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CONTENTS

FOREWORD iii
CHATPER 1
The Story of Village Palampur 1

CHAPTER 2
People as Resource 16

CHAPTER 3
Poverty as a Challenge 29

CHAPTER 4
Food Security in India 42
1
Chapter The Story of Village Palampur

Overview
The purpose of the story is to introduce
some basic concepts relating to production
and this we do through a story of a
hypothetical village called Palampur.
Farming is the main activity in
Palampur, whereas several other
activities such as small scale
manufacturing, dairy, transport, etc. are
carried out on a limited scale. These
production activities need various types
of resources — natural resources, man-
made items, human effort, money, etc. As
we read through the story of Palampur, Picture 1.1 Scene of a village
we will learn how various resources electric connections. Electricity powers
combine to produce the desired goods and all the tubewells in the fields and is used
services in the village. in various types of small business.
Palampur is well-connected with Palampur has two primary schools and
neighbouring villages and towns. Raiganj, one high school. There is a primary health
a big village, is 3 kms from Palampur. An centre run by the government and one
all weather road connects the village to private dispensary where the sick are
Raiganj and further on to the nearest treated.
small town of Shahpur. Many kinds of • The description above shows that
transport are visible on this road starting Palampur has fairly well-developed
from bullock carts, tongas, bogeys (wooden system of roads, transport, electricity,
cart drawn by buffalos) loaded with jaggery irrigation, schools and health centre.
(gur) and other commodities to motor Compare these facilities with those in
vehicles like motorcycles, jeeps, tractors your nearby village.
and trucks. The story of Palampur, an imaginary
This village has about 450 families village, will take us through the different
belonging to several different castes. The types of production activities in the
80 upper caste families own the majority village. In villages across India, farming
of land in the village. Their houses, some is the main production activity. The other
of them quite large, are made of brick with production activities, referred to as non-
cement plastering. The SCs (dalits) farm activities include small
comprise one third of the population and manufacturing, transport, shop-keeping,
live in one corner of the village and in etc. We shall take a look at both these
much smaller houses some of which are types of activities, after learning a few
of mud and straw. Most of the houses have general things about production.

The Story of Village Palampur 1


Organisation of Production capital. We shall learn more about human
capital in the next chapter.
The aim of production is to produce the • In the picture, identify the land, labour
goods and services that we want. There and fixed capital used in production.
are four requirements for production of
goods and services.
The first requirement is land, and
other natural resources such as water,
forests, minerals.
The second requirement is labour, i.e.
people who will do the work. Some
production activities require highly
educated workers to perform the
necessary tasks. Other activities require
workers who can do manual work. Each
worker is providing the labour necessary
for production.
The third requirement is physical
capital, i.e. the variety of inputs required
at every stage during production. What
are the items that come under physical Picture 1.2 A factory, with several labourers
capital? and heavy machines
(a) Tools, machines, buildings: Tools and
Every production is organised by
machines range from very simple tools
combining land, labour, physical capital
such as a farmer’s plough to and human capital, which are known as
sophisticated machines such as factors of production. As we read through
generators, turbines, computers, etc. the story of Palampur, we will learn more
Tools, machines, buildings can be used about the first three factors of production.
in production over many years, and For convenience, we will refer to the
are called fixed capital. physical capital as the capital in this
(b) Raw materials and money in hand: chapter.
Production requires a variety of raw
materials such as the yarn used by Farming in Palampur
the weaver and the clay used by the
potter. Also, some money is always 1. Land is fixed
required during production to make Farming is the main production activity
payments and buy other necessary in Palampur. 75 per cent of the people
items. Raw materials and money in who are working are dependent on
hand are called working capital. farming for their livelihood. They could
Unlike tools, machines and buildings, be farmers or farm labourers. The well-
these are used up in production. being of these people is closely related to
There is a fourth requirement too. You production on the farms.
will need knowledge and enterprise to be But remember that there is a basic
able to put together land, labour and constraint in raising farm production.
physical capital and produce an output Land area under cultivation is practically
either to use yourself or to sell in the fixed. Since 1960 in Palampur, there has
market. This these days is called human been no expansion in land area under

2 Economics
cultivation. By then, some of the larger areas of land more effectively. The
wastelands in the village had been first few tubewells were installed by the
converted to cultivable land. There exists gover nment. Soon, however, far mers
no further scope to increase farm started setting up private tubewells. As a
production by bringing new land under result, by mid-1970s the entire cultivated
cultivation. area of 200 hectares (ha.) was irrigated.

The standard unit of measuring land Not all villages in India have such
is hectare, though in the villages you high levels of irrigation. Apart from
may find land area being discussed the riverine plains, coastal regions in
in local units such as bigha, guintha our country are well-irrigated. In
etc. One hectare equals the area of a contrast, plateau regions such as the
square with one side measuring 100 Deccan plateau have low levels of
metres. Can you compare the area of irrigation. Of the total cultivated area
a 1 hectare field with the area of your in the country a little less than 40
school ground? per cent is irrigated even today. In
the remaining areas, farming is
largely dependent on rainfall.
2. Is there a way one can grow more
from the same land?
To grow more than one crop on a piece of
In the kind of crops grown and facilities
land during the year is known as multiple
available, Palampur would resemble a
cropping. It is the most common way of
village of the western part of the state of
increasing production on a given piece of
Uttar Pradesh. All land is cultivated in
land. All farmers in Palampur grow
Palampur. No land is left idle. During the
atleast two main crops; many are growing
rainy season (kharif) farmers grow jowar
potato as the third crop in the past fifteen
and bajra. These plants are used as cattle
feed. It is followed by cultivation of potato to twenty years.
between October and December. In the
winter season (rabi), fields are sown with
wheat. From the wheat produced, farmers
keep enough wheat for the family’s
consumption and sell the surplus wheat
at the market at Raiganj. A part of the
land area is also devoted to sugarcane
which is harvested once every year.
Sugarcane, in its raw form, or as jaggery,
is sold to traders in Shahpur.
The main reason why farmers are able Picture 1.3 Different crops
to grow three different crops in a year in
Palampur is due to the well-developed
system of irrigation. Electricity came early Let’sDiscuss
to Palampur. Its major impact was to
• The following Table1.1 shows the land
transform the system of irrigation.
Persian wheels were, till then, used by under cultivation in India in units of
farmers to draw water from the wells and million hectares. Plot this on the graph
irrigate small fields. People saw that the provided. What does the graph show?
electric-run tubewells could irrigate much Discuss in class.

The Story of Village Palampur 3


Table 1.1: Cultivated area over the years were traditional ones with relatively low
yields. T raditional seeds needed less
Cultivated Area
irrigation. Farmers used cow-dung and
1950 120 other natural manure as fertilizers. All
these were readily available with the
1960 130
farmers who did not have to buy them.
1970 140 The Green Revolution in the late 1960s
1980 140 introduced the Indian farmer to
1990 140 cultivation of wheat and rice using high
2000 140 yielding varieties (HYVs) of seeds.
Compared to the traditional seeds, the
HYV seeds promised to produce much
140 greater amounts of grain on a single plant.
120 As a result, the same piece of land would
100
now produce far larger quantities of
foodgrains than was possible earlier. HYV
80 seeds, however, needed plenty of water
60 and also chemical fertilizers and

40

20

0
1950 1960 1970 1980 1990 2000

• Is it important to increase the area


under irrigation? Why?
• You have read about the crops grown
in Palampur. Fill the following table
based on information on the crops
grown in your region.
You have seen that one way of
increasing production from the same
land is by multiple cropping. The other
way is to use modern farming methods
for higher yield. Yield is measured as
crop produced on a given piece of land
during a single season. T ill the mid- Picture 1.4 Modern Farming Methods: HYV
1960s, the seeds used in cultivation seeds, chemical fertilizer etc.

Name of crop Month sown Month Harvested Source of irrigation (Rain,


tanks, tubewells, canals, etc.)

4 Economics
pesticides to produce best results. Higher • Modern farming methods require the
yields were possible only from a farmer to start with more cash than
combination of HYV seeds, irrigation, before. Why?
chemical fertilisers, pesticides etc.
Farmers of Punjab, Haryana and Suggested Activity
Western Uttar Pradesh were the first to • During your field visit talk to some
try out the modern farming method in farmers of your region. Find out:
India. The farmers in these regions set
up tubewells for irrigation, and made use 1. What kind of farming methods—
of HYV seeds, chemical fertilizers and modern or traditional or mixed— do
pesticides in farming. Some of them the farmers use? Write a note.
bought farm machinery like tractors and 2. What are the sources of irrigation?
threshers, which made ploughing and 3. How much of the cultivated land is
harvesting faster. They were rewarded irrigated? (very little/nearly half/
with high yields of wheat. majority/all)
In Palampur, the yield of wheat grown 4. From where do farmers obtain the
from the traditional varieties was 1300 kg inputs that they require?
per hectare. With the HYV seeds, the yield
went up to 3200 kg per hectare. There 3. Will the land sustain?
was a large increase in the production of
wheat. Farmers now had greater amounts Land being a natural resource, it is
of surplus wheat to sell in the markets. necessary to be very careful in its use.
Scientific reports indicate that the modern
farming methods have overused the
Let’sDiscuss natural resource base.
• What is the difference between In many areas, Green Revolution is
multiple cropping and modern farming associated with the loss of soil fertility
method? due to increased use of chemical
• The following table shows the fertilizers. Also, continuous use of
production of wheat and pulses in groundwater for tubewell irrigation has
India after the Green revolution in reduced the water -table below the
units of million tonnes. Plot this on a ground. Environmental resources like soil
graph. Was the Green r evolution fertility and groundwater are built up over
equally successful for both the crops? many years. Once destroyed it is very
Discuss. difficult to restore them. We must take
• What is the working capital required care of the environment to ensure future
by the farmer using modern farming development of agriculture.
methods?
Suggested Activity
Table 1.2: Production of pulses and wheat
• After reading the following reports from
Production Production newspapers/magazines, write a letter
of Pulses of Wheat to the Agriculture Minister in your own
words telling him how the use of
1965 - 66 10 10 chemical fertilizers can be harmful.
1970 - 71 12 24
1980 - 81 11 36 ....Chemical fertilizers provide
1990 - 91 14 55 minerals which dissolve in water and
are immediately available to plants.
2000 - 01 11 70
But these may not be retained in the

The Story of Village Palampur 5


Picture 1.5 Palampur village: Distribution of cultivated land

soil for long. They may escape from Of the remaining families who own
the soil and pollute groundwater, land, 240 families cultivate small plots of
rivers and lakes. Chemical fertilizers land less than 2 hectares in size.
can also kill bacteria and other micro- Cultivation of such plots doesn’t bring
organisms in the soil. This means adequate income to the farmer family.
some time after their use, the soil will In 1960, Gobind was a farmer with
be less fertile than ever 2.25 hectares of largely unirrigated land.
before....(Source: Down to Earth, New With the help of his three sons Gobind
Delhi) cultivated the land. Though they didn’t
.....The consumption of chemical live very comfortably, the family managed
fertilizers in Punjab is highest in the to feed itself with a little bit of extra
country. The continuous use of chemical income from one buffalo that the family
fertilizers has led to degradation of soil possessed. Some years after Gobind’s
health. Punjab farmers are now forced death, this land was divided among his
to use more and more chemical three sons. Each one now has a plot of
fertilizers and other inputs to achieve land that is only 0.75 hectare in size. Even
the same production level. This means with improved irrigation and modern
cost of cultivation is rising very farming method, Gobind’s sons are not
fast.....(Source: The Tribune, able to make a living from their land. They
Chandigarh) have to look for additional work during
part of the year.
You can see the large number of small
4. How is land distributed between plots scattered around the village in the
the farmers of Palampur? picture. These are cultivated by the small
You must have realised how important farmers. On the other hand, more than
land is for farming. Unfortunately, not all half the area of the village is covered by
the people engaged in agriculture have plots that are quite large in size. In
sufficient land for cultivation. In Palampur, there are 60 families of medium
Palampur, about one third of the 450 and large farmers who cultivate more
families are landless, i.e. 150 families, than 2 hectares of land. A few of the large
most of them dalits, have no land for farmers have land extending over 10
cultivation. hectares or more.

6 Economics
Picture 1.6 Work on
the fields: Wheat crop—
ploughing by bullocks,
sowing, spraying of
insecticides, cultivation
by traditional method,
cultivation by modern
method, and cutting of
crops.

Let’sDiscuss Let’sDiscuss
• In the Picture 1.5, can you shade the • Would you agree that the distribution
land cultivated by the small farmers? of cultivated land is unequal in
• Why do so many families of farmers Palampur? Do you find a similar
cultivate such small plots of land? situation for India? Explain.
• The distribution of farmers in India and
the amount of land they cultivate is given 5. Who will provide the labour?
in the following Graph 1.1. Discuss in
the classroom. After land, labour is the next necessary
factor for production. Farming requires a
Graph 1.1: Distribution of Farmers and
great deal of hard work. Small farmers
Cultivated Area
along with their families cultivate their
Cultivated Area Number of Farmers own fields. Thus, they provide the labour
required for farming themselves. Medium
36%
20% and large farmers hire farm labourers to
work on their fields.

