Tuesday, August 20, 2013

Rich Economist Debate over the poor

Rich economists debate over India’s poverty and food security at low levels.

B. Yerram Raju

Planning Commission estimates poverty before the passage of Food Security Ordinance at 37.2% and after the passage it gets an estimate of 24% of the population with an annual decline of 2 percent in the Eleventh Five Year Plan. These estimates need to be also viewed in the context of continuing rise of food inflation that hurts the poor more than the rich and the rising subsidy basket, the rising minimum wages, with MNREGS wages not excluded. While this being so, the two economists of consequence to India: one, a Noble Lauriat, Dr Amartya Sen, batting for the food security initiative and the other Jagadish Bhagavathi, a NL aspirant arguing on the other side spat at each other over the assessment of poverty and the incongruities of the Food Security Bill. The Financial Times not excluding, all the financial dailies have carried these items with alarming glare in the media. This context makes me read through the poverty prevalence in our country in this brief column.

It is obvious that both the economists did not visit even a single village during the last five years. There has been increasing monetization both through the subsidies that the governments doled out and the five windows of elections – to the panchayats (local bodies), cooperatives and the General Elections as also mid-term elections to the State and Central legislatures. Private monetization is more than the public monetization.

NCAER – CMER study commissioned by Financial Express in 2010 (FE dated 30th June 2012) says: “The study finds that around a fourth of urban BPL households own a two-wheeler, a third own a colour TV and almost two-thirds a pressure cooker. Findings from rural India also throw stereotypes into the waste basket, with every one in ten BPL persons having a two-wheeler, every fifth BPL village kitchen having a pressure cooker and around 6% owning a colour TV. There is also interesting and upbeat news on the education and employment front. Almost one in five urban BPL households has at least one well-educated—graduate or above!—member and over 13% of them are led by a salaried chief wage earner (CWE). Only under a tenth of rural BPL households have an illiterate CWE. While these findings throw established formulas into a spin, others are along expected lines.” The position in 2013 has only improved and not deteriorated.

‘Poverty, politics and patronisation go together. Most villages do not suffer the agony of starvation or hunger. Most houses have electricity; most villagers have mobiles in their hands and those that have Business Correspondents even have cash in their hands. Statistics hide more than they reveal and more so that of the Planning Commission. Whatever are the measurement criteria that either the Planning Commission or some other agency adopts, quality of life in villages improved. Urban slums today are after the bottled water and are not content with the corporation water carriers.

While the Expert Committee (Dr Rangarajan – Chair) estimated a huge requirement of food subsidy to provide food security at the current level, the Costs and Agricultural Prices Commission estimated the food bill at an expenditure of Rs.6.8trillion the first three years of launching the scheme, with Rs.2.4trillion in the first year itself. This would take the fiscal deficit to the unsustainable level of 6.7% of the GDP during the current year surpassing the 1993-94 level. States have little inclination and capacity to support the food bill – particularly in States where poverty level even as per the suspect estimates is higher than the national average like Bihar, Orissa, Eastern UP and also in tribal tracts of the country. The States do not want to accept the poverty decline now announced by the Planning Commission, for their share in central resources would go down. Food Security Ordinance waiting to pass through both the Houses that ignores the requirements of millets, an essential ingredient to fight malnutrition, has no prospect to succeed in the current formula pattern, no matter how debasing the fight between the two world renowned economists reaches. It is a Good Governance action that enables reach of the poor to good health and good education at affordable cost far superior and better than the present that is the need of the hour. It is a resolve to fight endemic delays in implementation of well-intentioned schemes to reach at the lowest administrative cost that is very much required.
Published on Business Advisor , Digital Journal dated 10th August 2013.