Abraham George - Uncovering the Truth Behind Poverty

Who can claim to be a social entrepreneur in poverty reduction?

2009-10-28T09:46:00.009-05:00

Today, there are many ventures claiming to be social enterprises, some with the professed goal of poverty alleviation. In the frenzy of associating with social good, many such assertions do not face enough scrutiny. Further, there isn’t sufficient clarity on who is a social entrepreneur contributing to poverty reduction as its main goal.

Social entrepreneurship is the activity of a social entrepreneur. A social entrepreneur is one who recognizes a social problem and uses business principles to organize, create, and manage a venture to bring about social change. Social entrepreneurs are usually individuals with novel solutions to society’s pressing problems. Some social entrepreneurs often work through nonprofits and citizen groups, while most are now working in the private and governmental sectors.

Whereas a business entrepreneur measures performance in terms of profits and rates of return on investment, a social entrepreneur additionally includes the impact he has on society as well – the so-called double bottom line. The main aim of a social entrepreneurship is to further social and environmental goals for a good cause. In its purest form, social entrepreneurships are non-profits that reinvest the profits generated to further the social goal. Most social enterprises are built on business models that combine a revenue-generating objective with a social-value-generating structure or component. Social entrepreneurships redefine entrepreneurship as we know by adding a social component.

One well known contemporary social entrepreneur is Muhammad Yunus who founded the Grameen Bank in Bangladesh, and who was awarded a Nobel Peace Prize in 2006. His work was built initially on the concept of offering credit to those who were unable to obtain loan from conventional sources such as banks to undertake small business ventures. Subsequently, a new microcredit industry mushroomed in developing countries, most claiming that they are able to lend money profitably to the poor to enable them to start or run small businesses. However, there is some degree of skepticism about their motive, business practices, performance, and benefit offered to the poor.

I would like to offer some clarity to this field. Social entrepreneurship can be in many areas that offer products and services to improve consumer safety, environmentally friendly choices, poverty alleviation, and other worthwhile initiatives. There is no doubt that many of these ventures are valuable to the economy and the society in general. However, the problem arises when some of these initiatives claim that they are designed to alleviate poverty as their main goal. Such claims often attract public support and investment from the philanthropic community, but they do not necessarily meet the minimum criteria for claiming as a poverty alleviation enterprise.

In my opinion, for-profit ventures that claim to be social entrepreneurships to alleviate poverty must meet at least one of the following criteria:

Employ and/or train proportionately significant number of poor people in its main business activity (e.g.: making mosquito nets, pottery, processing vegetables, etc.) instead of simply using them as cheap manual labor, such as sweepers, porters, etc.
Produce/offer essential products and/or services (healthcare, education, housing, food, clean water, etc.) to poor people (those below income of $2 per day) at affordable prices.
Make credit available to poor people at reasonable rates (no higher than twice the rate charged by banks to their credit worthy clients) for personal or business uses.
Offer technical, material and/or financial assistance to the poor to enable them to engage in family-run businesses, with returns to investors generated in the form of products produced from those activities (milk production from cows and buffalos, tailoring of items such as designer quilts and cushions that may be sold at high prices to the affluent community, etc.).

In all these cases, the social entrepreneur employs the poor in the company’s main business activity at fair wages, makes possible for poor families to engage in small entrepreneurial ventures, and/or offer essential products and/or services at affordable prices/charges. The poor must benefit directly from the activities of such social entrepreneur. It is not sufficient to argue that the poor also benefits from the trickle down impact of a regular business run by or for the higher income population to qualify as a social entrepreneur serving the poor; otherwise, every corporate entity including Wal-Mart would fit the definition of a social entrepreneur serving the poor.

Further, the cost incurred by the beneficiary for the product/service obtained must be affordable and reasonable; not to place any such constraint to qualify as a social entrepreneur serving the poor would be to accept exploitation of and extortion from the poor in the name of social good, as is the case of local money lenders who charge exorbitantly high interest rates to those who badly need loans to meet emergencies.

