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Which is worse: Inequality or Extreme Poverty?

May 15, 2009

As all of us know the one real issue facing India is poverty. Today’s economic downturn has pushed more people into poverty than ever. 200,000 to 400,000 more babies will die each year. Most of them will be will be in Africa but one cannot help wondering how many of them will be in India. It is disturbing to know that India is now ahead only of sub-Saharan Africa when it comes to the percentage of people living in extreme poverty. The World Bank defines the extremely poor as those who earn less that USD 1.25 a day. Let’s check out India’s progress over the years:

1990
India – 51.3% of the population below the poverty line
China – 60.2%
Sub-Saharan Africa – 57.6%

2005
India – 41.6 percent
China -15.9%
Sub-Saharan Africa – 50.9%

2015 projections
India – 24.4%
China – 6.1%
Sub-Saharan Africa – 37.1%

China is leap frogging, and the World Bank has said that it has surpassed its target. India apparently is on target while Sub-Saharan Africa is not.

I have capitalist ideas (although not of the extreme variety) and I believe the answer lies in encouraging business. So far it has worked for India, if one goes by the figures of the last decade.

Many find the inequality more disturbing than the poverty
There are those who find it discomforting to have slums and affluence side by side, and in fact find it more disturbing than the actual poverty.  In India the gap between the haves and the have-nots seems to be rising and it is creating discontent amongst the poor as well. Let’s  take a look at the Gini coefficient which measures inequality of income distribution. The lower the number, the more the equality. The map showing comparisons between countries is from the wiki. India doesn’t fare too badly. Income disparity seems very high in South America and higher in China than in India, although there are fewer poor people in China.

A high Gini coefficient can lead to an unstable society. But a way to tackle the discontent that arises in an in unequal society is to ensure equal opportunity for all. This is easier said than done as it is not happening even in advanced and liberal economies according to this article from The Economist.

There might also be an argument in favour of wealth disparities if social mobility was high and the sons and daughters of office cleaners could fairly easily rise to become chief executives. But America and Britain have the highest intergenerational correlations between the social status of fathers and sons; the lowest are found in egalitarian Norway and Denmark. Things are even worse for ethnic minorities; a black American born in the bottom quintile of the population (by income) has a 42% chance of staying there as an adult, compared with 17% for a white person.

I need hardly add that India will fare worse than America. The high costs of education must be one of the obstacles to success in a country like America. A few smart people can rise in life without an education, but most cannot. In India college education is not that expensive but often it is not of a good quality. Not that all of the poor manage to get themselves educated. The extreme poverty forces parents to send their children off to work, not to school. And then in India there is far too much reliance on influence and contacts when it comes to jobs. This ensures that the system promotes those who are already well-to-do and influential. Yes, talent is wasted, and many smart people are confined to hovels. Lack of hope leads to dissatisfaction and anger. We know that this is the case in India but why is there less dissatisfaction in America if indeed their society does not provide equal opportunity for all?

The theory (based on studies) put forward by The Economist is that Americans put up with the system because they have unrealistic expectations of their chances of success. In reality only 2-3% of the poor have a chance of becoming rich, but as many as 31% think that they can . And only about 12-17% of the middle class actually become rich but over 50% of them think they can!

Random conversations with poor people in India will reveal that they do not expect to become rich. If they have not turned unhappy and bitter it is more to do with the fact that they have accepted their “karma”. A time will come when they won’t accept it and in fact the new generation isn’t accepting it. If India doesn’t give them opportunities we will have grave problems. Naxalism is an ever present danger.

Related Reading:
Growth is not leading to development in India
Trade is better than Aid!
The gap between the rich and the poor in India is not that wide
Instead of making the rich poorer lets make the poor richer
Is poverty declining in India?
Do top management deserve their high salaries?

87 Comments leave one →
  1. May 15, 2009 9:18 am

    Good article, Nita-ji. It is a pity that our mainstream media reports so little on these issues, and when it does, primarily from a sensationalist angle.

    One more factor I would point out as contributing to extreme poverty is population growth. This is the elephant in the room which most political parties are simply ignoring, but the fact is that in India, we are already over-utilising severely limited resources. This is one of the core reasons for over-use/mis-use of agricultural land, gradual poor quality of soil and eventual loss of livelihoods.

    However many industries we put up, the fact is that they cannot absorb an ever-increasing population.

  2. Vinod permalink
    May 15, 2009 9:46 am

    Now, which Greek philosopher was it, who wrote on anger saying that the cause of anger is the high expectations one has from life and that they key to staying calm is to have low expectations from life?
    In one sense, believing in a better life after death while viewing this life as merely a “test” is helpful provided that it doesn’t lead to fatalism.

  3. Vinod permalink
    May 15, 2009 9:50 am

    The population argument doesn’t quite explain China’s progress in all these years, does it?

  4. May 15, 2009 9:51 am

    Our media is obssessed with the rise of middle class and put no light on the growing wide gap of income between rich and poor. Lack of attention to agriculture sector by educated class is the root cause of poverty problem in our country.It is said in your previous article that trade is better than aid. Subsidies on fertilizers and seeds are not reaching to the farmer directly. When loan are sanctioned to farmers , the banks and brokers are ready to take huge bribe before crediting the loan to uneducated and poor farmers.
    Isn’t it sad that one-fourth of the world’s farming population — 600 million farmers are on the mercy of monsoon than a good irrigation system. Since 1997, more than 1.80 lakh farmers have committed suicide. The tragedy is that even this human sacrifice, massive from any political standards anywhere in the world, has failed to shift the national focus on the plight of farmers.India is the ungrateful nation be in a hurry to dump its farmers, the real backbone of the economy for implementing world bank policies.And still we ignore fundamental flaw in our development pattern.

    Comparison with China is very obtuse in terms of poverty line. But also Percantage should be converted in to numbers to give better figures. One child policy and one party program has strengthen china’s mission to bring down poverty line at a very low level.

    Nice write up Nita. It is very necssary to bring such matters in front of everyone.

    • May 15, 2009 3:55 pm

      The problem with socialism is that it sounds good only on paper, and history has proved it?

      History is an interesting subject indeed because it tells you about your mistakes, but clearly some of us are still to learn from our mistakes.

