Why Rural economy is always in a poor state ?
Poverty exists in both rural and urban India. Slums are visible signs of poverty in the our cities. Slums are our failure in planning to implement an affordable housing in metros for the poor migrants at the cost of welfare state.
There is an immense migration of the landless labours in cities from the rural areas. Many reasons can be cited for this state such as failure of rural economy, regional nature of growth, absence of basic civic amenities in rural India and caste discrimination in rural India. Poor people can afford the physical torture of the slums but cannot bear the mental torture of rural habitation caused due to caste discrimination. In slums people have only class identity and not caste identity.
There is a huge connection between poverty and caste system in India. Majority of land in rural India is in the possession of minority upper castes. Hence, all the subsidies and growth in the agricultural sector is enjoyed by this minority rich and relatively more educated class. Productive assets must be created for the landless rural population.
Planning and implementation in India are very centralized. Local self-governance is dysfunctional as transparency and accountability is lacking in the institutions. Social-auditing to the rural projects are absent. Local self government Institution should be involved in planning and decision making. Rural projects of the government and working of the local self government should be brought under the purview of e-governance for transparency. But a country with a low literacy rate, e- governance is still a dream.
Poverty can be well understood by this simple example. Deputy Governor of the Reserve Bank of India says that 46 percent of the farmers who own a mobile phone do not have a bank account.We need 'Financial Inclusion' for every citizen of this country. Financial Inclusion means, providing financial services to one and all, irrespective of their income and the place they belong to.
Five Articles on Social and Financial Issues in Rural India:-
1- Money for nothing. And misery for free : Afer a promising start, the microfinance story became one of desperate need on one side and greed and politics on the other, reports Rohini Mohan. Photographs by Vijay Pandey. Microfinance has created deeper crisis socially, about the creation of a life on credit.
MFIs typically borrow from banks at 11- 15 percent interest but charge 24-30 percent, including the operation cost of traveling to remote villages, and factoring in possible defaults. Unlike in an SHG, where the loan is given to the group, the MFI gives loans to an individual who is backed by a group guarantee.
2- Hiware Bazar: Model Village for the Nation ; A five pronged approach has been adopted for the socio-economic infrastructure of the village that includes : Free labour, Ban on Grazing, Ban on Tree Cutting, Ban on Liquor and Family Planning.
3- Tiding over farm woes: Reaping the advantage - Farmers’ unions, who only organise protests demanding higher prices, have failed to educate their members. And only way to pull out farmers from the vicious cycle of indebtedness is to push them out of the Green Revolution model of farming.
4- Living with 'installments' : Many micro-credit loans do no more than allow a family to juggle its finances for a month-to-month existance. As investors embrace this 'market', MFIs are increasingly under scrutiny. Jaideep Hardikar reports.
5- UNDERSTANDING UNTOUCHABILITY: A Comprehensive Study of Practices and Conditions in 1589 Villages [PDF file]--- Navsarjan is one of the leading organizations working for advancement of Dalit rights. Based in the western Indian state of Gujarat,Navsarjan currently organizes more than 3,084 villages to fight the practice of "untouchability” and to improve the economic conditions of Dalits.
Tuesday, December 28, 2010
Development Management -1
The present economic model is premised on the centrality and openness of markets. But the market forces themselves are a function of economic power and control. In cases in which economic resources and opportunities are widely distributed, economic activity may best be left to individual, private initiative, and market forces, but in societies with a skewed distribution of natural resources and opportunities, a free play of market forces could marginalize an increasing proportion of people, without state intervention through reforms.
Development projects are being initiated and implemented in order to fight against poverty and economic stagnation. It brings to us ethical questions of an inequitable distribution of development's benefits and losses. The principle of the "greater good for the larger numbers," routinely invoked to rationalize social disruptions like forced displacements, is, in fact, abused and turned into an unwarranted justification for tolerating ills that are avoidable. Compulsory displacements that occur for development reasons embody a perverse and intrinsic contradiction in the context of development. The outcome is an unjustifiable repartition of development's costs and benefits: Elite enjoy the gains of development, while majority bear its pains. This raises major issues of social justice and equity.
