India-the problem of poverty amidst plenty

Indian spacecraft is orbiting Mars, we have chosen the first president of the New Development Bank, we’re on our way of becoming an Asian lion compared to 74.04% of our adult population is literate compared to world average of 84%, 40% of our children drops out of schools at the elementary level, 56% of adolescent girls and 30% of adolescent boys are anaemic, 54% of Indian households doesn’t have adequate access to the sanitation facility, 29.5% of Indian population lives below the poverty line, that too on the basis of Rs47 spending in urban areas per capita per day and Rs 32 spending in rural areas. What a stark contrast.
In Indian context, development programmes are producing spectacular economic growth in terms of Gross Domestic Product (GDP) improvement, but that growth is not giving rise to sustainable economic development. The reason behind the hindrance is chiefly attributed to lack of political will coupled with weak and often misleading governance. Corruption, non participatory nature of development, a top down approach of planning, lack of transparency and accountability are some of the major causes of India’s chronic poverty. Despite billions spent in various development projects aimed at holistic development of Indian ‘Mango Man’. We’ve still failing to see India as a developed instead of developing nation-just like Milkha Singh in Helsinki Olympic.
As per 2013-14n budget estimate 2% of GDP has been earmarked for social security programs, the spending allocated per rural household is 40% in terms of annual poverty Line but during implementation, often the beneficiaries are chosen in politically biased way, administrative incapacitation in proper supervision results in affluent section of the society consuming the cream of such huge spending. Beside other reasons, in Indian federal set up states with higher barraging power take away the major chunk of the allocation, while weaker states lag behind. There is no standing formula to arrive at the sharing of cake.
The public distribution system (PDS) in India caters to 25% of Indian households and consumes about 1% of the GDP, has a very limited reach in respect of marginalized section of the society. As per national sample survey data, leakage and the diversion from the PDS are high. Only 41% of the government released by the Food Corporation of India (FCI) reached Indian households. As per FCI statistics As much as 1, 94,502 metric tonnes of food grain worth crores of rupees was wasted in India due to various reasons between 2005 and March 2013.

Since the induction of the first five year plan (1951-56), a central planning policy coupled with welfare approach was followed, stressing less reliance on market driven forces. The logic was that excessive reliance on market driven forces and public investment will result in excessive consumption by upper income group and immaturity in strategically important sector like infrastructural development, investment in mineral and heavy industrial sector etc. however from early nineties the shifting was gradually towards market economy with gradual withdrawal of state intervention and putting excessive stress on liberalization, privatization and globalization. However after walking for nearly twenty-five years on this neo liberal and market driven economic policies it is observed that the results are strikingly different than developed countries mainly due to government structure, socioeconomic and geopolitical imperatives. As per national human development report by GOI (2001), seven states experienced increased urban inequality while fifteen states shown enhanced rural inequality since reforms were introduced, based on NSS data of household consumption level survey. Thus the rich is getting richer and poor is getting poorer, in spite of spectacular economic growth. The plan formulators assumed that due to trickle down effect growth at the top will effect in enhancement of purchasing power of the marginalized.
Since the Indus valley civilization, India traditionally is an agricultural economy, but agriculture now contributes to merely 14% of GDP. The positive economic growth rate over the last decade didn’t really reflect in the rural scene of agricultural sustainable job creation. Rather there is a stagnation of agricultural employment during the period, due to the decline in the output elasticity of agricultural, mining, manufacturing, transport, storage, communication sectors.
During the reform region, direct tax rates were cut gradually to enhance ‘efficiency’, encourage private investment and indirect tax rates are reduced in a bid to encourage consumption. In India only 8% of the population pay direct taxes compared to 80% developed countries. As a consequence government resources get limited. It’s not easy to cut down non plan expenses, resulting plan expenditure cut. Let’s put it in this way-social sector investment that can generate sustainable growth is cut down- virtually a vicious circle-cutting down the expense to downsize the all inclusive growth.
In stark contrast to poverty, there are 165000 millionaire households in India in 2013, ranked 15th in the world and projected to become the seventh richest nation in the world. The number of ultra high rich household inn India with net worth $100 million or more stood at 284. With the tag of the one of the fastest growing economies of India, India is the seventh largest growing consumer market in India and projected to be the fifth largest in 2025. The luxury car majors are all eyeing Indian market as potential. White goods majors are wooing Indian consumers particularly middle class with discounts and sops. During the current decade car ownership in India has shown a double digit growth annually. A study conducted in 20007, in Ahmadabad and Kolkatta showed that country of manufacturing is a priority for the changing urban consumer with a larger purchasing power. Statistically the consumption pattern has already tilted heavily in favour of urban area, despite the fact that 70%of Indian population still live in villages.
India is not a poor country. The parallel economy in India siphoned away from the state through non-payment of taxes or amount earned through corruption amounts to many times India’s GDP. Estimated deposit in Swiss bank by Indian nationals amounts to nearly $ 1500 billion, 13 times Indians foreign debt. Many steps had been taken including voluntary disclosure of income, committee, legislations, through public awareness and media interventions, but what is unearthed is only the tip of the iceberg.

Infrastructures are getting developed in urban areas including the smaller cities and the real estate price is sky rocketed. In city like Gurgaon (which’s not a metro city), the rate has been more than doubled from 2006 to 2012. Let us cross examine this economic boom taking the case history of Mumbai. During the nineties, the surge in the tertiary sector activates has resulted in ballooning of real estate prices and the traditional ’chawls’ being replaced by high rise , resulting in migration of the lower middle class section to the suburb. An urbanisation policy that is more suited for the rich is threatening the existence of marginalised to these areas, for example apartments coming up in Dharavi, the largest slum in Asia is not only set to uproot the people who lived there traditionally but to eliminate many thriving industries in the clout of slum rehabilitation scheme(SRA).
India is the second largest bullion consumer after china, struggling with a widening trade deficit India imposed a 10% duty on overseas import of gold which partly attributed to 28% slump in gold price in 2013-14.
United Nations human development index (HDI) however paints a strikingly opposite picture of this economic ‘boom’ from the viewpoint of three livelihood factor-health, education and income where India ranks 136th out of 187 countries. As per world health organisation (WHO) India accounts for 21% of the world disease burden, which is primarily concentrated in rural areas. In 2011, more than 2 million people died in rural areas due to diseases that are preventable like diarrhoea, dengue, measles, typhoid and malaria. Rural area has inadequate access to equipment, medicine, trained nurses and doctors and above all primary healthcare centres with willing staff members to be ‘operational’- meant to be the backbone of rural India. 60% of Indian population doesn’t have adequate access to healthcare facility.
Spectacular economic growth have benefited Ambanis and Tatas, but not to the anaemic child of the village. Child malnutrition, which by WHO estimate is 48% and highest in the world, had fell by merely 1% over the decade. Spending in the primary health care is 1.1% of GDP, placing us below china, Pakistan and Nigeria. Private spending now accounts for 80% of total healthcare spending. So, the rule is simple-if you have purchasing power purchase it; otherwise wait for the god.
The economic ‘magic’ is meant for the rich. An affluent class have been created who as Arundhuti Roy puts it ‘“ascended into outer space from where they look down at the indigenous people and the poor.” Unless an all inclusive growth model is envisaged in India where not only political equality but social and economical equality will prevail, the poor will get poorer. They will still be condemned into a life of illness, exploration and suffering.
Until the voiceless gets the voice.

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