Poverty in India

National Poverty Line
India's reputation as a tiger economy rests on narrow data drawn from the booming fortunes of about 50 million people. Their status as consumers and taxpayers would be recognised as “middle class” in the developed world. The harsher existence of the remaining 96% of India’s population would by contrast find closer parallels in the countries of sub-Saharan Africa.

Woman carrying water, Rajasthan © CARE India

Official poverty numbers are uncertain because India is currently engaged in a difficult debate about the income threshold that defines its national poverty line. For many years this threshold has been held down to the cost of a basket of food providing a minimum calorie intake.

On this basis, poverty fell from 37.5% of the population in 1990 to 28.3% in 2004/05, the most recent year in which data for household expenditure has been collected. The target for the Millennium Development Goals (MDGs) is to halve the 1990 figure by 2015.

However, the food basket approach is inconsistent with internationally recognised practice which adds in essential non-food items. A government-appointed body, the Tendulkar Committee, recommended in late 2009 that India should recalibrate its poverty line accordingly. It suggested precise figures, assessed separately for each state, and for urban and rural environments, in order to recognise disparity in retail prices across the country.

Poverty Figures
If the recommendation is accepted by the government, the number of people classed as “below the poverty line” (BPL) will increase considerably. Based on the 2004/05 data, the national figure would be adjusted from 28.3% to 37.2%. By way of comparison, the World Bank’s broad method of calculating poverty, based on an international poverty line of $1.25 of purchasing power per day, gives a result of 41.6% for India.

Garbage piled high in Indian municipal dumps © Centre for Science and Environment

A more accurate assessment will become possible with the results of a new National Sample Survey of household expenditure now under way for 2009/10. Whatever the eventual resolution, it seems probable that 300-500 million people live below the poverty line in India, up to one third of the world total.

About half of India’s poverty is concentrated in just 7 of the 28 states: Bihar, Orissa, Uttar Pradesh, Madhya Pradesh, Rajasthan, Chhattisgarh and Jharkhand. These poorest states also have to contend with the largest and fastest growing populations.

Poverty is most acute in rural India where 72% of people live. The Tendulkar Committee calculation concluded that 42% of the rural population lives below the poverty line against 26% in the cities. Urban poverty throughout India is on the rise with at least 60 million people living in informal slum settlements.

India’s technology-driven economic development has excluded the poor and created greater inequality. Average per capita incomes in the richest states exceed those in the poorest by a factor of five.


The experience of dalit women in Andhra Pradesh illustrates how India's caste system traps people in poverty. Film by ActionAid HungerFree.
Food Security in India

Malnutrition
Chronic food insecurity is the most prominent symptom of poverty in India. According to UNICEF, 42.5% of all young children were underweight in 2008, many of them in the more serious categories of wasting and stunting. Any improvement in this indicator since 1990 has been far too slow to satisfy the MDG target of halving hunger.

Poor standards of nutrition undermine all health indicators. Almost half of all Indian babies are born underweight and 5% die within a year of birth. The risk of haemorrhage in childbirth is aggravated by anaemia, a diet-related condition which affects almost all pregnant women in India.

Per capita consumption of the crucial protein in pulses has declined to about 20% of recommended intake. Less food is available to rural households than in the 1950s. This is a worrying platform on which to build food security strategies for 2050 by which time India’s population is projected to grow from 1.2 billion to 1.7 billion.

Causes of Food Insecurity

Dairy co-operative in Pondicherry © Peter Armstrong

Across the country 75% of farms cover less than two hectares; in Bihar this figure rises to over 95%. Over 60% of crops are rain-fed. The rural investment necessary to support this profile of agriculture - efficient transport and communications, reliable microfinance and cooperative management structures – has not been forthcoming and middlemen hold the upper hand.

Regulations of the World Trade Organisation (WTO) which force Indian farmers to compete on an unlevel playing field have undermined the sector. Agricultural imports have increased four times since the WTO came into effect in 1995. It can be no surprise that India's insistence on special protection for its farmers was a vital factor in the collapse of the Doha round of WTO negotiations.

Government Policies
Governments have opted for subsidy over investment, often in pursuit of electoral support. Natural resources become degraded in consequence. Groundwater levels are collapsing and many irrigation systems are in poor repair, partly due to provision of free power and water to farmers. According to the government’s State of Environment Report 2009, about 15% of agricultural land has been degraded through excessive use of subsidised chemicals.

Pesticide spraying, India. © Centre for Science and Environment

Given such stresses in the rural economy, it is remarkable that India negotiated the food crisis of 2007/08 without any breakdown of public order. This was achieved partly by the temporary ban on food exports and partly through direct assistance.

For example the 2008 budget introduced a loan waiver scheme which wrote off debts totalling $14 billion for tens of millions of farmers. This was a response to the mounting tragedy of 90,000 suicides of farmers since 2001, most of them faced with crippling debts for farm inputs.

Existing safety net provisions also played a role, despite their flaws. The Public Food Distribution System (PDS) enables poor families to purchase essentials from a network of almost half a million government shops at discounted prices. The extent of the discount depends on need which is assessed individually.

This structure is a recipe for bureaucratic stagnation and corruption. Numbers are very unclear but it is thought that PDS distribution reaches less than 20% of those who should receive it. A new Food Security Act currently under discussion would guarantee the right of all BPL households to 25kg of wheat per month at very low price. How this will overcome all of the PDS shortcomings is uncertain.

