Why is India Poor?
Published by Yazad Jal May 15th, 2004 in Economics, IndiaPro-poor reform is the new political mantra in India. Personally, I think economic reform should ensure that there are no poor. But before we can do that, it might help to find out why is India poor? What is it that we lack or what are the chains that bind us to what is often called a vicious circle of poverty?
This is an an open thread. Do drop your comments on the reasons behind India’s enduring poverty. My aim is to then discuss the main issues that come out of the comments in separate posts.
Simply state the issues. E.g. If you think it’s “Lack of education” that should be enough. Most of us would know why the issue may be a stumbling block. Try to be as brief and succint as possible.
In this post, don’t debate if you think some suggestion is erroneous. I shall be taking the main issues up for debate one by one. Do ask for clarifications if required.
Feel free to repeat what someone else has already commented on. This gives everyone an idea of how widespread the feeling is about a certain issue.
Don’t limit yourself to just one or two issues. If you feel there are 20 reasons behind India’s poverty, state them all. (preferably in your order of priority)
Fire away!
Populism. Lack of federalism.
Lack of ethics and probity in public life.
corruption. if the monies allocated for development in the last 57 odd years had reached whom it was intended for, do u think we will still be poor?
1. Undereducated voters
2. Undereducated rulers
3. ‘Universal’ adult franchise.
Voting rights shouldn’t be available for all. One has to “qualify” for it.
4. Top heavy federalism
State finances should be made autonomous. Economics and development should be made state subjects. Striving for equality among states is only making all the states equally poor.
In short, all our problems are political and none are economics.
3. ‘Universal’ adult franchise.
Voting rights shouldn’t be available for all. One has to “qualify” for it.
Wow!
That’s all I can say… wow!
Before you get fisked on that, would you care to elaborate?
Lack of a strong middle class. Remember what Mao said: Let Shenzen and Guangdong get rich first - the others can wait a little. (this is not the only reason, just my $.02). A strong middle IMHO will demand accountability from the government for their tax rupees while inspiring the poor people to become one.
L.
Overpopulation,
Under-utilization of resources,
Lack of proper implementation of proposed economic development plans.
Acceptance of poverty
Hold your horses MadMan. I’ll take up all the points in separate posts where you can fisk away. In this post, I’d like everyone to simply ennumerate the reasons why India is poor. Dsicussion a bit later.
Sathish, Clarify this please (as briefly as possible)– What qualifications do you advocate for voters and candidates?
Appeasement of the poor, don’t give them free things, subsidy etc.. make them work for getting rich. A pro-rich government is the best (I miss BJP)
Laziness.
The fact that there is a safety net called wlfare and government aided charity that keeps them from really working hard at improving their status in life.
The so called middle class and upper class citizens encouragment and patronage of the poor.
1. We are a poor country because we hate being rich. We respect people who had given up worldly pleasures (money included). That’s why we love Ram and Budhha, both have given up the luxuries of life. We are taught that “money is the root cause of all evil”(from Atlas Shrugged, but expresses Indian thoughts well).And that those who have money can never be happy. That’s why we don’t want to work hard to earn money, but do not hesitate if we get it without working for it (after all if we are getting money w/o working it’s God’s grace).
2. We still have the “service” mentality. We want to do something where we need not work hard and think much, but can still get some money to keep us going. For e.g., our much hyped Software sector is another form of Government offices where you get some work , do it and go back home. Not much creativity or innovation is required or expected from you, until the client asks so.We can see many services companied around , but how many product companies?
The reason behind India’s enduring poverty is poverty.
But, I guess, I have to explain a bit. After we have achieved the goal of ‘no poor’, if someone were to graphically represent the fight against poverty, the curve would look like a hockey stick.
Right now, we have not reached that inflexion or tipping point - the point at which things shift from painfully slow growth to dramatically high growth. In fact, some villages, thanks mostly to self help groups and their micro enterprises, have actually experienced this dramatic growth. Reason? There was no critical mass earlier. But, these self help groups created that critical mass to stimulate demand and opportunities.
(Also, note there are usually pockets of poverty - in the sense that poor people - or rich for that matter - tend to get concentrated in a single location).
Inadequate size of the middle class population. With BJP fighting this election on an unapologetic reforms platform, I thought India was breaking free of the vicious cycle of poverty politics: get elected by promising freebies and keeping the poor poor so that next time around you have even more poor people that vote against reforms and for populism. But looks like its going to be a repeat of the same poverty politics we have seen for the last 50 years, this time newly powerful regional parties doing what Congress did on a national level all these years.
