Corruption in PDS: Rising or falling?

A group of economists have recently opposed the leakage figure of 47% in public distribution system (PDS) that was earlier endorsed by the Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, written under the chairpersonship of Shanta Kumar.

The HLC report on FCI reforms actually had taken the estimate on PDS leakage from an academic paper written by Ashok Gulati and Shweta Saini, which was published from Indian Council for Research on International Economic Relations (ICRIER) in January this year. Dr. Ashok Gulati was also a member in the HLC on FCI reforms.

In a briefing session for media persons on 3 February, 2015 held in New Dehi, the group which challenged the HLC figure informed that leakages and diversion from PDS stood at nearly 42%. They clarified that methodological differences is leading to 2 different estimates regarding PDS leakages. (Please check the chart below).

Comparison of estimated leakages in PDS during 2011-12 | Create infographics

Please note that many of the states/ UTs for which leakages have been calculated by Gulati and Saini are not shown in the above chart.

It was earlier seen in a number of studies that leakages from the PDS reduced over the years. Thanks to a series of measures undertaken in states like Odisha, Bihar and Chhattisgarh, PDS could see a turnaround in these states. For example, PDS leakage in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted apart from complete overhauling of PDS.

This indicates that PDS can be corrected and made to perform, provided there is adequate political will and enough room for introducing innovative measures. However, on the sole ground of leakage, the HLC on FCI restructuring had suggested to replace PDS with cash transfers without going into further details.

Two economists, namely Reetika Khera from IIT Delhi and Jean Dreze, Visiting faculty at Ranchi University, who disagree with the HLC recommendations on PDS dilution, have alleged that Gulati and Saini miscalculated the figures on total PDS offtake from FCI and total PDS purchase.

Dreze and Khera have argued that most of the leakage is in the Above Poverty Line (APL) quota (apart from the 'ad hoc quotas') into which more and more foodgrain is presently being dumped. Comparatively, there is much lower leakages in the below poverty line (BPL) quota.

One calculation by Dreze and Khera, based on National Sample Survey (NSS) data, shows that while leakages in the BPL/ Antyodaya Anna Yojana (AAY) quota was to the tune of 30%, it was nearly double (i.e. 67%) in the case of APL quota during 2011-12.

Instead of using the NSS data, if the India Human Development Survey (IHDS) data of National Council of Applied Economic Research (NCAER) is considered, then one can find that leakages from PDS was around 32% in 2011-12, which once again puts a question mark on the leakage figure quoted by HLC.

Apart from end-to-end computerization, the Government should ask the states to release the Socio Economic and Caste Census (SECC) data so that eligible households could avail the benefits of PDS, suggested Dreze and Khera.

References:

Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015, http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf

Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER, http://icrier.org/pdf/Working_Paper_294.pdf

The National Food Security Act 2013

http://www.im4change.org/siteadmin/tinymce//uploaded/NFSA%202013.pdf

The National Food Security Ordinance 2013

http://www.im4change.org/siteadmin/tinymce//uploaded/NationalFoodSecurityOrdinance2013.pdf

FCI reforms: prescription to cure or kill? -Roshan Kishore, Livemint.com, 27 January, 2015, http://www.im4change.org/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html

Water For The Leeward India -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014,

http://www.im4change.org/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html

Public Distribution System Reforms and Consumption in Chhattisgarh -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014, http://www.im4change.org/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html

Ajay Chhibber, Director General of the IEO, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014, http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html

Rural Poverty and the Public Distribution System-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013, http://www.im4change.org/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html

Reforming the Public Distribution System: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012, http://www.im4change.org/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf

PDS leakage drops to 10-15%: govt, The Indian Express, 12 December, 2011, http://www.im4change.org/latest-news-updates/pds-leakage-drops-to-10-15-govt-11988.html

Revival of the Public Distribution System -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 & 45, http://www.im4change.org/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf

Trends in diversion of PDS grain -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics,

http://www.cdedse.org/pdf/work198.pdf

PEEP survey 2013 and PDS Survey 2011, http://web.iitd.ac.in/~reetika/projects.html

Nutritional Progress in Maharashtra under doubt: latest DLHS

The results of the District Level Household and Facility Survey-4 for the year 2012-13, commonly known as DLHS-4, are out and it shows that among the 18 states and 3 UTs, the percentage of moderate wasting for children below 5 years is highest among Maharashtra (i.e. 34.1%). Similarly, in case of severe wasting and moderate underweight, the situation is worst in Maharashtra as compared to the rest (Please check the chart below).

The above outcomes may be shocking for those who got pleased with the state's decent performance in reducing stunting (i.e. too short for age) among children under 2 years, and expected similar trends for the rest two measures, namely wasting (i.e. too thin for height) and underweight (i.e. too thin for age).

Earlier, the provisional results of the Comprehensive Nutrition Survey (CNS) in Maharashtra during 2012, done jointly by the state's Department of Women and Child Development, International Institute for Population Sciences (IIPS) and UNICEF, found that the percentage of children under 2 years affected by stunting came down drastically to 22.8% in 2012 (under CNS) from 39.0% in 2005-06 (under NHFS-3).

