Paper
On
Could Charity Ever Remove Poverty? Doles vs Development (of Socio-Economic Infrastructure)
For the
40th Skoch Summit
On
Making India a $20 Trillion Economy
(Sub Themes- Human Development)
By
Dr. Ramya Ranjan Patel
Assistant Professor of Economics
Dyal Singh (E) College/University of Delhi, New Delhi
PhD- JNU
M.N.-8800779221,
1. Introduction
Poverty still remains the most crucial issue, India facing today even after more than sixty years of independence. It is because of this about more than one-fourth of the population are not able to satisfy to increase the availability and widen the distribution of basic needs of life live food what to think about other objectives like raising the levels of living and expanding the range of economic and social choice.
Despite many achievements India has not realised its end. The end, mentioned in Indian Constitution, 'no person shall be deprived of his life or personal liberty' (Art, 21) and 'the state to strive to promote the socio-economic and political welfare of the people’ (Art, 38). Despite more than six decades of independence, it is still known as the home to highest number of poor and malnourished people in the world. The UN-WFP report of Global hunger Index (2012) says, India is failing its poor with 230 million people (27 percent of world undernourished) being undernourished – the highest for any country in the world. Malnutrition accounts for nearly 50 percent of child deaths in India.
In this context the paper seeks to answer the following questions;
Research Questions:
1. Why India remains poor despite many years of constant policy and programmes to reduce poverty achieve human development?
2. What are the policy suggestions to achieve rapid human development?
2. Poverty, Malnutrition and Unemployment in India
The table 1 shows level of poverty in independent India, according to various estimates. There is a greater degree of debate, popularly known as The Great Indian Poverty Debate starting from its measurement, incidence, policy and so on and so forth. Some express their satisfaction regarding the achievement regarding the reduction of poverty, whereas some are unhappy with it. Whatever, may be the figure by whatever estimate, it must be admitted that it grappled a sizeable section of the population. Is it right to ask, whether India succeeded in reducing poverty or not? Perhaps not. The right question to ask not is, whether India succeeded in reducing poverty or not, rather whether the rate of poverty reduction is satisfactory or not? The answer is negative and agreed upon among all the groups.
Table 1: Poverty Ratio in India, According to Various Estimates
1 / Poverty Ratio / 1973-74 / 1977-78 / 1983 / 1993-94 / 1999-00 / 2004-05 / 2009-102 / Official Estimates / 54.9 / 51.3 / 44.5 / 36 / 26.1 / 27.5 / -
3 / Tendulkar Committee / - / - / - / 48 / 43 / 37 / 32
4 / Sengupta Committee / - / - / - / 82.8 / 80.7 / 76.7 / -
5 / Patnaik's Estimate / 72 / 65.5 / 70 / 74.5 / 77.5 / 87 / -
6 / Rangarajan Committee / 38.2
Sources: 2nd row, A. K. Mehta and S. Bhinde, Chronic Poverty Research Report, 2008, 3rd row, S. S. Bhalla, The Hindu Constant, The Indian Express, 23rd April 2011, 4th row, A. Sengupta, K.P.Kannan and G.Raveendran, India’s Common People: Who are They, How many are They and How do they Live, Economic and Political Weekly, 15 March, 2008, 5th row, U. Patnaik, Neo liberalism and Rural Poverty in India, Economic and Political Weekly, 28 July, 2007, 6th row, Report of the Expert Group to Review Methodology for Review of Poverty, Government of India, Planning Commission, 2014.
Similarly there is alarming level of malnutrition in India (table. 2), even higher than the poverty level (based on official estimates). What is even more alarming is the rate of reduction that is dismally low, less than a percentage in a year. There is also growing tendency of unemployment (table. 3). It shows, there is divergence, rather than convergence or growing inequality among the people. The growth story is excluding a sizeable section of the population.
