From the Times of India
" NEW DELHI: The number of people below the poverty line may have come down, but 79% of unorganised workers, 88% of SC/STs, 80% of the OBC population and 84% of Muslims belong to the "poor and vulnerable group"... "That includes 6.4% who live on less than Rs 9 per day or three-fourths the poverty line level, another 15.4% who are between this layer and the poverty line, 19% who earn at best 1.25 times the poverty line and 36% who earn between 1.25 and two times the official cut-off for poverty. It, therefore, cautions that while large numbers may have technically ceased to be included in the official poor, they remain vulnerable"This according to a report by the National Commission for Enterprises in the Unorganized Sector (NCEUS). The report (says Reuters) shows that about 836 million people - 77 percent of Indians live on below 20 rupees (50 U.S. cents) per day.
As expected, there is lament all around as to how growth has not benefited most Indians. A real surprise, isn't it? Was it supposed be another way? A few days ago we had a post from RV Bhawani regarding the agrarian crisis. Reporting on the same issue P. Sainath has now won the 2007 Ramon Magsaysay award. Then there was the issue about malnutirition amongst India's children. Much ink was spilt by great economists such as Surjit Bhalla to suggest that poverty did not exist anymore in India. Then there was the debate about exactly how much poverty had fallen by. All along, we have had (fairly predictable) evidence as to what was happening to most of India.
Of course, fiscal redistribution is an immediate need, although its limits are well-known. I think there is little evidence in history which suggests that a nation can keep growing at 8,9,10 per cent with 77 percent of its populace in such condition. And, ironically, there is much evidence that redistributive growth has multiplier effects. But beyond that, there is the need to go beyond the game of fiscal redistribution; band-aids only go thus far and no further. Living off the crumbs of the back-office of the world cannot be a permanent solution for the 77 percent; in fact it is not even clear that it can serve too long as a solution for the 5-10-15% who are now gaining from it.