Economy

The Socio-Economic Census Confirms that Indians are Poor. Now Wait for the Politics.

Women at a construction site in New Delhi. Credit: R Barraez D´Lucca/Flickr, CC BY 2.0

Women at a construction site in New Delhi. Credit: R Barraez D´Lucca/Flickr, CC BY 2.0

The much-awaited findings of the 2011-12 Socio Economic and Caste Census—the first since 1932—do not present a pretty picture on the state of poverty and deprivation in India. About 49% of the rural households show signs of poverty as per seven indicators of deprivation. Also 51% of the households have “manual casual labour” as the source of income. This reflects the rather precarious existence of over 450 million people in rural India.

The government has released data only for rural households so far. Politics around the new findings seems to have already begun. Based on the new data on rural deprivation, some commentators have quickly jumped to the conclusion that the UPA’s food security law has overestimated the rural population to be covered for delivery of subsidized grains. They have argued that the food security law seeks coverage of 75% of the rural population whereas the socio-economic and caste census indicated that only 49% of the rural households showed signs of poverty.

However, the intention of the food security law was to cover populations well beyond those who were in dire poverty. In fact, BJP leaders like Rajnath Singh, Murli Manohar Joshi, Raman Singh and Shivraj Chauhan had publicly spoken about universal coverage under the food security programme. The BJP had fully backed the food security law in Parliament. However, like the U-turn in the case of the land bill, there are murmurs within the government that the food security coverage needs to be targeted better, a euphemism for reducing the number of people being given subsidised food grains and other items. The Shanta Kumar Committee had fired the first salvo last year by suggesting it was enough to target 40% of the population for food security, as against the 67% mandated by law.

A big mistake

Many right-wing economists advising the BJP may be tempted to argue that the socio-economic caste census supports Shanta Kumar Committee’s recommendation in regard to the population to be covered under the food security programme. Accepting that argument would be a big mistake on the NDA’s part. In any case, 11 states are already implementing the food security law by doing their own rough estimates of deprived population and many of them are covering over 75% of the population, on average. It will be politically disastrous to cut the coverage.

Before the economic advisors of the NDA jump with joy that the government could save money by reducing its food subsidy bill, they may want to look at another data-set disclosed by the census. This says that 92% of rural households report the maximum income earned by a family member at below Rs.10,000 a month.  Such a family would certainly seek subsidised food entitlement.

The Census says 75% of the households reported the highest income of a member at less than Rs.5000 a month.  So 75% of the rural population should prima facie qualify to food security entitlements. This finding clearly matches the assumption made for rural population coverage(75%) in the food security law itself. Therefore any attempt to tinker with this will have serious consequences.

Politics of poverty

The socio-economic and caste census results can be interpreted in many ways depending on one’s ideological proclivities. The larger truth however remains: the extent of poverty and deprivation is still very high in India. The census will serve merely as a rough guide for targetting welfare programmes of the government.

The survey uses some key indicators of deprivation which point to subsistence level existence. These include kuchha houses, landless households engaged in manual labour, households without a working adult or headed by just a female adult without regular work and all SC/ST households.  All households with these characteristics are automatically included for delivery of welfare programmes. The automatic inclusion of all SC/ST households could become a political issue because a small fraction of SCs or STs may have assets or incomes which would entail their exclusion from the delivery of anti-poverty welfare schemes.

There are clearly laid down exclusion criteria for the exclusion of rural households. Some of these are:

  • Ownership of motorized 2/3/4 wheeler or fishing boat
  • Mechanised 3 or 4 wheeler agriculture equipment
  • Kisan credit card with a credit limited of Rs.50,000
  • Any household member earning more than Rs.10,000 a month
  • Any household member paying income tax
  • Ownership of 3 or 4 rooms pucca house with a pucca roof
  • Ownership of more than 2.5 acres of irrigated land with one irrigation equipment

The one politically sore point that might be raised by backward caste groups is that some SCs and STs may be covered under these exclusion criteria. For instance many SC households in rural India may have one government employee in their family who pays income tax. If that is the case then why are all SCs automatically included for coverage under various anti-poverty schemes? The Other Backward Classes (OBCs) are eagerly waiting for the census findings as they appear convinced that deprivation among them is quite high and the 50% limit on reservations imposed by the Supreme Court actually leaves a lot of their socially and economically disadvantaged out. This is another political hot potato the NDA will have to grapple with. It is not for nothing that the caste census was fully backed by all prominent OBC leaders across all political parties. The politics around the new census will certainly play out in due course.