To grow, keep numbers down

Before our politicians adopted the inclusive growth mantra, they had embraced a new orthodoxy that argued that wealth can’t be redistributed if there isn’t enough to go around.

Before our politicians adopted the inclusive growth mantra, they had embraced a new orthodoxy that argued that wealth can’t be redistributed if there isn’t enough to go around. The country’s latest poverty map vindicates this belief. Delhi’s urban industrial economy had 1.9 million destitutes in 2004-05, and their numbers grew by 400,000 in 2009-10. Over this time Delhi’s population, swollen by a tide of immigrants, increased by 1.5 million. On the other hand, Bihar’s predominantly agrarian economy had to sustain an extra 10.8 million population in these six years, adding another five million to the 49.3 million already living below the poverty line. As the Indian economy urbanises, its cities are lifting millions out of poverty, but the impact is dam-ped by the scale of migration from the countryside. Hence urban poverty reduction figures (a 4.6 percentage point reduction between 2004-05 and 2009-10) look tame in comparison to the rural numbers (a 8.2 percentage point fall over the same period).

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The overall gains are not to be sneezed at. Over 50 million Indians now have slightly more than what the government thinks is needed to keep body and soul together. The 355 million who don’t should not take away from the accomplishment. The Planning Commission’s most recent study has two critical, and oft-repeated, takeaways. States that have not managed to lower fertility levels lag in reducing poverty. And this gap opens up if such states fail to industrialise. Uttar Pradesh and Bihar fit into both categories and the percentage of their populations in poverty remains fairly static. West Bengal has managed to arrest its population growth, thereby making some headway in lowering its poverty ratio despite de-industrialisation. Maharashtra, which has done well on both counts, posts the biggest gains in economic mobility. The trick for any state government, whatever its political persuasion, thus seems to be to get the fertility rate lower — and the economy growing faster — than the national average.