Table 2: Percentage of Malnutrition of Children under 3 years
State / NFHS I (1992-93) / NFHS II (1998-99) / NFHS III (2005-06)Andhra Pradesh / 49.1 / 37.7 / 36.5
Assam / 50.4 / 36 / 40.4
Bihar + Jharkhand / 62.6 / 54.4 / 58.57
Gujarat / 50.1 / 45.1 / 47.4
Haryana / 37.9 / 34.6 / 41.9
Himachal Pradesh / 47 / 43.6 / 36.2
Jammu and Kashmir / 44.5 / 34.5 / 29.4
Karnataka / 54.3 / 43.9 / 41.1
Kerala / 28.5 / 26.9 / 28.2
MP + Chhattisgarh / 57.4 / 55.1 / 52.28
Maharashtra / 54.2 / 49.6 / 39.7
Orissa / 53.3 / 54.4 / 44
Punjab / 45.9 / 28.7 / 27
Rajasthan / 41.6 / 50.6 / 44
Tamil Nadu / 48.2 / 36.7 / 33.2
UP + Uttaranchal / 59 / 51.7 / 46.92
West Bengal / 56.8 / 48.7 / 43.5
All India / 53.4 / 47 / 45.9
Source: NFHS I (1992-93), II (98-99) and III (2005-06)
Table 3: Unemployment Rates based on Different Measurements
Measurement / 1993-94 / 2004-05UPS / 2.6 / 3.2
UPSS / 1.9 / 2.4
CWS / 3.6 / 4.4
CDS / 6 / 8.2
MCWS / 5.3 / 6.7
Source: NSSO 50th and 61st Round Survey on Employment- Unemployment. Computed, (NCAEUS)
Notes: MCWS- Modified Current Weekly Status, UPSS- usual principal and subsidiary status (UPSS), UPS- Usual Principal Status, CWS- Current Weekly Status, CDS- Current Daily Status
There could be many reasons of poverty: Historical, Geographical or Political. However history is history, and nothing much could be done regarding the geography of a vast region. Thus, the real problem of the persistence of poverty was basically a policy failure of the Indian Government after independence.
It does not mean the Government did nothing to reduce poverty or to achieve inclusive human development. The Government has taken various policies and programmes since independence to achieve it: (1) The phase strategy was focused on asset redistribution policy and reliance on heavy Industries, (2) the second phase, popularly known as the Garibi Hatao programmes was aimed at direct attack on poverty, like various employment generation programmes, and distribution of subsidised foodgrains, (3) the third phase was assigned to market led growth strategy. The relationship between the high incidence of poverty and the various programmes to fight, quite a very long period of time raises some doubts about the policies and their efficacies. It baffles many that, something has gone wrong in the fight towards poverty. The next section discusses the policies and its efficacies separately. And suggests best alternative to achieve poverty reduction and human development.
3. Poverty in Independent India: A Policy Failure
According to Amartya Sen (1999) poverty depends on the ability of a person command over alternative bundles of good which in turn depends on the ownership entitlement and the exchange entitlement. Referring to poverty in India, Patnaik argued, “poverty is not an intrinsic attribute of people, but a product of livelihood systems and the socio-political and economic forces that shape them… ” (Mallick, 1988). Stiglitz (2002), pointed out two factors are responsible for the economic development of an economy- agricultural development and human resource development. He concluded, “some countries have grown without reducing poverty, and some have been much more successful in reducing poverty, at any given growth rate, than others. Some policies promote growth but have little effect on poverty; some promote growth but actually increase poverty; and some promote growth and reduce poverty at the same time”.
Growth or the supply-side problem has been the first priority of the Indian Economy not only after the New Economic Policy, but even after the year of Independence. Whereas, the development issues or the demand-side constraints has always been relegated. The central core of Nehru-Mahalonobis plan was a move toward capital intensive, fast-paced heavy industrialisation, led by the public sector. In doing so the planners either sacrificed or postponed or paid lip service to all other ideal goals: the development of agriculture, the creation of employment opportunities, balanced regional development and improvement in the well-being and quality of life of the rural poor, well stated by Brass (1997). Another alternative the planners could have taken was the Gandhian model, which is based on the premise that, since capital and land are in short surplus, while labour is abundant and under-employed, India's need therefore, are to conserve capital and maximise the use of labour by promoting labour–intensive, employment-generating industries and land augmenting strategies to increase the product from Land.