      Stressing on the same line again –>

      We were so concerned about distribution of wealth that we forgot about actually creating it.

      This is what Indian did till 1990, achieving nothing. Why would you wanna go back on the same track again??

      • May 15, 2009 6:46 pm

        Unequal distribution of Economic Freedom is at the basis of India’s uneven development. The reason is simple, the areas in which the middle and upper classes make their living have seen the highest degree of liberalization, while the areas in which the poor earn their livelihood have seen the fewest reforms.All the countries today shouting for open economy had developed in the past either due to imperialism and protected economy. How can you measure the ‘comparative advantage’ of a commodity which is highly subsidized with an output that does not receive even a fraction of the subsidies received in the US? Today production is don for the consumption of masses, not by the masses.This has lead to current crisis. And the country whose 90% of GDP is consumed in loans(Sources:Business India 5,October 2008) ,you are following the same path.Today we are growing due to bliss of outsourcing but soon this job will also go to small countries like South Africa and Vietnam etc less developed countries. Creation of wealth and progress can only be maintained by manufacturing sector and self sufficiency in the agriculture sector is required for supporting such huge population.Example, For creation of wealth in future, we need to transfer Infy &Wipro into product based software companies like Adobe,Google and Microsoft.Do you want always profit to be privatized and losses to shared by your tax.

  5. zyakaira permalink
    May 15, 2009 9:52 am


  6. May 15, 2009 9:56 am

    Nita, I think at some level we need to think about beyond just numbers when it comes to poverty. I am not saying that numbers are not important, but they only say so much and are rather superficial. I think we should think more in terms of improving people’s quality of lives and their livelihoods than just think in terms of increasing income.

    As far as simple economics is concerned, Delhi (around $ 1700) is much wealthier than Kerala ($ 848) but the quality of life for the average Keralite is much better than even that of a middle-class Delhite.

    As for the China model, there are certain political and geographical reasons why China could take the route it did. Also, their growth has come at a substantial environmental and social cost. Try to read this article if you can find it, http://www.indiaenvironmentportal.org.in/content/should-mumbai-learn-shanghai

    • Vinod permalink
      May 15, 2009 11:03 am

      Vikram, that link was very educational. Thanks for sharing that.

    • May 16, 2009 6:10 pm

      Indeed, China’s growth is/was a catastrophic error for the health of our planet.

  7. May 15, 2009 10:05 am

    apu, thanks. Ofcourse, as you say population is definitely one of the causes. About the media, I am sick of it. Balbir Punj wrote a nice article in The Daily Pioneer about how badly the media is reporting on the elections. More on sensationalism and less on election manifestos.

    Vinod, that is a philosophical way of looking at it!🙂

    yayaver, thanks. I agree that more attention needs to be paid to the agriculture sector. Politicians are promising this, but lets see what happens.

    vikram, ofcourse quality of life is more important. In fact I was thinking of including the aspect of the environmental costs in this article but that would have made this post too long. Ofcourse there is a huge environmental cost and I have in fact written a post on the environmental problems in China. I noticed it starkly when I visited there. There are problems in Gujarat too. But that is an issue of another post. There should be strong laws to prevent environmental damage. Now they have these laws in developed countries.

    • Vivek Khadpekar permalink
      May 15, 2009 6:35 pm

      Nita,

      The environmental laws are good in India too. But the very people who make them — our legislators — are the first to break them, hand-in-glove with the capitalist corporate predators for whom “development” only means “growth” and whose vision does not etend even as far as the day after tomorrow.

      And have you noticed how the people who make the highest environmental sacrifices at the altar of “development in the larger public interest” are the meekest, the poorest and the weakest.

  8. May 15, 2009 11:11 am

    I think poverty and higher aspirations is the main reason there is crime, so they are equally bad. Nice blogpost

  9. May 15, 2009 11:17 am

    I belive in capitilistic ideas as well. The more your encourage business, the more jobs you create which will give not just the educated jobs, but the uneducated people as well.
    The recent retail store invasion itself has created numerous jobs to all youngsters who have dropped out of school.
    While some politicians argue about such invasions, I believe that this is the best way to create jobs and wealth.
    I guess ever since we opened up our market, the poverty atleast near the cities have come down.

  10. May 15, 2009 11:31 am

    Nita, you’re very rich. You have a marvelous country.

    “Look inside”.

  11. Ravi Matah permalink
    May 15, 2009 11:36 am

    Nitaji – this a very well written thought provoking blog. You are very right when you say that children of lesser Gods hardly get opportunities to succed to become wealthy – say 2 or 3% of the children of the poor in America are able to become rich. Actually what I feel is that it is the habit of saving more from whatever you earn – requires more emphasis. It is in direct proportion to what you earn and how much you can save. I have seen shops in US where you can obtain an advance against your monthly salary cheque. Most of the Americans cannot pay their house loans resulting in foreclosure, they do not honour their credit cards bills payments on time resulting in additional debt burden the next month and the next month and this goes on till they conk off – in debt of course. Then the difference in India, America ,China and Japan is the GDP as well the purchasing power of money also. There is no denying the fact that today’s India is far better progressive than this country was four decades ago. People have been able to acquire the basic essential consumeristic artcles to facilitate a comfortable ‘life ‘ or should I term it ‘existence’.
    The major hurdle in this coutry is and shall remain is that the opposition has to oppose the Government in whatever it does. Ever heard in any other country that the water of this river will not go from one State to another? Or that the Government should not construct a dam – because the fruits have not been evenly distributed? Eh?
    Best of luck for your future endeavours.

  12. May 15, 2009 12:33 pm

    @ Nita : Yesterday I had this interesting conversation with an “Auto” driver who was complaining about inequality. He claimed that if people who are monied fornicate in a public place the police just look the other way (exaggeration though our parks are littered with happy couples of all kinds) but if a poor cycle wallah teases a girl he gets bashed by the police and they extort money from him. Good point. He was also complaining about the nazi government of the city, well he called it authoritarian. Recently auto people have been in direct confrontation with the local government over banning of non-LPG autos. What I sensed was a deep resentment about people who have the means to deny the ones that don’t have the means to make their own decisions.

