MODULE 4: SOCIAL ASPECTS OF POVERTY AND THEORIES OF JUSTICE-I. Social Aspects of Poverty

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1 MODULE 4: SOCIAL ASPECTS OF POVERTY AND THEORIES OF JUSTICE-I Social Aspects of Poverty Module details Name Affiliation Subject Name Paper Name Principal Investigators Social Work Education Rural Development Prof S Parasuraman and Prof Manish Jha Tata Institute of Social Sciences Paper Coordinator Prof Bipin Jojo Tata Institute of Social Sciences Module Writer Prof Bipin Jojo and Dr Devan Kumar Kuda Tata Institute of Social Sciences Content reviewer Prof H Beck Tata Institute of Social Sciences Language editor Mr Venkatnarayanan Ganapathi Freelancer, Pune Module number and title Keywords Summary Module-4: Social Aspects of Poverty Poverty, Inequality, Unemployment, Development The module attempts to presents social aspects of poverty starting from regional dimension of poverty, caste dimension of poverty and gender dimension of poverty. Further, the module presented causes of poverty in India with special mention of inequality, unemployment and poor performances in various sectors such as agriculture and industry. Further, the module covers price rise and Inflation as one major cause of poverty and government efforts for eradication of poverty through developmental initiatives. 1

2 MODULE 4: SOCIAL ASPECTS OF POVERTY AND THEORIES OF JUSTICE - I Social Aspects of Poverty Objectives of the Module The module attempts to presents social aspects of poverty starting from regional dimension of poverty, caste dimension of poverty and gender dimension of poverty. Further, the module attempted to presents causes of poverty in India, where the major causes like inequality, unemployment and poor performances in various sectors specially the agriculture and industry was elaborately discussed. Further, the module focuses on the price rise and inflation issues and poverty. At the end in this module government effort for eradication of poverty through developmental initiatives was briefly discussed to better appreciate the causes and its remedial measure of the poverty in India. Regional Dimension of Poverty in India In India poverty and deprivation is not uniformly distributed across the States and Union Territories of the country rather poverty is concentrated certain States like Odisha, Bihar, UP, Jharkhand and Chhattisgarh. Rangarajan committee in 2014 estimation poverty rate for year accounts 29.5 % in India, while few states like Goa, Puduchery and Andaman Island the poverty ratio is accounts in single digits ranging between 6 % to 7 % positioned at the top of the poverty ladder. On the other hand some States, the poverty is ratio is close to half of the state population accounts % at the bottom in the poverty ladder from below Odisha stand at the bottom accounts 45.9 % while Madhya Pradesh stand 2 nd bottom estimates 44.3 %, Jharkhand at 3 rd bottom counts 42.4 % and Bihar at fourth with estimation of 41.3 % (Rangarajan Committee, 2014). If we go back to decade ago, national level poverty ratio for year stands at 27.5 percent. The states and UTs with poverty ratio of above the national average are Uttar Pradesh, Orissa, Maharashtra, Madhya Pradesh, Bihar, and also the the newly created states of Uttaranchal, Jharkhand and Chhattisgarh. Of these, Orissa has the highest HCR of 46.4 percent. If we consider rural areas, eight states, namely Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Uttar Pradesh, Uttarakhand and West Bengal are below the national average of

3 percent. Of these, Orissa is again the poorest with Jharkhand being a close second position from below. Finally, with regard to urban poverty rates, apart from Karnataka, all other states which were below the overall national average of HCR which accounts 27.5 percent. Here too, Orissa is the state with the highest rate of urban poverty. This is the regional phase of poverty. Caste Dimension of Poverty Historically caste phase of poverty was patently unchanging and it manifests where bulk of the people accounting 88 % of the poor and vulnerable groups were SCs and STs and these poor are largely live in rural areas (NCEUS 2007). The Xaxa committee (2014) shows around 42 % of tribal people are poor in India. Incidentally these disadvantage and deprived social groups are Tribal communities live in rural parts of hilly terrain in Central and Eastern India in the fifth Scheduled Area around 106 districts among nine States in India largely infested with Left Wing Extremis (LWE) activities and North-Eastern India infested with conflicts and insurgencies (Raghuram Rajan Committee 2013 and Planning Commission 2008). Therefore, poverty reduction initiatives stemmed from institutional intervention that has been attributed to the policy of noninterference and protection of tribal lands which have prevented tribals from being alienated from their major source of livelihood, i.e., their landholdings. It is not only the tribes were victims of the land alienation, but it is estimated that two-thirds of the bonded workers who are chronically poor and subject to inter-generational transmission of poverty are identified in India as SCs and STs in both of the rural and urban areas. The incidence of poverty is the highest for STs, followed by SCs, and then by the other category. Specifically, in rural areas the HCR for STs is more than double of the others category (48.02 compared to 23.23), and even significantly higher than that of the SCs (38.38). Gender Dimension of Poverty The incidence of poverty among females has been marginally higher than that of male counter parts both in rural and urban areas. As of , in rural areas, the percentage of female persons living in poor households was 27 compared to 26 percent for males, while in urban areas the corresponding percentages for females and males were 25 and 23. Females accounted for slightly less than half (49 percent) of the poor both in rural and urban areas. According to the 3

