Other
Backward Class
From Wikipedia, the free
encyclopedia
The Central Government of
India classifies some of its citizens based on their social and economic
condition as Scheduled Caste (SC),Scheduled Tribe (ST), and Other Backward Class (OBC). The
OBC list presented by the commission is dynamic (castes and communities can be
added or removed) and will change from time to time depending on social,
educational and economic factors. For example, the OBCs are entitled to 27%
reservations in public sector employment and higher education. In
the constitution, OBCs are described as "socially and educationally
backward classes", and government is enjoined to ensure their social and
educational development.
Until 1985, the affairs of
Backward Classes were looked after by the Backward Classes Cell (BCC) in the
Ministry of Home Affairs. With the creation of a separate Ministry of Welfare
in 1985 (renamed as Ministry of Social Justice and Empowerment on 25 May 1998) the matters relating
to Scheduled Castes, Scheduled Tribes, Other
Backward Classes (OBCs) and Minorities were transferred to the new Ministry.
The Backward Classes
Division in the ministry looks after the policy, planning and implementation of
programmes relating to social and economic empowerment of OBCs. It also looks
after matters relating to two institutions set up for the welfare of OBCs: National Backward Classes Finance
and Development Corporation (NBCFDC)
and the National Commission for Backward
Classes (NCBC).
Contents
·
7 Notes
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[edit]Other Backward Class (OBC)- Definition
What is Other Backward
Class: The peoples economically & socially backward other than SC,ST and FC
are and Other Backward Class (OBC).
Who are the Other Backward Class: The peoples who belong Backward Class (BC), Most Backward Class (MBC) and Denotified Community (DCN) category in the respective Indian states government’s criteria are grouped & called as Other Backward Class (OBC).
[edit]Overview
Rural landholding pattern of various social groups
calculated by National Sample Survey 99-00 indicate that OBC and forward Castes
are comparable in wealthiness.)
Backward class people
is a collective term, used by theGovernment of
India, for castes which
are economically and socially disadvantaged. They typically include the Other
Backward Classes (OBCs). According to "The Times of India" on 31
August 2010, even after 17 years, at most 7% of seats[clarification
needed]have been filled by OBCs, regardless of
their 27% reservation.[1]This
difference between proportion of different communities in higher educational
institutions is mainly because of difference in primary school enrolment.
Political parties in India
have attempted to use these communities as votebanks.[citation
needed]
[edit]Obligation
of the government
Under Article 340 of the Indian
Constitution, it is obligatory for the government to promote the
welfare of the Other Backward Classes (OBC). Article 340(1) states, " The
president may by order appoint a commission, consisting of such persons as he
thinks, fit to investigate the conditions of socially and educationally
backward classes within the territory of India and the difficulties under which
they labour and to make recommendations as to the steps that should be taken by
the union or any state to remove such difficulties and as to improve ‘their
condition and as to the grants that should be made, and the order appointing
such commission shall define the procedure to be followed by the
commission."
Article 340(2) states,
"A commission so appointed shall investigate the matters referred to them
and present to the president a report setting out the facts as found by them
and making such recommendations as they think proper."
[edit]Demographics
[edit]First Backward
Classes commission
Main article: Kalelkar
Commission
The First Backward Classes
Commission was set up by a presidential order on 29 January 1953 under the
chairmanship of Kaka Kalelkar. The commission submitted its report on 30 March
1955. It had prepared a list of 2,399 backward castes or communities for the
entire country and of which 837 had been classified as the "most
backward". Some of the most notable recommendations of the commission
were:
1. Undertaking caste-wise enumeration of population in the census of 1961;
2. Relating social backwardness of a class to its low position in the
traditional caste hierarchy
of Indian society;
3. Treating all women as a class as "backward";
4. Reservation of 70 per cent seats in all technical and professional
institutions for qualified students of backward classes.
5. Reservation of vacancies in all government services and local bodies for
other backward classes.
The commission in its final
report recommended "caste as the criteria" to determine backwardness.
But this report was not accepted by the government as it feared that the
backward classes excluded from the caste and communities selected by the commission
may not be considered and the really needy would be swamped by the multitude
and would hardly receive special attention.
[edit]Mandal commission
Main article: Mandal Commission
**NFHS Survey estimated only Hindu OBC population. Total
OBC population derived by assuming Muslim OBC population in same proportion as
Hindu OBC population.