    The Indian middle class often think it is ‘the defender of faith’ when it comes to preserving ‘values and traditions’. They also seem to have a holier than though, what do these poor idiots know kind of an attitude. No amount of business will change this unfortunately. It is just like the Borg of Star Treks basically the middle class only wants to assimilate the poor and create more middle class so that they become “acceptable”. What they do not ever want is to open a dialogue with the poor. So basically they want to reduce their numbers because they fear them and they do not want a change in the system.

    I am no communist by the way before the lot of you attack me. However I do not ever think that being poor is something undesirable, its just a “state”. Looking at it from my point of view people should not meddle unnecessarily in the right of the poor to choose their own course. How many auto wallahs did the bureaucratic nazi regime of chandigarh take in to confidence before they enacted a new law? Did they do an opinion poll of them? No. I will tell you what they did though, they asked the ’eminent’ citizens of the town for their views on silly things like ‘pollution’. Why? Because that makes scoring brownie points easier with the middle class who are likely to have more time to whine at the government anyway than some silly auto guy who has to drive the whole day to put bread on the table. QED.

    • Vinod permalink
      May 15, 2009 1:23 pm

      Odzer, what you point out is known in the realm of psychology as the result of the status consciousness and anxiety that comes from a meritocratic society. This in turn affects the way the people, who “by the strength of their merits” have gaines their status, to look upon those have-nots. People start thinking that the poor are poor because they deserve to be so. They haven’t tried enough and are good for nothing. This is particularly true of the American society where the homeless get a far less sympathetic treatment than those in India. The homeless and the beggars in America (yes, there are beggars there too!) actually get their alms from the Indians and the Latinos, and not from the Whites.

    • nehru mantri permalink
      May 15, 2009 11:15 pm

      Odzer

      But there is a way if the auto guys were taught to organize and press on with their demands and with a so called middle class interpreter to push their cause. Many people often give up at the first attempt and make a cardinal mistake of not putting in the first piece of paper by having the same self defeating argument that “it will fail”. But a case history is created and then somebody is forced to act sooner or later which should lead to an eventual second step. Democratic process is slow but it will gain speed depending on the participants. The communist system is the same where they will have you in assembly whether you are ready for it or not in which case you must have your homework ready failing which (anything could happen) they will be shuffled out hastily for a later session and given a warning meaning they are wasting state time and resources. I guess pointing fingers at “they” and politicians is a no winner. The one thing that can really be useful is a city committee that goes out and helps set up such small democratic organizations and follows them through. They are apt to be less political since they would be out in the field setting things up and in day to day contact with the sufferings of the needy. But again this needs two to jive and sustain. It is not just politicians _the people also fall back into insouciance upon fulfillment.

  13. May 15, 2009 1:16 pm

    Nita, unlike my usual response on your blog, I did not like this post.

    Rather than building on the excellent title, and leading us to either a conclusion or a definitive understanding of your stand on the issue, the post seems to lead us nowhere, with a lot of statistics. The post is like a statistical report, but the title promised so much more!

    I am afraid of being the ostracized commentator who’s offering criticism, but if this post were titled differently, my response would’ve been different.

    • May 15, 2009 3:19 pm

      Mahendra, I think perhaps you expect too much of me. I generally compile stats and present them in a readable and simple fashion. None of the stats you see above are available the way I presented them. In fact most people come to my blog for information presented in a simple manner. That is the feedback I get.
      Unfortunately most commentators have no idea as to how hard I work for my posts. I pick and choose from various articles to present a point of view. I spent hours on this post. Also combining several articles into one is always difficult. One has to read all and try and find a common thread. This is how I work. First get an idea. Try and get support from the internet and try and present my views as simply as possible. Takes time!
      But then I think you are perhaps expecting too much. And I have offered a clear answer, but yes not on a plate. Everyone has to decide for himself. I have presented both views and given my own opinion. I have clearly said that I have capitalist views! I am a little puzzled as to what else I could have written. My opinion is very clear throughout. In fact one sentence that says it all is: “But a way to tackle the discontent that arises in an in unequal society is to ensure equal opportunity for all.” I wonder if you read that Mahendra.

      • May 18, 2009 6:37 am

        I’m sorry, I guess I was being crass. I didn’t mean to undermine the effort you put in – I’ve lauded that several times in the past.

        I re-read your post, and re-read my comment, and honestly don’t know what I was thinking! I know this sounds bizarre, so please forgive me.

        In fact the way you weave everything together so nicely might be all the more reason why it appears deceptively simple.

        You don’t have to say sorry Mahendra. I was just surprised by your comment, particularly as we now know each for over 2 years. I also do not think anything wrong in presenting information without giving my own opinion (I may not have one!) although I have not done so in this post. And I often do take tables etc from another source (although I have not done so in this post) but again I see nothing wrong with it because that’s how I make a point! But don’t worry, all of us say things on impulse on first impressions so it’s okay!🙂 – Nita.

  14. May 15, 2009 1:34 pm

    No wonder the BJP’s ‘India Shining’ slogan failed to get them re-elected…

    So, which is worse – Inequality or poverty?

    • May 15, 2009 3:27 pm

      sraboneyghose, if you are asking me, my views are clearly given in the article. You are welcome to give your own view on the matter.

  15. May 15, 2009 1:44 pm

    Well.. It’s has been known for a long time that the inequality due to capitalism is way better than the equality due to socialism.. However, our leaders have chosen a middle path since independence. And I would say that they haven’t failed completely.. This middle path has done India good in many ways.. I am also a supporter of capitalism.. But unrestricted capitalism without social responsibilities is harmful to the society too..

  16. Vinod permalink
    May 15, 2009 2:02 pm

    From one point of view, inequality can be helpful in precipitating a revolution of social justice. With US installed puppet capitalist government in Latin America, only the rich benefited and the poor got alienated in the country. This applied to Bolivia, Equador, Chile, Nicaragua and Guatemela (is there any I missed?). You see the disparities as wide as they are in South America because of the historical US interference there. The rich in those countries saw Miami and New York as their second homes. The maps of these countries showed the hill sides where the poor lived in little houses as green uninhabited virgin areas. Guess what happened? Hugo Chavez and Fidel Castro. These individuals are gradually making a difference now. The poor are beginning to feel that they are a part of the society. For the first time they are getting to go to schools and are seeing doctors for treatment. They are hugely popular leaders there and hated by the US because they don’t support the US corporations there. South America was dismissedly treated as the “backyard of the US” for close to 40 decades.

