Falling HDI But Silver Linings


    By B.G. Verghese
    First the bad news. The just released South Asian Human Development Report for South Asia in relation to Food Security in 2010-11 produced by the Mahbubul Haq Development Centre in Lahore makes dismal reading. The global food crisis since 2008 has hit this region hard. The striking feature is that it is not lack of availability but lack of access to what is available among the under-mass of the population that is the cause of a continuing and growing crisis for the poor.

    The verdict on India is grim. “The path of economic reform that has resulted in high economic growth in some regions and sectors in India has been accompanied by failure on food security in all aspects – production, availability, distribution, affordability, absorption and nutrition – which makes India one of the most undernourished countries in the world”, well below the  standards prevailing in South Saharan Africa.

    As much as 76 per cent of Indians consume inadequate food; three-fourths of its women and children are anaemic; foodgrain production declined from 208 to 196 kg per annum per capita between 1997 and 2010 while unemployment among agricultural labourers rose correspondingly. Farm productivity has declined and food prices have spiralled upwards; only one in four households has access to safe drinking water and sanitation facilities. National investment in agriculture and health has been consistently low. Following economic liberalisation, the emphasis has been on reducing food subsidies rather than on ensuring greater food security. Climate change now poses further uncertainties. Farmer suicides are rising and now total over a quarter of a million since 1995 with almost 16,000 deaths in 2010.

    None of this was exactly unknown, but to be told it upfront on the basis of international comparisons is shocking. At the same time, India is growing more billionaires than most. This is an unacceptable and unviable situation, with huge regional and gender disparities as well, that contrasts ill with boastful talk of being an emerging great power that merits a seat at the high table. The latter claims are not without merit and cannot be discounted but there is a greater underlying truth that must be urgently addressed.

    Greater investment in agriculture and the whole gamut of farm production and management practices, especially post-harvest technologies that include storage, cold chains, marketing and processing, are overdue. There has to be a new evergreen revolution with much more attention being given to dry land farming and tapping the immense potential of the eastern alluvial plain with its still inimical land relations that remain what Daniel Thorner long back called an agrarian depressor.

    Contract farming, with safeguards, homestead farming (as a valuable nutritional supplement), and the licensing of multiple-brand retail trading could give a huge boost to farm production, productivity, processing and incomes. Bhoodan lands are still being distributed and settled tardily, years after the original land-gift. Unorganised small farmers suffer considerable storage and distribution losses and are exploited by middlemen. This results in their receiving a smaller share of the consumer’s rupee while the consumer pays more for poorer quality produce. Appropriate backward and forward linkages could make a significant difference to both productivity and prices to the benefit of both the famer and the consumer. 

    Yet, change is resisted and often two or more problems are cited to every reform solutions. Reforms must certainly be undertaken with due care and positioning of safety nets for those who might lose out or require time to adjust in the transition. The country is now ripe for the next round of reforms which should not be held back for fear of electoral loss but, instead, made the platform for winning electoral rewards.

    Speaking at the recent National Development Council meeting to approve the 12th Plan, the Prime Minister called on the nation to eschew negativism and not subject growth to short term considerations. The NDC endorsed a target of nine per cent growth during 2012-17 and heard a call to shun populism and not allow party election victories to overshadow India’s victory. The introduction and passage of the Goods and Services Tax and the new Direct Taxes Code will test the willingness to hew a new path away from negativism. Inflation has been a universal worry. But the GST, once adopted, should also help bring down prices.

    The good news is that there appears to be a new drive towards reform and measures to curb corruption. A practical slew of “Lok Pal” measures – rather than a single, cumbersome enactment – will hopefully be in place over the next few months. India’s latest HDI Report shows heartening signs of inclusive growth with all disadvantaged categories like Dalits, tribals, women and Muslims registering improvements and narrowing differentials with the rest in terms of literacy, health and employment parameters. This still merits only one cheer, as there is much leeway to make up to gain parity with the rest, and more so, to match international standards.  Poverty is being rolled back – slowly. The latest series of baby deaths in West Bengal and the heavy toll taken by Japanese encephalitis in eastern Uttar Pradesh show how far we need to go, especially as these fatalities are caused by maternal malnutrition and lack of primary health care.

    Census figures also show a continuing exodus to the cities from the countryside. These Malthusian refugees, mostly landless labourers, exploited sharecroppers and tiny peasants, find that the land is no longer a fond “mother” or them and simply cannot provide the income and opportunity they seek with a growingly unfavourable land-man ratio. NAREGA has helped but needs now to be better planned and professionally backstopped to create more and better farm capital assets and rural infrastructure, with less leakage. Yet no one has yet calculated to what extent the annual distress migration of 30-40 million “nowhere” persons (including family) has been arrested. 

    The challenge is to create an additional net 10-12 million jobs per annum to match the growth in the labour force on account of population increase. Unimaginative land acquisition and environmental restraints have thus far been impediments to infrastructure development and manufacturing growth. These policies are fortunately now being reviewed. Meanwhile, two major industrial-cum-employment initiatives have been taken with the announcement of a new manufacturing policy to generate 100 million jobs in 10 years by facilitating national manufacturing investment zones and industrial corridors, and an additional 400,000 new jobs in 21 integrated textile parks.

    These are bold new initiatives that must be supported and pushed through. But they need to be underpinned by a parallel process of incubating tiny, mini and small industries partly by upgrading the khadi and village industries, handloom and handicrafts sector as well as off-land farm processing and servicing industries though micro-finance, skill formation and cooperative development and facilitation.

    The entrepreneurship is there. Imagination has been lacking.
    www.bgverghese .com


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