The decision to set up a
second backward classes commission was made official by the president on 1
January 1979. The commission popularly known as the Mandal Commission, its
chairman being B. P. Mandal, submitted
a report in December 1980 that stated that thepopulation of OBCs, which includes both Hindus and
non-Hindus, was around 52 per cent of the totalpopulation according to the Mandal Commission.
However, this finding was
criticized[by
whom?] as
based on "fictitious data". The National Sample Survey puts the
figure at 32%.[2] There is substantial debate over the
exact number of OBCs in India ,
with census data compromised by partisan politics. It is generally estimated to
be sizable, but lower than the figures quoted by either the Mandal Commission
or and National Sample Survey.[3]
27 percent of reservation
was recommended owing to the legal constraint that the total quantum of
reservation should not exceed 50 percent. States which have already introduced
reservation for OBC exceeding 27 per cent will not be affected by this
recommendation. With this general recommendation the commission proposed the
following overall scheme of reservation for OBC:
1. Candidates belonging to OBC recruited on the basis of merit in an open
competition should not be adjusted against their reservation quota of 27 per
cent.
2. The above reservation should also be made applicable to promotion quota at
all levels.
3. Reserved quota remaining unfilled should be carried forward for a period of
three years and de-reserved thereafter.
4. Relaxation in the upper age limit for direct recruitment should be extended
to the candidates of OBC in the same manner as done in the case of SCs and STs.
5. A roster system for each category of posts should be adopted by the
concerned authorities in the same manner as presently done in respect of SC and ST candidates.
These recommendations in
total are applicable to all recruitment to public sector undertakings, both
under the central and state governments as well as to nationalised banks. All
private sector undertakings which have received financial assistance from the
government in one form or other should also be obliged to recruit personnel on
the aforesaid basis. All universities and affiliated colleges should also be
covered by the above scheme of reservation. Although education is considered an
important factor to bring a desired social change, "educational
reform" was not within the terms of reference of this commission. To
promote literacy the following measures were suggested:
1. An intensive time-bound programme for adult education should be launched in
selected pockets with high concentration of OBC population.
2. Residential schools should be set up in these areas for backward class
students to provide a climate specially conducive to serious studies. All
facilities in these schools including board and lodging should be provided free
of cost to attract students from poor andbackward class homes.
3. Separate hostels for OBC students with above facilities will have to be
provided.
4. Vocational training was considered imperative.
5. It was recommended that seats should be reserved for OBC students in all
scientific, technical and professional institutions run by the central as well
as state governments. The quantum of reservation should be the same as in the
government services, i.e. 27 per cent.[citation
needed]
[edit]Legal dispute
[edit]Supreme Court interim
stay
On 29 March 2007, the Supreme Court of
India, as an interim measure, stayed the law providing for 27
percent reservation for Other Backward Classes in educational institutions like
IITs and IIMs. This was done in response to a public interest litigation — Ashoka Kumar Thakur vs. Union of
India. The Court held that the 1931 census could not be a
determinative factor for identifying the OBCs for the purpose of providing
reservation. The court also observed, "Reservation cannot be permanent and
appear to perpetuate backwardness".[4]
[edit]Supreme Court verdict
On 10 April 2008 the
Supreme Court of India upheld the government's initiative of 27% OBC quotas in
government-funded institutions. The Court has categorically reiterated its
prior stand that those considered part of the "Creamy layer"
should be excluded from the scope of the reservation policy as well as from
private institutions. The verdict produced mixed reactions from supporting and
opposing quarters. Several criteria to identify the portion of the population
comprising the "creamy layer" have been recommended, including the
following:[5]
Those with family income
above Rs 250,000 a year (now Rs 450,000 a year, as of October 2008)
should be in creamy layer, and excluded from the reservation quota. Also,
children of doctors, engineers, chartered accountants, actors, consultants, media
professionals, writers, bureaucrats, defence officers of colonel and equivalent
rank or higher, high court and Supreme Court judges, all central and state
government Class A and B officials should be excluded. The Court has requested
Parliament to exclude MPs’ and MLAs’ children as well.
[edit]Supreme Court conclusions from Ashoka Kumar Thakur vs. Union of India
1. The Constitution (Ninety-Third Amendment) Act, 2005 does not violate the
"basic structure" of the Constitution so far as it relates to the
state maintained institutions and aided educational institutions. Question
whether the Constitution (Ninety-Third Amendment) Act, 2005 would be
constitutionally valid or not so far as "private unaided" educational
institutions are concerned, is left open to be decided in an appropriate case.
2. The "Creamy layer"
principle is one of the parameters to identify backward classes. Therefore,
principally, the "Creamy layer" principle cannot be applied to STs
and SCs, as SCs and STs are separate classes by themselves.
