Poverty and Destitution:-
There is a difference between poverty and destitution, or what I call pauperism. In poverty, it is difficult to make ends meet. You somehow cope, do your level best to add to your income. In destitution, you are simply unable to cope.
Excerpts from the interview of Jan Breman :-
Where is the need for terms such as ‘pauper’ and ‘pauperism’ as analytical categories, when we already have ‘poverty’?
There is a difference between poverty and destitution, or what I call pauperism. In poverty, it is difficult to make ends meet. You somehow cope, do your level best to add to your income. So you also have your wife and children working along. In destitution, you are simply unable to cope. You are so utterly poor that it is difficult to even survive. And if you survive, you need outside support. Unfortunately, the poverty debate in India has more or less been appropriated by economists. So we look at income or consumption or employment levels, and not at the social or political dimension of poverty. A category such as ‘pauperism’ is needed to capture these non-economic aspects as well.
You argue in your book that India’s poverty line is a destitution line. Are you saying that those below poverty line in India are not poor but destitute?
Not all but a good number are. According to the National Commission for Enterprises in the Unorganised Sector (NCEUS), the poverty line fixed by the Planning Commission is a joke: 76 per cent of the Indian population is living in poverty. If you have such a vast mass of poor, you have to differentiate between levels of poverty. Certainly a big number is close to the poverty line. But in my estimate, about 25 per cent of India’s poor are destitute, or paupers.
So from an economist’s perspective, do we need another line, below the poverty line, to identify the paupers?
The poverty line is a sort of magical construction. If you cross it, you are suddenly out of poverty. So the policy focus is always on those who are able to go past that threshold. As a result, there is absolutely no interest in those at the bottom, those way beneath the poverty line.
So who is a pauper, in sociological terms?
In the first place, the paupers are the non-labouring poor, those who have no earning capacity. They never had or have lost their labour power and therefore can’t make a living. These include the elderly, the disabled, the chronically ill, but also widows with small children, divorcees without any support from others. Basically, in order to survive in poverty, you need a household. You cannot manage on your own because the flow of income varies with the seasons. You need to pull the household together to bring in the income — this is why you have child labour in India, isn’t it? But paupers also include the labouring poor, especially those whose income and employment are erratic or seasonal.
But Indian economists don’t believe in terms like ‘pauper’.
That’s true. It was only Gandhi who wrote about paupers in an article published in Young India in 1928, when he was in south Gujarat. He argued that we cannot fight colonialism if we do not fight colonialism in our own society. He pointed out that paupers had been around in India for a long time. I use the term pauper to evoke the conditions in Victorian England, where the casual poor were driven out of the countryside to work in the mills during the industrial revolution. In the same way, the casual poor are being driven out of the countryside in 21st century India.
England amended its Poor Laws in 1834 to pauperise the rural labour and drive them to the cities. What is India doing to create an exodus from the countryside?
Your agrarian crisis. Agriculture is not able to provide livelihood for the land-poor and the landless classes, who have lived in the villages from time immemorial. So they are forced to leave the villages. But the city doesn’t want them either.
How can you say the city doesn’t want them? India is building a hundred smart cities. Who will live in them if not migrants?
Talk to policymakers, talk to municipal officials of any city. They will tell you they don’t want the poor around, that they are a burden on our modern, beautified, smart cities. The policy of the municipality in every Indian city has been to periodically evict the poor.They try desperately to find employment but are unable to establish themselves even in the slums. They hang around in the labour chowks, they become pavement dwellers because there is no shelter for them in the night. When weeks pass by without any work at all, they go back to the villages. I use the term ‘circular migration’ to describe this movement — from villages to cities and back to villages, in an endless cycle. This is widespread in Bihar, Andhra Pradesh, Rajasthan, Uttar Pradesh, Tamil Nadu. But you find it in every State.
Can the poor in India hope for inclusive citizenship?
Citizenship is about rights and obligations. It is about being able to make claims on the state, and at the moment this is a privilege afforded by a minority of the Indian population. Also, inclusive citizenship not only means offering employment (inclusion in economic terms) but also creating space for them in terms of housing, health, schooling, skilling, and inclusion in social terms — which means focussing on equality. But we don’t see pro-equality policies, only pro-inequality policies. The mindset of the Indian elite is: the poor are different from me and I don’t want them around.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.