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Rise in socioeconomic inequalities in Gujarat, a neo-liberal haven

By Rajiv Shah 
A well-known international organisation, Save the Children, has quoted official data to suggest how the neoliberal growth model, for which a section of economists project Gujarat as the idea, has failed to bring down social and economic inequalities in India. 
A new report, “Reducing Inequality: Learning Lessons for Post-2015 Agenda – India Case Study”, by top international organization, Save the Children, with presence in more than 120 countries and 15 Indian states, has blamed the neoliberal growth model, for which Gujarat is being projected as the best example of success, for the current woes of widening gap between the rich and the poor in India. The report says, “There is evidence to suggest that the poorer sections of India were actually further marginalized under the neoliberal economic regime introduced in India in the early 1990s.”
The report, in fact, states that the inequality gaps in India have increased at several layers. It says, “Poorer states like Bihar, Uttar Pradesh and Orissa witnessed only a marginal improvement in terms of per capita NSDP (Net State Domestic Product), whereas the richer states like Gujarat, Maharashtra, etc. witnessed substantial rises.” But in the states where per capita NSDP has increased, inequalities too have gone up. “States that witnessed greater rise in per capita NSDP during the period 1993- 94 to 2004-05 also witnessed higher rise in state-level Gini coefficients. This implies that the states that experienced more ‘growth’ actually had worsening inequalities”, it adds.
Per capita calorie intake in rural India
The report says, “Per capita NSDP does not capture the actual distribution amongst the population as it assumes equal shares for all. The easiest method of measuring actual distribution is by analyzing differences in consumption expenditures, as given by the National Sample Survey Organization (NSSO) periodic sample survey reporting. While analyzing this data, it is important to bear in mind that household consumption data tend to understate the extent of inequality by underestimating the tails of the distribution (excluding the very rich and the very poor) and because the poor are more likely to consume as much or even more than their income while the rich are more able to save.”
Quoting an expert study, the report states, the NSSO statistics reveal that inequality was prevalent not only between states, but within the respective states as well. Vasmi Vakulabharanam and Sripad Motiram, in their 2012 study ‘Indian Inequality: Patterns and Changes, 1993-2010’, published by the Indira Gandhi Institute of Development Research, provide evidence that in terms of consumption expenditures, the inequalities within the states have worsened. “Analyzing the NSSO consumption expenditure surveys for the 50th Round (1993-94), 61st Round (2004-05) and the 66th Round (2009-10), the authors report that inequality has increased in both rural and urban India”, the report states.
The expert study quoted in the report looks into Gini coefficient as the yardstick to calculate inequalities across India. The Gini index or Gini coefficient is a measure of inequality of income or wealth. Thus, a Gini index of “0” represents perfect equality, while an index of “1” implies perfect inequality. The study has found that Gujarat’s inequality levels have been rising since 1993-94, when its cumulative Gini index (both for rural and urban areas) was 0.279. This was the time when Gujarat began implementing the new economic policy. At that time, all states except three had higher inequality gap (or Gini index) than Gujarat. However, in 2004-05, the Gini index reached 0.334 and in 2009-10, it furthered reached 0.343, with inequality gap in Gujarat being higher than 10 other states.
Rural calorie per consumer unit per diem
The report finds that the neoliberal growth has failed to improve health of the people, calculated in terms of Calorie intake, and Gujarat is no exception here. In fact, Gujarat, among many other states, has seen a fall in Calorie intake. In fact, rural Gujarat’s Calorie intake is worse than the national average. To quote from the report, “In the rural sector, Punjab has the highest per capita Calorie intake of 2223 Cal while Jharkhand had the lowest of 1900 Cal. It is interesting to note that some of the poorer states like Orissa and Uttar Pradesh had Calorie intakes higher than the national average while comparatively richer states like Gujarat and Tamil Nadu had lower than the national average rate of Calorie intake. Comparison with 1993-94 levels reveals that barring Tamil Nadu and Maharashtra, all states have witnessed a fall in Calorie intake in the rural sectors.” It adds, “Gujarat, which has lower than average Calorie intake levels in 2009-10 also shows lower than average decline in Calorie intake from 1993-94.”
Coming to per capita Calorie intake, the report finds Gujarat’s performance dismal. It states, “For the rural sector, the national average of 2489 Kcal per consumer Unit is way below the basic requirement of 2700Kcal per diem. However, there are many states that do have per consumer unit Calorie consumption above the nominal requirement. Himachal Pradesh has the highest per consumer unit Calorie consumption of 3020 Kcal. Of the major states, Punjab and Rajasthan have above norm Calorie intake as well. Some of the poorer states like Orissa and Uttar Pradesh have above the national average per consumer unit intake, although lower than the nominal requirement. Some of the well off states like Gujarat and Tamil Nadu show lower than national average per consumer Calorie figures in the rural areas.”
Hunger Index for Indian states
Quoting “India Human Development Report 2011”, the report regrets there are “abysmal levels of hunger and malnutrition in select states across India.” It says, “It is shocking to note that even states like Maharashtra or Gujarat in the Western region, which have some of highest per capita NSDP and even higher than average MPCEs and rank amongst the richest states in the country, have very poor rankings in the Hunger Index. This proves that economic growth alone cannot resolve the problems of hunger and the growth process that India has experienced has often led to very high levels poverty amongst the population, reflecting stark inequalities.”
