Population and Poverty in India: Feeding Each Other

By Goodpal, 30th Jun 2011 | Follow this author | RSS Feed | Short URL http://nut.bz/2yl1kk6v/
Posted in Wikinut>News>World

Growing population in India is also feeding poverty, which in turn aids population growth. This is a vicious cycle of population and poverty feeding each other. The only way out is the correct development model for rural India.

India Vibrant, or Poor?
Employment Scenario
Indian Economy: All is Not Well
Vicious cycle of Poverty and Population Feeding Each Other
Conclusion
Further Reading

India Vibrant, or Poor?

Mumbai: Orphan City of India

A country of more than one billion people with almost half of them in the productive age group should make for an energetic and vibrant India. But can numbers this be strength when as many as 36% of Indians are illiterate, when one in four children are not enrolled in school, and only 60% of those who enroll, reach standard five? People living in poverty, illiteracy and squalor can hardly be the strength of any nation.

India increases its population by about 18 million every year at the annual growth rate of 1.5 percent. According to the latest estimate 33 percent of the Indian population is poor, though World Bank’s $1.25 a day income line puts the figure at 42 percent and its $2 or less benchmark estimates Indian poverty as 76%. An analysis using the latest multidimensional index (MPI) of UNDP puts the figure of Indian poverty at 55%.

If we stick to the official poverty figure of 33 percent, it is safe to assume that the headcount of the poor is increasing by about 6 million every year due to population growth alone !! This is more than the population of Denmark (5.5 million) and close to that of Jordan (6.1 million) and is phenomenal.

Despite 8 – 9% annual GDP India continues to face significant income inequality, poverty and malnutrition. So, one is left wondering whether India is a poor country or an economic superpower. “Both” should be probably the best answer.

Employment Scenario

According to a recent, first time ever, report of the Labor Bureau of Indian Government there are about 50 million unemployed in India, roughly 10% of the total workforce.

The unorganized sector in India accounts for 90% of the employment and only 10% are regular employees. About 40 percent of this 10% is employed in the government sector. Self employment accounts for more than 60% of the employed population of India. Daily wage workers, who get jobs only at times and remain unpaid when they don’t have work, constitute 30% of the workforce. Around 70% of the labor force in India has education below primary level or is illiterate.

Urban areas have higher employment opportunities compared with the rural countryside. This encourages migration towards cities.

The large service sector contributes 57.2% towards GDP while the industrial and agricultural sectors contribute 28.6% and 14.6% respectively. But these sectors don’t employ people in the same proportion. Despite small contribution to GDP, agriculture and related activities like forestry, logging and fishing provide employment to about 50% people, mostly in rural areas. The service and the industrial sectors, provide 34% and 14% jobs.

Therefore, despite a steady decline of its share in the GDP, agriculture still plays a significant role in the overall socio-economic development, particularly of rural India where most of the poor live. Vanishing employment opportunity in this sector is a major reason for both high poverty and unemployment in India.

Indian Economy: All is Not Well

Don't talk about Poverty, Please.

India started major economic reforms two decades ago. It has certainly succeeded in attracting foreign investment and technology. Since the focus is on high technology service and industry the quantum of job creation has not kept pace with what is expected from 8 – 9 percent annual GDP growth.

Right since India’s independence, politically and economically most of the development has remained confined within the quarter of the population living in the urban area. Neglect of the rural India is largely responsible for both, poverty as well as its current population size. Note that about 75% of the population lives in more than 550,000 villages and the remainder 25% in about 200 towns and cities.

Traditionally, the role of rural India has been merely to provide natural resources and unskilled labor force to the rich urban entrepreneurs and industrialists. Thus, the development is highly lopsided with extreme forms of inequalities of all types. Economic reforms for last two decades have failed to change this scenario; in fact the current high GDP growth has only widened the gap between the rich and the poor.

A development model that encourages urbanization is not ideal for India; it might have worked fine for countries with smaller populations. Major Indian cities are already overcrowded and have large slum areas with sub standard living conditions. It would be much better to fast improve infrastructure and living conditions in rural areas and encourage small and micro-enterprises, which are more suited to people living there. This probably is the only realistic way to reduce poverty. Large companies setting up units in rural areas for raw material and other natural resources actually don’t do much good to the local people who end up being displaced with meager or no compensation.

Vicious cycle of Poverty and Population Feeding Each Other

We are not SlumDogs!

It is a well known fact that lacking education and general awareness the average family size of a poor household is rather large. Every new born also invites expenditure on cultural and social ceremonies, just like marriage. It is a peculiarity of Indian culture that birth, marriage, as well as death are all expensive propositions; traditions have to be followed and social functions have to be organized regardless of the financial standing of the family.
This is the most important reason why poor folks end up in debt trap that not only anchors them to poverty generation after generation, but also enhances severity of their deprivations. For them extra pair of hands are potential earning hands; thus, sending kids to work comes first compared to schooling. This is nothing but poverty and family size (population) feeding each other.

Conclusion

Developing rural India, where most of the population and poverty exists, through propagation of education and healthcare networks along with creation of low skill jobs suitable for them is the only way to simultaneously remove poverty and halt population growth.

There is an urgent need to look at the current capitalistic model of free market economy that manly serves just the quarter of Indian population living in urban areas which are already better off. What is needed is promotion of micro-enterprises in rural areas so that poorly educated unskilled rural are lifted out of poverty – as visioned by Mahatma Gandhi who knew India in its true reality.

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