[Assam] Major lacuna in Millennium Development Goals-- Some Truths Told!

[Chan Mahanta]

*** A friend forwarded this to me. While I do not understand the statistical jargon, the overall  picture painted  is all too familiar . It also busts the popular myth
among Delhi-defenders  about how Delhi is not responsible -  the states are -- for managing the disbursement of development funds, like some of us always knew.

cm




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> UNITED NATIONS MILLENNIUM CAMPAIGN (India)
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> INAUGURAL ADDRESS
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> Millennium Development Goals:
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> THE MAJOR LACUNA
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> Mani Shankar Aiyar, MP (Rajya Sabha)
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> Former Union Minister of Panchayati Raj, 2004-06
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> British Council,
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> Kasturba Gandhi Marg,
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> New Delhi – 110 001
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> 1730 hours                          Sunday, 12 September 2010
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> I am truly grateful to the United Nations Millennium Campaign (India) for giving a notorious sceptic like me the indubitable honour of inaugurating this series of nation-wide presentations on the eight component elements of the Millennium Development Goals adopted by Heads of Government at the United Nations at the commencement of this millennium and dedicated to the overarching aim of substantially ridding our planet of the scourge of poverty within the first fifteen years of this new century.
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> We are now into ten years of the 15-year programme and the UN General Assembly is scheduled to review, at its forthcoming annual session commencing later this month, the progress made towards achieving the noble objectives of the MDG. The Government of India, responsible for harbouring the largest number in the world of the desperately poor, the poor, the marginally poor, the vulnerable and the hungry, has, of course, been in the forefront of informing the international community of our performance. Our MDG Country Report was released by the Hon’ble Vice-President on 29 June 2010.
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> Goal no. 1 is the “eradication of extreme poverty and hunger”. The other seven goals address other supporting dimensions of multi-dimensional poverty such as universalising primary education; promoting gender equality; drastically reducing child mortality; promoting maternal health; combating deadly diseases like HIV/AIDS and malaria; ensuring environmental sustainability; and forging a global partnership for development. This series of lectures will range across the entire spectrum of MDGs. I propose in this inaugural Address to concentrate on the major systemic lacuna which, I believe, unless addressed with great urgency, will cripple all our endeavours to even vaguely approximate to the achievement of the Millennium Development Goals.
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> To set the stage for a discussion on this major systemic lacuna, let me explore first the Indian performance and prospects in regard to the key target prescribed by the MDG: the reduction by half of those living on less than a dollar a day calculated at purchasing power price and also reducing by half the proportion of people suffering from hunger.
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> The India Country Report says it is not “plausible” to estimate the number of people surviving on under a dollar a day. This is because we are perhaps the only country in the world to calculate poverty ratios in terms of reported consumption expenditure rather than income earned. We also do not favour categorising the poor into different brackets of consumption expenditure but resort to a cut-off figure of Rs.12 per day in rural and Rs.17 per day in urban areas, to then establish that in the thirty years from 1973-74 to 2004-05 poverty has indeed diminished by half, from 55 to 27 per cent of our population.
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> What proportion of those sprung from the poverty trap have gone just across the Rs.12 threshold from a consumption expenditure of Rs. 11 a day thirty years ago to Rs. 13 a day thirty years later is, alas, not revealed. Since we do not categorise consumption beyond the singular National Poverty Line, everyone is either BPL (Below Poverty Line) or APL (Above Poverty Line). In consequence, the darwan standing outside the Reliance office is APL; so also are the Ambanis within. Similarly, several hundred million households that are vulnerable because the least illness or ill-fortune will plunge them back below the official poverty line within weeks are classified as APL and only the utterly destitute are classified as BPL. The figures are stark: over 47% of our children under five years of age are from severely to moderately malnourished, the tragic consequence of about 9 out 10 pregnant Indian women suffering from moderate to severe anaemia. The severely malnourished and anaemic are BPL; the moderately malnourished and anaemic are APL. Except in the Arjun Sengupta Committee Report (August, 2007), official India does not regard the vulnerable as poor. 
