Deficient rain not to hit growth: Rangarajan Priyadarshi Siddhanta
Posted: Thursday , Aug 13, 2009 at 0238 hrs
Voicing concerns over the misery unleashed by scanty rainfall on the farm sector, newly appointed chairman of the Prime Minister’s Economic Advisory Council (PMEAC) C Rangarajan today said it could unleash great distress on the farming community. Rangarajan pointed out that tackling the drought-like situation is one of the key areas of concern for the EAC. “Though the impact of deficient rains on the overall growth may not be much, yet it could potentially trigger distress among the farming community,” he told The Indian Express. He argued that as a measure to contain rising prices of essential commodities, the government could resort to importing food items saying “we have large foreign exchange reserves, so it should not be a problem”.
Refusing to be drawn into the controversy whether the Below Poverty Line (BPL) population needed more urgent attention on ensuring food security, he said “both APL and BPL should be provided relief from rising food prices.” He argued that rise in food prices was more due to apprehensions of the trading community on lowered farm productivity in the current crop season.
Among other major concerns of the PMEAC are the inadequate growth of the power sector, which Rangarajan argued, was a key to propelling the Indian economy in the medium term. “Infrastructure is a major concern, if India has to clock a high growth trajectory,” he emphasised. Ruling out any further scope for softening of interest rates, Rangarajan, who has earlier served as RBI governor, made it clear that the main concern now is to prevent a hardening of interest rates.
On 6th July,2009 just 140 days after the presentation of the Interim Budget, Sri Pranab Mukherjee, the Finance Minister presented the budget for the financial year 2009-10.This budget is crucial and assumes significance as the economy has come under the impact of global recession. The slow down of the global economy had its impact on India’s foreign trade, finance and investment, aviation, hospitality, real estate, engineering, garment manufacturing, jewellery and handicraft sectors. Recession in the global market affected our industries, jobs and income. Our GDP declined. Indian economy,in fact, suffered a decline in its growth rate from ‘an average of over 9% in the previous three fiscal years to 6.7% in2008-09.’There prevailed a fear that internal consumption in India might drop further leading to a decline in income and employment. The nation, in fact, was waiting almost breathlessly for a big stimulus package for the quick recovery of the economy. For announcement of sops in the budget for industry, trade, agriculture, services sector and for the social sector.
Higher and faster spending by the state was expected not only to provide an opportunity for the recovery of the economy but also to improve the prospects of growth. It became imperative that all efforts must be made not only to shield the economy from the effects of the global meltdown but also provide it with financial, functional and legal support for growth at all levels.
At the sect oral level tax payers including senior citizens and working women looked forward to tax reliefs. The corporate sector, because of the impact of global recession expected tax cuts and investment benefits. Farmers expected debt relief. Poor households looked forward to government action to bail them out of poverty and unemployment. They also looked forward to food security. They have to be given 25kgs.of rice wheat a month at the subsidized price of Rs.3 a kg.
To check recession successfully and reengineer growth at a higher level, the government have to spend heavily, put more and more money into the market, increase opportunities of employment for the youth and provide the promised benefits to the voters to achieve ‘inclusive growth’. Though the primary objective was to raise the growth rate of the national economy, the ‘aam admi’ was not forgotten. . The budget which adopts a ‘medium term perspective’ identified the following broad objectives; 1. to achieve GDP growth rate of 9per cent per annum, 2. to strengthen the mechanism of inclusive growth by creating almost 12million of new work opportunities per year 3. to reduce the proportion of people living below poverty line in 2009 to less than half by 2014, 4. to achieve an annual rate of growth of 4%in agriculture, 5. to increase investment in infrastructure to more than 9%of GDP by 2014, 6. to provide support to the Indian industry to meet the challenge of global competition and sustain growth in exports, 7. to strengthen the regulatory framework, 8. to expand the social safety network, particularly for the vulnerable sections of the society, 9. to strengthen the delivery mechanism for primary health care facilities, 10. to create an education system of global standards, and 11. to pursue an Integrated Energy Policy to provide energy security.
The budget recognises the immediate requirement of a stimulus package for the Indian economy. The Finance Minister has accordingly adopted a comprehensive approach to spending and given a detailed analysis of proposed expenditure by the government in the current year. As the Finance Minister, his immediate job is to prevent recession and create an enabling environment for investment and business opportunities at all levels to create millions of jobs for India’s young people who are restless and look forward to equitable development. Under these circumstances public spending will go up and the state has no choice but to take necessary measures to keep money flowing into the economy to finance investments, job creation and enlarge the delivery mechanism to run public services and fulfill the promises made to the ‘aam admi’.
It is therefore not surprising that budget 2009-10 provides for a total expenditure of Rs.10,20,838 crore of which Rs. 6,95,689crore is for Non-plan expenditure and Rs.3,25,149 for Plan expenditure. Non-plan expenditure takes care of the hike in pay after the implementation of recommendations of the Sixth Central Pay Commission, higher food subsidy and higher interest payments constituting 36%of the Non-plan revenue expenditure. Subsidies have also gone up from Rs.71, 431crore in B.E.2008-09 to Rs.1, 11,276crore in B.E.2009-10. As against the budget estimate of Rs.10,20,838 crore, gross tax receipts and non-tax revenue receipts to be mobilized in 2009-10 has been estimated at Rs.6,41,079 crore and Rs.1,40,279 crore respectively.Net tax revenue available to the centre after transfer of States’ share(Rs.1,64,361} crore and transfer to the National Calamity Contingency Fund(Rs.2,500 crore) stands at Rs.4,74,218 crore .Total Revenue Receipts(Rs.4,74,218 crore+Rs.1,40,279 crore) available to union government will brRs.6,14,497 crore. When Capital Receipts[ the Non-debt receipts, that is Rs.5,345 crore] are added to it, the total receipts for the year 2009-10 comes toRsRs.6,19,842 crore. Total Debt Receipts to be raised for financing the projected expenditure has been estimated at Rs.4,00,996 crore. Market loans will be the largest component estimated at Rs.3,96,957 crore. Budget 2009-10 has many ambitious proposals for the economy and particularly for rural India, that is, Bharat. It has focused on NREGA with a minimum wage of Rs.100 per day, BPL families, Rural Housing, Rural Electrification, development of Backward Villages, Empowerment 0f Weaker Sections, Bharat Nirman, Pradhan Mantri Adarsh Gram Yojana [PMAGY], IAY, and the development of villages with over 50% SCs/STs population. How do we finance these development projects and achieve the three challenges it sets out for itself in terms of high GDP growth, inclusive growth and a strong, efficient and reliable delivery system. To foster growth and achieve these objectives the country needs to mobilize funds for investment. Yet it can not afford to undermine the investment climate by raising either the personal income tax rate or the corporate tax rate. The state, on the other hand, may be called upon to adopt a generous view towards taxes to improve business environment.
To begin with, tax payers in India have reasons to feel cheerful for the tax cuts which have been announced as a part of the stimulus package by raising the personal income tax limit for the senior citizens, women tax payers and other categories of individual tax payers by Rs.15,000 and Rs.10,000 respectively. Tax exemption limit for the medical treatment of dependants has also been raised. The surcharge on personal income tax has been waived. Fringe Benefit Tax has been dispensed with. Left with a higher disposable income, people are expected to spend more in the market, raise the size of aggregate demand and provide incentives to the producers. Corporate tax rate has not been changed. This disappointed the corporate sector. But commodities transaction tax has been abolished Tax incentive provided to the corporate sector for expenditure incurred on R&D has been extended. The NPS [New Pension System] Trust has been exempted from income tax. And it is interesting to note that donations to electoral trusts have been totally exempted from income tax. This move by the Finance Minister will please all political parties and provide relief to the donors. Charitable institutions receiving anonymous donation and trusts ‘engaged in preserving and improving our environment….------and preserving our monuments or
Consumer spending patterns are witnessing mega-shifts, with implications for all involved parties Arvind Singhal / New Delhi August 13, 2009, 0:56 IST
Notwithstanding the current concerns regarding the impact on consumer spending on account of a truant monsoon, India will see a spending of almost Rs 21 lakh crore (about $435 billion) at current prices in 2009 (assuming a GDP growth rate of 6 per cent). Further, factoring in a 5 per cent inflation and assuming that GDP will further grow at 6 per cent, the consumer spending is likely to cross Rs 23 lakh crore (about $485 billion) in 2010.
However, a deeper analysis of this gross data on consumer spending throws up some very interesting insights. For as long as we remember, roti, kapda aur makaan have been the primary needs and drivers of private consumption. Indeed, it seems that the impact of the sustained economic growth of the last 18-20 years is that for a very large part of the population, consumption has moved beyond the basic survival needs. While food & grocery continue to account for the largest quantum of spending (about Rs 12.5 lakh crore in 2009), followed by healthcare (about Rs 165,000 crore) and textiles & clothing the third largest (about Rs 150,000 crore), the surprise numbers 4, 5, and 6 items on the consumer spending list in 2009 are spending on mobile phones and talk-time (about Rs 120,000 crore), jewellery & watches (about Rs 118,000 crore), and personal transport comprising two/four- wheelers including spending on fuel and repairs/maintenance (about Rs 115,000 crore).
This data, of course, is at some variation with the official data since this spending includes some through the parallel economy, but is more reliable since it has been arrived at “bottom-up” sector by sector. More interestingly, the growth rates in spending on non-basic needs are much faster now and therefore it is likely that by 2012, spending on textiles and clothing could be relegated to the sixth spot and the hierarchy (excluding healthcare) will be roti, mobile, personal transport, and jewellery & watches.
The shift in consumer spending priorities does not stop here. The total outlay of the government on higher education is about Rs 9,600 crore. The estimated revenue of the higher-education coaching market (including preparation for entrance examinations like JEE, CAT, GRE and GMAT) is about Rs 10,000 crore. If tutoring and other self- learning is included, the guesstimated private spending in 2009 is almost Rs 48,000 crore! Spending on domestic leisure (and religious) travel and tourism is expected to cross Rs 60,000 crore in 2009, while the spending on consumer durables and consumer electronics is just about Rs 55,000 crore. Spending on leisure and entertainment in 2009 is about Rs 55,000 crore, nearly equaling the entire size of the personal and home care FMCG industry! Other very fast-growing categories of consumer spending include personal computing (including internet) where consumers will spend almost Rs 10,000 crore in 2009, and personal grooming services where the spending is over Rs 4,000 crore already and growing in strong double digits.