Let’sDiscuss
• Identify the work being done on the
64% 80%
field in the Pictures 1.6 and arrange
Small farmers Medium and them in a proper sequence.
(Less than 2 ha.) Large farmers
(More than 2 ha.) Farm labourers come either from
landless families or families cultivating
Source: Agricultural statistics at glance 2003:
Dept of agriculture and cooperation, small plots of land. Unlike farmers, farm
Ministry of agriculture, Govt of India. labourers do not have a right over the
The Story of Village Palampur 7
Picture 1.7 The conversation between Dala and Ramkali

crops grown on the land. Instead they are labourer might be employed on a daily
paid wages by the farmer for whom they basis, or for one particular farm activity
work. Wages can be in cash or in kind like harvesting, or for the whole year.
e.g. crop. Sometimes labourers get meals Dala is a landless farm labourer who
also. Wages vary widely from region to works on daily wages in Palampur. This
region, from crop to crop, from one farm means he must regularly look for work.
activity to another (like sowing and The minimum wages for a farm labourer
harvesting). There is also a wide variation set by the government is Rs 60 per day,
in the duration of employment. A farm but Dala gets only Rs 35–40. There is

8 Economics
heavy competition for work among the agrees to give Savita the loan at an
farm labourers in Palampur, so people interest rate of 24 per cent for four
agree to work for lower wages. Dala months, which is a very high interest rate.
complains about his situation to Ramkali, Savita also has to promise to work on his
who is another farm labourer. field as a farm labourer during the harvest
Both Dala and Ramkali are among the season at Rs 35 per day. As you can tell,
poorest people in the village. this wage is quite low. Savita knows that
she will have to work very hard to
Let’sDiscuss complete harvesting on her own field, and
• Why are farm labourers like Dala and then work as a farm labourer for Tejpal
Ramkali poor? Singh. The harvest time is a very busy
• Gosaipur and Majauli are two villages time. As a mother of three children she
in North Bihar. Out of a total of 850 has a lot of household responsibilities.
households in the two villages, there Savita agrees to these tough conditions
are more than 250 men who are as she knows getting a loan is difficult
employed in rural Punjab and Haryana for a small farmer
or in Delhi, Mumbai, Surat, Hyderabad 2. In contrast to the small farmers, the
or Nagpur. Such migration is common medium and large farmers have their
in most villages across India. Why do own savings from farming. They are
people migrate? Can you describe thus able to arrange for the capital
(based on your imagination) the work needed. How do these farmers have
that the migrants of Gosaipur and their own savings? You shall find the
Majauli might do at the place of answer in the next section.
destination?
Thestorysofar....
6. The capital needed in farming
We have read about the three factors of
You have already seen that the modern production—land, labour and capital—
farming methods require a great deal of and how they are used in farming. Let us
capital, so that the farmer now needs fill in the blanks given below.
more money than before.
Among the three factors of production,
1. Most small farmers have to borrow
we found that labour is the most
money to arrange for the capital. They
abundant factor of production. There are
borrow from large farmers or the
many people who are willing to work as
village moneylenders or the traders
farm labourers in the villages, whereas
who supply various inputs for
the opportunities of work are limited. They
cultivation. The rate of interest on
belong to either landless families or
such loans is very high. They are put
. They are paid low wages,
to great distress to repay the loan.
and lead a difficult life.
Savita is a small farmer. She plans to
In contrast to labour,
cultivate wheat on her 1 hectare of land.
Besides seeds, fertilizers and pesticides, is a scarce factor of production. Cultivated
she needs cash to buy water and repair land area is . Moreover,
her farm instruments. She estimates that even the existing land is distributed
the working capital itself would cost a (equally/unequally) among
minimum of Rs 3,000. She doesn’t have the people engaged in farming. There are
the money, so she decides to borrow from a large number of small farmers who
Tejpal Singh, a large farmer. Tejpal Singh cultivate small plots of land and live in

The Story of Village Palampur 9


conditions not much better than the Tejpal Singh, the large farmer, has a
landless far m labourer. To make the surplus of 350 quintals of wheat from all
maximum use of the existing land, his lands! He sells the surplus wheat at
farmers use and the Raiganj market and has good earnings.
. Both these have led to What does Tejpal Singh do with his
increase in production of crops. earnings? Last year, Tejpal Singh had put
most of the money in his bank account.
Modern farming methods require a
Later he used the savings for lending to
great deal of . Small
farmers like Savita who were in need of a
farmers usually need to borrow money to
loan. He also used the savings to arrange
arrange for the capital, and are put to
for the working capital for farming in the
great distress to repay the loan. Therefore,
next season. This year Tejpal Singh plans
capital too is a scarce factor of production,
to use his earnings to buy another tractor.
particularly for the small farmers.
Another tractor would increase his fixed
Though both land and capital are capital.
scarce, there is a basic difference between Like Tejpal Singh, other large and
the two factors of production. medium farmers sell the surplus farm
is a natural resource, products. A part of the earnings is saved
whereas is man-made. It and kept for buying capital for the next
is possible to increase capital, whereas season. Thus, they are able to arrange
land is fixed. Therefore, it is very for the capital for farming from their own
important that we take good care of land savings. Some farmers might also use the
and other natural resources used in savings to buy cattle, trucks, or to set up
farming. shops. As we shall see, these constitute
the capital for non-farm activities.
7. Sale of Surplus Farm Products
Let us suppose that the farmers have Non-Farm Activities in Palampur
produced wheat on their lands using the We have learnt about farming as the main
three factors of production. The wheat production activity in Palampur. We shall
is harvested and production is complete. now take a look at some of the non-farm
What do the farmers do with the wheat? production activities. Only 25 per cent
They retain a part of the wheat for the of the people working in Palampur are
family’s consumption and sell the engaged in activities other than
surplus wheat. Small farmers like agriculture.
Savita and Gobind’s sons have little
surplus wheat because their total 1. Dairy — the other common
production is small and from this a activity
substantial share is kept for their own Dairy is a common activity in many families
family needs. So it is the medium and of Palampur. People feed their buffalos on
large farmers who supply wheat to the various kinds of grass and the jowar and
market. In the Picture 1.1, you can see the bajra that grows during the rainy season.
bullock cart streaming into the market The milk is sold in Raiganj, the nearby large
each carrying loads of wheat. The traders village. Two traders from Shahpur town
at the market buy the wheat and sell it have set up collection cum chilling centres
further to shopkeepers in the towns and at Raiganj from where the milk is
cities. transported to far away towns and cities.

10 Economics
Optional Exercise
• Let us take three farmers. Each has grown wheat on his field though the
production is different (see Column 2). The consumption of wheat by each
farmer family is the same (Column 3). The whole of surplus wheat this year
is used as capital for next year’s production. Also suppose, production is
twice the capital used in production. Complete the tables.
Farmer 1

Production Consumption Surplus = Capital for the


Production – next year
Consumption

Year 1 100 40 60 60

Year 2 120 40

Year 3 40

Farmer 2

Production Consumption Surplus Capital for the


next year
Year 1 80 40
Year 2 40
Year 3 40

Farmer 3

Production Consumption Surplus Capital for the


next year

Year 1 60 40

Year 2 40

Year 3 40

Let’sDiscuss
• Compare the production of wheat by the three farmers over the years.
• What happens to Farmer 3 in Year 3? Can he continue production? What
will he have to do to continue production?

2. An example of small-scale Unlike the manufacturing that takes


manufacturing in Palampur place in the big factories in the towns
At present, less than fifty people are and cities, manufacturing in Palampur
engaged in manufacturing in Palampur. involves very simple production methods

The Story of Village Palampur 11


and are done on a small scale. They are
carried out mostly at home or in the fields Kareem has opened a computer class
with the help of family labour. Rarely are centre in the village. In recent years
labourers hired. a large number of students have been
attending college in Shahpur town.
Kareem found that a number of
Mishrilal has purchased a
students from the village are also
mechanical sugarcane crushing
attending computer classes in the
machine run on electricity and has
town. There were two women in the
set it up on his field. Sugarcane
village who had a degree in computer
crushing was earlier done with the
applications. He decided to employ
help of bullocks, but people prefer to
them. He bought computers and set
do it by machines these days.
up the classes in the front room of
Mishrilal also buys sugarcane from
their house overlooking the market.
other farmers and processes it into
High school students have started
jaggery. The jaggery is then sold to
attending them in good numbers.
traders at Shahpur. In the process,
Mishrilal makes a small profit.
Let’sDiscuss
Let’sDiscuss • In what ways is Kareem’s capital and
labour different from Mishrilal’s?
• What capital did Mishrilal need to set • Why didn’t someone start a computer
up his jaggery manufacturing unit? centre earlier? Discuss the possible
• Who provides the labour in this case? reasons.
• Can you guess why Mishrilal is unable
to increase his profit? 4. Transport: a fast developing
• Could you think of any reasons when sector
he might face a loss? There are variety of vehicles on the road
• Why does Mishrilal sell his jaggery to connecting Palampur to Raiganj.
traders in Shahpur and not in his Rickshawallahs, tongawallahs, jeep,
village? tractor, truck drivers and people driving
the traditional bullock cart and bogey are
3. The shopkeepers of Palampur people in the transport services. They
ferry people and goods from one place to
People involved in trade (exchange of another, and in return get paid for it. The
goods) are not many in Palampur. The number of people involved in transport
traders of Palampur are shopkeepers who has grown over the last several years.
buy various goods from wholesale
markets in the cities and sell them in Kishora is a farm labourer. Like other
the village. You will see small general such labourers, Kishora found it
stores in the village selling a wide range difficult to meet his family’s needs from
of items like rice, wheat, sugar, tea, oil, the wages that he received. A few years
biscuits, soap, toothpaste, batteries, back Kishora took a loan from the
candles, notebooks, pen, pencil, even bank. This was under a government
some cloth. A few of the families whose programme which was giving cheap
houses are close to the bus stand have loans to poor landless households.
used a part of the space to open small Kishora bought a buffalo with this
shops. They sell eatables. money. He now sells the buffalo’s milk.

12 Economics
Further, he has attached a wooden cart Let’sDiscuss
to his buffalo and uses it to transport
• What is Kishora’s fixed capital?
various items. Once a week, he goes to
• What do you think would be his
the river Ganga to bring back clay for
working capital?
the potter. Or sometimes he goes to
Shahpur with a load of jaggery or other • In how many production activities is
commodities. Every month he gets some Kishora involved?
work in transport. As a result, Kishora • Would you say that Kishora has
is able to earn more than what he used benefitted from better roads in
to do some years back. Palampur?

Summary
Farming is the main production activity in the village. Over the years there have
been many important changes in the way farming is practiced. These have allowed
the farmers to produce more crops from the same amount of land. This is an
important achievement, since land is fixed and scarce. But in raising production
a great deal of pressure has been put on land and other natural resources.
The new ways of farming need less land, but much more of capital. The medium
and large farmers are able to use their own savings from production to arrange
for capital during the next season. On the other hand, the small farmers who
constitute about 80 per cent of total farmers in India, find it difficult to obtain
capital. Because of the small size of their plots, their production is not enough.
The lack of surplus means that they are unable to obtain capital from their own
savings, and have to borrow. Besides the debt, many of the small farmers have
to do additional work as farm labourers to feed themselves and their families.
Labour being the most abundant factor of production, it would be ideal if
new ways of farming used much more labour. Unfortunately, such a thing has
not happened. The use of labour on farms is limited. The labour, looking for
opportunities is thus migrating to neighbouring villages, towns and cities. Some
labour has entered the non-farm sector in the village.
At present, the non-farm sector in the village is not very large. Out of every
100 workers in the rural areas in India, only 24 are engaged in non-farm activities.
Though there is a variety of non-farm activities in the villages (we have only
seen a few examples), the number of people employed in each is quite small.
In the future, one would like to see more non-farm production activities in the
village. Unlike farming, non-farm activities require little land. People with some
amount of capital can set up non-farm activities. How does one obtain this capital?
One can either use his own savings, but more often has to take a loan. It is
important that loan be available at low rate of interest so that even people without
savings can start some non-farm activity. Another thing which is essential for
expansion of non-farm activities is to have markets where the goods and services
produced can be sold. In Palampur, we saw the neighbouring villages, towns and
cities provide the markets for milk, jaggery, wheat, etc. As more villages get
connected to towns and cities through good roads, transport and telephone, it is
possible that the opportunities for non-farm activities production in the village
would increase in the coming years.