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> Hence, so long as there is a reduction of those below an arbitrarily defined National Poverty Line, we claim to be overcoming poverty. How arbitrary is the National Poverty Line is revealed by the 2009 Tendulkar Committee report which, simply by tweaking the rural poverty line from Rs. 12 a day to Rs. 15 a day and urban poverty from Rs.17 a day to Rs. 19 a day, that is, by a mere three rupees in rural and a derisory two rupees in urban India, says poverty levels in our country are not 27 per cent, as hitherto officially maintained, but nearer 37 per cent, thereby putting paid to the India Country Report claim that poverty has been reduced by half over the past thirty years – although what the MDG seeks is a reduction by half of extreme poverty and hunger over the next fifteen years, that is from 2000 to 2015.
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> Thus, while, on the one hand, official India says we just do not maintain the statistics that would enable us to show whether or not we have attained the MDG of slashing by half those living on under a dollar a day, we also claim, on the basis of a methodology discredited by none less than Dr. S. Tendulkar, the Chairman of the Prime Minister’s Economic Council, that it took us thirty years to slash notional poverty by half but we do not know whether we will do so within the 15 year-period of the MDG because we just do not know the truth about income poverty although we could tell you something about consumption poverty.   
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> However, while our Government continues to rely on consumption expenditure reported in successive National Sample Surveys to estimate poverty and prosperity in our country, the National Council of Applied Economic Research (NCAER) has been undertaking since 1985 the yeoman task of estimating income rather than expenditure levels.
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> Their task is hugely complicated by the fact that the total national income which NCAER estimates by asking the large sample surveyed about their respective incomes constitutes only 53% of the national income of India as shown in our National Accounts.
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> Much of this under-reporting is accounted for by the rich of India, households engaged in business and self-employed (Lawyers, Doctors, CAs, etc.) who just do not reveal to either our tax authorities or even NCAER surveyors what their true income is. Also, of course, the poor and vulnerable think that under-reporting their incomes might fetch them benefits that stating their true income might deprive them of. Nevertheless, bearing in mind this caveat that we are talking of only about 53% of national income, there is but one source of national income estimates – the NCAER under the extraordinarily sincere and dedicated leadership of their chief statistician, Dr. Rajesh Shukla, and Mr. Suman Bery, the wise and gentle Director-General of NCAER.
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> NCAER have estimated is that if our economy grows at an average of 8.75 per cent per annum over the next five years, 2010-2015, as projected by the Planning Commission, then, by the terminal year of the MDG, 2015, the bottom 20 per cent of our population would have added about Rs. 2000 per year to their annual income while the top 20 per cent in urban India would have added a whopping Rs. 75,000 – 37 times more than the poorest 20 per cent to their annual income.
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> Please remember that the top 20% in NCAER’s quintile estimates comprise Indians with an average annual income of Rs. 154,000: therefore, the modestly well-off will probably see their annual incomes booming by 370 times more and the phenomenally wealthy garnering 37,000 times more than the poorest Indians making do with a rise of less than Rs.200 a month in their per capita income over just the next five years!
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> Moreover, says the NCAER, while at present the top 20% secure 51% of our national income, at 8.75% growth, their share will rise to 55% by 2015, while the share of the bottom 20% will shrink from 6.1% to 5.5%.  
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> In other words, the poorest of our poor are barely benefiting from accelerated growth while the richer are getting obscenely richer.
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> This was reported to Government by NCAER on 31 July 2010, a month after the release of our MDG Country Report. I am not privy to Government’s reaction but I did ask Dr. Rajesh Shukla, NCAER’s outstanding chief statistician, to share with me his projections of how the poorer would fare compared to the better-off if, instead of the quintiles he had used in his presentation to Government, that is, dividing the population into five segments of 20 per cent each, he were to break this down into 20 segments of five per cent each. While he is still working on such a projection, he was able to retrieve for me from his raw data the position as it obtained in 2004-05. 