    Look at the link which Vikram gave. It clearly says that in China for the development of Shanghai the price was paid by the rise in education in rural areas and that has led to an increase in rural illeteracy.

    • Vinod permalink
      May 15, 2009 2:30 pm

      This applied to Bolivia, Equador, Chile, Nicaragua and Guatemela (is there any I missed?).

      Damn..how could I miss Cuba and Venezuela?

  17. Vinod permalink
    May 15, 2009 2:03 pm

    oops..not 40 decades, but 4 decades

  18. Vinod permalink
    May 15, 2009 2:04 pm

    One can list the US presidents from Nixon to Bush and side by side list the respective Latin American countries that their govts destroyed.

  19. Vinod permalink
    May 15, 2009 2:05 pm

    Some of the best explanations for the current recession in America from Latin American economists who have a much sounder grasp of economic principles than the “boys of University of California”

  20. Vinod permalink
    May 15, 2009 2:08 pm

    The story of the rise of Hugo Chavez is one of the greatest success stories of real democracy in the world today. It was the poor that marched out to the Presidential palace of the puppet govts and demonstrated till they got back the kidnapped Chavez re-instated as the President. It was such an inspiring tear-jerker for me. Would we have such a revolution in India?

  21. Vinod permalink
    May 15, 2009 2:33 pm

    For an introduction to Latin America, I would refer one and all to the documentary on google video – ‘War on Democracy’ by John Pilger.

  22. May 15, 2009 2:37 pm

    I feel, apart from poverty, education is one huge problem we have and these things are too much interlinked to be looked seperately… i think!

  23. Vinod permalink
    May 15, 2009 3:17 pm

    I too believe in capitalism, but with moderation. It cannot come at the cost to universal healthcare and education. Also, it cannot operate in countries whose indigenous industries have long suffered the brunt of colonialism. Capitalism works when there is some genuine competition possible. The country should not be put on sale to foreign corporations! Many African countries have been devasted by the forced capitalism of the World Bank.

    • Vinod permalink
      May 15, 2009 6:34 pm

      One more point…while encouraging free markets, one must watch out for monopolizing tendencies of corporations. A country must have good anti-trust systems in place. Else, corporate elites will soon start dictating what is good for the country. Case in point – America’s Highway Lobby on internal policies and American’s Gun lobby on foreign policy.

      • Vinod permalink
        May 15, 2009 6:36 pm

        And into that, presidential campaign financing by corporations…people have sold their fates to corporations.

    • May 15, 2009 6:54 pm

      Vinod you are absolutely correct in all the points and have presented the facts in analytical way.

      Also,FYI.South Korean giant Daewoo has brought in the mother of all land-grabbing deals. It has taken on 99-year lease some 1.2 million hectares in Madagascar., half the total available arable lands in this African country. Now you can imagine the danger we are in.

  24. Vinod permalink
    May 15, 2009 3:20 pm

    The cause of the inequality in South Africa is not too difficult to speculate on – the historical apartheid regime. Remember it wasn’t toppled by a redistribution of wealth. It was toppled under the agreement that the looters will continue to have what they have looted all along. When Zimbabwe tried to resdistribute its wealth after taking away power form the ruling White elite there was such hue and cry in the Western world and the govt of Zimbabwe was boycotted worldwide. Capitalism often has a ring of racism to it that one has to watch out for.

  25. May 15, 2009 3:34 pm

    Ritu, that’s true and also lack of hope for the future.

    Xylene, I agree, anyway I prefer capitalism even if it means inequality.

    Ravi Matah, glad you got the nuances of the post. I consider this one of my better posts too. India has a lot of problems but I guess when it comes to inequality we are going to continue to have it for a long time to come!

    Odzer, frankly I do not see why a rickshaw driver should equate eve-teasing with couples making out in a park. And about your other views, well, environmental issues are important for the human race as a whole. However a solution can be found to the problem by giving soft loans to the auto drivers.

    Simply Ridiculous, yes I agree it has been, and that is the capitalist view but the socialist view is different. I am not sure though whether we have taken the middle path! Time will tell!

    Sakhi, absolutely I do agree.

  26. May 15, 2009 3:45 pm

    Time and again we Indians do not learn from our ‘mixed’ economy’s failure. This is our main problem ‘WE REFUSE TO LEARN FROM OUR MISTAKES’

    Back then We were so concerned about distribution of wealth that we forgot about actually creating it.

    And now some of the commentators here kinda wanna repeat the historic failures of Indian System.

  27. May 15, 2009 4:27 pm

    After comparing the statistics between India and china can’t stop asking, whtz wrong with India.Whether the problem lies in government or with we civilians.we can’t blame that population is a factor of unemployment, poverty and lack of education cause if a country like china fair well in same area , then why can’t India.What i feel is instead of giving reservation,the government should strengthen the basic education,like improve the standard of education in government schools and make it accessible to backward classes and bpl peoples.If the gov do this so, without any reservation they can excel. Right now what is happening is, they will get admission(many undeserved….can’t stop myself from saying that)in gud colleges and for top courses through reservation.But most of them will stumble there coz of the lack of base and in ability to understand the concept………..As education is the back born of the development,our government should focus and work on improving and strengthening basic education……..if they do so,then definitely we can get rid of unemployment, poverty to a big extend and we can be a another super power in the world……i feel like that

    • Vinod permalink
      May 15, 2009 6:46 pm

      What i feel is instead of giving reservation,the government should strengthen the basic education,like improve the standard of education in government schools and make it accessible to backward classes and bpl peoples.

      But…But….reservations are meant to improve accessiblity to education against the odds of caste discrimination!!