The Story of Village Palampur 13


Exercises
1. Every village in India is surveyed once is ten years during the Census and
some of details are presented in the following format. Fill up the following based
on information on Palampur.
a. LOCATION:
b. TOTAL AREA OF THE VILLAGE:
c. LAND USE (in hectares):
Cultivated Land Land not available for cultivation
(Area covering dwellings, roads,
Irrigated Unirrigated
ponds, grazing ground)

26 hectares

d. FACILITIES:
Educational
Medical
Market
Electricity Supply
Communication
Nearest Town

2. Modern farming methods require more inputs which are manufactured in


industry. Do you agree?
3. How did the spread of electricity help farmers in Palampur?
4. Is it important to increase the area under irrigation? Why?
5. Construct a table on the distribution of land among the 450 families of
Palampur.
6. Why are the wages for farm labourers in Palampur less than minimum wages?
7. In your region, talk to two labourers. Choose either farm labourers or labourers
working at construction sites. What wages do they get? Are they paid in cash
or kind? Do they get work regularly? Are they in debt?
8. What are the different ways of increasing production on the same piece of
land? Use examples to explain.
9. Describe the work of a farmer with 1 hectare of land.
10. How do the medium and large farmers obtain capital for farming? How is it
different from the small farmers?
11. On what terms did Savita get a loan from Tajpal Singh? Would Savita’s condition
be different if she could get a loan from the bank at a low rate of interest?
12. Talk to some old residents in your region and write a short report on the changes
in irrigation and changes in production methods during the last 30 years.
(Optional)

14 Economics
13. What are the non-farm production activities taking place in your region? Make
a short list.
14. What can be done so that more non-farm production activities can be started
in villages?

References
ETIENNE, GILBERT. 1985. Rural Development in Asia: Meetings with Peasants, Sage
Publications, New Delhi.
ETIENNE, GILBERT. 1988. Food and Poverty: India’s half won battle, Sage Publications,
New Delhi.
RAJ, K.N. 1991. ‘Village India and its Political Economy’ in C.T. Kurien (Edited) Economy,
Society and Development, Sage Publications.
THORNER, DANIEL AND ALICE THORNER. 1962. Land and Labour in India, Asia Publishing
House, Bombay.

The Story of Village Palampur 15


2
Chapter People as Resource

Overview India’s Green Revolution is a


The chapter 'People as Resource' is an dramatic example of how the input
effort to explain population as an asset of greater knowledge in the form of
for the economy rather than a liability. improved production technologies can
Population becomes human capital when rapidly increase the productivity of
there is investment made in the form of scarce land resources. India’s IT
education, training and medical care. revolution is a striking instance of
In fact, human capital is the stock of how the importance of human capital
skill and productive knowledge embodied has come to acquire a higher position
in them. than that of material plant and
'People as Resource' is a way of machinery.
referring to a country’s working people
Source: Planning Commission, Govt. of India.
in terms of their existing productive
skills and abilities. Looking at the
population from this productive aspect
emphasises its ability to contribute to
the creation of the Gross National
Product. Like other resources population
also is a resource — a 'human resource'.
This is the positive side of a large
population that is often overlooked when
we look only at the negative side,
considering only the problems of
providing the population with food,
education and access to health facilities.
When the existing 'human resource' is
further developed by becoming more
educated and healthy, we call it 'human
capital formation ' that adds to the
productive power of the country just like
'physical capital formation'.
Investment in human capital
(through education, training, medical
care) yields a return just like investment
in physical capital. This can be seen
directly in the form of higher incomes
earned because of higher productivity
of the more educated or the better trained
persons, as well as the higher
productivity of healthier people.

16 Economics
population need not be a liability. It can
be turned into a productive asset by
investment in human capital (for example,
by spending resources on education and
health for all, training of industrial and
agricultural workers in the use of modern
technology, useful scientific researches
and so on).
The two following cases illustrate how
people can try to become a more productive
resource:

Story of Sakal
There were two friends Vilas and
Sakal living in the same village
Semapur. Sakal was a twelve-year-
old boy. His mother Sheela looked
after domestic chores. His father Buta
Chaudhary worked in an agricultural
field. Sakal helped his mother in
domestic chores. He also looked after
his younger brother Jeetu and sister
Picture 2.1 Seetu. His uncle Shyam had passed
the matriculation examination, but,
Let’sDiscuss was sitting idle in the house as he
• Looking at the photograph can you had no job. Buta and Sheela were
explain how a doctor, teacher, engineer eager to teach Sakal. They forced him
and a tailor are an asset to the to join the village school which he
economy? soon joined. He started studying and
Not only do the more educated and the completed his higher secondary
healthier people gain through higher examination. His father persuaded
incomes, society gains also in other indirect him to continue his studies. He raised
ways because the advantages of a more a loan for Sakal to study a vocational
educated or a healthier population spreads course in computers. Sakal was
to those also who themselves were not meritorious and interested in studies
directly educated or given health care. In from the beginning. With great vigour
fact, human capital is in one way superior and enthusiasm he completed his
to other resources like land and physical course. After some time he got a job
capital: human resource can make use of in a private firm. He even designed a
land and capital. Land and capital cannot new kind of software. This software
become useful on its own! helped him increase the sale of the
For many decades in India, a large firm. His boss acknowledged his
population has been considered a liability services and rewarded him with a
rather than an asset. But a large promotion.

People as Resource 17
Picture 2.2 Stories of Vilas and Sakal

Let’sDiscuss
Story of Vilas
Vilas was an eleven-year old boy • Do you notice any difference between
residing in the same village as Sakal. the two friends? What are those?
Vilas’s father Mahesh was a Activity
fisherman. His father passed away
Visit a nearby village or a slum area
when he was only two years old. His
and write down a case study of a boy
mother Geeta sold fish to earn money
or girl of your age facing the same
to feed the family. She bought fish
condition as Vilas or Sakal.
from the landowner’s pond and sold
it in the nearby mandi. She could
earn only Rs 20 to 30 a day by selling In the two case studies we saw Sakal
fish. Vilas became a patient of went to school and Vilas did not go. Sakal
arthritis. His mother could not afford was physically strong and healthy. He did
to take him to the doctor. He could not need to visit the doctor frequently.
not go to school either. He was not Vilas was a patient of arthritis. He lacked
interested in studies. He helped his the means to visit the doctor. Sakal
mother in cooking and also looked acquired a degree in computers. Sakal
after his younger brother Mohan. found a job in the private firm while Vilas
After some time his mother fell sick continued with the same work as his
mother. He earned a meagre income like
and there was no one to look after
his mother to support a family.
her. There was no one in the family
In the case of Sakal, several years of
to support them. Vilas, too, was forced
education added to the quality of labour.
to sell fish in the same village. He
This enhanced his total productivity.
like his mother earned only a meagre
Total productivity adds to the growth of
income.
the economy. This in turn pays an

18 Economics
individual through salary or in some other Economic Activities by Men and Women
form of his choice. In case of Vilas, there Like Vilas and Sakal people have been
could not be any education or health care engaged in various activities. We saw Vilas
in the early part of his life. He spends his sold fish and Sakal got a job in the firm.
life selling fish like his mother. The various activities have been classified
Henceforth, he draws the same salary of into three main sectors i.e., primary,
unskilled labour as his mother. secondary and tertiary. Primary sector
Investment in human resource (via includes agriculture, forestry, animal
education and medical care) can give high husbandry, fishing, poultry farming, and
rates of return in the future. This mining. Quarrying and manufacturing is
investment on people is the same as included in the secondary sector. Trade,
investment in land and capital. One transport, communication, banking,
invests in shares and bonds expecting education, health, tourism, services,
higher return in the future. insurance etc. are included in the tertiary
A child, too, with investments made sector. The activities in this sector result
on her education and health, can yield a in the production of goods and services.
high return in the future in the form of These activities add value to the national
higher earnings and greater contribution income. These activities are called
to society. Educated parents are found to economic activities. Economic activities
invest more heavily on the education of have two parts — market activities and
their child. This is because they have non-market activities. Market activities
realised the importance of education for involve remuneration to any one who
performs i.e., activity performed for pay
themselves. They are also conscious of
or profit. These include production of goods
proper nutrition and hygiene. They
or services including government service.
accordingly look after their children’s Non-market activities are the production
needs for education at school and good for self-consumption. These can be
health. A virtuous cycle is thus created
in this case. In contrast, a vicious cycle
may be created by disadvantaged parents
who, themselves uneducated and lacking
in hygiene, keep their children in a
similarly disadvantaged state.
Countries like Japan have invested in
human resource. They did not have any
natural resource. These countries are
developed/rich countries. They import the
natural resource needed in their country.
How did they become rich/developed?
They have invested on people especially
in the field of education and health. These
people have made efficient use of other
resource like land and capital. Efficiency
and the technology evolved by people have
Picture 2.3 Based on the picture can you classify
made these countries rich/developed. these activities into three sectors?

People as Resource 19
consumption and processing of primary helps individual to make better use of the
product and own account production of economic opportunities available before
fixed assets. him. Education and skill are the major
determinants of the earning of any
Activity individual in the market. A majority of
Visit a village or colony located near the women have meagre education and
to your residential area and note low skill formation. Women are paid low
down the various activities compared to men. Most women work
undertaken by the people of that where job security is not there. Various
village or colony. activities relating to legal protection is
If this is not possible, ask your meagre. Employment in this sector is
neighbour what is their profession? characterised by irregular and low income.
In which of the three sectors will you In this sector there is an absence of basic
categorise their work? facilities like maternity leave, childcare
Say whether these activities are and other social security systems.
economic or non-economic activities: However, women with high education and
skill formation are paid at par with the
Vilas sells fish in the village market.
men. Among the organised sector,
Vilas cooks food for his family.
teaching and medicine attract them the
Sakal works in the private firm.
most. Some women have entered the
Sakal looks after his younger brother
administrative and other services
and sister.
including those, which need high levels
of scientific and technological service. Ask
Due to historical and cultural reasons your sister or your classmate what she
there is a division of labour between men would like to take up as a career?
and women in the family. Women
generally look after domestic chores and
Quality of Population
men work in the fields. Sakal’s mother The quality of population depends upon
Sheela cooks food, cleans utensils, washes the literacy rate, health of a person
clothes, cleans the house and looks after indicated by life expectancy and skill
her children. Sakal’s father Buta formation acquired by the people of the
cultivates the field, sells the produce in country. The quality of the poulation
the market and earns money for the family. ultimately decides the growth rate of the
Sheela is not paid for the services country. Illiterate and unhealthy
delivered for upbringing of the family. population are a liability for the economy.
Buta earns money, which he spends on Literate and healthy population are an
rearing his family. Women are not paid asset.
for their service delivered in the family.
Their work is not accounted in the Education
national income which is a sum total of Sakal’s education in the initial years of
goods and services produced in a country. his life bore him the fruits in the later
Geeta, mother of Vilas, earned an years in terms of a good job and salary.
income by selling fish. Thus women are We saw education was an important
paid for their work when they enter the input for the growth of Sakal. It opened
labour market. Their earning like that of new horizon for him, provided new
their male counterpart is determined on aspiration and developed values of life.
the basis of education and skill. Education Not only for Sakal, education contributes

20 Economics
...human being is a positive asset and
a precious national resource which
needs to be cherished, nurtured and
developed with tenderness and care,
coupled with dynamism. Each
individual’s growth presents a
different range of problems and
requirements. ... The catalytic action
Picture 2.4 School children of education in this complex and
dynamic growth process needs to be
towards the growth of society also. It planned meticulously and executed
enhances the national income, cultural with great sensitivity.
richness and increases the efficiency of
governance. There is a provision made Source: National Education Policy, 1986.

Graph 2.1: Literacy rates in India


person
80 male
70 woman
60
50
40
30
20
10
0
1951 1961 1971 1981 1991 2001

Source: Census of India 2001, Series I India, Paper 1 of 2001.

for providing universal access, retention Let’sDiscuss


and quality in elementary education with Study the graph and answer the following
a special emphasis on girls. There is also questions:
an establishment of pace setting of 1. Has the literacy rates of the population
schools like Navodaya Vidyalaya in each increased since 1951?
district. Vocational streams have been 2. In which year India has the highest
developed to equip large number of high literacy rates?
school students with occupations related 3. Why literacy rate is high among the
to knowledge and skills. The plan outlay males of India?
on education has increased from Rs 151 4. Why are women less educated than men?
crore in the first plan to Rs 43,825 crore 5. How would you calculate literacy rate
in the tenth plan. The expenditure on in India?
education as a percentage of GDP rose 6. What is your projection about India’s
from 0.64% in 1951–52 to 3.98% in 2002– literacy rate in 2010?
People as Resource 21
2010 .... It is a time bound initiative of
Activity
the central Government, in partnership
Count the number of boys and girls with the states, the local Government
studying in your class or in your and the community for achieving the goal
neighbouring co-ed school. of universalisation of elementary
Ask the school administrator to education.” Along with it, bridge courses
provide you with the data of boys and and back-to-school camps have been
girls studying in your class below five initiated to increase the enrollment in
years and ten years. Study the elementary education. Mid-day meal
difference if any and explain it in the scheme has been implemented to
classroom. encourage attendance and retention of
children and improve their nutritional
03 (Budgetary estimate). The literacy status. These policies could add to the
rates have increased from 18% in 1951 literate population of India.
to 65% in 2001. Literacy is not only a The tenth plan endeavoured to
right, it is also needed if the citizen are increase the enrollment in higher
to perform their duties and enjoy their education of the 18 to 23 years age group
right properly. However, a vast difference from the present 6% to 9% by the end of
is noticed across different sections of the plan period. The strategy focuses on
population. Literacy among males is increasing access, quality, adoption of
nearly 50% higher than females and it states-specific curriculum modification,
is about 50% higher in urban areas as vocationalisation and networking on the
compared to the rural areas. Literacy use of information technology. The plan
rates vary from 96% in some district of also focuses on distant education,
Kerala to a below 30% in some parts of convergence of formal, non-formal, distant
Madhya Pradesh. The primary school and IT education institutions. Over the
system has expanded to over 5,00,000 past fifty years, there has been a
villages in India. Unfortunately, this huge significant growth in the number of
expansion of schools has been diluted by university and institutions of higher
the poor quality of schooling and high learning in specialised areas. Let us read
dropout rates. “Sarva Siksha Abhiyan is the table to see the increase in number
a significant step towards providing of college, universities, enrollment of
elementary education to all children in students and recruitment of teachers
the age group of six to fourteen years by since 1951 to 1999.

