Friday, 3 August 2012

ECONOMIC INEQUALITY What, Why and the Way Out in the Context of Indian Political System




One of the thoughts that crowd, an average Indian mind today, is the question of inhuman poverty still prevalent in our country. We are alarmed at the select stories of starvation deaths, farmer suicides, gender discrimination, communal prejudices and the inhuman living conditions of the poor in urban areas, reported by the censored mainstream media. The whole truth, on the other hand, is actually disgusting. According to the human development report 2011, 53.7% of Indians suffer deprivation in health, education and basic sanitation that go to make a decent living for a human being. J Dash, the director general of National Sample Survey Organisation (NSSO) in his report for the year 2009-10, notes that 60% percent of rural population live only with Rs. 35/- and Rs. 66/- per day in rural and urban areas respectively. What could it probably get them? At the most food, clothes and some sort of habitat. Much worse is the stories of Dalits and Adivasis, the faceless minority in India. Probably they constitute the 10% identified as the poorest by the recent NSSO report, who make a living in rural and urban areas with less than Rs. 15/- and Rs. 20/- per day.  It is a mystery how the contradictory phrases ‘one of the fastest developing countries’ and ‘one of the world’s most under developed countries’ go well to present a complete picture of our nation. Are there two Indias?

In their article, “Putting Growth in Its Place” Jean Dreze and Amartya Sen render a scholarly treatment of the subject ‘economic inequality’ by presenting the problems, their causes and plausible remedies in the context of our multi-party democracy. We shall present their insights consecutively under the titles what, why and the way out.

‘What’: The Problem

The Indian economic problem is not poor economic growth. The growth estimates of per capita income and GDP of our country are exceptionally high and are on the rise since 1990s. The growth rates – 7.8% in 2002-03 to 2006-07 & 8% in 2007-08 to 2011-12 – are marked as the second highest in the world next only to China. India needs rapid growth, as the income per capita ($3,560/-) is insufficient to produce a reasonable standard of living. We are actually doing well in terms of economic growth. But, the fruits of the growth are not equally shared by all. Dreze and Sen write, ‘indeed, even today, after 20 years of rapid growth, India is still one of the poorest countries in the world’. The fact is validated by the World Bank data which lists India as one of the last outside Africa as regards the social indicators - basic sanitation, health and education. I quote,
[O]nly five countries outside Africa (Afghanistan, Bhutan, Pakistan, Papua New Guinea and Yemen) have a lower “youth female literacy rate” than India (World Development Indicators 2011, online). To take some other examples, only four countries (Afghanistan, Cambodia, Haiti, Myanmar and Pakistan) do worse than India in child mortality rate; only three have lower levels of “access to improved sanitation” (Bolivia, Cambodia and Haiti); and none (anywhere—not even in Africa) have a higher proportion of underweight children. Almost any composite index of these and related indicators of health, education and nutrition would place India very close to the bottom in a ranking of all countries outside Africa.

The scholars further point the seriousness of the problem by noting how despite the indication of decent income per capita India is doing bad compared to its South Asian neighbours Bangladesh, Bhutan, Nepal, Pakistan, Sri Lanka and China. In the scholars’ have attempted to rank South Asian countries in terms of growth and development, with the available data as per the year (roughly) 2010, except the high scores in the income per capita India stands last almost in every other social indicator that measures development: life expectancy, underweight children, child immunization, infant mortality, under five mortality, mean years of schooling and accesses to improved sanitation. According to the figures citizens of the rising super power meet death while their Asian neighbours continue to live.

‘Why’: The Causes

Dreze and Sen, primarily, point to the basic misconception of development as mere economic growth, as the root for the miserable living standards in modern India. “Demands of development” they write, “go well beyond economic growth. Indeed economic growth is not constitutively the same thing as development, in the sense of a general improvement in living standards and enhancement of people’s well-being and freedom. Growth […] can be very helpful in achieving development.” They term it as ‘growth mediated development’. Our country has precisely failed here. Hence a great number continue to be affected by ill-health, undernourishment and other deprivations irrespective of the ‘successful’ shift in economic policies in the 90’s. Bangladesh for example with only a half of our income per capita has overtaken India in terms of basic social indicators. We have failed to convert our economic growth to yield integral development. The public revenue generated by fast economic growth has not been equally distributed for the welfare of everyone especially the poor in the nation. Naturally, then the growth has been enjoyed by a small group. This in turn has resulted in the wide rich and poor divide – economic inequality – in our nation. As far as the economic life is concerned, there truly exist two Indias. 