Since the publication of CNS results, a lot many international reports, authored by renowned economists and health experts, had praised the state for reducing malnutrition among children, although there were critical reports too by the media on high malnutrition levels prevailing particularly among tribal children in parts of Melghat in Amravati, Jawahar and Mokhada in Thane and urban slums of Mankhurd and Shivajinagar in Mumbai.

Nutritional Status of Children below 5 years in DLHS 4 during 2012-13 |Create infographics

Since the DLHS-3 done in 2007-08 (& published in 2010) did not provide information on malnutrition, DLHS-4 can be straightway compared with NFHS-3 for the states whose latest nutritional data is available now.

On doing so, we get that moderate stunting among children below 5 years in Maharashtra has reduced from 46.2% in 2005-06 (NFHS-3) to 30% in 2012-13 (DLHS-4) while severe stunting came down from 19.1% to 14.7% during the same duration, but prevalence of moderate wasting nearly doubled and severe wasting quadrupled in the 7 years span for children below 5 years.

Nutritional Status of Children below 5 years in NFHS 3 during 2005-06 |Create infographics

Although prevalence of moderate underweight in Maharashtra for children under 5 years remained almost the same between NFHS-3 and DLHS-4, severe underweight increased slightly during the same time period.

Performance of various states under DLHS-4

In terms of prevalence of 'moderate wasting' among 18 states and 3 UTs, Maharashtra (34.1%) performs the worst and Nagaland (10.8%) performs the best. Except for Andhra Pradesh, Arunachal Pradesh, Kerala, Nagaland and Sikkim, the prevalence of 'moderate wasting' is higher in rural areas as compared to urban areas. The rural-urban divide is maximum in Andaman and Nicobar Islands.

The percentage of 'severe wasting' is highest in Maharashtra (20.0%) and lowest in Nagaland (5.2%). The prevalence of 'severe wasting' is higher in rural areas as compared to urban areas, except for Himachal Pradesh, Kerala, Nagaland and Sikkim. The rural-urban divide is maximum in Puducherry.

In terms of prevalence of 'moderate stunting', Meghalaya (41.7%) performs the worst and Goa (18.7%) performs the best. Except for Goa, Himachal Pradesh, Karnataka, Maharashtra, Puducherry and Telengana, the prevalence of 'moderate stunting' is higher in rural areas as compared to urban areas. The rural-urban divide is maximum in Tripura.

The percentage of 'severe stunting' is highest in Meghalaya (23.1%) and lowest in Goa (8.4%). The prevalence of 'severe stunting' is higher in rural areas as compared to urban areas, except for Andaman and Nicobar Islands, Arunachal Pradesh, Goa, Haryana, Karnataka, Punjab, Sikkim and Telengana. The rural-urban divide is maximum in Meghalaya.

In terms of prevalence of 'moderate underweight', Maharashtra (38.7%) performs the worst and Kerala (20.9%) performs the best. Except for Karnataka, the prevalence of 'moderate underweight' is higher in rural areas as compared to urban areas. The rural-urban divide is maximum in Andaman and Nicobar Islands.

The percentage of 'severe underweight' is highest in West Bengal (15.4%) and lowest in Sikkim (5.4%). The prevalence of 'severe underweight' is higher in rural areas as compared to urban areas, except for Goa. The rural-urban divide is maximum in Andaman and Nicobar Islands.

(No comparable data between NFHS-3 and DLHS-4 is available for A & N Islands, Chandigarh, Pudducherry and Telengana.)

What is there to learn from Maharashtra on stunting?

Although nothing definite can be said about reduction of malnutrition among children under 5 years between NFHS-3 and DLHS-4, there are certain important lessons that can be learnt from Maharashtra.

A commentary published in Economic and Political Weekly entitled: Progress in Reducing Child Under-Nutrition: Evidence from Maharashtra by Sunny Jose and KS Hari (2015) informs that nutritional interventions through the Rajmata Jijau Mother-Child Health and Nutrition Mission, which began in 2005, played a crucial role in reducing prevalence of stunting among children below 2 years in Maharashtra. However, the decline in malnutrition levels was confined largely to children belonging to two or three age groups and the interventions helped reduce stunting the most, but not wasting and underweight.

Jose and Hari have observed that in the 6 years span (between NFHS-3 and CNS), stunting among children below 2 years belonging to Scheduled Tribe (ST) households declined by 25.3 percentage point from 52.9% in 2005-06 to 27.6% in 2012. However, stunting among children below 2 years from Scheduled Caste (SC) and Other Backward Caste (OBC) households declined much lesser than that among ST children.

A similar trend could be observed in the case of underweight. However, in the case of wasting, the decline is highest among children from SC households as compared to the children from other 2 communities i.e. ST and OBC.

Girls have performed better than boys (both sexes below 2 years) in terms of decline in stunting, wasting and underweight between 2005-06 and 2012.

Jose and Hari inform that the nutrition & health mission of Maharashtra launched a dedicated programme to bring down child undernutrition through a menu of interconnected measures, ranging from monitoring the nutritional status of pregnant women to ICYF practices and vaccination, among others.