      • May 18, 2009 10:29 am

        @….But…But….reservations are meant to improve accessiblity to education against the odds of caste discrimination!!……………….

        i agree with u vinod…but do u think the deserved ones are getting reservation.Just imagine a guy who got 95% has to compete with a person who got probably 60-65 for medical or management seat.don’t you think it will demotivate hardworking deserved ones.From my point of view ,a marginal reservation is fine(probably 15-18 instead of 49 or 28).Instead of that(29-49 % reservation),let the government improve the quality and standard of education in schools and make the infrastructure like top management schools.What i feel is, equip them with basic education and enable them to compete with others instead of reservation and all…..Another after effect of reservation is corruption and inefficiency of employees in government offices…what u think?

        • Vinod permalink
          May 18, 2009 11:14 am

          Results from Tamil Nadu actually show that reservation is making a difference there. We have to seek results in objective surveys, not our personal experience of it.

          Reservation is not an easy remedy to the situation. It gets easily politicized. And once given it cannot (practically) be rescinded. It will take a lot of political ingenuity to moth ball it. But it is also equally difficult to come up with an alternative legal scheme which will address the problem meaningfully.

          Your alternatives – “equip them with basic education” , “improve quality and std of education”, “improve infrastructure” etc come nowhere near addressing the problem – the discriminatory practices of the upper castes that will prevent the lower castes from accessing these “improved infrastructure and quality of education” and if accessed, from enjoying it without harassment by the upper castes.
          Caste discrimination is very real and entrenched in India, although you and I, have probably been shielded from experiencing it in anyway.

          • anishthomas permalink
            May 18, 2009 11:39 am

            @ Caste discrimination is very real and entrenched in India, although you and I, have probably been shielded from experiencing it in anyway.

            ………….. yeah may be that is the reason.I studied in kerala and i brought up seeing many undeserved ones getting reservation and benefits(i mean financially rich) .in many cases i have seen poor remain poor(apart from cast)…….To be frank i haven’t exposed to caste discrimination in my life and those who were getting benefits were well settled….may be peoples in north india are worst affected by cast discrimination ..i don’t know……But vinod don’t you think this is the high time to get a solution for this curse and if u think wht i said is not a proper solution,then wht u suggest for this ……….Anyway thanks for the prompt reply vinod……….

            • Vinod permalink
              May 18, 2009 12:21 pm

              Well…my story is exactly the same. I used to think caste discrimination was only a rural phenomenon in some fringes of India. I also saw middle-class and upper-class looking lower caste people getting admissions in colleges though their performance was far below many others. In many ways, this ignorance of the problems in our society is probably because our educators thought it wouldn’t help engender national pride – the ‘Mera Bharat Mahan’ pride.

              I began hearing and reading of incidents where school teachers would make lower caste students sit separately; where they would be made to drink water without touching the tap while someone from the upper caste opened the tap fro them; where the school was cleaned and ritually purified after the students from the lower castes left; the Bihar riots between the upper caste Zamindars and the lower caste labourers; specific jobs like “dry toilets” were reserved for the lower castes and so on and so forth. That made me realize that the scale of the caste problem is far bigger than the illusion I had in my mind.

              I honestly don’t know what the solution is. If it makes you feel any better, there is race based reservation in colleges in the US. They too are grappling with it. I don’t know what the solution is. All that I know is that I can individually try and convince every person I meet of the evil of this practice, starting with my own parents.

              The only real solution

  28. Sindhu permalink
    May 15, 2009 9:32 pm

    “The theory (based on studies) put forward by The Economist is that Americans put up with the system because they have unrealistic expectations of their chances of success. In reality only 2-3% of the poor have a chance of becoming rich, but as many as 31% think that they can . And only about 12-17% of the middle class actually become rich but over 50% of them think they can!”

    It’s all in the mindset. Americans THINK they can, so they set forth on their path with a confident demeanor. Whether their confidence is inflated or not, that’s another issue, but at least they have the mental positivity to give it their all. It’s harder for Indians (especially ones battling poverty) to have this same mindset. They have much more “realistic” expectations of their world because they have seen it all… the good, the bad, and mostly, the ugly. Do you think a change in mindset would help? Maybe create a positive spin on things? Of course just a mindset won’t help – one would need the infrastructure and support from the government to change the situation India is currently facing.

  29. May 16, 2009 12:24 am

    Hey Nita, I’ve been a silent reader on your blog for a while now, I like your direct writing style, I find it very engaging🙂

    On the topic of income distribution, I think its ironic that many South American countries that are in fact Communist, suffer from really high income disparity. That sort of defeats the purpose of Communism, doesn’t it?

    In a sense, I believe that income disparity hurts the country more than poverty. Its disparity that breeds discontent, not poverty. And its discontent that fuels crime, corruption and injustice – leading to more disparity.

    I look at it this way, if everyone around you is poor or miserable, you tend to work collectively to rise out of your poverty. When there is disparity, many people tend to focus their energies on sticking it to the man, getting one over those darn rich guys. Its unproductive, and frankly, unrealistic. I’m not blaming those who are underprivileged, its the system and the circumstances (ergo the disparity) that are to blame.

    Just my two cents worth…

  30. May 16, 2009 3:28 am

    First and foremost, congratulations on the Indiblogger of the month award!!
    Secondly as far as the education in India goes,
    it is true that India lacks quality education. But the real problem is keeping the educated strata in India. Many of the educated youngsters in India feel frustrated at the inability of getting good jobs, not to mention the reservation system which force students to seek education in other countries.
    Even if you manage to have a decent educated strata of society, significant proportions of them leave for abroad to seek better fortunes.
    So what remains is the remainder of that portion as well as a huge amount of illiterate, ignorant and poor masses.
    The current trend is disturbing.
    Let me put it in a more factual context. I study abroad in Russia along with a good number of Indian students, And frankly a good deal of them do not wish to return back to India to face the scenario of bad jobs, reservations etc.
    Unless the Indian government does not get rid of the old systems that plague the rise of the educated masses, we will always remain an underdeveloped, corrupt and a poor nation.

  31. May 16, 2009 8:16 am

    Vinod, I do agree that capitalism should never be taken to an extreme, or followed to the letter. There needs to be a balance. And thanks for your comments, they as Yayaver said are very balanced and analytical.

    Chikki, when you write that “We were so concerned about distribution of wealth that we forgot about actually creating it” that’s spot on!

    Anish, I think the reservation policies of the government have gone too far. It has created a divide in our society. Worse, it has demotivated the bright people.