3. Preferably there should be a review after ten years to take note of the
change of circumstances.
4. A graduation (not technical graduation) or professional course deemed to be
educationally forward.
5. Principle of exclusion of Creamy layer applicable to OBC's.
6. The Central Government shall examine as to the desirability of fixing a cut
off marks in respect of the candidates belonging to the Other Backward Classes
(OBCs)to balance reservation with other societal interests and to maintain standards
of excellence. This would ensure quality and merit would not suffer. If any
seats remain vacant after adopting such norms they shall be filled up by
candidates from general categories.
7. So far as determination of backward classes is concerned, a Notification
should be issued by the Union of India. This can be done only after exclusion
of the creamy layer for which necessary data must be obtained by the Central
Government from the State Governments and Union Territories .
Such Notification is open to challenge on the ground of wrongful exclusion or
inclusion. Norms must be fixed keeping in view the peculiar features in
different States and Union
Territories . There has to
be proper identification of Other Backward Classes (OBCs). For identifying
backward classes, the Commission set up pursuant to the directions of this
Court in Indra Sawhney 1 has to work more effectively and not merely decide
applications for inclusion or exclusion of castes.
8. The Parliament should fix a deadline by which time free and compulsory
education will have reached every child. This must be done within six months,
as the right to free and compulsory education is perhaps the most important of
all the fundamental rights (Art.21 A). For without education, it becomes
extremely difficult to exercise other fundamental rights.
9. If material is shown to the Central Government that the Institution
deserves to be included in the Schedule (institutes which are excluded from
reservations) of The Central Educational Institutions (Reservation in Admission)
Act, 2006 (No. 5 of 2007), the Central Government must take an appropriate
decision on the basis of materials placed and on examining the concerned issues
as to whether Institution deserves to be included in the Schedule of the said
act as provided in Sec 4 of the said act.
10. Held that the determination of SEBCs is done not solely based on caste and
hence, the identification of SEBCs does not violate Article 15(1) of the
Constitution.
-------------------------------
SOCIO-ECONOMIC CLASSIFICATION ( INDIA )
The Socio-economic status (SES) is an important determinant of health and nutritional status as well as of mortality and morbidity. Socio-economic status also influences the accessibility, affordability, acceptability and actual utilization of various available health facilities. There have been several attempts to develop different scales to measure the socioeconomic status. The earliest attempts to find out the social class of an individual were from the standpoint of psychologists.
In Indian studies, the classification of British Registrar General based on occupation was tried earlier. Later on Prasad's classification of 1961based on per capita monthly income and later modified in 1968 and 1970 has been extensively used. Now a days Kuppuswami scale is widely used to measure the socio-economic status of an individual in urban community based on three variables namely education, occupation and income.
The modification of Kuppuswami scale meant to determine the socioeconomic status of family based on education and occupation of head of the family and per capita income per month has also been widely used. Recently, Mishra et al have suggested an economic revision of Kuppuswami's scale in order to account for the devaluation of rupee.
In the Rural areas, Pareekh classification based on nine characteristics namely
1.Caste
2.Occupation of family head
3.Educatiion of family head
4.Level of social participation of family head
5.Landholding
6.Housing
7.Farm power
8.Material possessions
9.Type of family.
The present instrument is proposed to measure the socio-economic status of the family and is neither based on the individual nor on the head of the family. Unlike the commonly used Kuppuswami Scale and later its modification, the modified version of Kuppuswami Scale and Pareekh Scale, the instrument developed by us is applicable both for urban as well as rural families. Moreover, the instrument has been developed for all sections of the Society.____________________All Bangalore Chennai Delhi Kolkata Mumbai Sample No 31398 3405 3767 7995 7170 9061 Est. Households (000s) (000s) 15427 1863 1869 3825 3340 4529 SEC : A1 Col % 7.5 5.6 4.2 12.5 4.8 7.3 SEC : A2 Col % 9.7 10.1 8.5 12.7 9.7 7.5 SEC : B1 Col % 11.4 12 11.7 11.7 10.8 11.2 SEC : B2 Col % 8.8 9.1 7.5 10 8.7 8.4 SEC : C Col % 23.3 29.3 31.4 19.1 16.8 25.9 SEC : D Col % 20.4 19 21.8 16.7 22.5 22.1 SEC : E1 Col % 8.1 6.2 8.5 5.8 11.2 8.5 SEC : E2 Col % 10.7 8.7 6.4 11.5 15.4 9
____________________
Economic
and educational status
The Government of India does not collect
community census data except for SC/ST. Economic and educational level of various
social groups are gauged using large sample surveys. The National Sample Survey
taken in 1999–2000 and the National Family Health Survey taken in 2005-2006 (or
perhaps an earlier round of the NFHS)[clarification
needed] estimated
economic, educational, and health indicators of various communities. These
surveys were used extensively in the report submitted by the oversight
committee.[7][dead link]
As of 2007 Forward
Castes had to compete only in the open category, as they are considered
socially, educationally, and economically advanced. At that time the
reservation proportion stood at 50% in central-government educational
institutions and central-government jobs. However, in certain states such as
Tamil Nadu, the reservation percentage was around 69%.[8]
[edit]Economic status
The 1998–1999 National Sample Survey[citation needed] calculated the economic status of
forward communities separately for rural/urban areas in various income
brackets. It shows
§
Only 6.4% of forward Castes in rural areas appear in upper income
bracket with per capita monthly income stands at above Rs 925 per month.
