Rural India under extreme poverty

By Anand Mishra
In Economy
August 11, 2015
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The first SECC in eighty odd years shows massive poverty

rural-poverty-government

The horrendous rural poverty numbers are sure to give headaches to governments

THE ONLY socio economic and caste census (SECC) of independent India has been launched. The good part is that it was finally released; the bad part is just about everything it says. It has not just confirmed what a large number  of economists have been saying so far about the prevalence of poverty, but has painted an even darker picture of rural poverty than was ever thought of. Worse still, it has underscored the worthlessness of all governmental schemes that promised to alleviate poverty. It also indicates towards a massive and increasing chasm between rich and poor. What is even more problematic is how quickly the public discourse has left the issue behind while dedicating time and space to meatier political topics with higher entertainment value.

The first SECC in eight decades was released by Finance Minister Arun Jaitley who said that the document would be essential for policy makers – both at the Centre and at the state-level. He added that “The enormity of schemes and reaches that all governments have, this document will form a basis of helping us target groups for support in terms of policy planning.”

Rightly so because what the census reveals that the programs that various governments have been running for many years, were either created without adequate homework, or were implemented pathetically. Either way, they had very limited success. The poverty has endured, and if anything, has entrenched which is bad news, for government and for society at large.

Stark Poverty
The SECC was commissioned by the UPA government in 2011, and was to get the information on the economic status of every Indian family, in rural as well as urban India. Based on the findings of this census, Central and State authorities were to come up with a range of indicators of deprivation, which could be used to identify and target various anti-poverty schemes. It was also meant, for the first time in over eight decades, to get the caste numbers which could allow more suitable social inclusion. The census used fourteen parameters to categorise deprived households which  ranged from ownership of land and two wheeler to income of over Rs 10,000 per month. After interviewing 24.39 crore households across the country, the census found that 17.91 crore households were in rural India. Bihar has the highest number of rural households; 90 per cent of households in the state are in rural areas. What is frustrating is the level of poverty that is pervasive, widespread and deeply entrenched. Even on a list of parameters some of which are ludicrous, more than 60 per cent of the rural households were found to be suffering from deprivation. As many as 74 per cent of the households had their highest earners earning a monthly income of less than Rs 5,000. More than 90 per cent of households in Chhattisgarh were in this category. As many as 51 per cent of the households were found to be engaged in casual, manual labor, cultivation supported 30 per cent households. Just about 14 per cent had non-farm jobs, with the government, public or private sector.

Underscoring the ineffectiveness of reservation policies of successive governments, the census shows only 3.96 per cent of rural SC households and 4.38 per cent of ST households as having government jobs. The plight of these sections of the population continues in land ownership as well. As many as 70 per cent of SC households are landless against 56 per cent overall landless households. In Tamil Nadu and Bihar, 55.80 per cent and 54.33 per cent of rural landless households depend on manual casual jobs to sustain. Odisha has the highest proportion of destitute households or those that are living on alms.

Risk of exclusion
What is ironic is the confusion and irrationality of the interpretation of data that has been gathered through the survey. As per data, as high as 7 out of 17 crore rural households are not deprived because they satisfy at least one of its 14 parameters of exclusion, regardless of the level of poverty. As such, these households will not be entitled to being included in the social safety programs of the government.

This cruel magic has been created by the defi nition of deprivation. NC Saxena, a member of the National Advisory Council,  headed the expert group that was set up in 2009 to design the SECC methodology. This group tried to undo the shortcomings of the 2002 census, which was aimed to determine the socioeconomic characteristics of households. The present criteria are based on those recommended by this group.

But some of these criteria were modified by the present government which has led to the exclusion of a large number of households from the social safety programs. For example, it included two-wheeler as a basis for exclusion even though the previous recommendation had only motorized three- or four-wheeler for the purpose. Similarly, against the recommendation of
including all female-headed households in the list of deprived households, the government has considered only those female-headed households as deprived which did not have any adult male member between 16 years and 59 years of age. This has resulted only 69 lacs of the 2.23 crore female headed households qualifying for deprived category. As many as 1.81 crore female-headed households, where the highest-earning member’s monthly income is less than Rs 5,000, do not qualify for the deprived category, because there may be a male member in their family in the age group of 16-59 years age group. Obviously, minor modifi cations can lead to a huge number of people getting excluded from the social safety programs that governments may roll out.

The census also throws open some uncomfortable questions about the social security fl agship programs that were launched by the previous government. For example, under the Food Security Act (FSA), which was brought in as a game changer social policy with huge potential political gains, 75 percent of rural households, or about 13.4 crore households, were considered poor enough to be eligible for food supplies at low cost. But as per the census, only 8.69 crore households were found out to be deprived or poor enough to qualify for the food security program.

This is because out of the 17.91 crore rural households, 7.05 crore households got eliminated because they could not satisfy all the criteria. Of the rest 10.69 crore households, about two crore households reported no sense of deprivation, leaving only about 8.69 crore households which should be targeted under FSA. So either the program was ill conceived, or the poverty criteria do not represent reality.