Table 2.1: Number of Institutions of Higher Education, Enrolment and Faculty

Year Number of Number of Students Teachers


Colleges Universities

1950–51 750 30 2,63,000 24,000


1990–91 7,346 177 49,25,000 2,72,000
1996–97 9,703 214 67,55,000 3,21,000
1998–99 11,089 238 74,17,000 3,42,000

Source: UGC Annual Report 1996–97 and 1998–99 and Selected Educational
Statistics, Ministry of HRD.

22 Economics
Let’sDiscuss improvement in the health status of the
population has been the priority of the
Discuss this table in the classroom and country. Our national policy, too, aimed
answer the following questions. at improving the accessibility of health
1. Is the increase in number of colleges care, family welfare and nutritional
adequate to admit the increasing service with special focus on under -
number of students? privileged segment of population. Over the
2. Do you think we should have more last five decades India has built up a vast
number of Universities? health infrastructure and man power
3. What is the increase noticed among required at primary secondary and
the teachers in the year 1998–99. tertiary care in Government as well as in
the private sector.
4. What is your idea about future college
and Universities?
These measures adopted have
Health increased the life expectancy to over
64 years in 2000. *Infant mortality
Firm maximise profit: Do you think any
rate (IMR) has come down from 147
firm would be induced to employ people
in 1951 to 75 in 2000. **Crude birth
who might not work efficiently as a
rates have dropped to 26.1 and
healthy worker because of ill health?
***death rates to 8.7 within the same
The health of a person helps him to
duration of time. Increase in life
realise his potential and the ability to
expectancy and improvement in
fight illness. An unhealthy person
childcare are useful in assessing the
becomes a liability for an organisation
future progress of the country.
indeed; health is an indispensable basis
Increase in longevity of life is an
for realising one’s well being. Henceforth,
indicator of good quality of life
marked by self-confidence. Reduction
in infant mortality involves the
protection of children from infection,
ensuring nutrition along with mother
and childcare.

Source: National Health Policy, 2002.

Let’sDiscuss
Study the Table 2.2 and answer the
following questions.
1. What is the percentage increase in
dispensaries from 1951 to 2001?
2. What is the percentage increase in
doctors and nursing personnel from
Picture 2.5 Children standing in queue for 1951 to 2001?
health check-up

* Infant mortality rate is the death of a child under one year of age.
** Birth rates is the number of babies born there for every 1,000 people during a particular period of time.
*** Death rate is the number of people per 1,000 who die during a particular period of time.

People as Resource 23
Table 2.2: Health infrastructure over the years

1951 1981 2001

H SC/PHC/CHC 725 57,363 1,63,181

Dispensaries and Hospitals 9.209 23,555 43,322

Beds 1,17,198 5,69,495 8,70,161

Doctors (Allopathy) 61,800 2,68,700 5,03,900

Nursing Personnel 18,054 1,43,887 7,37,000

SC: Sub centre, PHC: Primary Health Centre, CHC: Community Health Centre.
Source: National Health Policy, 2002.

3. Do you think the increase in the


number of doctor and nurses adequate How many doctors are there in the
for India? If not, why? hospital?
4. What other facilities would you like to How many nurses work in that
provide in a hospital? hospital?
5. Discuss about the hospital you have Besides, try to gather the following
visited? additional information:
6. Can you draw graph using this table. How many hospitals are there in your
locality?
There are many places in India which
How many dispensaries are there in
do not have even these basic facilities.
your locality?
Just four states like Karnataka, Andhra
Pradesh, Tamil Nadu, Maharashtra have
81 out of 181 medical colleges. On the
Unemployment
other hand states like Bihar and Uttar
Pradesh have poor health indices and few Sakal’s mother Sheela looked after the
medical colleges. domestic chores, children and helped her
husband Buta in the field. Sakal’s
brother, Jeetu and sister Seetu spend
Activity their time playing and roaming. Can you
Visit a nearby hospital, either call Sheela or Jeetu or Seetu
government or private and note down unemployed? If not, why?
the following details. Unemployment is said to exist when
people who are willing to work at the going
How many beds are there in the
wages cannot find jobs. Sheela is not
hospital you have visited?
interested in working outside her

24 Economics
domestic domain. Jeetu and Seetu are too phenomenon. Many youth with
small to be counted in the work force matriculation, graduation and post
population. Neither Jeetu, Seetu or Sheela graduation degrees are not able to find
can be counted as unemployed. The job. A study showed that unemployment
workforce population includes people from of graduate and post-graduate has
15 years to 59 years. Sakal’s brother and increased faster than among
sister do not fall within this age group so matriculates. A paradoxical manpower
they cannot be called unemployed. Sakal’s situation is witnessed as surplus of
mother Sheela works for the family. She manpower in certain categories coexist
is not willing to work outside her domestic with shortage of manpower in others.
domain for payment. She too cannot be There is unemployment among
called unemployed. Sakal’s grandparents technically qualified person on one hand,
(although not mentioned in the story) while there is a dearth of technical skills
cannot be called unemployed. required for economic growth.
In case of India we have unemployment Unemployment leads to wastage of
in rural and urban areas. However, the manpower resource. People who are an
nature of the unemployed differs in rural asset for the economy turn into a liability.
and urban areas. In case of rural areas, There is a feeling of hopelessness and
there is seasonal and disguised despair among the youth. People do not
unemployment. Urban areas have mostly have enough money to support their
educated unemployment. family. Inability of educated people who
Seasonal unemployment happens are willing to work to find gainful
when people are not able to find jobs employment implies a great social waste.
during some months of the year. People Unemployment tends to increase
dependant upon agriculture usually face economic overload. The dependence of the
such kind of problem. There are certain unemployed on the working population
busy seasons when sowing, harvesting, increases. The quality of life of an
weeding, threshing is done. Certain individual as well as of society is adversely
months do not provide much work to the affected. When a family has to live on a
people dependant on agriculture. bare subsistence level there is a general
In case of disguised unemployment decline in its health status and rising
people appear to be employed. They have withdrawal from the school system.
agricultural plot where they find work. Hence, unemployment has detrimental
This usually happens among family impact on the overall growth of an
members engaged in agricultural activity. economy. Increase in unemployment is an
The work requires the service of five indicator of a depressed economy. It also
people but engages eight people. Three wastes the resource, which could have
people are extra. These three people also been gainfully employed. If people cannot
work in the same plot as five people. The be used as a resource they naturally
contribution made by the three extra appear as a liability to the economy.
people does not add to the contribution In case of India, statistically, the
made by the five people. If three people unemployment rate is low. A large
are removed the productivity of the field number of people represented with low
will not decline. The field requires the income and productivity are counted as
service of five people and the three extra employed. They appear to work
people are disguisedly employed. throughout the year but in terms of their
In case of urban areas educated potential and income, it is not adequate
unemployment has become a common for them. The work that they are pursuing
People as Resource 25
seems forced upon them. They may the secondary sector, small scale
therefore want other work of their choice. manufacturing is the most labour -
Poor people cannot afford to sit idle. They absorbing. In case of the tertiary sector,
tend to engage in any activity irrespective various new services are now appearing
of its earning potential. Their earning like biotechnology, information technology
keeps them on a bare subsistence level. and so on.
Let us read a story to know how people
could become an asset for the economy of
a village.

Story of a Village
There was a village inhabited by
several families. Each family
produced enough to feed its members.
Each family met its needs by the
members making their own clothes
and teaching their own children. One
of the families decided to send one of
its sons to an agriculture college. The
Picture 2.6 Can you remember how much did boy got his admission in the nearby
you pay when you asked him to college of agriculture. After some time
mend your shoes or slippers? he became qualified in agro-
engineering and came back to the
Moreover, the employment structure
is characterised by self-employment in the village. He proved to be so creative
primary sector. The whole family that he could design an improved type
contributes in the field even though not of plough, which increased the yield
everybody is really needed. So there is of wheat. Thus a new job of agro-
disguised unemployment in the engineer was created and filled in the
agriculture sector. But all the family also village. The family in the village sold
have a share in what has been produced. the surplus in a nearby neighbouring
This concept of sharing of work in the field village. They earned good profit,
and the produce raised reduces the which they shared among
hardship of unemployment in the rural themselves. Inspired by this success
sector. But this does not reduce the all the families after some time held
poverty of the family, gradually surplus a meeting in the village. They all
labour from every household tends to wanted to have a better future for
migrate from the village in search of jobs. their children too. They requested the
Let us discuss about the employment panchayat to open a school in the
scenario in the three sectors mentioned village. They assured the panchayat
earlier. Agriculture, is the most labour that they would all send their
absorbing sector of the economy. In recent children to school. The panchayat,
years, there has been a decline in the with the help of government, opened
dependence of population on agriculture a school. A teacher was recruited
partly because of disguised unemployment from a nearby town. All the children
discussed earlier. Some of the surplus of this village started going to school.
labour in agriculture has moved to either After sometime one of the families
the secondary or the tertiary sector. In gave training to his daughter in

26 Economics
tailoring. She started stitching clothes consume. Now they could sell what
for all the families of the village for they produced to others who came to
everyone now wanted to buy and wear their village markets. Over time, this
well-tailored clothes. Thus another village, which formally had no job
new job, that of a tailor was created. opportunities in the beginning, had
This had another positive effect. The many like teacher, tailor, agro–
time of the farmers in going far for engineer and many more. This was
buying clothes was saved. As the the story of a simple village where
farmers spent more time in the field, the rising level of human capital
the yield of the farms went up. This enabled it to evolve into a place rich
was the beginning of prosperity. The with complex and modern economic
farmers had more than they could activities.

Summary
You have seen how inputs like education and health helped in making people an
asset for the economy. The chapter also discusses about the economic activities
undertaken in the three sectors of the economy. We also study about the problem
associated with unemployment. Finally the chapter ends with the story of a village
which formally had no job but later had plenty.

Exercises
1. What do you understand by 'people as a resource'?
2. How is human resource different from other resources like land and physical
capital?
3. What is the role of education in human capital formation?
4. What is the role of health in human capital formation?
5. What part does health play in the individual’s working life?
6. What are the various activities undertaken in the primary sector, secondary
sector and tertiary sector?
7. What is the difference between economic activities and non-economic activities?
8. Why are women employed in low paid work?
9. How will you explain the term unemployment?
10. What is the difference between disguised unemployment and seasonal
unemployment?
11. Why is educated unemployed, a peculiar problem of India?
12. In which field do you think India can build the maximum employment
opportunity?
13. Can you suggest some measures in the education system to mitigate the problem
of the educated unemployed?
14. Can you imagine some village which initially had no job opportunities but
later came up with many?
15. Which capital would you consider the best — land, labour, physical capital
and human capital? Why?
People as Resource 27
References
GARY, S. BECKER. 1966. Human Capital: A theoretical and Empirical Analysis, with Special
Reference to Education, General Series. Number 80. New York. National Bureau
of Economic Research.
THEODORE W. SCHULTZ. “Investment in Human Capital” American Economic Review.
March 1961.
Economic Survey 2004–2005. Ministry of Finance, Government of India, New Delhi.
India Vision 2020. The Report. Planning Commission. Government of India, New
Delhi.
Mid-Term Appraisal of the Tenth Five Year Plan (2002–2007). Planning Commission,
Part II. New Delhi.
Tenth Five Year Plan ( 2002–2007). Planning Commission, New Delhi.

28 Economics
3
Chapter Poverty as a Challenge

Overview dhabas. They could also be beggars with


This chapter deals with one of the most children in tatters. We see poverty all
difficult challenges faced by independent around us. In fact, every fourth person in
India—poverty. After discussing this India is poor. This means, roughly 260
multi-dimensional problem through million (or 26 crore) people in India live
examples, the chapter discusses the way in poverty. This also means that India has
poverty is seen in social sciences. Poverty the largest single concentration of the poor
trends in India and the world are in the world. This illustrates the
illustrated through the concept of the seriousness of the challenge.
poverty line. Causes of poverty as well as
anti-poverty measures taken by the Two Typical Cases of Poverty
government are also discussed. The
chapter ends with broadening the official Urban Case
concept of poverty into human poverty. Thirty-three year old Ram Saran works
as a daily-wage labourer in a wheat
Introduction flour mill near Ranchi in Jharkhand.
In our daily life, we come across many He manages to earn around Rs 1,500
people who we think are poor. They could a month when he finds employment,
be landless labourers in villages or people which is not often. The money is not
living in overcrowded jhuggis in cities. They enough to sustain his family of six—
could be daily wage workers at that includes his wife and four children
construction sites or child workers in aged betweem 12 years to six months.

