Filling bellies, mythically

Our record of poverty reduction has been as substantive as it has been full of startling surprises. The first half-century of the 20th Century saw growth crawl at one per cent or less. The historian Bipan Chandra cites three authorities who have studied the subject for the period 1914-1946: the highest estimate is that of Sivasubramanian who puts it at 1.22 per cent, followed by Heston at 1.08 per cent, and Maddison at a low of 0.73 per cent. On a per capita basis, income growth was at best a quarter of one per cent; at worst, according to Maddison, per capita income actually declined by a quarter of one per cent every year. Per capita foodgrains output, as estimated by Bagchi, fell by an average of nearly half a per cent every year in the 30 years from 1911 to 1941; Blyn believes the decline was sharper, some 1.14 per cent per annum.

To have retrieved the country from this deepening abyss has been a significant achievement — and the answer to those ignoramuses who ask, “Pachaas saal mein thum logon ne ky kiya?” In what may broadly be called the Nehruvian period (mid-sixties), the economy was pulled up by the highest factor in growth rates we have seen in several centuries. Yet, the poverty ratio through that period did not change significantly. Population growth was swallowing up economic growth, with the result that while the absolute number of poor rising above the poverty line was palpably going up, the share of the population below the poverty line (BPL) remained more or less where it had been at Independence. Then came the next quarter century, broadly the Indira-Rajiv period (mid-sixties to the end of the eighties) — the years of garibi hatao — during which the average annual rate of growth was pulled up from the 3.5 per cent `Hindu’ rate to almost 6 per cent; and pulled up literally by the boot-straps in thesense that for the first time since the high noon of the Mughal Empire, the BPL share of the population actually tumbled — from over half the population to about a third.

With regard to the first decade of reforms — the nineties — while the statistical jury is still out on poverty and reforms, our most well-known statistician of poverty, Gaurav Datt, has this tentative finding to offer (EPW, December 11, 1999): “The 1990s appears to have been a wasted decade as far as poverty reduction is concerned”. Nagaraj argues that the jump in trend growth rates pre-dates reforms by a decade; there has been no increase in the trend rate of growth in the nineties compared to the eighties (a point this column has been hammering away since Yashwant Sinha’s annual Economic Survey came out at the start of the Budget session) and, therefore, reforms in themselves cannot be credited with whatever rise in growth rates has occurred. More disturbingly, the spasmodic jump to the plus 7 per cent growth path we saw in the last two years of Manmohan Singh and the first year of Chidambaram does not appear to have impacted pari passu on the poverty ratio; on the contrary, rural povertyreduction has tapered off, perhaps even stagnated through the nineties.

Most disturbing of all, the dramatic post-reforms rise in procurement prices to stimulate output, and the fine-tuning of the public distribution system by successive civil supplies ministers, has done little or nothing to improve nutritional standards for the poor. So little does this bother the establishment — ranging from CII President Arun Bharatram to Prime Minister Vajpayee, in that order — that the issue does not figure at all in the agenda being drawn up for meetings with the business chiefs in New York and the Big Chief in Washington.

The country’s most enlightened rural development minister, M.Y. Ghorpade of the Congress government in Karnataka, has shown one way towards an answer. They have de-recognised 65 lakh old bogus ration cards and issued fresh `yellow’ cards to about 30 lakh really poor BPL families which will entitle them to 10 kg foodgrains at pre-Budget PFDS prices and an additional 10 kg at union food minister Shanta Kumar’s enhanced rate. Shanta Kumar thinks that by doubling prices but doubling quantities, he is going to fill the bellies of the poor. This is a dangerous statistical illusion — not unless the poor have the purchasing power can mythical quantities be purchased. They do not have the needed purchasing power. Their income is seasonal; their food security needs permanent.

Digvijay Singh of Madhya Pradesh has come up with a fascinating proposition: let grain banks be established in every village panchayat, run by the local community in full view of the gram sabha; then let the poor borrow grain from the village grain bank in the lean season when they are without work and pay back the grain in the season when they have a spot of surplus resources. And where work cannot be had even in the agricultural season, bring in a foodgrains-based employment guarantee schemes that will put the foodgrains rotting in FCI godowns to productive cycling. There can be no better way of ending the obscenity of nutrition standards plummeting while food stocks burgeon.