He, further says, the nationalist leaders who took power at independence were aware both of the pervasiveness and depth of poverty in India, along with associated problems of unemployment and underemployment, and of the inequalities in resources and income among the rural population. However, as has been notes above, the leadership chose not to attack these problems directly. Their first priority was heavy planning and heavy “industrialistion" with a believe that "the solution to poverty was to come through the ‘trickling down’ to the mass of poor population of the economic benefits that would arise from a dynamic, Industrialising economy".
Once planning and heavy industrialisation fails the planners and policy makers resorted to various Poverty Alleviation Programs (PAPs).
In India, there is a very strong sense of charity (or dana), since the mythological age of Raja Harischandra, Danaveer Karna and the ancient king of India, raja Harshabardhan. It still prevail in the mind of Indian psyche that through charity one earns Punya. The same mindset has not escaped the Indian leadership based on which various poverty alleviation and employment generation programmes (MGNREGA), subsidized foodgrains distribution, food for work programmes and many more.
There was only one policy for the development of people that is distribution of food, provision of employment and provision of housing. But there was complete neglect of empowering people or enabling them to do achieve all these like creation of rural infrastructure, roads, bridges, credit facilities, marketing facilities, cold storages, water, school and hospitals. The rural sector was completely dependent on the charity as principle of development. These measures are a welcome steps but particularly in the short term, to make people alive. But charity could only make a person alive and cold not empower him to do it for himself.
It is a general perception that rural people are poor because they are lazy, idle and do not work, few realises that, they including the marginalized groups like Scheduled Tribes and Castes are hard worker and engaged in various economic activities. They are primarily engaged in primary activities like agriculture and forestry. On the other hand they remain poor, not because of their own fault, because of the fault of the lack of appropriate public action of lack of facilities to improve their yields (irrigation and credit), lack of facilities to realize better prices (roads, cold storages and processing units) and lack of facilities to transform them into good human resource (education, skills and health). It is important to create capabilities by empowering them and enabling them, and not by destroying it by giving them doles and alms and charity.
Many of the poverty alleviation programmes like wage employment programmes and food security programmas are based on, to check poverty and not to solve the problem permanently; the origin of it. ‘An intriguing aspect of India's anti-poverty strategy is that while its policies to support the poor stagnate at the level of relief measures little attention is being paid to processes generating poverty which are operating without checks’ Rao (2005). Charity could be a good objective of development, particularly when they are dying. These programs would merely save the personal from disastrous consequences like malnutrition, hunger and starvation death but cannot significantly raise the income level of people. Only resorting to such policy is neither good for the society nor for the Government. It does not help the society in the long run. Dependence on such policy will completely ruin their ability to work, utilize their talent, skill, and denigrate their dignity. Charity could be a very good objective at individual level, since one earns Punya by doing that, but questionable when it is done at Governmental level.
In the long run there is urgent need to deal with its origin and for that the three measures will go a long way: First protection of livelihood, second, making the livelihood profitable and third, creation of asset or creation of new opportunities of livelihood. The programmes mostly based on the principles of "charity" will seldom work in solving it, since charity never reduces poverty. These programmes failed in its implementation because of large scale leakages, corruption and inefficiency. It is because of this, poverty still exists, despite thousand of rupees has been spent since independence and particularly after the famous slogan of "Garibi Hatao".
In India, it is no coincidence that all the states (Punjab, Haryana, Kerala, Gujarat, Maharashtra or Tamil Nadu) having lower incidence of poverty are agriculturally developed having a very sound base of irrigation and relatively better developed rural infrastructure. Agricultural development primarily promoted by irrigation facility has so many merits. Firstly in the double crops or triple crops area it suddenly enhances the resource base of the owner of all groups of farmers including the small and marginal. Secondly it assures return to the farmers, particularly in the single crop or rainfed or drought area. Thirdly it promotes farmers to adopt technology of production, leading thereby increase in overall productivity. Fourthly, the benefits are not only confined to the owners of land but also to the landless agricultural workers, by increasing their demand and ultimately the wage rate. Advanced agriculture requires high and intensive use of labourers, which increase their bargaining strength. This is the reason, the number of days employment as well as the agricultural wage rate are higher in agriculturally advanced states.