Lack of economic freedom!
India has a long history, and it has seen prosperity as well as poverty. Both pre as well as post independence, if at all there is one compelling reason which has ensured that Indians remain largely poor, then it is the “Lack of Economic Freedom”.
The prime reason for India’s poverty is that Indians have not been free to trade with whoever they want in whatever they want!! The lack of a free market has thwarted individual enterprise, leading to development of markets which favour a select few, who then ensure that the markets remain that way!
All other reasons cited above are effects and not causes.
There are various social & religious factors.
Hinduism & Islam bred poverty. Social structure and traditions are based on religion. Even in this age, voicing different opinion to an elder is considered offensive. As a result the child is hardly raised as an independent thinking rational human being. We think collectively so lack ingenuity & imagination. Our educational system is mirror image of our social structure. Because of this social support system one is less anxious about personal(outward as well as inward) progress/growth in life. This results in same networking system. People with similar economical or caste background tend to be with people with same background. So resources of riches are available to riches only. This creates hierarchy in society and in business too. A boss in office(or family patriarch in family) demands highest authority, as a result subordinates(or kids/other family memebers) are reluctant to share responsibility. They do what they are told to do, in family or in professional life. This slave mentality is prevalent in entire society.
Indians are behind a lot of countries when it comes to material prosperity, but if I remember correctly, a survey some time back had found Indians to be one of the happiest people on earth.
I think long ago, Indians discovered that wealth creation was an easy thing to do for a human being, but wasn’t sufficient for happiness. This perhaps led to a society that did not attach too much importance to wealth, much like as a society,we wouldn’t attach too much importance to being able to drive, coz its an easy thing to do
-important, but easy. You learn it, and move on to more imprtant things in life.
This led to a search for the real reason for human existence, and perhaps the saints and sages of ancient India found it.
But time diluted the message, and though the words of the sages passed from one generation to another, the soul of the words got lost. So Indians of later generations were taught that it was a ’sin’ to seek to earn money; and an insight that flowed from a logical understanding of human life gradually decayed into a moralistic canon.
This was obviously unsustainable, and people of clear minds in future generations regularly questioned rigid rules and societal conventions.
Now we are possibly entering the era when Indians have decided to seek material prosperity, and the chord that bound us to that era has been broken. I believe it is only a matter of time before India becomes the world’s wealthiest nation
Quoting Nani Palkhivala,
Only citizens who have successfully completed 14 yrs of primary education would get the right to vote. What makes a ’successful’ completion is another debate.
Just crossing 18 yrs will not maketh an adult citizen. A human becomes an adult when he is learned.
And, I would love to be fisked on this. Looking forward. :-) Sorry Yazad, for not being brief, thought I’ll maintain the context.
Rampant theism, lack of contraceptives and drugs. No contact with alien intelligence. Preoccupation with dietary issues and bowel movement.
Kingsley made me laugh. But I agree.
Preoccupation with bowel movements. Could not have said it better.
Agricultural Reform, Bureaucracy, Opaque and uneven Taxes. Rigid social stratification, insecurity of dalits and minorities.
To the education-before-vote argument, I’d point out the level of political participation and apathy to national issues in the Western Democracies does not seem to show a positive correlation between education and better political and social decision making. Far more important that education as it is peddled today, is the ideological outlook, by which I mean what the general populace evaluate as right and wrong.
Too many fucking people!
Or perhaps… too many people fucking! ;)
If the population of this country were half of what it is, things would be much different.
That’s one point. The other is that the systemic rot in our country is something that all politicians and people in positions of power feed off like vampires. To actually improve the situation would mean the politician giving up his means of plentiful financial nourishment. Hence things will never change substantially.
Government. Especially an ignorant, half witted racial government that feeds off the poor to advance its own life.
Welfare and social security, as I mentioned before. Remove the safety net, and then see how many people land on their feet, and whats more, hit the ground running and achieve economic stability.
Too much pre-occupation with socialistic ideals.
Assuming that we are helping a person when we donate alms. The middle class especially. Stop patronising the poor.
Religion, and the elite(read priests and politicians) of any religion. To ensure their livelihood, keep the rest in dark. and poverty
Naah.. most of you are wrong.
Correction: You’re not wrong. You’re just not looking at the root-causes.
The real reasons for poverty in India are:-
1. Democracy. (Enlightened dictatorship, imperialism or even communism is much more effective in eradicating poverty). Democracy is “safe”, for which the price to be paid is diluted/ineffectual decision making. “Hindu” rate of growth is a by-product.