4 Human Development Report 1.3 billion people worldwide live in poverty, among them 70 percent are women population. Poverty in India, has a gender dimension is evident from gender inequalities that exist in the sex ratio, child infanticide, literacy rates, health` and nutrition, access to productive resources, etc. Social and Political Aspects of Poverty Poverty is not caused by any single reason. It is the outcome of the interaction of range of factors social, cultural, economic, political and geographical and host of other factors. It is unequivocally agreed consensus that the poverty in India is the outcome of social factors. It starts from age old prevailing caste system, belief system, joint family system, gender differences, law of inheritance which were elaborately discussed in the earlier modules. Besides these social aspects of poverty lack of initiative on entrepreneurial activities, poor access to social sector amenities like education, health, medical facilities, illiteracy seen as root cause of poverty. General process of development largely bypassed to substantial proportion of people, especially the disadvantage section of Scheduled Caste and Scheduled Tribal social groups. Besides, the economic and social factor, political factors inherently stands one of the major of cause o poverty. Even after India s Independence from Colonial regimes the exploitation was not completely free, it is still prevalent in the governance and administration system. The political set up is not seems efficient to solve the grinding of cause of poverty even 70 years after independence. However, attempts were made to eradicate poverty under the Plan era of development. The Fifth Five Year Plan raised the slogan Garibi Hatao but still the poverty alleviation is enigmatic to Indian policy makers. Thus the poverty in India is happened due to various reasons. Regional disparities, lack of investment, lack of proper implementation of public policies, lack of vocational training and education, migration of rural to urban etc. have also causes of poverty in India. Underdevelopment cause of poverty Besides among the major causes of poverty, underdevelopment is considered to be prominent cause, which glaringly observed among the underdevelopment countries. Due to underdevelopment a large proportion of the people deprive to meet the basic necessities of life. Because of low national income and per capita income of the country people s aggregate 4

5 consumption and investment remains low, as results the standard of living of the people is goes so low. Planning initiatives of government of India in the early years after Independence the promoted steady growth rates in Indian economy, which is often referred as Hindu rates of Growth. The term Hindu rate of growth was coined by Indian economist Rajkrishna, in 1978 to characterize the prolonged low growth rate at 3.5% under the backdrop of socialist economy. It could not check the problem of poverty and reduce inequality. Even though economy railed in a high growth path in the mid of 2000 onwards, but the benefits are not trickle down to the poor sections of the society. Still the gap between rich and poor is increasing. Even though the growth rate of population is coming down still the size of it is very large and it stands one of the major cause of poverty. Inequality Further, inequality stands major cause of poverty in India, especially income inequality and wealth. Even the New Economic Policies initiatives in the last decades of 20 th century in 1991 was paradigm shift of economic reforms on the line of Washington Consensus to reduce the depth of inequality in India. But instead of reducing the inequality the economic reforms widened the inequality among the people. Indeed the inequality has many faces, it defined as the state of not being equal, especially in status, rights, and opportunities. The concept of inequality is very much at the heart of social justice theories. The analysis of inequality invites confusion in public debate as it tends to mean different things to different people. Some distinctions are common though. Many authors distinguish economic inequality, mostly meaning income inequality, monetary inequality or, more broadly, inequality in living conditions. Others further distinguish a rights-based, legalistic approach to inequality inequality of rights and associated obligations (e.g. when people are not equal before the law, or when people have unequal political power). Yet, the inequality chiefly concerned with the inequality of outcomes in the material dimensions of wellbeing and that may be the result of circumstances beyond one s control (ethnicity, family background, gender, and so on) as well as talent and effort. This view takes an ex-post or achievement-oriented perspective. The second view is concerned with the inequality of 5

6 opportunities, that is, it focuses only in the circumstances beyond one s control, that affect one s potential outcomes. Inequality of Income/Material Possession Inequality of outcomes occurs when individuals do not possess the same level of material wealth or overall living economic conditions. Development theory has largely been concerned with inequalities in standards of living, such as inequalities in income/wealth, education, health, and nutrition. However, the lens through which economists gauge progress in these fronts has typically been income or consumption. Historically, development theory was concerned with income inequalities, in so much as it affected or was affected by the economic growth of the average income of the nation. The most common measure of income inequality is the Gini coefficient or index (G), named after the Italian statistician Corrado Gini (1912). Graphical representation of the Gini coefficient The Gini coefficient has a value between 0 and 1, with 0 being perfect equality (all have the same income) and 1 being perfect inequality (all income earned by one person). In most 6

