India's deprived households as partners in growth and wellbeing

An economic growth of 7.2 per cent in FY 2022-23 and Morgan Stanley’s report on broad macro indicators have been encouraging for India in tough times. While the rich have done well, the poor are still struggling with the consequences of the K-shaped recovery. Loss of income and employment has had consequences for the consumption of fast-moving consumer goods, automobiles, footwear and other products that the poor and the lower middle class use. Lack of skills interferes with non-farm opportunities, leading to a higher-than-usual dependence on agriculture for employment. Marked characteristically by underemployment, many of the wage opportunities in agriculture remain at subsistence level. With an improvement in the asset base of the poor by housing, toilet, electricity, roads, bank accounts, credit, gas connection, and other pro-poor public welfare measures, even with some wage incomes, households are able to subsist in rural areas. While formalising fast, wage opportunities in urban areas are no better for a large number at the bottom of the ladder, as guards, watchmen, and construction workers.

With stable macro indicators and economic growth, what is it that is needed to make lives and livelihoods of the deprived, better at a faster pace? Will trickle down of growth suffice or do we need to make a real effort over the next twelve months to do a few things that we are currently not doing or not doing on scale. The following appear as immediate priorities for reconnecting with deprived households as memories of Gram Swaraj Abhiyan 2018 and pro-poor public welfare fades away with the onslaught of the post-panemic challenge.

The following seem critical:

First, recognize that the poor have really suffered loss of incomes and employment during Covid-19 and their livelihoods continue to remain very fragile. There is an immediate need to provide more wage employment through a better-governed MGNREGS for durable assets that augment incomes of poor households. Individual beneficiary schemes on scale, for water conservation, horticulture, animal resources, etc. can go a long way in improving the lives and livelihoods of the poor. The wage rates under MGNREGS needs further increase to make it closer to market wages in poorer regions. Let the focus of MGNREGS be on poorer regions and deprived households across regions. An immediate additional allocation of Rs 30,000 crore to 40,000 crore is needed in the current year and rigorous efforts are made to ensure targeting of the poor and for durable assets that generate incomes. Implementing in partnership with panchayats and with the 90 million women in collectives of Self Help Groups of the Rural Livelihood Mission will ensure quality of outcomes, transparency, and full coverage of the genuine deprived households. A similar initiative for public works, school and health facility infrastructure improvement while providing employment, is needed in urban areas as well, to tide over tough times.

Second, let us not underestimate the importance of a quality school, dependable and cashless primary care and secondary health facilities, nutrition for the infants and pregnant mothers, and skills programme access to deprived households. The learning poverty, the disruption of health services beyond Covid vaccination, shutting up of nutrition programmes, dysfunctional skills initiatives, during Covid, have all added to the woes of a deprived household. Rampant private tuition for children is a reflection of the aspirations of even a poor household to overcome the broken ladder of a government school. Nothing is more inclusive than the opportunities to every Indian child to develop her/his fullest human potential.

Gram panchayats and urban local bodies, in partnerships with women’s collectives or other community institutions, are best suited to meet the human development aspirations of the poor with equitable access to computers/tablets in community institutions. They need funds, functions and functionaries of local governments. All current resources of the Central, State, Local Governments must necessarily be spent by local Governments in the 29 sectors in the Eleventh Schedule for rural areas and 18 sectors in the Twelfth Schedule for Urban Local bodies. A Mission Manav Vikas (Human Development Mission) needs to be developed from below, starting with institutions, local, State, Central Governments. The country should have a Human Development Council at every level with flexible financial resources to achieve agreed outcomes. A societal mission and partnership, social harmony and brotherhood, is the need of the hour. Additional funds of Over Rs. 50,000 crores will be needed to meet the basic quality needs for assured human development.  Let it become the focus of all – Centre, State, Local Governments, Community, Citizens.  

Third, Digital Public Infrastructure for payments has been very successful in reaching out to the last mile. We need to develop last mile community owned, micro-credit plan based, hand-holding and financial literacy led, Digital Public Credit Infrastructure for a fair, timely, need based, access to credit. Technology is only a means to an end and institutions and collectives of the poor give strength to fair practices and transparency at the last mile. The skills initiatives have also to be built from below as do nano-enterprises of the poor, for them to break the bondage of poverty. Enterprises from below have to come up in large numbers. Community Resource Persons to ease the pains of transformation and to hand – hold the transition to well-being through higher order economic activity, is clearly the way forward.

Fourth, cities and towns have to be prepared on priority for the migrants whose numbers will further swell as non-farm opportunities emerge and engagement in agriculture comes down. Guaranteeing a basic life of dignity requires a more organic connection with community institutions at the basti level for very basic public services. Public information, handholding, changes in statutes to improve entitlements of the migrants, will all go a long way in improving the comfort of a newcomer, in search of jobs. The process is inevitable with half of India likely to live in cities by 2050, if not earlier.  Let the poor not be an afterthought.

Fifth, the current thrust on infrastructure is very good and does increase the growth numbers and employment. If we focused on socially relevant infrastructure of schools, health facilities, ITIs, and Skill Centres at the same time in a decentralized, need based manner, we may be able to multiply our gains from infrastructure at a faster rate. Also, infrastructure projects need to align closer with community institutions to improve their public connect, reduce wasteful costs, and significantly improve partnerships with the poor looking for opportunities.

Sixth, savings can be effected in subsidies for food grains and fertilizers. States should be asked to identify the deprived more carefully to ensure that any wrong enrolment for food grains, farmers, pensions, is deleted without delay and made available to the genuine poor. A community-led identification of the poor is a more effective means to confirm true need. Likewise, cash transfers should be for farmers and cultivators and not for absentee landlords. Revisit a few PLIs as well to ensure that there is value for money in terms of sustainable jobs and the subsidies do not become a crutch for all times. Markets and business ought to be free as that is how they work best.

(The writer is a retired civil servant.)

(These are the personal opinions of the writer. They do not reflect the views of www.business-standard.com or the 'Business Standard' newspaper.)