There was a need to incorporate economic fundamentals in the legislation on land acquisition as proposed but that was lacking. Self-explanatory Figure A8.1 indicates how the price per unit of land supplied by farmers would be constrained reflective of government policy. It describes the agricultural land market in which government has entered with the objective of acquiring land on behalf of industry – public or private or in combination. S(L) is the supply curve of land which is a summation of distinct supply curves of individual farmers. While each farmer is likely to have a different valuation of his land asset and therefore possess a different price-to-supply relation, overall, the market sums up to S(L). Note that S(L) is upward sloping since more land will be offered in the market as a whole only as the price per unit of land increases.

On the other hand, the industrialist has a demand curve D(L) for land needed for his proposed project which reveals that he will tend to demand more land as its per unit price diminishes. However, he has a maximum per unit price, OF, which he will not venture to offer for the land he requires. It is important to point this out since governments, in particular some state governments, run to offer land at prices above which they tend to believe industry would not be attracted to invest.

If government did not intervene, then equilibrium in the market would occur at C, the demand– supply intersection, at a price of CL and the land exchanged would be OL. The problem is that this amount of land is insufficient for the project, the requirement being larger (OL). At this point, AB emerges as the measurement of mismatched prices, the suppliers wanting a price of AL per unit and the buyer offering only to pay BL per unit reflecting a mismatch in the demand and supply curves, AB at L. So, government intervenes to find ways to acquire OL amount of land, and usually at a per unit price of less than AL.

Balboni et al. (2020) considered the impact of a small transfer of an asset in a study carried out in Bangladesh. Villager groups who were given one milch cow did significantly better in earning future incomes than did comparable groups who did not receive the asset. They used data from Bandiera et al. (2017) pertaining to a region in Northern Bangladesh on 23,000 households living in 1,309 villages in the 13 poorest districts in the country. Of these households, over 6,000 were considered extremely poor; the lack of opportunity prevented 96 per cent of the sample villagers from undertaking presumably a preferred optimal occupation since access to opportunities depended on initial wealth.

The researchers used a transfer programme comprising the random allocation of an asset – milch cow – in 2007 that gave some of the poorest women in Bangladesh access to the same work opportunities as their wealthier counterparts in the same villages. The livestock was transferred jointly to a finite number of poor households versus those who did not receive such transfer. Monga, the selected region, was a famine-prone region which experienced irregular demand for casual wage labour mainly employed in agriculture and domestic service. They faced high grain prices, extreme poverty and food insecurity. The richer were usually self-employed and were found in livestock rearing and land cultivation. Productive assets set the rich and poor apart – the former possessing 94 times higher assets than the latter on average.

Exploiting variations in initial endowments, they concluded that, if a programme pushed individuals over a threshold level of initial assets, then they could get out of persistent poverty. In fact, transferees continued to acquire new assets on their own that, combined with own labour, generated further income, generating an accelerator perhaps. But if the threshold was not crossed, for example by those whose baseline assets were so low that the transfer could not heave them over the threshold, then they slid back, and were trapped back in poverty. Thus a poverty trap did exist.

Another study by Bari et al. (2021) focused in Pakistan analysed the impact of loans tied to the hire-purchase of assets for business purposes.

Undertaking a study of the poor

The objective of this volume is to identify the sources of poverty and inequality in India, to draw instances from the global experience, to analyse their manifestations and ramifications and to explore solutions for eradicating poverty and alleviating inequality. Poverty is found not to be a condition for which subsidies and the provision of work would suffice. Global examples, including India, reveal that the genesis is more fundamental, more intrinsic, more embedded, indeed, generated by deliberate events that occurred and can be traced in recorded history. Those events separated some population groups from others through identifiable means and, sometimes, by imposing conditions by decree. Identifiable sources include enslavement, racial and gender differences, as well as discrimination against the indigenous, sexual minorities if identified, religions other than that of the majority and other differences. An example of non-identifiable means that stands out is caste determined at birth which is the particular case of the Indian subcontinent. There appears to be no universal scholarly agreement whether the establishment of caste came about from the segregation of an indigenous or settled population by an invading population, its extreme manifestation being the untouchability of one person by another.