Investors must differentiate between those for-profit business ventures that are set up in poor areas or employ low-wage labor from other activities that are clearly designed also to improve the lives of poor people at the true “bottom of the pyramid.” Without making such a distinction, every business that operates in deprived communities or sells products and services to the poor and the not-so-poor will be termed social entrepreneurships in poverty alleviation.

Innovation of a different sort -- educating the nation

2009-10-21T16:16:00.008-05:00

The idea of Shanti Bhavan School was conceived from my personal conviction that the leaders of tomorrow must come from a well-educated population that is brought up with innovative curiosity and good values. If one hundred such schools can be created, I thought, it will over time bring about great economic prosperity for India while offering social justice for all. The ingredients for such success could very well be innovation and risk-taking, among other important attributes. But what kind of innovation?

Innovation is rarely about top science or high technology; scientific breakthroughs don’t come about every day. It is more about the power of ideas and their creative application. Often it is about leveraging existing resources, technology or science to useful purposes in an innovative way.

Few would dispute that Steve Jobs of Apple is one of the greatest innovators of our time. Coming from humble beginnings and raised by adoptive parents who could not afford much, Jobs barely completed one year of college. But he was free to do what he liked most – attending lecturers given by scientists and innovators on subjects like calligraphy. He even went to India and returned as a Buddhist. His short employment at Atari Video Game gave birth to his own idea for mouse-driven graphic interface. All the innovations that followed at Apple were not new technology in the sense of basic science or research, but application of existing technology to new ideas. It was a result of his free spirit – the ability to decide for himself without confining to prevailing conventions and rules. It is about independent thinking and originality, and the courage to plunge ahead to create products and services that even more established companies could not innovate.

What we have tried to do at Shanti Bhavan is a little bit of imparting these strengths. When I started out creating Shanti Bhavan in 1995, most people, including some who had held high positions in government, told me that excellence among the poorest is not possible. I was told that they do not have the capacity to accomplish greatness. My contention, on the other hand, was that those who don’t have sufficient means are the ones who have that fire in the belly to succeed, if given the opportunity. After all, the past half a century of educational programs focusing on literacy and primary schooling to uplift the poor have not motivated many children from those families to even complete high school.

Today, we all can be proud of the children we have at Shanti Bhavan. They came from among the poorest families, and made academic history in India. The first two batches of children, entire classes – practically all from dalit families –scored first class in ICSE examination. Further, half of both classes passed with distinction.

Even more compelling is what these children are today – confident, creative, and bright, and yet humble and polite. They have the right values. It is the result of an academic program that encourages originality, and an environment that values open discourse and differing opinions. They may not fit the mold of young geniuses, but they have the capacity to think for themselves and the courage to act on it. I am confident they will be very successful in their lives.

The point I am making is this. If children are brought up with the spirit of freedom to go beyond what the books tell, and experiment with their own ideas, they will become the true innovators of tomorrow. Imagine what India would be like if it can unleash the potential among the hundreds of millions of people whose children presently go through a rote-learning system of education that curtails creativity and originality. If the required resources are put into creating institutions like Shanti Bhavan in every country, there will soon be many more innovative minds to make the world a better place. And what great contribution and tribute to social justice that would be!

Sure, today Shanti Bhavan is facing financial constraints that limit its ability to scale-up to achieve the original goal. But based on the accomplishments of the past 13 years, I am more convinced than ever before that this is a model that could transform India in a significant way. The lofty goal of one hundred such schools is not that distant if the already successful innovators of the country join forces to offer the opportunity for the next generation of young minds to become the innovators of tomorrow.

Abraham M. George
www.shantibhavanonline.org

The Heavy Hand of Government

2007-12-10T00:14:00.000-05:00

I returned to India in 1995 to start and run a charitable foundation (The George Foundation) without any financial assistance from governments at state and central levels. Since then, many people have asked me why I do not seek government support for our work in helping the poor. I tell them that the status of a government-funded or -assisted institution carries with it many undesirable obligations and interferences from the State. My personal belief is that private citizens must make their own contributions to social causes, and they should not be tempted by the potential for “easy” money that comes with corrupt practices.

