Emergence, Prevalence and Perpetuation of Poverty in India

One of the attributes, good as well as bad, by which India is commonly characterized is its poverty. There are, however, significant divergences in the estimates done by various agencies of the magnitude of this poverty. According to its own criterion used for the purpose, Planning Commission of the Government of India estimates that 27.5% of the population was living below the poverty line in 2004-05. While this estimate is contested by several states in India itself, according to the 2005 World Bank estimate, 42% of India live below the international poverty line of $1.25 a day, which works out to be Rs. 21.6 a day in terms of purchasing power parity. Still another agency set up by the Government of India, National Commission for Enterprises in the Unorganized Sector (NCEUS) in its 2007 Report asserts that 77% of Indians, i.e. 836 million people live on less than Rs.20 a day. Apart from these divergent estimates, poverty in India is reflected by several well recognized indexes and parameters. India has the highest rate of malnutrition among children in the world under the age of 3; India ranks 143 and 134 in the comity of 190 nations of the world in infant mortality rate (IMR) and human development index (HDI), respectively. India has also one the highest incidences of human trafficking, including trafficking in women and children. In spite of government regulations, child labour in India is rampant. Increasing criminality in life and living and growing insurgency unsettling various parts of India are largely caused and fed by poverty. The subhuman conditions in which the poor people live and survive in India have been recently depicted dramatically in the internationally acclaimed 2008 British film Slumdog Millionaire, which should shame India of Gandhi who was appalled and moved by the poverty and degradation of people brought about by the system of exploitative governance of the British colonial rule in India and it was these conditions which had inspired him to call for freedom from that system though a nonviolent struggle.
In order to understand the serious and complex problem of poverty in India, it will be helpful to consider it both in its historical as well as its comprehensive socio-political-economic perspectives. While the former will show that poverty is not at all intrinsic to India, the latter would indicate the framework in which the solution to the vexed problem lies. The Indus Valley Civilization which existed in India from 2800 BC to 1800 BC was a very prosperous period marked by trade activity and urban development. The Maurya Empire (321 BC to 185 BC), under which most of the Indian subcontinent was unified under one rule, was known for flourishing economic activities. The famous politico-economic treatise Arthashastra was written by Chanakya, the Prime Minister to the first Maurya Emperor Chandragupta under the pseudonym Kautilya. The Gupta period (320 AD to 550 AD) was the so called Golden Age of India marked by not only economic prosperity but also by singular achievements in art, science, literature, astronomy, mathematics etc. In fact, India is estimated to have had the largest economy of the ancient and medieval world between the first and 15th centuries AD under various rulers. Under the Mughal rule in the 16th century up to the period of the rule of the Marathas in central India in the first half of the 18th century, the Indian economy, i.e., its gross domestic product was either the largest or the second largest after China, controlling from 1/4th to 1/3rd of the world economy. The economic scenario, however, changed dramatically and drastically with the coming of the British colonial rule in India which was aimed primarily at exploitation of its resources for the benefit of Britain. India’s share in the world economy fell from about 24% at the beginning of the colonial rule to about 4% at the end, brought out systematically through a governance and economic institutional instrument specially designed for the purpose. India experienced several devastating famines in the period, killing an estimated aggregate of 30 million people. By the end of the colonial rule, India inherited an economy that was one of the poorest in the world and totally stagnant.
Free and republic India no doubt made valiant efforts to reverse the inherited economic trend, but using the same institutional instrument of governance, under the visionary leadership of Nehru, India’s first Prime Minister. In spite of having made considerable strides in infrastructural development, particularly in the first two decades after independence, no appreciable dent on the problem of poverty could be made. In the mixed economy model followed by India to bring about a socialistic pattern of society, with considerable state controls and regulations of economic activities, the rate of economic growth hovered around 3.5% in this period accompanied by increasing corruption. With the state having the prime responsibility of alleviating poverty but being unable to accelerate economic growth, the government depended on public distribution systems and price controls of essential commodities to provide succor to the poor resulting in black marketing, bureaucratic red tapism and growing corruption.
With the policy of economic liberalization, privatization and globalization courted by India since the early nineties, bidding socialism enshrined in the Constitution a formal good-bye and the vast Indian market opened to multi-national companies, Indian economy did register an appreciable growth rate of around 8%. While this has appreciably increased the size of the middle class and has led to acute concentrations of wealth in a limited number of hands, it has depressed the poor even more, both in numbers as well as in intensity. According to a recent report by an expert group, the poverty level in India has risen from an estimated 27.5% in 2004-05 to 37.2% in 2009 even according to the Planning Commission’s criterion. Thus while the problem of poverty remains essentially untouched, its sting has become sharpened in the midst of visibly widened economic disparity. Many schemes launched by the government targeted at benefiting the poor directly are only palliative measures like pain killers aimed at making the sting bearable, on the one hand, and at scoring political mileage, on the other. While India’s poverty is becoming intractable, India’s poor are becoming an increasingly attractive vote bank in India’s power-centric politics. The much acclaimed National Rural Employment Guarantee scheme is illustrative in this regard. The scheme apparently aims both at creating employment as well as contributing to development at one go. In effect, however, due to the inappropriate delivery mechanism in place, while the benefits reach the target only minimally, the net of corruption has become wider to include even the village functionaries. The political advantage accruing to the party in power at the Centre is distinct. Using India’s poor as a vote bank, while widely practiced by all political parties without exception, is at times carried to ludicrous extents. Fully air-conditioned long distance trains named as Garib Rath (Poor Man’s Train) at reduced fares were launched some years ago, flaunting this to be done with the poor in mind. While even those reduced fares are way beyond the affording capacity of the India’s poor, these trains really benefit only the middle class. A premier political party once fought and won a national election on the specious slogan of ‘Garibi Hatao’ (Remove Poverty). Thus, as the poor constitute a sizeable vote bank attractive to political parties, India’s poverty stands perpetuated in the present day polity.
While the new economic regime professes to benefit the poor by the process of trickling down of prosperity from the top to the bottom, it has certain disastrous fall outs. One of them is the growing nexus between the national and multi-national businesses, on the one hand, and politicians, on the other. Several high level and high magnitude corruption and scandals have been increasingly coming to light in recent years.
It is high time that we understand and appreciate that India’s poverty is rather systemic and is not amenable to any political gimmicks or economic stratagem. Its solution lies at systemic level only. More light will be thrown on this aspect in another post under this Blog.