If India was blinded by the razzle and dazzle of its economic growth, Nepal is blinded by its sense of poverty without enough thought on how to pull out of it
Here’s an exclamation mark to India’s razzle dazzle story of liberalization and economic growth that you might have missed.
Consider this: the Congress led United Progress Alliance (UPA) government is expected to bring the National Food Security Bill to Parliament for a vote this budget session. The bill seeks to provide 67 percent of the Indian population with subsidized food grains, rice at Indian Rupees (INR) 3 per kg and wheat at INR 2 per kg. It intends to transform the current system of public distribution and expand coverage beyond schemes such as the Antyodaya Anna Yojana that target only households below the poverty line. [break]
The National Food Security Bill, if implemented, will cost India at least INR 125,000 crore (approximately US $ 22 billion) in food grain procurement alone. There will also be the additional cost of building the infrastructure to procure, store, transport and distribute approximately 70 million more tonnes of food grain.
Image: The Hindu
The National Food Security Bill is not merely a short term response to the current economic crisis. It was a key electoral promise of the Congress party five years ago. It is Congress President Sonia Gandhi’s signature policy initiative.
The National Food Security Bill must be viewed within the context of India’s ongoing economic evolution, which is far from over. Many more decades of sustained high growth are required to lift its masses out of poverty. But as interim stock taking, at a point when Dr Manmohan Singh, the most influential architect of India’s liberalization, prepares to ride out into the sunset, the notion of 800 million hungry without the means to buy adequate food profoundly punctuates the boisterous razzle dazzle of India’s economic growth.
Does this mean that India’s liberalization and economic growth has failed its people, particularly the poor? Not quite. But it has become clear that the story of liberalization, economic reforms and growth cannot always secure an election victory.
Ever since the unexpected defeat of the Bharatiya Janata Party (BJP) on its slogan of ‘India Shining’ two terms ago, India has awakened to a new political reality. To the 800 million hungry, economic growth driven largely by the services sector hasn’t immediately translated into more food, employment, higher income and improved social services. Liberalization and economic growth may be essential to pulling India out of poverty but it hasn’t resonated with rural India where elections are won and lost.
This political reality has created a new challenge for Indian leaders. A reversal to past socialism is impossible. India’s economic reforms must continue. But, as the BJP realized with its stunning election defeat two terms ago, there is no point in having a crafty economic story if the vast majority of the electorate haven’t tasted its benefit and will not vote for it.
The National Food Security Bill must be interpreted within the frame of this political reality. It is a part of Sonia Gandhi’s broader strategy for balancing economic growth, poverty reduction and social welfare, while winning elections in the process.
Congress’ broader strategy is to secure the benefits of economic growth for the poor by defining their needs as legal rights. It allows economic reforms and liberalization to continue. But it institutionalizes needs as legal rights—the right to food, education, water, health, employment, land, water, energy and clean environment. It is a new kind of liberalism, recognizing that economic growth is essential to creating the wealth to address poverty but that the process of wealth creation doesn’t always reach the poor.
Legally recognising needs as right makes it obligatory for the state to meet those needs. It creates the conduits which guarantee that the benefits of economic growth will reach everyone, particularly the poor.
The National Food Security Bill builds upon a pattern of such rights. There was the Forest Rights Act, which gave forest dwellers the right to forest land. There was the right to education; the right to employment through the Mahatma Gandhi National Rural Employment Guarantee Act; the cash transfer scheme that seeks to put money directly into the hands of the poor.
“The spirit of the [National Food Security] Bill is to make the Right to Food a legal right. No other country gives this right. What is also important is that this Bill recognizes the mother as the head of the family. No other country has this system; in fact, they are sending their delegates to study our system,” the Union Minister of Food, K.V. Thomas, who is spearheading the charge of seeing the Bill through Parliament, said in an interview.
Should Nepal dispatch a delegation to study the Indian system, as Minister Thomas suggested many countries are doing? No, because Nepal’s political-economic reality is exactly the opposite of India’s at the moment.
If India was previously blinded by the razzle and dazzle of its economic growth without enough thought about whom it was reaching, Nepal is blinded by its sense of poverty without enough thought on how to pull out of it.
Two key budget metrics illustrate this overhang of poverty in Nepal: the pro-poor and gender responsive budget classification. The pro-poor metric is meant to signal how much of the budget directly helps with poverty reduction. In 2011-2012, it was 49 percent. Similarly, the gender responsive metric measures how much of the budget is beneficial to women. In 2011-2012, 19 percent was directly supportive and 45 percent indirectly supportive.
To see the senselessness of these metrics, you have to fully appreciate its irony. In one of the poorest countries in the world, why is only 49 percent of the budget going to directly reducing poverty? Why not 100 percent? In country where woman bear the brunt of poverty and injustices, why is only 19 percent budget directly benefitting them? Why not 100 percent?
That’s because these metrics are designed to make the case for aid. To a donor in a far away capital, it is reassuring to know that at least half of government budget is directly helping the poor. These metrics lend themselves to nice graphs that show growing commitment towards the poor. For aid, the focus on poverty sells; the focus on increasing the wealth for the middle class doesn’t.
Such metrics, though well intended and analytically sophisticated, are politically limiting. They create an undue focus on poverty and limit the space for the political discovery of a balance between economic growth and poverty reduction.
The Maoist uprising and the subsequent changes were an important part of Nepal’s awakening. It opened our consciousness to the grave political, economic and social injustices. These injustices must be addressed, but how? We need economic growth to address those challenges. But sustained long-term growth is impossible unless the claustrophobic overhang of poverty is shed. Political focus must turn towards consolidating and growing businesses and the middle class. Only a wealthier middle class can address Nepal’s injustices.
Nepal’s poor and disenfranchised underwrote its last revolution. The next revolution must now come from its middle class.
India can afford to spend US $22 billion to feed its hungry only because its economic growth has created the wealth to make it possible. How will we feed our hungry?
The author is a consultant on energy and environment
bishal_thapa@hotmail.co
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