There are several implications of these mega-shifts in consumer spending patterns. For the manufacturers and marketers, some of the imperatives include giving a fresh, much-deeper look into consumer and shopper behaviour using new age tools that go beyond traditional consumer/market research and then work the appropriate value proposition and delivery channels for their basket of goods and services. For entrepreneurs as well as businesses seeking to diversify, the implications are that there are incredibly large new business opportunities though, perhaps, these opportunities will require new business models (product, channel, consumer connect, delivery). Students planning their careers now would be well advised to study these new emerging sectors and plan accordingly. As is clear from the above, the sectors that are likely to create the most jobs (besides retail since most of this consumption will be facilitated through modern brick & mortar retail channels) are healthcare, telecom, travel & leisure, education & training, media & entertainment, personal grooming and fitness etc. The government itself has to get a much better understanding of these shifts since the implications are not only on its own revenue generation opportunities through direct and indirect taxation, but also in many other dimensions including vocational and higher education, and infrastructure (such as retail).
Economy is sound, let's push reforms, says Economic Survey
BS Reporter / New Delhi July 3, 2009, 0:26 IST
Painting a picture of a resilient economy, the pre-Budget Economic Survey 2008-09, tabled in Parliament today by Finance Minister Pranab Mukherjee, said India could grow up to 7.75 per cent in 2009-10, up from 6.7 per cent in 2008-09, provided the global economy, particularly the United States, bottomed out by September and the government was able to push the button on significant economic policy reforms.
The World Bank had recently said India would grow 8.1 per cent in 2010, ahead of China (7.5 per cent). The numbers in the survey also suggest India is finally ready to rub shoulders with its northern neighbour.
The economy, according to the survey, can count among its strengths the large services sector which has historically been less affected by cyclical downturns than manufacturing, a strong farm sector, robust savings rate, ambitious infrastructure development programme and upbeat foreign investors. The "shock absorbers of the economy," it said, were the sound banking system, large foreign exchange reserves, a comfortable external debt position and low inflation. It listed as concerns the dip in growth of private consumption and gross capital formation and said the downside risks were the reduced availability of risk capital, lower capital inflows and delayed revival of the OECD economies.
In keeping with the resurgent mood, the survey listed an ambitious reform agenda for the government, a clear signal that it was no longer weighed down by the Communist parties. Surcharges, cesses and new taxes like commodity transaction tax, securities transaction tax, fringe benefit tax and dividend distribution tax had reversed the move towards a simpler tax system, it said. The first three of these taxes were introduced by Mukherjee’s predecessor, P Chidambaram (2004-08). High government-administered interest rates on small savings, it added, had kept lending rates from coming down.
Reflecting the new-found boldness of the Manmohan Singh government, the survey made some radical suggestions like restricting the cooking gas subsidy to six or eight cylinders for a family every year, auction of freely tradable 3G spectrum for next-generation mobile telephone services, raising foreign investment in defence to 49 per cent, opening up multi-brand retail, restricting price control to drugs with just five or six players, relaxing the contract labour laws and permitting retrenchment of workers by companies without prior permission.
It conceded that the return to the path of fiscal correction could occur next year with a fiscal deficit target of three per cent of GDP by 2010-11, mobilisation of at least Rs 25,000 crore through disinvestment, de-control of petrol and diesel prices as well as sugar and fertiliser industries, opening coal mining for the private sector and reform of pension, insurance and retail sectors.
"These reforms should be implemented over the next four to five years, which will take the country back on trend of growth," said Arvind Virmani, chief economic advisor in the ministry of finance. These, however, are just a wish list of the finance ministry and may not be implemented in full by the government.
To balance the interests of farmers and consumers, the survey suggested that there should be a domestic price band for agricultural commodities within which imports and exports are freely allowed. If the international price threatens to exceed the brand, export restrictions and lower import duties would kick in and vice-versa. To rein in the fuel subsidy, it suggested temporarily taxing upstream crude oil producers. (This demand was made last year by the Samajwadi Party at the height of the crude oil crisis.)
The survey suggested that the indirect taxes, that were reduced in the recent part as part of fiscal stimulus package, could be restored once the economy is back on track. “The approach of the government has been to use a mix of fiscal measures including reduction in indirect which could be reversed subsequently,” it said.
In the last financial year, 2008-09, the government had cut peak excise duty rate in two tranches from 14 to 8 per cent and service tax from 12 to 10 per cent.
In spite of the optimistic projections, the survey raised doubts about the global economy, especially the “green shoots” of recent commodity price rises. According to the survey, this could be “a result of position-taking by financial investors, seeking to benefit from global recovery expectations due to the large fiscal and monetary stimulus and/or to hedge against inflation risk in the United States due to the massive quantitative easing.”
The unprecedented monetary-fiscal expansion of the recent period points to strengthening of inflationary pressures over the next 12-18 months.
The people are putting their faith in the Prime Minister, Dr Manmohan Singh, to check inflationary forces.
Dear Mr Prime Minister,
I am taking the liberty of addressing this communication to you as inflationary forces have gathered momentum and are likely to get accentuated in the next 12-18 months. In this context there are two issues.
First, the Wholesale Price Index (WPI) at present reflects a one percentage point negative rate of inflation while various Consumer Prices Indices (CPIs) reflect an increase of 9-10 per cent. Even the CPI does not reflect the recent acceleration in in flation.
Second, advocates of higher growth rates seem to hold sway and are forcefully, and successfully, asserting that the inflation issue needs to be put on the backburner. The fisc has undertaken an unprecedented expansion and monetary accommodation has been equally large.
Dangerous ideas are floating around that printing of money has no adverse effect as there would be higher output, higher tax collections and the burgeoning fiscal deficit would be self-liquidating.
The history of monetary and fiscal policies, the world over, has unequivocally shown that such policies, however well-intended, have disastrous consequences with a debauching of the currency.
Social sector tilt
The Government, in its recent Budget, has rightly tilted the balance towards social sector infrastructure investment and various measures have been devised to ensure distributive justice.
Unthinking criticism has been that these are populist measures which would result in wasteful seepages. Such views lack an understanding of the whole growth process.
As you, Sir, have pointed out on innumerable occasions, for growth to be sustainable, it has to be inclusive, which requires the Government to provide a strong tilt to social sector expenditure.
A basic axiom is that the pattern of investment determines the pattern of output, which in turn determines the distribution of income; hence, the tilt towards social sector expenditures is fully justified given the basic stance that policies must be pursued to redress the extremes of income inequalities.
Indian policymakers have all along been known to be inflation fighters. We have, Sir, imbibed from you that inflation hurts the weakest segments the most and that there can be no better anti-poverty programme than the control of inflation.
The unprecedented monetary-fiscal expansion of the recent period points to strengthening of inflationary pressures over the next 12-18 months, which, even on the basis of the dampened official price indices, point to double-digit inflation. According to grassroots information, the situation is getting out of control and calls for early policy action.
With the monsoon playing truant, the pressure on prices would be reinforced and all segments of economic policy have to train their guns to shoot down the inflationary forces.
A recent study by the Brihanmumbai Municipal Corporation (BMC) shows that 40 lakh people, out of the city’s population of 140 lakh, are Below Poverty Line (BPL) with a per capita income of less than Rs 592 per month.
Replicate this for the rest of the country and there are staggering segments of the population that are vulnerable to the searing impact of inflation. Well-documented reports on grassroots level prices show that between 2004 and 2009, prices of basic consumption of items such as cereals, pulses, sugar, tea, milk, vegetables and edible oils have risen by 100-200 per cent.
What is also alarming is that surveys show that in the space of the last four months, a lower middle-class simple meal of roti, subzi, rice, dal and curd has risen from Rs 63 to Rs 133.
The across-the-board increase in prices of a vast array of essential commodities of daily consumption cannot be explained away as mere supply side constraints which are self-correcting.
One of the biggest failures of public policy has been the inability to step up production and availability (including imports) of pulses. It is a tragedy that in a country almost entirely dependent on pulses as a source of protein, the daily per capita consumption has gone down in a 50-year period (1957-2007) from 72 gm to 36 gm.
The agricultural revolution has completely by-passed pulses. The worst is yet to come and the nation will pay a heavy price for this neglect.
Need for new CPI
9. The price increases of the recent period are reflective of the universal law of too much money chasing too few goods. If these trends continue there would be severe social unrest and a vicious wage-price spiral could spin out of control, leaving in its wake a hair-curling inflation of a sort not seen in our life time.
There has been talk of a new WPI with 2004-05 as base as against the present base of 1993-94.The share of primary articles will significantly come down from 22 per cent to 10 per cent.
Sad to say, the wide gap between the official price indices and the ground reality will further increase. There is a pressing need for a new Consumer Price Index which would reflect the ground realities.
Ultimately, it is not merely a matter of working out an appropriate inflation index but a need to set up a body of sufficient stature to pronounce on all aspects of inflation — assessing the extent of inflation, anticipating inflationary pressures and making specific recommendations to the Government to undertake measures for controlling inflation.
In this context, there is an urgent need to set up a High-Powered Inflation Commission, with clearly defined terms of reference and powers, headed by an eminent and well-respected person with vast experience, such as a former Governor of the Reserve Bank of India.
It is unfortunate that policymakers and opinion-makers have put inflation control on the backburner and the common person is left with the impression that the Government has lost its will to fight inflation and is even willing to chance inflation in the hope of attaining higher growth.
As Dr C. Rangarajan has said, a higher growth rate of 9 per cent would require the global economy to fully recover and in the interregnum it would be prudent to plan for a 7-8 per cent growth rate. Pushing for higher growth rates at this stage is a sure invitation for uncontrollable inflation.
A heart-rending memory haunts me. At a housing colony an old woman, bent and worn out, was sweeping the compound. She looked up with a painful expression and said: “What is there for us: Mehangai aur Mehangai (inflation and more inflation)”
You Sir, have all along been a strong advocate of inflation control. With inflation spiralling out of control, the nation turns to you as the Saviour. You will have the blessings of the disadvantaged, the deprived and the dispossessed.
50% Indians living below poverty line: Govt panel Nitin Sethi, TNN 1 July 2009, 03:44am IST
NEW DELHI: In what could provide a radical boost to UPA's aam aadmi agenda but also pose a mind-boggling fiscal challenge, a government panel has recommended that 50% of India's population be given below- poverty-line cards.
The recommendations of the rural development ministry's committee on BPL surveys, chaired by Supreme Court-appointed food commissioner N C Saxena, seek to double the population that benefits from the UPA's social sector schemes — both existing as well as those on the anvil like the ambitious Food Security Act and enhanced pension schemes. The expansion of the social security net is bound to substantially increase government expenditure.
