It's time to transmit economic progress to the underprivileged

Regardless of the nature of the economic, political and social order, ensuring equal opportunities or economic justice is an avowed goal. In the year 2000 the United Nations Development Programme (UNDP) came forward with Millennium Development Goals that included eradication of extreme poverty, achievement of universal primary education, women empowerment, reduction in child mortality and environmental sustainability.

 Measured against the Millennium Goals, India’s progress has been lopsided for want of focus and urgency, despite impressive economic growth. Although comparisons are odious on account of vastly different political systems in China and India, larger masses of people have gotten out of poverty in China. The percentage of the population that has missed the bus of economic progress and security in China is 11 per cent as and in India it is 31 per cent.

The latest report of the UNDP shows that India’s ranking among 169 nations under the UNDP Human Development Index has slid down to the 119th position. If recalibrated for disparities in income, education and healthcare, it would slide further down. The UNDP Report 2010 shows that Brazil and China are ahead of India with HDI of 0.699 and 0.663 as against India’s 0.519. When HDI is adjusted for inequalities in income, education and health care, the Index for India goes down precipitously to 0.319 but stays high for Brazil and China. Benchmarks such as infant mortality, life expectancy at birth are way behind those of other countries such as Sri Lanka and Vietnam. The silver lining is that the Gini coefficient of 36.8 for India is lower than 41.5 for China or 55.0 for Brazil.

Adherents of most economic persuasions welcome this generic sentiment of caring for the poor for the sake of overall solidarity and for broad-basing material well-being. Like Kaushik Basu states “very often the equity objective and the growth objective are treated as two separate targets (for an economy) but that is not right” and “everyone should be included in the growth bonanza.” Inflation of the order of 10-15 per cent further exacerbates rich-poor disparities and intensifies social strife.

Now the question of catering to those at the bottom of the Economic Pyramid. The late C K Prahlad would say, it is good business to cater to those at the bottom of the economic pyramid. This was also the drift of John Ruskin’s Unto the Last, a masterpiece credited with starting the theme of social economy. Given the ethos of mass destitution, often growth increases disparities. Provision of food, clothing, education, health care and crime-free environment would be the best antidote to Maoist-Naxalite terrorist activities in Andhra, Bihar, Chhattisgarh, Jharkand, and elsewhere.

 Inequality can be moderated just like under the normal bell shaped curve, with a majority of the households hovering around the mean value and almost all households falling within a couple of standard deviations from the mean. Outliers, the scheduled tribes and castes, on the left-side of the bell curve need the maximum possible uplift. Otherwise, democracies tend to become oligarchies of the privileged.

Institutionalised inequities

Everywhere income gaps are widening: The cliched assertion: the rich are getting richer and the poor are getting poorer – is too conspicuous to be missed, even in communist China. China’s emphasis on economic growth has ignored greenhouse gas emissions such as carbon dioxide, methane, nitrous oxides and ozone. There is thus self-evident environmental degradation, higher incidence of cancer, and a lowering of Life Index (PQLI), thereby aggravating disparities in standards of living. In a 2005 PQLI Report of The Economist, India’s rank was 73, China’s 60, and Vietnam’s 63.   There is ample support for environment-friendly technologies and avoidance of cocacolanisation in industrial development. Foreign practices and technology need to be notched to local specifications. Imitation is deleterious and may institutionalise inequity.

Corruption pervades almost all walks of life and aggravates inequalities. Transparency International’s (TI) Corruption Perceptions Index (CPI) for India is 87 and for China 78. Everyone has a role in putting an end to the ambiance that encourages officials to extort bribes running into countless crores. There is a serious deficiency in national character worsening the gap between the haves and have-nots. Unearned and tax-evaded incomes increase income disparities.

Nobody would ask the government to tax incomes 100 per cent and distribute the proceeds equally to end inequalities. What is disturbing is that there is hardly an earnest urge in Indian governance to encourage a just and caring social order. Government and the private sector could promote technology and jobs for the rural masses so that there is an all inclusive growth of all segments and no population segment is left out. It is time to transmit economic progress to the underprivileged to prevent jasmine revolutions like in Arab countries.

It would be unfortunate if radical elements, with little respect for democratic institutions took advantage of the deprivation of the low castes and tribes, and politically hijacked them and created anarchy like in Nepal. Spreading equal opportunities in education, health and minimum standards of living is our best hope for rapid inclusive growth which alone propels all-round progress.