5 Point Holistic Development Plan for India

The Comedy of Poverty Line in India!

Nothing can be a bigger joke on the poor than the “poverty line” experts create sitting in their cosy offices. Here is the international joke first.

The World Bank counts about 1 billion people living below its poverty line of $1.25-a-day. It has set an “ambitious” target of eliminating it by 2030 and create a “poverty-free” world. Wonderful! In fact, it can create a “poverty free world” right now by setting the poverty line at $0.01-a-day! Of course, you can’t ask an expert to show you how to live with $1.25 in the pocket for the whole day; he is too rich to do that!!

Now the joke from India.

Before June 2014, the government counted 269 million (22%) people living under its official poverty line. Then suddenly in June 2014 the latest “expert group” (look at the name!) headed by a former top bank chief shifted the poverty line. Suddenly, 363 million (29.5%) people found the newly created poverty line over their heads!

Why the “expert group” shifted the line? Because the earlier line was widely criticized as “too low” ! Now you know how “experts” work!!

The late PM Indira Gandhi is remembered for creating a political career for her by endlessly talking about poverty eradication. Of course, both the number of poor and poverty flourished!

However, leaving aside such silly number games, there are some thoughtful people in the UN Development Program (UNDP) who joined hand with Oxford Poverty and Human Development Initiative (OPHI) and created a sensible way to explore poverty – the Multidimensional Poverty Index (MPI). Their analysis puts Indian poverty at 53.7% making 650 million people poor. This is more realistic even if the government feels uncomfortable with it.

The human development reports of the UNDP have been offering a healthy perspective to look at both development as well as poverty for over two decades. But bad habits die hard! Leaders and economists are still stuck with the old-fashioned idea that poverty only means shortage of money and the only way to eradicate it through economic growth. Like a horse with blinders they can’t think beyond money or its shortage. Any way, they are not poor so they don’t have to really know what poverty is.

In reality, any poor will tell that poverty is a complex human issue that can’t be simplified in terms of money; the poor are deprived of many things, not just money. Of course, in economics no one talks of things like human dignity for the poor.

Sure, it is time to start thinking differently; we no longer live in 60s or 70s or even 80s. We are already over a decade into 21st century!

Skill Development Training
Skill Development Training | Source

Changing Times, Changing Realities

We live in the 21st century where rapid changes are taking place around the world. Revolution in IT and communication technologies are rapidly changing the way people want to live. Ease of connectivity is exposing all manners of distortions and inequalities: between the rich West and the poor East, handful rich elites controlling national wealth and making national policies; religious and communal discriminations becoming stronger rather than weaker and so on.

People today no longer want to be subjected to the same lies, laws, customs and social order of the bygone era. They no longer want to see heads of powerful democracies behaving like childish medieval tribal chiefs ready to wage war with anyone who disagrees. They no longer believe that growing economy should be the only national goal. People know how GDP numbers can be manipulated, how wasteful and harmful things boost it and how good things get neglected.

The so-called process of economic reforms that started in early 1990s, under pressure international money lenders, has failed the poor and ordinary masses of India. On the ground, it is an exercise in industrialization, corporatization and urbanization of the country where dominant population is rural. Now government priority is shifting from the poor to the rich who are given all manners of incentives (under the budget head “revenue foregone”) and facilities given to the poor are being withdrawn – because they are “subsidized” which is a bad word for the US economists, now creating government policies.

Their textbooks taught them that what government gives to the rich is “incentive” and what goes to the poor is “subsidy”. Their books further advise that “subsidies” must be eliminated and the market must dictate everything.

Why arms reach poor countries easier than development?

  • This is what rich countries want
  • This is what poor countries want
  • That's needed to improve profits of arms industry
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Ordinary Indian are Worried Today

Ordinary thinking people are worried about the rising influence of the rich and the powerful in the policy making. The nexus of politicians-bureaucrats-business is already a reality and is growing bigger. They worry about rising inequality and richest few controlling the nation.

