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Poor Mumbai | Source
5. Unequal Distribution of Wealth
India happens to be a rich country inhabited by very poor people. – Dr Manmohan Singh
Unfortunately, since departure of the colonial British in 1947 all economic development has taken place in the cities, while the majority of the population lives in the countryside. Thus, the rural India has always remained neglected. Another peculiarity is the land holding pattern in India: most land has traditionally been under the control of a few landlords, leaving the vast majority landless. The "Zamindari system” of lopsided land ownership has ancient origin but given a boost during the British rule. Handful zamindars became legal owners of vast tracts of land and all others had to work for them to survive. This rent seeking exploitative system has since kept a vast majority of people in the rural India poor. Land reforms were debated noisily after independence but implementation lacked honest political will, despite the famous "Bhoodan Andolan" of Vinoba Bhave. Unfortunately, land reforms are no more an issue of public debates at present. All talks of poverty removal appear to center only around economic reforms, imitating the unsuitable Western capitalism.
The corporate world has social responsibility to work to remove poverty.
Poor Children Sharing Meal | Source
What do you think?
Other than income, what is the most effective anti-poverty measure?
6. Faulty Economic Reforms
The so called economic liberalization and market reforms started in the 1990s are nothing but an attempt to replicate the Western capitalism that promotes "trickle down" economy. It serves to make the rich richer and expand the economy. India has become more unequal in recent years. In early 1990s, there were just 2 billionaires; now there are 97 billionaires, in a country of 1.25 billion people. The rich elites are also controlling more wealth, their share increased from 1.8 percent in 2003 to 26 percent in 2008. Today, they are still richer and much more powerful.
Experts suggest that if India could freeze its rising inequality, by 2019 around 90 million people could come out of extreme poverty. Reducing inequality by 10 points in Gini coefficient (equivalent of a 36 percent reduction) could further lift up another 83 million poor people.
The push to urbanization is meant to uproot the poor from their rural roots and turn them into “cheap labor resource” for businesses in the town. In the cities they would live in large slums, exploited both by the mafia and employers, devoid of human dignity and livelihood security.
Given the huge population and poverty, India needs an "employment centric" economy – millions of micro, small and medium business units. Only they can employ the unskilled or low skilled people from the vast pool of the poor.
Large high-tech industrial units don't generate too many jobs and whatever jobs they create is suitable for those who are already well off. According to the NSSO survey, the size of India's workforce is around 450 million. Of which only about 30 million work in the formal or organized sector. The government recognizes only about 70 million as unemployed or underemployed. Thus, there are 350 million unrecognized by the government as unemployed. Government surveys list them as "self employed" but they barely survive and live chronically in poverty. Who are these "self employed" people, more in numbers than the population of United States, and how do they survive?
They milk the cows, become seasonal farm workers, run small shops or sell on the roadsides, make incense sticks, match sticks and bidis, drive manual or auto rickshaws, work as domestic help, work as unaccounted contract workers on daily wages, work as gardeners and watchmen, or work as plumbers, carpenters or shoe repairers and so on. They have no safety net such as pension or healthcare benefits enjoyed by the regular employees and hence, are the most vulnerable. They are also the first victim of natural calamities, now becoming more frequent due to climatic disorder. [The poor are always the first victims of climatic disasters. Of course, nothing changes for better after their death-toll makes headline news.]
Jobless Economic Growth
The Indian economy created fewer than 3 million job between 2005 and 2010 !! Considering population growth of 18 million every year, around 10 million new jobs are needed per year!!! The current "follow West" economists of India haven't the slightest idea about what type of economic reforms India and its poor people really need. Their thinking stops at inviting "foreign direct investments" and vision fails to go beyond air conditioned corporate houses of the rich and wealthy.
India Needs “Social Capitalism”
India must reject the Western capitalism model; it needs a “Social Capitalism” that solves India’s problems. It should follow twin goals: ‘maximizing employment’ – given its huge population and poverty – and ‘maximizing social good’. This involves shifting away from the ‘shareholder’ to ‘stakeholder’ capitalism by incorporating interests of other stakeholders: employees, society, customers, and environment. Then finally encouraging what nobel winner Bangladeshi economist calls “social businesses” which operate to maximize chosen social goals while keeping the business profitable.
In fact, India needs development beyond GDP growth. Here is a 5 Point Real Development Plan for India.