Picture 3.1 Story of Ram Saran


Poverty as a Challenge 29
He has to send money home to his old Rural case
parents who live in a village near Lakha Singh belongs to a small village
Ramgarh. His father a landless near Meerut in Uttar Pradesh. His
labourer, depends on Ram Saran and family doesn’t own any land, so they
his brother who lives in Hazaribagh, do odd jobs for the big farmers. Work
for sustenance. Ram Saran lives in a is erratic and so is income. At times
one-room rented house in a crowded they get paid Rs 50 for a hard day’s
basti in the outskirts of the city. It’s a work. But often it’s in kind like a few
temporary shack built of bricks and kilograms of wheat or dal or even
clay tiles. His wife Santa Devi, works vegetables for toiling in the farm
as a part time maid in a few houses through the day. The family of eight
and manages to earn another Rs 800. cannot always manage two square
They manage a meagre meal of dal and meals a day. Lakha lives in a kuchha
rice twice a day, but there’s never hut on the outskirts of the village.
enough for all of them. His elder son The women of the family spend the
works as a helper in a tea shop to day chopping fodder and collecting
supplement the family income and firewood in the fields. His father a
earns another Rs 300, while his 10- TB patient, passed away two years
year -old daughter takes care of the ago due to lack of medication. His
younger siblings. None of the children mother now suffers from the same
go to school. They have only two pairs disease and life is slowly ebbing away.
of hand-me-down clothes each. New Although, the village has a primary
ones are bought only when the old school, Lakha never went there. He
clothes become unwearable. Shoes are had to start earning when he was 10
a luxury. The younger kids are years old. New clothes happen once
undernourished. They have no access in a few years. Even soap and oil are
to healthcare when they fall ill. a luxury for the family.

Study the above cases of poverty


and discuss the following issues
related to poverty:
• Landlessness
• Unemployment
• Size of families
• Illiteracy
• Poor health/malnutrition
• Child labour
• Helplessness

Picture 3.2 Story of Lakha Singh

30 Economics
These two typical cases illustrate many both a cause as well as a
dimensions of poverty. They show that consequence of poverty in the usual
poverty means hunger and lack of shelter. sense. Broadly, it is a process through
It also is a situation in which parents are which individuals or groups are
not able to send their children to school excluded from facilities, benefits and
or a situation where sick people cannot opportunities that others (their
afford treatment. Poverty also means lack “betters”) enjoy. A typical example is
of clean water and sanitation facilities. It the working of the caste system in
also means lack of a regular job at a India in which people belonging to
minimum decent level. Above all it means certain castes are excluded from
living with a sense of helplessness. Poor equal opportunities. Social exclusion
people are in a situation in which they thus may lead to, but can cause more
are ill-treated at almost every place, in damage than, having a very low
farms, factories, government offices, income.
hospitals, railway stations etc. Obviously,
Vulnerability
nobody would like to live in poverty.
One of the biggest challenges of Vulnerability to poverty is a measure,
independent India has been to bring which describes the greater
millions of its people out of abject poverty. probability of certain communities
Mahatama Gandhi always insisted that (say, members of a backward caste)
India would be truly independent only or individuals (such as a widow or a
when the poorest of its people become free physically handicapped person) of
of human suffering. becoming, or remaining, poor in the
coming years. Vulnerability is
Poverty as seen by social scientists determined by the options available
Since poverty has many facets, social to different communities for finding
scientists look at it through a variety of an alternative living in terms of
indicators. Usually the indicators used assets, education, health and job
relate to the levels of income and opportunities. Further, it is analysed
consumption. But now poverty is looked on the basis of the greater risks these
through other social indicators like groups face at the time of natural
illiteracy level, lack of general resistance disasters (earthquakes, tsunami),
due to malnutrition, lack of access to terrorism etc. Additional analysis is
healthcare, lack of job opportunities, lack made of their social and economic
of access to safe drinking water, ability to handle these risks. In fact,
sanitation etc. Analysis of poverty based vulnerability describes the greater
on social exclusion and vulnerability is probability of being more adversely
now becoming very common (see box). affected than other people when bad
time comes for everybody, whether a
Social exclusion flood or an earthquake or simply a
fall in the availability of jobs!
According to this concept, poverty
must be seen in terms of the poor
having to live only in a poor Poverty Line
surrounding with other poor people, At the centre of the discussion on poverty
excluded from enjoying social equality is usually the concept of the “poverty line”.
of better -of f people in better A common method used to measure
surroundings. Social exclusion can be poverty is based on the income or

Poverty as a challenge 31
consumption levels. A person is the higher amount for urban areas has
considered poor if his or her income or been fixed because of high prices of many
consumption level falls below a given essential products in urban centres. In
“minimum level” necessary to fulfill basic this way in the year 2000, a family of five
needs. What is necessary to satisfy basic members living in rural areas and
needs is different at different times and earning less than about Rs 1,640 per
in different countries. Therefore, poverty month will be below the poverty line. A
line may vary with time and place. Each similar family in the urban areas would
country uses an imaginary line that is need a minimum of Rs 2,270 per month
considered appropriate for its existing level to meet their basic requirements. The
of development and its accepted minimum poverty line is estimated periodically
social norms. For example, a person not (normally every five years) by conducting
having a car in the United States may be sample surveys. These surveys are
considered poor. In India, owning of a car carried out by the National Sample Survey
is still considered a luxury. Organisation (NSSO). However, for
While determining the poverty line in making comparisons between developing
India, a minimum level of food countries, many international
requirement, clothing, footwear, fuel and organisations like the World Bank use a
light, educational and medical uniform standard for the poverty line:
requirement etc. are determined for minimum availability of the equivalent of
subsistence. These physical quantities are $1 per person per day.
multiplied by their prices in rupees. The
present formula for food requirement Let’sDiscuss
while estimating the poverty line is based Discuss the following:
on the desired calorie requirement. Food
• Why do different countries use different
items such as cereals, pulses, vegetable,
poverty lines?
milk, oil, sugar etc. together provide these
needed calories. The calorie needs vary • What do you think would be the
depending on age, sex and the type of “minimum necessary level” in your
work that a person does. The accepted locality?
average calorie requirement in India is
2400 calories per person per day in rural Poverty Estimates
areas and 2100 calories per person per It is clear from the Table 3.1 that there is
day in urban areas. Since people living substantial decline in poverty ratios in
in rural areas engage themselves in more India from about 55 per cent in 1973 to
physical work, calorie requirements in 36 per cent in 1993. The proportion of
rural areas are considered to be higher people below poverty line further came
than urban areas. The monetary down to about 26 per cent in 2000. If the
expenditure per capita needed for buying trend continues, people below poverty line
these calorie requirements in terms of may come down to less than 20 per cent
food grains etc. is revised periodically in the next few years. Although the
taking into consideration the rise in percentage of people living under poverty
prices. declined in the earlier two decades (1973–
On the basis of these calculations, for 1993), the number of poor remained stable
the year 2000, the poverty line for a person around 320 million for a fairly long period.
was fixed at Rs 328 per month for the The latest estimates indicate a significant
rural areas and Rs 454 for the urban reduction in the number of poor to about
areas. Despite less calorie requirement, 260 million.
32 Economics
Table 3.1: Estimates of Poverty in India

Poverty ratio (%) Number of poor (in millions)

Year Rural Urban Combined Rural Urban Combined

1973–74 56.4 49.0 54.9 261 60 321


1993–94 37.3 32.4 36.0 244 76 320

1999–00 27.1 23.6 26.1 193 67 260

Source: Economic Survey 2002–03, Ministry of Finance, Government of India.

Let’sDiscuss among the economic groups, the most


vulnerable groups are the rural
Study the Table 3.1 and answer the agricultural labour households and the
following questions: urban casual labour households. The
• Even if poverty ratio declined between following Graph 3.1 shows the percentage
1973–74 and 1993–94, why did the of poor people in all these groups.
number of poor remain at about 320 Although the average for people below
million? poverty line for all groups in India is 26,
• Are the dynamics of poverty reduction 51 out of 100 people belonging to
the same in rural and urban India? scheduled tribes are not able to meet their
basic needs. Similarly, 50 per cent of
Vulnerable Groups casual workers in urban areas are below
The proportion of people below poverty line poverty line. About 50 per cent of landless
is also not same for all social groups and agricultural workers and 43 per cent of
economic categories in India. Social scheduled castes are also poor. The double
groups which are most vulnerable to disadvantage, of being a landless casual
poverty are scheduled caste and wage labour household in the socially
scheduled tribe households. Similarly, disadvantaged social groups of the

Graph 3.1: Poverty in India 2000: Most Vulnerable Groups


60
100 person from the category

51 50
Number of poor out of every

50 47
43
40

30 26

20

10

0
Scheduled Urban casual Rural agriculture Scheduled Average Indian
tribes labourers labourers castes poverty ratio
Social Groups and Economic Categories
Source: Reports on Employment and Unemployment among Social Groups in India No. 469,472,
NSSO, Ministry of Statistics, Programme Implementation, Govt of India.
Poverty as a Challenge 33
Picture 3.3 Story of Sivaraman
scheduled caste or the scheduled tribe
population highlights the seriousness of Story of Sivaraman
the problem. Some recent studies have Sivaraman lives in a small village
shown that except for the scheduled tribe near Karur town in Tamil Nadu. Karur
households, all the other three groups (i.e. is famous for its handloom and
scheduled castes, rural agricultural powerloom fabrics. There are a 100
labourers and the urban casual labour families in the village. Sivaraman an
households) have seen a decline in poverty Aryunthathiyar (cobbler) by caste now
in the 1990s. works as an agricultural labourer for
Apart from these social groups, there Rs 50 per day. But that’s only for five
is also inequality of incomes within a to six months in a year. At other
family. In poor families all suffer, but some times, he does odd jobs in the town.
suffer more than others. Women, elderly His wife Sasikala too works with him.
people and female infants are But she can rarely find work these
systematically denied equal access to days, and even if she does, she’s paid
resources available to the family. Rs 25 per day for the same work that
Therefore women, children (especially the Sivaraman does. There are eight
girl child) and old people are poorest of members in the family. Sivaraman’s
the poor (see box). 65 year old widowed mother is ill and

34 Economics
Although state level poverty has witnessed
needs to be helped with her daily
a secular decline from the levels of early
chores. He has a 25-year -old
seventies, the success rate of reducing
unmarried sister and four children
poverty varies from state to state. Recent
aged between 1 year to 16 years.
estimates show that in 20 states and
Three of them are girls, the youngest
union territories, the poverty ratio is less
is a son. None of the girls go to school.
than the national average. On the other
Buying books and other things for
hand, poverty is still a serious problem
school-going girls is a luxury he
in Orissa, Bihar, Assam, Tripura and
cannot afford. Also, he has to get them
Uttar Pradesh. As the Graph 3.2 shows,
married at some point of time so he
Orissa and Bihar continue to be the two
doesn’t want to spend on their poorest states with poverty ratios of 47
education now. His mother has lost and 43 per cent respectively. Along with
interest in life and is just waiting to rural poverty urban poverty is also high
die someday. His sister and elder in Orissa, Madhya Pradesh, Bihar and
daughter take care of the household. Uttar Pradesh.
Sivaraman plans to send his son to In comparison, there has been a
school when he comes of age. His significant decline in poverty in Kerala,
unmarried sister does not get along Jammu and Kashmir, Andhra Pradesh,
with his wife. Sasikala finds her a Tamil Nadu, Gujarat and West Bengal.
burden but Sivaraman can’t find a States like Punjab and Haryana have
suitable groom due to lack of money. traditionally succeeded in reducing
Although the family has difficulty in poverty with the help of high agricultural
arranging two meals a day, growth rates. Kerala has focused more on
Sivaraman manages to buy milk once human resource development. In West
in a while, but only for his son. Bengal, land reform measures have
helped in reducing poverty. In Andhra
Pradesh and Tamil Nadu public
distribution of food grains could have been
responsible for the improvement.
Let’sDiscuss Global Poverty Scenario
Observe some of the poor families The proportion of people in developing
around you and try to find the following: countries living in extreme economic
• Which social and economic group do poverty— defined by the World Bank as
they belong to? living on less than $1 per day—has fallen
from 28 per cent in 1990 to 21 per cent in
• Who are the earning members in the 2001. Although there has been a
family? substantial reduction in global poverty, it
• What is the condition of the old people is marked with great regional differences.
in the family? Poverty declined substantially in China
• Are all the children (boys and girls) and Southeast Asian countries as a result
attending schools? of rapid economic growth and massive
investments in human resource
development. Number of poors in China
Inter-State Disparities has come down from 606 million in 1981
Poverty in India also has another aspect to 212 million in 2001. In the countries of
or dimension. The proportion of poor South Asia (India, Pakistan, Sri Lanka,
people is not the same in every state. Nepal, Bangladesh, Bhutan) the decline has
Poverty as a challenge 35
Graph 3.2: Poverty Ratio in Selected Indian States, 1999–2000
50 47.2
45 42.6
40
Percentage of people