In a note given in the Global Nutrition Report 2014 of IFPRI, Prof. Lawrence Haddad from IDS Sussex has explained the following key factors that helped in reducing stunting among children under 2 years in Maharashtra:

* Economic growth and poverty reduction helped in reducing malnutrition in the state. Maharashtra has a modest track record in transparency, anti-corruption efforts, and service delivery.

* Spending on nutrition doubled from a low level, and vacancies among frontline workers in the Integrated Child Development Services (ICDS) scheme dropped dramatically

* The decline in stunting was broad based and was greater—absolutely and proportionately—for the least wealthy, the least literate, and those with the worst access to improved water sources.

* The determinants that improved the most between the NFHS-3 and CNS surveys were the age of mother at first birth, maternal underweight, maternal literacy, coverage of antenatal visits, delivery in the presence of birth attendants, child feeding practices, and access to ICDS.

* Underlying determinants were reasonably supportive: women’s decision-making status inside and outside the home was high; the Public Distribution System (PDS), which distributes subsidized food to poor people, suffered from slightly less leakage than the all-India average; and female education rates were high and rising.

* The state’s Nutrition Mission was seen as a signal of high-level political commitment to nutrition improvements and helped coordinate different sectors at village and policy levels.

Caveat: Data comparability and Methodology

A caution for readers about DLHS-4 is that the data provided by it on stunting, wasting and underweight does not take into account data of those (big) states where malnutrition levels have traditionally been higher (such as Bihar, Madhya Pradesh etc.), as shown by the last 3 National Family Health Surveys (NFHS).

The DLHS-4 data is based on a much smaller survey (in terms of sample size) as compared to DLHS-3. The former has covered the better performing states but left out 9 such states where most malnourished children of India are concentrated. However, as pointed above, DLHS-3 did not provide information on the 3 measures of nutrition.

Both the DLHS and NFHS surveys have been done in India under the auspices of Ministry of Health and Family Welfare where IIPS played a key role.

Since the state-wise malnutrition figures based on the Rapid Survey on Children (RSOC), conducted by the Ministry of Women and Child Development in partnership with UNICEF India, is not yet available in the public domain, the publication of the DLHS-4 data providing updated nutritional trends in a few select states is definitely a welcome step. (Please see the alert: Child Malnutrition declining, though not fast enough). However, media reports suggest that publication of NFHS-4 would have done justice to the absence of comprehensive and comparable data since 2005-06.

References

District Level Household and Facility Survey-4 (DLHS-4) in 2012-13,

https://nrhm-mis.nic.in/SitePages/DLHS-4.aspx

Comprehensive Nutrition Survey (CNS) in Maharashtra

http://www.iipsindia.org/pdf/CNSMFACTSHEET%20-%202012.pdf

National Family Health Survey-3 (NFHS-3) in 2005-06,

http://www.rchiips.org/nfhs/report.shtml

District Level Household and Facility Survey-3 (DLHS-3) in 2012-13,

http://www.rchiips.org/PRCH-3.html

Child Malnutrition declining, though not fast enough

http://www.im4change.org/news-alerts/child-malnutrition-declining-though-not-fast-enough-4674611.html

Progress in Reducing Child Under-Nutrition: Evidence from Maharashtra -Sunny Jose and KS Hari, Economic and Political Weekly, Vol-L, No. 3, January 17, 2015,

http://www.im4change.org/siteadmin/tinymce//uploaded/Progress_in_Reducing_Child_UnderNutrition.pdf

Panel 2.3: How did Maharashtra cut child stunting? by Prof. Lawrence Haddad (page no. 13) in Global Nutrition Report 2014: Actions and Accountability to Accelerate the World's Progress on Nutrition, IFPRI, http://www.im4change.org/siteadmin/tinymce//uploaded/Global%20Nutrition%20Report%202014.pdf

Beyond the Great Indian Nutrition Debate-Sonalde Desai and Amit Thorat, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013,

http://www.im4change.org/siteadmin/tinymce//uploaded/Nutrition.pdf

The fuzzy numbers on child malnutrition, Livemint, 14 October, 2014,

http://www.im4change.org/latest-news-updates/the-fuzzy-numbers-on-child-malnutrition-4674213.html

Fewer kids under 2 years of age malnourished in Maharashtra, but tribal pockets still lag -Madhavi Rajadhyaksha, The Times of India, 16 November, 2013, http://timesofindia.indiatimes.com/india/Fewer-kids-under-2-years-of-age-malnourished-in-Maharashtra-but-tribal-pockets-still-lag/articleshow/25857173.cms

Image Courtesy: Shambhu Ghatak

Missing girls in 'developed' states

The child sex ratio (CSR) in India has declined from 927 in 2001 to 918 in 2011 (girls per 1,000 boys) according to a new report entitled Missing Girls: Mapping the Adverse Child Sex Ratio in India (Census 2011). Of the total 640 districts in the country, 429 districts have experienced decline in CSR.

Of these 429 districts, 26 districts exhibited drastic decline (of 50 points or more), and 52 districts reported sharp decline (of 30-49 points).