7. Corruption
Corruption and leakages in government schemes are widespread in India. Late Prime Minister Rajeev Gandhi had famously admitted that only about 15% money actually reaches the ultimate beneficiaries. Even if we discard this figure as highly pessimistic and assume that say 30-35% of the welfare funds actually reach the designated beneficiaries, the rest is siphoned off by people connected to the implementing government machinery. This is a common way for the people with “high connections” to acquire wealth – of course at the cost of the poor who generally have no voice or ability to assert. Another common form of corruption in schemes designed for the poor is inclusion of non-poor people with political connections in the list of beneficiaries. The end result is that the eligible poor are denied the benefits.
The scale of corruption has steadily increased since the economic reforms were started. In 1992, when market reforms just started Harshad Mehta led stock market scam was estimated at 750 crores; it was mind boggling figure then. Now even the CAG estimate of 1,86,000 crore coal scam proves to be an understatement! Shall we see it as a sign of progress!
ow India was "colonized" is reflected in this "brilliant" thinking of a British Official
Photograph by W.W. Hooper, a Colonel in British army | Source
8. The Colonial Rule
"A significant fact which stands out is that those parts of India which have been longest under British rule are the poorest today." – Jawaharlal Nehru, First Prime Minister of India
The colonial British rule laid the foundation for a long term and chronic poverty in India after they departed. This is what Nehru is saying above using different set of words. The tiny state of Kerala in the southern India fortunately saw the least damaging influence of the British exploiters (there are many reasons for that) and is at present a unique model (in the world) of improvement in the quality of life through social and human development alone. It is something unthinkable for a Western brain which has been taught to see economic growth alone as "development."
It was the traditional historic prosperity of India that attracted invaders from various parts of the world in the last 2000 years. Prior to the British, India had been ruled by the foreigners like the Kushanas, Turko-Afghans and Mughals. All of them gradually got assimilated into the Indian society and culture. They not only became absorbed in India but also protected and promoted Indian society, culture and economy. None of them systematically drained India’s wealth or resources to make another country prosperous. Revenue collected or wealth acquired by them was spent within India. Whether spent on the public or for personal luxury of the ruling elite, the wealth remained within the country. Thus, India remained prosperous even in the Mughal era until the East India Company started acquiring "diwani" (right to collect revenue) around 1760. It was the beginning of the legal "loot." The colonial rule was all about robbing India to enrich Britain; other unfortunate colonized States were also bled to make Britain prosperous.
The Battle of Plasssey in June 1757 marked the beginning of British dominance (and also the beginning of end of the Mughal Empire): when a small force of the East India Company's professional troops, defeated and killed the ruling Nawab of Bengal, Siraju-ud-daula. The outcome of the battle marked a significant turning point in the history of Indian subcontinent. It allowed the English East India Company foothold on the Indian soil, from which to undertake its future expansionist ventures within and around India. Soon, after the Battle of Buxar it acquired the "diwani" in Bengal and in 1765 its rights expanded to Bihar and Orissa.
Unlike their predecessors the British, however, consciously remained in India as foreign occupiers until their departure in 1947. They remained isolated from the Indian society and culture and formed a separate class of their own within India. The only reason for their presence in India (and in other occupied regions) was to secure raw materials for British industries and other goods for the comforts of their citizens. The vast population in India also provided market for goods manufactured back home. They subordinated Indian economy to the British trade and industry. Their economic policies actively favored non-Indians or made things difficult for Indian businessmen. As occupiers, they used Indian wealth to pay for all their expansionist ventures and territory building both inside and outside India.
Moreover, the British policies forcibly disbanded community grain banks and promoted replacement of food crops for local consumption to cash crops like cotton, opium, tea and grains for export to feed the animals in England. This change in the cropping pattern left Indian farmers vulnerable to famines. There are documentary evidence to suggest the colonial rulers chose to ignore the famine affected people. It is estimated that during the two centuries of colonial rule, famines and the resulting epidemics caused over 30 million deaths. The most recent Bengal Famine of 1943-44 led to about 1.5 million deaths from starvation; 3.5 million if deaths from epidemics are also included.
In his masterpiece "Poverty and un-British Rule in India" Dadabhai Naoroji(popularly labelled as "The Grand Old Man of India" and "The Father of Indian Nationalism") also categorically blamed "the drain of wealth" for the poverty in India.
Conclusion
As oppose to the Western capitalism India needs a comprehensive “development” plan in order to really crush widespread poverty. 1. It needs an economy that supports millions of small and medium enterprises; it will be suitable to employ low skilled poor people. 2. Focus on good governance to root out deep rooted corruption that eats away major chunk of the welfare budget. 3. Finally, promote women empowerment through education and healthcare; it will greatly help deal with poverty fed by the population growth.
