By Manav Pamnani –
Introduction
The recent growth in India’s Gross Domestic Product (GDP) and booming financial indicators suggest progression toward unparalleled economic abundance and robust financial stability. These contemporary developments reflect a utopian state of affairs. They are accompanied by joyous celebrations and cries of triumph by the wealthy upper class and urban middle class people. Oblivious to the unimaginable suffering of the poor, these sections commemorate exponential growth as their personal victory. While the nation celebrates newfound prosperity, the stark reality remains that the underprivileged slip further into poverty’s abyss.
The Poverty Paradox
The National Statistical Office (NSO) has recently estimated the GDP growth for 2023-24 at 7.3 percent. The BSE Sensex, one of the leading stock exchange indicators, is constantly reaching new highs, crossing the 80,000 mark for the first time since its inception in 1986. The inflation rate has been restricted to the bandwidth specified by the Reserve Bank of India (RBI). The Indian foreign exchange reserves have also shown commendable improvement to reach the 620 billion dollar mark by the end of 2023. The Morgan Stanley Report further states that the Foreign Direct Investment (FDI) has increased to 46 billion dollars, up from 22 billion in 2013 and the Corporate Debt as a percentage of GDP has decreased by approximately 15 percent. A mere superficial analysis of these financial metrics paints a glorified picture very different from the stark reality of the poverty level rising incessantly, which adversely affects more than half of the Indian population.
The recent 2024 OXFAM Inequality Report states that the rich are getting richer much faster while the poor are still struggling to earn a minimum wage and access quality education and healthcare. It supported this by providing empirical evidence of around 63 million Indians being unable to access basic healthcare, with the associated high costs pushing almost two people into poverty every second. This horrendous plight is not restricted only to healthcare but extends to other avenues such as education, food and basic necessities, with these fundamental requirements transforming into extravagant, unaffordable luxuries.
Several poverty reports alongside the one released by OXFAM provide diverse perspectives regarding the Indian poverty scenario. Propelled by political and strategic considerations, some make exaggerated claims that the poor’s predicament has improved, but these baseless claims can be put to rest without any suspicion. The basis for deriving such skewed interpretations lies in the multiple approaches used to estimate the current poverty level. The epitome of such a report is the one released recently by Niti Aayog which states that multidimensional poverty in India has declined from 29.17 percent in 2013-14 to 11.28 percent in 2022-23. Economists have already challenged this report because there is a paucity of data regarding the actual poverty level with hard data not accurately depicting the abominable and critical situation.
Another example is the Interim Union Budget presented by the Finance Minister on 1st February, 2024. While stating the achievements, a claim was made that in the last ten years around twenty-five crore people have been lifted out of poverty. The factual accuracy of this positive assertion is questionable. The reason is that the Global Hunger Index still ranks India 111 out of 125 countries, which is more or less constant since several years. Thus, the rhetoric surrounding poverty estimation varies with motives and interests, necessitating immediate action to address persistent inequalities rather than celebrating superficial economic successes.
Legal Safeguards and thier Corresponding Challenges
India’s legal framework includes numerous laws and regulations intended to safeguard the rights and interests of the poor, yet the effectiveness of these legislations warrants critical analysis and scrutiny. One of the primary welfare legislations in place in India is the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA). It guarantees hundred days of wage employment to every rural household whose adult members volunteer to do unskilled manual work, providing a safety net for vulnerable populations. However, even after almost two decades of its introduction, effective changes have not been realised. Its major drawbacks include implementation challenges like corruption and bureaucratic inefficiencies, which frequently impede effectiveness, leading to delayed payments and insufficient job opportunities.
Steps have also been taken to promote financial inclusion and access to banking services for all citizens. One such initiative is the Pradhan Mantri Jan Dhan Yojana (PMJDY). This aims to ensure access to financial services like savings accounts, insurance, and pensions for the poor, thereby bridging the gap between the rich and the poor in terms of financial access. The policy-makers definitely had noble intentions while introducing such a welfare-based legal framework, but without effective execution, such intention is futile. The major lacuna associated with PMJDY is that many people remain excluded from the formal banking sector due to barriers such as lack of documentation and awareness, although they desperately require assistance. The gap between the have and have-nots is then not bridged at all but is instead widened because the poor are deprived of these benefits, thus causing them to fall further into the abyss of poverty. The rich on the contrary are able to constantly accumulate wealth due to the privileges associated with their class and status. The trustworthiness, influence and bargaining power that they possess allows them to multiply their wealth freely by taking unhindered loans due to their heightened credit rating and investing the borrowings into lucrative projects to obtain gainful returns. This is often done at the cost of the marginalised poor. The epitome of this is the Covid-19 pandemic wherein the rich became richer and the poor became poorer. The estimated fall is the GDP was around 7.3 percent but the billionaires in India doubled their wealth to around 800 billion dollars with around sixty-eight new billionaires in the two pandemic years. This came at the cost of the poor who were exploited by being forced to buy protective masks and other equipment at extravagant rates.
India also has various social welfare laws intended to provide assistance to marginalised communities and individuals, such as the National Food Security Act (NFSA), which aims to provide subsidised food grains to approximately two-thirds of the population, addressing issues of hunger and malnutrition among the poor. However, in spite of the well-drafted provisions, even this act faces challenges such as leakages and targeting errors. This leads to inadequate distribution of subsidised food grains, leaving many vulnerable populations underserved.
Additionally, land rights and tenancy laws, such as the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006, play a crucial role in securing livelihoods of vulnerable communities and preventing land dispossession. However, they fail to entirely protect the land rights of marginalised communities effectively, with issues such as land grabbing and displacement persisting in many regions.
Further, labour laws, including regulations related to minimum wages and working conditions protect the rights of workers, particularly those in the informal sector, contributing to the economic well-being of the poor. Although they have made notable contributions, they often lack enforcement mechanisms and fail to address the exploitation of labourers in the informal sector.
India thus aims to address socio-economic inequalities and promote inclusive development through legal frameworks, but the effectiveness of these laws is hindered by implementation challenges, bureaucratic hurdles, and systemic weaknesses, underscoring the need for comprehensive reforms and improved governance.
Potential Solutions
The stark contrast between celebratory narratives surrounding economic achievements and the grim realities of inequality underscores the pressing need for proactive measures beyond rhetoric. Policy measures must uplift the poor by not merely prioritising economic growth for a select few but by focusing on introducing efficient policies and ensuring their effective implementation. An expedient checks and balances mechanism should be introduced to ensure these guidelines are followed. Poverty alleviation programmes must be initiated with their goals directed towards balancing the needs of the poor without focusing entirely on achieving a higher growth rate in financial indicators. Moreover, standardised poverty indicators should also be evolved to track the poverty level and its changes accurately. Thus, only by emphasising the welfare of the underprivileged beyond financial metrics can holistic societal well-being be achieved. Addressing root causes of poverty and inequalities is crucial for India’s development, as economic growth alone does not ensure self-sufficiency or prosperity.
Conclusion
By addressing poverty’s root causes and fostering holistic development, India can redefine success as not just economic growth but as a beacon of compassion and progress for all its citizens. Mere economic growth, measured in GDP figures and stock market highs, is an incomplete benchmark for development. True progress lies in addressing the deep-rooted issues of inequality, ensuring access to basic necessities, and striving to achieve the overall well-being of the underprivileged, emphasising the implementation rather than formulation of policies. In embracing a vision of development that prioritises the well-being of every citizen, India can forge a path where the triumphs of progress are measured not only in economic terms but also in the radiant smiles of a populace that has truly prospered together.
Manav Pamnani is a Third Year Student at the NALSAR University of Law, Hyderabad.