Can India turn around the sad story into a happy one?
Dr Devender Singh is a Delhi-based sociologist. He can be reached at devchaudhury[at].
Data from recent Socio-Economic and Caste Census (SECC) that more than 70% of the population in Rural India is living below the income of 5000 rupees, generated a lot of interest among people in general and people in media and on social media in particular. However, for people who know the reality in Indian hinterland and those who deal with data on a more regular basis, this does not come as a surprise. The situation has been more or less similar or worsening for the rural folks and for those living near or below the poverty line in India. Nearly a decade ago, Arjun Sengupta Committee on work conditions in the informal sector had reported that more than 70% of Indian population was living below the poverty line i.e. living on an average less than 20 rupees per day.
As a Nation, we have done well since Independence. We are living longer; GDP is way higher than in 1947; per capita income has grown by a whopping 32000 percent since Independence. That is when we talk of our Nation through statistics in terms of ‘average’. But when we look beyond the ‘average’ statistics, we get a grim picture. The disaggregated statistics points to the fact that we have not grown together. A huge mass is still poor, the difference between rich and poor is widening, and a large number of people are excluded from bare minimum amenities or facilities. Poverty, inequality and exclusion are interrelated. Exclusion from most public goods including decent livelihood and general wellbeing are functions of poverty and inequality. The number of those living below the poverty line has hovered around the same levels. Different committees on poverty estimation have come out with similar numbers, only exception being when they employ starkly different methodologies for measuring the same phenomenon. The SECC findings are the latest and exhaustive source of information on lives of people in India. The figures paint a very disturbing picture: no one in three in four rural households earns more than Rs. 5,000 a month. More than nine out of 10 rural households have no one earning over Rs. 10,000 a month. More than half of all the households in rural India, 56 percent are landless. Nearly same numbers of households have reported that they survive on manual labor.
The mainstay of rural folks is agriculture. It is an open national secret now that agriculture is a loss making enterprise for every household engaged in agriculture. The inputs costs have gone up and the minimum support prices have not increased in that proportion. Loss making enterprise nature of the agriculture also affects its capacity to employ labour and pay them decent wages. It is not surprising that more than 100 million farmers have left agriculture in since 2004 and have joined the ranks of footloose labour to use a term popularized by Jan Breman for those who depend on casual work as they are pushed out of the agrarian labor market. Poverty is manifested in many forms. Harshest of them is going hungry day after day. As per a report by UN, India accounts for 195 million or 25 percent of the total 800 million people who are undernourished worldwide.
To make the situation worse, there is definite evidence that inequality in India has increased over the years, especially since 1991. A Global Wealth Databank report shows that one percent of richest Indians own nearly half (49%) of India’s personal wealth against 37 percent in 2000. The top 10% Indians own nearly three-quarters or 74% (up from 66 percent in 2000) of the country’s personal wealth. The growth story of India has not benefitted all equally. There is hardly any surprise that India’s share in the world’s poorest is 20 percent; every 5th world’s poorest is an Indian. Inequality has led to increased relative poverty of large number of people, which, in turn, leads to exclusion of large populace of India from the very tools through which this populace can come out of the poverty. Inequality and relative poverty leads to differential worth of different individuals and hence their access to public goods, depending on their ranks or status on the economic ladder. Devender Sharma, an expert in agricultural matters and a popular columnist, has given a beautiful example in one of his articles. A woman wanting to take a loan of few thousands from an MFI to buy a livestock in rural area can do so only after paying an interest at the rate of 36 percent while a big corporate house can get a loan of thousands of crores at the interest rate of 0.1 percent. And they have more instrumentalities available to them if they cannot pay the interest or the loan on time or do not pay at all. Access to quality education, health services, skill-building and employment opportunities gets out of access for the poor in an unequal society.
Wide and long standing inequality can also obfuscate the reality of the society and hence its priorities. The priorities of the rich and influential may be posited as the priorities of the nation. For the sake of an example, let us take education. The public education, just like other publicly provided services, is falling off the radar of the policy focus. The dismal allocation of 4 percent of GDP to education is a reflection of larger neglect of the public or government services. The result is that approximately 600 million Indians are either illiterates or barely literates. As per the recently released UNESCO e-atlas on out-of-school children (OOSC), 17.7 million children and adolescents in India are out of school. This constitutes 14 percent of the total 124 million children and adolescents worldwide. For a poor family, it is not easy to resolve the dilemma between sending the children to school for improving their life chances and sending them to work to support the family income. The drop outs rates are higher for the poorer sections. As a result, they end up joining the lowest rungs of the economy, either as agricultural labour in rural India or manual labour in the urban informal economy.
Migration is resorted to as a mean of livelihood option by a large number of youth. Without the requisite skills and economic opportunities in rural India, this migration is more of a distress migration, which P. Sainath has called ‘footloose’ migration. After leaving home, they travel from one place to another depending upon the economic activity and employment opportunity – two months in one town, three months in another town, may be in same state or may be in another state.
On an average, approximately 12-14 million people join the labour force in India every year. The job creation by Indian economy is approximately 5-6 lakhs in a year. Most of the job growth happened in low quality job employment in India in recent years such as private security agencies, hospitality sector, or service sector. They enjoy no job security or social security. This was the case even when India was registering a growth of 8 to 9 percent, indicating that the Indian growth story has not benefitted all. Moreover, approximately 2-4 percent as per different studies of Indian workforce has any sort of skill building qualification. And government’s target to train 400 million to become skilled workers by 2022, though laudable, is a highly ambitious target. This amounts to take the current 2-4 percent to 67 percent of Indian workforce. Gaining skills will lead to hiring by the organized sector or better wages is not guaranteed. Several studies have shown that the employers mostly prefer to hire the non-qualified compared to the qualified skilled workers as they have to pay them less salary. They, rather, prefer people who can learn the job while working, through informal on-the-job apprenticeship.
Mr. Modi generated a hope in the country during the last general election campaign and the country responded with a huge mandate for him and his party and National Democratic Alliance. He is a great motivator and has initiated several steps in the direction of financial inclusion and skill building. But to turn the story of the nation and her people from the sad one to a happy one will require fundamental structural and policy changes where the last man is receiving attention and benefits and does not remain perennially on the receiving end.