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High Levels of Poverty, Increasing Economic Inequality

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High Levels of Poverty, Increasing Economic Inequality The Other Side of India's Economic Growth and Development

Bharat Dogra

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Fast die Hälfte aller Kinder in Indien unter fünf Jahren ist nach Angaben der Vereinten Nationen unterernährt. (© picture-alliance/AP)

"Whenever you are in doubt, or when the self becomes too much with you, apply the following test: Recall the face of the poorest and the weakest person whom you may have seen, and ask yourself, if the step you contemplate is going to be of any use to him or her? Will he (she) gain anything by it? Will it restore him (her) to a control over his (her) life and destiny?" - Mahatma Gandhi

Despite the recent slowing down, India's overall development is widely regarded as that of a relatively fast growing economy. However this achievement begins to look very uncertain and suspect if we apply Mahatma Gandhi's test mentioned above. What can not be denied is that shockingly high levels of human deprivation continue to exist in many areas despite the relatively high growth rate of the economy for several years. As noted development economists Jean Dréze and Amartya Sen conclude in their recent book on India titled An Uncertain Glory, "The history of world development offers few other examples, if any, of an economy growing so fast for so long with such limited results in terms of reducing human deprivations."

Several other senior economists have also pointed out the limitations of government data which revealed a significant decline in poverty. Critics state that the poverty-line had been fixed at ridiculously low levels of 32 Rupees (0,37 Euro) per person per day in urban areas and 26 Rupees (0,30 Euro) per person per day in rural areas. They have pointed out that if it was raised even slightly to more practical norms, it would lead to a huge increase in poverty estimates in India.

Available data from the United Nation's Human Development Report 2013 indicate that in India 28,6 percent of the population live in severe poverty. Another 16,4 percent are vulnerable to poverty. These are around 540 million of the 1,2 billion people living in the country. In China on the other hand, only 4,5 percent of the 1,3 billion people live in severe poverty. Another 6,3 percent are vulnerable to it. The difference between the two Asian giants is huge even though until the end of 1970s both were almost at par in their economic development.

Half a million children die because of poor nutrition

The percentage of under weight children (moderate and severe) under age 5 is much higher in India compared to most neighbouring countries. Child malnutrition rate was estimated at around 42 percent in a recent assessment by the Nandi Foundation, another 17 percent were found stunted because of undernourishment. This estimate is not much different from earlier estimates of the National Nutrition Monitoring Bureau (NNMB). According to the third National Family Health Survey (2005-06), almost half of the deaths of children under five years of age were closely associated with poor nutritional status. This implies about half a million deaths in a year.

In rural India the body mass index (BMI) of 35 percent of people is below the norm of 18.5 (values below 18.5 indicate chronic energy deficit). If only scheduled castes are considered, then 38 per cent have BMI below 18.5. In the case of scheduled tribes, as many as 42 percent have BMI below 18.5. NNMB surveys also show significant anaemia in 55 percent of the men and 70 percent of the women, as well as deficiency of other main nutrients including vitamins and minerals.

Despite all the publicised economic growth, there has been very little improvement in nutrition indicators during the last two decades or so. Dr. Yogesh Jain, Secretary of Jan Swasthya Sahyogi (JSS or People Health Cooperation), an organisation that has worked with and for the poorest communities in Chhattisgarh state says, "High levels of malnutrition and under-nutrition are a major hindrance in efforts to reduce child mortality."

While the government says that the National Food Security Bill or Right to Food Act passed in 2013 is a big step forward, in reality the legislation limited to cheaper availability of cereals while nutrition improvement is based on balanced availability of all essential nutrients. Pulses, vegetables, fruits, milk and other main sources of proteins, vitamins and minerals have been getting more expensive and scarce for the poor.

Inequalities in India are high and have many dimensions

Despite all talks of rapid growth, according to official data collected by the National Sample Survey average per capita expenditure in rural areas, increased at an extremely low rate of about 1 per cent per year between 1993/94 and 2009/10. Growth rate of agriculture wage was reduced to 2 percent per year in the 1990s compared to 5 percent per year in the 1980s. It was only after the arrival of rural employment guarantee in the form of Mahatma Gandhi National Rural Employment Guarantee Scheme in 2005 that significant gains were made. Overall the growth rate of real wages has been much lower than that of per capita GDP in the first decade of this century.

Forest Rights Act

The Forest Rights Act or as it is officially termed The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act was passed in 2006. It is supposed to guarantee India's indigenous people – Adivasi or Scheduled Tribes – the right to own land in their traditional settlement areas. Earlier this was prohibited by existing laws that dated back until colonial times. That meant, Adivasi, who lived for centuries e.g. in the forests and hills of eastern and central India, had no certified ownership rights for their land. The government and subsequently commercial enterprises had a free hand to decide about the use of this land and at the same time about the destiny of its inhabitants. (ends)

Inequalities in India have been unacceptably high and have many dimensions. As Jean Dréze and Amrtya Sen assert, "All countries in the world have inequalities of various kinds. India, however, has a unique cocktail of lethal divisions and disparities. Few countries have to contend with such extreme inequalities in so many dimensions, including large economic inequalities as well as major disparities of caste, class and gender (…) It is the mutual reinforcement of severe inequalities of different kinds that creates an extremely oppressive social system, where those at the bottom of these multiple layers of disadvantage live in conditions of extreme disempowerment."

What is more, inequalities are growing rapidly. As Dréze and Sen write, "There is also much evidence of growing economic inequality in India in recent decades. For instance, per capita expenditure data suggest an increase in rural-urban disparities as well as growing inequality in urban areas. The comparatively affluent in urban areas have been the main beneficiaries of rapid economic growth in India in recent years. Similarly, per capita income data indicate a growing concentration of incomes at the top, and wealth data, patchy as they are, also point to growing disparities in the post-reform period."

Land reforms are needed, but have been neglected

In many villages land inequalities are increasing as more and more small peasants are reduced to landlessness. In fact the available statistics of the National Sample Survey Organisation suggest that in the bottom categories about 60 percent of the total rural households have access to only 5 percent of the total farmland.

Latest available census data suggest that the number of mainly farmer households has been reduced by nearly 8 to 9 million during the last decade, or at the rate of over 2000 farmers per day. Many unjust and illegal devices are used to deprive small farmers of their land. Land reforms are badly needed to protect the land of small farmers, as well as to provide some cultivation land to small peasants. But land reforms have been increasingly neglected by the government as is admitted even in official documents. The land ceiling laws enacted in various states have been badly neglected in recent years, and very little land could be redistributed among the landless rural households under these laws.

However, at least in principle the Tenth Plan document agreed that land distribution to poor landless peasants is important. As the document said, "Ownership of even a small plot of land enables a family to raise its income, improve its nutritional status, have access to credit facilities and lead a more dignified life.

The Report of the Working Group on Land Relations for Formulation of the 11th Five Year Plan 2006 made a strong plea for bringing back land reforms as a national priority and made important recommendations for strengthening land reforms. It also admitted quite frankly that land-reforms have been badly neglected in recent times. The Report points to disturbing trends within the government to sabotage or derail land reforms and states, "From the mid-eighties when liberalization started entering the Indian economy, at first rather stealthily and then with thunderous gale force from 1991, land reform went off the radar screen of the Indian polity. It became a forgotten agenda."

P.V. Rajagopal, co-ordinator of Ekta Parishad, a national organisation of rural poor, has led marches of thousands of poorest peasants to demand implementation of better land reforms. He says, "The assault of big mining and other projects for catering to a global market increased to such an extent that in our work area small farmers and in particular tribal farmers appeared to be increasingly threatened by the possibility of losing their land. The issue now was not just demanding land for the landless but also protecting the land rights of those who always had some land."

Tribals have suffered the most from injustice and displacement

Tribals have suffered the most from land injustice and displacement. At one time there was a great hope that Forest Rights Act will provide long-awaited justice to workers, but actual benefits have been much below expectation. A recent consultation of social activists working in the tribal belt of Rajasthan revealed that while some efforts have been made to protect the land rights of tribals, the overall impact of a complex of policies and projects may leave them even more deprived than before.

Dharmchanda, an activist from Kotra region said, "There were great hopes from the Forest Rights Act, and we worked very hard for its success. However, 62.000 claims were made out of which only 32.000 were accepted. Among the accepted claims, generally a small portion of the claim made has been accepted. If this is regarded as the final settlement, then most of the tribals and forest-dwellers will lose land instead of having their land rights confirmed."

Devlibai, a tribal woman, said that land mafias are active particularly in villages closer to cities and they use liquor as well as force to get tribals to part with their land despite laws being enacted to protect their land rights.

Due to increasing poverty among tribals, in recent years Kotra block of Udaipur district and some other areas with a significant tribal population became a main source for obtaining child labour to work in the fields growing cotton in neighbouring Gujarat. Moreover, there were media reports about deaths of some children due to dangerous exposure to toxic pesticides and about some of these child workers being chained at night by their employers.

Large-scale distress migration has taken place from Bundelkhand region, spread over the states of Uttar Pradesh and Madhya Pradesh. Bhagwat Prasad, director of a leading NGO ABSSS says, "Rural inequalities and oppression as well as plunder of natural resources has forced increasing number of people here to migrate to distant areas in search of work."

"The existing development path is not fair to millions"

Tribals and other communities have also lost heavily in several huge mining, industrial and infra-structure projects which either displaced or else took away their water and forests. Many displaced or impoverished people in rural areas have been adding to number of homeless and destitute people in Indian cities. Paramjit Kaur, who work with homeless people in Delhi adds, "Anti-poor policies which deprived people of their huts and livelihoods have also increased the number of homeless and destitute people in Delhi (and other big cities)." Clearly the existing development path is not fair to the millions of poorest households in India. India's growth story will be real only if, following the test prescribed by Mahatma Gandhi, the needs and priorities of the poorer and weaker sections get adequate attention and resources. On the one hand, more budgetary funds are needed for the poor. On the other hand income and wealth inequalities as well as wider socio-economic inequalities need to be reduced significantly.

is a Delhi based journalist, author and researcher. His work focuses on issues of development, environment, human rights and social reforms.