    Vivek K, you are talking of corruption. Well, that is the biggest scourge of our country.

    yayaver, thanks for that! Good ideas!

    Sindhu, that is a point, whether it is a bad to be so hopeful! I guess that at least motivates Americans to work and strive! And the fact that they face competition from people from all over the world makes it more difficult for them to win I guess.

    Nehru, I think it was the dash in your comment in the last sentence which put your comment into moderation.

    Pranav, thanks. About communism, I have a very low opinion of it. I think it never takes care of the poor and in fact panders to the elite. Same was the case in Russia. It will create disparity of the kind that is worse than that of capitalism. One of the reasons is political power is never transferred to the people. What is happening in China though is different. Socialist countries with a democratic government like we were in India are better for making everyone poor. Less income disparity but overall poverty. In countries like America income disparity has continued to rise and it is supposedly the hallmark of capitalism. Reward those who well handsomely and let everyone else go to hell!
    Your last para is food for thought! Did not think of it that way!

    Vyas, thanks. I think the job situation has improved considerably in India in the last five years and in fact even today in the days of global recession we are not doing too badly. I think if you come back from Russia to India, you won’t do too badly either!🙂
    About the poor ignorant masses in India, it frighens me at one level. Millions of people without any skills whatsoever. So much poverty. So many people, but difficult to get a person to do simple skilled jobs. Majority of Indians are skilled enough only to do manual labour. It’s sad. And tragic.

    • nehru mantri permalink
      May 16, 2009 9:34 am

      Thanks, Nita…..and is the election going the way you wished ? Or is it piling up fast into some grist you really don’t need. I am exhausted just looking at these posts and for a few minutes today sat me down and visualized what it means to be you. It is maniacal to say the least and I just hope you take care. You ARE precious🙂 and I hope you get everything you are looking for !

      • May 16, 2009 10:00 am

        Thanks Nehru. Yes, it can get exhausting to reply to comments. I do genuinely want to and therefore push myself as much as I can. Writing the posts is very tiring too and it hurts when people don’t realise what I put into each post. It’s not just the hard work of researching, but also making sense of stuff and trying to put it across in a way. However I am open to fair criticism! But at the same time there are people who expect too much of me. I get no monetary benefit and therefore appreciation is all that I have! So thank you!
        Here in India the counting has started, the mania has started. The excitement has got to me too and I am going to be glued to the news the whole day.

    • Vivek Khadpekar permalink
      May 16, 2009 5:04 pm

      Nita:

      Yes, I am talking about corruption, but it is somewhat more complex than how you put it. There is corruption by coercion — such as a cop demanding hafta or a project engineer demanding a cut to clear the payment of your bill for services rendered — and there is corruption by collusion (also known as crony capitalism) — where I invite you to be a partner in, and share the spoils of, this highly remunerative venture I float, to which your presence will bring inscrutability, impeccability, legitimacy and respectability.

      The important difference between these two kinds of corruption is that the former can be curbed merely by enforcing existing laws. Curbing the latter is a ball-game of a very different order.

      • Vinod permalink
        May 18, 2009 11:18 am

        I think it would help to boost spirits up if we get to hear some anti-corruption stories, eh?
        Lookup ‘Antanus mockus’ in wikipedia and his work in Bogota.

  32. May 16, 2009 9:36 am

    Well it is not just about accepting it or not…people need to realize that the reason our education system is bad is because of low salaries , bad/no teachers , reservations etc …change them and everything changes…

    Vishesh, I agree. improve education and everything changes. But most of those who vote don’t give the most importance to the the education system! The middle educated classes vote the least. – Nita.

    • openlight permalink
      May 16, 2009 5:32 pm

      correct, just upheaval of education can do wonders we all are waiting for

  33. May 16, 2009 11:51 am

    Nita, sometimes I am scared that a social explosion is about to go off in the slums, just
    across the street from where middle class and affluent Indians live. The picture that our metros project is that of Darfur in its slums and Dubai in its posh areas as they face each other off to survive and expand. You cannot have Darfur like conditions on one side of the street and Dubai like opulence on the other side. For centuries the rural poor of India have lived like that but they have not been a threat to the social order because they have been illiterate, superstitious and cast oppressed. A whole generation of Indians has now grown in urban poverty. They know how to drive, write, read, text, log on but have no hope of crossing over the great economic divide to the other side. They see their employers enjoying wealth and power and aspire to live like them overnight(Hindi film style).
    Extreme leftist revolutionary movement (Naxalism) is now affecting large parts of eastern India. Our politicians are fueling the fires by provoking the divisions of caste, religion and material divide and arming them to build private goon armies. If the menace is not checked now by taking some positive measures to alleviate poverty, situation could worsen.
    I absolutely agree with you that the solution lies in encouraging business.

    Prerna, I feel that cable television has also caused the discontent. The way the rich live is now being beamed straight into the slums and now they can see for themselves every single day how it is. They also see advertised product they can never have! – Nita.

    • openlight permalink
      May 16, 2009 5:31 pm

      only way to check the problem are — education and infrastructure development of the area with focus on sustainability in environmental context also.

  34. May 16, 2009 4:08 pm

    Nita

    I must say up front I have only read the post, not the comments. So if someone else has already made these points, I apologise.

    Much literature in Economics explains how people’s assessment of their wealth works and how this correlates to their satisfaction. It is not about how much money we have, but about how much less we have compared to X, Y or Z. So, from a social cohesion perspective, “inequality that is visible” is potentially more dangerous than “all-pervasive sheer poverty”. How much of this “potential” becomes real, e.g. riots happen or do not happen when they could happen easily, depends on many societal factors.

    Particular to India, the rapid growth of wealth (and consumption) in some segments isn’t the problem; the problem is that nearly all of them believe in putting it all on display. That stokes the awareness of the comparative poverty amongst the broader public.

    The difference between India and America is stark and much of it is down to attitudes to work and success. My experience shows the following:

    Evidence may show whatever but Americans have a commendable optimism (some say foolhardy belief) that if they work hard, they can improve their lives.

