Economic Highlights
New Delhi, 21 December 2009
Prices, Poverty &
Growth
STOP JUGGLERY OF
FIGURES
By Shivaji Sarkar
Reality and projections are foxing
the nation. Almost 20 per cent price rise and the growing numbers of the poor
are the reality. But when it comes to growth projections nobody is sure whether
there is reality in these or these are mere officialese. One can only hope it
is not the latter.
The October figures lead to a claim
of 10.3 per cent surge in the industrial production and GDP growth at 7.9 per
cent. Basic projections on the low growth parameters of October 2008 -- 4.3 per
cent and a comparison with that of October 2009 and the claims of high growth
possibilities certainly do not project the actual facts.
Else, the Government would not have
grappled with the poverty figures. Growth in this country is not linked to
betterment of living conditions of the people at large. Instead, it has been
observed that social and financial discrimination increases. Despite the supposed
fast-paced pre-2008 growth at around 7 to 8 per cent, it is surprising that the
number of poor have not come down. Of course there are different figures by
different committees and departments.
This apart, the Government is also unsure
whether the growing food prices are adding to the numbers or not? In November
alone inflation jumped three-fold from 1.34 per cent in October to 4.78 per
cent as WPI. Shockingly, food prices have risen to nearly 7 per cent – from
13.68 per cent on October 31 to 19.95 per cent on December 5. Logically it
would marginalize many more and push them below the poverty line. This is what
four different figures for poverty estimation seem to suggest. \
Higher poverty ratio has its effect
on the Government’s kitty as well. It may swell expenditure on poverty
alleviation and subsidy-related issues by over Rs 15,000 crore. The Planning
Commission in 2004-05 estimated that 28.3 per cent of the population was below
the poverty line. The Government still projects this as the figure of poor
persons. There is a dichotomy. It does not take into account the rise in
population. The figures have to vary accordingly.
Importantly, three official
committees have rejected these figures. The SD Tendulkar committee set up by
the Planning Commission has stated that even in 2004-05 there were 41.8 per
cent people below the poverty line. Officially there were 38 per cent poor in
1990. The NC Saxena committee set up the Ministry of Rural Development
estimated, on the same parameters of per capita calorie intake of the Planning
Commission that a poor person requires at least Rs 700 a month to survive.
The committee estimates 50 per cent
of the people are below the poverty line. It has also taken into account
low-weight children and anaemic women into account for the purpose of its
calculation. This means almost 55 crore persons are living in absolute poverty.
The Economic Survey of 2008-09 puts the figure at 60.5 per cent on the basis of
subsisting on a wage below Rs 20 a day as per National Statistical Organisation
Survey. The average works out to Rs 600 a month.
It is important to note that the Budget
process has started and is to be presented almost two months later. The Government
has to accept one or the other figure for deciding allocations. The closest to
the present Government estimates are the Tendulkar committee figures. But these
are also 13 per cent higher than the accepted official figures.
Clearly, the figures would be
definitely more if the high food prices are taken into account. Incomes have not
increased. There were more people who had been out of jobs and even those who
are in corporate jobs have seen erosion in wages as most of them have been
denied a raise since about two years.
According to the Tendulkar
committee, there would be 30 per cent more poor in Chhattisgarh, Jharkhand,
Bihar, UP, Rajasthan, MP and even West Bengal.
This means that on PDS alone the Government would have to spend Rs 10,000 to
12,000 crore. Expenditure would also increase on schemes such as NREGS, Indira
Awas Yojana, Swarna Jayanti Employment Scheme and similar other schemes.
If the rising prices are taken into
account, it would further swell the Government expenditure, which it is trying
to do with larger borrowings. Presently almost 7 per cent is the estimated
fiscal deficit. It is likely to swell further. This has a cascading effect on
expenses as also on actual growth prospects. Is the country getting into a
vortex?
Regrettably, the Government has not
been able to contain the prices. The Union Agriculture and Commerce Ministers,
Sharad Pawar and Kamal Nath respectively, are giving statements that are only
fuelling up food grain and sugar prices. Prime Minister Manmohan Singh has also
warned of further rise in prices. The only dissenting voice is that of Finance Minister
Pranab Mukherjee, who says he is concerned about this and is taking requisite steps.
His concern appears genuine. But, he has to show results in the Budget and this
seems difficult.
If the number of poor and price
rise, the Government may do projections but it would be away from reality. It
also raises the question about the intention of bringing down the prices. So
far, nobody has yet explained why butter has become scarce in the market. The only
answer has come from the multi-national retailer Walmart, which admitted
hoarding butter stocks after acquiring it from Anand in Gujarat.
One needs to look at the meeting of Walmart Chairman S Walton with Manmohan
Singh on November 4.
This above is a grim signal and
points to the linkages of price rise and entry of the MNCs and big corporate in
the retail market. Somehow nobody raids their warehouses, whereas godowns of the small wholesalers have
been searched under the provisions of the Essential Commodities Act.
Indeed, the nation and its
parliamentarians need to speak against the entry of big business into the
retail commodity and vegetable markets. There is no scrutiny of the officials
and others promoting entry of this sector. They lure the Government with
artificial growth projections. The Government instead has to look at actual
growth of the people. The US
and the West are suffering the ills of monopolization of transnational
retailers. There is time to secure India from their ill effects.
The Opposition and the Government
need to sit together to study the menace. Finances benefit only a few but
growth requires a vision and not statistical jugglery. The West and now even Dubai is suffering from
financial projections, created in the books. India has survived some of the
recent financial crisis but if the present trend continues it may not be able
to do so for long. ---INFA
(Copyright,
India News and Feature Alliance)
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