7 countries, it ranges between 0.3 and 0.7. The Gini coefficient can thus be intuitively interpreted as the share of the total income (GDP) that has to be redistributed to hypothetically obtain perfect income equality. For example, a country with a relatively high inequality and G = 0.6 must take an equivalent of 60 % of its GDP from the rich and give to the poor to reaming 40 % of GDP. Another commonly used measure of inequality is the Kuznets ratio. This gives the ratio between the average income of the richest and the average income of the poorest typically undertaken by focusing on the averages of the top and bottom quintiles, i.e., the richest 20 % and the poorest 20 %. This has a clear intuitive meaning: how many times richer are the rich compared with the poor? The Kuznets ratio typically varies from about five (5) for egalitarian European countries to more than thirteen (30) in some Latin American countries. Although popular, this measure is from a scientific viewpoint less satisfactory as compared to the Gini coefficient, because income changes in the middle range are ignored (e.g. a transfer of income within the 60 % in the middle would not affect the Kuznets ratio, but would change the Gini index) Slowly, studies began showing that growth had inconclusive effects on inequality, but income inequality was detrimental for economic growth. Further, as income inequality rose in many countries, a distributional bias in the growth process was made evident. Startling levels of poverty in the late 1990s pushed the income inequality debate to refocus on poverty reduction. Pro-poor growth approaches made their debut and growth and equity (through income redistribution) were seen as separate policy instruments, each capable of addressing poverty. The central concern was in raising the incomes of poor households. By the early 2000s, it was clear that growth and inequality were not separable, and the previous decade s focus on extreme poverty was seen as falling short (indeed, there was progress in extreme poverty, but income inequalities were rising in many developing countries). Inclusive growth approaches emerged, advocating broadly-shared well-being and the extension of disproportionate benefits of growth to a wider share of the population (UNDP, 2013). Inequality of opportunity In the late 1970s, Amartya Sen s capability framework brought a new way of thinking on inequality emphasizing on human well-being, its measurement, and inter-personal comparisons. However, Amartya Sen s capability approach of poverty has been a greatest departure in the 7

8 intellectual platform of academic and public policy circle. It has huge influence in the international and national levels for poverty eradication and pursuing development agenda. It is a paradigm shift in the meaning of development and alternative from economic growth and GDP (UNDP, 1997). Sen proposed that well-being should be defined and measured in terms of the beings and doings which are valued by people (functionings) (Alkire et al., 2015) and the freedom to choose and to act (capabilities). In other words, he used two key terms to express his idea of capability functionings and capabilities. Former functionings indicates to what a person actually manages to do or be; the later the capabilities range from basic needs like nourishment to more sophisticated ones as participation in public with community and the achievement of self-respect. The capabilities can be range of choices that are left to the person only for choosing not specified by Sen rather Sabina Alkire (2002) claims that Sen deliberately not specified any capabilities and left to the people for choosing the capabilities with their own freedom and act what they values and reasoned to value. This approach emphasizes the freedom to choose one type of life rather than another. In this framework, equalizing income should not be the goal, because not all people convert income into well-being and freedom in the same way. What is more, this relationship seems highly dependent on contingent circumstances, both personal and social (Sen, 1999) that include the individual s age, gender, family background and disability. It also depends on climatic conditions, societal conditions (health care, education systems, prevalence of crime, community relationships), customs and convention, among other factors. Hence, what should be equalized is not means of living, but the actual opportunities of living that give people the freedom to pursue a life of their own choosing. Equality of opportunity exists when life outcomes depend only on factors for which persons can be considered responsible, and not on disadvantageous attributes outside of their control. It argues that gender, ethnicity, family background, etc. should not determine outcomes. In practical terms, it exists when individuals are compensated in some way for their disadvantageous circumstances. Equality of outcome describes a state in which people have similar economic conditions. While inequality in terms of opportunity is defined on an ex-ante basis and is concerned with ensuring a common starting place, inequality of outcomes is concerned with the finish line and depends on both circumstances beyond one s control as well as talent and effort. 8