After millennia of contiguous existence, there remains little physical difference among castes. Therefore, the prevailing practice of caste is ensured by identity markers such as surnames, birthplace, or assigned occupation (see Chapter 6). Similar instances occurred in history during periods of colonialism and slavery and post-abolition periods in other societies (see Chapter 5). In every case, the process that occurred and continues to occur comprises exclusion, isolation, domination and perpetration of social and economic differences. It leads naturally to inequality and to poverty by predetermining occupations, thus curtailing the freedom to choose a profession according to one's ability or desire. In turn, this gives rise to distortions in the natural choices that would be otherwise made by the members of a society. These distortions are found to be of varied intensities and tend to lead to a society's production outcomes that are well below its potential or what economists term the ‘production possibility frontier’.

Introduction

This chapter attempts to reveal how racism and colonialism have comprised important factors in the genesis of poverty and inequality across the world. It would be pertinent to begin with a quote from Gilroy (2019):

This chapter will pursue arguments along the earlier-mentioned lines in an attempt to establish their roles in perpetrating poverty and inequality.

Genesis of poverty and inequality

A reflection on the incidence of poverty and inequality globally leads to an inevitable conclusion, that they are not self-generated but are constructed, imposed and often perpetuated.

The genesis of inequality and, consequently, of poverty is a timeless phenomenon of societies. Indeed, the very nature of Man in its ability to remain in a state of opacity regarding the phenomenon, has to be pondered. In that vein, poverty and inequality must reflect certain societal beliefs and actions that must generate and elevate them. They comprise,

• • first, to exclude, a portion of society from the rest. Exclusion can be specified in various ways. The more the exclusion is layered, the higher is the number of exclusion criteria and excluded categories generated;

• • second, to isolate the excluded categories preferably into non-intersecting groups, more often than not by locating their residences apart and prohibiting any social interaction between them except for well-defined economic functions for which the input of a particular category may be needed by another category;

• • third, to dominate them in as many ways as possible thus ensuring that the economic return diminishes per unit of work as the order of categories is descended even if those occupying the bottom categories approach extreme poverty;

Introduction

India's growing inequality since economic liberalization and even earlier has been of increasing concern to fair-minded social scientists. Chancel and Piketty (2017) authored an analysis drawing attention to the issue. Drawing on this and subsequent and previous research carried out by various researchers, as well as the Human Development Report (HDR) published annually since 1990, this chapter examines the state and trajectory of inequality in India. It notes that, though India has made progress in the dimensions or components of the HDI, it has fallen behind comparable countries. It, therefore, needs to speed up if it were to achieve the United Nations’ Sustainable Development Goal (SDG) of ‘leaving no one behind’ by 2030 to which it is signatory.

Inequality indicators in India

India has experienced some success in its story of income growth, but a question remains as to the extent to which its income inequality has been addressed. Available data focuses on the above-20 age group as the incomegenerating section of the population. That comprised 351 million in 1980– 81, 778 million in 2013– 14, 810 million in 2015– 16 and 872 million in 2019– 20 reflecting the last available population data. What may be concluded from analysis is that there has been consistently worsening inequality when the averages of annual growth rates of group incomes for 1980– 2016 are examined.

From the state of the ‘bottom’ 50 per cent of this group, and even the next 40 per cent, that is, all but the top 10 per cent, there is little doubt that controlling income inequality remains the most intractable prevailing challenge for Indian society. Indeed, based on sporadic reports reflecting indirect indicators, the situation has been worsening and consistent updated data are eagerly awaited by domestic and international analysts alike.

