What Will It Take To Eradicate Poverty?

• Published in: Business today (New Delhi, India) India), 2006-01, p.114
• Main Author: Lord Meghnad Desai
• Format: Magazinearticle
• Language: English
• Subjects: Employment; Nehru, Jawaharlal (1889-1964); Singh, Manmohan; Wholesale Price Index-US
• ISSN: 0974-3650

India is doing very well. For the first time in 200 years, India is back in the world as an economic power. There are Indian products-outsourcing, Bollywood, auto parts, pharma-which are world beaters. No longer do Indians have to lament Dacca muslin and the horror stories about the severed limbs of weavers. India is alright and growing at 7-8 per cent, thank you. Barring small delays while Manmohan Singh gets Prakash Karat's head around FDI (what is good for West Bengal and Kerala is good for the rest of India, too!), we could be looking at 10 per cent. Yes, India is a democracy, the largest and the most successful, but despite much that has been achieved, it has disappointed us. In terms of what the fighters for Independence dreamt of, India has barely scratched the surface of its enormous problems. The first 30 years after Independence were wasted in slow, hesitant growth and the setting up of highly capital-intensive industrial units which were designed to flatter the ego of the ruling elite than to benefit the masses. These are not navratna; they are the fake diamonds reminiscent of Guy de Maupassant's short story. These expensive baubles represent a massive waste of scarce capital. They are the reason why India can detonate a nuclear bomb but cannot provide clean water or decent roads. Above all, they are the reason why there is still a lot of poverty in India after 58 years of independence. Statistics about India's poverty are much disputed. Yes, poverty has come down, from the high 40s (in percentage terms) in the early 70s to the high 20s in the late 90s. Growth during the 90s did make a serious dent on poverty. But the 28 per cent or so who are poor by the official poverty line do not exhaust the poor. There are poor above the line as well. While statisticians and economists endlessly quarrel about the methodology of gathering the data, survey techniques and so on, few have questioned the poverty line itself. It was fixed during the early debates in the late 60s and by 1973, it was around Rs 50 per month at 1973-74 prices (the levels are different for rural and urban areas, but those are details). Since then, it has been updated for inflation.