9 Unemployment Unemployment is another major developmental issue and cause of poverty in Indian economy. Although this problem had existed in the past; it has become more acute after the independence. The backwardness and increasing population are mainly responsible for this problem. The socioeconomic consequences of unemployment are very dangerous. It has economic consequences for the individual as well as the society. Unemployment means idleness of man power. It is the state in which labour possesses necessary ability and health to perform a job, but does not get job opportunities. In other words unemployment is the situation in which individuals are available for work, but are not able to find a work. In order to explain the concept of unemployment it is better to distinguish between the concepts like labour force and work force. The labour force refers to the number of persons who are employed plus the number who are willing to be employed. In India the labour force excludes children below the age 15 and old people above the age 60 and mentally or physically handicapped. The work force includes those who are actually employed in economic activity. If we deduct work force from labour force we get the number of unemployment. The unemployment rate means the number of persons unemployed per 1000 persons in the labour force. In India, the National Sample Survey Organization (NSSO) measures the unemployment on the basis of its quinquennial surveys and it has three different concepts. They are Usual Status Unemployment, Current Weekly Status unemployment and Current Daily Status unemployment. a) Usual Status Unemployment (US): Here the reference period is 365 days. The usual status gives an idea about long- term employment (or chronic and open employment) during the reference year. A person is considered unemployed on Usual Status basis, if he/she was not working, but was willing to work for the major part of the reference year (more than 183 days) but did not get work for even 183 days. b) Current Weekly Status Unemployment (CWS) Here the reference period is one week.a person is considered unemployed by Current Weekly Status, if he/she had not worked even for one hour during the week, but was seeking or was available for work. The estimates are made in terms of the average number of persons unemployed per week. The 9

10 Current Weekly Status approach gives an idea about temporary unemployment (or chronic plus temporary unemployment) during the reference week. c) Current Daily Status Unemployment (CDS) Here the reference period is each of the 7 days, preceding the date of survey in each of these days. It records the activity status of a person for each day of the 7 days preceding the survey i.e. persons who did not find work on a day or some days during the survey week. Poor performance of Agriculture and Industrial Sector Agriculture sector still lagging behind and depends on traditional and primitive techniques. Indian agriculture is largely depends on monsoon, lack irrigation facilities. Large chunk of people in India have smallholding and scattered holdings, lack of inputs, exploitative land tenure system, competition from foreign markets, lack of storage and marketing facilities etc. are responsive to the poor performance of agriculture sector even after the Green Revolution. Not only the agriculture is lagging behind but the industrial sector India is performing poorly. In spite of tremendous improvement modern industries and development is yet to make substantial impact. Lack of dynamic entrepreneurs, lack of competitiveness, lack of skilled and trained workers, inadequate finance, irregular supply of power and raw materials, poor transport and methods of production etc. leads to slow industrialization of the country. Price rise and Inflation vis-à-vis Poverty Price rise and inflation is an alarming problem in India and many other countries in the world by reducing the value of money. It is the poor who suffer the most due to price rise and inflation situations. When prices are high the purchasing power of money falls and leads to impoverishment of the poor sections of the country. Poverty Reduction and Development Rapid Economic growth is a necessary condition for poverty alleviation and brining development. It changes the low income agricultural set up, helps to strengthen the redistributive activities of the government, made a radical change in production and distribution process, create more employment opportunities etc. Even there is the possibility of trickledown effect to economic growth. Accelerate agricultural growth potentially reduces the burden of poverty 10

11 because majority of poor are lived with agriculture sector. So steps should be taken to solve the problems of small and marginal farmers. The accelerated industrial development possibly creates more income and employment opportunities to the people and potentially reduces the poverty. To promote rural economy, development of small- scale and cottage industries are imperative. In Indian economy small- scale and cottage industries have played a crucial role and these are labour intensive sector, create more employment opportunities and help in the removal of poverty. Besides, land reforms India is long pending initiatives which potentially break the old feudal socio- economic structure of land ownership. It aims to eliminate exploitation by providing security of tenure and regulation of rent. It also aims to bring direct contact between the state and the tiller and give social economic status of the landless by distributive measures. Creating opportunities to people for accessing resources and services by ensuring affordable price for essential commodities and taking closer to the people the social amenities can reduce the poverty. In other words, the government should spend for the provision of free common services like primary education, medical aid, potable drinking water, housing and other facilities to the people. This will increase their real consumption and make them feel better off and hence reduce the poverty. Improve the Status of the Women Gender equality can help to reduce poverty and encourage growth in variety of ways. Women are provided with direct access to institutional credit, direct membership in cooperatives, setting up of women organization etc. There shall be urgent call for comprehensive family planning measures to bring down the birth in the country. Above all the success of any programme primarily depends on the effective working of the administrative machinery, which shall accountable, transparent and responsible and corruption free system of good administration system is imperative. Summary The module attempts to presents social aspects of poverty starting from regional dimension of poverty, caste dimension of poverty and gender dimension of poverty. Further, the module presented causes of poverty in India, where the major causes like inequality, unemployment were 11

12 elaborately discussed. In addition to the inequality and unemployment, in this module poor performance of various sectors especially the agriculture and industry was elaborately discussed. The module sheds lights on the issues of price rise and inflation and its causal effect of poverty. Further in this module also discussed about the government efforts for eradication of poverty through developmental initiatives was briefly discussed to better information to the student in the subject matter. 12