At present, the Planning Commission estimates that only 28.3% of the population qualifies for BPL benefits.
While the recommendations of the Saxena committee are not binding, the former bureaucrat, who was also on the Sonia Gandhi-led National Advisory Council, has emerged as a powerful voice on food policy. The government may also be compelled to take a close look at his estimates because they are close to the tally compiled by states under the rural development survey.
States reject plan panel's BPL figures
The states have, however, disregarded the BPL figures prepared by the Planning Commission, to prepare their own list of BPL benficiaries.
The rural development ministry conducts a survey along with the states every five years to identify the poor, while the Planning Commission gives an overall percentage for the number of poor in a state.
The mismatch between the two, with Planning Commission progressively lowering poverty estimates while the states push higher numbers, has always been a source of controversy. The Centre allocates resources for BPL schemes based on the figures of the Planning Commission, raising the hackles of the states. With the government set to increase the allocation for the BPL schemes, the conflict can escalate, with a very strong possibility of states pressing of the Saxena formula.
The rural development ministry had set up the Saxena committee to review the methodology of the survey and resolve the conflict between the plan panel estimate and the survey enumeration. The report would be made public on Tuesday.
In order to reconcile the plan panel estimates with the rural development surveys, the Saxena committee has suggested a change in the way Planning Commission works out its numbers. The Commission used the poverty lines of 1973-1974 to arrive at its latest figures in 2004 after adjusting for inflation.
17 Aug 2009, 0536 hrs IST, Bakul Chugan Tongia, ET Bureau
President of The Institute of Actuaries of India, Mr Gorakhnath Agarwal, is the former Executive Director (Actuarial) of LIC. In a candid Mr Gorakhnath Agarwal, Chief Actuary, Future Generali India Life Insurance conversation with ET Bureau, Mr Agarwal, who is currently designated as the Chief Actuary of Future Generali India Life Insurance, clears the air about the new mortality tables which are expected to hit the market soon and shares his views on the state of under-insurance in the country and the rationale behind the introduction of insurance cum investment products. The excerpts...
The current mortality tables are quite old. Meanwhile demographics in India have gone through lot of changes. So is it correct to use these old mortality tables even today?
There is a gross misconception among people that we are using 15 year old mortality tables. While we do take the old mortality tables as a base, the projections for the future are made taking into consideration the recent changes in mortality in light of the scientific innovations, lifestyle of the population etc. So we assess the mortality for the future and charge the premiums accordingly.
The existing mortality tables are based on the data pertaining to 1994-96 . Why such a long gap between the revised mortality tables?
It is the general international practice to revise mortality tables after a gap of 10 years, just like the census. For if you examine mortality after every 4 or 5 years, there will not be many changes in such a short span. However we have taken more time here because the insurance industry has opened up to private players only in 2000-01 . So if we had assumed a 10 year time span i.e. 2004, it would have once again turned out to be a LIC table like the existing one as the new private players did not have sufficient data then. So while we have taken about 14 years to bring the revise the tables, the new tables will be highly comprehensive as it incorporates data from both the private and the public institutions and shall thus prove to be a representative for the entire insurance industry. The new mortality tables will be ready to be implemented by the end of this year.
Is it right to say that the Indian population is highly under- insured ?
To some extent it may be yes, but I would beg to differ. To determine under-insurance , we have to consider only the population that is insurable. We have got 110 crore of population. If the average size of a family is taken as 5, we have about 22 crore insurable families in the country. Now 30% of the population we know is below poverty line and are being considered by the Government to be brought under the social security net. Now if we remove these BPL families, we are left with about 15.4 crore insurable families. Assuming one or two earning members per family, we may assume some 22-25 crore people that need insurance. Of these, about 70-80 % of these are currently insured by about 25-30 crore odd insurance policies. I say 70-80 % since many people have more than one insurance policy.
But what about the sum assured per policy?
I do agree that the insurance cover is small, very small. And the reason for the same is that the people in this country take insurance as a savings product and when you take a policy with savings in mind, it naturally reduces the cover.
What is the average sum assured per person in this country?
It is very less, not even a year’s salary. In US, people are insured for an amount equivalent to two years salary, in Japan it is three or even more than three years salary.
So you agree that insurance should not be used as an investment vehicle.?
It is not so. In India people are savings oriented since there is no social security system currently in place. So Indians try to save as much as possible. In contrast developed countries have elaborate systems for social security and citizens know that their families will be taken care of by the government in case of an unforseen event. So they have a lesser incentive to save. Life insurance provides an opportunity of compulsory saving.
But then there are other saving avenues. So why go for a savings insurance plan for the balance?
While there are other savings avenues, people tend to discontinue them after a point of time. In case of savings insurance plans, you are discouraged to do so resulting in compulsory savings for the future.
But don’t you think that the term plans are actually under-sold in this country?
It is not only the distributors to be held responsible. There is a typical feeling among people that the premium paid for the term plan is lost if the policyholder survives the policy term. People do not see it as a cost incurred to provide security to their families. They want it back and generate returns on the same. They do not realize that the returns would be not enough for him or his families. But I always tell people that while taking a term plan assume that you are paying for some unfortunate person who is going to die and thank God that you are not the one.
But is it not true that distributors abstain from selling term plans as these command lower commissions?
Distributors are paid commission on term plans also. However, they feel that term plans call for a one-time investment so they may not be called back by the investor once the term plan is sold. However, if they sell a savings plan of say five or 10 years, then the investor might seek his advice again and again as the policy matures.
Even after being into business for nine years, private players have failed to break-even ....
Private players in India are growing aggressively. The growth or expansion rate has been very high here. So it is taking a longer time to break-even . But if an insurance company is on a normal growth trajectory, it can break-even in just about 6-7 years time.
Activists of the Jamshedpur Jan Kalyan Samiti at Sakchi on Monday. (Bhola Prasad) Jamshedpur, Aug. 17: Traffic was disrupted for over two hours hours with the Jamshedpur Jan Kalyan Samiti activists laying siege to the district collectorate today in support of their demands.
Commuters had to face a harrowing time as the Old Court Road was blocked by the agitators.
Providing red cards to below poverty line (BPL) families, timely payment to beneficiaries of the widow pension scheme, development of road in various localities of Mango and restoration of defunct hand pumps were some of the major demands of the association.
Hundreds of activists, including a large number of women, started gathering outside the district collectorate in processions around 11am.
Traffic came to a grinding halt as they shouted slogans and prevented commuters to pass that way.
The women activists squatted on the road, outside the district collectorate, thus bringing traffic on the Sakchi-Mango road to a standstill. Movement of small vehicles was diverted to other routes in view of the protest staged by the agitators.
Commercial vehicles were also stranded near Jubilee Park for more than an hour because of the agitation.
Addressing the gathering, founder-president of the Jamshedpur Jan Kalyan Samiti Sanjeev Diwedi said: “The social organisation has been formed for taking up various issues concerning people of Mango in particular.” In his memorandum to the deputy commissioner, Diwedi maintained that red cards should be provided to people in BPL category.
“We have requested the district administration to ensure that all the BPL families are covered in the recent survey undertaken by the state government. Complaints received by us point that number of families in Mango are still waiting to get registered in the survey,” he added.
He claimed that the administration had assured the delegation that it would immediately repair hand pumps lying defunct in the region. “We have been asked to provide the list of hand pumps, which are not functional in Mango. Besides, we also took up the issue of bad roads in various localities of Mango,” Diwedi added.
Health insurance for Below Poverty Line (BPL) families
All 2,98,291 below poverty line (BPL) families in the state will be covered under the National Health Insurance Scheme from the current financial year...
Source: Tribune News Service
Updated on: 7/20/2009
All 2,98,291 below poverty line (BPL) families in the state will be covered under the National Health Insurance Scheme from the current financial year.
The government has decided to extend the scheme, which was introduced in Kangra and Shimla districts last year, to remaining 10 districts from 2009-10. The scheme is being implemented through the Swasthaya Bima Yojna Society of the Health Department, which has been made the nodal agency for the purpose.
Under this scheme, a beneficiary will be insured for Rs 30,000 per annum on a family floater basis. The BPL family unit will comprise maximum five members irrespective of age. It will not be required to pay any premium for the insurance cover.
However, the beneficiary will be required to pay Rs 30 per annum as registration and renewal fee. Each beneficiary will be issued a smart card. Insurance money will be payable only if the beneficiary gets indoor treatment in hospitals empanelled by the state government. The scheme provides cashless coverage of all health services in the insured package.
In the first phase, 1,00,547 families were covered in the two districts when the scheme was launched last year. The New India Insurance Company, the insurance provider, has issued 80,242 smart cards--- 54,511 in Kangra and 25,731 in Shimla. Till date, 310 BPL patients, 82 in Shimla and 228 in Kangra, had received medical treatment free of cost from the empanelled hospitals under the scheme. A provision for pre and post hospitalisation expenses has also been made and the scheme also covers the services of surgical nature, which can be provided on a daycare basis, apart from covering all pre- existing diseases. The transportation cost of patients to the hospital has also been covered to a maximum limit of Rs 100 per visit and overall limit of Rs 1,000.
The Centre will spend Rs 491.13 per family per annum and the state Rs 143.70. A provision of Rs 19 crore has been made for the implementation of the scheme in all 12 districts. The state has submitted a proposal for covering critical-illness expenses under which an additional coverage of up to Rs 1 lakh for meeting expense of hospitalisation and surgical procedures treatment of heart ailments, transplant surgeries, spinal surgeries and neurosurgery, will be provided. The insurance for maternity expenses will provide an additional cover up to Rs 10,000, covering normal deliveries, C- section deliveries and newborn cases.
Roadblock & gherao rock drought-hit dists TNN 19 August 2009, 06:57am IST
GUMLA/LOHARDAGA: Road blockades and gherao of officials are on the rise in several parts of this drought-hit state as the cry for foodgrains reached a feverish pitch. Villagers put up a roadblock at Langi village on NH-23 on Tuesday, demanding free foodgrain for all families belonging to the BPL category.
The blockade, which was staged at a place some 12 kilometre from Gumla town from around 8 am, threw traffic haywire as it went on for about three hours. Later, police had to resort to a mild lathicharge to clear the jam on the busy national highway, said Gumla circle officer Praveen Rohit Kujur. He, along with Gumla police station officer-in- charge Randhir Kumar, had almost persuaded the villagers to give up the blockade.
Villagers were demanding BPL (below poverty line) and AAY (Anpurna Anna Yojana) cards alleging that those who are well off have the cards while most of them have no card of any kind. Kujur tried to convince them by saying that the administration was conducting a door-to-door survey through gram sabhas to ascertain the family wise state of poverty and rescinding those names from the BPL list who actually do not fall in this category.
The deputy commissioner's office in Lohardaga district was gheraoed for the second day on Tuesday while road blockades were reported from over a dozen places, including Barhi, Bhujanian Road, Masmano and several other parts of Bhandra, Senha, Kisko and Kairo blocks.
While angry villagers manhandled officials at Bhandra block demanding equal distribution of foodgrains, officials were locked up in their offices at Kisko block.
Deputy commissioner M P Sinha said the district administration was yet to receive guidelines on how to tackle such situations.
Ranchi, Aug. 18: The JVM(P) is out to hijack rival BJP’s political action plan in the state.
The party today announced that it would begin its Jharkhand Janadesh Yatra on August 28. The yatra will be led by party supremo Babulal Marandi, who will address over 115 public meetings and convince the masses that holding early Assembly elections was the only solution.
The JVM(P) will also send a delegation to meet the Prime Minister and Union ministers for agriculture and rural development to suggest effective ways and means to fight drought. Marandi does not want to knock on the doors of the governor on the issue as his previous memorandum went unnoticed.
A detailed programme of the JVM(P)’s campaigns has already been published and the cadres have been assigned their new tasks. They have been asked to ensure the success of the show.
While Marandi himself is now touring interior pockets across the state to get first-hand account of the drought scenario, his subordinates are trying to secure appointments with the Prime Minister and the Union ministers.
“The state machinery under the President’s rule has failed to work out viable alternatives. People are fighting for foodgrain. After two to three months, they will come to blows for drinking water. All the development schemes have flopped while the role of banks has become questionable,” said JVM(P)’s principal general secretary Pradip Yadav at a news conference.
He demanded the Centre to ensure that both below poverty line (BPL) and above poverty line (APL) families receive essential commodities through PDS outlets because the drought has affected all. As APL ration cards too have not been issued in the state for the past 20 years, the state should work out other viable alternatives, he added. Yadav also pressed for the formation of all-party committees at different levels to monitor the relief operations.
Similar resolutions were taken by the state unit of BJP yesterday. The party is also trying to secure appointments with President, Prime Minister and governor. It is yet to announce the details of its mass campaign programme to evoke public consciousness for a fresh mandate.
Mainstream, Vol XLVII, No 35, August 15, 2009 (Independence Day Special)
“When the People Lead, the Leaders will Follow” Wednesday 19 August 2009, by K Saradamoni
This is not a slogan that I have coined. I got it from the write-up on the US Solidarity Economy Network which organised its first National Forum on the Solidarity Economy: Building Another World. The write-up continues:
The current economic crisis provides a historic opportunity to push for an economic system that puts people and planet front and centre. The Solidarity Economy is a growing global movement that is building real world practices and policies grounded in principles of solidarity, equity, participatory democracy and pluralism.
The forum took place between March 19 to 29, 2009 in the University of Massachusetts, Amherst, USA.
Besides the forum, there are other events taking place on the theme of Building a Society from Below. One such was a panel held in MIT on March 19. Speakers at the panel, supported by the consulates of the Bolivian Republic of Venezuela in Boston and New York, included the eminent Professor Noam Chomsky. These are without doubt encouraged by the changes taking place in the US and the world. The write-up says:
Barack Obama’s election and the Democratic Congressional majority signal new opportunities and challenges in a period when our nation and the world are suffering a series of disastrous wars, the most serious economic crisis since the Great Depression and potentially catastrophic environmental degradation, including global warming.
As President Obama’s election demonstrates real change comes from below, from our efforts for greater peace, justice, environmental sustainability. In a new era, we need new movement strategies to stop wars, violent conflicts and to guarantee ourselves and others meaningul security. This requires peace, a dynamic economy and universal access to health care and clean environment. It has to be repeated that this is a critical moment for peace, justice and environmental movements, a time to organise and lead the Obama Administration and Congress to deliver the changes that we and the world need. Unfortunately, the composition of the Obama Cabinet, other senior appointments and some of his policy commitments are sources of deep concern. President Obama intends to escalate the war in Afghanistan and Central Asia, to increase the size of the US military and to leave tens of thousands ‘residual forces’ in Iraq.His economic stimulus package has been criticised as inadequate and there is much to do to protect the environment. The Obama administration and Congress will deliver some of the changes that we and the world need, but powerful grass roots pressure on the new Administration and Congress will be required if our hopes for change are to be realised.
To provide clear and profound visions, campaigns, movements for change, the American Friends Service Committee, Tufts University Peace and Justice studies Programme and a growing number of co-sponsoring orgamisations have organised “New Strategies for the Obama Era: Are you Ready?“
This New England wide multi-generational movement was held at the weekend from March 27 to 29.
But Solidarity Economy is not limited to certain areas in the US. While the range of organisations and activities encompassed by the term solidarity economy are the fulfilment of human needs, the breakdown of oppressive economic hierarchies of all types, the development of human potential, and the preservation of communities and the environment, at the core is a transformation of the values that motivate and organise economic activity. The Solidarity economy rejects the individualistic, money and profit centred values of the modern capitalistic eonomy. It recognises that economics is about our relationships to other people and to our environment,and strives to insert values of cooperation, equality, democracy, local community control and sustainability into these relationships. It advocates the expression of these values in the myriad economic decisions people make, from an individual’s decision about what to buy or where to work, to a business’s decisions about what technology to adopt,of how to treat its workers, to public policy choices about how to respond to climate change.
There are four distinct aspects to the interconnected and organic whole that is the Solidarity economy. It is at once a collection of existing economic practices that promote these aims and embody these values; a network of people and organisations engaged in these practices; a theoretical framework for understanding and analysing these practices; and a developing local and global movement that informs and advocates for these practices. As each of these components grows and develops, understanding and strengthening the connections among them will facilitate scaling up initiatives that work, transcending political boundaries, and even challenging neoliberalism.
In the US, there are many practices that strive to embody the Solidarity Economy values. They include fairtrade product marketing, socially responsible investing, and community supported agriculture. However few in this country are familiar with the term “ Solidarity Economy”or how powerfully the term has redefined economic development elsewhere. Worker cooperatives have existed in the US for long, but only recently have they begun to net-work with one another, and to work on expanding the cooperative sector. In 2004, the US Federation of Worker Cooperatives was created to bring together local and regional coop organising, develop new cooperatives and offer support services to its members. The federation describes its vision as one in which workplaces will uphold the values of empowerment, equity, dignity and mutual respect for all workers without discrimination. Workplaces will offer long term, stable jobs, and a living wage and the opportunity for ownership for every worker.
The green jobs movement is also gaining momentum, responding to the twin crises of unemployment and climate change. A number of green jobs groups also incorporate anti-racist, community development, and work place democracy values into their organising.… (From Crisis to Job Creation, Labour and the Solidarity Economy. Dollars and Sense, Massachusetts, January/February. 2009, pp 15-18)
However the development of the Solidarity Economy is not restricted to the US. Over a decade ago, the Canadian province of Quebec turned to the Solidarity Economy to address a serious unemployment problem.
In Latin America, the Solidarity Economy organisation has been able to create employment opportunities for the poorest of the poor in times of ecnomic crisis. In Argentina, after the dramatic 2001 ecnomic collapse caused by the failure of neoliberal policies, factories closed and capital fled. Over 20 per cent of the population was unemployed, over half was living in poverty. Out of necessity workers in numerous idle factories took control over the means of production. By now over 180 factories have reopened under worker’s control giving jobs to more than ten thousand workers. The Unemployed Workers’ Movement organised to make collective demand on the government food parcels, public infrastructure investments and state funded locally administered jobs. In Brazil, the social movements that were at the core of the opposition to the military dictatorship also spearheaded the development of the Solidarity Economy.
In the 1980s Brazil experienced a currency crisis and hyperinflation as it changed from dictatorship to democracy. This along with the vastly unequal distribution of income and land and all of the problems attendant to a huge informal sector,spurred these movements to pursue an alternative model of employment and economic development.
The Landless Workers’ Movement, the largest Social Movement in Latin America, uses a clause in the new 1988 Constitution to seize land not being used for its social purpose, and to create communities of cooperative farms. The Central Union of Workers, the largest labour federation in Brazil partnered with the Solidarity Economy movement to new cooperatives. Since the Workers’Party has come to power politically, it has also pursued job creation through the Solidarity Economy. In June 2003 President Lula de Silva created the Solidarity Economy National Secretariat within the Employment Ministry to work with, study and support national, regional and local solidarity economy organisations.
WE cannot say that the Solidarity Economy has come to be discussed in our country. We are proud of the fact that we are a democracy, that independent India gave voting rights to all above the age of 21(later changed to 18) regardless of religion or caste, gender or literacy level. The Constitution of India guaranteed to the people, again irrespective of religion, caste, gender or place of living, that is, rural/urban, developed/less developed, equal opportunities to develop and grow. The government of independent India accepted development based on five-year planning, a strong public sector which had under its control all key sectors of the economy. The government was aware of the inequalities persisting in the society which had deep-rooted social and economic reasons. Schemes evolved to tackle them did not lead to any fundamental change in the society. A catastrophe was prevented by agriculture and a very large part of the economy known by many names like traditional, informal, household and unorganised.
But things changed for the worse and that too with great speed in the last two decades. This is the period when the political parties wielding power at the Centre decided to become part of a ‘globalised world’. Many of the earlier policies like non-acceptance of foreign aid with ‘strings attached’ and self-reliance were discarded. In fact foreign
Posted: Thursday, Aug 20, 2009 at 0925 hrs IST Updated: Thursday, Aug 20, 2009 at 0925 hrs IST
Discuss New Delhi: The issue of poverty estimation seems to be getting more complicated as a government-sponsored panel has now said that about 38 per cent Indians are poor — 10 percentage points higher than a previous estimate.
The states are already opposed to the Centre’s calculations on poverty estimation. In an interim finding, former chief of the Prime Minister’s Economic Advisory Council Suresh Tendulkar has estimated that 38 per cent of India’s population (comprising 8.32 crore families) is poor.
The Planning Commission in 2004-05 had said that 28.5 per cent of the country’s population was poor. The estimate was based on a National Sample Survey Organisation (NSSO) survey’s finding which said an income of Rs 560 per month for urban families was enough to purchase 2,100 calories of nutrition and an income of Rs 368 per month was enough to purchase 2,400 calories of nutrition in rural areas. However, different government bodies disputed the plan panel’s estimate. In 2007, the Arjun Sengupta committee had said that 77 per cent of India’s population was living below the poverty line, earning less than Rs 20 per day.
In June 2009, a rural development ministry-sponsored committee headed by N C Saxena to fix criteria for the Below Poverty Line survey in India had estimated that 50 per cent of Indians were poor. The Saxena Committee’s estimate matched the number of BPL ration cards issued so far — 10.86 crore households. As per the estimate, 10.87 crore households will have to be issued cards as per the new estimation, starting January 2010.
In the backdrop of the findings of these committees and the UPA government’s pledge to give a legal guarantee of food for everyone, Tendulkar was asked to determine the number of poor in India based on the new nutritional realities of the country. Abhijit Sen, the commission member in-charge of food, had advocated that the new estimation methodology be based on income. In line with the changing poverty estimates, the figures for annual subsidy requirement too changed. According to official estimates, 10.86 crore families currently hold BPL cards with each family drawing 25-kg foodgrains per month entailing a subsidy of about Rs 28,890.56 crore. If the Saxena Committee’s findings were factored in, then nearly 10.87 crore families would mean a government subsidy of nearly Rs 36,812.62 crore. And now with Tendulkar pegging BPL families at 8.32 crore, the subsidy bill would be nearly Rs 47,917.22 crore. The Planning...
New report shows increase in rural poorThe report, however, does show that poverty levels have declined from the mid-1990s Anil Padmanabhan and Sangeeta Singh
New Delhi: Four out of 10 people in rural areas in India are poor, according to a new report—a significant change from an existing estimate dating back to 2004-05, the most recent data available, that pegs rural poverty at 28.5% (which means around three in 10 people in rural areas are poor).
The report, however, does show that poverty levels have declined from the mid-1990s.
If the government accepts the report, which is to be submitted next month, it will have implications for public policy, increase the fiscal burden on the government and lead to greater devolution of resources to states with larger number of poor people.
Also See Tracking The Poor (Graphics)
The potentially controversial findings are part of the report of the high-level expert group appointed by the Planning Commission and chaired by Suresh Tendulkar, former chairman of the National Statistical Commission. Tendulkar could not be immediately reached for comment.
Some details of this report were first reported on 20 August by the Hindustan Times, which is published by HT Media Ltd that also publishes Mint.
According to a person in the Planning Commission who has viewed the contents of the draft report, but did not want to be identified, it estimates the number of rural poor in 2004-05 at 42% of the rural population, as opposed to the existing estimate of 28.5%.
The report also estimates that between 1993-94 and 2004-05, the number of rural poor dropped from 50% to 42% and in urban India from 31% to 26%. This is also the period when the country witnessed an acceleration in economic reforms and the beginnings of an unprecedented surge in growth that pitchforked India into the exclusive preserve of trillion-dollar economies.
The report has also revised the number of poor in the states. In urban areas, the trend is mixed, with some states showing a higher number of poor people after the revision and some, lower. However, in rural areas, the revision has been uniformly upwards.
The revision in the poverty estimates came about after the expert group revised and expanded the norms that define people living below the poverty line (BPL). The group was mandated to calculate the poverty line and the proportion of the population below it, and if required, to redraw the line itself.
Conventionally, poverty in India has been measured through a minimum household consumption level estimated by the National Sample Survey Organisation, part of the Central Statistical Organisation, the apex statistical body. This measure was anchored in the per capita calorie norms of 2,400 (rural) and 2,100 (urban) per day. The existing official poverty line was originally defined in terms of per capita total consumption expenditure at 1973-74 prices; while the original reference basket of goods and services was left unchanged. This is periodically updated by an expert group, using state price indices. However, the calorie count—which measures individual consumption— assumed in the original poverty line in 1973 has not changed.
Now, the expert group has completely reordered these norms by doing away with the upper bound for the calorie count per person, standardized the price indices and at the same time expanded the criteria to include education, health and actual spending on rent and conveyance as part of the individual’s consumption basket.
The committee justified this shift on the grounds that: the consumption basket of the poor was getting upgraded with the rapid economic growth and rising living standards; the crude price adjustment for inflation was leading to implausible results, wherein urban poverty ratio was higher than that of rural areas in some states; the Consumer Price Index for Agricultural Labourers that was used for measuring inflation for the rural population tended to understate the price rise and hence the extent of rural poverty; and the earlier measure of poverty did not cover private expenditure on education and health, which have been increasing over time.
This fundamental shift in approach, explains an official familiar with the findings, recognizes fundamental changes in the economy and revisits basic assumptions on poverty. In the 1970s, the implicit assumption was that it would be difficult for a BPL person to break free of the shackles of poverty; hence the response of public policy was to prevent starvation. In the new millennium, in a fundamentally transformed economy, by including health and education, the expert group has implicitly asserted that these are requirements for someone to come out of poverty.
According to Harsh Mander, Supreme Court commissioner on the right to food, if Tendulkar has included education, health and actual spending on rent, it’s a very good idea and a reasonable measure of poverty. “Today, a street child can earn up to Rs100 a day. By convention he should be out of poverty, but does he have the shelter and facilities to educate himself and get health benefits?”
Mander also said that expert groups and the government deliberately minimize one’s satisfaction levels so that the quantum of government expenditure on anti-poverty measures is reduced. “Food consumption and per capita income are narrow measures of poverty. It is necessary to improve one’s capabilities in order to move one out of poverty, and education, shelter and good health help doing that.”
He added that even Arjun Sengupta has said over 76% of people in India are poor.
The National Commission for Enterprises in the Unorganized Sector (NCEUS), in a report brought in 2007, said that a majority of the population, 77%, subsists at incomes just above the poverty line, at Rs12 per person per day, and much below the prevailing minimum wages, which range between Rs40 and Rs150 a day across most states. Sengupta was the chairman of the commission.
“I cannot comment till I have seen the report. Having said that, I feel Suresh (Suresh Tendulkar) is a good economist and if he says something, it has to be taken seriously,” said Sengupta, former chairman of NCEUS.
Y.K. Alagh, economist and former Union minister and also the person who had headed the earlier expert group on poverty that measured poverty in terms of calorific value, had a different perspective.
While maintaining that it was difficult to comment on the report without actually seeing it, he said: “The earlier theory was that the state should take care of food consumption of the poor under the basic minimum needs programme, and education and healthcare are anyway responsibility of the state. The 11th Plan also says that government should take care of necessities of the poor.”
“I don’t know whether Tendulkar has assumed that private sector is willing to take care of these facilities (education and health) or that government facilities are not up to the mark, but I am sure he has used some sound logic,” added Alagh.
A vote bank called NREGSWith the new changes in store, chances are the rural jobs scheme will become a vehicle for gigantic expenditures in the name of the poor with very little money actually going to the poor
We have for long said that the National Rural Employment Guarantee Scheme (NREGS) has the potential to turn into one large political and bureaucratic machine. With the changes now being considered in the programme, that may be announced soon, the chances are it will become a vehicle for gigantic expenditures in the name of the poor with very little money actually going to the poor.
From being an employment guarantee programme NREGS is being mutated into a vast official set-up with its own permanent staff and “mini secretariats” at the village assembly level. In addition, the nature of work allowed under NREGS is being changed: From being a public programme where the rural landless poor work on the creation of public assets, the government now plans to permit work on private sites, such as farms of small and marginal farmers as NREGS work.
The original instigators of NREGS, Jean Dreze, Aruna Roy and others, have decried the move. They should have known better: In India “welfare” schemes often meet this fate. But their ignorance is another story.
The ministry of rural development has claimed that so far, Rs60,350 crore has been expended on NREGS. Of this amount, Rs41,000 crore has been spent as wages under the scheme. If a permanent bureaucracy is created, it is certain that spending under wages will come down drastically due to salaries being paid to officials. The plan, at the moment, is to recruit a permanent cadre of local officials called lok sewaks who will “safeguard” NREGS workers. It is anybody’s guess whether these officials will safeguard these workers or ensure that no one gets any work.
More pernicious, however, is the plan to classify work on private sites as NREGS work. There is no economic rationale for that. Work on private site involves private assets: Anyone who owns land or any other asset, however meagre, has no business being on NREGS rolls. Once this is allowed, vote bank politics will kick in like a torrent. Money will only flow to those whom officials, and in turn their political masters, favour. This will ensure that the real rural poor get no work under NREGS.
Corruption in publicly funded programmes in India is inevitable: The wonder is that a flagship employment scheme is being subverted so openly and on a breathtaking scale.
Is this the end of the road for NREGS? Tell us at vi...@livemint.com
> A vote bank called NREGSWith the new changes in store, chances are the > rural jobs scheme will become a vehicle for gigantic expenditures in > the name of the poor with very little money actually going to the poor
> We have for long said that the National Rural Employment Guarantee > Scheme (NREGS) has the potential to turn into one large political and > bureaucratic machine. With the changes now being considered in the > programme, that may be announced soon, the chances are it will become > a vehicle for gigantic expenditures in the name of the poor with very > little money actually going to the poor.
> From being an employment guarantee programme NREGS is being mutated > into a vast official set-up with its own permanent staff and “mini > secretariats” at the village assembly level. In addition, the nature > of work allowed under NREGS is being changed: From being a public > programme where the rural landless poor work on the creation of public > assets, the government now plans to permit work on private sites, such > as farms of small and marginal farmers as NREGS work.
> The original instigators of NREGS, Jean Dreze, Aruna Roy and others, > have decried the move. They should have known better: In India > “welfare” schemes often meet this fate. But their ignorance is another > story.
> The ministry of rural development has claimed that so far, Rs60,350 > crore has been expended on NREGS. Of this amount, Rs41,000 crore has > been spent as wages under the scheme. If a permanent bureaucracy is > created, it is certain that spending under wages will come down > drastically due to salaries being paid to officials. The plan, at the > moment, is to recruit a permanent cadre of local officials called lok > sewaks who will “safeguard” NREGS workers. It is anybody’s guess > whether these officials will safeguard these workers or ensure that no > one gets any work.
> More pernicious, however, is the plan to classify work on private > sites as NREGS work. There is no economic rationale for that. Work on > private site involves private assets: Anyone who owns land or any > other asset, however meagre, has no business being on NREGS rolls. > Once this is allowed, vote bank politics will kick in like a torrent. > Money will only flow to those whom officials, and in turn their > political masters, favour. This will ensure that the real rural poor > get no work under NREGS.
> Corruption in publicly funded programmes in India is inevitable: The > wonder is that a flagship employment scheme is being subverted so > openly and on a breathtaking scale.
> Is this the end of the road for NREGS? Tell us at vi...@livemint.com
Ending rich-poor divide more vital than being PM: Rahul
Posted: Friday , Aug 21, 2009 at 1505 hrs
AICC general secretary Rahul Gandhi addresses the media in Raipur.Related ArticlesMost Read Articles Minister points out problems with NREGS, Rahul stays mum
Congress General Secretary Rahul Gandhi on Friday said that ending the wide disparity between rich and poor in the country is more important than being the Prime Minister.
"Today, there are two worlds in the country. One which is progressing very fast and another the backward one, which includes states like Chhattisgarh," Rahul told reporters in Raipur on Friday.
The Congress leader said that working towards making both the worlds progress and develop simultaneously is more important for him than being a minister of prime minister.
He also said that Chhattisgarh government is not doing enough to deal with Naxalism.
"I have already said that Naxalism will prosper wherever the benefits of welfare schemes do not reach," he said adding Chhattisgarh is suffering because of the same problem.
He, however, evaded reply when asked if Congress party intends to end reservations in the country.
Rahul said that the poor in the country do not have any identity.
"At times, even the ration card provided to them turns out to be fake. They also have to face a lot of problem if migrated to other states," he said.
"To deal with such problems it is very important that an identity is provided to all."
"Therefore, an ambitious project to provide a unique identity card to all in the country has been undertaken," he said adding it will not be based on caste, class or religion.
Rahul Gandhi is on a two-day tour of the state to review elections in National Students Union of India.
"More and more youth are joining NSUI," he said adding they should work their way to the top in a democratic manner.
Gap between rich and poor By: A.Dias | 21-Aug-2009
It is true that there are two worlds in the country i.e. Rich and Poor. But one thing is sure that Congress Politicians are not there in the Poor world. Congressmen by nature are the corrupt people in the country. Congress Party brought and flourished the Corruption in the country. Congress Party is fully responsible to run these two worlds in the Country. It is good Mr.Rahul has realised that Poor people has the right to live a decent life in India. Mr. Rahul, to make this- the first step is Stop Corruption at every level in your Government. Make sure your M.P's and MLA's are accountable. Check their loot. See how fat they have become overnight by looting the people. Set a target date to make country Corruption free. Bring stringent laws to deal with corruption. Today, the politicians are the most corrupt people in the country. Deal with them first if you really love the poor and the country. Show that you can do this. WE INDIANS LOVE YOU. Jai Hind!!!!
Rich - Poor Vs The real divide) By: S. Desikar | 21-Aug-2009
What does this mean? Will rich become poor or the poor become rich? How will having an ID eradicate poverty?People in power should understand that poor are not craving to become rich. Do what may there will be poverty or the divide (as even in developed countries). More important is how citizens feel living in the country. Needed are> All should be same before law.> Clear separation of power (water tight)> Make justice fast
I must praise the Congress for their strategy- Send Rahul baba go to undeveloped areas in non-Congress led states and have him give statements to the media that show how much he cares for the youth, democracy and development of the poor. I wonder if Rahul baba ever realizes that when he criticizes the Chattisgarh govt for weak action against the Naxals, that his party has been a strong opponent of Salwa Judum (which was to a certain extent effective in holding the Naxal tide). He talks of lack of development, and his concern (if genuine) should be appaluded, but should we also not remind him that for 47 years Congress has ruled India, that for 35 years a member of the Nehru-Indira lineage has been P.M.? Democracy should also involve accountability, and where is the accountability in conveniently negelecting your own failures and berating others for that ? And finally, it was found that majority of new recruits in NSUI in Surat (who joined under his watch) were actually fake !
welldone Rahul By: sasi | 21-Aug-2009
It is very pleasant to hear .It proves the desire of a young man with a servise mode.Our claps to you ,keep it up.Please upheld the slogan to eradicate corruption from the politicians,govt. servants etc .Then congress can win the match easily .
Rich-Poor By: S. Desikar | 21-Aug-2009
What does this mean? Will rich become poor or the poor become rich? How will having an ID eradicate poverty?> All should be same before law.> Clear separation of power (water tight)> Punish the guilty quick and fast, without favour.> The perception that one can get away with making mistake in India to change.> Hypocratic mentality to be done away with (all else need to stand in line and me not, jumping traffic light is ok but still I am law abiding).>Do away with cuts, commissions and bribe culture. Would be difficult since votes need to be bought (in parliment too).> Accept merit has to be one of the criteria and last of all> People to take pride in calling Indian.
Top Article: Creative Leadership Can Make All The Difference GEETANJALI KIRLOSKAR22 August 2009, 12:00am IST
The recession has, thank God, stopped all of us crowing about how India is rising and shining. Giving us time to reflect on it in terms of our personal value systems and not "irrational exuberance". But did the 'boom' pull everybody's quality of life up? Without doubt, agriculture only 20 per cent of our GDP but supporting 60 per cent of our population grew at a healthy clip.
The NREGS benefited 44 million families. The debt write-off made the lives of 43 million farmers a little easier. But travelling extensively around India, one cannot say that life for the poor and even lower middle classes has changed substantially over the past decade.
The tide is coming in and, if we grab the opportunity, every single one of us 1.1 billion Indians can rise. If this tide is not harnessed, it will result in social and economic conflicts leaving India worse off than before. The India growth story is on razor's edge in almost all dimensions.
India's young have driven the growth story. Our educated, English- speaking youth have made India the world's back office. But the back office business can absorb only a fraction of our almost limitless supply of the young which will continue to increase well into this century's third decade.
India must ensure all its young have a shot at getting educated well. The Right to Education Bill has been passed and i will be rooting for it to achieve its objectives. To paraphrase Franklin Roosevelt, we cannot always build the future for our youth, but we can build our youth for the future.
India must ensure its educated young have more avenues of productive growth than just the IT-BPO industries. More sectors need to take off. The central challenge is in promoting originality and innovation. India cannot emulate its way to success.
We cannot do a US or a Japan. The US's population density is 30 times lower than India's. The US had to do a lot less with a lot more resources. But India has time on its side. We can find sustainable growth models that harness modern technology provided we learn from others' mistakes and innovate.
India has no dearth of grassroots innovation yielding world class results in diverse fields. Consider the story of Ram Charan. He grew up in a small town in UP.
In his early years he worked in his family's modest shoe shop. As he saw his father juggle the shop's finances to meet the income rhythms of mostly rural customers, he learnt the importance of carefully managed cash flow.
Today he is a world-renowned consultant to global companies. In the recession his practice, unlike that of some consulting giants, is unaffected as he helps clients through turbulent times, adapting the lessons he learnt in his father's little shop.
Consider India's private health care sector. Doctors have fearlessly rejected new technologies like surgical robots and keyhole surgery kits despite these being popular in the West as fanciful and not cost- effective.
Instead they innovate, making breakthroughs like 'beating heart' surgery which causes less pain, does not require general anesthesia, has the patient faster on his feet and costs less! 'Beating heart' surgery has medical tourists from across the world flocking to Bangalore.
Paul Yock, head of Stanford University's bio-design laboratory which develops medical devices, thinks that amid growing concerns about runaway health spending, the global industry can find inspiration in India on how to serve need without being blind to cost.
The Indian as an individual has in every field across the world, including business, demonstrated innovation and originality. But as a society and as communities, India is among the world's least innovative. In every social sector public education, public health, public infrastructure, public morality India is abysmally below world class standards, ranking below 100 in the comity of nations.
India has always been a land of contrast. But this contrasts between the achievement of individuals and businesses and the continuing rot of India as a society can destroy us all. India must and will find a solution. Indian society needs a new kind of leadership.
While the most visible component of a society's leadership is the people in the corridors of power, an equally if not more important component is at the grassroots: the village sarpanch, the wise teacher whose counsel many seek, the respected NGO worker, the journalist respected for his perspective and his integrity, the spiritual or religious leader who is his community's rallying point.
This ecosystem of leadership needs to shift from perpetuating the status quo to being a catalyst of change. To me, the greatest sign of hope is that this is beginning to happen.
The general election results were a symptom of this tectonic shift. More important, the most potent political force to emerge from the election is a quiet young man who continues to concentrate on building a new apparatus of leadership at the grassroots. With creative leadership, India will become innovative at the societal level. Combine this with the innovative abilities of individuals and business and India could reach a strategic inflection point that finally puts it on a path that lifts millions to a life without lack.
The writer is chairperson, India Japan Initiative.
S.D.Tendulkar, the former chairman of Prime Minister’s economic advisory council has prepared a report, according to which India has 38 % population below poverty line (BPL). At present Planning commission of India’s 2006 figure is only 28.5%. of the population is under BPL.
If Tendulkar’s report is accepted officially by the Govt and the Planning commission, there shall be an addition of about 11 crore populations in the exiting number of people living BPL. In India, since 1972, Poverty is being calculated in terms of calories. 2100 calories for Urban and 2400 calories for rural areas are the yardsticks to measure poverty in India.
Tendulkar has used different methodology for this survey and took education, health, sanitation, nutrition and household income etc into account while calculating Poverty, the definition of which has always been a point of difference amongst economists and experts. Many experts, economists and rights activists believe, and they give some convincing arguments also to support their views, that poverty measurement formula in India is not satisfactory, there are actually more people below BPL, they argue.
Efforts has had been made earlier also by the government in order to find a broader consensus on the definition of poverty. One N.C.Saxena committee was formed by government in June this year which suggested that 50% people are under BPL. In 2007, Arjun Sengupta, associated with National commission for enterprises in unorganised sector, said that 77% of Indians are in BPL.
Only a couple of years ago, NSSO, the national sampling govt organisation, has thrown a figure in the public domain that about 70% of populations in India don’t even spend 20Rs/- a day on them. Whereas in this country itself, there are people who gifts 700 crores plane to his wife on birthday. The number of HNI in India is increasing with galloping speed and it has crossed one lakh figure till date. What a contrast and irony in deed!
Nitish Kr, CM of Bihar, only a couple of years ago, organised one ‘Global Seminar’ at Patna for evolving a unanimous definition on poverty. It was attended by a plethora of luminaries from across different fields ranging from economy to science and from NGO to government functionaries. The seminar deliberated upon ‘Poverty’ and consensus was arrived at that the definition of poverty should be made ‘broad based’. Kumar had called on the union government to reconsider the determinants to define the poverty. The report of Tendular has vindicated the stand of Nitish kumar.