2. Lack of common values needed for success
(Japanese are obedient and hard working, Americans are dynamic and aggressive. Indians are only… enlightened). Corruption, lack of meritocracy, disproportional levels of contentment are by-products.
3. Family values (overlaps a bit with previous point)
Children are molly-coddled and over-protected. Lack of values like initiative, drive, aggression, and independance are by-products. Current education system also compounds these ills.
P.S. This factor was hidden in the early “glory” daze because there was always a king to whup your ass if you didn’t deliver the goods. Sadly, we still expect to be treated the same.
4. Lack of big wars (Even the freedom struggle got diluted by the Satyagraha. Note that America fought a WAR of independance whereas ours was a measly “struggle”). Only a devastating war enables a country to rebuild and rediscover itself.
What this country needs is a good healthy slapping with a good healthy trout.
I am sorry to break in with a refutation here, I hope yazad does not mind too much. Assuming asli is serious about the things in the previous comments, here is what I would like to say:
1. Democracy: Which dictatorship or other system of government are you talking about? I am rather disgusted with most people who say democracy is the problem, that is a blatantly counter-intuitive analysis. But I don’t think disgust is enough to express how wrong this is. Contrary to asli, the root cause of the problems perceived with democracy in India is the continued social division, which prevents the formation of a common polity. The great advantage of democracy, is that it instituitionalises much (though not all) of the dissent towards the ruling order.
2. Indians are very aggressive and obedient too, except they exert these charachteristics in the political sphere rather than the economics sphere.
4. War? umm… classic broken window fallacy, check out Henry Hazlitt’s “Economics in One Lesson”.
War.
The way the country was set-up was that people did NOT have equal rights. The trend continues.
The basic flaw is assuming that people can be equal. People can *never* be equal whether one considers factors like affluence, intelligence, physical ability or ethics. There will be the 10% which are superior in all those respects. There will be 10% who will form the dregs of society, whom everyone else will have to look after. The goal is to ensure that the remaining 80% should be economically prosperous. i.e. form a substantial middle class.
Our lack of economic freedom post 1947 was singularly responsible for our lack of progress. The Mahalanobis model (incidentally, he was not an economist) was the prime culprit. The second biggest factor was lack of judicial progress in administering law. We have laws, we just do not enforce them - and if we do, we do not do it quickly enough.
Btw, the connection between a legal system and economic progress is well highlighted by Hernando De Soto. I had put this in my blog many months back http://www.pbs.org/wgbh/commandingheights/shared/minitextlo/int_hernandodesoto.html
1. Lack of economic freedom
2. Monarchies in politics
Ah..the third big reason is british colonialism. Contrast the Indian economy pre 1757 to post 1757.
Gautam, I do mind. Cut the refutations.
I’ll repeat what I told MadMan. Hold your horses. No debate on the points on this post. Let people give their views only. I want to classify the major areas and then take each one for debate.
Hey yazad, this is an idea that i tht will do on my blog long back but postponed for want of…mmnnn..well, readers. Anyway u already have multitude of reasons that are typically heard at LSS.
To enumerate- a list might help new commentors
population(powercuts and then procreation is the only recreation for the poor)
unemployment
Illiteracy/ lack of education
lack of resources
corruption/redtapism
Inequality- rich too rich, poor too poor
Work culture/work ethic/’values’
Fatalism- Enuf is enuf/ enterprise discouraged by culture/religion and even the lack of both
Democracy
British Raj/Colonialism
Too large country/ regionalism
Globalisation-anyone..? American conspiracy/ corporate imperialism through foreign capital
Wars and lack of big wars apparently!
Lack of ’sound monetary/ fiscal’ policy.(I think that’s an oxymoron!)
Dynasty politics/ no meritocracy
Climate and geographical location-dependancy on monsoons and the likes.
Listening to ‘piano man’ way too loudly and have an exam later in the day. Can’t think of any more. But hey guys i know some people who believe none of the above but Economic freedom is the only parameter which has a correlation with the GNP of a nation. I’m not trained in Economics and hence i do not know. Can that be true/possible..? Aren’t these high sounding jargon a tool only to mislead the common man..? What does Economic freedom mean on ground..? Can it be more important a reason than say over population..? Don’t we have economic freedom..? If we don’t, what about countries which have it..? r they rich..? Is it more important than the freedom to cast our votes..? Think abt it..!
