The poverty of myths

When the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) launched its India Shining campaign, it had a fertile ground on which to sow the seeds of its electoral sloganeering. Newspaper editorials were going dizzy with India’s forever rising gross domestic product (GDP). Pundits were engaged in animated discussions over India being the economic superpower of the new century, nay millennium. Headlines every day would hysterically tell us that the Sensex had scaled a new high. Everyone was happy. Everyone was richer today than the day before. If what you saw or read in the media was anything to go by, India was indeed shining. Quite brightly at that. What the BJP-NDA only did was prop up an effort to capitalise on the apocryphal myth of resplendence that was already being perpetuated by the news media.

The India Shining campaign was such a load of Goebbelsian bunkum that you almost fell for it. Well, most did. Detractors of the Hindu rate of growth were either castigated as sceptics who could never get their numbers right, or branded as a bunch of traitors who could never stand their own country. The BJP-NDA even splurged $20 million of the taxpayers’ money on this glizty ad blitz to prove that we were richer by the dozen. Those who tried to drill holes in the BJP-NDA’s arguments were its political opponents, and therefore had their own psephological spins to think of. The Congress did what it could of it, and the Left Front did as it is wont to – cry itself hoarse. At the end of the day, India stopped shining for the BJP-NDA. It had glossed too much over poverty and social inequalities. If anyone made money in the bargain, it was Grey Worldwide.

Five years down the line, the equations have turned around diametrically. Now it is the Congress-led United Progressive Alliance (UPA) which is tomtomming the same kind of fables, and it is the BJP which is desperately seeking numbers – numbers which would prove that India is not shining and it is, for all practical purposes, a poor country still. Nobody takes the Left Front seriously anymore – what, with its morbid tendency to see the ghosts of American imperialism even in broad daylight. Marginalised as always and forgotten in this who-is-richer-who-is-poorer battle of words have been the poor.

It is in this context a couple of weeks back that came the World Bank’s Global Purchasing Power Parities and Real Expenditures: 2005 International Comparison Program. According to the report, the actual number of poor in India has gone up over the years if the new poverty line benchmark – a daily income of $1.25 – is adopted as a yardstick. As per the estimates for India, the percentage of people living below $1.25 a day decreased from 60 per cent in 1981 to around 42 per cent in 2005. At $1 a day (2005 prices), poverty has declined from 42 per cent to 24 per cent over the same period. In absolute numbers, the estimated poverty rates correspond to 267 million people living below $1 a day in 2005, down significantly from 296 million in 1981. However, the number of poor living under $1.25 a day has gone up from 421 million in 1981 to 456 million in 2005.

There would, of course, be differences in poverty estimates between that of World Bank and the Indian government. That is because the two go by different measures. To assess global poverty on comparable terms, the World Bank uses a mean of the national poverty lines of the world's 15 poorest countries to determine the international poverty line at $1.25 per day at 2005 purchasing power parity (PPP) prices. India measures poverty according to its own poverty line which, in 2005 PPP, would be $1.02 per day. There are other problems with the Bank report since there is a question of constant dollars, and that of currency fluctuations. If we were to look at our country, it would be better to calculate in rupee terms at constant or current prices. But then, that is likely to become an academic exercise in econometric skulduggery. It would get us nowhere.

But before we get into that, let’s look at some of the wellness statistics that are thrust on us by India Inc. The number of ''high net worth individuals'' (HNWIs) in India at the end of 2006 grew by 20.5 per cent over the previous year to 100,000, according to the second Asia-Pacific Wealth Report of Merrill Lynch and Capgemini. In fact, their World Wealth Report 2008 went on to reveal that in 2007 India led the world in HNWI population growth, rocketing ahead with 22.7 per cent. This lure is for all those who see India as the promised land, especially, for fashion, retail and outsourcing processes.

India, in 2006, had 100,000 individuals who have a liquid cash of $1 million. By next year itself the number of millionaires will jump to 134,000. India has more adult consumers for luxury goods than the total population of many countries. In 2006 there were a million of such people in India; this number is expected to treble by the year-end. According to the survey Indian Consumer Trends 2006-07, the highest spends are on jewellery, clothing, digital accessories and timewear, cosmetics, and skincare. The per capita annual spend on luxury goods then was Rs 400,000, roughly a tenth of their annual earnings. Big amount that, and growing bigger by the day.

Photo: Atul Pandey / Unsplash

 

Seen in the backdrop of the GDP growth figures that the finance minister of India routinely sputters and of what one sees around in the metros in terms of more cars and mobile users, most will agree that the wealth of this nation is skyrocketting. And when one reads those jingoistic headlines about Indian companies going on a worldwide takeover spree, one might even concur that Indians today are the richest in the world. The world is on the brink of being taken over by third world India.