The report from the office of Registrar General & Census Commissioner shows that 13 out of the 35 states and Union Territories (UTs) have CSR lower than the national average of 918 girls per 1,000 boys in 2011. The CSR ranged from a maximum of 972 in Arunachal Pradesh to a minimum of 834 in Haryana. Jammu & Kashmir, Punjab, Haryana, NCT of Delhi, Chandigarh, Rajasthan, Uttarakhand, Gujarat and Maharashtra have recorded lower than 900 girls per 1,000 boys.

It has been found that although the CSR for most of the tribal districts (having more than 25 percent tribal population) was above the national average of 918, the situation significantly deteriorated in 2011. While in 2001, 120 tribal districts had CSR of 950 or more, in 2011 this figure unfortunately declined to 90 districts.

Another report titled Women and Men in India 2014 from MoSPI shows that the bottom 5 big states in terms of CSR (for the age-group 0-6 years) are: Haryana (834), Punjab (846), Jammu & Kashmir (862), Rajasthan (888), Uttarakhand (890) and Gujarat (890). The top 5 states in terms of sex ratio for the same age group are: Arunachal Pradesh (972), Meghalaya (970), Mizoram (970), Chhattisgarh (969) and Kerala (964).

Due to the weak implementation of Pre-conception and Pre-natal Diagnostic Techniques (Prohibition of Sex Selection) Act, 1994 (PCPNDT Act), in-laws often get to know the sex of the unborn child. Thereafter, it is followed by provision of low quantity & less nutritious food to pregnant and lactating mothers (at the place of in-laws) apart from insufficient attention to maternal health & care, mental and physical torture etc., all of which have a strong negative bearing on women's health and survival and also on their children—unborn or otherwise.

A report published earlier entitled The Law and Son Preference in India: A Reality Check by Advocate Kirti Singh (November, 2013) informs that the two-child norm and the laws and measures to effectuate this norm has resulted in son preference and daughter aversion as most people, if they are forced to have a small family, automatically prefer sons to daughters.

Concerned over the skewed sex ratio, Minister for Women and Child Development Smt. Maneka Gandhi has recently expressed that a programme for Beti Bachao Beti Padhao (Save and Educate the Girl Child) may soon be started in North and western states of India.

Latest available Census data clearly shows that some of India's more developed states have low overall sex ratio such as Haryana (879), Punjab (895), Uttar Pradesh (912) and Gujarat (919), indicating that growth may not automatically improve gender equality.

On the contrary, the top 5 states in terms of overall sex ratio are: Kerala (1084), Tamil Nadu (996), Andhra Pradesh (993), Chhattisgarh (991) and Meghalaya (989) – some among which are harbingers of human development and female literacy.

Sex ratio is often used as an indicator by social scientists to depict the level of gender discrimination existing in a society. Although women are considered to be biologically stronger than men in terms of survival and life expectancy, gender discrimination often cuts short the life span of the unborn/born female child in a patriarchal set up.

Overall sex ratio, however, may not give a true picture of gender discrimination because due to migration one may find that more women are left behind in the rural areas vis-a-vis men, thereby, yielding high sex ratio figures. Corollary to this, when more men flock to cities and towns for livelihood, it results in low sex ratio in the urban areas.

Overall Sex Ratio - Rural, Urban and Combined (1951-2011)

As per the Census 2011 data, sex ratio in urban areas is 929 females per 1000 males while in rural areas it is 949 females per 1000 males (see the graph above). Between 1951 and 2011, sex ratio has declined by -0.32 percent to reach 943 females per 1000 males.

Instead of relying on the overall sex ratio, experts prefer sex ratio in the age-group 0-6 years so as to assess gender discrimination resulting in female foeticide & infanticide. Also, the latter rules out to a great extent the effect of migration (as discussed earlier). Low child sex ratio (for the age-group 0-6 years) is an outcome of female foeticide, which takes place because sons are preferred to daughters for various reasons including to carry forward the lineage.

Effective advocacy and policy implementations can take place only when good quality data and acceptable gender-based indicators are available. However, one may encounter a variety of problems that are associated with indicator-based study of poverty amongst women such as choice of an appropriate indicator, lack of correlation between various gender based indicators, problems with the sources of data (such as reliability), unavailability of data and qualitative versus quantitative data. Therefore, one should be careful in choosing sex ratio over other gender-based indicators to show gender discrimination.

References:

Missing Girls: Mapping the Adverse Child Sex Ratio in India (Census 2011)

http://www.censusindia.gov.in/2011census/missing.pdf

Women and Men in India 2014, 16th Edition,

http://mospi.nic.in/Mospi_New/upload/man_and_women/Women_Men_In_India_2014.htm

Chapter 1: 'Population' in Women and Men in India 2014, 16th Edition

http://www.im4change.org/siteadmin/tinymce//uploaded/Chapter%201.pdf

"The Law and Son Preference in India: A Reality Check" by Advocate Kirti Singh, United Nations, November, 2013,

http://www.im4change.org/siteadmin/tinymce//uploaded/Laws_and_Son_Preference_in_India.pdf

Maneka Gandhi Releases ‘The State of the Girl Child’ Report “Pathways to Power”

http://planindia.org/about-plan/media-centre/news/maneka-gandhi-releases-plan-india%20the-state-of-the-girl-child