Table 4.1 dissects income inequality over time. Between 1980– 81 and 2015– 16 (36 years), the share of national income declined significantly for the bottom 50 per cent population – from 23 per cent to 15 per cent – and for the next 40 per cent population – from 45 per cent to 29 per cent. Contrarily, it increased significantly for the top 10 per cent – from 7 per cent to 21 per cent– – as well as its component groups. However, interestingly, the numbers reveal that the degree of inequality on account of the top 1 per cent dipped between 2013– 14 and 2015– 16.

That slavery left an indelible mark on the US economy and society is without doubt. Its manifestation in the form of a continuation of inequality has been analysed by many authors. By the end of the 20th century, when economic growth slowed and inequality of income and wealth grew, whatever income gains there were, primarily benefited smaller slices of the population at the top.1 As income and wealth distribution worsened, microeconomic aspects began to be analysed revealing how worsening distribution obstructed the economy and its economic mobility. Boushey (2019) reviewed this literature comprehensively. Chetty et al. (2017) found that fewer children from the middle class and at the bottom did better than their parents did, countering the achievements of the 1960s and 1970s. They estimated that 70 per cent of the decrease in absolute mobility would not have occurred had the inequality in income and wealth been kept in check. Clearly, for the US youth to move up, the gap between incomes at the top and the bottom has to narrow.

Economic inequality led to health inequality that, in turn, exacerbated differences in lifelong skills of people. Goldin and Katz (2010); Almond and Currie (2011); Currie and Thomas (1999) – demonstrated this in various ways. In the UK, 17,000 children born during one week in 1958 and tracked through adulthood, revealed that healthier ones passed school English and maths more easily; they were 4– 5 per cent more able to have jobs, and received higher wages at age 33. Based on this, Currie and Hyson (1999) concluded that children's health at birth relates to health during life. Others related birth weight to the probability of graduating high school. Adult employment was also related to birth weight. Thus, child and family characteristics at school entry explained the number of years of education as well as other outcomes such as future employment. Epidemiologist David Barker pointed to mother's nutrition and health rather than only genetics or poor lifestyles as determinants of health disorders. These researchers have consistently taken the view that prenatal conditions had lifelong ramifications.

Education differences have had a dual directional relation with inequality, one feeding the other. Out of the 31 Organisation for Economic Cooperation and Development (OECD) member countries, the US ranks 20th in formal childcare, and 29th in preschool enrolment.

Macro-Economic Comparisons: Selected Economies

Introduction

The concluding chapter proposes a range of policies based on a spirit of ‘radical humanism’ that could successfully address the challenges of extreme poverty and deepening inequality in India. Why this term is being used may be explained by the radical nature of the proposals while being based on a humanism whose objective is to vanquish poverty and inequality. Earlier chapters had, at various points, explained the need to combine economic, socio-economic and anthropogenic aspects, not shying away from subjectivity to justify a set of arguments and proposals that are found acceptable to traditionalists (Levinas, 2006). The term ‘radical humanism’ was brought up by Amery (2009), in illustrating his experience in a Nazi concentration camp of enduring torture and its supply chain. To quote Gilroy (2019),

Amery's recounting of his past is reminiscent of that of the helpless, castaway atishudra, at least metaphorically, both conditions reflecting the accident of birth. Perhaps this imagination is inept reflecting that it is not possible to imagine life experience in either condition unless one has actually lived it. Ironically, technology has contributed useful, eye-opening illustrations of this condition in recent times.

Introduction

This chapter presents in a nutshell the development of untouchability as progressively enunciated in Brahmanic law. It could explain to some extent the pre-conditions of non-Brahminic low-caste birth into a drudgery of life, a condition that, in many instances, ends only with death. It draws from the work of Ambedkar (1936) and supplements it from the works of other scholars. Ambedkar (1891– 1956), the father of India's constitution, himself belonged to the Scheduled Caste (SC). What is not so well-known is his unsurpassed treatise on caste and untouchability, sorting through ancient texts to identify what they had to say on caste matters, the confusion they caused, their irrationality and their dogma, yet the power they held, and continue to hold on Hindu society.