People believe in aid as a form to get rid of poverty. Aid has empowered only authorities, not necessarily citizens. The Nobel Peace Prize 2006 was given to Muhammad Yunus, Grameen Bank because contradictory to popular economic axiom, he believes that credit is a fundamental human right despite of one's financial position. His objective was to help poor people escape from poverty by providing loans on terms suitable to them and by teaching them a few sound financial principles so they could help themselves.
Muhammad Yunus delivered his Nobel Lecture on 10 December 2006 at the Oslo City Hall, Norway. Read the full Nobel Lecture and watch a 15 minutes interview.
Mohammad Yunus gives emphasis in his noble lecture : There is a conceptual restrictions imposed on the players in the market. This originates from the assumption that entrepreneurs are one-dimensional human beings, who are dedicated to one mission in their business lives - to maximize profit. This interpretation of capitalism insulates the entrepreneurs from all political, emotional, social, spiritual, environmental dimensions of their lives. This was done perhaps as a reasonable simplification, but it stripped away the very essentials of human life.
Human beings are a wonderful creation embodied with limitless human qualities and capabilities. Our theoretical constructs should make room for the blossoming of those qualities, not assume them away.
Interview with Muhammad Yunus - Media Player at Nobelprize.org
Development projects are being initiated and implemented in order to fight against poverty and economic stagnation. It brings to us ethical questions of an inequitable distribution of development's benefits and losses. The principle of the "greater good for the larger numbers," routinely invoked to rationalize social disruptions like forced displacements, is, in fact, abused and turned into an unwarranted justification for tolerating ills that are avoidable. Compulsory displacements that occur for development reasons embody a perverse and intrinsic contradiction in the context of development. The outcome is an unjustifiable repartition of development's costs and benefits: Elite enjoy the gains of development, while majority bear its pains. This raises major issues of social justice and equity.
People believe in aid as a form to get rid of poverty. Aid has empowered only authorities, not necessarily citizens. The Nobel Peace Prize 2006 was given to Muhammad Yunus, Grameen Bank because contradictory to popular economic axiom, he believes that credit is a fundamental human right despite of one's financial position. His objective was to help poor people escape from poverty by providing loans on terms suitable to them and by teaching them a few sound financial principles so they could help themselves.
Muhammad Yunus delivered his Nobel Lecture on 10 December 2006 at the Oslo City Hall, Norway. Read the full Nobel Lecture and watch a 15 minutes interview.
Mohammad Yunus gives emphasis in his noble lecture : There is a conceptual restrictions imposed on the players in the market. This originates from the assumption that entrepreneurs are one-dimensional human beings, who are dedicated to one mission in their business lives - to maximize profit. This interpretation of capitalism insulates the entrepreneurs from all political, emotional, social, spiritual, environmental dimensions of their lives. This was done perhaps as a reasonable simplification, but it stripped away the very essentials of human life.
Human beings are a wonderful creation embodied with limitless human qualities and capabilities. Our theoretical constructs should make room for the blossoming of those qualities, not assume them away.
Interview with Muhammad Yunus - Media Player at Nobelprize.org
Food Food Everywhere but not a grain to eat
It becomes imperative, therefore, to strike a balance between the economic and social functions of land. A model of development that excludes one in the favor of the other loses out on the very basic meaning and purpose of development.
Public Distribution System (PDS) :
Public Distribution System in short PDS means distribution of essential commodities to a large number of people through a network of fair price shops (FPS) on a recurring basis. The commodities are as follows:- Wheat · Rice · Sugar · Kerosene
PDS evolved as a major instrument of the Government’s economic policy for ensuring availability of food grains to the public at affordable prices as well as for enhancing the food security for the poor. It is an important constituent of the strategy for poverty eradication and is intended to serve as a safety net for the poor who number more than 330 million and are nutritionally at risk. PDS with a network of about 4.99 lakh fair price shops is perhaps the largest distribution network of its type in the world.
PDS is operated under the joint responsibility of the Central and the State Governments. The Central Government has taken the responsibility for procurement, storage, transportation and bulk allocation of food grains, etc. The responsibility for distributing the same to the consumers through the network of FPS rests with the State Governments. The operational responsibilities including allocation within the State, identification of families below poverty line, issue of ration cards, supervision and monitoring the functioning of FPSs rest with the State Governments.