Message for government
The data released presents a depressing picture of poverty in the country and is a telling commentary on the effi cacy of the various poverty alleviation schemes that governments have been running since the time of the famous “Garibi Hatao”  campaign.  he level of poverty that has been reported by the SECC is much grimmer than the previous estimates. It shows that roughly 60 per cent of households were deprived. This is much higher than Tendulkar Committee estimates of 25.7 per cent and Rangrajan Committee estimate of 30.9 per cent for rural BPL population. According to some reports, the urban poverty has been pegged at nearly 35 percent by the SECC which was estimated at 13.7 per cent and 26.4 per cent by Tendulkar and Rangrajan Committees for urban BPL population.

Essentially, the SECC says three things about the government’s poverty alleviation programs. First, these programs have been created without proper understanding of the poverty level as well as dynamics of poverty. The example of land acquisition bill is worth taking a look here. There has been much cry about how the last land acquisition bill was good and the present bill is bad. But the SECC shows that just about 30 percent of the total households, i.e. 5.39 crore households depend on cultivation whereas manual, casual labor sustained over 51 percent of the households. The rest were involved in other activities. So, about 70 per cent are more concerned about the non-farm related economy to sustain. However, land bill has become the focal point of painting rural versus industrial India debate.

Secondly, the SECC is a damning evidence of how inefficient government can be. Ever since independence, successive governments have used hundreds of poverty reduction programs by using various socialist tools. However, all these programs  have not done much on the ground. Not just that, the entire philosophy of trickle-down effect of liberalization has not taken place; if anything, these have only increased the inequality in both rural and urban India.

Finally, it says that the social justice and affirmative action programs of the government has failed to pull disadvantaged classes of society out of poverty and wretchedness. These might have improved some lucky ones in the backward sections, but the communities perse have not benefitted from the social justice programs.

The message for the government is clear. It needs to deliver on the basic requirements of society. Whether it is urban or rural India, people need an opportunity, not doles. The paradigm of providing freebies is passé, it has failed miserably in improving the lives of the vast majority of people. The real requirement is of an enabling environment in which people can use available opportunities to improve their lot. It is not rocket science, but it requires strength and determination to eliminate the entrenched structural inefficiencies that do not allow poverty eradication.

not be in nature of tweaking the market mechanism. Not only have various public subsidy programs like PDS have bled the exchequer, they have not reached the poor. As the example of direct transfer of cash benefits shows, there is a way for effective and targeted intervention. Government needs to think out of box to better deliver on anti-poverty programs.

Hopefully, the government would be shaken up by the SECC data and spring into action. The horrendous rural poverty numbers are sure to give headaches to policymakers.

WHAT MAKES INDIA

  • Total 24.39 crore households (rural plus urban)
  • 1.11 per cent of total households are public sector-employed; 3.57 per cent earn from private sector employment The country has 44.84 lakh domestic helps, 4.08 lakh rag pickers and 6.68 lakh beggars
  • Of the total rural population, landless ownership is 56 per cent with 70 per cent of Scheduled Castes and 50 per cent of Scheduled Tribes being landless owners

SNAPSHOT OF RURAL INDIA

  • In 75 per cent of the households, monthly income of the highestearning member is less than Rs 5,000
  • Only 8.29 per cent of households have a member earning over Rs 10,000 per month
  • 60 per cent (or 10.69 crore) families qualify for “deprivation” 94 per cent own a house
  • 54 per cent have 1-2 room dwellings
  • 25 per cent households still do not own a phone
  • 25 per cent households have no access to irrigation
  • 20.69 per cent have either an automobile or a fishing boat
  • 5 per cent earn salary from the government

KEY FINDINGS FROM RURAL INDIA

  • Total Households (Rural plus Urban) 24.39 Crore
  • Total Rural Households 17.91 Crore
  • Total Excluded Households (based on fulfilling any of the 14 parameters of exclusion –
    >> Motorized 2/3/4 wheeler/fishing boat.
    >> Mechanized 3-4 wheeler agricultural equipment.
    >> Kisan credit card with credit limit of over Rs. 50,000/-.
    >> Household member government employee.
    >> Households with non-agricultural enterprises registered with government.
    >> Any member of household earning more than Rs. 10,000 per month.
    >> Paying income tax.
    >> Paying professional tax.
    >> 3 or more rooms with pucca walls and roof.
    >> owns a refrigerator.
    >> Owns landline phone.
    >> Owns more than 2.5 acres of irrigated land with 1 irrigation equipment.
    >> 5 acres or more of irrigated land for two or more crop season.
    >> Owning at least 7.5 acres of land or more with at least one irrigation equipment.
  • Automatically included (based on fulfi lling any of the 5 parameters of inclusion –
    i. Households without shelter
    ii.  Destitute, living on alms
    iii. Manual scavenger familie.
    iv. Primitive tribal groups
    v. legally released bonded labour. 16.50 lakh 0.92%
  • Households considered for deprivation 10.69 Crore
  • Households not reporting deprivation 2.00 crore
  • Households with any one of the 7 deprivation 8.69 Crore