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> This showed that the lowest income earners, those earning less than Rs.20 a day and comprising 50% our population, secure only 19.6% of our national income while the richest 5% secure nearly a quarter of our national income, 23.8% (excluding the non-reported 45% of national income, the bulk of which is the black money income of the rich and the richest)
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> The other deeply disturbing finding is that the poorer an Indian is, the more entrapped in personal debt he is likely to be. Thus, the poorest 5%, earning less than Rs.8 a day, consume Rs. 3590 a year against an income of Rs. 2145 a year: their share of expenditure is 167% of income. As one goes up the scale, income approximates to expenditure only at 15%. It remains as high as 79% for the best off 5% segment of 50% of our population and does not significantly taper off till we have reached three-quarters of our population. It is only the richest five per cent of our population whose percentile savings at 37% approximates the national savings rate. It is this high level of personal indebtedness of the poor, combined with easy access to corporate debt for the rich, that necessitates our regarding not only the utterly destitute as poor but also the vulnerable as poor.
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> These are, of course, figures relating to five years ago. I am willing to bet that when the 2009-10 figures come in, and later the figures for the terminal year of MDG, 2015, are compiled, income : consumption ratios for the poor would have worsened while the Pareto extrapolation would show the richest 1% to be way ahead of even the next 4% on every scale of earning, spending and saving.
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> One telling indicator of the skewing of income and the distortion of wealth distribution is that of Forbes Indiaof 4 December 2009 which proudly announced that the 100 richest Indians owned between them assets equal to a quarter of our Gross Domestic Product, supplemented by the very recent Asian Development Bank finding that only 0.00009 per cent of Indians earn more than Rs.10,000 a month. NCAER’s Dr. Rajesh Shukla doubts that this is accurate but concedes that no more than 1.5% Indians earn more than Rs. 10, 000 a month. And this in the same India that boasts some of the richest persons in the world and the fourth largest number of dollar billionaires with combined assets second only to that of US billionaires.
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> We seem to be replacing land-based feudalism with stock-market based feudalism! Accelerated growth is not so much a tide that raises all boats as a tsunami that raises all yachts!   
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> The skewed outcome of the reforms process on income and wealth distribution was underscored by the Arjun Sengupta Committee report tabled in Parliament in 2007, three years ago. Basing himself on the same National Sample Survey reports that all of Government uses, Dr. Sengupta came up with the shocking statistic that 77% of our people – approximately 836 million Indians - live on less than Rs. 20 a day!
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> To put in perspective the consumption figure of Rs. 20 per day per person, please consider that the minimum wage prescribed by the Government of India under the National Rural Employment Act is Rs.100 a day, with the caveat that only one member of a given household can secure NREGA employment on any given day. This means that for a household of five persons, the per capita earning under NREGA would amount to Dr. Sengupta’s cut-off figure of Rs. 20 a day. Thus, nearly eight Indians out of ten are eking out a living at less than the prescribed minimum rate for lifting mud under our proudest programme of poverty eradication and hunger elimination.
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> The very model of economic growth we have adopted thus militates against any significant achievement in any reasonable period of time in eliminating poverty and, therefore, huger by the accelerated growth process on its own. GDP, the favoured figure of the establishment, might rise and rise and rise, challenging China’s before this decade is out, but little of this will impact on income levels for one half to three –quarters of our people while hugely disproportionately raising not only the income and wealth, but also inevitably the political influence, of the richest of our rich – and thus the immense danger of crony capitalism undermining popular democracy.
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> Hence the imperative necessity of compensating for the failure to raise money incomes of the poor and vulnerable by launching a massive programme of reaching to them public goods such as subsided food for food security and subsidised energy for energy security, along with public services like potable drinking water and elementary sanitation; primary and secondary education; dispensaries and primary health centres; and other basic minimum services.