More girls go ‘missing’; sex ratio declines -Smriti Kak Ramachandran, The Hindu, 30 November, 2014,

http://www.thehindu.com/news/national/more-girls-go-missing-sex-ratio-declines/article6649019.ece

Image courtesy: Missing Girls: Mapping the Adverse Child Sex Ratio in India (Census 2011)

Eminent citizens oppose Govt.'s plan to dilute MGNREGA*

People's Action for Employment Guarantee called a press conference at Indian Women's Press Corps (New Delhi) on 8 October, 2014 to oppose the dilution of Mahatma Gandhi NREGA Act. Addressing the conference, social activist Nikhil Dey informed that prior to the 16^th Lok Sabha election, BJP and other major political parties promised to improve the implementation of MGNREGA. However instead of doing so, after the election the NDA Government tried to roll back the job guaranty programme in 3 different ways—a. Budget allocation for the programme has been squeezed despite MGNREGA being demand-based; b. The Government is changing the nature of programme from labour intensive to material intensive; and c. The Act is being converted into a scheme by restricting its implementation in one-third of the blocks in India that are considered as backward.

Nikhil Dey argued that the law cannot be abrogated by the Executive. It is illegal to make changes in the schedule of MGNREGA. The Parliament too cannot be allowed to make amendments in the MGNREGA since the NDA Government at the Centre did not get the mandate to make changes in it when it was voted to power. A recent RTI reveals that due to proposed change in the labour to material ratio, officials at the Ministry of Rural Development apprehend that “5 crore households will be adversely affected by this decision” that goes against the spirit of the Act.

In order to keep the expenditure on MGNREGA (as a proportion GDP) the same as it was in 2007-08, the Government should spend nearly Rs. 60,000 crore to Rs. 65,000 crore annually at present. Dey said that the motive behind changing the labour to material ratio is to allow the entry of contractors. However, the move will also discriminate against villages where unemployment and poverty is high. The marginalized and the primitive tribals will die due to hunger and starvation in the absence of this programme.

Nikhil Dey said that MPs from across the political spectrum will be approached to oppose the dilution of MGNREGA. People shall be mobilised against the changes proposed in MGNREGA.

Former member of the National Advisory Council and RTI activist Aruna Roy alleged that the Government is in denial. She said that not all schemes are getting closed down due to the presence of corruption. However, MGNREGA has been systematically targeted since its inception. A letter to the Prime Minister of India opposing the dilution of the Act has been signed by more than 200 eminent citizens. A recent RTI reveals that the Union Rural Development Minister Nitin Gadkari has ordered to make amendment in the schedule for changing the labour to material ratio from the existing 60:40 to 51:49. This will usher in Contractor Raj, which was so far restricted to the real estate sector, anticipated Roy. Despite MGNREGA being demand driven, there has been rationing of funds. By restricting the Act to 1/3^rd of the blocks, the Govt. is trying to convert the MGNREGA into a scheme. She argued that poverty cannot be defined geographically. Even in rich cities and locations, there exists poverty and unemployment. A lot many myths have been created to tarnish the Act. It is purely a myth that assets have not been created under the MGNREGA.

Aruna Roy argued that both unemployment and underemployment can be solved via MGNREGA. MGNREGA provided employment to women, SCs and STs. Water bodies could be conserved due to the Act, which helped farming in villages. Financial inclusion of women has happened under the programme since bank accounts could be opened in their names. Almost two-third of the MGNREGA work is related to agriculture.

Retired professor of JNU Prabhat Patnaik informed that prior to the MGNREGA, India had food-for-work programme. However, the MGNREGA is different from the former since it is demand driven and also a rights-based programme. One is supposed to receive unemployment compensation if demand for employment is not met. The primary aim of the MGNREGA is to provide employment and not asset creation. Currently the Act is under danger from the Executive. If an amendment is made in the schedule of MGNREGA to change the labour to material ratio, then it will no longer remain a rights-based programme. The recent statement by the Rajasthan Chief Minister to convert the MGNREGA into a food-for-work programme indicates the Act is on the verge of being diluted.

The wages provided to the labourers employed under the MGNREGA generated demand in the village economy via the 'multiplier-effect'. It increased purchasing power of the rural masses during global financial crisis, argued Patnaik. Ideally Rs. 60,000 crore to Rs. 65,000 crore should be allocated annually under the MGNREGA to keep the real allocation constant in the face of inflation. However, presently the programme gets an allocation, which is nearly half of it.

Prof. Patnaik clarified that it is not due to fund crunch that funding to the MGNREGA has been squeezed. The Government has given huge tax concessions to the corporate rich in successive budgets. The Government has enormous amount of foodgrain stock, which is being exported. There is unutilized capacity in the industry. All these indicate that India is a demand constrained economy and, therefore, MGNREGA should not be rolled back.

The Government is presently pressuring the people to reduce demand for employment under the MGNREGA by altogether changing the Act. Commenting on restricting the MGNREGA to 1/3^rd of the blocks, Patnaik argued that poor in rich localities cannot be discriminated against poor in backward localities.

