Development Days
Why the poor in India are still hungry
By Michael Neri
One disadvantage of having world class economists in government is that their rationalizations and justifications for policy failures can be hard to argue with and negate –such is the sophistication and sophistry at their command. That has certainly been the case in India, where official claims that poverty has been reduced sharply in recent times, have been dressed up in credible data and impeccable analysis. But every now and then, an inconvenient truth jumps out and tears into the smoke screen of self-serving explanations. One such inconvenient truth can be seen in a recent report titled The Global Hunger Index 2011, compiled and published by the UN funded International Food Policy Research Institute( IFPRI).
India is once again placed at the bottom of the list, in the “alarming” category of the world’s hungriest nations, an inglorious distinction it shares with Sudan, Ethiopia, Bangladesh, Niger and the Central African Republic, among other deeply underdeveloped countries. Translated into tangible terms, its dismal ranking means that forty per cent of India’s children below 5 don’t get enough to eat, and are malnourished and underweight. More tellingly, India’s Global Hunger Index (GHI) has worsened marginally from 22.9 in 1996 to 24.1 in 2001 and 23.7 in 2011, though the government has consistently claimed a sharp drop in poverty levels during this period. But no statistical sleight of hand can obfuscate the sad reality of persistent hunger that the GHI reveals.
Left wing critics of India’s neo-liberal, pro-globalizing growth strategy have long argued that these right wing inspired policies worsen inequality and make the poor worse off, and the GHI report will seem to lend some credence to their views. But the so called Washington Consensus which formed the intellectual framework for the neo-liberal agenda has long been in retreat thanks to the amazingly brave critiques of Nobel laureate Joseph Stiglitz –by no means a left ideologue- who was once the chief economist at the World Bank. Over the past decade, we have also seen the rapid rise of a third pressure group in India comprising of international and domestic civil society groups, NGOs, and an activist judiciary. Together, these entities have effectively pushed for a modification of the neo-liberal agenda – though left parties such as the CPM have disingenuously sought to take credit for such actions – resulting in a spate of new legislation and budgets to match it. The newly redefined Rural Employment Guarantee Scheme, the Right to Education bill, and other lesser initiatives have massively expanded welfare schemes, including anti-poverty and food distribution schemes. How then can we explain the persistent and worsening hunger situation in India?
Food production and supply is certainly not to blame, because agricultural output in India has consistently outgrown population growth by a margin of 2-3 percent, and India’s granaries are overflowing with an excessive and unmanageable 50 million tonnes of food grain as a result. Obviously, the cause lies in the distribution system, and at a more fundamental level, in persistent unemployment and underemployment in both rural and urban areas. India is one of the few poor countries in the world to have a nationwide Public (food) Distribution System (PDS) which theoretically reaches into the remotest corners of the country. Few very poor African nations can boast of anything similar. Erected almost from inception and supported by a socialist inspired policy framework and elaborate institutional mechanisms, India’s PDS was once touted as a model for other nations to emulate.
In reality, the scheme was an outright disaster, and was superseded in 1997 by the so called Targeted Public Distribution System (TDPS) which was supposed to correct the failures of the earlier scheme and deliver highly subsidized food to people Below the Poverty Line, but even this mechanism was a failure. The Indian Planning Commission has recognized and admitted as much in a 2005 study –an admission provoked not because it was overcome by a bad conscience, but due to some very aggressive prodding from the now more centrist World Bank.
The Commission’s study showed that a full 36 percent of food purchased by the PDS is lost or diverted (an euphemism for stolen), a further 21 percent goes to richer Above Poverty Line families, and only 42 percent gets to people below the poverty line who are the intended recipients. Worse still, the Commission found that due to classification ‘errors’ (another euphemism for corrupt manipulation and hijacking of the scheme by richer people), only 57 per cent of the actual poor are covered by the TPDS scheme, leaving out a large minority, who are typically the most vulnerable. Thus in effect, only 23 per cent of the poor get subsidized food. This is a damning admission. The commission also discovered (to its horror?) that it cost the government Rs. 3.65 to deliver Rs. 1 of food through the PDS, which obviously makes no sense at all.
So there we have it, the reason why India’s poor have remained hungry, and increasingly so. Its TPDS has failed to deliver, in a spectacular manner. An attempt to reform the system is now underway, and there is talk about abandoning the physical distribution of food in favor of cash disbursals to the poor, given the high costs of physical delivery. This is a whole other discussion, and in my view, not an optimal solution.
The risks of moving to a cash transfer system have simply not been assessed in enough detail to determine its suitability. In the absence of the price stabilizing impact of a PDS mechanism, will prices escalate sharply as they often do in commodities which are not part of the PDS basket of goods? Will markets have an incentive to service remote areas which are currently only served by the PDS network? Though cash transfers have worked fairly well in some countries, the case for using this mechanism in India has yet to be made convincingly.
But whatever the mechanism used to redistribute benefits to the poor, in the end, it is about political will to implement and enforce, and that has obviously been lacking. Without it, welfare legislation and continuing pressure from civil society groups and an activist judiciary can only be half-hearted and ineffective measures which will eventually breed greater cynicism and a feeling of helplessness.
The question, as celebrated UC Berkeley economist PranabBardhan has asked, is, who will speak for the poor, such that their voices will be heard and translated into the political will to effect change on the ground? The farm lobby, representing the interests of middle income and rich farmers, is certainly well represented, as evidenced by the large subsidies on energy inputs for agriculture and on fertilizer, which together make up about 65 % of all subsidy expenditures in India, which are already running at 10 per cent of GDP. The middle class too has had it good, in the form of continuing tax concessions, and subsidies on education and health. The rich, needless to say, have benefited spectacularly from the neo-liberal policy regime of the past 2 decades. Only the poor seem to have missed out, at least in relative terms, since the total cost of the TDPS at Rs. 60,000 crores ($ 12 billion)in 2011 is less than 1 per cent of Indian GDP at current prices ($ 1.63 Trillion). Their only representatives thus far have been civil society organizations and NGOs, and they alone can’t enforce well-meaning policies on the ground.
There is obviously a political hole that is waiting to be filled by a party of and for the poor, and the mainstream political system ignores it at its peril. The poor will not wait forever for a measure of justice at a time when rising expectations and growing political awareness are beginning to define even the poorest segments of Indian society.
The author is a writer and consultant based in Fort Lauderdale, Florida