The report states, “One of the most important measures for children is the basic measure of Infant Mortality Rate (IMR). IMR denotes the number of infant deaths (less than one year of age) per 1,000 live births. Infant and child mortality rates reflect a country’s level of socio-economic development and quality of life and are used for monitoring and evaluating population and health programmes and policies. India has had historically high IMR. Despite major improvements a lot remains to be done in this area. Furthermore, there are significant differences in IMRs across states, both in terms of absolute levels and changes over time.”
It underlines, “The highest IMR was reported (in 2011) from Madhya Pradesh (59 per 1000 live births) followed by Orissa (57), Uttar Pradesh (57) and Assam (55), while Kerala has the lowest IMR (12 per 1000 live births). The states that have performed well over the period 1999-2011 are Tamil Nadu, Maharashtra, Punjab, Karnataka and West Bengal, all of which have shown relatively rapid decline in IMR since 1999. In the Eastern region, Orissa shows the highest IMR, despite making some major improvements since 1991. In terms of rate of decline in IMR, the states of Tamil Nadu, Maharashtra and West Bengal have shown rapid decline since 1991.”
However, as for Gujarat, “which has one of the highest per capita incomes of all major states (per capita net state domestic product (NSDP) at constant (2004-05) prices of Rs 52,708 in 2010-11, has only been a moderate performer in this regard. Gujarat’s IMR in 2011 is close to that of much poorer and less developed Bihar despite the much higher per capita income in that state (per capita NSDP of Bihar in 2010-11 is Rs.13,632). The Southern State of Kerala has shown one of the lowest infant mortality rates historically. Its IMR has been many times less than the Indian average. Kerala’s performance is more creditable than any other states as it has managed to reduce the already low IMR even further.”
The report underlines, “It is surprising to note that even urban IMR is high in the states of Delhi and Gujarat. In this context it is important to note that the rapid economic growth that Gujarat has experienced over the past decade has been of the nature of exclusionary growth where goals like social equality, sustainable livelihoods, access to education It adds, “In this context it is important to note that the rapid economic growth that Gujarat has experienced over the past decade has been of the nature of exclusionary growth where goals like social equality, sustainable livelihoods, access to education and health, justice and peace have been abandoned in the race for high-speed growth.”
The report quotes recent study, “Poverty Amidst Prosperity: Essays on the Trajectory of Development in Gujarat”, to say that “state expenditure in social sectors, both as a percentage of GSDP and as a percentage of total expenditure, has declined more than the average decline in other comparable States and stands below the national average pointing to a clear shift in the priorities. The study also observed that there is a decline in the usage of government health services in both rural and urban areas of Gujarat and a very high reliance on the private sector. In urban areas, the decline has been quite significant for the lowest income group.”
It further quotes from the study to say that in “there is a decline in the usage of government health services in both rural and urban areas of Gujarat and a very high reliance on the private sector. In urban areas, the decline has been quite significant for the lowest income group. Data for some select states of IMR for 2010 (based on availability) reveal that across all states and across regions, the IMR for females are relatively higher. This is a clear reflection of the gender bias that exists in India even today. The Western states of Gujarat and Rajasthan and Northern state of Uttar Pradesh show higher differences than the other states. Incidentally, states like Orissa or Madhya Pradesh, which has historically had very high IMR in the country show lower differences.”
Infant mortality rate male vs female
The report says, “Another important indicator to map health conditions in general and particularly the condition of women in the society is the Maternal Mortality Rate (MMR). The Office of the Registrar General, India provides data on maternal mortality in India on a regular basis for the period of three years averages. However, the first survey in maternal mortality was conducted in 1997 and hence the first report released data from 1997. The performance of West Bengal has been remarkable in reducing MMR since 1997.”
It adds, “The latest report (2007-09) shows that Maharashtra again has been an achiever in reducing the maternal mortality and has joined Kerala to realize the MDG target of reduction in maternal mortality in the country (chart 23). On the other hand, Gujarat again has proved to be a poor performer as the MMR has actually gone up in Gujarat over the period 1997-98 to 2007-09 recording a negative rate of decline. The states of the north western region Uttar Pradesh, Rajasthan and Bihar still show quite high rates of maternal mortality. The impact of such neoliberal polices has been the delinking of economic policies and social policy. A systematic withdrawal of the state from social welfare manifested in terms of reduction of budgetary allocation, increasing commercialisation of services and/or handing over of service provision and its financing to private parties and introduction of cost recovery measures such as user fees for public services.”
It comments, “In the process, the previous progress towards universal access has been thoroughly undermined and has resulted in rise in out-of pocket expenditure, particularly for the poor, and increased inequality and exclusion. Government expenditures for both Centre and States in developmental activities as percentage of total expenditures have gone down substantially since the early 1990s. While there has been some recovery in this trend in the very recent past, in the case of state governments it still remains significantly below the levels prevailing in the early 1990s. And this has been happening precisely at the time when the growth process has failed to generate adequate, decent employment and has instead given rise to an increasing percentage of the population being pushed into low paying, insecure and low productivity informal jobs with no social security.”

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