People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 38

September 19, 2010


‘Reversal of Present Policy Direction Needed To Meet MDG Targets’



The following is the text of the speech delivered by Sitaram Yechury, MP and Polit Bureau member of the Communist Party of India (Marxist) on ‘Millennium Development Goals: Status and Way Ahead’ organised as a part of the Millennium Development Goals Lectures by the UN Millenium campaign and survey organisation Whypoll on September 12 in New Delhi. Sub-headings have been added.

THE Millennium Development Goals and poverty alleviation is a subject that assumes even more significance when we look at it in the background of the present acute economic crisis we are passing through.

Pledges have been made by governments across the world for taking up cudgels against poverty and “making it history”. As we all are aware, the Millennium Development Goals (MDG) are drawn from the actions and targets contained in the Millennium Declaration that was adopted by 191 nations – and signed by 147 heads of state and governments during the UN Millennium Summit in September 2000. “We will spare no effort to free our fellow men, women and children from the abject and dehumanising conditions of extreme poverty, to which more than a billion of them are currently subjected”. It was agreed to undertake periodic reviews – and in fact they were undertaken – to ensure that governments remain on course to achieve the targets that were agreed with unanimous consent. This was rightly hailed as a crucial step towards ending poverty and inequality. As the UN itself states, “despite the gains, no region in the world is on-track to achieve all of the goals, and some regions are off-track on many of them”.

The government of India has recently come out with its assessment on the progress made on the millennium development goals and had brought out a document 'Millennium Development Goals: India Country Report 2009'. Let me quote some of the conclusions reached by this document to help us in locating where the country stands today.

The Country Report broadly divides the 12 targets into five groups and predicts their achievability based on their current status. It states that India is “moderately or almost nearly on track considering all indicators” achieving the targets of (i)reducing the population below national poverty line to half (ii) eliminating gender disparity in primary and secondary education and (iii) halting and reversing the spread of HIV/AIDS.

Three more targets according to the Report are “on track or fast considering all indicators”. They are (i)ensuring that all children (boys and girls) complete full course of primary education (ii) integrating the policies of sustainable development and reversing the loss of environmental resources (iii) making available the benefits of new technologies in cooperation with private sector. The country is “slow or off-track by some indicators but fast by other indicators in respect of three targets”- (i) reducing the under-five mortality rate by two-thirds (ii) reducing maternal mortality rate by three quarters and (iii) halt and reverse the incidence of malaria and other major diseases.

The report states that India is “on track or fast by one main indicator but slow by another main indicator” in respect of halving the number of people without sustainable access to safe drinking water and basic sanitation.

The report agrees that the country is “slow or almost off track considering all indicators” with respect to halving the proportion of people  who are suffering from hunger and that the “pattern of change is not clear due to lack of sufficient data” on achieving significant improvement in the lives of at least 100 million slum dwellers.

To better understand the conclusions drawn in the report, let us look at some official statistics:

·        The number of people living below poverty line in 1990 was 37.2 per cent. This is supposed to be brought down to 18.5 per cent by 2015 but is expected to come down to 22 per cent. Present number of poor varies from 27 to 37 per cent depending on the various government appointed official committees. According to another estimate, nearly 77 per cent of the people are living on an income of less than $2 per day.

·        There were 53.5 per cent of underweight children below 3 years age in the country in 1990 and this is required to be reduced to 26.8 per cent by 2015. This is expected to come down to about 40 per cent only.

·        Under-five child mortality rate was 125 per thousand in 1990 and it has to be reduced to 42 per thousand live births by 2015. But it is expected that it would only reach 70 by that year.

·        In 1990, infant mortality rate was 80 per thousand live births and this is to be reduced to 26.7 per thousand live births by 2015. This is expected to reach only 46.

·        In 1990, maternal mortality rate was 437 per 100,000 live births and it is to be brought down to 109 per 100,000 live births by 2015. This is expected to reach only 135 per 100,000 live births by 2015.

·        Only 51 per cent of the population are covered by sanitation facilities in the country at present and this is to be brought down to 38 per cent and the government states this goal cannot be achieved.





These facts question some of the analysis done in the report. The report, as we have noticed, states that the target of poverty reduction would be met by 2015, but the target of reducing the number of hungry cannot be achieved. There are many studies conducted both in India and many other countries, which establish the fact that prevalence of hunger is intrinsically connected with the incidence of poverty. This basic fact gives rise to many apprehensions and questions on the claims that poverty would be reduced – would the number of poor be really reduced or a statistical jugglery committed. This naturally leads us to question the 'growth' and who are benefiting from it.

