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30 June, 2015

Good days are not for the poor

BRP Bhaskar
Gulf Today

Considering India’s huge size and the complexity of the problems it faces, it is not surprising that Prime Minister Narendra Modi was not able to work wonders in his first year in office. However, there are disconcerting signs that if and when his promise of achche din (good days) is realised, the vast poor population may be left out.

According to the disparate opposition parties, several steps the government has taken in the name of speedy development are making life increasingly miserable for the poor, who number about 300 million.

They point out that the changes made in the land acquisition law to help industrialists will deprive a large number of people, especially the farmers, of their means of livelihood.

Congress Vice-president Rahul Gandhi, who has been in a combative mood since he returned from a holiday abroad, has dubbed the Modi government “anti-farmer” and “pro-industrialist”. He has made it clear that the party would put up stiff resistance against the government’s anti-poor policies inside and outside Parliament.

He has also said Modi is paying back the loans of the industrialists – an allusion to the huge contributions they made to the Bharatiya Janata Party before the parliamentary elections.

Similar sentiments have been expressed also by the two Communist parties and the Janata Parivar parties which are in the process of reunification, realising that they will be annihilated if they don’t come together.

The government, on its part, justifies the steps it has taken saying they are part of long-overdue reforms needed to accelerate economic growth. It claims these measures will lead to increased investment which in turn will generate new employment opportunities for the poor.

This explanation has not impressed even some of the government’s supporters. A few Rashtriya Swayamsevak Sangh affiliates have echoed the opposition’s view that the measures are inimical to the interests of the poor. The RSS leadership can be expected to restrain them.

Modi’s economic reforms framework is no different from what Manmohan Singh laid down as Prime Minister of the United Progressive Alliance government more than a decade ago. When popular mood was not supportive of reform measures, the UPA was ready to step back and wait for an opportune moment to go forward again.

It also made conscious efforts to soften the impact of reform measures by introducing welfare schemes to mitigate the plight of the poor. These included assured employment to poor villagers for at least 100 days in a year under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and supply of rice and wheat at subsidised rates under the food security mission.

MGNREGA uses the villagers’ labour to create rural assets. Several studies have shown that the law has benefited the poor immensely. Yet Modi ran it down in Parliament as a living monument of the UPA government’s failure. Mercifully, he said the scheme will continue.

Early this year Modi launched a scheme to help the girl child with the slogan “save daughter, educate daughter”. At the same time, his government cut the budget outlay of the Women and Child department from Rs 211.9 billion last year to Rs 103.8 billion this year. The worst sufferer is the department’s flagship Integrated Child Development Scheme (ICDS). Its allocation has been halved – from Rs160 billion to Rs80 billion. Social activists fear this will put poor children at risk.

Modi is actually attempting to replicate at the national level the development model which he evolved as Chief Minister of Gujarat state. While his party has uncritically accepted his claim that it was a great success, independent studies tell a different story.

Hemantkumar Shah, Professor of Economics at Gujarat University, in a book titled “Sacchai Gujarat ki” (The Truth about Gujarat) says the state’s economic and human development parameters worsened after Modi came to power in 2001.

Citing data, he points out that the state recorded an annual average growth of 14.97 per cent during 1980-1990 and 12.77 per cent during 1990-2000. The national average for the period was 5.5 per cent. Between 2001 and 2011, the average growth rate fell to 9.82 per cent, which was just 1.26 percentage points above the national average.

The number of families below the poverty line in the state in 1999 was 2.6 million. A government advertisement early last year gave the number of BPL families as 4 million.

Ahead of its first anniversary, the Modi government launched three insurance and pension schemes. The schemes are being publicised through radio and television and government advertisements to create a pro-poor image. But the situation calls for a hard rethink, not an image makeover.

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