Despite our independent status, the past 12 years have not been free of attempts by government officials to extract money from us. We have faced difficulties as a result of the political ideology of a past government that targeted any organization that was deemed to be “Christian.” Arrogance of power on the part of officials had once forced us to seek court protection to prevent damage being inflicted by the government on physical infrastructure (the sub-collector ordered digging up an access road we had improved at our own expense with local panchyat permission but without state permit). I have written extensively about this and other instances in my book, India Untouched: The Forgotten Face of Rural Poverty.

Political and bureaucratic machineries in India may not find anything unusual or wrong about the way government officials have been conducting themselves for decades. They would argue that it is their duty to safeguard the interests of the general public. In dealing with governments, citizens have very little rights or recourse to what they consider as unfair and unjust acts.

Just last month our Shanti Bhavan School received a State order from the education department requiring us to complete an extensive survey form within a short period of seven days. Principals of all schools – government funded as well as independent schools -- were required to personally attend a session at the Taluk Education Office to receive instructions on how to fill the forms, and then return within another week with completed forms. A month later, the principals were called again to enter the submitted data into computers provided at the Taluk office. The argument justifying this procedure was that the State wants to hold the Heads of all local schools personally responsible for the accuracy of the information provided. No exception to this rule would be permitted; no one else could substitute for the principal.

On the surface it sounds a justifiable demand on the part of the State. Past surveys have not been accurate and it is essential that the government is now able to collect correct data (though one has to wonder about the validity or relevance of the data being asked for). But if this goal is all that matters, I suppose that principals of schools will be spending time only filling forms submitted by the numerous agencies of the government. Failure to appear in person could result in summons, fines and even harassment. I wonder whether CEOs of private companies are also expected to appear in person at the offices of labor, environment, water, electricity and other departments of governments.

When a government department exercises its powers arrogantly, one can be certain that its top management does not value or respect others. Such officials have no place in leadership positions. The strength of a democracy lies in fair and just laws and regulations applied equally and correctly for everyone. Private individuals and institutions must be able to seek protection from unjust acts of governments, and obtain redress. Until such time this balance between the responsibilities of the State and the rights of individuals is brought about, the country will not be able to create a just society and accomplish its full potential.

Please visit us at www.tgfworld.org and www.indiauntouched.com

Insurmountable financial obstacles faced by NGOs

2007-11-28T17:17:00.000-05:00

NGOs play a major role in the global effort to reduce poverty and suffering. Traditionally, these organizations are not-for-profit, and they focus mainly in the delivery of critical services in education and healthcare. Lately, some NGOs have been engaged in projects to create livelihood for poor people through job training, assistance in starting small businesses, and direct employment. These efforts complement programs run by governments and assisted by international agencies and donors.

There is much to be said about the contribution that the NGO community has made over the past several decades. However, it is also true that, for a variety of reasons, their efforts have not brought about sustainable results on a wide scale. In this brief article, I shall offer my thoughts on why NGOs have not been sufficiently effective in poverty reduction.

1. Heavy dependence on donor funds: Practically all NGOs carry out their programs with grants from governments, international agencies and/or private donors. These funds are for specific projects within areas denoted by the donor, with disbursements usually made on an annual basis. Donors prefer to set small goals, and hence, grants are often in limited amounts for a given period. NGOs submit their proposals tailored to grant amounts, and consequently, the resources that are made available seldom meet what is needed to do a good job. When each approved project period is over, there is no assurance of continuity. Donor fatigue sets in after a few years, requiring NGOs to seek new or additional “partners.” Neither the NGO nor the beneficiaries are assured of assistance to see through the completion of projects. When funding stops, projects simply end. Results are seldom complete, permanent, or sustainable without additional assistance.