Former Planning Commission member and JNU Professor Abhijit Sen said that he is concerned about the recent developments for a number of reasons—a. MGNREGA is an Act and not a scheme. It is a right which is guaranteed by the Act. Therefore, changes should be made in the legislation first, and the Executive has no right to change it; b. The MGNREGA has faced stiff opposition even during the UPA-2. In many villages, farmers opposed MGNREGA. Wages given to labourers under the MGNREGA strengthened their bargaining power vis-a-vis the landowners and farmers. MGNREGA has changed the political fabric in the rural areas. Therefore, being a political issue, the Executive has no right to change it; c. The MGNREGA has been underestimated. Those who are against it say that it has increased the cost of production. Some of it is exaggeration. For example, it is the growing construction sector in Bihar that absorbed labourers in that state, and not the MGNREGA, due to which agriculture in Punjab suffered.

Abhijit Sen informed that there used to be a number of employment schemes running in the country prior to the MGNREGA. Expenditure on the Jawahar Rozgar Yojana (JRY) as a proportion of GDP prior to 2004 had been higher as compared to the expenditure made on the MGNREGA (as % of GDP). Many of the sample surveys done earlier did not show significant increase in employment under the JRY. However, NSS surveys surely indicate rise in employment under MGNREGA. Employment generation has been the main objective of the MGNREGA and not asset creation. However, there is evidence that more assets are being created under the programme lately. At the time when Prof. Sen left Planning Commission, the preliminary findings of the programme evaluation of asset creation under MGNREGA revealed more assets are being created under the Act. He said that amendments to the MGNREGA is a political matter and, therefore, it cannot be left to the Executive.

Abhijit Sen clarified that the proposed changes in the schedule of MGNREGA is different from the changes in guidelines that was recommended by Dr. Mihir Shah of Planning Commission earlier. He said that MGNREGA 2.0 involved an open and transparent consultation process. It gave more powers to the panchayats in opting the type of work required in their respective villages.

Noted lawyer and Additional Solicitor General of India Indira Jaising informed that various senior bureaucrats have agreed that the MGNREGA contributed to the welfare of the poor. Corruption cases in MGNREGA in states of Bihar and Odisha have taken matters to the court. There is clarity in the Act on what proportion of funds should come from the Centre and the state/s. It is widely documented that the MGNREGA enforces the Directive Principles of State Policy embodied in article 39 and 41.

Norati Devi, sarpanch of Harmada panchayat in Ajmer district of Rajasthan said that the MGNREGA provided livelihood security. The programme improved drinking water facility in her village apart from ensuring food security. She demanded that MGNREGA should not be rolled back since many people will become unemployed and fall into poverty in the absence of this Act.

For more information, please check the links below:

Government rolling back rural job scheme, say activists, IANS, The Business Standard, 8 October, 2014, http://www.business-standard.com/article/news-ians/government-rolling-back-rural-job-scheme-say-activists-114100800982_1.html

Do not dilute MGNREGA, eminent citizens ask government, Business Standard, 8 October, 2014, http://www.business-standard.com/article/economy-policy/do-not-dilute-mgnrega-eminent-citizens-ask-government-114100800832_1.html

Human rights groups criticise govt, PTI/ Business Standard, 8 October, 2014, http://www.business-standard.com/article/pti-stories/human-rights-groups-criticise-govt-114100800901_1.html

Proposed changes to rural job scheme will hit 5 cr households, say activists, The Hindu Business Line, 8 October, 2014, http://www.thehindubusinessline.com/industry-and-economy/proposed-changes-to-rural-job-scheme-will-hit-5-cr-households-say-activists/article6482199.ece

* While utmost care has been taken in good faith to summarize the main speakers’ views, these may not be exact quotes. Please check with the speakers for verbatim quotes. Advance apologies for any factual error.

 

Rising inequality can hurt peace and justice, says UNDP report

Just when the entire world has started clamouring about the new book on inequality by French economist Thomas Piketty, it becomes essential to mention a UNDP report on the same subject that was released in early 2014. Entitled: Humanity divided: Confronting inequality in Developing Countries, the UNDP report claims that the richest one percent of the world population owns about 40 percent of the world's assets, while the bottom half owns no more than one percent. It warns that inequality could shake the foundations of development, and social and domestic peace. Among other things, the social impacts of inequality include unemployment, violence, crime, humiliation, and deterioration of human capital and social exclusion, informs the report. (Please see the links below).

The report has stated that in populous countries like India and China, household income inequality is rising. The Gini index of primary income distribution in India rose from 33.0 in early 1990s to 35.7 in late 2000s. Similarly, Gini index of secondary income distribution rose from 31.4 in early 1990s to 34.0 in late 2000s*. (Please see the table 1 below for details).

Using the data provided by Abhijit Banerjee and Thomas Piketty (2010) in a study, the UNDP report tells that the richest 1 percent's income share witnessed a rise between 1990 and 1999 in India (see box 3.2, page 86 of the original report).