India State Hunger Index
The India State Hunger Index (ISHI) is a tool to calculate hunger and malnutrition at the regional level in India. It is constructed in the same fashion as the Global Hunger Index (GHI) 2008 and was calculated for 17 states in India, covering more than 95 percent of the population.
It combines three equally-weighted indicators:
1. the proportion of undernourished as a percentage of the population (reflecting the share of the population with insufficient dietary intake);
2. the prevalence of underweight children under the age of five (indicating the proportion of children suffering from weight loss and / or reduced growth); and
3. the mortality rate of children under the age of five (partially reflecting the fatal synergy between dietary intake and unhealthy environments).
Full report of INDIA STATE HUNGER INDEX Comparisons of Hunger Across States Purnima Menon, Anil Deolalikar, Anjor Bhaskar [PDF file]
Please have a look on - Land Reform in India: Issues and Challenges by Manpreet Sethi [ PDF file]
Public Distribution System (PDS) :
Public Distribution System in short PDS means distribution of essential commodities to a large number of people through a network of fair price shops (FPS) on a recurring basis. The commodities are as follows:- Wheat · Rice · Sugar · Kerosene
PDS evolved as a major instrument of the Government’s economic policy for ensuring availability of food grains to the public at affordable prices as well as for enhancing the food security for the poor. It is an important constituent of the strategy for poverty eradication and is intended to serve as a safety net for the poor who number more than 330 million and are nutritionally at risk. PDS with a network of about 4.99 lakh fair price shops is perhaps the largest distribution network of its type in the world.
PDS is operated under the joint responsibility of the Central and the State Governments. The Central Government has taken the responsibility for procurement, storage, transportation and bulk allocation of food grains, etc. The responsibility for distributing the same to the consumers through the network of FPS rests with the State Governments. The operational responsibilities including allocation within the State, identification of families below poverty line, issue of ration cards, supervision and monitoring the functioning of FPSs rest with the State Governments.
India State Hunger Index
The India State Hunger Index (ISHI) is a tool to calculate hunger and malnutrition at the regional level in India. It is constructed in the same fashion as the Global Hunger Index (GHI) 2008 and was calculated for 17 states in India, covering more than 95 percent of the population.
It combines three equally-weighted indicators:
1. the proportion of undernourished as a percentage of the population (reflecting the share of the population with insufficient dietary intake);
2. the prevalence of underweight children under the age of five (indicating the proportion of children suffering from weight loss and / or reduced growth); and
3. the mortality rate of children under the age of five (partially reflecting the fatal synergy between dietary intake and unhealthy environments).
Full report of INDIA STATE HUNGER INDEX Comparisons of Hunger Across States Purnima Menon, Anil Deolalikar, Anjor Bhaskar [PDF file]
Please have a look on - Land Reform in India: Issues and Challenges by Manpreet Sethi [ PDF file]
Monday, December 27, 2010
Understanding Economics - 2
Chilean Economist Manfred Max-Neef: US Is Becoming an "Underdeveloping Nation"
Never in human history has there been such an accumulation of knowledge like in the last 100 years. What was that knowledge for? What did we do with it? And the point is that knowledge alone is not enough, that we understand very little. When you’re separated, you can accumulate knowledge. And that is—that’s been the function of science. Now, science is divided into parts, but understanding is holistic.
And that happens with poverty. One understood poverty only by experience. And then you begin to learn that in that environment there are different values, different principles from—compared to those from where one is coming. Economists look at the poverty from the outside, instead of living it from the inside.
And you learn extraordinary things. The first thing you learn, that people who want to work in order to overcome poverty and don’t know, is that in poverty there is an enormous creativity. You cannot be an idiot if you want to survive.
The whole language as an economist is not coherent with those situations and conditions. The principles, you know, of an economics which should be are based in one fundamental value and principle five postulates.
The fundamental AXIOM to sustain a new economy should be that no economic interest, under no circumstance, can be above the reverence of life.
1- The economy is to serve the people and not the people to serve the economy.
2- Development is about people and not about objects.
3- Growth is not the same as development, and development does not necessarily require growth.
4- No economy is possible in the absence of ecosystem services.
5- The economy is a subsystem of a larger finite system, the biosphere, hence permanent growth is impossible.