§
30% of rural population is made up of forward Castes.
§
More than 65% of forward Castes per capita income stands below Rs
525 per month.
For urban areas:
§
Only 5.6% of forward Castes appear in the upper-income bracket
with per capita income at or above Rs. 1925 per month (around US $40).
§
More than 25% of forward Castes per capita income stands below Rs.
500 per month (around $10)
[edit]Educational status
§
More than 30% of forward Castes above 15 years of age are
illiterate.
§
Only 8% of forward Castes are graduates.
§
Around 85% of forward Castes above 15 years of age have done equal
to or below secondary education (10 Years of education).
[edit]Reservation for
economically backward among forward Castes
Currently forward Castes are only allowed to
compete for seats in the unreserved category in educational institutions and
central government jobs, irrespective of their educational/economical status in
the society. However, a significant percentage of the Forward Caste population
lives below the poverty line and more than 30% of the members of this community
are illiterate. To meet their aspirations, demands have been raised for
providing separate reservations for the poor among Forward Caste populations.
Many political parties like Congress, BJP, Samajwadi Party, LJP, Rastriya
Janata Dal, Communist Party of India(Marxist), Bahujan Samaj Party[9][dead link][10][11][12] have
supported proposals for providing separate reservation for the poor among the
forward Castes. These parties account for over 400 of the 542 members in the
current parliament, as well as holding power in most states in the union.
Indian Government
surveys have pointed out that Poverty is
widespread in all communities. Indian definition of poverty is living life
with less than 0.25
|
Only 2.77 percent of India 's population pay income tax
“The number of
effective tax payers as on March 31, 2011 was 3,35,79,831 (33.57 million),”
Minister of State for Finance S.S. Palanimanickam said in a written reply to a
question in the Rajya Sabha Tuesday.
This is just 2.77 percent of over 121 crore or 1.21 billion population of the country,
The amount of direct tax collection rose to Rs.446,070 crore in 2010-11 from Rs.378,063 crore in the previous year, the minister said.
This is just 2.77 percent of over 121 crore or 1.21 billion population of the country,
The amount of direct tax collection rose to Rs.446,070 crore in 2010-11 from Rs.378,063 crore in the previous year, the minister said.
Poverty in India
From Wikipedia, the free encyclopedia
Map
of world poverty by country, showing percentage of population living on less
than $1.25 per day. Based
on 2009 UN Human Development Report.
