A sobering report on India’s poverty from OPHI

Poverty talk is mostly confined these days to prime time television, where contrived debates fuelled by puffed-up anchors and venal politicians fill the gap between commercials. In the case of newspapers, they minimally take notice of the problem. Their so-called process journalism mostly ignores chronic poverty, as it does everything else chronic — lack of access to education, health care, housing and so on. Against the background of this middle-class bias and indifference, new data that show Indian states faring as poorly as or worse than sub-Saharan African countries is most welcome.

Today, The Hindu reported that the BJP-ruled Madhya Pradesh has almost the same poverty metrics as the Democratic Republic of Congo. It is useful to remember that unlike Madhya Pradesh, The DRC has a history of violent conflict that has enfeebled its economy. The new report should sufficiently shame the Hindu supremacist BJP rulers of the state, who constantly crow about the superiority of India’s heritage. Their assumption is that countries such as Africa are simply uncivilised. The latest data clearly show that Indians living in some states including those ruled by such bigots are worse off. Read the report in the newspaper here.

The measurement of poverty in India, so far done by the World Bank and even development agencies of the UN, have obviously not been sufficiently fine grained. The assessment made by the Oxford Poverty and Human Development Initiative is multi-dimensional, and should therefore be illuminating.

There is an interesting observation in the report, which flies in the face of what our neo-liberal economists, including Prime Minister, Manmohan Singh and the Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia have been preaching. That GDP income by itself may mean little when it comes to poverty. “It shows that low per capita GDP income does not necessarily mean high poverty,” says Dr. Sabina Alkire, the Director of the Oxford initiative. The reason is that countries that spend on social capital are able to reduce poverty more. In India’s case, the gains from high GDP are siphoned out of the system by corruption.

We must also link this discussion to another theme. That countries such as India, despite their fast-depleting resource base are inflicting a double jeopardy on themselves. For one, they are exporting their natural resources to feed the consumption in other countries (ores, minerals) and thereby subsidising other already wealthy countries. During the colonial era, India was forced to do that.

Now, in doing the same, the country’s rulers are neither helping the present generation of Indians nor laying the framework for prosperity of future generations. The latter is also true because they are not investing the small incomes from resource extraction to strengthen social capital (education, health, skill-building). This theme was discussed, with some caveats on the need for further work, by Kenneth Arrow and others in an article in the Journal of Economic Perspectives, Vol.18, No. 3, Summer 2004, p 147-172.

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