Archive for May, 2016

By Manali Chakrabarti (manalichakrabarti[at]

According to the World Bank, India’s nominal GDP crossed the $ 2 trillion mark in 2014[1], and is slated to grow at close to 8 per cent annually in 2016 and 2017[2]. To put this in perspective: In 1991, the year the Indian economy was opened up and we embraced neoliberal policies, the Indian GDP was about $275 billion, which by the turn of the century had doubled to $481 billion. But the really rapid growth of the Indian economy has been in the last 15 years, which saw GDP increase by almost four-and-a-half times. One needs to remember that these include years which saw the greatest global recession since the 1930s. Thus, for the economy as a whole the promised ‘achche din’ seem to be happening and there are numbers to prove it. The policymakers who have been rooting for further opening up and freeing of the economy have been justifiably sporting a smug expression with this quantitative endorsement of their position.

However, one vexing question for them is that some people continue to claim that all this growth has not translated into alleviation of poverty–the ‘poor’ have been stubbornly impervious to this stunning growth of the economy. And this is disturbing, particularly given that the officials have not even been able to decide how many poor people exist and, more importantly, how to identify them.

The ‘Poverty Line’ and a Brief History of Poverty Level Calculation
While definitions of poverty in India have a long history, the last decade has witnessed a flurry of activity among academics and policymakers in trying to determine what constitutes poverty, and where to draw the line below which people can be termed ‘officially’ poor. Popular media and academic journals have produced a plethora of articles on the various definitions of poverty and poverty lines. (more…)

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Insuring the Government against the Peasantry

Before the Union Budget, the Government announced a new crop insurance scheme, the Pradhan Mantri Fasal Bima Yojana (PMFBY). This has been touted as a flagship programme of the Modi government in the agricultural sector, a ‘game-changer’, a solution to the problem of peasant suicides, part of a broader shift to ‘pro-farmer’ policies, and so on.

The rationale for insuring peasants can hardly be questioned. Peasants face enormous insecurity in eking out a livelihood. Since they engage, even more than other sections of the workforce, with natural processes, they are particularly affected by the uncertainties inherent in such processes. Since they are very small operators in the market, they are at the receiving end of market fluctuations, and are unable to affect it by their actions. As shown both by the National Sample Survey data for 2012-13, the majority of peasants struggle to make ends meet, particularly in the absence of off-farm income. Without doubt, they need protection against all sorts of natural and manmade calamities. The question is, how. (more…)

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