(Extracted with permission from An Alternative Development Agenda for India by Sanjay Kaul, published by Routledge India.)
Notwithstanding the economic liberalization of the early 1990s, and the ensuing years of relatively high GDP growth rates, the reality is that four out of five impoverished South Asian families live in India. The country has poor health and education indicators, sharp gender disparities, high child mortality and malnutrition, a significant food-insecure population, declining employment levels, and a rapidly increasing urban population surviving in unliveable conditions.
Over the years, income inequality has only risen (and) this inequality in income distribution and wealth has dramatically undermined the expected trickle-down effect of economic growth. Moreover, not only has the employment rate declined perceptibly, but the absolute number of jobs has also dropped in India for over a decade; a phenomenon aptly described as 'job-loss' growth. And yet, several sectors of the economy have done remarkably well. In overall terms as well, India is forecast to be the world’s fastest growing economy.
Against the above background, we posit an alternative economic development plan that proposes a transformative approach to radically improve people's lives. The alternate public policy is a double-barrelled approach that encompasses both well-being and livelihood.
Identifying Vital Areas
The concepts of well-being and livelihood are multi-dimensional. Thus, we look at seven intertwined areas that matter – health, nutrition, and food security, school education, the young child, livelihoods, gender, and urban issues. The policies in each of these areas may require a complete overhaul from the perspective of putting people first.
The first area of concern is health care. The health sector in India has long suffered neglect. Morbidity and mortality rates, especially amongst children, are among the worst even compared with developing countries. Almost half of India's women are underweight, while non-communicable diseases are on the rise. It is possible to build a sustainable and resilient public health system that can effectively battle epidemics through a set of meaningful and cost-effective programmes.
A closely related issue is food insecurity and malnutrition. Even with vast food grain stocks and large and rising food subsidy budgets, India has unacceptable levels of food insecurity and malnutrition. Despite high malnutrition levels, government budgets for mitigating malnutrition are only 10 percent of those towards food subsidies. At the same time, there has been a disturbing decline in per capita food consumption, and huge nutrition imbalances persist despite a rise in household incomes.
There can be no better way to improve health and nutrition than to focus on the young child. Despite Indian boasting of the world's most extensive childcare programme, as many as 30 percent of Indian children are malnourished, underweight, and unable to get full immunization. There is growing evidence that the more a society invests in the young child, the greater are the economic returns.
Education is the most vital enabler for the poor to improve their health and nutrition, expand their choices, and lift themselves out of poverty. Education is also critical for human dignity and empowerment and for realizing the economy's productive potential. Learning outcomes remain dismal. Children of low-income households have been particularly disadvantaged, as the performance of government schools, with rare exceptions, is inferior to that of private schools. We (need to) delineate a set of actions that can radically improve schools, particularly government schools.
We should also acknowledge that human capital by itself cannot materially enhance livelihoods. Sixty-five per cent of Indians live in rural areas, and large-scale interventions are needed to transform and materially enhance their livelihoods. The government can no longer sit back in the fond hope that jobs will get created through market forces. The situation of women's livelihood is particularly bleak. A transformative environment can enhance livelihoods, particularly of women, and create jobs that the country urgently needs. Agriculture cannot create enough jobs for the country's sizeable rural population. Most new opportunities will be created in urban agglomerations and our strategies must recognize this reality.
One of the prime causes of the non-participation of women in the workforce is gender discrimination. Existing public policy interventions have failed to address entrenched social beliefs and practices concerning the role of women. We (need to) consider a few policy actions on a massive scale, which can not only ensure gender justice but also materially improve the working life of women.
As noted, urban settlements are the focus zone for new livelihoods and jobs, and, thus, improving the urban landscape is the seventh area that needs urgent action. A near absence of urban planning, poor and unhygienic living conditions, pathetic state of waste management and sanitation arrangements, hugely inadequate public transport, and unsafe streets, characterize India's average town or city. We (need to) look at strategies to reverse the urban sprawl across all cities and many urban settlements.
We should be mindful that a silo approach to these fundamental developmental issues will not work. Success in one sector will catalyze positive change in other sectors. The ideas we suggest for redesigning and restructuring the country's priorities rest on two fundamental planks. The first is a robust and clear understanding of the target audience, particularly the neediest households; the second is a fuller understanding of government institutions and implementation structures.
Understanding Poverty
To understand the poor, we need to put ourselves in the shoes of a typical impoverished family. The poor often do not display what is considered 'rational' behaviour. Deficiency of service or lack of knowledge does not fully explain such behaviour. Economists Sendhil Mullainathan and Eldar Shafir attribute this behaviour to 'scarcity' and bandwidth: ‘poverty is the most extreme form of scarcity.’ If the poor could afford the luxury of devoting careful thought and attention to improving their lives, they would undoubtedly participate in programmes intended to help them.
The accurate identification of poor households (also) poses a huge challenge. The methodology for estimating the number of poor households in each state must begin with national sample surveys of household expenditure and the list must be finalized by intensive engagement with local communities.
Understanding Government Policymaking
It is equally crucial to be conscious of governance structures, bureaucratic capacity, and political realities. The government must prioritize as it too has limited 'bandwidth'; its capacity is often needlessly stretched because it tries to do too many things. A fundamental challenge for policymakers is to identify strategies and programmes that both make for good economics and have broad electoral appeal. In recent years, there has been a disturbing over-centralization in the design of programmes. Implementation has always been and should continue to be driven by the states. Unless states take ownership of them, the programmes will fail.
A “people first” agenda must have the people at the centre stage. This can be best achieved by involving them in decision making, empowering local communities, and collaborating actively with grass-root level civil society. Radically overhauling public policies and re-ordering priorities to favour the well-being and livelihoods of people sectors is not an aspirational, impractical dream. Rather, it is an imperative that is practical, implementable, and, as we will demonstrate, well within the fiscal capacity of the state.
[Sanjay Kaul is a development policy analyst, a former IAS officer (1979-2007).]
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