but as a socio-economic problem which is different in different areas. The indicator has to reflect this.  

Clearly, the 1991 so-called reforms have not led to improvements in the living standards of the 40 crores poor. Add to this, agriculture which is the mainstay and backbone of India’s economy is in shambles. Consequently, this has led to clogging of the progress path of the rural and urban poor.

In reality, rural poverty has blocked urban areas. Poor farming has led to massive migration of the rural poor who live in abysmal conditions in metros and towns across the country. Wherein, cities stand testimony to the failure of our economy. Thus, calling it progress or growth is a misnomer.

Recall, during the last few decades, India's inward-looking and public sector driven industrialization strategy led to modest growth rates and poverty reduction than those witnessed elsewhere in the world, particularly in South East Asia.

However, the last five years have shown the growth rates India could achieve with market oriented development policies and better integration with the world economy. But the benefit of this growth has not reached the larger population.

Mahatma Gandhi suggested many actions which were refined by Deen Dayal Upadhyay whereby RSS-linked organisations started experimenting with cluster village programmes. The Prime Minister should take this up as a priority. Already, seven decades have been wasted. If India cannot get rid of this syndrome in the next two decades, its dream of being the next Super Power might end up as nightmare.

Further, India needs to overcome its tremendous infrastructure problems, improve the efficiency of its financial system and liberalize parts of the economy which remain heavily regulated: like agriculture, small scale industry and urban land markets.

By maintaining its commitment to economic liberalization and redirecting itself towards infrastructure, health and education instead of large resources being  absorbed by subsidies inter-alia for power, irrigation and fertilizers, India could  give its long battle to reduce poverty a new impetus.

Subsidies per se are bad. The 1991 economic concept propagated it. This is the greatest untruth.

India’s economy progressed with subsidized education, food, fuel and transport system. Affordable Government schools created great brains in the 1950s till early 1980s who are ruling the world today. This is called “brain gain”. The new economic concepts should endorse this so that people are able to educate their children without tightening their belt.

Questionably, expensive education from primary levels has led to emergence of a generation of moderately employed parents who remain half fed or often unfed. This creates great economic danger. Poor parents can hardly have strong children.

Sadly, this syndrome has spread to every sphere of life. Market means exploitation and profiteering. This is accentuated by the poverty syndrome. Therefore the study on poverty has to go beyond the classical routine to include new pastures.

In sum India urgently needs to formulate an anti-poverty strategy that is finely targeted to those who truly cannot benefit from the opportunities offered by growth. Modi must focus on prosperity of the poor for a strong India --- sammridhh janata sashakt Bharat. ----- INFA

(Copyright, India News and  Feature Alliance)