5. Unequal Distribution of Wealth
India happens to be a rich country inhabited by very poor people. – Dr Manmohan Singh
Unfortunately, since departure of the colonial British in 1947 all economic development has taken place in the cities, while the majority of the population lives in the countryside. Thus, the rural India has always remained neglected. Another peculiarity is the land holding pattern in India: most land has traditionally been under the control of a few landlords, leaving the vast majority landless. The "Zamindari system” of lopsided land ownership has ancient origin but given a boost during the British rule. Handful zamindars became legal owners of vast tracts of land and all others had to work for them to survive. This rent seeking exploitative system has since kept a vast majority of people in the rural India poor. Land reforms were debated noisily after independence but implementation lacked honest political will, despite the famous "Bhoodan Andolan" of Vinoba Bhave. Unfortunately, land reforms are no more an issue of public debates at present. All talks of poverty removal appear to center only around economic reforms, imitating the unsuitable Western capitalism.
The corporate world has social responsibility to work to remove poverty.
Poor Children Sharing Meal | Source
What do you think?
Other than income, what is the most effective anti-poverty measure?
- Free Education
- Free Healthcare
- Free Food
- All of the above
6. Faulty Economic Reforms
The so called economic liberalization and market reforms started in the 1990s are nothing but an attempt to replicate the Western capitalism that promotes "trickle down" economy. It serves to make the rich richer and expand the economy. India has become more unequal in recent years. In early 1990s, there were just 2 billionaires; now there are 97 billionaires, in a country of 1.25 billion people. The rich elites are also controlling more wealth, their share increased from 1.8 percent in 2003 to 26 percent in 2008. Today, they are still richer and much more powerful.
Experts suggest that if India could freeze its rising inequality, by 2019 around 90 million people could come out of extreme poverty. Reducing inequality by 10 points in Gini coefficient (equivalent of a 36 percent reduction) could further lift up another 83 million poor people.
The push to urbanization is meant to uproot the poor from their rural roots and turn them into “cheap labor resource” for businesses in the town. In the cities they would live in large slums, exploited both by the mafia and employers, devoid of human dignity and livelihood security.
Given the huge population and poverty, India needs an "employment centric" economy – millions of micro, small and medium business units. Only they can employ the unskilled or low skilled people from the vast pool of the poor.
Large high-tech industrial units don't generate too many jobs and whatever jobs they create is suitable for those who are already well off. According to the NSSO survey, the size of India's workforce is around 450 million. Of which only about 30 million work in the formal or organized sector. The government recognizes only about 70 million as unemployed or underemployed. Thus, there are 350 million unrecognized by the government as unemployed. Government surveys list them as "self employed" but they barely survive and live chronically in poverty. Who are these "self employed" people, more in numbers than the population of United States, and how do they survive?
They milk the cows, become seasonal farm workers, run small shops or sell on the roadsides, make incense sticks, match sticks and bidis, drive manual or auto rickshaws, work as domestic help, work as unaccounted contract workers on daily wages, work as gardeners and watchmen, or work as plumbers, carpenters or shoe repairers and so on. They have no safety net such as pension or healthcare benefits enjoyed by the regular employees and hence, are the most vulnerable. They are also the first victim of natural calamities, now becoming more frequent due to climatic disorder. [The poor are always the first victims of climatic disasters. Of course, nothing changes for better after their death-toll makes headline news.]
Jobless Economic Growth
The Indian economy created fewer than 3 million job between 2005 and 2010 !! Considering population growth of 18 million every year, around 10 million new jobs are needed per year!!! The current "follow West" economists of India haven't the slightest idea about what type of economic reforms India and its poor people really need. Their thinking stops at inviting "foreign direct investments" and vision fails to go beyond air conditioned corporate houses of the rich and wealthy.
India Needs “Social Capitalism”
India must reject the Western capitalism model; it needs a “Social Capitalism” that solves India’s problems. It should follow twin goals: ‘maximizing employment’ – given its huge population and poverty – and ‘maximizing social good’. This involves shifting away from the ‘shareholder’ to ‘stakeholder’ capitalism by incorporating interests of other stakeholders: employees, society, customers, and environment. Then finally encouraging what nobel winner Bangladeshi economist calls “social businesses” which operate to maximize chosen social goals while keeping the business profitable.
In fact, India needs development beyond GDP growth. Here is a 5 Point Real Development Plan for India.