37.4
below poverty line

36.1
35 34.4
31.2
30 27.1 26.1
25
25
21.1
20
20
15.8 15.3
15 14
12.7

10 8.7 8.2 7.6


6.2
5 3.5

0
h

ia
am

ra
ra

an

sh

ab
ka

na
ar

at

a
a

hi
l
ga

h
es

al
es
ss

ir
ad
d

ht
pu
ih

ar

nj
de
el
es

th
ta

ya

hm
In
ss

er
ad

en
ri

ad

N
B

D
as

uj

Pu
na
ri

ad

as

ra
ar
O

K
pr

ll
B
Pr

il

G
T

as
ar

lP
aj

H
Pr
ar
A

m
t

ah

K
a

R
ar

es

K
Ta

ha
hy

&
tt

hr

ac
ad

u
nd

im

m
M

m
H

Ja
Source: Economic Survey 2001–02, Ministry of Finance, Government of India

Let’sDiscuss calls for reducing the proportion of people


living on less than $1 a day to half the
Study the Graph 3.2 and do the following:
1990 level by 2015.
• Identify the three states where the
poverty ratio is the highest.
Let’sDiscuss
• Identify the three states where poverty
ratio is the lowest. Study the Graph 3.4 and do the following:
• Identify the areas of the world, where
not been as rapid. Despite decline in the poverty ratios have declined.
percentage of the poor, the number of poor
• Identify the area of the globe which has
has declined marginally from 475 million
in 1981 to 428 million in 2001. Because of the largest concentration of the poor.
different poverty line definition, poverty in
India is also shown higher than the
national estimates. Table 3.2: Poverty: Comparison among
Some Selected Countries
In Sub-Saharan Africa, poverty in fact
rose from 41 per cent in 1981 to 46 per Country % of Population below
cent in 2001 (see graph 3.3). In Latin $1 a day
America, the ratio of poverty remained the 1. Nigeria 70.8
same. Poverty has also resurfaced in 2. Bangladesh 36.0
some of the former socialist countries like 3. India 35.3
Russia, where officially it was non-
4. Pakistan 17.0
existent earlier. Table 3.2 shows the
5. China 16.6
proportion of people living under poverty
6. Brazil 8.2
in different countries as defined by the
7. Indonesia 7.5
inter national poverty line (means
8. Sri Lanka 5.6
population below $1 a day). The Millennium
Development Goals of the United Nations Source: World Development Report, 2001.

36 Economics
Graph 3.3: Share of people living on $1 a day, 1980–2001
70
China

60 East Asia &


Pacific

South Asia
50
Sub-Saharan Africa Sub-Saharan Africa
Percentage

40

South Asia
30

20
China

Latin American & Carribean East Asia &


Pacific
10
Latin American & Carribean

0
1981 1990 2001
Years

Source: World Development Indicators 2005, The World Bank.

Graph 3.4: Number of poor by region ($ 1 per day) in millions


2500

2000

1500
Millions

Sub-Saharan Africa
others

East Asia &


1000 Pacific

China

500

South Asia

0
1981 1984 1987 1990 1993 1996 1999 2001
Years

Source: World Development Indicators 2005, The World Bank.

Poverty as a Challenge 37
Causes of Poverty effectively by most of the state
governments. Since lack of land resources
There were a number of causes for the
has been one of the major causes of
widespread poverty in India. One
poverty in India, proper implementation
historical reason is the low level of
of policy could have improved the life of
economic development under the British
millions of rural poor.
colonial administration. The policies of
Many other socio-cultural and
the colonial government ruined traditional
economic factors also are responsible for
handicrafts and discouraged development
poverty. In order to fulfil social obligations
of industries like textiles. The low rate of
and observe religious ceremonies, people
growth persisted until the nineteen-
in India, including the very poor, spend a
eighties. This resulted in less job
lot of money. Small farmers need money
opportunities and low growth rate of
to buy agricultural inputs like seeds,
incomes. This was accompanied by a high
fertilizer, pesticides etc. Since poor people
growth rate of population. The two
hardly have any savings, they borrow.
combined to make the growth rate of per
Unable to repay because of poverty, they
capita income very low. The failure at both
become victims of indebtedness. So the
the fronts: promotion of economic growth
high level of indebtedness is both the
and population control perpetuated the
cause and effect of poverty.
cycle of poverty.
With the spread of irrigation and the Anti-Poverty Measures
Green revolution, many job opportunities
Removal of poverty has been one of the
were created in the agriculture sector. But
major objectives of Indian developmental
the effects were limited to some parts of strategy. The current anti-poverty
India. The industries, both in the public strategy of the government is based
and the private sector, did provide some broadly on two planks (1) promotion of
jobs. But these were not enough to absorb economic growth (2) targeted anti-poverty
all the job seekers. Unable to find proper programmes.
jobs in cities, many people started working Over a period of thirty years lasting
as rickshaw pullers, vendors, up to the early eighties, there were little
construction workers, domestic servants per capita income growth and not much
etc. With irregular small incomes, these reduction in poverty. Official poverty
people could not afford expensive housing. estimates which were about 45 per cent
They started living in slums on the in the early 1950s remained the same even
outskirts of the cities and the problems in the early eighties. Since the eighties,
of poverty, largely a rural phenomenon India’s economic growth has been one of
also became the feature of the urban the fastest in the world. The growth rate
sector. jumped from the average of about 3.5 per
Another feature of high poverty rates cent a year in the 1970s to about 6 per
has been the huge income inequalities. cent during the 1980s and 1990s. The
One of the major reasons for this is the higher growth rates have helped
unequal distribution of land and other significantly in the reduction of poverty.
resources. Despite many policies, we have Therefore, it is becoming clear that there
not been able to tackle the issue in a is a strong link between economic growth
meaningful manner. Major policy and poverty reduction. Economic growth
initiatives like land reforms which aimed widens opportunities and provides the
at redistribution of assets in rural areas resources needed to invest in human
have not been implemented properly and development. This also encourages people
38 Economics
to send their children, including the girl Prime Minister Rozgar Yozana (PMRY)
child, to schools in the hope of getting is another scheme which was started in
better economic returns from investing in 1993. The aim of the programme is to
education. However, the poor may not be create self-employment opportunities for
able to take direct advantage from the educated unemployed youth in rural areas
opportunities created by economic and small towns. They are helped in
growth. Moreover, growth in the setting up small business and industries.
agriculture sector is much below Rural Employment Generation Programme
expectations. This has a direct bearing (REGP) was launched in 1995. The aim of
on poverty as a large number of poor the programme is to create self-
people live in villages and are dependent employment opportunities in rural areas
on agriculture. and small towns. A target for creating 25
In these circumstances, there is a lakh new jobs has been set for the
clear need for targeted anti-poverty programme under the Tenth Five Year
programmes. Although there are so many plan. Swarnajayanti Gram Swarozgar
schemes which are formulated to affect Yojana (SGSY) was launched in 1999. The
poverty directly or indirectly, some of them programme aims at bringing the assisted
are worth mentioning. National Rural poor families above the poverty line by
Employment Guarantee Act (NREGA) 2005 organising them into self help groups
through a mix of bank credit and
was passed in September 2005. The Act
government subsidy. Under the Pradhan
provides 100 days assured employment
Mantri Gramodaya Yozana (PMGY)
every year to every rural household in 200
launched in 2000, additional central
districts. Later, the scheme will be
assistance is given to states for basic
extended to 600 districts. One third of the
services such as primary health, primary
proposed jobs would be reserved for
education, rural shelter, rural drinking
women. The central government will also
water and rural electrification. Another
establish National Employment important scheme is Antyodaya Anna
Guarantee Funds. Similarly state Yozana (AAY) about which you will be
governments will establish State reading more in the next chapter.
Employment Guarantee Funds for The results of these programmes have
implementation of the scheme. Under the been mixed. One of the major reasons for
programme if an applicant is not provided less effectiveness is the lack of proper
employment within fifteen days s/he will implementation and right targeting.
be entitled to a daily unemployment Moreover, there has been a lot of
allowance. Another important scheme has overlapping of schemes. Despite good
been the National Food for Work Programme intentions, the benefits of these schemes
(NFWP), which was launched in 2004 in are not fully reached to the deserving poor.
150 most backward districts of the Therefore, the major emphasis in recent
country. The programme is open to all years is on proper monitoring of all the
rural poor who are in need of wage poverty alleviation programmes.
employment and desire to do manual
unskilled work. It is implemented as a The Challenges Ahead
100 per cent centrally sponsored scheme Poverty has certainly declined in India.
and foodgrains are provided free of cost But despite the progress, poverty
to the states. Once the NREGA is in force, reduction remains India’s most
the NFWP will be subsumed within this compelling challenge. Wide disparities in
programme. poverty are visible between rural and

Poverty as a challenge 39
urban areas and among different states. have been able to feed themselves. But
Certain social and economic groups are do they have education? Or shelter? Or
more vulnerable to poverty. Poverty health care? Or job security? Or self-
reduction is expected to make better confidence? Are they free from caste and
progress in the next ten to fifteen years. gender discrimination? Is the practice of
This would be possible mainly due to child labour still common? Worldwide
higher economic growth, increasing stress experience shows that with development,
on universal free elementary education, the definition of what constitutes poverty
declining population growth, increasing also changes. Eradication of poverty is
empowerment of the women and the always a moving target. Hopefully we will
economically weaker sections of society. be able to provide the minimum
The official definition of poverty, “necessary” in terms of only income to all
however, captures only a limited part of people by the end of the next decade. But
what poverty really means to people. It is the target will move on for many of the
about a “minimum” subsistence level of bigger challenges that still remain:
living rather than a “reasonable” level of providing health care, education and job
living. Many scholars advocate that we security for all, and achieving gender
must broaden the concept into human equality and dignity for the poor. These
poverty. A large number of people may will be even bigger tasks.

Summary
You have seen in this chapter that poverty has many dimensions. Normally, this is
measured through the concept of “poverty line”. Through this concept we analysed
main global and national trends in poverty. But in recent years, analysis of poverty is
becoming rich through a variety of new concepts like social exclusion. Similarly, the
challenge is becoming bigger as scholars are broadening the concept into human
poverty.

Exercises
1. Describe how the poverty line is estimated in India.
2. Do you think that present methodology of poverty estimation is appropriate?
3. Describe poverty trends in India since 1973.
4. Discuss the major reasons for poverty in India.
5. Identify the social and economic groups which are most vulnerable to poverty
in India.
6. Give an account of interstate disparities in poverty in India.
7. Describe global poverty trends.
8. Describe current government strategy of poverty alleviation.
9. Answer the following questions briefly
(i) What do you understand by human poverty?
(ii) Who are the poorest of the poor?
(iii) What are the main features of the National Rural Employment
Guarantee Act 2005?

40 Economics
References
DEATON, ANGUS AND VALERIE KOZEL (Eds.) 2005. The Great Indian Poverty Debate.
MacMillan India Limited, New Delhi.
Economic Survey 2002–2003. Ministry of Finance, Government of India, New Delhi.
(Chapter on social sectors, [Online web] URL: http://indiabudget.nic.in/
es_2002–03/social.htm)
Economic Survey 2004–2005. Ministry of Finance, Government of India, New Delhi.
(Chapter on social sectors, [Online web] URL: http://indiabudget.nic.in/
es_2004–05/social.htm)
Mid-Term Appraisal of the Tenth Five Year Plan 2002–2007. Planning Commission,
New Delhi. Part II, Chapter 7: Poverty Elimination and Rural Employment,
[Online web] URL: http://www.planningcommission.nic.in/midterm/english-
pdf/chapter-07.pdf
National Rural Employment Guarantee Act 2005. [Online web] URL: http://
rural.nic.in/rajaswa.pdf
Tenth Five Year Plan 2002–2007. Planning Commission, New Delhi. (Chapter 3.2,
Poverty Alleviation in Rural India: Strategy and Programmes, [Online web] URL:
http://www.planningcommission.nic.in/plans/planrel/fiveyr/10th/volume2/
v2_ch3_2.pdf
World Development Report 2000–2001. Attacking Poverty, The World Bank, Oxford
University Press, Delhi.

