Rising Poverty and Lack of Inclusive Growth in India

By : MunibarBarui

                In current context, our country India has made rapid progress in its economic growth wherein the GDP size has increased from $ 275 bn in 1991 to $ 2.7 trillion in 2019. India is also considered to be the fastest growing major economies around the world. Yet, such a growth model has failed to promote balanced, equitable and inclusive growth. Our country’s growth is often equated with “Jobless Growth”. For example: India’s ranking on manyglobal indices such as that of the Human Development Index HDI (at 131), Global Hunger Index (GHI) (at 94), Multi-dimensional Poverty Index (MPI) (at 62), Environmental Performance Index (at 168), etc. continues to beremain poor. In similar veins, the NSSO’s—Periodic Labour Force Survey (PLFS) report has stressed that the unemployment has increased to 45-year high of 6.1%.

                Thus, in this view I would like to present the problems which are plaguing our country since Independence from the British Raj. Their redressal has also taken place through Government initiatives but the slow process perpetuates the vicious cycle of poverty.

The current situations are classified into points as mentioned below:

1. Issues regarding Poverty Alleviation Programmes:The Directive Principles of State Policy enables the Union and State Governments to ensure equitable distribution of wealth and to prevent the concentration of wealth (under Article-39[b] & [c]). In this context, the Government has been able to reduce the percentage of BPL population from 45.3% (1993-94) to 21.9% (2011-12). Further, as per latest Global MPI, the number of poor people in India fell by more than 271 million between 2005-2015. However, there are a number of problems related to poverty Eradication programmes such as poor identification of beneficiaries, presence of ghost beneficiaries, poor allocation of finances, poor implementation, large scale corruption and lack of transparency and accountability.For example:as per NSSO report, around 40-60% of the food grains do not reach the beneficiaries due to diversion of food grains and black marketing.  On similar veins, according to government data, the typical days of employment provided per household under MGNREGA between FY 2016 to FY 2019 stand at 47, which is not even half of the 100 days of guaranteed work. Furthermore, in most of the states, the MGNREGA wages are much below the national level minimum wages. Thus, there is an urgent need for formulation of Universal Basic Income (UBI) for such masses.
2. Issues regarding Joblessness: The higher economic growth in India has not translated into higher employment opportunities leading to jobless growth. As perseveral estimates, the employment elasticity in India has remained abysmally low at 0.1.
3. Issues regarding Agricultural Development: The Agricultural sector employs around 49% of India’s workforce and henceforthit is indispensable for ensuring inclusive growth and development. Nevertheless, the average growth rate of Indian agriculture is under the targeted growth rate of 4% and is way below the double-digit growth rate of the service sector. The upsurge in the input costs, decrease in the agricultural productivity attended by decrease in the prices acknowledged by the farmers on the agricultural produce has led to decrease in the income levels of the farmers. As per NSSO estimates, the average monthly income of the agricultural household is around Rs 6500 while their average monthly expenditure is around Rs. 6250. Thus, the target of Doubling Farmers Income by 2020 is also a miss.
4. Issues regarding Equitable Distribution of Income: Our country’s entire line of governance has failed to prevent concentration of wealth and provide for equitable distribution of income. For example: as per the agricultural census 2011, the percentage of the land ownership of the poor and vulnerable sections is quite poor: SCs (12%), STs (7.8%), Women (8%), etc. In similar veins, according to the Credit Suisse, 1% of the wealthiest in India have increased their share in wealth from 40% in 201o to 60% in the last five years. The richest 10% in India own more than 4 times the wealth than the remaining 90%.  In pursuance of such trends, the richest 10% in India would take away the majority share of $ 5 trillion economy.
5. Issues regarding provisioning of basic services: The Government-of-the-day has failed to allot sufficient financial resources for provision of basic goods and services. For example: India’s expenditure of 3% on education is much below the target of 3%. In similar veins, expenditure on health has remained quite lower at 1.3% as against the mandated 3%. These values are to be increased as per the New Education Policy of 2020 and the National Health Policy of 2017. But it hasn’t increased yet, nevertheless, the sanitation coverage in India has drastically improved to around 99%, concerns remain with respect to regular use of toilets. Our country has achieved the ODF status, but the ground reality seems to be different. Furthermore, the Government has recently achieved its target of providing 8 crore LPG connections to the poor under the PM Ujjwala Yojana. Yet, concerns have been raised due to non-regular use of LPG cylinders on account of higher refilling costs. India is also facing the urban housing shortage wherein there is a shortage of around 18 million dwelling units, out of which 96% of the shortage is mainly for the economically weaker sections. The Housing for All by 2022 is also a dream which shall be postponed due to policy paralysis which is induced due to the lockdown posed by COVID19 pandemic.
6. Issues regarding Balanced Regional Development: There is a huge discrepancy in the development across the states and within states in India. Some of the states such as Maharashtra, Tamil Nadu, Punjab, etc have made rapid progress on account of historical, geographical and economic factors. However, the states in the North East and Eastern India continue to have lower growth rates. In similar veins, even within the states, there are certain pockets of underdeveloped regions such as Vidharbha (Maharashtra), Saurashtra (Gujarat), etc.This could be accredited to a number of issues such as top-down approach, lack of decentralisation, failure to adopt area-based approach, failure to set up dedicated planning institutions etc.

                All these leads to a question that: What is the way forward? But we have to remember that the answer is not so simple. As because since Independence various Union Governments have tried to alleviate poverty in various manner. In such context, the Government-of-the-day has to realize that “Ease of Living” is much wider and comprehensive as compared to “Ease of Doing Business”. Even though, improvement in the Ease of Doing Business can lead to increase in the private sector investment, but then again improvement in the “Ease of Living” can result in both better development upshots and charm private sector investment. This is so because a well-adjusted, all-encompassing and sustainable growth can not only enhance the income levels of the people, but also attract greater amount of private sector investment. 

                In conclusion, Gandhi’s philosophy of “Sarvodaya” should be at the heart of Governmental policies as because progress for all.The notion of “Antyodaya” proposed by DeenDayal Upadhyay, has been at the forefront in most of Governmental policies. The term “Antyodaya” means the welfare of the people in the bottom of the pyramid.So, there is necessity to create nexus between both these philosophies which results in the need-of-the-hourwhich is “Think Globally and Act Locally”.