As this article appears, Prime Minister Narendra Modi and many in his government, along with the Chief Minister of Uttar Pradesh, would be busy in pran pratishta at the Ram temple in Ayodhya. One hopes that with the consecration, the country will also see the beginnings of Ram Rajya in the true sense, where communal harmony and safety of all people, especially women, is secured, and poverty is abolished.
While PM Modi has given a clarion call for a Viksit Bharat by 2047, the NITI Aayog has recently come up with a report estimating that 248.2 million Indians have been lifted out of poverty in the nine years of the Modi government. This is based on the National Multidimensional Poverty Index (NMPI). While UNDP’s methodology of MPI has 10 indicators under three dimensions – health (nutrition and child mortality), education (years of schooling and school attendance) and standard of living (cooking fuel, sanitation, drinking water, housing, electricity and assets), NMPI adds maternal health and bank accounts to this list making it 12 indicators.
NITI Aayog argues that NMPI is a better measure to estimate poverty than the traditional estimates based on income/consumption. We welcome the improvement in the standards of life of people in India based on 12 indicators. It has been driven largely by government investments. But household incomes are as important. What is the point of enrollment in schools if the quality of education remains poor, as pointed out in Pratham’s ASER report. The education system may create “educated unemployable youth”. Similarly, what is the point in having accounts if the poor have low incomes and hardly any savings.
This raises questions about the sustainability of a development model that provides better access to public utilities (education, health, and even gas) but does not work towards improving its quality or income levels.
We are not sure whether the publication of the index is a calculated move to replace income poverty by NMPI, but we do feel there is an equal need to track income poverty, real wages, and unemployment in the country to make sure that the development pathway to 2047 helps people improve their incomes significantly. India still has the largest number (160 million) of people under extreme poverty in the world as per the World Bank’s estimate based on $2.15/capita/day income (at 2017 purchasing power poverty). True Ram Rajya will be established only when these poor people come out of income poverty and are also not poor as defined by NMPI.
What occupations are these extremely poor engaged in? The majority of them are in rural areas, working both in agriculture as well as in the non-farm sector as labourers. So, it is important to see what is happening to employment in agriculture and the real wage rates in rural areas over the last two government regimes.
Our research shows that during UPA-1 (2004-05 to 2008-09), real agricultural wages for men (deflated by CPI-AL) grew at a meagre 0.2 per cent per annum, while real rural non-agricultural wages (deflated by CPI-RL) declined at -0.9 per cent per annum. But we observe spectacular growth during UPA-2 (2009-10 to 2013-14) with real agriculture and non-agriculture rural wages growing at 8.6 per cent and 6.9 per cent per annum respectively. In contrast, during the NDA-1 period (2014-15 to 2018-19), growth of real farm and non-farm wages in rural areas decelerated to 3.3 per cent and 3 per cent per annum respectively. However, most concerning has been the situation in the last five years of NDA-2 (2019-20 to 2023-24), when the annual growth rate of real rural wages has become negative for both agriculture (-0.6 per cent) and non-agricultural (-1.4 per cent). It may be the impact of Covid-19 and its aftermath, giving credence to the K-shaped recovery.
The share of the workforce engaged in agriculture had seen a secular decline — from 69.7 per cent in 1951 to 54.6 per cent in 2011 (Census), then to 42.5 per cent in 2018-19 (PLFS). But in 2019-20, it reversed to 45.6 per cent and then increased to 46.5 per cent in 2020-21 (reverse migration due to Covid), before falling to 45.5 per cent in 2021-22. This may be one reason why growth in farm and non-farm rural real wages has become negative during Modi-2 period.
As far as the unemployment rate is concerned, the ILO data suggests that it averaged around 8.4 per cent during 10 years of the UPA government (2004-05 to 2013-14) and roughly 7.9 per cent during the 10 years of the Modi government. So, the growth model under both governments has not seen a significant reduction in unemployment. During the UPA government, the BJP was at the forefront saying that it was “jobless growth”, and the same criticism is being flung at it by the Congress and other opposition parties.
Interestingly, government data from the PLFS, which started collecting information on unemployment from 2017-18, shows a much lower level and a clear declining trend. It has come down from 6 per cent in 2017-18 to 4.1 per cent in 2021-22. The difference between ILO estimates and PLFS estimates, says Santosh Mehrotra, Economic Adviser in the erstwhile Planning Commission and a prolific writer on this topic, is due to difference in the definition. PLFS tends to include some work as employment even when it is not paid for. That makes PLFS estimates non-comparable with other countries, which follow ILO criteria. Mehrotra further argues that CMIE estimates are on the lines of ILO, and it shows much higher levels of unemployment compared to PLFS.
For us, the litmus test of employment hinges on real wage rates, and we have seen from the government data itself that in rural areas, real wages in fact have had negative growth in the last five years of Modi-2 period. This needs urgent attention and further research to create more employment-intensive growth processes.
Gulati is Distinguished Professor and Jose a Research Fellow at ICRIER. Views are personal
Sriram Raghavan: Writing script with an actor in mind hasn'tPremium Story
Rise of DINKs: Why more couples are now opting forPremium Story
‘Many Ayodhyas, but name of Ram’s birthplace same in allPremium Story
Main Atal Hoon movie review: Pankaj Tripathi nails Atal BihariPremium Story
Writers share with us their New Year resolutions for art,Premium Story
The eccentricities of tide-poolingPremium Story
How did we get herePremium Story
Abraham Verghese on his new Kerala-based colonial-era epicPremium Story
Anyone But You movie is a bland romedyPremium Story
'Delulu is the solulu': Can faking it till you makePremium Story
Indian Police Force is all surface, minimal depthPremium Story
The litmus test of employment hinges on real wage rates, and in rural areas, wage rates have fallen
12
1
22.01.2024
As this article appears, Prime Minister Narendra Modi and many in his government, along with the Chief Minister of Uttar Pradesh, would be busy in pran pratishta at the Ram temple in Ayodhya. One hopes that with the consecration, the country will also see the beginnings of Ram Rajya in the true sense, where communal harmony and safety of all people, especially women, is secured, and poverty is abolished.
While PM Modi has given a clarion call for a Viksit Bharat by 2047, the NITI Aayog has recently come up with a report estimating that 248.2 million Indians have been lifted out of poverty in the nine years of the Modi government. This is based on the National Multidimensional Poverty Index (NMPI). While UNDP’s methodology of MPI has 10 indicators under three dimensions – health (nutrition and child mortality), education (years of schooling and school attendance) and standard of living (cooking fuel, sanitation, drinking water, housing, electricity and assets), NMPI adds maternal health and bank accounts to this list making it 12 indicators.
NITI Aayog argues that NMPI is a better measure to estimate poverty than the traditional estimates based on income/consumption. We welcome the improvement in the standards of life of people in India based on 12 indicators. It has been driven largely by government investments. But household incomes are as important. What is the point of enrollment in schools if the quality of education remains poor, as pointed out in Pratham’s ASER report. The education system may create “educated unemployable youth”. Similarly, what is the point in having accounts if the poor have low incomes and hardly any savings.
This raises questions about the sustainability of........
© Indian Express
visit website
login
who are we?
contact us
qosheapp
Toi Staff
Gideon Levy
Belen Fernandez
Andrew Mitrovica
Mort Laitner
Nikkei Editorial
Ali Fathollah-Nejad
Rami G Khouri