The Threshold Hypothesis :
Growth is a quantitative accumulation. Development is the liberation of creative possibilities. Every living system in nature grows up to a certain point and stops growing. But we continue developing ourselves. So development has no limits. Growth has limits. And that is a very big thing, you know, that economists and politicians don’t understand. They are obsessed with the fetish of economic growth.
Economist Ha-Joon Chang on the G20 Summit, Currency Wars and Why the Free Market is a Myth
Never in human history has there been such an accumulation of knowledge like in the last 100 years. What was that knowledge for? What did we do with it? And the point is that knowledge alone is not enough, that we understand very little. When you’re separated, you can accumulate knowledge. And that is—that’s been the function of science. Now, science is divided into parts, but understanding is holistic.
And that happens with poverty. One understood poverty only by experience. And then you begin to learn that in that environment there are different values, different principles from—compared to those from where one is coming. Economists look at the poverty from the outside, instead of living it from the inside.
And you learn extraordinary things. The first thing you learn, that people who want to work in order to overcome poverty and don’t know, is that in poverty there is an enormous creativity. You cannot be an idiot if you want to survive.
The whole language as an economist is not coherent with those situations and conditions. The principles, you know, of an economics which should be are based in one fundamental value and principle five postulates.
The fundamental AXIOM to sustain a new economy should be that no economic interest, under no circumstance, can be above the reverence of life.
1- The economy is to serve the people and not the people to serve the economy.
2- Development is about people and not about objects.
3- Growth is not the same as development, and development does not necessarily require growth.
4- No economy is possible in the absence of ecosystem services.
5- The economy is a subsystem of a larger finite system, the biosphere, hence permanent growth is impossible.
The Threshold Hypothesis :
In every society there is a period in which economic growth, conventionally understood or no, brings about an improvement of the quality of life. But only up to a point, the threshold point, beyond which, if there is more growth, quality of life begins to decline.
Growth is a quantitative accumulation. Development is the liberation of creative possibilities. Every living system in nature grows up to a certain point and stops growing. But we continue developing ourselves. So development has no limits. Growth has limits. And that is a very big thing, you know, that economists and politicians don’t understand. They are obsessed with the fetish of economic growth.
Economist Ha-Joon Chang on the G20 Summit, Currency Wars and Why the Free Market is a Myth
Sunday, December 26, 2010
The Max-Neef Model of Human-Scale Development
Manfred Max-Neef is a Chilean economist who has worked for many years with the problem of development in the Third World, articulating the inappropriateness of conventional models of development, that have lead to increasing poverty, massive debt and ecological disaster for many Third World communities. He works for the Centre for Development Alternatives in Chile, an organisation dedicated to the reorientation of development which stimulates local needs. It researches new tools, strategies and evaluative techniques to support such development, and Max-Neef's publication Human Scale Development: an Option for the Future (1987) outlines the results of the Centre’s researches and experiences
Max-Neef and his colleagues have developed a taxonomy of human needs and a process by which communities can identify their "wealths" and "poverties" according to how these needs are satisfied.
Human Scale Development is defined as "focused and based on the satisfaction of fundamental human needs, on the generation of growing levels of self-reliance, and on the construction of organic articulations of people with nature and technology, of global processes with local activity, of the personal with the social, of planning with autonomy, and of civil society with the state." (Max-Neef et al, 1987:12)
The main contribution that Max-Neef makes to the understanding of needs is the distinction made between needs and satisfiers. Human needs are seen as few, finite and classifiable (as distinct from the conventional notion that "wants" are infinite and insatiable). Not only this, they are constant through all human cultures and across historical time periods. What changes over time and between cultures is the way these needs are satisfied. It is important that human needs are understood as a system - i.e. they are interrelated and interactive. There is no hierarchy of needs (apart from the basic need for subsistence or survival) as postulated by Western psychologists such as Maslow, rather, simultaneity, complementarity and trade-offs are features of the process of needs satisfaction.
Max-Neef classifies the fundamental human needs as: subsistence, protection, affection, understanding, participation, recreation(in the sense of leisure, time to reflect, or idleness), creation, identity and freedom. Needs are also defined according to the existential categories of being, having, doing and interacting, and from these dimensions, a 36 cell matrix is developed which can be filled with examples of satisfiers for those needs.