People from the tribal communities are worried about their displacement from ancestral lands eyed by corporate sharks for the mineral or natural resource underneath. Cut off from the rather peaceful and dignified community life in intimate contact with nature, they now find thrown to sharks of labor markets.

Youth which dominates the demography is worried about its future and the jobless growth of economic as has happened in the past.

The landless farm labor and small farmers, who committed suicide in bulk numbers in the past decade, see no end to their vows in current government policies.

The high diverse social and cultural structure of India might be an attraction for foreign tourists, but people at the lowest rung are as powerless today as they always have been.

In fact, all Indians are worried about the entrenched poverty rooted in social backwardness, social exclusion of the lowest caste communities; neglect of the environment and ecology; increasing crimes and weakening of community fabric when the finance minister’s only worry is GDP growth – the “holy cow” of Western economics.

India Needs a People and Society Centered Development

People are the ‘true’ wealth of a nation and they live in society, and need healthy environment to sustain. So any sensible development will revolve around people and environment. Any act of creating destruction of societies or environment in order to prop up GDP is a senseless idea.

When development is seen correctly in this broad perspective, fresh new insights evolve which will point to the right solutions of problems we have accepted as unsolvable. Poverty then no longer remains an economic problem alone, neither income the only solution and the importance of social, cultural and political dimensions become clear.

Amartya Sen’s capability approach offers framework for such a comprehensive development by putting people at the center of attention. It views the process of development as activities increasing people’s potential ‘to be’ and ‘to do’ what they desire, so that they live in a more fulfilling way. Seeing from the other end, development also means removing all hurdles that force people to live a limited or compromised life – poverty. Economics or money alone can’t remove all such barriers.

Here are some important steps India needs to take for all round healthy development.

A 5 Point Development Plan for India

To start with India must change its goal of development. It must put the GDP number where it belongs: among the many economic numbers. It must define a national goal for next 25-30 years after public debate and adopt a holistic development model, learning from Bhutan which is a wonderful example of sustainable development. Bhutan’s GNH framework model is more comprehensive and is not limited to mere material development but includes psychological, cultural and spiritual well-being also. Therefore, it vibes well with Indian psyche compared with the chase of abstract GDP of Western economists, devoid of human face.

The GDP can be easily dumped and replaced with, say the Genuine Progress Indicator (GPI) which modifies the GDP separates the useful and harmful expenditures based on their impact on people’s well-being. The GPI at least conveys the nature of economic activities vis a vis human wellbeing. Rest of the indicators may be chosen based on the ‘goals’ of development.

The following 5 dimensions can be an illustrating example.

What happens to GDP if people stop falling ill?

  • GDP will fall; good for people
  • GDP will fall; economy goes in depression; it's bad
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1. Right Economic Model

India needs a “Social Capitalism” with focus on maximum employment, given its huge population and poverty. Economy should be directed and designed towards solving these two major problems.

The current brand of Western capitalism, being ushered in by the government, can’t meet aspirations of 1.25 billion Indian people with widespread poverty and backwardness. It will only widen inequality as proven around the world and exploit the poor masses. It creates a class of super rich elites who can easily highjack the state policymaking. They are always a serious threat to the democratic roots as well as fair governance, to the disadvantage of ordinary and poor people.

In fact, its self proclaimed motto that “the only goal of a business is profit maximization” creates all manners of distortions in the social and market atmosphere. This promotes greed leading to disruptive competition or cartelization and employee exploitation. Neglect of environment and its destruction around the world is a serious example of this selfish belief. But now is the time to question, “Why on the earth a business should run unmindful of its impact on the people of the society and the environment?”

However, rather than rejecting capitalistic economy India must tailor its own brand of capitalism. It must move towards a type of “social capitalism” with either or both of the twin goals: ‘maximizing employment’ and ‘maximizing social good’. This involves first changing the brand of capitalism from ‘shareholder’ to ‘stakeholder’ capitalism by incorporating interests of other stakeholders: employees, society, customers, and environment. Then finally encouraging what nobel winner Bangladeshi economist Muhammad Yunus calls “social businesses” which operate to maximize chosen social goals while keeping the business profitable. “Social businesses” and the selfish “profit maximizing businesses” can always coexist; the less of the later the better.

