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See, Neoliberalism Really Works!

by P. SAINATH

FIRST THE good news. Well, good news for someone, anyway. The collective net worth of 311 Indian billionaires is now Rs.3.64 trillion. This is up 71 per cent from last year, when it was a paltry Rs.2.13 trillion. The tribe has also grown. It now includes 133 new entrants who just months ago were merely millionaires. The daily newspaper that tracks this elite club (Business Standard, November 9, 2005) puts it simply: “India’s billionaires have never had it so good.”

Some hundreds of millions might never have had it so bad either. So just before we pop the corks on those bottles, have a look at the news from the nation’s farm households. There are millions of those, not 311. The average monthly per capita expenditure (MPCE) of farm households across India was Rs.503 in 2003. [At the current rate of just under 44 rupees to the US dollar, that’s about $11.50. Editors.] That is just about Rs.75 above the rural poverty line. And it is an average across regions and classes and income groups. So even this dismal figure hides huge inequities.

A big chunk of those households are below the poverty line. Millions of them deeply below it. The Rs.503 figure–awful in itself–is derived from an average that clubs States such as Kerala (MPCE Rs.901) and Punjab (Rs.828). And those like Orissa (Rs.342), Jharkhand (Rs.353), Chhattisgarh (Rs.379), and Bihar (Rs.404). Note that in those four regions, even the State-wide average is well below the poverty line. More than a fifth of households in these States and Madhya Pradesh had an MPCE equal to or less than Rs.225.

The numbers are from the National Sample Survey Organization’s “Situation Assessment Survey of Farmers.” This survey was done in 2003 as part of the NSSO’s 59th round. The official press note tells us that “such a survey has been conducted for the first time in the history of the NSSO.”

Even if we take the national figure of Rs.503, the picture is quite bad. For one thing, this clubs huge zamindars and tiny landholders together. So the average, again, misleads. For another, over 55 per cent of this is spending on food. Clothing, footwear, fuel, and light take close to 18 per cent.

Health spending is double that on education. The average household spends less than Rs.17 a month per capita on education. It spends over Rs.34 a month on health. Also remember, the Rs.503 figure is for people owning some land, large or small. How bad would the picture be for the millions of landless?

Even for the landed, if such a great share is grabbed by food, clothing, and health, it leaves little for anything else. That is why (also NSSO data) just six per cent of rural homes have telephones. And that is mainly amongst those with an MPCE of over Rs.950, a lot of which are non-farm households. It is also why we need to postpone the joy over the spread of the Net for a bit. PCs with Net connections almost do not exist in rural India. Just about 0.6 per cent of rural households have a computer.

But back to the farm. The MPCE of farm households is less than that of the non-farm homes by close to 10 per cent. The average for all rural households is Rs.554. Which means the non-farm groups are able to spend more. And this is the case with both food and non-food items.

Another vital fact. These numbers are about consumer expenditure. They do not and cannot tell us how much of this spending was based on incurring debt. Yet we do know from even the flawed data that exists that farm debt is on the rise. And quite steeply. The NSSO seems to underestimate private moneylender debt. Yet it shows that nearly half of all farm households are in debt. In 1991, that figure was 26 per cent. (See BusinessLine, August 30, 2005.)

Take Maharashtra. The State ranks third in wealth in the country. But income from agriculture has declined. Bank credit to the farm sector is dismal. Most farmers are forced to turn to private moneylenders. Over 55 per cent of the State’s farm households are in debt. That figure would be a lot worse if we looked at, say, Vidharbha. This season has seen a debt-related suicide by a farmer in the region every so many hours. It should also not surprise us that in Andhra Pradesh where farm suicides were at their worst, “four fifths of surveyed farmers were in debt.”

The data from the NSSO survey on farm spending once again points to the link between poverty and family size. The average household size for farmers was 5.5 at the all-India level. But in those with an MPCE equal to or less than Rs.225, the number goes up to 6.9. On the other hand, households with an MPCE of more than Rs.950 were much smaller. Their average size was 4.1. Broadly, the better off the household, the fewer its members. In the NSSO survey, Bihar and Uttar Pradesh logged the highest average household size of 6.1. The poor tend to have larger families. That is their insurance against higher mortality. Particularly against infant mortality. The logic of “more hands to work” cannot be wished away.

Limited as the NSSO data are, they still throw up a different picture from the glory days’ vision of the private surveys coming out of Delhi. Mostly crawling out of the bottomless data-on-demand pit of the capital’s “think tanks.” These surveys in turn get the rah rah treatment from a media dying to show how good the “reform years” have been. In one case, a daily crowed that “Bharat-matches-India-in-bang-for-buck.” This was so over the top that even the gung-ho authors of the survey the daily was quoting felt compelled to write a piece saying “Don’t romanticize the village.”

Well, also do not romanticize the growing gap between rich and poor. And do not celebrate gross inequality either.

When many households have an MPCE of less than Rs.225, you really need to think of how people live. On what it is that they live. What can you spend on if the most you can spend is, on average, Rs.8 a day? And if close to 80 per cent of what you spend is on food, clothing and footwear, what else could you possibly buy?

Contrast that with a year in which 133 people joined the billionaires’ club. Taking its membership from 178 to 311. (The collective net worth of this Club was computed by Business Standard on “the basis of average market prices for promoters’ stocks in August 2005.”) On their joint net worth of Rs.3.64 trillion you could run the current rural employment program for many years. Or, if we take the yearly returns on that net worth to be around eight per cent, then their joint annual income from it would be over Rs.290 billion. Or nearly Rs.800 million each day. On just that, you could every year run a bigger employment programme than anything the Government is bound to now. It could also make a massive difference to the health, housing, and education budgets.

The point though, is that at the other end of the spectrum, the sector that still employs the largest number of Indians is in deep trouble. Obscene levels of inequality stare this society in the face. And there seems to be little concern over this at the top, though some over there know things are bad. Even Union Agriculture Minister Sharad Pawar says in interviews and press briefings that “the Indian farmer is facing a serious crisis.”

It is very hard for those who have been plugging the glorious impact of the reforms to accept this. It undermines their religion. For years now, rural Indians have been viewed as just so many buyers of consumer goods. So we have one interviewer trying repeatedly to get Mr. Pawar to say that things are much better than they are. But the Minister, who took a long time to accept it himself, did not oblige. Mr. Pawar told him the idea that the farmers’ living standards have gone down is “100 per cent correct.” He also says–surprise, surprise–“the farming community has been ignored in this country. And especially so over the last eight to ten years.”

Mr. Pawar also tells his interviewer: “You will be surprised. In the budgetary provision, not more than two per cent money has been allocated for agriculture. [Though that is] where more than 65 per cent of the population works.”

That the Government he belongs to tries to apply as a solution that which is the problem is another story. The effects of its approach will make things worse on many fronts in this sector. But maybe we can at least hope for a little less fantasy and a little more focus on the farmer in the media.

P. SAINATH is the rural affairs editor of The Hindu (where this piece initially ran) and the author of Everybody Loves a Good Drought. He can be reached at: psainath@vsnl.com.

 

 

P. SAINATH is the rural affairs editor of The Hindu, and is the author of Everybody Loves a Good Drought. He can be reached at: psainath@mtnl.net.in

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