Poverty as a Challenge 41
4
Chapter Food Security in India

Overview In the 1970s, food security was


• Food security means availability, understood as the “availability at all times
accessibility and affordability of food of adequate supply of basic foodstuffs”
(UN, 1975). Amartya Sen added a new
to all people at all times. The poor
dimension to food security and
households are more vulnerable to food
emphasised the “access” to food through
insecurity whenever there is a problem what he called ‘entitlements’ — a
of production or distribution of food combination of what one can produce,
crops. Food security depends on the exchange in the market alongwith state
Public Distribution System (PDS), or other socially provided supplies.
Government vigilance and action at Accordingly, there has been a substantial
times when this security is threatened. shift in the understanding of food security.
The 1995 World Food Summit declared,
What is food security?
“Food security at the individual,
Food is as essential for living as air is for household, regional, national and global
breathing. But food security means levels exists when all people, at all times,
something more than getting two square have physical and economic access to
meals. Food security has following sufficient, safe and nutritious food to meet
dimensions their dietary needs and food preferences
for an active and healthy life” (FAO, 1996,
(a) availability of food means food
p.3). The declaration further recognises
production within the country, food
that “poverty eradication is essential to
imports and the previous years stock
improve access to food”.
stored in government granaries.
(b) accessibility means food is within reach a national disaster/calamity like
of every person. earthquake, drought, flood, tsunami,
(c) affordability implies that an individual widespread failure of crops causing
has enough money to buy sufficient, famine, etc. How is food security
safe and nutritious food to meet one's affected during a calamity? Due to a
dietary needs. natural calamity, say drought, total
Thus, food security is ensured in a production of foodgrains decreases. It
country only if (1) enough food is available creates a shortage of food in the affected
for all the persons (2) all persons have areas. Due to shortage of food, the prices
the capacity to buy food of acceptable go up. At the high prices, some people
quality and (3) there is no barrier on cannot afford to buy food. If such calamity
access to food. happens in a very wide spread area or is
stretched over a longer time period, it
Why food security? may cause a situation of starvation.
The poorest section of the society might A massive starvation might take a turn
be food insecure most of the times while of famine.
persons above the poverty line might also A Famine is characterised by wide
be food insecure when the country faces spread deaths due to starvation and
42 Economics
epidemics caused by forced use of Do you know who were affected the
contaminated water or decaying food and most by the famine? The agricultural
loss of body resistance due to weakening labourers, fishermen, transport
from starvation. workers and other casual labourers
The most devastating famine that were affected the most by dramatically
occurred in India was the FAMINE OF increasing price of rice. They were the
BENGAL in 1943. This famine killed thirty ones who died in this famine.
lakh people in the province of Bengal.

Table 4.1: Production of Rice in the Province of Bengal

Year Production Imports Exports Total Availability


(Lakh tonnes) (Lakh tonnes) (Lakh tonnes) (Lakh tonnes)

1938 85 – – 85
1939 79 04 – 83
1940 82 03 – 85
1941 68 02 – 70
1942 93 – 01 92
1943 76 03 – 79
Source: Sen, A.K, 1981 Page 61

Let’sDiscuss
1. Some people say that the Bengal famine happened because there was a shortage
of rice. Study the table and find out whether you agree with the statement?
2. Which year shows a drastic decline in food availability?

Picture 4.1 Starvation victims arriving at a Picture 4.2 During the Bengal Famine of
relief centre, 1945. 1943, a family leaves its village
in Chittagong district in Bengal.

Food Security in India 43


engaged in seasonal activities and are paid
Suggested Activity very low wages that just ensure bare
(a) What do you see in Picture 4.1? survival.
(b) Which age group is seen in the first Story of Ramu
picture? Ramu works as a casual labourer
(c) Can you say that the family shown in in agriculture in Raipur village. His
the Picture 4.2 is a poor family? why? eldest son Somu who is 10 years old
(d) Can you imagine the source of also works as a pali to look after the
livelihood of the people, (shown in two cattle of the Sarpanch of the village
Pictures) before the occurrence of Satpal Singh. Somu is employed for
famine? (In the context of a village) the whole year by the Sarpanch and
(e) Find out what type of help is given to is paid a sum of Rs 1,000 for this
the victims of a natural calamity at a work. Ramu has three more sons
relief camp. and two daughters but they are too
(f ) Have you ever helped such victims (in young to work on the field. His wife
the form of money, food, clothes, Sunhari is also (part time) working
medicines etc.) as house cleaner for the livestock,
removing and managing cow dung.
PROJECT WORK: Gather more She gets ½ litre milk and some
information about famines in India.
cooked food along with vegetables
Nothing like the Bengal Famine has for her daily work. Besides she also
works in the field along with her
happened in India again. But it is
husband in the busy season and
disturbing to note that even today, there
supplements his earnings.
are places like Kalahandi and Kashipur
Agriculture being a seasonal
in Orissa where famine-like conditions
activity employs Ramu only during
have been existing for many years and times of sowing, transplanting and
where some starvation deaths have also harvesting. He remains unemployed
been reported. Starvation deaths are also for about 4 months during the
reported in Baran district of Rajasthan, period of plant consolidation and
Palamau district of Jharkhand and many maturing in a year. He looks for
other remote areas during the recent work in other activities. Some times
years. Therefore, food security is needed he gets employment in brick laying
in a country to ensure food at all times. or in construction activities in the
Who are food-insecure? village. By all his efforts, Ramu is
able to earn enough either in cash
Although a large section of people suffer or kind for him to buy essentials for
from food and nutrition insecurity in two square meals for his family.
India, the worst affected groups are However, during the days when he
landless people with little or no land to is unable to get some work, he and
depend upon, traditional artisans, his family really face difficulties and
providers of traditional services, petty self- sometimes his small kids have to
employed workers and destitutes sleep without food. Milk and
including beggars. In the urban areas, the vegetables are not a regular part of
food insecure families are those whose meals in the family. Ramu is food
working members are generally employed insecure during 4 months when he
in ill-paid occupations and casual labour remains unemployed because of the
market. These workers are largely seasonal nature of agriculture work.

44 Economics
Let’sDiscuss run his family even with small
earnings from rickshaw-pulling?
• Why is agriculture a seasonal activity? The social composition along with the
• Why is Ramu unemployed for about inability to buy food also plays a role in
four months in a year? food insecurity. The SCs, STs and some
• What does Ramu do when he is sections of the OBCs (lower castes among
unemployed? them) who have either poor land-base or
• Who are supplementing income in very low land productivity are prone to
Ramu’s family? food insecurity. The people affected by
• Why does Ramu face difficulty when natural disasters, who have to migrate to
he is unable to have work? other areas in search of work, are also
• When is Ramu food insecure? among the most food insecure people. A
Story of Ahmad high incidence of malnutrition prevails
among women. This is a matter of serious
Ahmad is a rickshaw puller in
concern as it puts even the unborn baby
Bangalore. He has shifted from
at the risk of malnutrition. A large
Jhumri Taliah along with his 3
proportion of pregnant and nursing
brothers, 2 sisters and old parents.
mothers and children under the age of 5
He stays in a jhuggi. The survival of
years constitute an important segment of
all members of his family depends on
the food insecure population.
his daily earnings from pulling
rickshaw. However, he does not have
a secured employment and his According to the National Health and
earnings fluctuate every day. During Family Survey (NHFS) 1998–99, the
some days he gets enough earning for number of such women and children is
him to save some amount after buying approximately 11 crore.
all his day-to-day necessities. On
other days, he barely earns enough The food insecure people are
to buy his daily necessities. However, disproportionately large in some regions
fortunately, Ahmad has a yellow card, of the country, such as economically
which is PDS Card for below poverty backward states with high incidence of
line people. With this card, Ahmad poverty, tribal and remote areas, regions
gets sufficient quantity of wheat, rice, more prone to natural disasters etc. In
sugar and kerosene oil for his daily fact, the states of Uttar Pradesh (eastern
use. He gets these essentials at half and south-easter n parts), Bihar,
of the market price. He purchases his Jharkhand, Orissa, West Bengal,
monthly stock during a particular day Chattisgarh, parts of Madhya Pradesh and
when the ration shop is opened for Maharasthra account for largest number
below poverty people. In this way, of food insecure people in the country.
Ahmad is able to eke out his survival Hunger is another aspect indicating
with less than sufficient earnings for food insecurity. Hunger is not just an
his big family where he is the only expression of poverty, it brings about
earning member. poverty. The attainment of food security
therefore involves eliminating current
hunger and reducing the risks of future
Let’sDiscuss hunger. Hunger has chronic and seasonal
• Does Ahmad have a regular income dimensions. Chronic hunger is a
from rickshaw-pulling? consequence of diets persistently
• How does the yellow card help Ahmad inadequate in terms of quantity and/or
Food Security in India 45
quality. Poor people suffer from chronic
hunger because of their very low income
and in turn inability to buy food even for
survival. Seasonal hunger is related to
cycles of food growing and harvesting. This
is prevalent in rural areas because of the
seasonal nature of agricultural activities
and in urban areas because of the casual
labour, e.g., there is less work for casual
construction labour during the rainy
Picture 4.3 A farmer from Punjab standing in
season. This type of hunger exists when
a field of one of the High Yielding
a person is unable to get work for the Varieties of wheat on which the
entire year. Green Revolution is based.

Table 4.2: Percentage of Households with special stamp entitled ‘Wheat


‘Hunger’ in India Revolution’ in July 1968. The success
of wheat was later replicated in rice. The
Type of hunger
increase in foodgrains was, however,
Year Seasonal Chronic Total disproportionate. The highest rate of
growth was achieved in Punjab and
Rural
Haryana, where foodgrain production
1983 16.2 2.3 18.5 jumped from 7.23 million tonnes in
1993–94 4.2 0.9 5.1 1964–65 to reach an all-time high of
1999–2000 2.6 0.7 3.3 30.33 million tonnes in 1995–96.
Production in Maharashtra, Madhya
Urban Pradesh, Bihar, Orissa and the
1983 5.6 0.8 6.4 northeastern states continued to
1993–94 1.1 0.5 1.6 stagger. T amil Nadu and Andhra
1999–2000 0.6 0.3 0.9 Pradesh, on the other hand, recorded
significant increases in rice yield.
Source: Sagar (2004)

Suggested Activity
The percentage of seasonal as well as
Visit some farms in a nearby village and
chronic hunger has declined in India as
collect the details of food crops cultivated
shown in the above table.
by the farmers.
India is aiming at Self-sufficiency in
Foodgrains since Independence. Food Security in India
After independence, Indian policy Since the advent of the Green revolution
makers adopted all measures to achieve in the early-’70s, the country has avoided
self-sufficiency in food grains. India famine even during adverse weather
adopted a new strategy in agriculture, conditions.
which resulted in the ‘ G r e e n India has become self-sufficient in
Revolution’ especially in the production foodgrains during the last thirty years
of wheat and rice. because of a variety of crops grown all
Indira Gandhi, the then Prime over the country. The availability of
Minister of India, officially recorded the foodgrains (even in adverse weather
impressive strides of the Green conditions or otherwise) at the country
revolution in agriculture by releasing a level has further been ensured with a

46 Economics
Graph 4.1: Production of Foodgrains in India
(Million Tonnes)
250

200

150

100

50

0
1960-61 1970-71 1980-81 1990-91 2000-01 2001-02 2002-03 2003-04
Source: Economic Survey 2004–05.

Let’sDiscuss before the sowing season to provide


incentives to the farmers for raising the
Study the Graph 4.1 and answer the production of these crops. The purchased
following questions: foodgrains are stored in granaries. Do
(a) In which year did our country cross you know why this buffer stock is created
the 200 million tonnes per year mark by the government? This is done to
in foodgrain production? distribute foodgrains in the deficit areas
(b) In which decade did India experience and among the poorer strata of society
the highest decadal increase in at a price lower than the market price
foodgrain production? also known as Issue Price. This also
(c) Is production increase consistent in helps resolve the problem of shortage of
India since 2000–01? food during adverse weather conditions
or during the periods of calamity.
carefully designed food security system
What is the Public Distribution
by the government. This system has two
System?
components: (a) buffer stock and (b) public
distribution system. The food procured by the FCI is
distributed through government
What is Buffer stock? regulated ration shops among the poorer
Buffer Stock is the stock of foodgrains, section of the society. This is called the
namely wheat and rice procured by the public distribution system (PDS). Ration
government through Food Corporation shops are now present in most localities,
of India (FCI). The FCI purchases wheat villages, towns and cities. There are
and rice from the farmers in states about 4.6 lakh ration shops all over the
where there is surplus production. The country. Ration shops also known as Fair
farmers are paid a pre-announced price Price Shops keep stock of foodgrains,
for their crops. This price is called sugar, kerosene oil for cooking. These
Minimum Support Price. The MSP is items are sold to people at a price lower
declared by the government every year than the market price. Any family with

Food Security in India 47


a ration card* can buy a stipulated amount The introduction of Rationing in India
of these items (e.g. 35 kg of grains, 5 litres
dates back to the 1940s against the
of kerosene, 5 kgs of sugar etc.) every
backdrop of the Bengal famine. The
month from the nearby ration shop.
rationing system was revived in the wake
*There are three kinds of ration cards: of an acute food shortage during the
(a) Antyodaya cards for the poorest of 1960s, prior to the Green Revolution. In
the poor; (b) BPL cards for those below
the wake of the high incidence of poverty
poverty line; and (c) APL cards for all
others. levels, as reported by the NSSO in the
mid-1970s, three important food
intervention programmes were
Suggested Activity
introduced: Public Distribution System
Visit your area’s ration shop and get the (PDS) for food grains (in existence earlier
following details but strengthened thereafter); Integrated
1. When does the ration shop open? Child Development Services (ICDS)
2. What are the items sold at the ration (introduced in 1975 on an experimental
shop? basis) and Food-for -Work** (FFW)
3. Compare the prices of rice and sugar (introduced in 1977–78). Over the years,
from the ration shop with the prices several new programmes have been
at any other grocery shop? (for families launched and some have been
below poverty line) restructured with the growing experience
4. Find out: of administering the programmes. At
Do you have a ration card? present, there are several Poverty
What has your family recently bought Alleviation Programmes (PAPs), mostly in
with this card from the ration shop? rural areas, which have an explicit food
Are there any problems that they face? component also. While some of the
Why are ration shops necessary? programmes such as PDS, mid-day meals
etc. are exclusively food security
programmes, most of the PAPs also
enhance food security. Employment
programmes greatly contribute to food
security by increasing the income of
the poor.