Moreover with such lopsided idea of development, we have staged riots against our environment, destroyed the culture and livelihood of poor Adivasis by involuntary displacement. Everything is being done in the name of development. But authentic development conserves environment our resource, and assures the well-being of everyone, never the opposite.

Second, democracy functions only by the force of participation by the people in the elections, demands and policies. Participation is done through public discussions, debates, conscientious strikes and most importantly by politicization of the issue at hand. The poverty of our participation nevertheless, is vivid in our democracy. This is worsened by the intrinsic imbalance in the economic and political power founded on the good old discriminations on the basis of caste, class and gender. The authours give the examples of our media and parliament: Not even one of the 315 editors and other leading members of the printed and electronic media in Delhi surveyed recently by the Centre for the Study of Developing Societies had belonged to a scheduled caste or scheduled tribe; Lok Sabha is male dominated. Definitively we are not well placed to address the concerns of the poor and the vulnerable. ‘The rural issues get only two percent of the total news coverage in national dailies’ goes a recent study on rural-urban disparities. Thus we find a massive neglect of the interests of the unprivileged in our governance. This implies, I quote, “disregard for agriculture and rural development, environmental plunder for private gain with huge social losses, large-scale displacement or rural communities without adequate compensation and the odd tolerance of human rights violations when the victims come from the underdogs of society”. The public policies therefore, are mostly controlled by and directed to the significant minority, with a meager proportion to the poor. They write,
However, the rhetoric of inclusive growth has gone hand in hand with elitist policies that often end up promoting a two-track society whereby superior (‘world-class’) facilities are being created for the privileged, while the unprivileged receive second-rate treatment, or are left to their own devices, or even become the target of active repression – as happens, for instance, in cases of forcible displacement without compensation, with a little help from the police.

‘Way Out’: Reasonable Solution

Dreze and Sen propose two solutions: first, growth mediated development; second, a comprehensive approach in public policies. They explain the former as skilful use of the opportunities provided by the increasing public revenue.  In this respect they invite us to take lessons from China as it makes much better use of the opportunities offered by the economic growth to expand public resources for developmental purposes. For instance the government expenditure for health care in China, taking into consideration its higher population and income per capita, is four times that in India. As a result it has higher values for most social indicators such as life expectancy (73 years in China - 64 years in India), infant mortality rate (16 per thousand in China and 48 in India), and mean years of schooling (estimated to be 7.6 years in China – 4.4 years in India) than India. In this comparison, there is a tendency to escape pointing to the inefficiency of our multi-party democracy in contrast to the autocracy in China. The authours affirm that we can achieve such social policies by strong political will in our country. I quote “using democratic means for remedying inadequate coverage of public healthcare, non-extreme undernourishment, or inadequate opportunities for school education demands more from democratic practice – more vigour and much more range.”

Second they invite us to adapt a more comprehensive approach in social policies to eradicate poverty in India.  The existing approach offering assistance to the people on the basis BPL and Conditional Cash Transfers (CCT) which they think enables them to meet the requirements for the basic living conditions. Their ineffectiveness have been proved by the persisting grand scale poverty in India. BPL is non-reliable and unjust as there is an ever present danger to exclude the deserving poor with unrealistic poverty line such as Rs. 27/- and 30/- in the recent past. Moreover, it divides the public who in unity and strength can demand their right standard living conditions. The method of monitory assistance CCT, as an alternative to creating opportunities through public services would not improve the living conditions of the poor. The cash received would not serve in a place where there is no opportunity to convert them into a standard living condition.  The authors therefore, propose a comprehensive approach in social policies that assures a universal provision of essential services such as health, education and sanitation. They argue that it was the power of comprehensive approach that has given rise to the high social indicators of Kerala, Tamil Nadu and Himachal Pradesh in India.

Conclusion

In the context of mounting criticism about the growing economic inequality and poverty in India, the article rendered a clear statistical presentation of the problem and its causes - the misunderstanding of development as mere growth, the imbalance of power and poor democratic practice. However, unlike the other contemporary scholars who either end up cynic or give cursory suggestions for improvement the situation in India, the ‘vigorous democratic engagement’ through public discussion, and debates on development related matters suggested by the authours, is realistic and promising. The strong point of the article was the sustained belief in the effectiveness of the multi-party democracy despite its limitations and hope for a better India. 

A critical summary of
Dreze, Jean and Amartya Sen. “Putting Growth in Its Place: It has to be a Means to Development, Not an End in Itself.” Outlook Nov 14, 2011 http://www.outlookindia.com/article.aspx?278843 accessed 13/07/2012.





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