FALL OUT ON PROPOSED NATIONAL FOOD SECURITY ACT- the union government is to come out with a historic bill on food security in the next session of parliament. The proposed legislation is historic in the sense that it would guarantee availability of at least 25 Kg of grains to one BPL families per month @ 3 Rs/-. The proposed legislation would incur an additional 9500 crore rupees on the subsidy of the grains. At present government is incurring 37,010 crore rupees on the subsidy of the food meant for BPL families.
KOLKATA, 21 AUG: The state government today announced the launch of three schemes for widows belonging to Below Poverty Line (BPL) families, persons with certain disabilities and farmers who have lost land. The initiative would be taken up very soon.
State panchayat and rural development department minister, Mr Anisur Rahman today said the state would launch the Indira Gandhi National Widow Pension Scheme (IGNWPS) for BPL widows aged between 40 and 64 years, Indira Gandhi National Disabled Pension Scheme (IGNDPS) for disabled persons aged between 18 and 64 years and an insurance scheme for landless farmers aged between 18 and 59 years soon in the state. The minister said all the widows fulfilling the criteria and living in gram panchayat areas or municipal areas would be given Rs 400 every month as pension.
The Centre would bear 50 per cent (Rs 200) of the expenditre and the remaining 50 per cent would be shouldered by the state. Similarly, disabled persons aged between 18 and 64 years would get a pension of Rs 400 every month. The Centre would bear 50 per cent of the cost and the rest would be given by the state.
In case of the insurance scheme, one time premium of Rs 200 has to be given per head. The state and the Centre would share Rs 100 each to pay the premium. Under this pension scheme, a farmer's family would get Rs 30,000 in case of natural death. In case of accidental death, Rs 75,000 would be given and if a farmer becomes disabled completely, he would get Rs 75,000. If a farmer becomes partially disabled, he would get Rs 37,500 under the scheme.SNS
According to a government estimate, 38 per cent Indians live in severe poverty — 10 per cent higher than a previous estimate.
The report, by the Planning Commission chaired by Suresh Tendulkar, former chairman of the National Statistical Commission, states four out of 10 people in rural areas in India are poor.
Earlier in 2004-05, the Planning Commission had said that 28.5 per cent of the country’s population was poor, based on a survey by the National Sample Survey Organisation (NSSO).
The finding said an income of Rs 560 per month for urban families was enough to purchase 2,100 calories of nutrition and an income of Rs 368 per month was enough to purchase 2,400 calories of nutrition in rural areas.
Later, in 2007 a different version was rendered by the Arun Sengupta committee that said 77 per cent of India’s population was living below the poverty line. Says the committee, mostly all of those earned less than Rs 20 per day.
According to the current estimates, the number of poor in India is approximately 297 million. This means the government will have to spend an additional $1.9bn on ensuring food security to the poor.
In the last four years, the Indian government has spent $31.19bn on poverty alleviation schemes.
Interestingly, the latest report does also show that poverty levels have declined from the mid-1990s. Between 1993-94 and 2004-05, the number of rural poor dropped from 50 per cent to 42 per cent and in urban India from 31 per cent to 26 per cent.
New Delhi: How many are really poor in India? The figures have always been disputed. But now, the rural development ministry is coming out with a new set of criteria to determine who makes it to the below poverty line (BPL) list.
"The ministry has finalised five characteristics that will decide whether a person is below or above the poverty line," said a source in the ministry. The criteria were cleared at a meeting of state rural development secretaries on June 13.
Families who meet any one or more of the following criteria will not be considered eligible for BPL listing: A monthly income of over Rs5,000, a person owning a mechanised farm implement or a two-wheeler and above, living in a pucca house of about 1,100 square feet.
The land holding of a family should also be less than the district's average land holding size to be considered eligible for BPL category.
"The enumeration will begin at the end of this month and continue till January 2010. After a preliminary survey by the village panchayat, a rough list will be posted on the walls of the panchayat building. After that someone from another block will come and, helped by three people from the village, verify the list.
Posted: Tue, Aug 25 2009. 11:00 PM ISTEconomy and Politics
Food subsidies to rise 25-140% under new criteria
New measure includes education, health, rent and conveyance as part of individual’s consumption basketSangeeta Singh
The cost of food subsidy for the poor can rise by between 25% and 140%, reaching as much as a staggering Rs90,000 crore, if new definitions of poverty suggested by two expert panels are adopted by the government, according to an analysis by the Planning Commission, India’s apex planning body.
More benefits? A true estimate of BPL families has become important for two reasons--to tackle the problem of the government’s rising subsidy bills and implementation of the proposed National Food Security Act. Ramesh Pathania / Mint
One expert group was headed by Suresh Tendulkar, former chairman of the National Statistical Commission, and will submit its report to the government next month. It estimated that four out of 10 people in rural areas are poor, a significant increase over the most recent estimate, dating back to 2004-05, that pegged rural poverty at 28.5%.
The group, appointed by the Planning Commission, expanded the criteria for defining those below the poverty line (BPL) by including education, health and actual spending on rent and conveyance as part of an individual’s consumption basket, besides expenditure on food.
The other report was prepared by the National Commission for Enterprises in the Unorganized Sector, headed by Arjun Sengupta, and was published in 2007. That report said 77% of the population subsists at just Rs12 per person per day, much below the prevailing minimum wage, which ranges between Rs40 and Rs150 a day across states.
Click here to watch India’s overhauled definition of poverty
According to the Planning Commission analysis, the number of persons living BPL stands at 36% of the total population, or 65.2 million families. These figures pertain to poverty as estimated in 1993-94. At a monthly allocation of 35kg of foodgrains per month per family, the annual subsidy to BPL families works out to Rs37,000 crore.
“These figures rise to Rs46,500 crore, or by 25%, if we were to adopt the definition of poverty as estimated by Suresh Tendulkar,” said a Planning Commission official, who didn’t want to be identified. “According to his report, all-India poverty figures stand at 38%.”
According to the same Planning Commission analysis, the government will have to spend as much as Rs90,000 crore as food subsidy on BPL families, 140% more than the present subsidy cost, if the Sengupta report is accepted.
Food subsidy is the largest explicit subsidy in the government’s budget. The budget estimate of the food subsidy bill for fiscal 2009-10 was Rs42,490 crore. Apart from subsidy on foodgrains sold through the public distribution system to BPL families, the cost includes welfare programmes such as mid-day meal schemes meant for schoolchildren.
The Planning Commission official also said the Centre is continually being told by states to increase the BPL count. The total number of BPL cards, which entitle holders to subsidized foodgrains, already issued by state governments is 109 million.
Union food and agriculture minister Sharad Pawar last week told reporters in New Delhi that if states were to have their way, the BPL population can be as high as 80-85% of India’s total population.
Conventionally, poverty in India has been measured through a minimum household consumption level estimated by the National Sample Survey Organisation, part of the Central Statistical Organisation, the apex statistical body. This measure was anchored in the per capita calorie norms of 2,400 (rural) and 2,100 (urban) per day.
The existing official poverty line was originally defined in terms of per capita total consumption expenditure at 1973-74 prices; the original reference basket of goods and services was left unchanged. This is periodically updated by an expert group, using state price indices. However, the calorie count—which measures individual consumption— assumed in the original poverty line in 1973 has not changed.
A true estimate of BPL families has become important for two reasons— to tackle the problem of the government’s rising subsidy bills and implementation of the United Progressive Alliance’s proposed National Food Security Act.
Under the legislation, every BPL family in rural as well as urban areas will be entitled, by law, to 25kg of rice or wheat per month at Rs3 per kg.
A note for the empowered group of ministers on the National Food Security Act, a copy of which was reviewed by Mint, says the government will soon have to come up with well defined figures for BPL families to decide what number will be covered under the Act, besides working out a mechanism to identify BPL families in rural and urban areas.
Social worker Harsh Mander, a special commissioner appointed by the Supreme Court to advise it on the right to food, hunger and state responsibility, said a larger BPL population would reflect a “more correct scenario of the poor in India”.
“Spending on education, health and shelter are basic necessities, which help in capacity building and, therefore, should be included while calculating poverty,” he said.
AP A child outside her home at a roadside slum area in Allahabad. Photo: AP
The time has come for a comprehensive right-to-food law to tackle the deprivation and food insecurity that haunts India.The essential demands of the campaign have to be seen in the context of the nutritional emergency in India and the need to address the structural roots of hunger.
Over the last decade or so, a series of developments have drawn attention to the problem of food security. These are the persistence of hunger in many parts of the country being juxtaposed with food surpluses and stocks; the adverse impact of globalisation on agriculture and rising food prices resulting in widespread food insecurity; media reports of starvation deaths, hunger and malnutrition and, finally, the Supreme Court rulings in response to public interest litigation.
Despite reports of hunger and rampant malnourishment, the government has not paid enough attention to ensuring food security. In the last few years civil society campaigns, public interest litigation and directions issued by the courts have converted the benefits of nutrition-related schemes into legal entitlements. As a consequence, food security is emerging as a significant policy area for public intervention and public demands stressing a rights-based approach to ensure it. The central idea of the right-to-food campaign that started in 2001 is simply this: the right to food is one of the basic economic and social rights to achieve substantive democracy, and without it political democracy is incomplete. It is directly linked to the right to life, a fundamental human right enshrined in the Constitution and conceivably all human rights conceptions.
The essential demands of the campaign have to be seen in the context of the nutritional emergency in India and the need to address the structural roots of hunger. Indias track record, as far as the commitment to tackling hunger and malnutrition is concerned, is among the worst. The National Family Health Survey (2006) showed that the child under-nutrition rate in India is 46 per cent. This figure is almost double that of sub-Saharan Africa, which is economically poorer than India. In the Global Hunger Index (2008), India ranks 66th among the 88 countries surveyed by the International Food Policy Research Institute (IFPRI). It comes below Sudan, Nigeria and Cameroon, and slightly above Bangladesh. The recent rise in food prices has possibly made matters worse in terms of peoples access to food. The blame for this nutritional emergency has to be shared by the persistence of widespread poverty, poor implementation of government programmes (especially Integrated Child Development Services and the Public Distribution System), and various other factors that interact in many ways to produce this dismal result.
