Opinion Castes of mind

When you go a bit deeper,the discrimination gives way to a more sobering analysis where factors like education,location and job-type matter more than just caste — a Hindu upper-caste household’s annual income goes up from Rs 27,650 when the head of the household is illiterate to Rs 135,535 when he’s a graduate; Muslims in Uttar Pradesh had an annual household income of Rs 53,351 in 2004-05 versus Rs 60,645 for all-India; SC/STs in Uttar Pradesh had an income of Rs 39,713 versus Rs 43,314 for all-India; for Hindus in general it was Rs 60,630 in UP versus Rs 64,413 all-India.

Between 1993-94 and 2004-05,when the economy was growing at a more sedate pace,poverty levels for Hindus and Muslims fell by 2.1 per cent a year — in the case of Muslims,the fall in rural poverty was higher. Between 2004-05 and 2009-10,the good news is that with the economy accelerating dramatically,the rate of poverty decline more than doubled,from 2.1 per cent in the 1993-94 to 2004-05 period to 4.3 per cent in the 2004-05 to 2009-10 period — in this period,poverty levels for Hindus fell 3.9 per cent per annum versus 5.8 per cent for Muslims,a simple factor called catch-up where less well-off groups (even countries,like India) catch up faster with the better off (Table 2).

For STs,the annual fall in poverty levels accelerated from 1.1 per cent between 1993-04 and 2004-05 to 5.1 per cent between 2005-05 and 2009-10; for SCs,the fall accelerated from 2 per cent to 4 per cent.

Clearly,the decline in poverty levels is related to the kind of work various groups do — the fall in poverty levels for farm labour,for instance,accelerated from 1.7 per cent between 1993-94 and 2004-05 to 4.3 per cent between 2004-05 and 2009-10. In the case of ST farm labour,the change accelerated from 0.6 per cent to 4.1 per cent which is what ensured rural poverty levels for STs fell the fastest. In the case of the self-employed in urban areas,where a lot of Muslims are,the acceleration in poverty levels is the lowest (while it accelerated from 2.1 per cent in the first period to 3.7 per cent in the second period for the entire category of self-employed in urban areas,the acceleration was only from 1.6 per cent to 1.8 per cent in the case of Muslim self-employed in urban areas. In other words,instead of across-the-board reservation,Thorat and Dubey argue,it makes more sense to tailor policies aimed at sub-groups.

Which takes us to the Dehejia and Panagariya study that focuses on entrepreneurship in the services sector among the socially disadvantaged. They use NSS data,the 2001-02 and 2006-07 surveys on service sector enterprises. Sadly,the data set is restricted to proprietary and partnership enterprises (there in nothing on corporate enterprise) but the data sets represent roughly a fourth of GDP and a tenth of the labour force — so it’s not perfect,but it’s a good start.

Dehejia and Panagariya begin by pointing out that not even one of the 55 Indian billionaires in the latest Forbes list is either an SC or an ST,yet they find that the picture is not as bleak as you’d expect. SCs,for instance,are 19 per cent of the population and they own 16 per cent of the enterprises in the service sector proprietary/partnership universe — when it comes to Gross Value Added,however,their share is a lower 8.5 per cent,suggesting the productivity of such enterprises is very low. This is where the inter-linkages Ratan Tata spoke of at the Dalit fair become important — blind reservation for SCs is of little help,but if large corporates start buying from them and helping them upgrade,as Tata suggested,the results will be more effective.

In the case of STs,the picture is depressing — they are 8.1 per cent of the population,just 2.3 per cent of the Gross Value Added and 3.5 per cent of the number of enterprises. OBCs,as is to be expected,are the average Indian — 41.2 per cent of the population,41.6 per cent of enterprises and 36.9 per cent of the Gross Value Added. Interestingly,Dehejia and Panagariya point out,in their sample base,the most important competition for SC entrepreneurs is not from forward castes but OBCs. The largest growth,in terms of Gross Value Added,between 2001-02 and 2006-07,has been by STs (82 per cent),followed by OBCs (46 per cent) and then SCs (26 per cent).

As for the help given by government schemes,Dehejia/Panagariya cite a recent Planning Commission meeting with 30 Dalit crorepatis. Milind Kamble,the head of the Dalit Indian Chamber of Commerce and Industry,spoke of how globalisation and the weakening of the licence-permit-raj helped Dalits seize opportunities. When asked about government schemes,only one of the 30 said he had used them — he had “ applied for $20,000,spent three years visiting government offices to chase his money and finally got $15,000”. Ratan Tata versus Manmohan Singh,you know which works better.

The writer is opinion editor,‘The Financial Express’ sunil.jain@expressindia.com