The role of Indian government in promoting “faster, sustainable and more inclusive growth” relying on decent employment during the 12^th Five Year Plan has been stated in the report. It is said that India has started experimenting with small and medium enterprise (SMEs) financing through central bank mechanisms along with special public funds to stimulate and guarantee bank loans linked to their business plans. Since land reforms are problematic, the report emphasizes on improved access to infrastructure, including physical and social infrastructure so as to improve agricultural productivity. The report observes the positive impacts of Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) such as increasing rural wages, reducing distress migration, improving infrastructure, reducing unemployment and underemployment, encouraging agricultural productivity and reducing malnutrition.

Discussing the merits and demerits associated with various types of subsidies, the report says that total expense on food subsidies in India constituted US$12.4 billion, or 1 percent of the GDP as compared to 3 percent directed to education in 2009 (Jha et al., 2011). On gender equality, the report informs that the reform of inheritance laws in India, which granted women the right to inherit or own land or capital property through amendments to the Hindu Succession Act, increased women’s land inheritance, but also improved their control over economic resources in the household and their intra-household bargaining power. Quotas as part of affirmative action policies to promote the employment of scheduled castes and tribes in the public sector is also discussed in the report.

According to the UNDP report, a significant majority of households in developing countries – more than three-quarter of entire humanity – are living today in societies where income is more unequally distributed than it was in the 1990s. Although redistribution remains crucial to reducing inequality, the report calls for a shift towards a more inclusive pattern of growth, one that raises the incomes of poor and low-income households faster than average in order to sustainably reduce inequality, key to the post-2015 development agenda.

The report has identified the main drivers of inequality, namely—a. Inadequately regulated financial integration and trade liberalization processes, whose benefits have been distributed very unequally across and within countries; b. Domestic policy choices, such as interventions that weakened labour market institutions or resulted in a downsizing of public investments in critical sectors like health, education and social protection; c. Various economic, social and cultural barriers hindering the political participation of various segments of the population; and d. Discriminatory attitudes and policies that are marginalizing people on the basis of gender or other cultural constructs such as ethnicity or religious affiliation drive many intergroup inequalities.

Incidentally, the world owes a lot to the managing director of the International Monetary Fund (IMF) Christine Lagarde who conjured up everyone's interest on inequality. While delivering the Richard Dimbleby Lecture in London on 3^rd February this year, she paid special attention to inequality as a leading cause for global instability. (Please see the link of her lecture below).

The key messages of the UNDP report entitled: Humanity divided: Confronting inequality in Developing Countries (January, 2014) are as follows:

• On average—and taking into account population size—income inequality increased by 11 percent in developing countries between 1990 and 2010.

• A significant majority of households in developing countries—more than 75 percent of the population—are living today in societies where income is more unequally distributed than it was in the 1990s.

• Evidence shows that, beyond a certain threshold, inequality harms growth and poverty reduction, the quality of relations in the public and political spheres of life and individuals’ sense of fulfilment and self-worth.

• There is nothing inevitable about growing income inequality; several countries managed to contain or reduce income inequality while achieving strong growth performance.

• Evidence shows that greater income inequality between households is systematically associated with greater inequality in non-income outcomes.

• Inequality cannot be effectively confronted unless the inextricable links between inequality of outcomes and inequality of opportunities are taken into account.

• In a global survey conducted in preparation for this report, policy makers from around the world acknowledged that inequality in their countries is generally high and potentially a threat to long-term social and economic development.

• Redistribution remains very important to inequality reduction; however, a shift is needed towards more inclusive growth patterns in order to sustainably reduce inequality.

• Reducing inequality requires addressing inequality-reproducing cultural norms and strengthening the political agency of disadvantaged groups.

• Evidence from developing countries shows that children in the lowest wealth quintile are still up to three times more likely to die before their fifth birthday than children in the richest quintiles.

• Social protection has been significantly extended globally, yet persons with disabilities are up to five times more likely than average to incur catastrophic health expenditures.

• Despite overall declines in maternal mortality in the majority of developing countries, women in rural areas are still up to three times more likely to die while giving birth than women living in urban centers.

• Besides improving the progressivity of taxes, it is important to expand the tax base in developing countries as a way to mobilize additional resources.

Note:

* The analysis of the trends in income inequality has been focused on the distribution of income between households in an economy. One can interpret household income distribution in three ways (van der Hoeven, 2011):

a. Primary income distribution: the distribution of household incomes consisting of the (sometimes cumulated) different factor incomes in each household before taxes and subsidies as determined by markets and market institutions

b. Secondary income distribution: the distribution of household incomes after deduction of taxes and inclusion of transfer payments (i.e., as determined by fiscal policies)

c. Tertiary income distribution: the distribution of household incomes when imputed benefits from public expenditure are added to household income after taxes and subsidies. This interpretation of household income is particularly relevant for developing, emerging and developed countries, as different government services are often provided for free or below market prices.

** Distribution of income across households or individuals in an economy is usually measured using the Gini Index of inequality, which varies between zero and 100, with zero reflecting complete equality and 100 indicating absolute inequality.

