Friday, 22 March 2013

INDIA: Poverty Amid Plenty in the New India

An analysis by the Organization for Economic Cooperation and Development (OECD) finds that the blatant gap between poor and rich is growing in India almost faster than anywhere else on the globe. Although the world's largest democracy amended its constitution in 1976 to declare that it was a socialist state, the fact of the matter is that the country is failing to give the huddled masses a fair share of the country's economic miracle.

This is one of the main differences between India and China, its rival up-and-coming Asian economic powerhouse: In China, some 13 percent of the population subsists on the equivalent of less than $1.25 (€0.97) a day, while one-third of all Indians have to make do with the same amount.

Experts at the University of Oxford have concluded that the level of poverty in some areas is roughly equivalent to that in the Democratic Republic of the Congo (DRC), the Central African country that has been ravaged by years of civil war. To make matters worse, if the comparison is restricted to nutrition, Madhya Pradesh is significantly worse off than the DRC.

Critics contend that India's rapid economic growth, which began in the 1980s, has not led to a decline in poverty. The fragmentation of Indian society into castes and religions thwarts modernization -- and it prevents India's poor from jointly rising up against the rich.

Shankar Singh is one of those who dreams of a better life in vain. The 53-year-old works a few blocks from Shahnaz' residence as a security guard at Panchsheel Park, an enclave for the rich surrounded by walls and gates. He protects the villa of a Sikh businessman.

Shankar's boss has amassed a fortune selling sinks and toilets, but his security guard still lives with his wife and six children in an impoverished hovel right behind the gated community -- beyond the walls, where stray dogs and cows rummage through the refuse of the rich.

This is where the gardeners, cooks, chauffeurs and chambermaids of the nouveau riche live. Their neighborhood may be in one of Delhi's better slums, but they live in constant fear that they will slide back into abject poverty if they get sick or are fired. According to the results of the OECD analysis, informal jobs without any protection against dismissal are more prevalent in India than in virtually any other emerging economy.

It is early afternoon, and Shankar is resting in his windowless dwelling in preparation for the night shift. He is wearing the same dark baseball cap he wears on duty. A small Hindu altar hangs on the wall. Shankar worships the god Shiva, the "auspicious one," who brings good fortune.

Shankar and his family are still waiting for their luck to change. They do not even have a washbasin. He and his sons wash up in front of the door every morning, while his wife and daughters somehow bathe inside. Water only flows between 3:00 and 6:00 a.m., so that's when all the neighbors quickly fill up buckets and pots.

When Shankar moved to Delhi from the province of Uttar Pradesh 32 years ago, he dreamed of a better life. He hasn't been back to his home village for seven years now because he can't afford to travel there. Shankar earns 8,000 rupees a month, or the equivalent of €110. He pays 2,000 rupees a month in rent, and lives off the rest.

He can't even honor the Hindu gods with a modest display of fireworks at Diwali, the Hindu festival of lights. Instead, he gazes in amazement at Panchsheel Park, where well-heeled Indians stage increasingly extravagant firework displays year after year

 Indeed, it is the relatively well-educated who primarily benefit from the Indian economic miracle: IT engineers and college graduates who speak fluent English and work in call centers. Out in the countryside, though, the only hope is the National Rural Employment Guarantee Act (NREGA). This 2005 law guarantees every adult in the country 100 hours of paid work every year.

Under NREGA, the government currently pays the country's poor over $7 billion to improve roads and build bridges. That's better than begging.

Furthermore, India helps its poor with food rations and other subsidies. But the aid often doesn't reach those in need. In a bid to cut out corrupt middlemen, the government has been making money transfers since January. It now directly pays scholarships and pensions to the accounts of some 245,000 needy individuals in 20 districts.  But what the governing Indian National Congress party praises as a "pioneering reform" is criticized by the opposition as a political trick to buy votes in the run-up to the 2014 parliamentary elections.

The widening gulf between those at the top and those at the bottom is steadily increasing the pressure on the many fissures in this highly fractured society.

Despite boasting the world's second-fastest economic growth, India has made little progress in eradicating poverty, according to a new study by the Organization for Economic Cooperation and Development (OECD). Instead, the gap between the incomes of the rich and poor has doubled, so the top 10 percent of workers now earn 12 times the amount earned by the bottom 10 percent — while 42 percent of the country's 1.21 billion people survive on less than a dollar a day.

One cause is a high population growth rate, although demographers generally agree that this is a symptom rather than cause of poverty. While services and industry have grown at double-digit figures, agriculture growth rate has dropped from 4.8% to 2%. About 60% of the population depends on agriculture whereas the contribution of agriculture to the GDP is about 18%. The surplus of labour in agriculture has caused many people to not have jobs. Farmers are a large vote bank and use their votes to resist reallocation of land for higher-income industrial projects.

Other points of view hold that the economic reforms initiated in the early 1990s are responsible for the collapse of rural economies and the agrarian crisis currently underway.

According to data from the United Nations Development Programme, an estimated 37.2% of Indians live below the country's national poverty line. A recent report by the Oxford Poverty and Human Development Initiative (OPHI) states that 8 Indian states have more poor people than 26 poorest African nations combined which totals to more than 410 million poor in the poorest African countries.

The 2012 Global Hunger Index (GHI) Report places India amongst the three countries where the GHI between 1996 and 2011 went up from 22.9 to 23.7, while 78 out of the 81 developing countries studied, including Pakistan, Nepal, Bangladesh, Vietnam, Kenya, Nigeria, Myanmar, Uganda, Zimbabwe and Malawi, succeeded in improving hunger conditions

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist