Blackmoney_caste (Minimum wages)

THE MIRACLE OF HIGH MINIMUM WAGES

By M.B. Lal

Like it or not consumerism is here to stay. It has gripped the hearts and minds of humanity as no other creed, ideology or religion. capitalism, communism, Hinduism, Christianity and Islam are mere names of only one phenomenon, Consumerism, which the whole of humanity is pursuing single-mindedly.  If India wishes to achieve an economic miracle in the shortest possible time-frame it has only to widen its consumer base from a small fraction of its population to the majority. This is how it can be done.

 This study is intended to show how the notorious Indian caste system is responsible for India’s black money hordes in Swiss banks which exceed the combined black money deposits of the rest of the world. Black Money in India is largely the accumulated unpaid wages that should have legitimately been given to the working classes. The workers are not paid their due wages because they belong to the lower castes whose services have been guaranteed for thousands of years virtually free. Instead the upper caste masters horde that money by buying property in the black market or, if it is a large sum, putting it secretly in foreign banks. If you add the vast majority of Muslims and Christians who are equally exploited by the Hindu upper caste you will find 90% of the nation's wealth concentrated in the hands of about 10% of the population constituted almost entirely of upper caste Hindus.

 The author of this study is of the view that socialism or communism will not solve  India’s problems since parties that follow those ideologies are also controlled  by upper caste Hindus. What the common man needs is an assured national minimum wage which is at least 33% of the per Capita income of the country and 66% in metropolitan towns where house and transport consume the bulk of the pay. A beginning can be made with big megalopolitan cities where the minimum wage should be rigorously enforced.

 The author’s central theme and thesis is that if you want to develop India rapidly you have to increase the purchasing power of the people. This can be best done by enforcing a rigorous minimum wages act. The bogey that it will reduce employment is false. In fact as we have said above it will generate more employment by increasing the demand for light and mass produced consumer goods. No employer can afford not to hire people. Even now the stingy Indian employer hires the minimum number and makes them work 12 hours a day.

        The essence of this economic philosophy is that the larger the consumers base the faster the progress of a country. In countries like India, Mexico, Russia, Ukraine, South Africa and others where workers live on a starvation wage and money is hoarded by a few employers unemployment and under employment is 20 to 40% of the work force whereas in developed countries with high minimum wages unemployment is only 4 to 12% of the work force. (See statistics of World Economy 2012 in my blog " www.blackmoney-caste.blogspot.com ")

The irony of the situation is the fact that the majority of upper caste people are also poor.  It is the cream of the upper caste that has grabbed all the wealth of the country with their cunning and muscle power. Members of the lower castes among the rich would not account for more than five percent of their numbers. if that. And nearly all of them would be politicians who control the vote banks of their respective castes. India practices a peculiar type of feudal capitalism where the only law that operates is that of  "might is right”. Writing in TIME magazine of May 7 Rana Faroohar put the problem succinctly quoting a big UK retailer. "In China ", he said "you might pay 20 cents on a dollar to get your project done, and it will get done quickly. In India it is 40 cents (to the dollar as bribe) and it will get done in a few years. In Russia it is 80 cents --- and you may get shot before it is done".

 The attitude of the upper castes Hindus to the rest of the population is identical to that of the Whites towards the Blacks in America. The only difference between the two nations is that whereas the Blacks in America are protected by a strictly enforced Minimum Wages Act, the lower castes and minorities in India enjoy no such safeguard and are entirely at the mercy of their overlords who have been accustomed for centuries to treating them as slaves and availing their services virtually free.

 This is why countries with large amounts of black money are generally those where workers’ wages are low. Property prices in such countries, specially in their metro cities, have risen astronomically in the last ten years while they have fallen in countries which have high minimum wages for workers. Why this contrast? In India by not paying his due wages the employer hordes his money and turns it into black money by fudging his accounts. In developed capitalist countries, on the other hand, the same money is distributed among the workers in the form of statutory minimum wages. This naturally means that the employer is left with less money to horde than his Indian counterpart. He has no black money to put in properties and Swiss banks or other tax havens.

The most important effect of this contrast between India and the developed world is that in advanced countries it vastly expands the consumer class. Every worker becomes a consumer. This has a chain effect on production, generation of wealth and employment. More intermediate goods of mass use are produced while the production of luxury items remains restricted. This is proved by the explosion of a vast new consumer market in electronic and IT products which everybody uses.

According to the Financial Express of May 6 Economic intelligence agencies have informed the Finance Ministry that a major chunk of illegal funds and black money is being generated and routed in the real estate sector of the country. Special departments like the Central Economic Intelligence Bureau (CEIB), Income Tax (Intelligence) and the Directorate General of Excise Intelligence have alerted enforcement agencies like the Enforcement Directorate and I-T (Investigations) to conduct special operations and keep a tight vigil on the funds moving in this sector.  Published figures in the weekly property supplement of a national daily show that land  prices have shot up 100,000 to 300,000 times in the last  60  years in Delhi, upsetting the entire economy of the average household and virtually driving the entire lower middle class to the slums and the lower classes to living in the streets.

It is to be noted that while the rate of inflation in developed countries with high minimum wages is one to four percent per year, in India it is 12% per year, which is obviously the result of black money of the affluent sections of society pouring into the market and making life increasingly difficult for the poorer classes.

The first step in the author’s opinion is the creation of an awareness among the working classes, nearly all of whom belong to the lower castes that (a) a statutory minimum wage is their birthright and (b) any segregatory discrimination against them on the basis of their nature of employment, (which effectively manifests the age-old caste prejudices) are crimes to be reported to the police and against which the victims must seek legal remedy.   

An interesting study by Esther Duflo of the famous American MIT reported by the Economist (London) from a lecture she delivered at Harvard under the title "Hope Springs a  Trap" shows how injection of a little extra money over and above the starvation wages they were accustomed to changed the life of a whole community  in West Bengal from one of utter despair to one of hope. Even after the aid was stopped they now earn more, eat more and aspire for a better life.

"The results were far more dramatic. Well after the financial help and hand-holding had stopped, the families of those who had been randomly chosen for the Bandhan programme were eating 15% more, earning 20% more each month and skipping fewer meals than people in a comparison group. They were also saving a lot" says the report.  It is my considered view that rigid enforcement of the Minimum Wages Act across the  country can bring about just that miracle  in India. It will  create a consumer class of at least half a billion people, cut down black money transactions to near zero, bring house prices and rents to affordable levels and usher in a new era of prosperity for the whole nation.  Economists should examine this layman's theory with unprejudiced eyes.  Indonesian Experience My daughter, Anju, has been living in Indonesia for the last 12 years with her husband Arun Bansal. Arun tells me that in Indonesia the Minimum Wages Act is rigidly enforced on all businesses, shops and establishments-small or big. In the last 10 or 12 years the Minimum Wage has gone up four times. I any businessman proves to the Labour Commissioner that he cannot pay so much he has still to pay the previous year’s minimum wage. No exception is made to this rule. The result is the economy is booming, everybody has the purchasing power to buy things. Unlike India , there every body is a consumer. The economy has been growing steadily at the rate of 65% a year and the country has faced no recession. From around US dollars 50 in 2001 the minimum wage has gone up to about $200 per month. Each year the government fixes the wage at a level considerably higher than the rate of inflation in the economy. (How full implementation of the Minimum Wages Act can dramatically revive the Indian economy has been explained in a separate chapter in this book) For more information on this subject visit www.black money-caste.blogspot.com

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Hello Uncle

Perhaps, you have already seen this Financila Express report on real estate being a prime generator of black money. in case you missed it, i am pasting it here for you.
Here goes:

Rajiv

http://www.financialexpress.com/news/black-money-real-estate-top-violator/946077/0

THE FINANCIAL EXPRESS

Black money: 'Real estate top violator'

Posted: Sunday, May 06, 2012 at 1607 hrs IST

New Delhi: Economic intelligence agencies have informed the Finance Ministry that a major chunk of illegal funds and black money is being generated and routed in the real estate sector of the country.

Special departments like the Central Economic Intelligence Bureau (CEIB), Income Tax (Intelligence) and the Directorate General of Excise Intelligence have alerted enforcement agencies like the Enforcement Directorate and I-T (Investigations) to conduct special operations and keep a tight vigil on the funds moving in this sector.

At a meeting of the Economic Intelligence Council (EIC) chaired by Finance Minister Pranab Mukherjee some time back, the CEIB reported that during the year 2011, the maximum percentage of undisclosed income (40 per cent) was detected in the real estate sector, followed by the manufacturing sector (27 per cent).

The concealed incomes were detected by the investigation units of the I-T department and the total undisclosed income in the real estate and construction sector was more than Rs 1,400 crore, while the manufacturing sector reported more than Rs 1,100 crore of stashed funds during the calendar year.

The CEIB is the nodal body for collection and dissemination of economic intelligence data. It coordinates with all the concerned agencies in the area of economic offences like the I-T, ED, Directorate of Revenue Intelligence (DRI), Customs and other agencies like the Narcotics Control Bureau, CBI and the IB.

The data also indicates the modus operandi used by tax evaders in these sectors -- wrong claim of deductions under the I-T Act, unreported cash transactions, multi-layered transactions, routing of funds from foreign shores, including tax haven nations, and under-valuation of profits.

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The Hindu

March 19, 2012

ENFORCE MINIMUM WAGES ACT

The Hindu has done a great service to the millions of homeless in the country by reporting the seminar on homelessness organized by the Indo-Global Social Service Society. Allow me to point out the two factors that are primarily responsible for urban homelessness:

The first is that urban housing has become a safe haven for Black Money with the result that in the last 60 years land prices have shot up 100,00 to 300,000 times in posh colonies and at least  2,000 to 10,000 times in the unauthorized slums. Slowly but surely the poorest of the poor are being driven to living in the streets.

But the second and more important reason for the growing destitution and homelessness of the working class in the urban unorganized sector is the refusal of our middle and upper middle classes to implement the Minimum Wages Act. Ask any messenger delivering goods worth thousands per day from a nearby store about his salary and he will tell you he is paid just about Rs 2000 to Rs 4,000  per month for working from 8 am to 10 p.m. against the Rs 6,422 fixed for an eight-hour day in the Minimum Wages Act.

The story is the same of workers in all establishments, be it posh housing societies where the minimum price of a small flat is two crores, big restaurants, clubs or private educational institutions. While according to an Indian Census report published in The Hindu Delhiites are the richest people in the country, the story of the vast working class is entirely different though  Delhi 's richness rests on their shoulders. The IGSSS seminar reported by your paper was fully justified in highlighting the callous attitude of the middle class elite towards the working class which is thus forced to live on a "starvation wage".

About the Government's complete indifference to the open violation of the laws against Black Money and non-payment of the minimum wage to labour, the less said the better.

M.B.Lal

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Food Availability

Dear Mr Sainath

Your brilliant study of food availability is most revealing. You are right that public investment in food farming is shrinking. The Sixties and Seventies were the glorious decades of the *Gentleman Farmer* about whom I wrote copiously in The Statesman  after touring the country extensively

In my humble opinion the solution lies in increasing the purchasing power of the   average worker  which means forcing the middle class to part with some of its ill-gotten wealth  and give  the worker his due. One of the first steps in this direction could be strict enforcement of the Minimum Wages Act about which I wrote  the small letter  given below in the local page of your Delhi edition

ONCE  THE COMMON MAN IS ENABLED TO SPEND MORE ON

FOOD THE AGRICULTURAL OUTLOOK IS BOUND TO BRIGHTEN.

Regards

M.B.Lal

Retired Assistant Editor and

Bureau Chief, The Statesman

Mr. Sainath’s reply

 

Date: 16 April 2012 6:20:25 PM GMT+05:30

Subject: Re: Food Availability

 

Thank you very much for your mail which I have only just seen. You see, I do not use this ID ormally but The Hindu keeps posting it up there on the net! 

 

The point you make about minimum wages act I fully endorse.

 

Regards

Sainath

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The Hindu

May 7, 2012

 

Rights and wrongs

 

Most of your readers would have missed the very important (almost historic) pronouncement of the Delhi High Court reported in The Hindu of April 5  under the heading "Casual Worker Also a Workman", that the "Principal Employer"  of a worker is not the contractor who hires him but the person who hires the contractor. This rare  declaration  by the court under the Amendments made by Parliament in  2000 AD to the Workman's Compensation Act  will have far reaching consequences for thousands of businesses, industries, housing colonies  and others who hire their workforce through so-called security agencies, under the mistaken belief that the  supplying agency and not the "Principal Employer"  would be responsible for  any violation of the labour laws in the salaries and working conditions of the workers.

The judgement which should be widely publicized should come as a relief  to millions of workers who have to suffer numerous hardships and ignonimities in their place of work while the contracting agency takes a hefty cut from the wages which should rightly belong to the workers. While Parliament has done it's duty more than a decade ago, it is upto the State Governments to implement the amendments to put a stop to the rampant ruthless exploitation of workers by employers under the cover of these employing "agencies".

 

Mukut Beharilal,

New Delhi

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Minimum wage-Housing chart (30.3.12)

Minimum wage

Country	Minimum wage		Gross annual wage (Intl. dollars)[1][2]							% of 2009 GDP per capita[1][3]						Effective
India	N/A; varies according to the state and to the sector of industry; state governments set a separate minimum wage for agricultural workers[10]		N/A						N/A				N/A
Russia	4,330 Russian rubles per month; essentially an accounting reference for calculating transfer payments[10]		2,812						19				2008
South Africa	R1,041 a month for farm workers in urban areas and R989 a month in rural areas; for domestic workers employed more than 27 hours per week it ranges from R1,067 a month to R1,167 a month[10]		2,471						24				N/A
Lithuania	800 Lithuanian litas per month[32]		5,759					35			January 1, 2008
Hong Kong	HK$3,740 per month for foreign domestic workers[10]; bill for city-wide minimum wage introduced[31] (see Minimum wage in Hong Kong)		7,932					19			N/A
Bulgaria	270 Bulgarian leva per month[14]		2,880					33			January 1, 2009
France	€9.22 per hour; €1,398.37 per month for 151.67 hours worked (or 7 hours every weekday of the month)[26]		17,701[27]					53			December 23, 2011
New Zealand	NZ$13.50 per hour for workers 18 years old or older, and NZ$10.80 per hour for those aged 16 or 17 or in training.[45]		17,440[9]					62			April 1, 2012
Australia	570.00 Australian dollars per week; set federally by the Fair Work Australia[8]		20,027					52			July 1, 2010
Norway	none; wages normally fall within a national scale negotiated by labor, employers, and local governments[10]		—					—			—
Belgium	€1,387.49 a month for workers 21 years of age and over; €1,424.31 a month for workers 21 and a half years of age, with six months of service; €1,440.67 a month for workers 22 years of age, with 12 months of service; coupled with extensive social   benefits[10][11]		18,813					53			October 1, 2008
Finland	not in law; however, the law requires all employers, including nonunionized ones, to pay minimum wages   agreed to in collective bargaining agreements; almost all workers are covered under such arrangements[10]		—					—			—
United Kingdom	£6.08 per hour (aged 21 and older), £4.98 per hour (aged 18–20) or £3.68 per hour (under 18 and finished compulsory education), £2.60 per hour (apprentices)[66]		18,830[9]					66			October 1, 2011
People's Republic of China (China)	none, nationally; set locally according to standards laid out by the central government[10] (see Minimum wage law#People's Republic of China)		—					—			—
Republic of China (Taiwan)	NT$17,280 a month; NT$104 per hour[10]		12,175					38			July 1, 2007
Spain	€633.30 per payment.[59] Note that the monthly minimum wage is paid 14 times a year in Spain, i.e. in order to compare with other countries the monthly figure to consider should be 633.30*14/12=738.85, more than a 16% over.		11,426[29]					39			January 1, 2010
Iceland	none; minimum wages are negotiated in various collectively bargained agreements and applied automatically to all employees in those occupations, regardless of union membership; while the agreements can be either industry- or sector-wide, and   in some cases firm-specific, the minimum wage levels are occupation-specific[10]		—					—			—
Italy	none by law; instead set through collective bargaining agreements on a sector-by-sector basis[10]		—					—			—
Israel	approximately 47.5 percent of the average wage, or 3,850 Israeli new sheqel per month[10][35]		12,493[36]					44			July 1, 2008
North Korea	N/A[10]		N/A					N/A			N/A
South Korea	4,580 South Korean won per hour; reviewed annually[40]		9,988[9]					42			January 1, 2012
Switzerland	none; however, a majority of the voluntary collective bargaining agreements contain clauses on minimum compensation, ranging from 2,200 to 4,200 francs per month for unskilled workers and from 2,800 to 5,300 francs per month for skilled employees[10]		15,457					38			N/A
Canada	set by each province and territory; ranges from C$9.00   to C$11.00 per hour (see List of minimum wages in Canada)		16,710[6]					44			November 1, 2001
Denmark	none, nationally; instead, negotiated between unions and employer associations; 103.15 kroner per hour, according to statistics released on March 1, 2009[4]		23,573[23]					66			2009
Malaysia	none, nationally; 350 Malaysian ringgit per month for plantation workers; raised to 700 ringgit by productivity incentives and bonuses[10]		4,735					34			N/A
Netherlands	€1,398.60 per month, €322.75 per week and €64.55 per day for persons 23 and older; between 30-85% of this amount for persons aged 15–22[44]		19,335					48			July 1, 2009
Greece	€350 a month [28]		11,454[29]					38			January 1, 2008
United States	the federal minimum wage is US$7.25 per hour; states may also set a minimum, in which case the higher of the two is controlling[67] (see Minimum wage in the United States, List of U.S. minimum wages)		15,080[9]					33			July 24, 2009
Austria	none; instead, nationwide collective bargaining agreements set minimum wages by job classification for each industry; the accepted unofficial annual minimum wage is €12,000 to €14,000[4]		14,101					37			N/A
Portugal	€485 per month (14 months) for full-time workers, rural workers, and domestic employees ages 18 and older[10][54]		9,756[29]					40			January 1, 2011
Germany	none, except for construction workers, electrical workers, janitors, roofers, painters, and letter carriers; set by collective bargaining agreements in other sectors of the economy and enforceable by law[10]		—					—			—
Ireland	€8.65 per hour[33]		18,965[34]					49			July 1, 2007
Japan	ranges from 618 Japanese yen to 739 yen per hour; set on a prefectural and industry basis[10]		11,254[9]					35			N/A

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2

Focus

Grassroots

bharat dogra, New Delhi

Photos: Bharat Dogra

A man’s decades-long selfless work

improves lives of the marginalised

Unorganised workers form the bulk of India's workforce, yet the overwhelming majority are denied any form of social

security. Lighting up the path to social justice and entrepreneurship is Baba Adhav, a satyagrahi who has tirelessly

worked for 60 years to improve the lives of workers in the unorganised sector, including the most marginalised. This is

an inspiring story of one of the foremost social activists in the country, unsung though, whose work has been marked

less by rhetoric and more by hard work

Neglected by both the

government and the bigger

trade unions, most workers in

India suffer from exploitation, health

hazards and very insecure work and

living conditions. The situation is

dismal and the only embers of hope

are the few encouraging initiatives in

various parts of India to mobilise the

workers. Perhaps the brightest and

most sustained of such efforts has

been the one led and inspired by Baba

Adhav. At 82, he is still as involved

in the work as he was 60 years ago

when his efforts to organise ‘headloaders’

or hamals started. It has been

a tremendous achievement indeed,

linking his efforts to wider national

efforts so that the experience gained

and models developed can reach a

much wider number of workers.

Adhav received The Times of

India's first Social Impact Award for

Lifetime Contribution in 2011. As the

newspaper reported, he received the

award for "decades of selfless work to

secure labour rights and social security

for lakhs of people in the unorganised

sector". Earlier, The Week magazine,

which named Baba Adhav Man of the

Year in 2007, called him, tongue-incheek,

Coolie No. 1, for all his efforts

in helping workers gain rights and

dignity.

If such awards have come quite

late in life for Adhav, jail terms came

too early. He has served 53 jail terms

in his six decades of struggle, the last

one in 2008. He has never sought or

received funds from the government or

from foreign donors for his activities.

His work has been marked less by

rhetoric and more by innovative effort.

When it was difficult to get enough

funds for providing social security to

workers who lift heavy loads, Adhav

and his colleagues thought up the

idea of a levy on all payments made

to the workers, which could be used

to provide provident fund, gratuity,

bonus, insurance and other benefits.

While organising the workforce,

who would have thought that women

who clean grain also need to be

protected and organised? But Adhav’s

effort included them, too; he held

talks with merchants to improve their

conditions. Who would have thought

that a few scattered people who collect

used lubricating oil for re-refining

can also be organised and protected

from needless harassment? But he

tried to include even such completely

marginalised and neglected groups of

workers. The result: many small and

big unions (panchayats) embracing

marginalised and unorganised

workers have been organised in Pune.

Some unions have reached towns and

villages in Pune District, while others,

such as the one for workers lifting

heavy loads, have entered some of the

most remote districts of Maharashtra

as well, specifically the agricultural

produce marketing committees in the

districts.

The unions have brought

improvements in the working, living

and social conditions of workers, most

visible in the case of older unions

such as those of hamals. Earnings

have increased, over 400 houses have

been built. A school provides quality,

free education to children of hamals

and other workers. An information

technology instruction unit is being

started for senior students. Some are

now able to access college education

and are receiving engineering

education as well. Hamals get

provident fund, gratuity and health

insurance benefits, and now the

demand for pension is picking up. The

union has made substantially efforts

to implement an International Labour

Organisation resolution which limits

the weight to be lifted by a worker to

a maximum of 50 kg. This has helped

reduce health hazards, although other

hazards continue for those lifting

loads of chillies and cement.

Unions of domestic workers,

vendors, rickshaw drivers and other

unorganised sections have recorded

important achievements. In the case

of vendors, policy guidelines have

been formulated by local authorities

in addition to the national policy of

2007. These as well as the union's

support enable the vendors now to

protect their livelihood rights more

strongly then before, apart from

resisting illegal extortion made by

police and others. Even for those

who are evicted, there is now a better

chance for rehabilitation. However,

many of the economic gains could

not have been sustained and protected

but for the simultaneous setting up of

several cooperative credit societies

alongside the unions or panchayats,

in order to enable loaders, vendors

and rickshaw-drivers to obtain credit

at a low interest rate. The facility has

enabled them to escape the clutches

of moneylenders and also expand

income-earning activity (such as

by purchasing auto-rickshaws or

expanding their retail vending

business), construct houses and

educate children.

A huge, self-sustaining community

kitchen is another example of Adhav’s

social entrepreneurship initiative.

It daily provides cheaply priced

nutritious, fresh and wholesome food

to about 12000 workers and others.

The kitchen provides employment

to about 100 women, mostly from

needy worker households. It has

many outlets where the products are

sold. At one such place, we meet two

friends relishing a lunch of roti, rice,

vegetable, curry and a sweet (laddu).

One such thali (plate) is modestly

priced at Rs 20. Rotis include wheat

chappatis as well as bhakris made

of mixed grain and millet, which are

relished by workers in the area. While

government schemes that have tried to

emulate the effort have died out after

a few days, the workers' community

kitchen has continued for 37 years,

remaining financially viable even at

times when prices of raw material

were increasing rapidly. The reason

is that everyone associated with

the effort works with honesty and

dedication, and with a wider purpose

of providing healthy and wholesome

food to as many people as possible.

Says Nitin Pawar, coordinator,

Mahatma Phule Pratishthan,

who is closely associated with

Baba Adhav's many-sided work:

“Although at the national level, it is

Baba's contributions to unorganised

sector workers which have been

most highlighted, it will be a great

injustice to confine his work only to

this aspect. He has striven for much

wider mobilisation in many areas to

end socio-economic injustice. Way

back in 1972 at the time of a serious

drought, Baba worked tirelessly

to end discrimination in access to

water-sources in villages – taking

out morchas (rallies) and carrying

out satyagraha wherever there was

discrimination against dalits. Then

he fought a long battle for providing

justice to nomadic and de-notified

tribes, and another one on behalf of

devadasis, so that pension could be

provided to them.”

Indeed, Adhav was far ahead of

his time in taking up issues such as

displacement of farmers caused by

dams and other projects. His efforts

led to a rehabilitation policy in

Maharashtra at the early stage. His

vision of social change has a special

place for a greater role for women.

Women dominate the membership of

the unions of domestic workers, ragpickers

and vendors.

A socialist, satyagrahi, and a

satyashodhak (someone who yearns

for truth to prevail) is how Baba

Adhav likes to describe himself. In

2005, at 75, he organised a cycle

yatra from Pune to Delhi to mobilise

support for the rights of construction

workers. Finding time and place

for humour as well as for close

relationships (his wife, Sheela, has

been his biggest support), Adhav

is today among the most respected

social activists in India, combining

mass mobilisation for justice with

social entrepreneurship initiatives.

A young Adhav.

Baba Adhav garlands the statue of Mahatma Jyotirao Govindrao

Phule in Pune.

Baba Adhav (extreme left) at a

rally organised by workers.

A hamal panchayat (meeting of

head-loaders) in session.

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Minimum wages for labour increased in Delhi

http://www.thehindu.com/todays-paper/tp-national/tp-newdelhi/article3351189.ece

NEW DELHI, April 25, 2012

Special Correspondent

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The Delhi Government has increased the minimum wages of unskilled, semi-skilled and skilled labour with effect from April 1, Labour and Industries Minister Ramakant Goswami said here on Tuesday.

Noting that the minimum wage rates were last revised in October 2011, Mr. Goswami said the Government has increased them after adjustment of the average consumer price index number on half yearly basis by addition of dearness allowances in the wages. “This reflects the pro-active and pro-labour policies of the Delhi Government,” he claimed.

The Minister said as per the new rates the monthly minimum wages have gone up from Rs. 6,656 to Rs. 7,020 for unskilled labour; from Rs 7,358 to Rs.7,748 for semi-skilled labour and from Rs.8,112 to Rs.8,528 in respect of skilled labour.

As for the clerical and non-technical supervisory staff in all scheduled employments, the Minister said the minimum wages of non-matriculates have gone up from Rs.7,358 to Rs.7,748, in respect of matriculates, but not graduates, from Rs.8,112 to Rs.8,528 and in respect of graduates and above from Rs.8,814 to Rs.9,282. 

Overall, he said the minimum wages in Delhi have been fixed in the range of Rs.7,020 to Rs.9,282 per month.

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 US$/Day(Approx). Whereas United nations definition of Poverty is living life with less than $1/Day.[13] More than 65% of forward Castes will be living below poverty line if UN poverty definition is considered.[citation needed]

Only 2.77 percent of India's population pay income tax

New Delhi, Aug 31 (IANS)

Just 2.77 percent of India's 1.21 billion people pay personal income tax, official data showed.

“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.

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   [hide]  ·                                 1 Poverty estimates ·                                 2 Impact of poverty ·                                 3 Causes o                                        3.1 British Empire o                                        3.2 Caste system o                                        3.3 India's economic policies o                                        3.4 Liberalization policies and their effects ·                                 4 Reduction in poverty ·                                 5 Efforts to alleviate poverty o                                        5.1 Outlook for poverty alleviation o                                        5.2 Controversy over extent of poverty reduction o                                        5.3 Persistence of malnutrition among children ·                                 6 See also ·                                 7 References ·                                 8 Further reading ·                                 9 External links

[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]

[show]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

A rural worker drying cow dung in Bihar.

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 132^ond 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 122^ond 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.

__________________________

The Economist

http://www.economist.com/node/21556575/print

Burgernomics to go

Using McDonald’s to compare international productivity trends

Jun 9th 2012 | from the print edition

A MCDONALD’S Big Mac contains 29 grams of fat and a surprisingly large quantity of useful economic information. Since 1986 The Economist has used the ubiquitous sandwich in serving up the Big Mac index, a lighthearted look at currency valuations.

The burgernomics craze is spreading. In a new working paper for the National Bureau of Economics Research, Orley Ashenfelter of Princeton University and Stepan Jurajda of the Charles University in Prague use Big Mac production as a simple but powerful tool for examining productivity and welfare gaps in different economies.

Their work, like The Economist’s Big Mac index, grapples with the tricky business of international price and wage comparisons. At its heart is the theory of purchasing-power parity (PPP). Economists reckon the price of a good should not vary much across efficient markets. Otherwise people would buy in cheap markets and sell in dear ones until prices equalised. PPP generalises this “law of one price”. Over the long run, it suggests, exchange rates should adjust so a basket of goods costs the same in different countries. If that basket is whimsically taken to contain only a Big Mac, then burger prices may be used for back-of-the-napkin currency valuations. In January a Swiss Big Mac cost $6.81, compared with $4.20 in America and just $2.44 in China, hinting at an overvalued franc relative to the dollar and an undervalued yuan.

Economists use PPP to provide better comparisons of welfare across countries than can be gleaned from simply converting wages at market exchange rates. Exchange rates should adjust so that workers making traded goods are paid according to their productivity. But firms that sell non-traded goods and services must compete with firms in the tradable-goods sector for labour. So a country with high-productivity exporting firms will have high wages across all sectors—including those, like hair-cutting, where productivity differences between rich and poor countries are small. As a result, the cost of living is higher in rich countries, and simple exchange-rate adjustments overstate real welfare differences. On an exchange-rate basis, the average American is 35 times richer than the average Indian. On a PPP basis, however, taking account of the lower cost of living in India, American income is just 13 times higher. (The World Bank maintains a PPP database for some 180 countries.)

Unfortunately, PPP adjustments are hard to calculate. Residents of different countries buy different combinations of goods and services, or similar items with subtle variations in quality. To get around such problems Messrs Ashenfelter and Jurajda focus on a single company. All McDonald’s employees turn similar ingredients into Big Macs, which are more or less identical everywhere (although India’s Maharaja Mac is made from chicken, not beef). Sandwiches are produced according to a rigidly uniform process detailed in a 600-page manual. The company’s reputation depends on its ability to deliver identical burgers in every city: an ideal environment for global productivity comparisons.

To make such comparisons, the authors gather data on McDonald’s wage rates (the McWage) and Big Mac prices. Their efforts began in 1998 in 13 mostly rich countries but have since expanded to include more than 60. Data have been collected annually since 2007, and will be available publicly in future, according to Mr Ashenfelter. Prices and wages are collected from two or more stores in the capital city of smaller countries and from multiple cities in larger ones, including China.

Supersizing pay rates

Converting McWages into a common currency generates a surprisingly good picture of international differences in the cost of labour for simple, well-defined tasks. McWages are roughly comparable across the rich world (see chart, left panel), though rigid minimum-wage laws in western Europe make it a bit of an outlier. Among emerging economies, wages vary from 32% of the American level in Russia to about 6% in India, enormous gaps for functionally identical work.

Dividing the McWage by the local price of a Big Mac gives what the authors call Big Macs per hour (or BMPH). This statistic represents an alternative, PPP-like calculation of the real wage, taking account of the local cost of goods. Labour costs represent more than half the price of a Big Mac.

Workers in less productive economies earn lower wages, but their Big Macs cost less to produce. The gap in worker welfare between rich and poor countries is therefore smaller than exchange rates suggest. In China, for instance, the exchange-rate-adjusted McWage is 11% of that in America. The BMPH real wage shows a much smaller gap. BMPH also erases the seeming advantage conferred on workers by western Europe’s minimum wages.

Both versions of the real wage show large gaps in pay for similar work across economies. These are due, the authors reckon, to variation in “total factor productivity” (TFP) or the efficiency with which an economy transforms raw inputs into final goods. An estimate of TFP derived from their McWage analysis closely matches economists’ estimates by more traditional means.

A quick look at fast-food wages can shed light on the globe’s vast gulfs in productivity and welfare. Those gaps are shrinking, and not simply as a result of rapid emerging-market growth.

Between 2000 and 2007 America’s McWage rose by 13% while the Big Mac price jumped by 21%, resulting in a net tumble in the BMPH real wage of 7% (see chart, right panel). Meanwhile, the BRICs advanced as McWages grew faster than Big Mac prices. The BMPH jumped by 53% in India, 60% in China and 152% in a Russian economy recovering from financial crisis in 1998. The going has been slower since then. Russia and China managed gains from 2007 to 2011. Most others did not, as food prices rose faster than McWages. Data gathered this summer for the 2012 calculations may show a further slowdown. Bad news for an emerging world still hungry for better living standards.

____________________________________

http://www.thehindu.com/arts/books/article3543409.ece?css=print

Published: June 18, 2012 21:21 IST | Updated: June 18, 2012 21:21 IST June 18, 2012

Untold story of the rural woman

M. S. Nagarajan

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arts, culture and entertainment books and literature

If India lives in its villages, what a shame then that the Indian rural woman has been consistently — nay, deliberately — sidelined in the feminist and postcolonial discourse. One may search in vain the literary canon of South Asia to find any trace of her history since feminist consciousness has generally been dominated by the urban middle-class woman. There is a crying need to reclaim this lost territory, the voice of the voiceless. Jaiwanti Dimri’s Images and Representation of the Rural Woman does exactly this. It protests the apparently systematic neglect of the rural woman’s experience in the literary canon. It investigates, with great specificity, the image of the rural woman projected in eight post-independence woman-authored novels — two in English and six in regional languages. Selected from different social and geographical locales, the fictional representation in these novels is examined in three categories, familial, social and cultural constructs against the background of “(i) subaltern consciousness, patriarchal benevolence and, (ii) feminist postulates of identity and subjecthood.”

Dimri maintains that the social or cultural specific image of a woman is not an unintended, innocuous act but is always determined by domination and subordination. What is most disturbing is that in such a construct the entity ‘rural’ or ‘urban’ is homogenised and treated as if it were one unit ignoring the wide chasm that divides the two entities .

Chapter three examines the representation of the rural woman in two categories of patriarchy: brahminical and feudal. How the rural woman has subverted or collaborated with patriarchy in her familial or social roles is examined with reference to these four novels: Kamala Markhandaya’s Nectar in a Sieve, Ashapurna Devi’s The First Promise, Maitreyi Pushpa’s Idannamam and Chaak in such different contexts as sexuality, violence and female resistance. Patriarchy establishes its control over women by marginalising them in the two primary institutions of marriage and family. Dimri employs the term ‘phallo-centric Narcissism’ while referring to this oppression. It rewards handsomely those who conform by accepting their roles as wives and mothers and punishes those who disobey or violate these standards expected of them. The hegemonic male domination is perpetually sustained and transmitted through caste, class and gender.

Dimri declares that though the low-caste woman is pervasively present in the hegemonic texts, it is only in the non-vedic religions we can identify representations of low-caste women being relocated in social hierarchy. In Dalit literature caste is a determining motif since it is based on felt experience. But it has outgrown these narrow limits these days. It is getting more politically informed and radical. In the genre of autobiography and life-histories Dalit women’s writings have surely enriched the literary canon.

Owing to greater urbanisation, migration and other social factors, caste configuration has undergone a sea change. In remote villages mostly conditioned by rigid class privileges, however, the socio-cultural framework is different; hence the dwellers often get segregated to ghettos. They face social exclusion. The concluding chapter asserts that the image of the rural woman should not be seen as being confined to the family alone. It should also be treated as a cultural construct. This construct could be seen as possessing a wealth of oral tradition in the form of folktales, anecdotes, rumours, proverbs, etc. In the context of homogenisation of culture, subaltern identities get relegated or even disregarded. Indian villages are the nucleuses of our communal culture. Many oral narratives get integrated into the psyche of the village women constituting their collective cultural memory. Western feminist scholarship — especially in Afro-American women’s writing — focuses on the retrieval of memories. Folk discourse also adds an emotional tone to the language of rural women.

Gynocritical writings interrogate and reinvestigate old myths by dismantling the absolutes and reinventing new ones. Dimri is convinced that “a gynocritical study of this kind would not only contest and deflate the cultural and civilisational imperialism and offshoots of globalisation but also shift the critique of colonialism from the economic and political domain to the cultural domain from the ‘bourgeoisie culture’ to ‘indigenous culture’. ” 

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http://www.economist.com/node/21556974/print

The global labour market

United workers of the world

Unbalanced skill levels could make the world more unequal

Jun 16th 2012 | WASHINGTON, DC | from the print edition

THE working world was much cosier in 1980. Just 1.7 billion people were picking up a pay packet a generation ago, nearly half on farms. Globalisation has since upended labour markets. In 2010 the world counted 2.9 billion workers, with the emerging world responsible for most of the increase: it added 900m new non-farm workers, of which 400m live in China and India alone. The meaning of these striking numbers is the subject of a new study by the McKinsey Global Institute, the consultancy’s research arm.
The integration of China’s and India’s masses into the world’s labour market lifted legions out of poverty. The transition from soil-scratching powered rapid growth. China’s non-farm workers are seven times more productive than peasants. India’s performance lagged behind China’s because it struggled to move workers away from agriculture. Non-farm employment merely kept pace with the overall growth of India’s labour force.

In rich countries, competition from millions of new, low-skilled workers has acted as a drag on wages for less-skilled ones in advanced economies. At the same time, rich-world firms have invested heavily in new technology, raising demand for skilled workers faster than schools could increase supply. In combination, these two trends raised inequality in developed countries and strengthened the hand of capital relative to labour. Workers’ share of overall income fell 7 percentage points between 1980 and 2010.

These dynamics will continue, but also change, reckon the authors of the study. Despite great efforts to improve schools and universities, workers in the emerging world are less educated than those elsewhere. Some 35% in China and a stunning 70% in India have no more than a primary education. Yet this will change: China and India, McKinsey predicts, will be the world’s main source for skilled workers over the next two decades. The two countries alone will add 184m college graduates to the global labour market. As a result, the centre of gravity of human capital and innovation is likely to shift towards Asia.
The main story in advanced economies will be the rapidly ageing workforce. Retirements will take 12m college-educated workers out of the labour force by 2030. In many countries the labour force will even shrink. Rapid productivity improvements will be necessary to maintain income growth, particularly in the parts of southern Europe that produce and procreate the least. At current labour-force participation rates, Spain, Italy, Greece and Portugal will need productivity growth of 1.4% a year—more than twice what they managed between 1990 and 2010—simply to keep up recent growth rates in output per head.
Taken together, these developments will lead to big skills imbalances. McKinsey estimates that over the next decade rich countries and China will need 40m more college-educated workers than they will be able to produce. At the same time, employers across the world may find themselves with 90m more low-skilled workers than they need. This glut will drag down wages, worsening inequality.
Governments can mitigate the worst effects, McKinsey argues. Innovation in higher education, such as online teaching, would help raise the supply of skilled workers. Labour-market reforms would increase demand for less-skilled workers, particularly in service industries such as health care. Tax incentives would encourage households to “outsource” household chores to paid workers. Yet in a global labour-market that will be 3.5 billion strong in 2030, competition is bound to be intense and often uncomfortable, for workers and governments alike.

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http://www.thehindu.com/opinion/columns/sainath/article3595351.ece?css=print

Farm suicides rise in Maharashtra, State still leads the list

P. Sainath

It accounted for well over a fifth of the total of 14,027 deaths in 2011

With a figure of at least 14,027 in 2011, according to the National Crime Records Bureau (NCRB), the total number of farm suicides since 1995 has touched 2,70, 940. The State of Maharashtra shows a rise in numbers yet again, logging 3,337 against 3,141 farmers’ suicides the previous year (and 2,872 in 2009). This, despite heavy massaging of data at the State level for years now, even re-defining of the term “farmer” itself. And despite an orchestrated (and expensive) campaign in the media and other forums by governments and major seed corporations to show that their efforts had made things a lot better. Maharashtra remains the worst single State for farm suicides for over a decade now.

The total number of farmers who have taken their own lives in Maharashtra since 1995 is closing in on 54,000. Of these 33,752 have occurred in nine years since 2003, at an annual average of 3,750. The figure for 1995-2002 was 20,066 at an average of 2,508. Significantly, the rise is occurring even as the farm population is shrinking a fact broadly true across the country. And more so in Maharashtra which has been urbanising more rapidly than most. The rising-suicides-shrinking-population equation suggests a major intensification of the pressures on the community. A better understanding of that, though, awaits the new farm population figures of the 2011 Census — not expected for many months from now. At present both national and State-wise farm suicide ratios (the number of farmers committing suicide per 100,000 farmers) are based on very outdated 2001 Census numbers.

Big five States

The 2011 total gets dicey with Chhattisgarh’s posting a figure of zero farm suicides. A zero figure should be great news. Except that Chhattisgarh had 7,777 farm suicides in the preceding five years, including 1,126 in 2010. It has been amongst the very worst States for such deaths for several years. The share of the worst (Big 5) states (Maharashtra, Karnataka, Andhra Pradesh, Chhattisgarh and Madhya Pradesh) as a percentage of total farm suicides, is now around 64 per cent. Even with Chhattisgarh showing a ‘zero’ figure, that is not much lower than the preceding five-year average for the Big 5 of close to 66 per cent. It could be that Chhattisgarh’s figures have simply not made it to the NCRB in time. Otherwise, it means that the State is in fact a late entrant to the numbers massage parlour. Others have been doing it for years. Maharashtra since 2007, following the Prime Minister’s visit to Vidarbha. Union Minister for Agriculture Sharad Pawar has strictly avoided using NCRB farm data in Parliament since 2008 because the data are unpleasant. (The union government however quotes the NCRB for all other categories). Now, governments are deep into fiddling the data that goes from the States to the NCRB.

With the Big 5 also staring drought in the face, what numbers the coming season will throw up is most worrying. Within Maharashtra, Vidarbha and Marathwada have already been under great stress (which in turn pushes officials to step up data fiddles). If the numbers are re-calculated using the annual average of Chhattisgarh in the past five years, the national total of farm suicides for 2011 would be 15,582. And the share of the Big 5 (at 10,524) would be nearly 68 per cent. That’s higher than the five-year average for those States, too. In 1995, the first time the NCRB tabulated farm suicide data, the Big 5 accounted for 56.04 per cent of all farm suicides.

In 2011, five States showed increases of over 50 farm suicides compared to 2010. These included Gujarat (55), Haryana (87), Madhya Pradesh (89), Tamil Nadu (82). Maharashtra alone showed a rise of 196. Nine States showed declines exceeding 50 farm suicides, of which Karnataka (485) and Andhra Pradesh (319) and West Bengal (186) claimed the biggest falls. That, of course, after Chhattisgarh, which claimed a decline of 1,126, with its zero farm suicides figure in 2011.

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http://www.economist.com/node/21558631/print

Seducing shoppers in Sticksville

India’s small towns are the next frontier

Jul 14th 2012 | CHENGALPATTU | from the print edition

GROWTH in India is slowing. The economy expanded at an annualised rate of 5.3% between January and March, the slowest for seven years. Shoppers are scrimping. Sales of consumer durables fell by 10-15% in the year to March 2012, executives say. Indian factories cranked out 30% fewer air conditioners and 15% fewer colour televisions, official data show.
Yet there is a bright spot: small-town shoppers are starting to splurge. Godrej, a family-owned conglomerate, saw its sales of white goods drop by over a tenth in big cities in the past fiscal year. But sales in towns of less than 100,000 people rose by 19%, and in villages by over 40%. Bajaj, another conglomerate, says small-town and rural sales have risen handily in recent years, to a quarter of its home-appliances business. Sales of motorbikes and mopeds have decelerated more gently than cars, an urban luxury.

In this section

• Lurching into the fast lane
• Can Russia create a new Silicon Valley?
• Measuring mud
• Stealing steel
• »Seducing shoppers in Sticksville
• Chipping in
• Intoxivation
• Correction: Airbus A320

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• India

“As far as I am concerned, the slowdown is not having an effect,” beams C.S. Gurubaran, as he plies customers with fizzy drinks in his home-appliances shop in Chengalpattu. Two years ago Mr Gurubaran would sell a dozen washing machines a month at most in this dusty town of 64,000 people in south India. He now sells that many a week. Fridges, food processors and fans are also shifting more quickly. A bride’s parents often buy a whole set of white goods as a dowry.
Government subsidies, good monsoons, high land prices and a low reliance on credit have thus far sheltered these consumers. Chengalpattu’s shoppers are mostly farmers who benefit from government-fixed floor prices for crops. Some have also made big sums by selling fields to developers. Poorer shoppers from nearby villages make money from a government scheme that guarantees 100 days of work a year.
Such subsidies and schemes pushed up rural incomes by 12% last year, according to Kotak Institutional Equities, a broker. Rural incomes have grown more rapidly than urban ones since 2008.
Indian firms sense a fortune to be made by selling rustic folk their first fridges. Shekhar Bajaj, the head of Bajaj Electricals, the wing of the conglomerate that sells home appliances, wants to start reaching rural buyers directly and cutting out costly middlemen (such as Mr Gurubaran). Last year Mr Bajaj launched a chain, Bajaj World, mostly for rural areas. It now has 11 stores, one in a town of just 20,000 people. Mr Bajaj hopes to have 70 by next spring. “We never looked at these markets…[but] a couple of years ago we started looking at this because we need to continue to grow,” he says.
Godrej is pushing even deeper into the hinterland, trying to reach villages with as few as 5,000 people. It is also designing washing machines with manual motors and tiny fridges for homes with unreliable electricity.
Foreign firms such as Samsung and Panasonic are following suit. Mahesh Krishnan, who heads Samsung’s home-appliances division in India, hopes to increase the firm’s presence in rural shops by a fifth in time for November’s Diwali festival, a big shopping season. Foreign firms typically have skimpier distribution networks than their local rivals, but their products are more popular where they are available. A foreign brand is often a status symbol.
As India gets richer, rural folk are becoming more entwined with the national economy. Ramesh Iyer, the managing director of Mahindra & Mahindra Financial Services, a rural lender, now has 2m customers, twice as many as he had in 2008. “As they move up the chain, the demand for credit will only get higher,” he says. “They are getting aspirational.”
Chengalpattu’s shopkeepers are upbeat. A motorcycle vendor says families are buying one bike per adult, rather than one for everyone to share, as they did a few years ago. Mr Gurubaran has started stocking 3D televisions that cost 95,000 rupees ($1,700) a pop. Viewers will doubtless see even more new products to crave.

However, rural shoppers cannot always be relied on to splurge. Their wealth often depends on handouts rather than increased productivity. A poor monsoon curbs spending for a whole year—light rains in June are causing jitters, though the forecast for the whole year is still good. Life in small-town India may be better, for now, but it is precarious.

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http://www.thehindu.com/opinion/op-ed/article3738921.ece?css=print

Published: August 8, 2012 01:35 IST | Updated: August 8, 2012 01:35 IST August 8, 2012

From crisis to resilience: why inequality matters

Anuradha Seth

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We need to understand the links between rising income inequality and frequent economic crises

The frequency of global financial and economic crises has increased over the past decade-and-a-half, and they appear to have become a systemic feature of the international economy. The risk of economic growth and human development achievements being undermined by such volatile international developments is fostering an overall rethink about the inner nature of crises, the growing vulnerability of developing countries and their capacity to be resilient in the face of these shocks.

As the 2015 Millennium Development Goals deadline approaches, the debate around a new framework for understanding macroeconomic vulnerability and resilience is gaining momentum among a wide array of stakeholders, ranging from academia, civil society and grassroots movements, to international organisations, development policymakers and the media. A new research piece by the United Nations Development Programme contributes to the public debate by arguing that at present there is no uniform approach to understanding macroeconomic vulnerability or resilience in the context of financial and economic crises in developing countries.

Two approaches

Broadly, two distinct approaches can be identified: the first addresses macroeconomic vulnerability principally in relation to financial crises — currency, debt or banking crises. Currency crises, for instance, are seen as being driven mainly by macroeconomic imbalances in the financial sector of developing economies and by fragile domestic financial systems. Hence, policy recommendations to build resilience to such shocks are focused on containing credit growth and the money supply, ensuring flexible exchange rates and guarding against expansionary fiscal policies. However, the empirical and theoretical assumptions underlying many of the studies and articles that support this approach have been long questioned — in particular, the assumption that markets are self-regulating and inherently efficient.

A second approach frames macroeconomic vulnerability in the context of both economic and financial crises. The focus here is on identifying the structural determinants and transmission channels through which an economy is exposed to crises, reflecting the rapid integration of developing countries in international trade and finance. This broader perspective argues that the growing dependence of many developing countries on exports — specifically primary commodity exports, their increased dependence on foreign investment for economic growth, coupled with limited fiscal and institutional capacity — renders them vulnerable to economic and financial shocks. Yet, there is no clear agreement on which structural determinants and transmission channels are the primary drivers of macroeconomic vulnerability. Some argue that the size and location of an economy are critical determining factors, whereas others focus on trade dependency or dependency on international private capital flows as the primary conditions that expose an economy to shocks.

Major factor

A major determinant of macroeconomic vulnerability that is either totally neglected or barely mentioned by these studies is that of rising income inequality. The staggering escalation in inequality contributes to global and domestic economic and financial instability by fostering a political environment that lends itself to risky investment behaviour and the emergence of asset bubbles. The critical importance of inequality as a driver of crisis is clear when one is confronted with the fact that the average income of the world’s richest five per cent is 165 times higher than the poorest five per cent. In a world where the richest five per cent earn in 48 hours as much as the poorest in one year, understanding the linkages between rising income inequality and the greater frequency and severity of the financial and economic crises is central to proposing policies that build systemic resilience and enable a less volatile growth process. In traditional thinking, there is no disagreement on the need for policies that help economies cope with or counteract the impacts of shocks. Indeed, this is how resilience is defined in the economics literature. Nevertheless, coping with a shock only when it happens presents decision makers with a limited set of policy options to build resilience. This narrows the choices for concerted action to tackle rising inequality and to address the longer term policies needed to build systemic resilience.

A relook

The recent — and lasting, economic and financial — crisis, along with renewed calls for a rethink on traditional approaches to economic growth and development, offers us the opportunity to embark on a more comprehensive framework for the assessments of macroeconomic vulnerability in developing countries. Such a framework should allow for a comprehensive mapping of all the structural conditions and transmission channels that drive the vulnerability of developing economies, and that expose them to the virulent impacts of crises. Calls for a rethink of existing approaches should ultimately help us deliver policies for resilience that build coping capacities to withstand and counteract a shock and reduce exposure to shocks, while advocating for global coordination mechanisms to minimise the frequency of global crises themselves.

(The writer is Anuradha Seth is the Senior Policy Adviseo√r on Macroeconomic Policy and Poverty Reduction with the Poverty Practice of the UNDP’s Bureau for Development Policy in New York.)

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 http://www.thehindu.com/opinion/op-ed/article3780996.ece?homepage=true&css=print

Published: August 17, 2012 00:34 IST | Updated: August 17, 2012 00:34 IST August 17, 2012

Bridges that widen the gap

Darryl D’Monte

The Hindu Economics gone awry: The Rs. 1,600-crore Bandra-Worli Sea Link was supposed to carry 75,000 passengers a day, but actually sees less than half as many. Photo: Shashi Ashiwal

Slum dwellers do not figure in any column of the Rs. 58,000-crore transport infrastructure plan being pushed for Mumbai

Top decision-makers have been vying to present plans for the “makeover” of Mumbai. This term smacks of meretriciousness, as if the former industrial and still financial capital of the country wants to deck itself up and camouflage its squalor. The Maharashtra government is gung-ho about transforming the megalopolis into a “world class city” and has set up a Mumbai Transformation Support Unit with an office in the business district of Nariman Point.

The harsh truth is that Mumbai — the city proper, or Greater Mumbai, comprising some 480 sq km — is among the most wretched cities in the world, with the proportion of slum dwellers officially estimated at 60 per cent. That amounts to a staggering 7.5 million out of the 2011 census tally of 12.5 million. Split off, this “Jhopdistan” is almost as populous as the state of Israel. This is surely, both in proportionate and absolute terms, the largest number of slum dwellers in the entire world. But they do not figure, unsurprisingly enough, in any official discourse — whether by the state or corporate lobbies — in the “makeover” of this mega city.

Chief Minister Prithviraj Chavan is keeping his powder dry before meeting the Prime Minister on his visit to Mumbai on August 18. He has some big-ticket projects up his sleeve for “funding aid and fast-track clearances”. These are the Virar-Alibaug Rs.10,000-crore multi-modal vehicle corridor from the northernmost point of the Greater Mumbai peninsula to the much larger Mumbai metropolitan region on the mainland; the identically priced 21-km Trans-Harbour Sea Link for vehicles from Sewri in the city proper to the mainland; the Rs.14,000-crore Navi Mumbai airport in the twin city; the Rs.16,000-crore Colaba-Bandra Metro line, connecting the southernmost tip of the island city to the first suburb on the west coast; and the Rs.8,000-crore coastal ring road (which term is incorrect, since it does not traverse the congested docklands in the east) from Marine Drive to Malad, hugging the entire length of the west coast .

By any reckoning, no city — with the exception of New Delhi — has attempted such ambitious Rs.58,000-crore projects. But none of them meets the prime needs of this beleaguered metropolis, which are jobs and homes. Even 15 years ago, demographers estimated that at least 75 per cent of the jobs were in the euphemistically termed “informal sector” — i.e. casual work. Now, the situation is far worse. Mumbai has only grown by six lakh since 2001 because there are no jobs to be had.

The Trans-Harbour Link, the multi-modal corridor (partly by road, largely by rail), and the coastal ring road are all for motorists and a very restricted number of buses. By their very nature, buses are meant for shorter distances, regular stops, which a multi-modal corridor and coastal road do not provide.

It is shocking that these three projects cater mostly to motorists, who only constitute eight per cent of the commuting public. These cars, along with trucks, which are far fewer in number, generate 60 per cent of the air pollution, which is driving away top executives, foreign or Indian, and incinerating any notion of making Mumbai “world class” like Singapore or Shanghai, let alone an “international finance centre”, as Mumbai First, a corporate think-tank, has been plugging for.

Politics plays its bit in configuring some of these projects. The Mumbai Metropolitan Region Development Authority, which is firmly in the grip of the ruling Congress, is gunning for the coastal ring road. It should be the apex planning body for the city, after it developed the new central business district of Bandra-Kurla.

Its model is to develop and sell land — mostly by reclaiming land from mangroves, in total ignorance of the ecological repercussions — and is the only cash-rich State institution. It has been bypassed in recent years by the Maharashtra State Road Development Corporation (MSRDC), a fiefdom of the Nationalist Congress Party, the junior partner in the coalition. As its name suggests, it is an implementing agency, not a planning body; but it has built some 50 flyovers and the Bandra-Worli Sea Link in utter disdain of any planning principles.

Even the economics of the new road schemes has gone awry. The MSRDC built the Bandra-Worli Sea Link and wants to extend it northwards: sea links cost Rs.400 crore per km, five times more than a road on reclaimed land. The Rs.1,600-crore Sea Link was supposed to carry 75,000 passengers a day, but actually sees less than half as many. That, when the toll was Rs.50 one way and Rs.75 return. The slight increase to Rs.55 and Rs.82.50 return has seen a further decline in traffic. Transport experts estimate that if Bandra is linked to Versova entirely by a sea link, as MSRDC is still pushing for, a motorist may have to fork out Rs.440 for a return trip. That will only witness a further decline of users, and ultimately lead to the public subsidising motorists.

The final nail in the coffin for a coastal road, which is a far easier option and may not involve a toll, is its ecological impact. Apart from destroying the scenic beauty of Mumbai’s most prized natural asset — its coastline — it threatens to decimate the mangroves at stretches like Carter Road. This road, and its companion at Bandstand, lie cheek by jowl and have public promenades, maintained by residents, and is the jewel in the crown of these suburbs.

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http://www.thehindu.com/news/international/article3776691.ece?css=print

Published: August 16, 2012 02:11 IST | Updated: August 16, 2012 02:11 IST BEIJING, August 16, 2012

In China, alarm over widening income gap

Ananth Krishnan

A resident in urban China earns as much as 5.2 times what a rural Chinese takes home — the widest ever income gap in the country’s history — according to a new study released this week by a leading Beijing think-tank.

The study, published by the Chinese Academy of Social Sciences (CASS) on Monday, said the urban-rural income gap last year was 68 per cent higher than in 1985.

The government-run centre’s Urban Blue Book measured the urbanisation rate in major cities and also estimated the spending needed to build a social security system for new urban residents. It described the next five to 10 years as “a key period for China to turn from a village-based to a city-based country and enhance the quality of urbanisation”.

Last year, the urban population for the first time exceeded the number of rural residents — a landmark in the rapid urbanisation over the past three decades since the introduction of “reform and opening up”.

The urbanisation rate in 2011 was 51.27 per cent, with 691 million residents in cities. The study estimated that a further 500 million rural residents would need to be “urbanised” in the next two decades.

It estimated the cost of providing social security to the new urban residents at four to five trillion Yuan (or US$ 794 billion) in the next 20 years.

China’s rapid urbanisation had left record income gaps between urban and rural Chinese, the study found. The disposable income of urban Chinese was 3.13 times that of the net income of rural residents. With rural Chinese spending 40 per cent of their net income buying fertilizers, seeds and farm equipment, the real income gap was much wider, it said, estimating the average urban income at 5.2 times the average income in rural areas.

The study stressed the need for the government to boost provision of social security services to address the gap. Scholars have cited the lack of access to social welfare for China’s more than 200 million migrant workers — classified as rurally registered but living in cities — as a major source of inequalities.

Calls have grown in recent years for the government to reform its decades-old system of household registration or “hukou”, which denies access to social security to rural residents when they move to cities.

While officials argue that the system has regulated migration and prevented the emergence of slums in Chinese cities, critics say the restrictions which deny access to free healthcare and education for migrants have fuelled income divides. Sheng Guangyao, a researcher with CASS who was involved in the study, told Global Times that the system of “neglecting rural growth and supporting thriving urban areas has hindered the country’s urbanisation”.

Kang Houming, one of three migrant worker representatives of the National People’s Congress (NPC) or parliament, told The Hindu in an interview that hukou reforms were essential to address inequalities.

He cited the experience of his hometown Chongqing — China’s biggest municipality — on addressing the issue by relaxing restrictions and providing subsidised housing.

“More than 2 million migrant workers have been given rights because of the reform,” he said, pointing out that any worker who had spent three years in the city was eligible to access the same rights as urban residents. “When I came to Chongqing, few workers had social security” he added. “With the reform, the problems of housing, inequalities and of lack of access to education have all been addressed. This is a lesson for the rest of the country”.

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Global house prices

Searching for solid ground

An era of frothiness is over

Aug 18th 2012 | from the print edition

AFTER years of dizzying ascents, a big dose of gravity has hit residential-property markets around the world. According to The Economist’s latest round-up, year-on-year prices are now falling in 12 of the 21 countries we track; in five of the other nine, prices are rising at a slower rate than they were a year ago.
Earthbound prices are returning many markets to “fair value”, defined as the long-run average ratio of house prices to disposable income and to rents. Housing is now around or below its fair value in eight countries. But reaching this mark does not mean prices will stop falling. After dropping by a third from their 2006 peak, prices in America now stand at 19% below fair value. The bottom of the market is close, however. The month-on-month Case-Shiller index of 20 cities increased for the fourth consecutive time in May, by 0.9%. Housing sales are picking up, although they remain below their long-run average, and the number of mortgages in foreclosure has fallen to its lowest level for three years. Financing is cheap, too: real 30-year fixed mortgage rates are at 30-year lows.

Other markets are still in free fall. Property prices in Ireland, at the foot of our table since April 2010, continue to plummet. They have now halved in value, after a fivefold rise between 1995 and their 2007 peak. The pace of decline in Spain, a fellow euro-zone sufferer, quickened in the second quarter. Although prices have already fallen by 23% from their peak, they remain well above fair value and the dire state of the Spanish economy, where a quarter of the workforce is unemployed, suggests that prices will keep diving.
Such drops would be more precipitous still were it not for the cushioning effects of ultra-low interest rates on European mortgage-holders. Prices in Britain fell by 0.7% in July, compared with the previous month, taking the total fall since the market peak to a rather modest 13.1%. With many lenders hanging back, sales remain subdued, at around half their 2007 level. The market is heavily reliant on London and the south-east: 47% of residential transactions took place in this part of the country in 2011.
Once-wild Asian markets are also muted. Prices in Hong Kong are now rising at a manageable 6% a year, as opposed to 28% a year just 12 months ago. Price rises in Singapore have slowed in recent months, too. Our index of Chinese prices fell year on year for the fifth month in a row in June. (That may not last, however: prices of new homes rose month on month in 25 of the 70 cities tracked and there is plenty of room for growth.)

Explore and compare global housing data over time with our interactive house-price tool

Indeed, so subdued is residential property at the moment that the list of the world’s bounciest housing markets has an unusually Germanic flavour. Austrian house-price rises are the only ones in double digits; the Swiss market sits in fourth place. As for Germany itself, prices there have increased by a ground-breaking 5.7% over the past two years after nearly two decades of stagnation. Hopes that a German property boom will unleash spending are slight, however. German regulators are watchful, and owner-occupation in the country stands at just 46%, so any rise in prices has a fainter “wealth effect” than in Britain, say, where 66% of homes are owner-occupied.

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ON JULY 6th, a month after an altercation at a mosque in a region run by (non-Muslim) tribesmen in north-east India, four men on motorcycles shot and killed two Muslims. Six weeks later, some 80 people have been killed in communal bloodletting; the army has been sent into Assam with orders to shoot to kill; tens of thousands of north-easterners in other parts of India have fled homeward in fear of their lives; India has accused Pakistanis of being the origin of doctored video messages designed to stir up religious hatred; and 400,000-500,000 Indians are homeless or displaced within Assam, the largest involuntary movement of people inside the country since independence. How on earth did a local conflict, one of many in the area, produce such devastating nationwide consequences?
The spark for the extraordinary sequence of events was a fight in western Assam between indigenous Bodo tribesmen (pronounced Boro) and Bengali-speakers who have been moving into the area for more than a century. The Bodo say the incomers are illegal immigrants from Bangladesh and want them to be kicked out.

In this section

• »A neglected crisis
• Hitched to the China wagon
• Touchable after all
• Up to a point, Lord Copper
• Nuclear profusion

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• Assam
• India

The migrants are mostly Muslim. The Bodo are animist or Christian. Muslims have grown modestly as a share of Assam’s population (from 24% to 31% in the three decades to 2001). No surge explains the latest violence, although the Muslim population of western Assam is growing faster. In some villages the Bodo are now a minority. They say they feel swamped by Muslim immigrants.
However, the conflict is not primarily about religion. It is about land. The Bodo hold land in common. The Bengali-speakers are settled farmers, anxious to establish private-property rights as protection against dispossession. In 2003, after a long, violent campaign for autonomy, the Bodo got their own Bodo Territorial Council, on whose turf outsiders may not own property. The Bodo consider all Muslims outsiders—hence the dispute at the mosque.
Assam’s conflict has been going on for decades. A massacre in 1983 was far more brutal than this year’s violence. Yet until now the dispute, like other insurgencies of the north-east, has had no real impact elsewhere in the country.