India must promote small and medium enterprises

India must create at least 10 million new jobs per year, mostly at the lower end for its vast pool of poor. It is only possible by promoting small and micro enterprises; only they can generate employment on the scale India needs. Large, high-tech and mechanized industries as well as multinational corporations can’t do that. They have to keep a lean work force for maximum profits. They are more comfortable catering to the upper and upper middle income people who form less than 25% of total population. As far as the poor are concerned, they are mere labor input to make good money in India.

2. Population and Family Planning

Why population of India does not stop growing – is a question everyone wants to ask. It is growing not because people are having large families, but simply because there are too many people in the reproductive age group – population momentum – not due to large family sizes.

The correct anti-dotes to momentum led population growth are: late marriage, delayed pregnancies and spacing among children. It points to two major government interventions: ending all girl child marriages, and spreading awareness and availability of contraceptives in the rural areas.

Worldwide, around 37,000 girls under the age of 18 are married off everyday – which translates to about 13.5 million a year. If Nigeria tops the list with 75% girls marrying before 18, in neighbouring Bangladesh 66% girls marry too soon. In India, 47% girls are married before 18 and many are already mothers! Child marriages feed both population and poverty; they must be curtailed. This one single step can reduce fertility rate from the current 2.6 to replacement level of 2.1 and dent poverty growth.

Early marriages of girls and the weak status of women are closely related. By and large, women in India nearly suffocate under the oppressive patriarchy; they have little breathing space. Therefore, women empowerment must form the third area of developmental thrust. In fact, empowerment of women by itself acts as a natural contraceptive!

Fortunately, there are intelligent men who realise the harmful effects of weak status of women, they have formed a group of men working very effectively against violence against women.

3. Eliminate Social Exclusion and Backwardness of Low Caste Communities

How can any nation ever progress if a large chunk of its population is left excluded and marginalized?

This peculiar problem comes from the caste system. It has severely undermined all efforts of national development and is still an issue. Unfortunately, this issue has become a joke due to petty "vote bank" politics.

If the virus of color and race based discrimination has undermined the social setup of many countries in the West, the bacteria of “caste” division has damaged the social fabric of India. Lower caste people have traditionally been excluded from the mainstream society governed by the so-called upper caste communities. Considered “un-touchable” they had been often forced to live isolated in the periphery of the villages and townships. They traditionally subsisted doing only ‘low tasks’ considered “unfit” for the other castes. Gandhi tried to remove the social stigma of un-touchability by coining the label "Harijan" (god's people) for them but with only partial success.

While considerable changes have taken place since 1947, the “lower caste” communities are still not satisfactorily absorbed in the mainstream society. Rural India (where 70% of the population lives) is still quite “caste conscious” compared with the urban society where education, financial well-being and modern ideas have largely erased the caste divisions. The official label for about 170 million (about 16%) unfortunate lower caste people is Scheduled Caste (SC).

Similar in developmental status but not stigmatized are the other backward caste (OBC) communities. They may or may not be Hindus. The OBC list is dynamic and quite frequently the government edits it (mostly for political reasons); there is much confusion about their exact proportion. But most experts estimate their population in the 25 – 35 percent range.

Yet another segment of society that has remained untouched by waves of development is the tribal community forming around 8% of the population. These tribes (called Scheduled Tribe (ST)) have historically lived in secluded forests areas. The Colonial British designated their habitations as "excluded areas" and left them away from governance – not as any special privilege but for their own convenience. Unfortunately, the “free” governments after 1947 never bothered to assimilate them into rest of the mainstream society and the tribal communities stayed backward.

Taken together these backward communities form about 50% population. They naturally form the largest block of people under poverty.

How to Assimilate them in the Mainstream

Raising welfare fund allocation alone is not going to work because their backwardness is the main issue. The government needs to aggressively promote formal and informal education. It means opening more schools and involving social organizations in a big way.