Suggested Activity
Gather detailed information about some
of the programmes initiated by the
government, which have food component.
Hint: Rural wage employment
programme, Employment Guarantee
Scheme, Sampurna Grameen Rojgar
Yojana, Mid Day Meal, Integrated Child
Development Services, etc.
Discuss with your teacher.
Picture 4.4

48 Economics
**National Food for Current Status of Public Distribution
Work Programme System

National Food for Work Programme Public Distribution System (PDS) is the
most important step taken by the
was launched on November 14, 2004
Government of India (GoI) towards
in 150 most backward districts of the
ensuring food security. In the beginning
country with the objective of the coverage of PDS was universal with
intensifying the generation of no discrimination between the poor and
supplementary wage employment. The non-poor. Over the years, the policy related
programme is open to all rural poor to PDS has been revised to make it more
who are in need of wage employment efficient and targeted. In 1992, Revamped
and desire to do manual unskilled Public Distribution System (RPDS) was
work. It is implemented as a 100 per introducted in 1,700 blocks in the country.
cent centrally sponsored scheme and The target was to provide the benefits of
the foodgrains are provided to States PDS to remote and backward areas. From
June 1997, in a renewed attempt, Targeted
free of cost. The Collector is the nodal
Public Distribution System (TPDS) was
officer at the district level and has the
introducted to adpot the principle of
overall responsibility of planning, targeting the ‘poor in all areas’. It was for
implementation, coordination, monitoring the first time that a differential price policy
and supervision. For 2004–05, Rs 2,020 was adopted for poor and non-poor.
crore have been allocated for the Further, in 2000, two special schemes
programme in addition to 20 lakh were launched viz., Antyodaya Anna
tonnes of foodgrains. Yojana*** (AAY) and the Annapur na
Scheme (APS) with special target groups

Table 4.3: Some Important Features of PDS

Name of Year of Coverage target Latest volume Issue price


scheme Introduction group (Rs per kg.)

PDS Up to 1992 Universal – W-2.34


R-2.89

RPDS 1992 Backward blocks 20 kg of W-2.80


food grains R-3.77

TPDS 1997 Poor and non-poor 35 kg of BPL – W-2.50


food grains R-3.50
APL-W-4.50
R-7.00

AAY 2000 Poorest of the poor 35 kg of W-2.00


food grains R-3.00

APS 2000 Indigent senior 10 kg of Free


citizens food grains

Note: W - Wheat; R - Rice; BPL - Below poverty line; APL - Above poverty line
Source: Economic Survey

Food Security in India 49


of ‘poorest of the poor’ and ‘indigent senior with some rotting away and some being
citizens’, respectively. The functioning of eaten by rats. The Graph 4.2 shows the
these two schemes was linked with the rising stocks of foodgrains till 2002.
existing network of the PDS.
***Antyodaya Anna Yojana (AAY)
Some important features of PDS are
summarised in Table 4.3. AAY was launched in December 2000.
The PDS has proved to be the most Under the scheme one crore of the
effective instrument of government policy poorest among the BPL families
over the years in stabilising prices and covered under the targeted public
making food available to consumers at distribution system were identified.
affordable prices. It has been instrumental Poor families were identified by the
in averting widespread hunger and famine respective state rural development
by supplying food from surplus regions of departments through a Below Poverty
the country to the deficit ones. In addition, Line (BPL) survey. Twenty five
the prices have been under revision in kilograms of foodgrains were made
favour of poor households in general. The available to each eligible family at a
system, including the minimum support highly subsidised + rate of Rs 2 per
price and procurement has contributed kg for wheat and Rs 3 per kg for rice.
to an increase in food grain production This quantity has been enhanced
and provided income security to farmers from 25 to 35 kgs with effect from
in certain regions. April 2002. The scheme has been
However, the Public Distribution further expanded twice by additional
System has faced severe criticism on 50 lakh BPL families in June 2003
several grounds. Instances of hunger are and in August 2004. With this
prevalent despite overflowing granaries. increase, 2 crore families have been
FCI go-downs are overflowing with grains, covered under the AAY.

Graph 4.2: Central Foodgrains (Wheat + Rice) Stock and Minimum


Buffer Norm (Million Tonnes)

70
61.7 63 Actual Stock
60 Buffer Norm
50
40 35.2
29.9
30
21.7
20 24.3 24.3 24.3 24.3
16.8
10
0
Jul-01 Jul-02 Jul-03 Jul-04
Source: Economic survey 2004–05.

50 Economics
+
Subsidy is a payment that a
government makes to a producer to
supplement the market price of a
commodity. Subsidies can keep
consumer prices low while maintaining
a higher income for domestic producers.

Let’sDiscuss
Study the Graph 4.2 and answer the
following questions:
• In which recent year foodgrain stock
with the government was maximum?
• What is the minimum buffer stock
norm for the FCI?
• Why were the FCI granaries
overflowing with foodgrains? Picture 4.5 Farmers Carrying Bags of Grains
to the Granaries.
In July 2002, the stock of wheat and
rice with FCI was 63 million tonnes foodgrain producing states, such as
which was much more than the Punjab, Haryana and Andhra Pradesh.
minimum buffer norms of 24.3 million Mor eover, as the pr ocur ement is
tonnes. The stock eased after 2002–03 concentrated in a few prosperous
due to relief opertations undertaken by r egions (Punjab, Haryana, Wester n
the goverment as the year was declared Uttar Pradesh, Andhra Pradesh and to
as drought year due to failure of a lesser extent in West Bengal) and
monsoon. The decline in stocks mainly of two crops— wheat and rice—
continued in the subsequent years. increase in MSP has induced farmers,
However, these remained consistently particularly in surplus states, to divert
higher than the buffer norms. The land from production of coarse grains,
situation improved with the distribution which is the staple food of the poor, to
of foodgrains under different schemes the production of rice and wheat. The
launched by the government. There is intensive utilisation of water in the
a general consensus that high level of cultivation of rice has also led to
buffer stocks of foodgrains is very environmental degradation and fall in
undesirable and can be wasteful. The the water level, threatening the
storage of massive food stocks has been sustainability of the agricultural
responsible for high carrying costs, in development in these states.
addition to wastage and deterioration
#
in grain quality. Freezing of MSP for a The rising Minimum Support Prices
few years should be considered (MSP) have raised the maintenance
seriously. cost of procuring foodgrains by the
The increased food grains government. Rising transportation
procurement at enhanced MSP# is the and storage costs of the FCI are other
result of the pressure exerted by leading contributing factors in this increase.

Food Security in India 51


Another major area of concern is the different prices, any family above the
marked ineffectiveness of PDS, which is poverty line gets very little discount at
apparent from the fact that the average the ration shop. The price for APL family
consumption of PDS grain at the all-India is almost as high as open market price,
level is only 1 kg per person per month. so there is little incentive for them to buy
The average consumption figure is as low these items from the ration shop.
as less than 300 gm per person per month
in the states of Bihar, Orissa and Uttar Role of cooperatives in food security
Pradesh. In contrast, the average The cooperatives are also playing an
consumption in most of the southern important role in food security in India
states like Kerala, Karnataka, Tamil Nadu especially in the southern and western
and Himachal Pradesh is in the range of parts of the country. The cooperative
3–4 kgs per person per month. As a result societies set up shops to sell low priced
the poor have to depend on markets rather goods to poor people. For example, out
than the ration shops for their food needs. of all fair price shops running in Tamil
In Madhya Pradesh only 5% of wheat and Nadu, around 94 per cent are being run
rice consumption of the poor are met by the cooperatives. In Delhi, Mother
through the ration shops. In Uttar Pradesh Dairy is making strides in provision of
and Bihar the percentage is still lower. milk and vegetables to the consumers
PDS dealers are sometimes found at controlled rate decided by
resorting to malpractices like diverting Government of Delhi. Amul is another
the grains to open market to get better success story of cooperatives in milk
margin, selling poor quality grains at and milk products from Gujarat. It has
brought about the White Revolution in
ration shops, irregular opening of the
the country. These are a few examples
shops, etc. It is common to find that ration
of many more cooperatives running in
shops regularly have unsold stocks of poor
different parts of the country ensuring
quality grains left. This has proved to be
food security of different sections
a big problem. When ration shops are
of society.
unable to sell, a massive stock of
Similarly, in Maharashtra,
foodgrains piles up with the FCI. In recent
Academy of Development Science (ADS)
years, there is another factor that has has facilitated a network of NGOs for
led to the decline of the PDS. Earlier every setting up grain banks in different
family, poor and non-poor had a ration regions. ADS organises training and
card with a fixed quota of items such as capacity building programmes on food
rice, wheat, sugar etc. These were sold at security for NGOs. Grain Banks are now
the same low price to every family. The slowly taking shape in different parts of
three types of cards and the range of Maharashtra. ADS efforts to set up
prices that you see today did not exist. A Grain Banks, to facilitate replication
large number of families could buy through other NGOs and to influence the
foodgrains from the ration shops subject Government’s policy on food security are
to a fixed quota. These included low thus paying rich dividends. The ADS
income families whose incomes were Grain Bank programme is acknowledged
marginally higher than the below poverty as a successful and innovative food
line families. Now, with TPDS of three security intervention.

52 Economics
Summary
Food security of a nation is ensured if all of its citizens have enough nutritious food
available, all persons have the capacity to buy food of acceptable quality and there
is no barrier on access to food. The people living below the poverty line might be food
insecure all the time while better off people might also turn food insecure due to
calamity or disaster. Although a large section of people suffer from food and nutrition
insecurity in India, the worst affected groups are landless or land poor households
in rural areas and people employed in ill paid occupations and casual labourers
engaged in seasonal activities in the urban areas. The food insecure people are
disproportionately large in some regions of the country, such as economically
backward states with high incidence of poverty, tribal and remote areas, regions
more prone to natural disasters etc. To ensure availability of food to all sections of
the society the Indian government carefully designed food security system, which is
composed of two components: (a) buffer stock and (b) public distribution system. In
addition to PDS, various poverty alleviation programmes were also started which
comprised a component of food security. Some of these programmes are: Integrated
Child Development Services (ICDS); Food-for-Work (FFW); Mid-Day Meals; Antyodaya
Anna Yojana (AAY) etc. In addition to the role of the government in ensuring food
security, there are various cooperatives and NGOs also working intensively towards
this direction.

Exercises
1. How is food security ensured in India?
2. Which are the people more prone to food insecurity?
3. Which states are more food insecure in India?
4. Do you believe that green revolution has made India self-sufficient in food
grains? How?
5. A section of people in India are still without food. Explain?
6. What happens to the supply of food when there is a disaster or a calamity?
7. Differentiate between seasonal hunger and chronic hunger?
8. What has our government done to provide food security to the poor? Discuss
any two schemes launched by the government?
9. Why is a buffer stock created by the government?
10. Write notes on:
(a) Minimum support price
(b) Buffer stock
(c) Issue price
(d) Fair price shops
11. What are the problems of the functioning of ration shops?
12. Write a note on the role of cooperatives in providing food and related items.

Food Security in India 53


References
DEV, S. MAHENDRA, KANNAN, K.P. AND RAMCHANDRAN, NEERA (EdS.). 2003. Towards a Food
Secure India: Issues and Policies; Institute for Human Development, New Delhi.
SAGAR, VIDYA. 2004. “Food Security in India”, Paper presented in ADRF-IFRI Final
Meeting on Food Security in India, September 10–11, New Delhi.
SAXENA, N.C. 2004. “Synergising Government Efforts for Food Security” in Swaminathan,
M.S. and Medrano, Pedro (Eds.), Towards Hunger Free India, East-West Books,
Chennai.
SAXENA, N.C. 2004. “Reorganising Policies and Delivery for Alleviating Hunger and
Malnutrition” Paper presented at National Food Security Summit, New Delhi.
SEN, A.K. 1983. “Poverty and Famines: An Essay on Entitlement and Deprivation”.
Oxford University Press.
SHARMA, REKHA AND MEENAKSHI, J.V. 2004. “Micronutrient Deficiencies in Rural Diets”.
Towards Hunger Free India: From Vision to Action. Proceedings of Consultation
on “Towards Hunger-free India: Count Down from 2007”. New Delhi.
FAO 1996. World Food Summit 1995. Food and Agricultural Organisation, Rome.
Government of India. Economic Survey. 2002–03, 2003–04, 2004–05. Ministry of
Finance. New Delhi.
IIPS 2000. National Health and Family Survey – 2. International Institute of
Population Sciences. Mumbai.
UN 1975. Report of the World Food Conference 1975. (Rome), United Nations, New
York.

54 Economics