The chapter also explores the role and efforts made by early Indian reformers to subdue the virulence of untouchability and caste if not to eradicate them and, essentially, their failure to do so despite their own exemplary lives with regard to the abrogation of caste practices. Several examples are given and instances are provided from the literature of Tagore, the Nobel laureate from Bengal, and the writings of Kalki, the Tamil literary figure, despite which they encountered lack of success in their endeavours.

Ambedkar's analysis of Hindu shastra

The untouchable caste Ambedkar was born into is known as Mahar, a group which was viewed by the British as ‘inferior village servants’. Nevertheless, Ambedkar's father became an Indian Army officer; hence Ambedkar could attend school though teachers were often reluctant to mark the exams of such lower-caste boys. Ambedkar was the first in his community to graduate from high school who, subsequently, graduated in economics and politics from Bombay University. There he met Sayaji Rao III, the Maharajah of the princely state of Baroda, who was in favour of the removal of untouchability. He sponsored Ambedkar's further education at Columbia University, New York, where he completed a Masters degree and a PhD. He also attended the London School of Economics (LSE). During this period, Ambedkar wrote on various issues including a history of caste in India.

Introduction

The primary motivation of this chapter is to draw attention to the deleterious ramifications of uncontrolled population growth on poverty and the happiness of a society. There was a short period in the 1960s during which the link between rapid population growth and famine and pestilence was pointed out by citing Malthus's (1798) early work, as well as of others. Recalling Bacaër (2011),

Advancement of society and an economy was linked to the ability of a country to control population growth. Multilateral institutions strongly encouraged population control for developing countries. Following this policy route, China opted in favour of a one-child policy with severe consequences for those who failed to adhere to it. India too had a population policy encouraging a two to three children family but abandoned it later.

With global advancements in crop production, disease control, education levels, and rapid improvements in per-capita gross domestic product (GDP) often accompanied by enhancements in the economic standard of living, the earlier emphasis on the need for population control receded. Two factors seemed to play a part. First, economic advancements seemed to have imparted a sense of confidence to advanced and developing economies alike that a high rate of population growth could not only be managed but used for further advancements of individual economies. This was termed the ‘demographic dividend’. Second, there was a reappearance of a major influence of the declared Western religions to re-emphasize the abrogation of the use of population control methods across the globe and that influence appears to have come to stay

Introduction

In this chapter, we selectively examine the significance of nutrition and health as well as the role of clean water, for example, what is likely to happen to the poor if natural resources such as water are insufficiently available to them; what is the extent of food security and its effects on nutrition and health including on the urban poor? How do urban pollution and the lack of sanitary facilities affect the poor? And how forest inhabitants’ flailing rights impinge directly on the poor. Some of India's new laws created legal entitlements over discretionary disbursements and demarcated new identification markers for beneficiaries (Chiriyankandath et al., 2020). Were they sufficient? These are some of the questions that will be addressed.

Nutrition and health

Under a Common Minimum Programme (CMP), India's United Progressive Alliance (UPA-I) government (2004– 09) introduced a number of social insurance measures reflecting a Right to Food Campaign (RFC) that included the universalization of an existing midday meal programme, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the Forest Rights Act. In its second term, the United Progressive Alliance government (UPA-II, 2009– 14) introduced additional programmes including the National Food Security Act (NFSA) and a reform of child development. By then, important architects of the earlier programmes had left, and the new efforts came under critical expert examination. Desai and Vanneman (2015) have assessed that they were not successful in expanding India's Public Distribution System (PDS) targeted to poor households or in strengthening the Integrated Child Development Scheme (ICDS) for child nutrition. Access to subsidized grains via the PDS was not linked to improved child nutrition, and the ICDS had a limited reach despite its universal application. The authors proposed that such programmes should begin with the identification of undernourished children and districts where they were located. This should be followed up with targeting severe and moderate malnutrition, rather than merely focusing on cereal distribution as was the case with the NFSA. Chiriyankandath et al. (2020) argued that a good part of the explanation of their relative lack of success was political, the UPA-II coalition being less assertive than UPA-I.