Map
of world poverty by country, showing percentage of population living on less
than $2 per day. Based on
2009 UN Human Development Report.
Poverty is
widespread in India, with the nation
estimated to have a third of the world's poor. According to a 2005 World Bank estimate, 41.6% of the total Indian
population falls below the international poverty line of US$ 1.25 a day (PPP, in nominal terms
21.6
a day in urban areas and
14.3
in rural areas).[1]


According to 2010 data from the United Nations Development Programme,
an estimated 37.2% of Indians live below the country's national poverty line.[2] A recent report by the Oxford Poverty
and Human Development Initiative (OPHI) states that 8 Indian states have more
poor than 26 poorest African nations combined which totals to more than 410
million poor in the poorest African countries.[3][4]
According to a new UN Millennium Development
Goals Report, as many as 320 million people in India
and China are expected to
come out of extreme poverty in the next four years, while India 's poverty
rate is projected to drop to 22% in 2015.[5] The report also indicates that in
Southern Asia, however, only India ,
where the poverty rate is projected to fall from 51% in 1990 to about 22% in
2015, is on track to cut poverty in half by the 2015 target date.[5]
The latest UNICEF data shows that one in
three malnourished children worldwide are found In India, whilst 42 percent of
the nation's children under five years of age are underweight. It also shows
that a total of 58 percent of children under five surveyed were stunted. Rohini
Mukherjee, of the Naadi foundation-one of the NGO's that published the
report-stated India is
"doing worse than sub-Saharan Africa ,".[6]
The 2011 Global Hunger Index (GHI) Report places India amongst the
three countries where the GHI between 1996 and 2011 went up from 22.9 to 23.7,
while 78 out of the 81 developing countries studied, including Pakistan, Nepal,
Bangladesh, Vietnam, Kenya, Nigeria, Myanmar, Uganda, Zimbabwe and Malawi,
succeeded in improving hunger condition.[7]
Contents
·
3 Causes
|
[edit]Poverty estimates
There has been no uniform measure of poverty
in India .[8][9] The Planning Commission of India has accepted the Tendulkar Committee report which says that 37%
of people in India live below the poverty line(BPL).[10]
The Arjun Sengupta Report (from National Commission for
Enterprises in the Unorganised Sector), based on data between the period
1993-94 and 2004-05, states that 77% of Indians live on less than
20
a day (about $0.50 per day).[11] The N.C. Saxena Committee report states, on account of
calorific intake apart from nominal income, that 50% of Indians live below the
poverty line.[12]

A study by the Oxford Poverty and Human
Development Initiative using
a Multi-dimensional Poverty Index (MPI) found that there were 650
million people (53.7% of population) living in poverty in India, of which 340
million people (28.6% of the population) were living in severe poverty, and
that a further 198 million people (16.4% of the population) were vulnerable to poverty.[13] 421 million of the poor are
concentrated in eight North Indian and East Indian states of Bihar, Chattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh and West Bengal.
This number is higher than the 410 million poor living in the 26 poorest African nations.[14] The states are listed below in increasing
order of poverty based on the Multi-dimensional Poverty Index.[15]
MPI rank
|
States
|
Population (in millions) 2007
|
MPI
|
Proportion of poor
|
Average intensity
|
Contribution to overall poverty
|
Number of MPI poor (in millions)
|
Estimates by NCAER (National Council of
Applied Economic Research) show that 48% of the Indian households earn more
than
90,000 (US$1,795.5) annually
(or more than US$ 3 PPP per person). According to NCAER,
in 2009, of the 222 million households in India , the absolutely poor
households (annual incomes below
45,000)
accounted for only 15.6% of them or about 35 million (about 200 million
Indians). Another 80 million households are in income levels of
45,000–
90,000 per year. These numbers also are more or less in line with the latest
World Bank estimates of the “below-the-poverty-line” households that may total
about 100 million (or about 456 million individuals)[16]



[edit]Impact of poverty
Indian street children at a railway station inMedak district, Andhra Pradesh.
Since the 1950s, the Indian government and non-governmental organizations have initiated several programs to
alleviate poverty, including subsidizing food and other necessities, increased
access to loans, improving agricultural techniques and price supports, and
promoting education and family planning.
These measures have helped eliminate famines,
cut absolute poverty levels by more than half, and reduced illiteracy and malnutrition.[17]
Presence of a massive parallel economy in the
form of black (hidden) money stashed in overseas tax havens and
underutilisation of foreign aid have also contributed to the slow pace of
poverty alleviation in India.[18][19][20]
Although the Indian economy has grown steadily over the last two
decades, its growth has been uneven when comparing different social groups,
economic groups, geographic regions, and rural and urban areas.[17][21] Between 1999 and 2008, the annualized
growth rates forGujarat (8.8%), Haryana (8.7%), or Delhi (7.4%) were much higher than for Bihar
(5.1%), Uttar Pradesh (4.4%), or Madhya Pradesh (3.5%).[22] Poverty rates in rural Orissa (43%) and
rural Bihar (41%) are among the world's most
extreme.[23]
Despite significant economic progress, one
quarter of the nation's population earns less than the government-specified poverty
threshold of 32 rupees
per day (approximately US$ 0.6)[24].
According to a recently released World Bank
report, India
is on track to meet its poverty
reduction goals.