The rural economy also benefits from the National Rural Employment Guarantee Act (NREGA) which guarantees 100 days of paid employment to one person from every household to work on public infrastructure projects. Initially confined to selected states, NREGA has been extended. It too is impeded by inefficiencies but is scheduled to support over 40 million households in 2009/10.

Indian farmers burn genetically modified crop © Intercontinental Caravan (ICC)

Critics have suggested that the vast expenditure involved in these and other farming subsidies should be more strategically targeted. Rural development needs such as soil regeneration, irrigation, land reform and diversifying livelihoods are crying out for investment. Resort to genetically-modified food crops appears unlikely as farmers are generally opposed. In a landmark decision in early 2010, the Environment Minister, Jairam Ramesh, rejected proposals to develop Bt Brinjal, a modified aubergine.

Prices have been rising again in the latter part of 2009, partly on account of the failure of the summer monsoon. With so many households just above the poverty line, spending large proportions of their income on food, there is concern that poverty and malnutrition will be on the rise once again.
Climate Change in India

Impact

Wading through Orissa floodwaters © Christian Aid

Climate models for India predict a profile of rising temperature and changing rainfall patterns typical of other sub-tropical regions. The country’s vast coastline will be vulnerable to rising sea levels, and uncertain intensity and frequency of cyclones.

The 2008 flooding in Bihar was described as the worst for 50 years, as was the failure of the summer monsoon in 2009, which caused drought conditions in nearly half of the country’s districts.

India’s most respected plant scientist, Professor M.S.Swaminathan, estimates that a one degree Celsius rise in temperature will reduce the wheat growing season by a week. Water resources are threatened by the retreat of Himalayan glaciers which currently account for 85% of the source water of India’s 3 major rivers, in particular securing their flow in the summer months. Over 500 million people live in the catchment of the Ganges and Indus rivers.

Adaptation
The extent of poverty and food insecurity means that India’s adaptive capacity is very weak, exposing the country to considerable humanitarian risk. Although the government claims to be spending over 2% of GDP on climate change adaptation, the details suggest that existing rural development programmes have simply been relabelled.

Damage in Ersama town after the cyclone © Centre for Science and Environment

In 2008 the Indian government published its National Action Plan on Climate Change. It addresses adaptation through proposals for a National Mission for Sustainable Agriculture. A sub-committee of national experts appointed for this Mission has subsequently published a report setting out its intentions.

Key components for adaptation in rural India are likely to be dominated by water conservation and its optimum application for crop irrigation. The search for seed varieties resistant to drought, flooding and salinity will be important. There is also interest in techniques for advance warning of extreme weather events, as pioneered in Bangladesh.

This top-down approach contrasts with “NAPA” plans produced by many poor countries. These have concentrated on defining modest village-level adaptation projects, carefully prioritised. Whilst India is very different, some critics would prefer to see a more consultative process.

Mitigation
In parallel to the threat to its poverty reduction strategies, India is itself the world's 4th largest emitter of greenhouse gases. Furthermore, its emissions are projected to increase by 2030 by a factor of 3-5, powered largely by a stream of new coal-fired power stations.

Traffic congestion in India © Centre for Science and Environment

The country has no obligations under the Kyoto Protocol and vigorously defends a principle of climate justice based on equal per capita rights to energy. However, under the terms of the Copenhagen Accord, India has submitted a non-binding commitment to reduce the 2005 intensity of its energy consumption by 20-25% by 2020.

This move towards low carbon growth is to be achieved through improved efficiency of industrial production and a drive for renewable energy. India already has a considerable global presence in solar and wind technologies. Meanwhile, Greenpeace is targeting India’s middle class with campaigns in coastal cities where it says 50 million people are at risk from rising sea levels.

There is a strand of criticism which accuses the government of switching sides in climate change negotiations. Instead of representing the interests of the poor in South Asia and Africa with demands for stringent cuts in emissions by the richer countries, India supported the feeble Copenhagen Accord.


Jairam Ramesh, Minister of State for Environment and Forests, makes a keynote speech on India's role confronting climate change
Household Electricity

It is difficult to obtain a reliable estimate of the availability of domestic electricity in India. Most large cities boast almost universal 24-hour coverage but supplies everywhere are prone to interruption, especially in peak summer months. Over 50% of supplies are lost through theft or wastage. Millions of slum dwellings are connected through haphazard and unsafe improvisation.

Photo-voltaic panels in India © Peter Armstrong

Beyond the cities there is close correlation between the availability of household power and poverty reduction. Villages disconnected from the grid remain dependent on kerosene for light and biomass for cooking. The government’s State of Environment Report 2009 concedes that “600 million Indians have no access to electricity.”

The drive towards rural electrification rests with the Rajiv Gandhi Grameen Vidyutikaran Yojana, a plan of lofty ideals, 90% funded by central government. It absorbs all previous initiatives in a goal to achieve universal electrification by 2012, including free connections for BPL households.

The programme’s launch in 2005 quantified the task as connecting 78 million households in 125,000 villages. Government progress reports suggest that the programme is about one third of the way to completion.

There are 10,000 remote villages that lie beyond the reach of the Rajiv Gandhi plan. A separate government initiative aims to construct a very basic renewable resource for each of these villages.

Environmental groups believe this model of decentralised renewable power deserves wider application, the country being well endowed to exploit solar energy in particular. Large power projects, especially hydro, have a poor reputation for human and environmental impact in India.

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