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> The core of our official self-assessment of attaining the key target of the MDG – the halving of extreme poverty and hunger - is that we have launched the National Rural Employment Guarantee Programme named after none less than the Father of the Nation, Mahatma Gandhi. Yet, the Ministry of Rural Development, which is the Ministry in charge of implementing MNREGA, admits that even in Tripura, the state that scores highest in proving households with the full 100 days of employment guaranteed under the Act, it is no more than 36.6% of all entitled households. Far more upsetting is that in the most poverty-stricken States of India the share drops to a mere 14% in Uttar Pradesh and Madhya Pradesh and to 8% or less in Chattisgarh, Jharkhand and Bihar and even further below 6% in Orissa and Uttaranchal. Many of these States are precisely those most seriously afflicted with “Left-Wing Extremism”, as the Ministry of Home Affairs archly describes the Naxalite/Maoist menace. In Manipur, the state most infected by insurgency and for the longest time running to several decades, it is utterly shocking to find that only 0.02% of eligible Manipur households were afforded 100 days of employment under NREGA. In other words, this much-lauded key Flagship Programme under Bharat Nirman, which we are proudly trumpeting to the world through our Country Report, is barely eroding extreme poverty in the most poverty-stricken parts of India.
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> Even more distressing is the revelation in a written answer to my Unstarred Rajya Sabha Question no.1011 answered by the Minister of State for Rural Development on 3 August 2010 that the unemployment allowance that is statutorily required to be paid in lieu of failing to provide employment asked for has been paid to exactly one person in Kerala for 32 days of the last one thousand days and more; and no more than 1574 persons in Madhya Pradesh at the other end of the spectrum; and that in about three-quarters of the States and Union Territories of our extremely poor country with widespread unemployment and under-employment, not one single person has been paid a khota paisa of unemployment allowance in the last four years since the launch of the programme.
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> Since MNREGA, as the Government itself claims, is far and away the most important single instrument we have devised for both poverty eradication and hunger elimination, the pathetic performance of this key programme for the attainment of the key MDG goal in the country with the largest number of the extremely poor in the world makes one despair of the present system of delivering development ever attaining the much-desired Millennium Development Goals.
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> How utterly bereft we are of a solution to poverty and hunger is dramatically illustrated by the findings of the UN Human Development Index. This index reflects per capita incomes of different segments of the population through the prism of several other parameters of poverty, including education, health and gender equality – key components of the MDG.
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> In 1994, India stood at 134 on the UN HDI. 15 years later, in 2009, India continues to be stagnant at the same position of 134. Formally asked what accounted for this stagnation, the Minister of  Panchayati Raj replied to an unstarred Question no. 976 posed by me on the 3rd August 2010 that the Ministry had not undertaken any detailed study to analyse the reasons for this stagnation but helpfully added that we had at least risen from position 138 in 1998 back to 134!
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> Every other study of poverty in India, in relation to poverty elsewhere, bears out the UN HDI, indeed, even suggests that the UN might be over-estimating India’s achievements in the multiple dimensions of poverty eradication. A recent report from the Oxford Institute of Multi-Dimensional Poverty, endorsed by the UNDP, places most Indian states, and the most populous among them, well below the poorest of sub-Saharan African countries on multiple parameters of poverty, thus underlining the fact that extreme inequalities of income and wealth among households is compounded by extreme inequalities in different regions of the country and across the urban-rural divide.
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> This very disturbing performance in poverty eradication is not because the Central Government is stinting on spending on social sector and anti-poverty programmes. On the contrary, such spending, including on the much-flaunted Bharat Nirman programmes, have risen by at least 15 times over the last 15 years. Government has been more than generous in pouring miraculously increased revenues into exponentially increased spending on MDG-related Central and Centrally-Sponsored schemes. I estimate that such spending has increased from about Rs. 7500 crore in 1994 to over Rs.1,35,000 crore in the current fiscal. So, there is no lack of resources being deployed on inclusive growth for the poor and vulnerable - but, tragically, outcomes bear no relationship to outlays. We are as unstinting in resource allocation as we are unsuccessful in attaining the purposes for which we are spending quite humungous sums on battling all MDG dimensions of poverty and hunger, from income to employment, education, health, gender equality, environment and global partnerships. What then has gone so desperately wrong?   