2. Misplaced focus on compliance reporting: As recipients of donor assistance, NGOs are greatly concerned about keeping the donor “happy.” Inordinate amounts of attention and time on the part of senior management at NGOs are spent on preparing reports that show compliance of grant conditions, and in preparing for the next application for grant renewal. The bureaucracy at donor institutions offers the recipient very little room for innovation or divergence from previously agreed upon terms for project execution. Often, it matters less what has been accomplished in the field, and more what is put on paper. Demonstration of success is usually a function of quantity (number of beneficiaries) as opposed to quality (sustainable outcomes).

3. Lack of institutional infrastructure to deliver services: Donor funds are mostly assigned for operating needs and seldom toward capital expenses. For example, grants may be available to purchase medicines and supplies but not for constructing medical clinics or purchasing major equipment. Similarly, an NGO might receive donations to buy books and supplies for students from poor families, but the school itself might have to operate without functional classrooms and toilets. This bias toward meeting on-going operational needs without the necessary physical infrastructure results in major inefficiencies. The long-term viability of projects depends greatly on institutions and their underlying organizational structure to deliver services efficiently on a continuing basis.

4. Inability to attract good staff: Most NGOs cannot offer a stable work environment where assurance of continued employment is not dependent on renewal of current projects. Cost overruns are commonplace, and consequently, staffing may have to be reduced during the course of the project to remain within budget. Tight financial constraints and inability to raise sufficient funds for a project force the organization to hire employees at below-market salaries or to rely on volunteers. NGOs usually refrain from offering their employees long-term compensation in the form of pensions and other benefits. The result is that NGOs usually attract less competent people than their for-profit counterparts. A quick survey of even major NGOs will show that, except for the founder and a few top managers, the remaining staff does not have adequate background or training. The absence of competent staff results in inefficiencies and failure to accomplish goals.

5. Inadequate seed capital and endowment: Often, it is one individual or a small group of people with a common vision and ideal who are responsible for establishing an NGO. They contribute their own savings or seek seed money from others to get started and carry out the mission for a year or two. In most instances, initial capital received is far less than what is needed to establish a sound base in terms of staffing and required material resources. The first project undertaken may not have been sufficiently funded. In such situations, the NGO is forced to function in a survival mode right from the very beginning of its existence. Even those NGOs who are able to overcome their initial financial constraints may still have to rely on external funding each subsequent year. Only a small number of NGOs are able to attract adequate external resources to establish an endowment fund, the return on which might cover some or all of the future operational needs. Donors seldom provide the capital as seed money or endowment funds. Unlike for-profit companies that operate with adequate initial investment, line of credit, and subsequent reserves, NGOs are forced to function with little or no certainty about future cash flows. The result of insufficient funding is serious inefficiencies and subsequent failures.

6. Absence of internally generated funds: Not-for-profit NGOs seldom generate any income of their own to meet their capital and annual operating needs. Their reliance on project funding from external sources alone makes them financially vulnerable. Very few NGOs operate within a self-supporting financial model. They are reluctant to charge fees for services provided to the poor. The general assumption is that the poor are entitled to free services or they are incapable of paying even a small portion of the costs involved. Further, most NGOs do not have the managerial skills or resources to start and run revenue generating businesses, even when poor people can be employed. Without an endowment fund or business income, NGOs perpetually function by the benevolence of donors. This is not a self-sustaining situation in the long run.

Recognizing the above financial obstacles, The George Foundation has been attempting to cover its annual operating expenses from internally generated funds. As the founder of the organization, I made the investment to meet initial capital expenses (to build Shanti Bhavan, Baldev Hospital, etc.) and most of the annual operating needs for the first 10 years. During this period, the foundation invested in several acres of farm land, most of which is being used for agriculture to employ poor people. The surplus income from farming and fee revenues from a journalism school run by the foundation are being ploughed back into its other humanitarian initiatives.

