The arithmetic of India’s poverty

Author of this article,  Praful Patel is an Ugandan national of Indian origin. He is currently working as the Vice President, South Asia Region of the  World Bank. He is sharing his views about poverty in India, which he witnessed during his recent visit to Gujarat, a state ruled by India’s extremist Hindu nationalists. Gujarat is one of the most indebted states in India. Its public debt to GDP ratio is a whopping 28.5 per cent.  According to official figures (widely believed to be a gross understatement), over 500 farmers in the state have committed suicide. This is primarily due to rural indebtedness, which, according to the NSS’ 55th round data, is, at around 40 per cent, widely higher than the national average of 25 per cent. 

Janaury 16, 2008: A few months after taking over my new position in the World Bank, I spent a few days and nights with Bhavnaben and her young family of salt workers on the edge of the desert in the Little Rann of Kutch in Gujarat.

Since that time, Bhavnaben has been my touchstone of progress in India’s booming economy, and I return every year to visit them. I go to see first hand the life of India’s poorest citizens, to learn about their hopes and dreams, and to trace the small changes in their lives amidst India’s rising prosperity.

In the four years that I’ve known the family, they have made many efforts to improve their circumstances. But escaping the clutches of poverty is never easy. Little did I realise how vulnerable the poor are to exploitation from those who wield power over them.

Now that the family farmed two pans, the water vendor who supplied drinking water while they camped in the desert had doubled his charges! As the sole seller of a vital commodity —albeit of dubious quality— he charged whatever he pleased.

One encouraging sign was that the family had begun to diversify their sources of income to reduce their dependence on their backbreaking ancestral occupation. They had set up a small shop selling basic supplies to others on the pans.

The shop —looked after by the oldest son— also sold flour which they now ground themselves using a new machine. In addition, they had begun to produce industrial salt which fetched a much higher price than the consumption salt they produced earlier. And, the older children — none of whom went to school when I first met them — were now in school.

My most recent visit to the family reminded me of the many pitfalls in the climb out of poverty. All parents dream of giving their children a better future. But poor families’ inability to cope without their children’s labour invariably compromises the one thing that can make a real difference — education.

The question continues to nag me: Will Bhavnaben’s children ever be able to avail of the new opportunities provided by India’s booming economy? Health services also remain a huge problem, causing many poor people to slip back into poverty despite their best efforts. An illness means the loss of precious work days, and a consequent set-back in income.

When I tried to talk to Mangabhai about his financial planning for the time he can no longer work, he looked at me with glazed eyes. He had absolutely no idea. “The poor don’t have the luxury of looking into the future,” Bhavnaben said to me.

Business Daily Africa,  Jan 16, 2008