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Monday, July 02, 2001

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Why are we still poor?

By Bhanu Pratap Singh

SOMETIME BACK, the Government of India had announced that there had been a 10 per cent decline in the incidence of poverty in the country from about 36 per cent in 1993-94 to 26 per cent in 1999- 2000. No informed person could believe it, because all the available circumstantial evidence points in the opposite direction. The growth rate of agriculture, the main source of income of nearly two-thirds of the population, stood reduced during the 1990s to less than half of what it was during the 1980s.

The Planning Commission in its mid-term appraisal of the Ninth Five-Year Plan had stated: ``In the 1990s, the growth rate in availability of foodgrains per capita has come down to (-) 0.28 per cent per annum, as compared to a growth rate in per capita availability of (+) 1.20 per cent per annum during the 1980s. The food consumption of the poor in India has gone down in the last 10 years.''

The decline in agricultural growth is now sought to be explained on grounds of certain aberrations in the 2000 monsoon. Though last year the country as a whole had received 92 per cent of the normal rainfall, certain districts had suffered a deficient. But such minor deficiencies cannot be blamed for the sharp decline in agricultural growth. The reality is that there had been a sharp decline in capital formation in the farm sector. What needs to be noted is that it is the Government which has defaulted most in contributing its share.

Yet another bleak feature has been the sharp decline in employment generation in the country. It has been reported, ``Against the growth rate of job-seekers of 2.3 per cent per annum, the rate of job creation has dropped from 2.1 per cent in the 1980s to a mere 0.8 per cent in the 1990s. So far as the private sector is concerned, while jobs grew at an unprecedented rate of 3.1 per cent per annum in the brief golden years from 1994 to 1997, the rate of job growth has fallen to a miserable 0.11 per cent in 2000-2001. Since the public sector is now effectively bankrupt, and is creating no more jobs, it is hardly surprising that the rate of job creation in the last three years has been below 0.5 per cent per annum.''

In modern times, the prosperity of any country does not depend so much on natural circumstances, as on policies pursued by its Government. India is very richly endowed by nature in agricultural production, and yet it has the largest number of undernourished people in the world. Our undernourishment is not due to our huge population. On per capita basis, area under cereals in China is 29 per cent less than in India; yet its per capita availability of foodgrains is 50 per cent more than ours.

The main cause for poverty in India is our outdated low-yielding agriculture. Though politicians are never tired of extolling the achievements of the ``green revolution,'' the reality is that production per hectare of cereals in India is no more than three- fourths the world average. This low productivity is not due to nature's niggardliness. In fact, nature has been very bountiful. Arable land in India is 51 per cent of the total area, whereas this percentage in the world, as a whole, is only about 11. We already have the largest irrigated area in the world, which can be further extended. Our climate too being moderate throughout the year, we can grow two to three crops in a year, whereas in most parts of the world, due to severe winters, only one crop can be grown in a year. In spite of these natural advantages, because of our low productivity, we are still only a marginal case in food self-sufficiency. Our average per capita annual availability of cereals - even after the ``green revolution'' - is less than two-thirds of the world average.

The small size of holdings is not an impediment in achieving higher productivity. Japan, South Korea, China and Taiwan are all countries of small holdings; yet their productivities are more than double that of India. Field trials conducted throughout the country over a long period of time have amply demonstrated that at the level of our currently available agricultural technology, yields of nearly all crops in India can be more than doubled. If we are able to increase our productivity even by 50 per cent, we can emerge as the largest exporter of farm products and earn several times more foreign exchange. If we can increase agricultural productivity, rural poverty will certainly be reduced.

It is, in fact, the niggardliness and the exploitative attitude of our policy-makers towards farmers which are responsible for the poor productivity. The niggardliness of our policy-makers is evident from the drastic cut in Plan expenditure on agriculture and allied activities, rural development and irrigation from 37 per cent of the total Plan expenditure during the First Plan, to less than 20 per cent during the Ninth Plan. The exploitative attitude of our policy-makers is evident from the fact that during the last 30 years, the terms of trade, as reported by the Commission on Agricultural Costs and Prices, have always been adverse to farmers. They have been paying more for their purchases than what they have been getting for their produce. This has not been due to natural causes, but because of various controls and restrictions imposed on the trade of farm products. The hypocrisy of our present-day rulers is evident from the fact that while they are loudly advocating globalisation of trade, they have not yet lifted all the controls and restrictions on domestic trade of farm produce. This has resulted in poor profits, savings, and capital formation in the farm sector which in turn have now resulted in a sharp decline in the growth rate of agriculture.

Yet another reason for widespread poverty in our country is the lack of good education, which improves work efficiency, opens new avenues of employment, reduces population growth, promotes social justice, inhibits fanaticism, and stabilises democracy. Realising the essential need of education for national progress, it was laid down in the Constitution that within 10 years of its coming into effect it shall be the duty of the State to make education free and compulsory for all children between the ages of 6 and 14. How indifferent our politicians are towards education is evident from the fact that they have not implemented this directive even 50 years after its adoption.

Before rejoicing over the recently-released figures of literacy rate in the country, one should ascertain what literacy really means in India. If it means only ability to scribble one's signature, India can achieve cent per cent literacy within a fortnight because one can be trained to sign within a few days. The minimum qualification for a literate person should be the ability to read at least the headlines in newspapers, write brief letters of applications, and solve simple arithmetical questions. If one does not have these minimum qualifications, of what use is the ability to sign. In most parts of northern and central India, rural education has become a farce.

The total allocations by the Union and State Governments for education had declined from 4.34 per cent of the GDP in 1990-91 to 3.35 in 1997-98. The figure of 3.35 per cent compares very unfavourably with the global average of 5.2 per cent of the GDP. Poor allocation of funds for primary schools has resulted in great shortage of teachers in primary schools, which in turn has resulted in an ever increasing pupil-teacher ratio in primary schools. One should not forget that good education is the starting point of all progress.

Our policy-makers should also keep in mind that no country can make steady progress unless all sectors of its economy move ahead at the same speed, like an infantry division. If only service and industry sectors are enabled to move ahead at a faster rate, leaving the farm sector behind, those will also soon get stranded for want of support from below. This has already happened in India, where for want of purchasing power among farmers, demand for industrial goods has slackened, and industries are stagnating.

(The writer is a former Union Minister.)

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