The answer can be easily discerned from the following statistics. During the course  of this year, the number of US dollar billionaires in India doubled to 52 holding combined assets equivalent of 25 per cent of Indian GDP. Apart from these people, there is another minuscule section who are called high net worth individuals (HNWIs). They are just 0.01 per cent (120,000) of the total population of our country and their combined worth is close to one-third of India's Gross National Income. According to the 2010 World Wealth Report brought out by financial services firms Capgemini and Merrill Lynch Wealth Management, India now has 126,700 HNWIs, an increase of more than 50 per cent over the 2008 number. These are the people who have not lost in the period of global economic crisis, but in fact gained.

On the other hand, the Millennium Development Goals Report 2010, released recently by the UNDP states, “Newly updated estimates from the World Bank suggest that the global economic crisis will leave an additional 50 million people in extreme poverty in 2009 and some 64 million by the end of 2010 relative to a no-crisis scenario, principally in sub- Saharan Africa and Eastern and South-Eastern Asia. Moreover, the effects of the crisis are likely to persist: poverty rates will be slightly higher in 2015 and even beyond, to 2020, than they would have been had the world economy grown steadily at its pre-crisis pace”.

This is equally true in India, as facts testify. An estimated 33.6 million more people in India became poor or remained in poverty over 2008 and 2009 than would have been had the pre-crisis (2004-07) growth rates been maintained over these two years. In 2009 alone, an estimated 13.6 million more people in India became poor or remained in poverty than would have been the case had the 2008 growth rates continued, according to the United Nations Department of Economic and Social Affairs (UNDESA).




According to some simple calculations, it would take an average urban Indian 2,238 years, based on the monthly per capita expenditure estimates in the 2007-08, to achieve a net worth equal to that of the average HNWI. And that's assuming that this average urban Indian just accumulates all his income without consuming anything. A similar calculation shows that an average rural Indian would have to wait a fair bit longer – 3,814 years! It is this gross inequality with which we are living today in India.

Sha Zukang, UN under-secretary-general for Economic and Social Affairs, states “Policies and interventions will be needed to eliminate the persistent or even increasing inequalities between the rich and the poor, between those living in rural or remote areas or in slums versus better-off urban populations, and those disadvantaged by geographic location, sex, age, disability or ethnicity”. It is an accepted fact, even when the MDG targets were committed upon, by those parties that are running governments today, that it is policies that determine whether a particular target can be achieved or not. A commitment to achieve MDGs is thus presumed as a commitment for re-orienting policies. On the contrary, the reality we are witnessing today shows a drastic increase in inequalities. This implies that it is high time for serious introspection of the policies pursued by successive governments – if they are really serious about their commitment to poverty alleviation and achieving the MDGs.

This is precisely what we are arguing. Unless there is a reversal of present policy direction, which is widening the gulf between the rich and the poor, these targets cannot be met. With a radical shift in policy direction, however, these can be realised. For instance, let us look at  the tax concessions given by the government. According to the Tax Forgone Statistics provided by the government in the parliament, the overall tax concessions provided by the government in the last fiscal (2009-2010) were Rs 5,02,299 crores. Even accepting the government logic that these tax concessions served as stimulus, the direct tax concessions foregone to the corporate sector and to the high end income tax sector, this fiscal works out to be Rs 1,20,483 crores and for 2008-09 this figure is 1,04,471 crores. Now if this amount of money in the last two years equalling Rs 2,24,954 crores were legitimately realised by the government and invested in public welfare measures, then that would have generated substantial employment and the consequent enlargement of domestic demand would have sustained the cycle of the economic growth. This may not provide instant super-profits, but would ensure that the benefits of growth would flow more equitably than they are today. This would have ensured a sharp reduction in the levels of poverty and malnutrition. In the final analysis, reduction of poverty will not happen through charity or government largesse – sustained poverty reduction can only come through appropriate policy framework and through active intervention of people in the affairs of the polity.

Kautilya in his Arthashastra prescribes taxation on “gambling houses” or modern day speculation activities and warns that “no king should give room to such causes as would bring about impoverishment, greed or disaffection among his people. If, however, they appear, he should at once take remedial measures against them”. Hope the government heeds!