Since 2005, the foundation has been seeking donor funds to meet its capital expenses and to set up a permanent endowment fund that would cover a portion of the operating expenses. Several generous individuals – visionaries – have come forward so far to assist us. If our income generating activities also succeed, the foundation will have increasing financial resources to widen its services in the years to come.

Good work is not possible without financial stability. Donor funds will never be sufficient. A pure form of social entrepreneurship might be the best financial model for those NGOs who can tap managerial talent and sufficient “investment capital.”

Please visit us at http://www.tgfworld.org/ and http://www.indiauntouched.com/

Tips on preparing high quality compost on a large scale

2007-11-13T00:49:00.000-05:00

In my last blog entitled Organic farming isn’t always easy, I promised to present our experience in preparing compost in large quantities. This is an attempt to do just that. As mentioned earlier, we have been growing over 200 acres of bananas for the past 4 years, relying mostly on compost. Our compost requirement each year has been in excess of 3,000 tons – 12-15 Kg per plant per year (other crops might require much less). It would be prohibitively expensive to purchase that much compost from commercial suppliers; further, we could not rely on their quality. We were motivated by the fact that large quantities of plant material is available within our own farm every year after harvest of bananas (banana plant is cut down after harvest at the end of 12-13 months).

Here below is a cookbook recipe style explanation on how to produce 200 tons of compost. I have used this quantity as a guide as each of our compost pits holds approximately that quantity. However, there is no restriction on the size of the pit, and all the “ingredients” may be adjusted according to the total compost produced.

We start with banana waste collected after harvest. Banana waste is one of the best plant material available as it is rich in NPK (nitrate, phosphate and potassium), especially in potassium which is usually not contained in sufficient amounts in most other plant material. Banana waste also has several micronutrients such as iron, boron, magnesium, manganese, and zinc.

Banana waste is crushed using earth-mover (JCB) bucket and brought to a central location. It is then placed on a 400-500 sq. ft area in layers of approximately 2 ft. Over each layer, a solution containing EM (Effective Micro-organisms) is poured to speed up the decomposition process. Maximum of 3 layers are placed, and the entire pile is covered with 50-60% shade net to avoid too much direct sun. The pile is maintained moist by weekly application of water.

Before we go any further, just a few words about EM, originally developed by Dr. Teruo Higa, professor of horticulture at the University of the Ryukyus in Okinawa, Japan. It is a concentration of different kinds of “good bacteria” that helps improve soil condition, converts fertilizers into digestible forms for plant absorption, and speeds up decomposition of plant material. EM can be obtained from several suppliers in India; two suppliers that I know of are Bio-India Biologicals (BIB) in Hyderabad, and Maple Organics in Dehra Dun. The concentrated form of EM is then made into SEM (Secondary EM) – also called Extended EM -- in diluted large quantities through a fermentation process. SEM is add to cow-dung solution in water and sprayed on each layer of plant material as described above.

Many suppliers of composting bacteria claim that full decomposing can take place in 45 days or less. Our experience is that banana waste, especially stem, does not compost sufficiently in less than 75 days. Even then, it needs further decomposing in a large pit along with other compost ingredients for at least another 45 days.

We use some amount of sandy soil in the preparation of compost as our land is slightly clayish. We believe that soil is a necessary media for bacteria to function effectively in producing good compost.

Here below is the list of ingredients in 200 tons of finished compost. I have indicated multiples of 15 tons as a tipper load is around that weight.

30 tons of sandy soil

60 tons of decomposed garbage waste from government-run processing factory

60 tons of banana and plant waste (partly decomposed as described above)

60 tons of cow-dung

10 tons of dry decomposed poultry waste

There will be approximately 10-15% evaporation of moisture, and hence the above quantity yields no more than 200 tons of final output.