This time, there were riots in Mumbai and attacks in nearby Pune on people from Manipur. Some 30,000 north-easterners fled from Bangalore, nine of them being thrown off a moving train. Some authorities encouraged the exodus by laying on special trains: 30,000 tickets to Guwahati, Assam’s capital, were sold in three days.
The impact of mobile phones has made a difference. On August 12th people started getting text messages warning north-easterners to go home before the end of Ramadan (August 20th). They also got video messages with doctored images purporting to show the bodies of Muslims killed in Assam. In fact these were victims of Cyclone Nargis in 2008 in Myanmar.
India’s home minister, Sushil Kumar Shinde, said that many of the fake images came from websites in Pakistan and asked for the Pakistani government’s help in closing them down. Pakistan denied involvement. India ordered the blocking of over 250 websites and asked mobile-service providers to restrict the number of SMS messages. Yet the images have gone viral.
The Assam conflict also spread because people elsewhere sought to capitalise on it. Mumbai saw rival protests by a big Muslim organisation, the Raza Academy, then a big Hindu one, the Maharashtra Navnirman Sena. The opposition (Hindu-nationalist) Bharatiya Janata Party said Assam’s problem is illegal immigration from Bangladesh. Assam is ruled by the Congress party. Its chief minister, Tarun Gogoi, said bluntly “there are no Bangladeshis in the clash but Indian citizens.” The Assam conflict has not been such partisan fodder before.
The reverberations across the rest of the country may force Indians to focus for once on the chronic failings of government policy in the north-east. Linked to the rest of the country only by a “chicken’s neck” stretch of land 22km wide, the region is isolated, poor and different. Assam, easily its biggest state, is one of India’s poorest. North-easterners look different: a Manipuri teacher in Pune says everyone from passers-by to his pupils calls him, offensively, “Chinky”. North-easterners call the rest of the country “mainland India”.
One manifestation of this distinctiveness is the persistence of insurgencies. The Institute for Conflict Management, a think-tank, lists 26 active armed groups in the region, and ten organisations proscribed by India’s home ministry. There are armed separatists in five of the seven states. In the early 2000s the death toll was 1,700 a year.
Dealing with such a region was always going to be hard. Yet successive governments have made things worse. They have attempted to placate insurgent groups by giving them more autonomy. The north-east has 16 such areas, more than the rest of India. But giving each group a place of its own creates restive new minorities within the area—as in Bodoland.
National politicians have also shied away from dealing with illegal migration, partly because the issue is toxic and partly because local politicians like to register newcomers as voters. For a while, Assam even had its own immigration policy, until that was struck down by the Supreme Court. By letting ambiguity about incomers’ legal status persist, politicians leave the field open to armed extremists who want to kick all Muslims out.
Central governments have attempted to buy peace. Between 20% and 55% of north-eastern states’ GDP comes in transfers from the centre—a huge proportion. It keeps their economies going, but turns local governments into client states surrounded by autonomous areas ruled by former insurgents, while armed gangs wage guerrilla campaigns at the margins.
It is fair to say there have been some improvements. Fatalities have fallen since 2008, thanks to a deal with Bangladesh which denied some insurgents their former bases. But as is clear from the Bodo conflict, the grievances which produced the insurgencies remain. India’s long-term goals in the region are to encourage its integration with the rest of the country, to use the north-east to boost economic ties with South-East Asia, and to check China’s influence in Myanmar. At the moment, none of those aims is being advanced.

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Minimum wages hiked from Oct 1 

New Delhi, October 5

Delhi Labour Minister AK Walia today said that the government has decided to pay the hiked minimum wages to all unskilled, semi-skilled and skilled workers from this month. The new rates have been fixed after the adjustment of dearness allowance. The rates are also applicable to the clerical and non-technical supervisory staff.
As per the new rates, the monthly minimum wages of an unskilled worker are Rs 7,254 against the earlier Rs 7,020, taking the per day wages up by Rs 9 (from Rs 270 to 279). For the semi-skilled workers, the new monthly minimum wages are Rs 8,008 instead of the earlier Rs 7,748, which means a hike of Rs 10 (from Rs 298 to Rs 308) in the wages per day.
For the skilled workers, the new monthly minimum wages are Rs 8,814 instead of Rs 8,528. Their wages per day have gone up by Rs 11 (from Rs 328 to Rs 339).
In respect of the clerical and non-technical supervisory staff, the new monthly wages for the non-matriculate workers have been fixed at Rs 8,008 instead of the earlier Rs 7,748. Their wages per day have gone up from Rs 298 to Rs 308. For those workers who have completed matriculation, but not graduation, the new monthly wages are Rs 8,814 instead of the earlier Rs 8,528. Their wages per day have also gone up by Rs 11 (from Rs 328 to Rs 339). For the graduates or more qualified workers, the monthly minimum wages have been fixed at Rs 9,594 instead of the earlier Rs 9,282. Their wages per day have gone up by Rs 12 (from Rs 357 to Rs 369).
The government has urged the employers to pay their workers as per the new rates, which came into effect from October 1. The workers have been asked to contact the labour department in case they are not paid wages as per the new rates.
They can also register their complaints with the labour department. 

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Very interesting. It strengthens the drill down effect. For instance in an IT company each direct job, creates 4 indirect ones. With min. Wages being increased, the drill down impact will increase.

One could also do a profit comparison of industries. Profit of large Indian companies ( especially in IT like Infosys, cognizant) is 20 percent compared to large US cos. like IBM, Accenture, which is close to 10 percent.

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 Published: October 17, 2012 00:00 IST | Updated: October 17, 2012 05:04 IST

Release foodgrains from godowns: Bhojan Yatra activists

Staff Reporter

On Tuesday, Bhojan Yatra, a campaign demanding a comprehensive food security bill, reached here after travelling through Bihar, Chhattisgarh and West Bengal.

In a rally, organised from Bistupur to Ram Mandir maidan, Right to Food (RTF) activists demanded that the proposed National Food Security Bill (NFSB) give universal access to food instead of capping it at 67 per cent of the population.

They demanded that 8.2 crore metric tonnes of food grains lying in government storage be distributed through the Public Distribution System (PDS). In Jharkhand, in public meetings in 60 villages in 17 districts, the campaign demanded better implementation of nutrition-related schemes.

In 2009, the Jharkhand government reduced the price of rice to Re.1/kg and entitled families with Antyodaya cards to get rice for free. But the distribution of Below Poverty Line (BPL) cards continues to be based on a survey by the Bihar government 15 years ago, and many poor families are still excluded from PDS. The government did a fresh survey last year, but the date for issuing fresh ration cards based on this survey had been shifted thrice this year.

In districts adjoining Ranchi, including East Singhbhum and Lohardaga, which are among 35 districts most affected by Left Wing Extremism and have been identified by the Central government for “focused development,” a majority of villagers still don’t have ration cards.

“Even one family doesn’t have a ration card. They did a survey in our village last year, but none of us got a ration card,” said Kanhu Hembrom, gram pradhan of Musabani, a hamlet of 70 households adjoining the CRPF Battalion 193 camp in Ghatshila in East Singhbhum. In Kekrang village in Lohardaga district, parts of which lie in the hills and are accessible only on foot, only 20 out of 110 households have a ration card. “We don’t grow enough rice to last us through the year. We are tired of asking the panchayat officials to give us ration cards. Everyone got an MGNREGA card but the officials keep the work site open only for 10-15 days,” said Bifan Nagesiya (25) in Kekrang village.

Nagesiya says he migrated to work in a brick kiln in Tripura for one year, but returned when he earned only Rs. 6,000 after working for eight months. In a 2011 survey done in the districts of Dumka and undivided Ranchi, only 25 per cent of households surveyed said they were getting their full PDS entitlement. More than a quarter of the households reported that one family member missed meals in the previous three months, and 12 per cent said that they hadn’t consumed dal even once the previous week.

“Jharkhand has the highest levels of malnourishment after Madhya Pradesh. The Central government allots rations, categorising 46 per cent of the State population as BPL. The Jharkhand government includes another 20 per cent from its own funds, but 13 to 14 per cent of the State’s poor population is still left out. The proposed law will leave even more people out,” said Gurjit Singh, convener, RTF campaign in Jharkhand.

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No hope of a life of dignity for these bonded labourers

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The blaring gurdwara loudspeakers at Punjab’s Gandav village confirmed the worst fears of Jasbir Kaur. They were announcing that the recently- widowed young woman would lose the oneroom shed she calls home if she was unable to pay back the Rs. 80,000 her husband had borrowed from the village landowner. With the home would go the hope for a life of dignity for her nineyear- old son Gurpreet.
— PHOTO: BINDU SHAJAN PERAPPADAN PERNICIOUS PRACTICE: Gurpreet. Jasbir Kaur with her son Jasbir’s husband, Avtar Singh, had “sold” himself and his wife as bonded labourers against a loan of Rs. 45,000 four years ago, to the village landlord. He died this August leaving behind the unpaid debt.
“The fact that they [ Jasbir Kaur and her husband] had worked for virtually no money and stale food at the landlord’s farms day and night did not help; the debt only accumulated interest,” says social activist Jai Singh who has been working in the area for the rescue and rehabilitation of bonded labourers in Punjab for several decades now.
Sitting alongside Mr. Jai Singh, her son huddled against her, Ms. Kaur tells her story.
“Avtar Singh was often beaten up so brutally at work that he wouldn’t be able to stand up the next day. Then one day the landlord came and told me that my husband had committed suicide while at work. I got so frightened that they would now come after my son — as is a common practice in Punjab to replace an injured, dead worker with another male member from his family — that I decided to run away from the farm with my son. But last week my landlord found me and asked me to return his money with interest.”

Ms. Kaur says that she has now been ex- communicated from the village until she pays the landlord who has also “threatened to take away her utensils and broken cot — the only assets we owns”.
Mr. Jasbir Singh says Ms. Kaur is in fact lucky that her son hasn’t already been taken away. “It is an illegal but accepted practice in Punjab to employ labourers against a loan. These bonded labourers are paid almost no, or very little, salary and kept poor enough to be never able to pay back the landowner,” says Mr. Singh. “Despite laws and strict punishment, bonded labour continues to be widely followed across Punjab’s agricultural sector.”
He estimates that the State currently has five lakh bonded workers — men, women and children — struggling in abject poverty with no access to basic health care, education or social security.
In India, Haryana, Punjab and Uttar Pradesh continues to have the largest population of bonded labour according to report released by the National Human Rights Commission last year.
Says Manoj Verghese of International Justice Mission which along with Adivasi Solidarity Council and others will be soon launching a national advocacy campaign against bonded labour: “Lack of awareness and education among the bonded labours ensures that the schemes aimed specifically at their rescue and rehabilitation is not yielding results. Most still prefer to stay on in the farmlands with the assurance of at least one meal a day. Sadly even death isn’t able to rescue the families out of the vicious cycle with their children often being pushed into this vicious cycle to repay their father’s debt.”
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