However by 2015, an estimated 53 million people will still live in extreme poverty and 23.6% of the population will still
live under US$1.25 per day. This
number is expected to reduce to 20.3% or 268 million people by 2020.[25] However, at the same time, the effects
of the worldwide recession in 2009 have plunged 100 million more Indians
into poverty than there were in 2004, increasing the effective poverty rate
from 27.5% to 37.2%.[26]
As per the 2001 census, 35.5% of Indian
households availed of banking services, 35.1% owned a radio or transistor,
31.6% a television, 9.1% a phone, 43.7% a bicycle, 11.7% a scooter, motorcycle
or a moped, and 2.5% a car,
jeep or van; 34.5% of the households had none of these assets.[27] According to Department of
Telecommunications of India
the phone density has reached 33.23% by December 2008 and has an annual growth
of 40%.[28] This tallies with the fact that a
family of four with an annual income of 1.37 lakh rupees could afford some of
these luxury items.
[edit]Causes
Global economic inequality is one of the main
causes of poverty in present day India.[citation needed] There is also a high population growth
rate, although demographers generally agree that this is a symptom rather than
cause of poverty. While services and industry have grown at double digit
figures, agriculture growth rate has dropped from 4.8% to 2%. About sixty
percent of the population depends on agriculture whereas the contribution of
agriculture to the GDP is about eighteen percent.[29] The surplus of labour in agriculture
has caused many people to not have jobs. Farmers are a large vote bank and use
their votes to resist reallocation of land for higher-income industrial
projects.
[edit]British
Empire
An estimate of India 's economy prior to the
arrival of the British, puts the annual revenue of Emperor Akbar's treasury in
1600 at £17.5 million, the highest in the world. (in contrast to the entire
treasury of Britain
two hundred years later in 1800, which totalled £16 million) [30] As a result of the unethical trade
policies and high taxes imposed by the British, the largely independent and
self-sustained Indian economy was ruined. British economist, Angus Maddison argues that India 's
share of the world income went from 27% in 1700 (compared to Europe 's
share of 23%) to 3% in 1950, largely due to the exploitative trade practices
and policies of the British. [31] According to David M. Malone,
theBritish Raj was an elaborate project aimed at
exploiting the immense wealth of Ancient India, and as such, the British Raj was a huge success. One of the
side-effects of this economic exploitation was the complete removal of India 's
impressive and formidable historical achievements from the general public
consciousness.
[edit]Caste
system
Further
information: Caste system in India
According to S. M. Michael, Dalits constitute the bulk of poor and
unemployed.[32] According to William A. Haviland, casteism is widespread in rural areas, and
continues to segregate Dalits.[33] Others, however, have noted the steady
rise and empowerment of the Dalits throughsocial reforms and the implementation of reservations in
employment and benefits.[34][35]
Caste explanations of poverty fail to account
for the urban/rural divide. Using the UN definition of poverty, 65% of rural forward castes are below the poverty line.[citation needed]
[edit]India 's
economic policies
In 1947, the average annual income in India was US$619,
compared with US$439 forChina, US$770 for South Korea,
and US$936 for Taiwan. By 1999,
the numbers were US$1,818; US$3,259; US$13,317; and US$15,720, respectively.[36] (numbers are in 1990 international
Maddison dollars) In other words, the average income in India was not much different from South Korea in 1947, but South Korea
became a developed country by 2000s. At the same time, India was left
as one of the world's poorer countries.
License Raj refers to the elaborate licenses,
regulations and the accompanying red tape that were required to set up and run
business in India between 1947 and 1990.[37] The License Raj was a result of India 's
decision to have a planned economy,
where all aspects of the economy are controlled by the state and licenses were
given to a select few. Corruption flourished under this system.[38]
The labyrinthine
bureaucracy often led to absurd restrictions - up to 80 agencies had to be
satisfied before a firm could be granted a licence to produce and the state
would decide what was produced, how much, at what price and what sources of
capital were used.
—BBC[39]
India had started out in the 1950s with:[40] high growth rates, openness to trade
and investment, a promotional state, social expenditure awareness and macro
stability but ended the 1980s with:[40] low growth rates, closure to trade and
investment, a license-obsessed, restrictive state (License Raj),
inability to sustain social expenditures and macro instability, indeed crisis.