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> What has gone wrong is that we have failed to fully, or even significantly, absorb the penetrating perception of one of the brightest but least understood Prime Ministers of India who 25 years ago observed that 85 paise in the rupee of all public expenditure on public services and public goods is leached in administrative expenses by a colonial system of delivering development through the bureaucracy instead of funnelling functions, finances and functionaries to democratically elected institutions of local self-government that can then undertake the task of delivering development to themselves instead of remaining hapless recipients of a patrician system that absorbs 85% of budgetary outlays on administrative expenses and reaches a mere 15% to the intended beneficiaries. (Incidentally, a recent Planning Commission estimate has shown Rajiv Gandhi to be utterly wrong: it is not 85 paise but 83 paise that goes into administrative expenses!)
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> A quarter century after Rajiv Gandhi made this profound observation, and then assured Constitutional sanctity and sanction for Panchayat Raj Institutions to put local development in the charge of elected local authorities responsible to local communities through Gram and Ward Sabhas, we continue with hundreds of mutually insulated administrative silos to deliver development to the same set of beneficiaries. We are so far from attaining participative development through participative governance principally because each of the line Ministries of the Central Government jealously preserve their respective fiefdoms and State governments – except in a few States – fail to genuinely empower institutions of local self-government. That is the root systemic cause of outlays bearing no relation to outcomes. Until and unless the Union Government shows the same determined political will that Rajiv Gandhi displayed in prioritising and pushing through his Constitutional amendments, there is no hope – I repeat, no hope whatsoever – of increased Government revenues promoted by the accelerated growth process and reflected in exponentially increased budget outlays on public services and public goods translating into a tangible improvement in the multiple parameters of poverty alleviation and eventual eradication.
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> The major lacuna in the strategy for MDG is that it ignores or assumes away the crucial delivery aspect of poverty and hunger eradication. While most countries in the world, developed and developing, emphasise devolution or decentralisation as the way forward, notwithstanding the 73rd and 74th amendments to our Constitution, much of our commitment to devolution remains a paper commitment floundering on the rocks of the Constitutional point that local self-government is a State not a Central responsibility.
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> Yet, with the overwhelming share of budgetary allocations for inclusive growth coming from the Central Government, which lays down elaborate guidelines for the spending of its money, we seem in Delhi to be strangely inhibited about so designing our Central and Centrally-Sponsored programmes for poverty eradication and grassroots development as to conform to the Constitutional imperative of Panchayat Raj. Thus, the Sarva Shiksha Abhiyan relies on registered societies, not panchayats responsible to gram sabhas, to deliver primary education; the National Rural Health Mission on its own Asha-based structures, and not democratically elected and democratically responsible panchayats and gram sabhas, to deliver basic health and reductions in infant and maternal mortality; the Integrated Child Development Scheme to Government-appointed “volunteers”, not elected community-based institutions to deliver child and maternal nutrition; and forest officers and policemen, not Panchayat Raj Institutions governed by the Panchayats (Extension to Scheduled Areas) Act, to deliver their entitlements and ordinary justice to the tribals. These are but a few illustrations. I could extend the list to cover all of the hundreds of Centrally-Sponsored Schemes on which our budget outlays are being squandered with virtually no impact on participative human development at the grassroots. We will never get Inclusive Growth without Inclusive Governance – an observation made by none less than the Prime Minister himself in January 2009, yet almost entirely ignored in the mid-term review of the Eleventh Plan which boasts that the Plan is dedicated to the over-arching goal of Inclusive Growth.
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> To come to the present, neither the Integrated Action Plan on the anvil for the Left-Wing Extremist Affected Areas, nor the draft Food Security Bill currently under discussion, rely on the panchayats for delivery: both assume the bureaucracy will do the job although over 63 years of Independence and post-coonial development, the bureaucratic delivery machine has proved itself to not only be hopelessly inefficient but also self-serving, corrupt and inhuman. Until and unless we replace delivered development with participative development, until and unless we axe development on development by the poor, for the poor and of the poor, will any element of the MDG be attained.
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> Let me illustrate from the NCAER report, “How India Earns, Spends and Saves”, the Bible, Quran Sharif and Gita of our economic reforms brigade.