SK, I don’t want a rehash of what others have said at seminars like the LSS. I was part of the team and helped in organising 11 LSSes and for most I assisted Dr. Parth Shah in this presentation. So I’m sure I can give this list better than most ;-)
I want to know what you think. Your opinion. Leave the rehashing to me!
The reasons India remains poor.
Lack of economic freedom. restrictions of usage of property.
Too much property lies in the hand of the state where it rots. It should have been more in the hands of private entrepreneurs. There is a concept called the margin of production, which states that the more land (natural resources) are kept idle/inefficient, the lower the wages are, in a society.
The primary religions (hinduism and islam) have a charitable bent. How many sikhs do we see begging?
The caste system is in an inverted order of productivity. A caste system which extalled the entrepreneur and the labourer would have made any society the richest in the world.
Any society that treats its women badly suffers. Women are the more non-violent, hardworking, enterprising and promise-redeeming section of society in a village/small town. (This, incidentally, is the bourgeois ideal) Where physical strength is extalled over productivity, don’t expect great wealth.
Not enough emphasis on developing cities. Cities act as the showcase of the liberal life. A place where people can make money of their minds and not their muscles. They also are where small families and literacy make more sense. And ofcourse, plain and simple division of labour.
50 years of Nehruvian socialism.
Let your readership not blind you yazad. If you are trying to control what people will post on your site, you’ll do well to take off the comments section altogether. May the force be with u..;-)
Lack of micro financing institutions, Still existing Feudalistic structure
Sk,
My readership is less than a 100 a day. Not enough to blind me yet ;-)
As it is my blog, I make the policy that guides comments. It’s rather open and when I disagree I largely do it publicly without deleting the offending comment. (unless it’s spam)
Many blogs have a comments policy. Does not make us “controlling” in the way you imply.
You have a choice on whether you want to comment or not. Up to you. The same choice is offered to all those who wish to comment. Cheers!
1. Mixed up economy! (Not mixed economy).
2. Socialistic approach
3. Poor execution of plans and projects
4. Under educated politicians
1. Lack of visionary leadership.
You may not agree with Nehruvian economics, but at least there was a vision.
2. Indians are “homo heirarchicus” rather than “homo sapiens.”
3. Education and social justice (perhaps two different points)
4. And finally—this is just a theory, I may be completely off base here:
We are afraid to dream collectively, and hence dwell too much on individual achievements of the past.
Why do we forget that most of corruption is in Government and mostly all of our officers are highly intelligent and qualified? (At least they have to clear IAS or state level exams)
Most corrupted department in India is Anti-Corrupted department;)
I think it does not matter how many people there are and how educated they are, even it does not matter how good are politicians, what matters is how much really educated learned people care about country. If they really do care and want to do something, they can change things. We can see some few examples here and there. Like Mr. Rao did it in Surat. Mr. Sheshan did with elections. If all officers and other educated people start working for country all other things will fall in line.
I do not agree with Madman.
Quantity is not issue, Quality is defiantly.
Quality not in terms of only IQ but in other terms. Love towards country, fellow countrymen and duty etc.
I think it is not uneducated people’s fault if they are that way, it is educated and learned people’s fault as they did not do enough/effectively what needed to be done.
If I do not send my child to school and when he is adult if I accuse him of not being educated and learned, it is wrong, it is not his fault but it is mine, as mature, educated adult it was my duty to make sure that immature, uneducated gets enough education when one is suppose to get.
We our officers/educated/learned/wise/or-what-ever-you-call would have done their duty in last 50 years; it would have been different story.
I think we have some problem in our Gene ;)
imho, the bastard nehru family. great idea having an elitist family which could barely spell “poverty” or “liberty” run our country. nehru never cared about the poor, nor did indira. and to certain extent, nor does any of the congress. they are like the republicans.
yes, yes, everyone will groan and moan about how we shouldn’t blame it on some guy who ran the country 55 years ago…but honestly, he is single largest reason why we live in a shit hole.
yes, yes, there will now be people up in arms about how india is amazing and wonderful and not a shit hole. seriously? living in new delhi, we have no decent water, electricity supply or public transportation. you give me a better example.
well i feel that the thing which lacks in india is personal motivation and the desire to change things around oneself .
let alone that . i feel that even the desire to work efficiently and do ones own job propery lacks in the indian.
and this is mainly due to the sense of frustation in people and the realisation that being complacent is the best n most convenient option , and not to mention , most fruitful too .
oh yes economic factors do count but its much easier to find means of getting over them if an indian has the will to do so