All the above are put into a large pit in no less than 4 or 5 installments. Use the bucket of the JCB to thoroughly mix the ingredients. Water well to assure that the material remains moist. It requires 2-3 days of effort to put each installment of ingredients and to mix them. After the entire quantity is put into the pit and mixed, cover it with tarpaulin or plastic sheet. Once a month, mix and spray water to keep it moist.

In our experience, it takes approximately 2 months of decomposing in the pit for the compost to be ready. Practically all the plant material will be totally “digested” by the heat generated in the pit as a result of the composting process. The final material is fairly soft and black in color.

The required quantity of compost is put around each plant at least 6 inches away from the stem. SEM (without cow-dung) as well as nitrogen and phosphate fixing bacteria (azetobacteria and phosphobacteria) solutions are applied and covered with a thin layer of soil.

It is important that no chemical fertilizers (if needed) are applied for at least 45-60 days after the compost is put around the plant to allow healthy multiplication of good bacteria. It takes over 30 days for the compost to become digestible for plant absorption.

The above process is what we have experimented with and found successful for vigorous plant growth. This approach to compost preparation can be applied to smaller farms by using proportionately smaller quantities of ingredients. Also, plant materials other than banana waste may be used, but care must be taken to ensure that they do not create toxicity from acidity or other factors, as is the case with coconut fiber. Similarly, leaves of eucalyptus tree are not suitable for preparing compost.

The all-in cost of finished compost is estimated to be around Rs. 250 ($6.25) per ton assuming that banana waste is free. We have found the above process to be a practical methodology to produce large quantities of high quality compost in our own farm. Other agro-specialists may recommend different techniques for preparing compost; their results should be confirmed by laboratory tests of the finished product. I hope my sharing our experience with readers will help others develop their own relevant methodology.

In a subsequent blog I shall write about processing raw sewage into safe fertilizer and water for irrigation. It is based on our experience in Shanti Bhavan residential school where its sewage processing facility generates over 75,000 litres of residue water for irrigation every day.

Please visit us at www.tgfworld.org and www.indiauntouched.com

The Per Capita Game

2007-11-09T02:29:00.000-05:00

First the good news. Finance Minister Chidambaram stated on November 6, 2007 that the country has already exceeded a BRIC (Goldman Sachs investment bank report on Brazil, Russia, India and China) forecast of India's per capita income of $800 by 2010 and $1,149 by 2015. According to him, “we have exploded this assumption as our per capita income has already touched $1,000 this year and expect it to touch $4,000 by 2025."

Let us consider both sets of forecasts. BRIC forecast calls for a per capita income of Rs. 88 ($2.20) per day by 2010 and Rs. 126 ($3.15) by 2015. By contrast, the finance minister expects daily per capita income of Rs. 110 ($2.75) by this year and Rs. 438 ($10.95) by 2025. These forecasts compare against a daily per capita income of Rs. 82 ($2.05) estimated for 2007 (in nominal terms) in several published studies.

Per capita income should be calculated by dividing total personal income by the population. It is not calculated by dividing total output measures like GNP or GDP, which gives an exaggerated picture of per capita income. Only if a nominal (at current prices) GDP figure of $1.1 trillion and an exchange rate of Rs. 40/$ are used can one arrive at a daily per capita income of Rs. 110 ($2.75) for 2007. But that wouldn’t be correct.

Leave aside these discrepancies for a moment; after all, everyone wants to hear good news. The real question is whether the rapid rise in national per capita income is reflective of prosperity for all.

It was just two months back when India’s Central Ministry of Statistics reported that the daily per capita income of the rural population was Rs. 18.50 ($0.46) in 2005. With rural income rising no more than 5% per annum, the best estimate for 2007 is around Rs. 20.40 ($0.51). This estimate is consistent with the recent report by the National Commission for Enterprises in the Unorganized Sector (NCEUS) showing that 77% of Indians in 2004-2005 -- about 836 million people -- live on less than Rs. 20 ($0.50) a day. Obviously, there is a wide gap between the national daily per capita income figure of Rs. 110 ($2.75) estimated by the finance minister and the rural figure of Rs. 20.40 ($0.51) for 2007.