Yoga is the best preventive medicine
Yoga is the best preventive medicine

4. Focus on Preventive Healthcare

The modern concept of healthcare is designed to suit the pharma and medical care industry, Coupled with insurance its costs can only go up and manipulated. Once a person is sucked into paying insurance premium he is sucked into loop and ends up surrendering his well being to medical "experts" whose every act extract money from his pocket. Favorable to the rich, the modern healthcare system will drain the meagre resources of the poor and push them back into poverty.

Being originator of the science of Yoga, India should promote preventive healthcare through Yoga. Only yoga can train people to be disciplined enough to stay healthy both physically and mentally. The ancient 8-fold path of yoga is designed to take care of all manners of imbalances and impurities – physical, emotional, and spiritual. Western medicine has limited itself to the physical aspect only due to its inherent philosophy. Fortunately, despite western influence people in India still want holistic good health without visits to doctors. They still have the desire to be masters of their body and mind. Only yoga can provide them this dignified independence.

Indian systems of medicine like Ayurveda and Yunani have served people since time immemorial. These systems need reviving so that they can join hands with yoga and keep them fit. Only the diagnostic and surgical aspects of modern western medicine are worth acceptance if they become affordable to common people. The recent launch of National Ayush Mission is a wonderful initiative and must be whole heartedly supported. However, care must be taken to ensure that these indigenous systems are not turned into a drain on people's pockets and the traditional motto of healing is preserved.

Have you ever wondered what would happen if people stop falling ill?

The mammoth healthcare and pharma industry would collapse taking the GDP down with it!! It would certainly be good for the people but bad for economists who want the GDP to grow eternally.

Awesome Kerala

5. Promote Green Economy

This should be taken seriously as a responsible nation that cares about ever increasing climatic disorder around the world and must not connect with the US does or China does. Indian culture has inherent respect for nature and gratitude for all its gifts. It must resist becoming one among the thankless nations who are driven by greed and myopia.

As shown in the above chart, coal supplies 59% of India’s power. Renewable sources contribute just 13% or 33 GW: 22 GW from wind, 3 GW from solar energy and the rest from small hydro and biomass projects. It's a serious imbalance and a major green issue.

Recently, the government launched an ambitious plan for creating 100 GW solar and 55 GW wind capacities by 2022, apart from saving 20 GW power through energy efficient means. Besides its commitment to provide “Power for All” by 2019, Indian government has to also meet its future international commitment to reduce GHG emissions, although the framework of the agreement is currently under negotiations. Therefore, India must focus on renewables, particularly the solar power given abundance of sunlight throughout the country.

A village girl installing a solar street light!
A village girl installing a solar street light! | Source

Solar is the Future of India

India has a large solar energy potential due to its location near the Equator. It gets twice as much sunshine as many European countries that have significant amounts of solar power. In most parts of India, clear sunny weather is experienced 250 to 300 days a year. Depending on the location, the daily incidence ranges from 4 to 7 kWh/m2. About 58% of the total land area (1.89 million km2) receives annual average Global insolation above 5 kWh/m2/day. The country has the solar potential of about 750 GW only with 3% wasteland; compare it with the current total capacity of 258 GW.

In the recent RE-Invest 2015 summit, 293 companies agreed to set up plants to generate 266 GW of renewable energy in 5 years. Of which, about 80 percent new green commitments came from solar developers. While all of it will not materialize, but shows the tremendous enthusiasm to enter in the solar market of India. The US based GTM Research, predicts India to be among the world’s top five solar markets by 2020.

India must remove 3 major hurdles in solar power development:

  1. it must strengthen the financial health of the discom companies,
  2. provide low cost long term financing from green fund, and
  3. revive the failing REC market by enforcing RPOs

Good news is that solar power is already beating commercial and industrial tariffs. It is expected to reach grid parity by 2017.

Conclusion

India should evolve a composite indicator of development devoid of GDP and consisting of say the GPI, women empowerment metric, social inclusion parameter, health indicator that considers reduction in medical expenditure as progress, and promotion of green economy.

Citing GDP doesn't tell anything about the progress in quality of life. National focus should be on measuring and debating people's well being, not rise and fall of some economic numbers.

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