Satisfiers also have different characteristics: they can be violators or destroyers, pseudosatisfiers, inhibiting satisfiers, singular satisfiers, or synergic satisfiers. Max-Neef shows that certain satisfiers, promoted as satisfying a particular need, in fact inhibit or destroy the possibility of satisfying other needs: eg, the arms race, while ostensibly satisfying the need for protection, in fact then destroys subsistence, participation, affection and freedom; formal democracy, which is supposed to meet the need for participation often disempowers and alienates; commercial television, while used to satisfy the need for recreation, interferes with understanding, creativity and identity - the examples are everywhere.
Synergic satisfiers, on the other hand, not only satisfy one particular need, but also lead to satisfaction in other areas: some examples are breast-feeding; self-managed production; popular education; democratic community organisations; preventative medicine; meditation; educational games.
This model forms the basis of an explanation of many of the problems arising from a dependence on mechanistic economics, and contributes to understandings that are necessary for a paradigrn shift that incorporates systemic principles. Max-Neef and his colleagues have found that this methodology "allows for the achievement of in-depth insight into the key problems that impede the actualisation of fundamental human needs in the society, community or institution being studied" (Max-Neef et al, 1987:40)
This model provides a useful approach that meets the requirements of small group, community-based processes that have the effect of allowing deep reflection about one's individual and community situation, leading to critical awareness and, possibly, action al the local economic level.
Max-Neef and his colleagues have developed a taxonomy of human needs and a process by which communities can identify their "wealths" and "poverties" according to how these needs are satisfied.
Human Scale Development is defined as "focused and based on the satisfaction of fundamental human needs, on the generation of growing levels of self-reliance, and on the construction of organic articulations of people with nature and technology, of global processes with local activity, of the personal with the social, of planning with autonomy, and of civil society with the state." (Max-Neef et al, 1987:12)
The main contribution that Max-Neef makes to the understanding of needs is the distinction made between needs and satisfiers. Human needs are seen as few, finite and classifiable (as distinct from the conventional notion that "wants" are infinite and insatiable). Not only this, they are constant through all human cultures and across historical time periods. What changes over time and between cultures is the way these needs are satisfied. It is important that human needs are understood as a system - i.e. they are interrelated and interactive. There is no hierarchy of needs (apart from the basic need for subsistence or survival) as postulated by Western psychologists such as Maslow, rather, simultaneity, complementarity and trade-offs are features of the process of needs satisfaction.
Max-Neef classifies the fundamental human needs as: subsistence, protection, affection, understanding, participation, recreation(in the sense of leisure, time to reflect, or idleness), creation, identity and freedom. Needs are also defined according to the existential categories of being, having, doing and interacting, and from these dimensions, a 36 cell matrix is developed which can be filled with examples of satisfiers for those needs.
Satisfiers also have different characteristics: they can be violators or destroyers, pseudosatisfiers, inhibiting satisfiers, singular satisfiers, or synergic satisfiers. Max-Neef shows that certain satisfiers, promoted as satisfying a particular need, in fact inhibit or destroy the possibility of satisfying other needs: eg, the arms race, while ostensibly satisfying the need for protection, in fact then destroys subsistence, participation, affection and freedom; formal democracy, which is supposed to meet the need for participation often disempowers and alienates; commercial television, while used to satisfy the need for recreation, interferes with understanding, creativity and identity - the examples are everywhere.
Synergic satisfiers, on the other hand, not only satisfy one particular need, but also lead to satisfaction in other areas: some examples are breast-feeding; self-managed production; popular education; democratic community organisations; preventative medicine; meditation; educational games.
This model forms the basis of an explanation of many of the problems arising from a dependence on mechanistic economics, and contributes to understandings that are necessary for a paradigrn shift that incorporates systemic principles. Max-Neef and his colleagues have found that this methodology "allows for the achievement of in-depth insight into the key problems that impede the actualisation of fundamental human needs in the society, community or institution being studied" (Max-Neef et al, 1987:40)
This model provides a useful approach that meets the requirements of small group, community-based processes that have the effect of allowing deep reflection about one's individual and community situation, leading to critical awareness and, possibly, action al the local economic level.
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