Few countries in the world can claim to have achieved total food security. Even fewer of them have introduced legislation to guarantee it. Implementing this right requires not only equitable and sustainable food systems and increases in agricultural productivity but the purchasing power to buy the necessary food. This, in turn, requires means of livelihood security such as the right to work and social security. Since those at risk of hunger are poor and also socially powerless, discriminated and marginalised, an enabling legal entitlement can weaken the power of entrenched interests arraigned against them, and empower the intended beneficiaries by assigning the responsibility and culpability of the government since the primary responsibility for guaranteeing these entitlements rests with the state.
The Congress 2009 election manifesto promised to enact a law to facilitate access to sufficient food for all, particularly the most vulnerable and deprived sections of society. The party is keen to implement this promise, which has much to do with the widely held view that the National Rural Employment Guarantee Act (NREGA) played an important part in the Congress election victory. Not surprisingly, making access to food a fundamental right is likely to become the centrepiece of the United Progressive Alliances second innings. Politically the main challenge is to ensure that the Right to Food law is not limited to the fulfillment of the Congress election promise of 25 kg of grain a month at Rs. 3 a kg for Below Poverty Line families: this would amount to whittling down the peoples access to food in the guise of the new law. However, Sonia Gandhis very first letter to the Prime Minister on the food security issue after the installation of the UPA government raises the hope that the proposed legislation will offer a more comprehensive guarantee of food security for the poor.
The draft of the Right to Food (Guarantee of Safety and Security) Bill has been widely criticised for its excessive focus on freezing the number of the poorest-of-the-poor who need guaranteed food entitlements. Since then there has been a big debate on the scale and scope of the proposed law.
Three conceptual issues are critical to the provision of an effective food security law. These pertain to how much to give, at what prices, and to whom. On the first issue, there is a consensus that the entitlement under the Antyodaya Anna Yojana which stands at 35 kg of foodgrains per poor household, which is anyway below national nutritional norms, should not be cut.
On the second issue, the rate of Rs. 3 a kg for rice and wheat that the Congress has promised is higher than the existing price of foodgrains available to BPL households in several major States and this would mean paying more for less foodgrains. The entitlements should not be cut to 25 kg, and BPL families receiving wheat at Rs. 2 should obviously continue to do so.
Of the three issues, the criterion for identifying beneficiaries and coverage under the food security law is the most crucial. Taking a minimalist view, the Food Ministry proposes to find a way to limit this list to BPL households, at a level decided by the Centre, and without giving much flexibility to the States to expand the list. However, BPL estimates vary sharply because of the different methods used to determine the beneficiaries. While the Planning Commission estimates that there are just over 62 million BPL families, State governments claim the existence of nearly double that number. Adding to this debate, a recent report by a Supreme Court-appointed panel on food security says the number of food-insecure people is larger than the figures of people officially declared as being poor.
Limiting access to the public distribution system in terms of food to BPL families is at variance with the current political expectations from a law that must ensure food for all to combat widespread malnourishment and hunger. Narrow targeting of food security on the basis of income poverty is likely to exclude a large part of the vulnerable population. The key to an inclusive approach to food security is a guarantee of universal access rather than getting bogged down in ascertaining the target group. For this it is necessary to delink food security from poverty which would help avoid the mistakes inherent in targeting: unfair exclusion of the really poor and the gratuitous inclusion of the non-poor. Above all, a law to make access to food a fundamental right for all must not be hindered by the question of additional fund allocation or subsidy.
Recent campaigns for the right to food, education, work, and information have brought issues of deprivation and livelihood centrestage as never before. Some of these campaigns have produced substantial results in the form of the NREGA and the Right to Information Act. The time has now come to put in place a comprehensive right-to-food legislation that can begin to tackle the colossal deprivation and food insecurity that continues to haunt the country. A food security law will be effective only if it is based on universal access and ensures that the nutritional requirements of every citizen are met.
This also means that the entitlement must be individual and not household-based. Based on individual entitlements, such a law would be able to avoid the difficulties faced by many of the rural development programmes, including the NREGS, which are only nominally rights-based and are heavily dependent on the benevolence and discretion of the implementing government. Such a law will not only give an impetus to the UPAs paradigm of inclusive politics but underline the important point that the right to food, to health, to education, and to employment are interdependent and incomplete without one another.
( Zoya Hasan is a Professor at Jawaharlal Nehru University, Delhi)
Haryana eases building norms, makes room for cheaper homes Posted by paragjani on August 27, 2009
New Delhi: Homebuyers can now look forward to buying homes for as low as Rs 4 lakh to Rs 16 lakh in Gurgaon, thanks to a recent policy initiative by the Haryana government. The state government’s new scheme caps the price of the homes built by developers in return for permission to builders to make more housing units of smaller sizes in the same area.
Developers say the scheme will help launch new projects and increase cashflow . “Projects under the scheme would give minimal margin. Nevertheless , developers would be encouraged to launch homes under the scheme, as there is a great demand for low-cost homes,” says Navin Raheja, chairman of Delhi-based Raheja Developers that plans to shortly launch some projects in Gurgaon under the scheme.
The incentives for developers include a relaxed density norm (from current 250 people per acre in Gurgaon to 600 people per acre) and higher ground coverage area from 35% to 50%. “The move to relax density norms will help us build smaller homes and thus make them more affordable ,” Unitech head of corporate planning R Nagraju said, adding that it was impossible to build homes of less than 1,500 sq ft on average under present density norms. Under the new scheme, a 10- acre plot will be able to house over 1,200 dwelling units as against 450 units at present, Mr Raheja estimates. A larger ground coverage means concrete structure could occupy larger area on the ground thus lowering project costs. Construction cost is usually lower in low-rise buildings.
Under the scheme, which will be open for developers until November 20, the low-cost homes with a minimum carpet area of 25 sq mt (approx 350 sq ft) will have a maximum price tag of Rs 4 lakh all over the state. Dwelling units with a minimum 48 sq mt (approx 700 sq ft) carpet area, defined as affordable category by the government, will be sold for Rs 16 lakh in Gurgaon-Manesar urban complex, Rs 14 Lakh in Faridabad, Panchkula and Ballabhgarh complex and Rs 12.50 lakh for rest of the state.
Below poverty line (BPL) families as well as the class IV staff of the state government will be eligible for the Rs 4-lakh homes, which will be at least 15% of the total dwelling units built in a project. The allotment will be made through a draw of lots and allottees can’t sell their property before five years of possession.
Haryana government’s new scheme caps the price of the homes built by developers in return for permission to builders to make more housing units of smaller sizes in the same area
Incentives for developers include a relaxed density norm (from current 250 people per acre in Gurgaon to 600 people per acre) and higher ground coverage area from 35% to 50%
Under the new scheme, a 10-acre plot will be able to house over 1,200 dwelling units as against 450 units at present.
Full interest subsidy on edu loans for poor students: Govt by Agency on August 27, 2009
In a significant move, the government has decided to provide full interest subsidy on education loans taken by poor students to pursue technical and professional courses and fixed their parental income limit at Rs 4.5 lakh per annum to avail the benefit.
A meeting of the Cabinet Committee on Economic Affairs, chaired by Prime Minister Manmohan Singh, gave its nod to the scheme to enable students from economically weaker sections to
continue any approved course in recognised technical and professional institutions in the country.
The scheme would benefit over five lakh students to pursue higher education in technical and professional streams, Home Minister P Chidambaram said, adding that the number of loans as on 31st March this year was 16 lakh and the total outstanding amount Rs 24,000 crore.
The scheme, to be applicable from the ongoing academic year, would provide full interest subsidy during the period of moratorium on loans taken by students from scheduled banks.
The moratorium period begins from the launch of a course till one year after the course ends or six months after the student gets a job, whichever is earlier.
The interest during this period would be borne by the government.
After this moratorium period is over, the interest on the outstanding loan would have to be paid by the student borrower as per its provisions.
Chidambaram said the interest subsidy would be available to students only once, either for the first undergraduate degree course or the post-graduate degree and diploma courses.
The interest subsidy scheme, formulated by the Indian Banks Association, would however be admissible for combined undergraduate and post-graduate courses.
The benefit would not be available for those students who either discontinue the course mid-stream due to any reason, except on medical grounds.
He said the modalities for implementation and monitoring mechanism would be finalized in consultation with Canara Bank, which has taken a lead role. A Memorandum of Understanding would be signed with the bank.
The monitoring mechanism would see how the benefits of the scheme were reaching the students belonging to the scheduled castes, tribes and OBC communities.
Observing that one of the responsibilities of the government was to ensure that no one was denied professional education due to their economic conditions, Prime Minister Manmohan Singh had in his Independence Day address this year announced that a new scheme would be started in this regard.
Finance Minister Pranab Mukherjee in this year’s budget speech also made a similar announcement.
Panel recommends religion, caste as new BPL criteria
BS Reporter / New Delhi August 28, 2009, 0:03 IST
In a drastically new approach to identifying Below the Poverty Line (BPL) families, the Manmohan Singh government may resort to a three- pronged approach to identify poor households that could, for the first time, see caste and religion as determinants.
There will be a list of those automatically excluded and included. The remaining rural households will be surveyed and judged on the basis of scores, to ascertain their eligibility for the BPL category.
Currently, BPL families are identified on the basis of scores (0 to 4) on 13 socio-economic parameters. But an expert committee, formed by the rural development ministry, has recommended additional marks for scheduled castes and tribes (SC/STs), Most Backward Castes, Other Backward Classes (OBCs) and Muslims. If a household has members with tuberculosis, leprosy, disability, mental illness or AIDS, it will also be awarded points.
While the previous methodology had a maximum score of 52 (4x13), the new method will have a maximum score of just 10 marks. “The scheme has to be so simple, that everyone in a village could calculate his own score even before the survey,” the draft report said.
The committee is chaired by N C Saxena, a former bureaucrat who’s a respected figure for his work and advocacy on poverty and development issues. He headed as Secretary of both, the Planning Commission and the rural development ministry.
The committee was formed in August 2008, after various states pointed out major anomalies in the methodology adopted during the 2002 BPL census. While the estimation of poverty is done by the Planning Commission, the census to identify the BPL households is undertaken by the rural development ministry. Based on the Census figures, the Plan panel decides the BPL quota in different states.
The Saxena committee also strongly argues that the Plan panel’s system of fixing BPL quotas for all states should not be continued, as it allows only a section of those eligible to enroll as BPL families. If the recommendations are accepted, the number of BPL households is likely to increase substantially. States like Bihar and West Bengal have been complaining for a long time that many deserving poor are left out because of the flawed approach.