[edit]Liberalization
policies and their effects
Other points of view hold that the economic
reforms[clarification needed] initiated in the early 1990s are
responsible for the collapse of rural economies and the agrarian crisis
currently underway. As journalist and the Rural Affairs editor for The Hindu, P Sainath describes in his reports on the rural
economy in India, the level of inequality has
risen to extraordinary levels, when at the same time, hunger in India has
reached its highest level in decades. He also points out that rural economies
across India have collapsed,
or on the verge of collapse due to the neo-liberal policies of the government of India since the
1990s.[41] The human cost of the
"liberalisation" has been very high.[clarification needed] The huge wave of farm suicides in
Indian rural population from 1997 to 2007 totaled close to 200,000, according
to official statistics.[42] That number remains disputed, with
some saying the true number is much higher. Commentators have faulted the
policies pursued by the government which, according to Sainath, resulted in a
very high portion of rural households getting into the debt cycle, resulting in
a very high number of farm suicides. As professor Utsa Patnaik , India ’s
top economist on agriculture, has pointed out, the average poor family in 2007
has about 100 kg less food per year than it did in 1997.[42]
Government policies encouraging farmers to
switch to cash crops,
in place of traditional food crops, has resulted in an extraordinary increase
in farm input costs, while market forces determined the price of the cash crop.[43] Sainath points out that a
disproportionately large number of affected farm suicides have occurred with
cash crops, because with food crops such as rice, even if the price falls,
there is food left to survive on. He also points out that inequality has
reached one of the highest rates India has ever seen. In a report by Chetan Ahya, Executive
Director at Morgan Stanley,
it is pointed out that there has been a wealth increase of close to US$1 Trillion in the time frame of 2003-2007
in the Indian stock market, while only 4-7% of the
Indian population hold any equity.[44] During the time when Public investment
in agriculture shrank to 2% of the GDP, the nation suffered the worst agrarian
crisis in decades, the same time as India became the nation of second
highest number of dollar billionaires.[45] Sainath argues that
The per capita food availability has declined
every five years without exception from 1992-2010 whereas from 1972-1991 it had
risen every five-year period without exception.
Farm incomes have collapsed. Hunger has grown
very fast. Public investment in agriculture shrank to nothing a long time ago.
Employment has collapsed. Non-farm employment has stagnated. (Only the National
Rural Employment Guarantee Act has brought some limited relief in recent
times.) Millions move towards towns and cities where, too, there are few jobs
to be found.
In one estimate, over 85 per cent of rural
households are either landless, sub-marginal, marginal or small farmers.
Nothing has happened in 15 years that has changed that situation for the
better. Much has happened to make it a lot worse.
Those who have taken their lives were deep in
debt – peasant households in debt doubled in the first decade of the neoliberal
“economic reforms,” from 26 per cent of farm households to 48.6 per cent.
Meanwhile, all along, India
kept reducing investment in agriculture (standard neoliberal procedure). Life
was being made more and more impossible for small farmers.
As of 2006, the government spends less than
0.2% of GDP on agriculture and less than 3% of GDP on education.[46] However, some government schemes such
as the mid-day meal scheme, and the NREGA have been partially successful in
providing a lifeline for the rural economy and curbing the further rise of
poverty.
[edit]Reduction in poverty
Despite all the causes, India currently adds
40 million people to its middle class every year.[citation needed] Analysts such as the founder of
"Forecasting International", Marvin J. Cetron writes that an
estimated 300 million Indians now belong to the middle class; one-third of them
have emerged from poverty in the last ten years. However this has to be seen in
perspective as the population of india has also increased by 370
million from 1991 and 190 million from 2001 so the absolute no of poor have
actually increased.
Despite government initiatives, corporate social responsibility (CSR) remains low on the agenda of
corporate sector. Only 10 percent of funding comes from individuals and
corporates, and "a large part of CSR initiatives are artfully masqueraded
and make it back to the balancesheet". The widening income gap between the
rich and the poor over the years, has raised fears of a social backlash.[47]
[edit]Efforts to alleviate poverty
Since the early 1950s, govt has initiated,
sustained, and refined various planning schemes to help the poor attain self
sufficiency in food production. Probably the most important initiative has been
the supply of basic commodities, particularly food at controlled prices,
available throughout the country as poor spend about 80 percent of their income
on food. The schemes have however not been very successful because the rate of
poverty reduction lags behind the rapid population growth rate.[48]
[edit]Outlook
for poverty alleviation
Eradication of poverty in India is
generally only considered to be a long-term goal. Poverty alleviation is
expected to make better progress in the next 50 years than in the past, as a trickle-down effect of the growing middle class.
Increasing stress on education, reservation of seats in government jobs and the
increasing empowerment of women and the economically weaker sections of
society, are also expected to contribute to the alleviation of poverty. It is
incorrect to say that all poverty reduction programmes have failed. The growth
of the middle class (which was virtually non-existent when India became a free nation in August 1947)
indicates that economic prosperity has indeed been very impressive in India , but the
distribution of wealth is not at all even.