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> Tables 2.25 and 2.26 at pages 40-41 of the Report show that the single most important determinant of income levels for households is the level of education of the head of the household. When the head of a poor rural household moves from illiteracy to primary, 5th class education, an 18% increase is recorded in the household’s income; when education levels go up to matric, 10th class levels, average household income soars by 48%; on reaching the higher secondary, 12th class level, the increment is of the order of a massive 113%; and nearly doubles to 223% in a household being headed by a graduate. In short, much more significant than GDP growth for livelihood security for the poor is village-level education graduating to the block and district levels.
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> In Kerala, all primary schools fall under the administrative supervision and control of the village panchayat; secondary and higher secondary schools under the control ad supervision of the intermediate panchayats; and all district colleges under the district panchayats. Kerala’s educational attainments are, therefore the envy of the rest of India. But instead of learning from the Kerala experience, the educational programmes of the Ministry of Human Resource Development rely entirely on bureaucratically appointed registered societies and the State government bureaucracy to deliver primary and secondary education. In consequence, the returns in terms of well-educated youth is as nothing compared to the thousands and thousands of crore being increased every year on education. Outcomes nowhere near match outlays. The tragic loss is that the one instrument which could deliver more livelihood security than GDP growth alone ever could falls by the way-side as reflected in drop-out rates and the quality of education collapsing even as the quantity of education, measured by school buildings and other such physical infrastructure, is apparently, but hardly tangibly, increasing education opportunities for the poor and the vulnerable.
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> Gwatkin and others in their 2007 Word Bank-sponsored India Country Report on Health, Nutrition and Population showed, albeit on the basis of statistical information that was a decade earlier, the intimate relationship between income poverty in different quintiles of the population and access to health and nutrition. Rajiv Gandhi had intuitively understood this a decade before Gwatkin and his colleagues; and Mahatma Gandhi had, of course, instinctively understood this long before we became independent: he knew there could be no Poorna Swaraj before we have Gram Swaraj.
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> Why not then panchayat-based delivery for primary education, primary health and other basic minimum services? If we will not learn from the Kerala experience, would we at least learn from China – where all such delivery of public goods and services is concentrated in their local government bodies and with such spectacular outcomes? 
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> Our Millennium Development Goals will not be reached even by the end of the present century, leave alone 2015, and perhaps not even then, until and unless there is a systemic revolution in our approach to poverty eradication. The path to middle-class prosperity lay through their Empowerment in our democratic institutions in Parliament and the State assemblies which dismantled land-based feudalism and placed political power in the hands of the small land-holders, the professionals and the emerging businessmen, securing for the then emerging middle classes their Entitlements to basic goods and services. Nehruvian socialism gave our nascent middle class world standards of education almost for free in our Central Unversities and IITs and world standards of health in our Medical Institutes in Delhi, Chandigarh and Puducherry. Securing Entitlements though Empowerment, our middle classes are now stunning the world through their Enrichment. Empowerment, Entitlement, Enrichment, E-E-E – and we are the flavour of the month at Davos. But that has been the route only for a tiny fraction of our population. Why not the same E-e-E route, Empowerment to Entitlements to Enrichment for all our peoples? If democracy in Delhi and the state capitals led to entitlements of education and health leading in turn to enrichment for the middle classes, why not empower the poor and the vulnerable in their villages and bastis through democratic institutions of local self-government to ensure them self-access to their entitlements of basic education, health and other public services, leading, as it has already done for our middle classes, to enrichment for all Indians? Then alone will Indians prosper even as India prospers.
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> The alternative is the spread of the Naxal revolt from the jungles of central India to the heart of our towns and cities. MDG is not only about saving our economy; MDG is more crucially about protecting our political stability, nurturing our democracy and securing the survival of India as a nation into the 22nd century. Can we, will we rise to the challenge? The next lectures in this series will chart the path to the future. I hope the foundations I have tried to lay, of grassroots development through grassroots democracy, will find resonance in the remaining lectures of this series and in how the UN Millennium Initiative reverberates at the UN General Assembly later this month.
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