The Bank of International Settlements Red Book of March 2021 reported 2018 figures which enable a comparison of cash use in Brazil, China and India. To begin, cash in circulation in terms of GDP has been higher in India (11.3 per cent) than in China (8.9 per cent) though in Brazil it has been much lower (3.8 per cent) reflecting a mammoth successful attempt in the 1990s towards non-cash use. Accordingly, India's non-cash transactions volumes trail that of China as shown in Table A2.1. In 2014, in terms of the number of non-cash transactions, India was about one-eighth that of China. Though India's position did improve from 2014, it nevertheless remained one-eighth that of China, reflecting a significant jump in noncash use in China (so that India failed to catch up). In per-capita terms, the improvement in India was an impressive 350 per cent, nevertheless falling short of China's 426 per cent. It may be noted that, reflecting earlier reform in Brazil, the numbers and increases thereof had already stabilized there over the years considered.

Non-cash transactions have various forms. Table A2.2 reveals their percentage distribution and change during 2014– 18. An examination of their distribution in 2018 reveals significant variations among the three countries. India uses credit transfers and cheques more than Brazil or China while using credit cards less. Brazil uses the most direct debits compared to the others while China's use of credit cards and e-money payments is the highest, reflecting its low use of direct debits or cheques.

A comparison of the changes that occurred during 2014– 18 reveals different trends. First, the use of cards and e-money payments in Brazil has overtaken those of cheques and transfers. In China, cards and e-money payments have grown and direct debits and cheques have become almost insignificant and, of course, there are low reported credit transfers. In India too, the use of cheques and direct debits reduced, while there was a significant increase in credit transfers and cards and e-money payments. It may perhaps be anticipated that both India and Brazil's future experience would also move in the direction of higher shares for cards and e-money payments.

Introduction

The 2022 World Development Indicators, World Bank, indicate that 65 per cent of the total population comprises the rural population. Of this, 55 per cent engage in agricultural activities according to the Department of Agriculture and Farmers’ Welfare, Government of India (GOI). Nevertheless, agriculture's share in gross domestic product (GDP) has declined steadily since India's independence. Current shares have diminished significantly when seen against the relative size of the rural population. The continuation of differences between rural and urban sectors informs the higher incidence of poverty and the extent of inequality between the sectors. Comparing various sectors, Table 8.1 reveals that the share in GDP of agriculture and forestry and fishing has declined while those of mining, manufacturing and services – and their components – have increased. In particular, those of trade and the financial services have increased indicating that sectors that have habitually participated in and are accessed by the relatively rich and wealthy in the organized sectors have gained at the cost of others – the poorer. It points to a lop-sided development pattern for a primarily rural society with labour-intensive agriculture.

Ideally, the rate of return to capital use and the rate of return to the supply of labour should approach each other over time. A rate of return from capital markets that persistently exceeds the rate of return from offering work, disrupts that balance. This disequilibrium has been unfolding for decades in the world's democracies and glaringly so in India – and it has exacerbated the rural-urban divide. This chapter analyses the existing and growing rural-urban divide causing income inequality, in particular in India. Some proposals of redressal are presented in Chapter 11.

Drivers of rural-urban migration

A few observations contrasting India and China may help to assess how the two economies moved over time with respect to their agricultural sectors. Agriculture – rural activities – continues to provide the livelihood of over half of India's population though accompanying structural and economic reforms have not kept up (Gulati et al., 2021a). While the grain sector still dominates India's cropped area, China, after meeting its domestic demand for food, has transformed its agriculture over the past four decades.

Selected Country Tables