Even more troubling is the widening trend between national and rural figures. If we are to assume that rural per capita will increase by the same percentage as the change in national figure between 2007 and 2025, the gap between national and rural per capita will only widen from Rs. 90 ($2.25) in 2007 to Rs. 358 ($8.95) by 2025 – a whopping 400% increase. Undoubtedly, we have a society that does not share equitably the benefits of a growing aggregate economy.

The fact is that much of the rise in overall per capita income comes from the rapidly increasing personal income of the 34 million or so of people employed in the nation’s organized sector. These are the people who benefit most from the current economic expansion. Less than 10% of the nation’s population contribute to more than 90% of the growth in GDP and incomes.

The real test is in how the poor are benefited. With 770 million people living in the villages, and over 80% of them on less than Rs. 20 ($0.50) per day, what can we forecast about their future? All this talk about national per capita income adds up to very little when a great majority of people in the country is likely to remain below $1 per day in income even after another decade.

Please visit us at www.tgfworld.org and www.indiauntouched.com

Organic farming isn’t always easy

2007-11-02T09:17:00.000-05:00

Everyone is talking these days about the virtues of organically grown fruits and vegetables. Consumers are anxious to buy, even at higher prices, produce that do not contain chemicals. Agricultural experts and environmentalists argue that use of compost and herbal pesticides protect the soil from turning toxic and offer produce free of dangerous chemicals.

There is no doubt that plants and trees grow well if sufficient qualities of compost material is applied to soil periodically. It also ensures adequate moisture holding capability and avoids toxicity of soil from residues of chemical fertilizers, usually called NPK – nitrate, phosphate and potassium. Soil remains healthy with compost application, and fair crop output is assured every year.

There is no doubt that use of chemical pesticides pose danger to the environment, especially by contaminating ground water. Fruits and vegetables protected by spraying toxic chemicals may leave residues that are very harmful for human consumption. Healthy plants have the best in-built protection; use of herbal and other natural ingredients such as neem offer alternatives to the use of certain chemical pesticides.

Unfortunately, there are just too many forms of diseases and pests that attack plants and trees. They are usually soil and air borne, affecting the root system, stems, leaves and crop. For example, caterpillars and termites attack bananas and grapes in their early stages of growth. Nematodes that prevail in most soils can become a serious problem when they take hold of the root system. There are stem borers that consume and degenerate the entire plant. Funguses can spread wild after few days of rain. Different types of viruses, bacteria, fungus and parasites cause havoc to the plant and the crop. If the infected area is not properly taken care of, the problem will most likely spread to the entire field. Certain crops are more susceptible to diseases than others, and none are totally resistant.

Herbal remedies do not always arrest the problem before it spreads wide. For example, caterpillars and termites can multiply and attack a wide area in less than a week or two, and we have not found a way to prevent extensive loss without chemicals. There might be natural remedies for every situation, but they may not be fast-acting or readily available locally in sufficient quantities. Whether one likes it or not, often the needed solution may lie in the use of appropriate chemical pesticides.

The George Foundation has been growing bananas on over 200 acres for the past 4 years, and recently we have been switching over to grapes. It is one thing to use organic and herbal products on small areas, but large scale farming cannot avoid the use of some form of chemicals, especially pesticides, if the entire farm crop is not to be lost to diseases and pests. Though chemicals have their place in farming, to the maximum extent possible it is better to work with good quality compost and herbal pesticides, insecticides and repellants.

The trouble with the use of compost alone is that it is unlikely to offer high crop output that chemical fertilizers may provide in the short run. Further, all compost material may not contain sufficient quantities of micronutrients such as magnesium, boron and others, and may be deficient in potassium as required for certain types of crops. In those cases, use of chemical fertilizers and micronutrients as supplements may be required occasionally.