References

Humanity divided: Confronting inequality in Developing Countries (January, 2014), UNDP

http://www.undp.org/content/dam/undp/library/Poverty%20Reduction/Inclusive%20development/Humanity%20Divided/HumanityDivided_Full-Report.pdf

http://www.undp.org/content/undp/en/home/librarypage/poverty-reduction/humanity-divided--confronting-inequality-in-developing-countries.html

http://www.undp.org/content/dam/undp/library/Poverty%20Reduction/Inclusive%20development/Humanity%20Divided/HumanityDivided_overview.pdf

Warning of 'humanity divided,' UN urges job creation, inclusive growth strategies, The United Nations, 29 January, 2014, http://www.un.org/apps/news/story.asp?NewsID=47039&Cr=inequality&Cr1#.U2wzC9xdHVI

Capital in the 21st century -Thomas Piketty, http://piketty.pse.ens.fr/en/capital21c2

Banerjee, A. and T. Piketty (2010). “Top Indian Incomes 1922-2000”, in Atkinson, A. B. and T. Piketty (eds), Top Incomes: A Global Perspective, Oxford University Press, chapter 1, http://global.oup.com/academic/product/top-incomes-9780199286898;jsessionid=C8BCCC3A901A212BDC55B5EAD4FFF2CF?cc=in&lang=en&

Jha, R., R. Gaiha, M. K. Pandey and N. Kaicker (2011). “Food Subsidy, Income Transfer and the Poor: A Comparative Analysis of the Public Distribution System in India’s States”, ASARC Working Paper 2011/16. Canberra: Australia South Asia Research Centre.

A New Multilateralism for the 21st Century: the Richard Dimbleby Lecture By Christine Lagarde, Managing Director, International Monetary Fund, London, February 3, 2014, https://www.imf.org/external/np/speeches/2014/020314.htm

Why We’re in a New Gilded Age-Paul Krugman, The New York Times, 8 May, 2014, http://www.nybooks.com/articles/archives/2014/may/08/thomas-piketty-new-gilded-age/

The Taxation of Wealth-Prabhat Patnaik, People's Democracy, Vol. XXXVIII, No. 18, May 04, 2014 , http://peoplesdemocracy.in/2014/0504_pd/taxation-wealth

The 1 Percent’s Problem by Joseph Stiglitz, May 31, 2012, Vanity Fair,

http://www.vanityfair.com/politics/2012/05/joseph-stiglitz-the-price-on-inequality

RURAL URBAN GAP SHRINKS BUT INEQUALITY RISES

http://www.im4change.org/news-alerts/rural-urban-gap-shrinks-but-inequality-rises-16499.html

RURAL URBAN DIVIDE: A TALE OF TWO INDIAS

http://www.im4change.org/news-alerts/rural-urban-divide-a-tale-of-two-indias-15424.html

People’s perception about Delhi’s public transport

I live in a country where leaders and elderly men believe that eating of chowmein prompt young men to rape our sisters and daughters. In a nation whose female labour force participation rate has been falling over the last ten years, women do not feel safe while traveling to their workplaces even in a city like Delhi.

The gruesome gang rape of Nirbhaya inside a bus in Delhi on 16 December, 2012 has brought the public transport system under microscope. The results of a perception survey done for Delhi Human Development Report 2013 reveals that only a small fraction of the respondents (both male and female) thought that public transport was very secure (0.4 percent) or secure (12.5 per cent) for women. Focus Group Discussions (FGDs) finds that respondents felt women were the least secure while using public transport and most safe in spaces closer to their homes. Female respondents felt that buses were the worst type of public transport in terms of safety since they were harassed by both the young and old, illiterate and educated men.

Perceptions about the safety of public transport for women decreased with increasing education levels. The illiterate and the less educated respondents perceived public transport to be safer than those who were educated up to the graduate level and above.

The male respondents disliked the relatively long time taken by buses to travel from one destination to another, while the female respondents cited the indecent behaviour of bus drivers, conductors and co-passengers as their reasons for disliking the same.

While men, in general, were appreciative of the transport system in Delhi as a whole, women specifically appreciated the Metro service. Women, on the whole, reported disliking the transport system in Delhi, possibly due to issues of safety and overcrowding, among other reasons. Women claimed that the separate women’s compartment in the Metro was a welcome feature.

Overcrowding, non-availability of direct Metro facilities to various locations, lack of toilets at all the metro stations and expensive fares were reasons whereby the Metro seemed to fall short of people’s expectations. The perception survey finds that the percentage of people using the Metro is still the least among the lowest income groups and increases as one ascends the economic ladder, which is in contrast to DTC buses, for which the usage falls as one climbs up the economic ladder.

Two fifths of respondents felt road conditions are below average in the city of Delhi while a little over a third felt the same to be above average.

A recent survey of 3,400 Delhi women by the PHD Chamber of Commerce and Industry reveals that 43 percent of them are looking for a job out of Delhi. This is because of Delhi's unsafe environment.

References

Government of Delhi (2013): Delhi Human Development Report 2013,

http://www.im4change.org/docs/522Delhi-Human-Development-Report-2013.pdf

43% of migrant women want to quit Delhi: Study -Smriti Singh, The Times of India, 13 March, 2014, http://www.im4change.org/latest-news-updates/43-of-migrant-women-want-to-quit-delhi-study-smriti-singh-24497.html

Image Courtesy: Millennium Development Goals: India Country Report 2014, MoSPI,

http://www.im4change.org/docs/242mdg_2014.pdf