 

The GDP growth figures, the never-ending rise of the Sensex, and the number of richer-by-the-day Indians, unfortunately, present only one half of the story. Probably, the lesser half. It becomes increasingly difficult to imagine that there can be another half – call it rural India, poor India, Other India, or whatever strikes your semantical fancy.

 

It is a veritable fact that this poor-rural India has all but disappeared from our radar. Coverage in the news media is unabashely and unrepentantly skewed – news from 80 per cent of the country’s population/area constitutes 20 per cent of the coverage, and vice versa. That may be hazarding a prejudiced guess, that may well be an understatement; yet it is an inexorable truth that bar the Kosi floods and the Kandhamal riots, the visibility of the other India is non-existent on our firmament. This poor India has also vanished from the world of cinema. Poor India is nothing more than a standalone setting – that is why you have aOmkara whose characters have little to do with their own milieu and could have existed on the high streets of Mumbai, for all you care. Rural India provides just a prop – that is why you have a Vogue India strutting lesser mortals far removed from urban India to peddle Burberrys and Fendis.

 

This is an India, for all measures and purposes, which does not exist. We believe what we see. We believe what we are virtually coerced to see. Beyond that is nothingness. The World Bank report ought to make us wake up from this self-delusional stupor.

Photo: Chitto Cancio / Unsplash

 

There is, of course, nothing wrong with people becoming rich or richer, especially if by means legal and ethical. The better-offs need not be apologetic about their wealth, if ill-gotten it is not. But there is also a need to look at the flipside of our growth story.

 

That would make us look around for numbers, as authentic and immediate as possible. The closest we can get to this is the Report on Conditions of Work and Promition of Livelihoods in the Unorganised Sector by the National Commission of Enterprises in the Unorganised Sector that was submitted to the Prime Minister in August 2007. As the title of the survey and its executing agency suggest, the report was about the status of the unorganised sector in the country. The authors, however, presented its findings in the overall economic context and came up with the kind of numbers that would be relevant to the context of this write-up.

The numbers of impoverishment and inequalities did in no way negate those of opulence mentioned earlier. In fact, they complement each other and help us piece together a composite picture of the state of the buoyant Indian economy.

The commission divided the total population of the country into six groups based on their consumption expenditure. The first group of Extremely Poor were those who had a monthly per capita consumer expenditure of up to three-fourths of the official poverty line (i.e. an average of Rs 8.9 per capita per day (pcpd) in 2004-05); the second group Poor were those between the Extremely Poor and up to the official poverty line (average expenditure of Rs 11.6 pcpd); the third was called Marginally Poor with per capita consumer expenditure of only 1.25 times the poverty line (i.e. Rs 14.6 pcpd); and the fourth called Vulnerable had per capita consumer expenditure of only two times the poverty line (i.e. Rs 20.3 pcpd). In 2004-05, the Extremely Poor constituted 6.4 per cent, the Poor 15.4 per cent, the Marginally Poor 19.0 per cent. These three constituted 41 per cent of the population. If the Vulnerable were added to this group the total accounted for about 77 per cent of the country’s population.

The report’s authors categorised this 77 per cent, totalling 836 million people, with an income roughly below $2 in PPP terms, as the poor and vulnerable segment of the Indian population. This segment is usually referred to as the “common man”. Only 4 per cent of this segment were part of this segment in 1999-2000 could wriggle out of their pecuniary morass and be a part of the Middle and High Income in 2004-05. This was also the time, remember, when the India Shining blitzkrieg was on.

It helps to keep benchmarks low – that way you can show that you have fewer numbers of the poor and vulnerable in the country. Even by conservative estimates the 836 million people at the last count is a huge number. If we accept the official contention that India's real national income grew by 125 per cent during the economic reform period of 1992/93 - 2005/06 and the per capita income increased by 77 per cent during the same period, even a dud at arithmetic will tell you that the rich have been growing richer at a much faster rate than at which the poor have been shedding off their tatters.

As inequalities widen, we well-offs remain smug with the numbers of euphoria that the news media literally perpetrate on us. It is our misfortune that we choose to look though the other India which is a constantly-ticking time bomb of disgruntlement, resentment, and therefore widespread unrest. And when it blows up on our face, it would come across as a bolt from the blue. Now, that would be called a calamity.

If we don’t unleash a war against poverty now, the poor will sooner than later wage a war against us. Don’t say that you weren’t warned.