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LATEST NEWS UPDATES | Poverty haunts India's economic miracle

Poverty haunts India's economic miracle

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published Published on Jul 18, 2010   modified Modified on Jul 18, 2010


When flames from an open cooking fire raced through Fida Hussein's shack in northern India, it was a disaster for him and his poverty-stricken family.

"We have nothing," said Hussein as he stood in the ruins of his hut through which the sky could be seen between the burnt roof timbers in a remote corner of Uttar Pradesh, India's most populous state.

India's number of millionaires grew by 51 percent to 126,700 in 2009, according to US investment bank Merrill Lynch and consultants Capgemini, boosted by a buoyant economy which grew 8.6 percent in the last fiscal quarter.

But increasing wealth has not trickled down to the likes of 40-year-old Hussein, a landless labourer whose seamed face is prematurely aged, and his family of six children who have no toys, books or other possessions.

"We have no clothes, no furniture," he said, gesturing to what remained of his burned out shack which he had roughly patched up with plastic bags.

"We have only one quilt -- eight of us sleep under it in winter," he said, as his children played in the dirt yard outside the hut. "But there's no use in crying -- no one hears us," he added.

Like the more than 400 million Indians who have no electricity, Hussein's home has has no lighting and there is no running water in the huts in his village, which lies 60 kilometres (40 miles) from the state capital Lucknow.

In 1947, in his midnight independence address, India's first prime minister, Jawaharlal Nehru, called for "the ending of poverty and ignorance and disease and inequality of opportunity."

It's an end that still seems a long way off.

JUMP IN NUMBER OF INDIANS BELOW POVERTY LINE

In April, the Planning Commission, India's premier economic policymaking body, raised its estimate of the number of Indians living in poverty -- unable to meet their nutritional needs -- from 28 percent to 37 percent, which is roughly 440 million of the 1.2 billion population.

A new international Mulitple Poverty Index, developed at Oxford University and measuring a wide range of household-level deprivation, suggests that more people are mired in poverty in just eight Indian states than in the 26 poorest African countries.

"There are two categories growing in the 'Rising India'... the super rich, and the abysmally poor," noted newspaper editor M.J. Akbar in a recent column.

The left-of-centre Congress government was re-elected on a pro-poor platform that promised to do something for its main support base in India's rural hinterlands.

During its first term, it increased social spending, raising health and education budgets and launched a huge public works program -- the National Rural Employment Guarantee Act -- and a big loan repayment waiver for farmers.

But Hussein, who does work for local farmers, says he has not managed to obtain a card needed to work in the jobs scheme. Others in the area complain that they only get a few days work with the programme.

Former premier Rajiv Gandhi once said only 15 percent of development money gets to its intended targets. While things have improved, there is still a lot of "leakage" from poverty programmes.

The government will spend at least 250 billion dollars on services for the poor in the next five years but a recent report by investment house CLSA Asia Pacific Markets estimated more than 100 billion dollars would be skimmed off.

"There's personal gain going on at public cost where people who are supposed to look after the interests of the people accumulate large sums," Anupama Jha, executive director of Transparency International India, said.

Corruption, she said, is rife -- percolating through government, the private sector, the police and the judiciary.

"There are signs of deterioration in behaviour where people who have access to money do not feel accountable to the people they represent," Jha said.

"The poor are not spared even in the case of targeted programmes" and are often obliged to pay bribes to take advantage of public services, according to a recent study by the group.

STUCK IN MONEYLENDER TRAP

Hardwari Lal, a labourer who has three children and whose wife is expecting a fourth, says he also has not received the card needed to get work.

Lal, 32, owes a moneylender who is charging five percent interest a month on a 7,000 rupee (150-dollar) loan he took out for his son's hospital bill.

"There is only so much I can do," he said, adding he has no way of feeding his family properly as he can barely keep up with the interest payments let alone make a dent in the principal.

"So many poor villagers are caught up in this cycle of poverty where they get into difficulty and go to a moneylender," said local development worker Vikrant Kumar.

As part of its anti-poverty drive, the government is drafting a Right to Food Act which calls for a government-subsidized minimum of 25 kilograms (55 pounds) of wheat and rice a month for households below the poverty line.

Hussain feeds his six children two meals a day -- potatoes and wheat chapatis or flat bread -- and eats one meal a day himself. Dal, the mainstay of Indian diets because of its high protein, is too expensive, he says.

Malnutrition among under-fives in India stands at 43.5 percent -- worse than sub-Saharan Africa -- and only nine percentage points less than when India's "economic miracle" began in 1991.

During the same period, India's gross domestic product per capita has jumped 50-fold.

"We have gone from being a food deficit country to a food surplus country, which is a big achievement, but there's a lot to be done in terms of getting the food to people who need it," said Indian political author Ajoy Bose.

"You look slightly stupid in claiming to be a major power or even a modern progressive state if you haven't done the very elementary basics for your marginalised population," Bose said.

Mountains of grain and vegetables still rot each year due to poor storage and distribution.

The immense gap between poor and rich has been pointed to by numerous commentators as a factor fuelling a growing Maoist insurgency that has spread across a large swathe of the country and is at its strongest in remote, impoverished regions.

"It is not just poverty that is increasing, it also the inequality," said senior Indian communist leader Brinda Karat.

The government insists it needs double-digit growth to eradicate poverty, but New Delhi-based food and trade policy analyst Devinder Sharma argues that effective distribution of wealth is the real key.

"We are already on a growth trajectory, but people are getting poorer. Eradicating poverty is not woven into growth," he said.

The Economic Times, 18 July, 2010, http://economictimes.indiatimes.com/news/economy/indicators/Poverty-haunts-Indias-economic-miracle/articleshow/6183209.cms


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