7. Corruption
Corruption and leakages in government schemes are widespread in India. Late Prime Minister Rajeev Gandhi had famously admitted that only about 15% money actually reaches the ultimate beneficiaries. Even if we discard this figure as highly pessimistic and assume that say 30-35% of the welfare funds actually reach the designated beneficiaries, the rest is siphoned off by people connected to the implementing government machinery. This is a common way for the people with “high connections” to acquire wealth – of course at the cost of the poor who generally have no voice or ability to assert. Another common form of corruption in schemes designed for the poor is inclusion of non-poor people with political connections in the list of beneficiaries. The end result is that the eligible poor are denied the benefits.
The scale of corruption has steadily increased since the economic reforms were started. In 1992, when market reforms just started Harshad Mehta led stock market scam was estimated at 750 crores; it was mind boggling figure then. Now even the CAG estimate of 1,86,000 crore coal scam proves to be an understatement! Shall we see it as a sign of progress!
Photograph by W.W. Hooper, a Colonel in British army | Source
8. The Colonial Rule
"A significant fact which stands out is that those parts of India which have been longest under British rule are the poorest today." – Jawaharlal Nehru, First Prime Minister of India
The colonial British rule laid the foundation for a long term and chronic poverty in India after they departed. This is what Nehru is saying above using different set of words. The tiny state of Kerala in the southern India fortunately saw the least damaging influence of the British exploiters (there are many reasons for that) and is at present a unique model (in the world) of improvement in the quality of life through social and human development alone. It is something unthinkable for a Western brain which has been taught to see economic growth alone as "development."
It was the traditional historic prosperity of India that attracted invaders from various parts of the world in the last 2000 years. Prior to the British, India had been ruled by the foreigners like the Kushanas, Turko-Afghans and Mughals. All of them gradually got assimilated into the Indian society and culture. They not only became absorbed in India but also protected and promoted Indian society, culture and economy. None of them systematically drained India’s wealth or resources to make another country prosperous. Revenue collected or wealth acquired by them was spent within India. Whether spent on the public or for personal luxury of the ruling elite, the wealth remained within the country. Thus, India remained prosperous even in the Mughal era until the East India Company started acquiring "diwani" (right to collect revenue) around 1760. It was the beginning of the legal "loot." The colonial rule was all about robbing India to enrich Britain; other unfortunate colonized States were also bled to make Britain prosperous.
The Battle of Plasssey in June 1757 marked the beginning of British dominance (and also the beginning of end of the Mughal Empire): when a small force of the East India Company's professional troops, defeated and killed the ruling Nawab of Bengal, Siraju-ud-daula. The outcome of the battle marked a significant turning point in the history of Indian subcontinent. It allowed the English East India Company foothold on the Indian soil, from which to undertake its future expansionist ventures within and around India. Soon, after the Battle of Buxar it acquired the "diwani" in Bengal and in 1765 its rights expanded to Bihar and Orissa.
Unlike their predecessors the British, however, consciously remained in India as foreign occupiers until their departure in 1947. They remained isolated from the Indian society and culture and formed a separate class of their own within India. The only reason for their presence in India (and in other occupied regions) was to secure raw materials for British industries and other goods for the comforts of their citizens. The vast population in India also provided market for goods manufactured back home. They subordinated Indian economy to the British trade and industry. Their economic policies actively favored non-Indians or made things difficult for Indian businessmen. As occupiers, they used Indian wealth to pay for all their expansionist ventures and territory building both inside and outside India.
Moreover, the British policies forcibly disbanded community grain banks and promoted replacement of food crops for local consumption to cash crops like cotton, opium, tea and grains for export to feed the animals in England. This change in the cropping pattern left Indian farmers vulnerable to famines. There are documentary evidence to suggest the colonial rulers chose to ignore the famine affected people. It is estimated that during the two centuries of colonial rule, famines and the resulting epidemics caused over 30 million deaths. The most recent Bengal Famine of 1943-44 led to about 1.5 million deaths from starvation; 3.5 million if deaths from epidemics are also included.
In his masterpiece "Poverty and un-British Rule in India" Dadabhai Naoroji(popularly labelled as "The Grand Old Man of India" and "The Father of Indian Nationalism") also categorically blamed "the drain of wealth" for the poverty in India.
Conclusion
As oppose to the Western capitalism India needs a comprehensive “development” plan in order to really crush widespread poverty. 1. It needs an economy that supports millions of small and medium enterprises; it will be suitable to employ low skilled poor people. 2. Focus on good governance to root out deep rooted corruption that eats away major chunk of the welfare budget. 3. Finally, promote women empowerment through education and healthcare; it will greatly help deal with poverty fed by the population growth.