[edit]Controversy
over extent of poverty reduction
The definition of poverty in India has been
called into question by the UN World Food Programme. In its report on global
hunger index, it questioned the government of India 's definition of poverty
saying:
The fact that calorie deprivation is
increasing during a period when the proportion of rural population below the
poverty line is said to be declining rapidly, highlights the increasing
disconnect between official poverty estimates and calorie deprivation.[49]
While total overall poverty in India has
declined, the extent of poverty reduction is often debated. While there is a
consensus that there has not been increase in poverty between 1993–94 and
2004–05, the picture is not so clear if one considers other non-pecuniary
dimensions (such as health, education, crime and access to infrastructure).
With the rapid economic growth that India is experiencing, it is likely
that a significant fraction of the rural population will continue to migrate
toward cities, making the issue of urban poverty more significant in the long
run.[50]
Some, like journalist P Sainath,
hold the view that while absolute poverty may not have increased, India remains
at an abysmal rank in the UN Human Development Index. India is
positioned at 132ond place
in the 2007-08 UN HDI index. It is the lowest rank for the country in over 10
years. In 1992, India
was at 122ond place in
the same index. It can even be argued that the situation has become worse on
critical indicators of overall well-being such as the number of people who are
undernourished (India has the highest number of malnourished people, at 230
million, and is 94th of 119 in the world hunger index), and the number of
malnourished children (43% of India's children under 5 are underweight
(BMI<18.5), the highest in the world) as of 2008.[49]
A 2007 report by the state-run National
Commission for Enterprises in the Unorganised Sector (NCEUS) found that 77% of
Indians, or 836 million people, lived on less than 20 rupees per day (USD 0.50 nominal, USD 2.0 in PPP), with most working in
"informal labour sector with no job or social security, living in abject
poverty."[51][52] However, a new report from the UN
disputes this, finding that the number of people living on US$1.25 a day is expected to go down
from 435 million or 51.3 percent in 1990 to 295 million or 23.6 percent by 2015
and 268 million or 20.3 percent by 2020.[53]
[edit]Persistence
of malnutrition among children
According to the New York Times,
is estimated that about 42.5% of the children in India suffer from malnutrition.[54] The World Bank,
citing estimates made by the World Health Organization, states that
"About 49 percent of the world's underweight children, 34 percent of the
world's stunted children and 46 percent of the world's wasted children, live in
India ."
The World Bank also noted that "while poverty is often the underlying
cause of malnutrition in children, the superior economic growth experienced by
South Asian countries compared to those in Sub-Saharan Africa, has not
translated into superior nutritional status for the South Asian child."[55]
A special commission to the Indian Supreme
court has noted that the child malnutrition rate in India
is twice as great as sub-Saharan Africa [56]
Data from The World Bank shows that the
percentage of underweight children in sub-Saharan Africa is 24% while India has
almost twice the amount at 47%. Out of the 47%, 50 % were from rural
areas, 38% from urban areas, 48.9% of the underweight are girls and 45.5% are
boys.[57]
Malnutrition is often associated with
diseases like diarrhea, malaria and measles due to the lack of access in health
care which are also linked to the problem of poverty. The United Nations had
estimated that “2.1 million Indian children die before reaching the age of 5
every year – four every minute”.[58]
The Indian government had come up with the
Integrated Childhood Development Service (ICDS) in 1975 to combat the problem
of malnutrition in the country. ICDS is the world’s largest child development
program but its effects on the problem in India are limited.[59] This is because the program failed to
focus on children under 3, the group that should receive the most help from the
ICDS. This is due to the fact that most growth retardation would have developed
during the age of 2 and are mostly irreversible.[60] With the lack of help, the chances
that newborn babies are unable to develop fully would be higher. The quality of
ICDS centers also varies from states to states and often, the states with the
most serious problem of malnutrition have the lowest amount of help given.[59] Examples are “Rajasthan, Uttar
Pradesh, Bihar , Orissa and Madhya Pradesh, all
rank in the bottom ten in terms of ICDS coverage”.[60] Despite the poor distribution of help,
the ICDS is still considered to be efficient in improving the health of the
children in the country.[61] Statistics from UNICEF shows that the
mortality rate of children under 5 has improved from 118 per 1000 live births
in 1990 to 66 in the year 2009.[62]
However, malnutrition is still a problem for India ; it has been found that “micronutrient
deficiencies alone may cost India
US$2.5 billion annually”.[63] Malnutrition can lead to children not
being able to attend school or perform to their fullest potential, which in
turn leads to a decrease in labor productivity, affecting India ’s
economic growth as a whole.
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