    Americans celebrate hard work not just results whereas in India it is all about results (a broader problem that makes people give and take bribes easily)

    Americans also celebrate achievement much more than Indians rather than focus on shortfall (e.g. a caricature: if a child gets 98 on 100 in Maths, an American parent will commend him while an Indian parent will ask what happened to the other 2!)

    Interesting point to ponder. I think inequality is more problematic. You may want to watch the MPs’ expenses scandal in the UK to see how it unfolds and affects election outcomes next. People are truly angry. There may not be riots but rallies may happen and elections will be telling.

    • May 18, 2009 7:44 am

      Shefaly, I agree with you about the display. In fact as I mentioned to Prerna, there is also the plethora of satellite channels which show obscene ways of living, some of which are exxagerated. And the ads of fancy cell phones and bikes has prompted many a middle class kid to commit crimes! 7-8 years ago there were no malls but today they offer gaming, which is also expensive and tempting for teens. One day at a mall and a couple of thousand rupees can easily be spent today. A decade ago one would not know what to spend it on as even imported clothes and products were hardly available! I agree with you about American values. I admire them. Just the other day I was having a discussion with a neighbor about there being something to admire in western values. But it’s sad that here in India many tradiitonal people unilaterally condemn western culture without understanding their value for hard honest work.

  35. openlight permalink
    May 16, 2009 5:27 pm

    Good topic.

    Indians are hard working and industrious thats why businesses are going on despite so much chaos (lack of infrastructure, fear of bombs, crime, etc.)

    Things that are bogging us down is able and honest leadership with focus on development, corruption sucks lots of wealth generated eah year in name of welfare scheme.

    If proper environment ( able and honest leadership with focus on infrastructure, education and development) is given, India can easily outshine china in 5 yrs and emerge as the “Golden Bird” which we were and will be surely be one day.

    Further, regarding poverty, India is importing poverty from bangladesh,pakistan,Nepal in lakhs each year, cost has to be borne if this pilferage of India’s resourced does not stop.

  36. Vinod permalink
    May 16, 2009 7:15 pm

    Americans have a commendable optimism (some say foolhardy belief) that if they work hard, they can improve their lives.

    Shefaly, there is a downside to this attitude of the Americans, particularly in the way they look at the poor – they think of the poor as deserving their fate for not having worked hard. I recommend the documentary ‘Status anxiety’ on google video for more details on this.

    • Vinod permalink
      May 16, 2009 7:18 pm

      I clearly recall the disdain that my white colleagues had to the New Orleans hurricane victims who had now stayed in Houston. It’s as if the hurricane victims had overstayed their welcome and were now relying on the efforts of the other hard working population of Houston. Leave alone all the rabid discriminatory efforts at addressing the hurricane affected states by the Federal govt. All that somehow faded away from their minds. “The system is never responsible, u see? It has to be the lazy individual”

    • May 16, 2009 7:52 pm

      Vinod

      That sort of blame apportionment is not limited to Americans. Nita mentions that many poor people in India accept it as their fate (fatalism); equally many not-poor people in India also blame poor people for their poverty (determinism). However it is safe to say that Americans are more inclined to determinism than fatalism and therefore likely to strive harder with a positive expectation of favourable results.

  37. May 17, 2009 3:29 am

    @all. go through this article to know more about poverty and education.

    http://thesouthasianidea.wordpress.com/2008/10/11/more-on-numbers-about-poverty-and-education/

  38. May 17, 2009 4:29 pm

    I have read this news sometime back and was surprised by the results of China! Isn’t it amazing?
    Its an example for all the other countries.

  39. Vinod permalink
    May 17, 2009 8:26 pm

    From a human rights perspective, China has arguably done well to meet its obligations under the International Covenant on Economic, Social and cultural. It still cracks done heavily on free speech and political dissent. But then, that is also consistent with the fact that China has not signed the second Human rights convenant – The International Covenant on Civil and Political Rights. Interestingly, the US has not signed up to the former covenant (the social, economic and cultural) and has only done so to the latter (the political).

    • Vivek Khadpekar permalink
      May 18, 2009 6:19 am

      Vinod,

      I would be very interested in reading anything to which you can provide links relevant to your comments of 8:26 and 8:28 pm.

      • Vinod permalink
        May 18, 2009 10:11 am

        Vivek, they were actually comments made by a professor in international law (can’t remember Uni name) on the program ‘Great Decisions’.

      • Vinod permalink
        May 18, 2009 11:16 am

        Vivek, are you involved in any human rights related work? I’d be keenly interested to talk to you if you are.

        • Vivek Khadpekar permalink
          May 18, 2009 4:53 pm

          Vinod,

          I cannot seriously claim to be. Joining the occasional protest meeting or march against whatever I see as injustice or atrocities, or writing the occasional letter to the editor, is not really “involvement”.

          However, in Ahmedabad where I live, the establishment is so far right as to border on the fascistic. In this situation, my mildly left-of-centre stance often counts as fairly ‘revolutionary’, and people working in issues of Environment & Sustainable Development, Livelihoods, Human Rights and Secularism count me as one of them. But my language politics (which to me is a serious human rights and social justice issue) has no buyers among them.

          I hope that adequately answers your question.

          • Vinod permalink
            May 18, 2009 5:23 pm

            Vivek, you have no idea how inspiring it is to know that there are people who do that.

            • Vivek Khadpekar permalink
              May 18, 2009 5:47 pm

              Vinod,

              People who do what?

            • Vinod permalink
              May 18, 2009 7:14 pm

              People who do what you do, however little you may think that is.🙂

  40. Vinod permalink
    May 17, 2009 8:28 pm

    An opportuity for human rights groups to engage China is to question whether the obligations under the International Covenant for Social, Economic and Cultural Rights is being compromised in the race to capitalize its economy.

  41. Dev permalink
    May 18, 2009 3:08 am

    Nita, thanks for this post. This post is again an example of all the hard work you put in for such type of posts.

    thanks dev.🙂 – Nita.

  42. May 18, 2009 7:49 am

    openlight, thanks for those points. the change is going to be slow to come, noticing that even in these election the voter turnout was not that good!

    Priyank, in India too there are environmental problems but I think it’s worse in China because the government there tends to hide things from the world. Also their industry is not like ours, developed slowly over the years with systems and regulations.

    Amit, I agree that there are many things about China that one needs to admire!

  43. Vivek Khadpekar permalink
    May 18, 2009 6:10 pm

    I have so far refrained from seriously intervening in this post, mainly because my arguments favouring poverty (though not ‘extreme’ poverty) over inequality would be extremely lengthy, complex and possibly convoluted. But a friend just sent me the following, seemingly off-topic anecdote, which I think has some bearing on the current dialogue:

    Money ! It changes hands and keeps the economy going
    …..
    It is August. In a small town on the South Coast of France, holiday season is in full swing, but it is raining so there is not too much business happening. Everyone is heavily in debt.

    Luckily, a rich Russian tourist arrives in the foyer
    of the small local hotel. He asks for a room and puts a Euro100 note on the reception counter, takes a key and goes to inspect the room located up the stairs on the third floor.

    The hotel owner takes the banknote in hurry and rushes to his meat supplier whom he owes E100. The butcher takes the money and races to his supplier to pay his debt. The wholesaler rushes to the farmer to pay E100 for pigs he bought some time ago. The farmer triumphantly gives the E100 note to a local prostitute who gave him her services on credit. The prostitute goes quickly to the hotel, as she owed the hotel for her hourly room use to entertain clients.

    At that moment, the rich Russian comes down to reception and informs the hotel owner that the proposed room is unsatisfactory. He takes his E100 back and departs.

    There was no profit or income. But everyone no longer has any debt and the small town people look optimistically towards their future.

    COULD THIS BE THE SOLUTION TO THE Global Financial Crisis? Or, is there a catch here?

    My response to the sender of the above anecdote was:

    “I am sure there is a catch, but I don’t know enough economics to figure it out. Anyway, it sounds very familiar.

    “If I am not mistaken, the name Madoff has Russian roots. And ponzi schemes are known to work very well in the short run. What could be shorter than the time taken by a tourist to climb up three floors of a small hotel, inspect a room, climb down three floors, pronounce his disapproval and take his money back?

    “The serious problem would arise if this were the only hotel in the town and the tourist moved on to the next town, depriving the locals of any business (lodging, boarding, drinks, sundry shopping, possibly availing of the prostitute’s services) during his stay. So it is a ponzi relay that keeps the economy going and destitution at bay. Much food for thought.

    “My guess would be that a lot of the basics of the locals’ lives lie outside the market economy. The remarkable thing is that each one, after getting what they were owed, rushed to fulfil their obligations. They did not blow it up at the bistro or at the bordello, or gamble with it or lay by essential provisions. That is far more honourable than Wall Street and the Investment Banking firms.”

    • Naveen permalink
      May 18, 2009 9:01 pm

      Vivek,

      I think, I understand what your friend meant. He is probably of the belief that the present format of Globalization(and also Capitalism) is true to Adam Smith (where everyone is a producer and also a consumer). Unfortunately, this is not the ground reality. There is only one engine that runs the world and consumes the world’s resources (with a debt of USD 12 trillion). The story should end like this -the butcher, -the meat supplier, -the wholesaler, -the farmer and -the prostitute ‘contribute’ their savings to the hotel owner so that he could repair the hotel and make it a beautiful star hotel. This is all in the false hope that there will be crowds of Russians arriving at the hotel from the next day, who will trigger the economy.

      • Vivek Khadpekar permalink
        May 18, 2009 9:29 pm

        Naveen,

        An important postulate of Adam Smith — the invisible hand — is missing from the postulate. That, of course, presumes a “competitive marketplace”, which is not part of the hypothesis. On the other hand, there is no monetisation involved. Smith did not explicitly stipulate that as a precondition, did he?

        • Vivek Khadpekar permalink
          May 18, 2009 9:31 pm

          Pardon the awkward construction of the first sentence above. The second “postulate” should read as “premise.”

        • Naveen permalink
          May 19, 2009 3:09 am

          Vivek,
          I think the gist of Adam Smith’s “Wealth of Nations” is not any of the above three you mentioned but ‘self-interest driving the economy ‘.

          “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”
          -Adam Smith

    • Naveen permalink
      May 19, 2009 4:42 am

      Vivek,

      I am trying this again. I think there are 2 important preconditions to apply this solution to the global financial crisis – the debt has to be cyclical or else only a small group will be ‘highly’ benefitted and also the payable and receivable should be equal for each individual. If the receivable is lesser than payable, the cycle will break automatically. If the payable is less, the individual will make profit and less amount will pass into the cycle.

      Most developed countries will have a higher debt(payable) than their savings (receivable). So I think this solution won’t work.

      In any case, I’d like to know the answer.

  44. May 19, 2009 4:18 pm

    Up to a point high expectations might also result in more efforts to change one’s lot. When there is no hope or expectation one doesn’t even try.

  45. May 20, 2009 12:39 am

    Good post. The extremely poor and illiterate people living in villages who are far away from the opulence of the rich may be more tolerant of their state than not so poor ones who are living close to the extreme rich in the Cities.
    According to Marx [if you believe his theories] there is no choice between Capitalism and Socialism. They are not competing ideologies. Only when Capitalism becomes redundant another system will come to take its place. There is no sign of it becoming redundant anywhere in the World. So no need to worry. All the so-called Communist and Socialist Governments in the World are said to be following State Capitalism.

  46. May 7, 2012 3:40 pm

    this says what we should do being an indian… but actually if we think deep the problem is something else… its the education system that pulls us down everytime as a nation. all the people from india cannot be good in studies at all…. they have their own talent in their own fields. and the problem is that in our country this young blood i.e the future of india, are not allowed to do what they really want to do n be in life… in the end they have to go in he field of degree or so orelse their life is ruined, no chance of becoming rich. so why not value on all the fields of talents. if the government started valuing each and every field or talent then no one will suffer frm povery cause all will be busy doing what hey love to do in life . in india if we want to become a footballer there is no proper coaching as compared to other world class training and in india they earn less.. so who would chose to be one knowing that he or she is not going to earn doing what they love to do.. government should understand that we as indians need actual freedom not just a document written freedom. we should get in what we do. this will surely improve our country from poverty and crimes too… please listen to public n know what they want to become n give them a lifetime platform. tc .

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