For example, bananas are large potassium consumers, and despite the heavy use of compost, our farm could not obtain high yield without supplementing with chemical forms of potassium, such as potassium nitrate or potassium sulphate. We have also found that the absence of certain micronutrients result in poor quality produce. We have tried to overcome these with improved quality compost, but this effort too has its limitations.

In another blog, I will try to communicate our knowledge and experience in preparing good quality compost. We have been using over 3,000 tons of compost prepared in our own farm every year. The difficulties associated with producing good compost in large quantities are a subject that every serious farmer needs to understand before embarking on totally organic cultivation.

Please visit us at www.tgfworld.org and www.indiauntouched.com

Better rural healthcare through primary health initiatives

2007-10-29T01:30:00.000-05:00

For decades, the government’s approach to meeting the health needs of the rural population in India has been one of offering mainly primary healthcare. For example, during the past half a century, India has built up a vast infrastructure of public health services by establishing one primary health centre (PHC) for every 50,000 population on the average. Undoubtedly the focus on primary and public health is the right one, but poor management, absence of committed physicians, corruption, and inadequate infrastructure, medicine and financial resources have turned them into ineffective institutions. Further, international organizations that provide much of the external funding seem to believe that a targeted approach to addressing some of the top health concerns can be successful, without worrying much about the institutions that actually deliver primary healthcare.

According to the World Health Organization (WHO), the top 10 preventable health risks are childhood and maternal underweight; unsafe sex; high blood pressure; tobacco; alcohol; unsafe water; sanitation and hygiene; high cholesterol; indoor smoke from solid fuels; iron deficiency and obesity. Our foundation’s experience in rural Tamil Nadu tells us that many of the health problems can be addressed through a comprehensive approach that deals with a) housing and sanitation needs, b) malnutrition and deficiencies in iron/folic acid and calcium among pregnant women and young children, c) worm infestation and skins ailments, and d) common infectious diseases such as viral fever, malaria and typhoid.

The George Foundation runs a rural clinic that offers healthcare and community development services to 17 surrounding villages. One aspect of our program is out-patient primary healthcare at the clinic, health education including training of birth attendants on safe delivery of babies, and holding periodic health camps in specific areas such as eye, gynecology, and heart. The clinic has its own laboratory to test for diseases such as diabetics, typhoid, malaria and HIV/AIDS. A computerized database of every patient’s health history is maintained to allow timely interventions and proper treatment.

The second part of our program is field services wherein our medical staff visits the villages every week and meets with women and children, especially high-risk pregnancy cases. The goal is to intervene well before health conditions deteriorate. Cases of malnutrition are identified, and protein-rich supplements are provided. Practically the entire population in every village is given de-worming tablets every six months, and skin ailments are treated with appropriate medication.

The third component of our health program is sanitation and safe drinking water. For the past several years, our foundation has been undertaking efforts to clean-up the area by leveling ground where water stagnation and mosquito infestation have been a problem. Latrines have been dug and drainage has been improved. Starting 2008, we are planning to drill wells to provide sufficient drinking water for the increasing population in each of the villages. 200 houses are targeted for improvement – to add adjoining latrine and ventilated kitchen to every home. Needless to say, all these require additional financial resources, and our foundation is reaching out to supporters for their contribution.

As can be seen, the main focus of all these initiatives is prevention and early intervention. Further, we are attempting to offer quality medical care for common ailments. Cases that require major interventions – less than 10% of all cases – are referred to nearby urban hospitals.

The above approach to healthcare delivery is found to be cost-effective. These programs are not very expensive. For example, to add a kitchen and latrine to a house will cost around $750 (Rs. 30,000). De-worming and protein/nutrition supplements cost around $10 (Rs. 400) per individual per year. It is the sheer large numbers of people that make these programs expensive. But we believe there are enough government and private financial resources to tap to make these programs successful. Over time, as incomes rise, patients will be able pay for most of the associated costs.

When early health interventions are undertaken and living conditions improve, the cost of long term medical care declines dramatically. Further, people do not have to needlessly suffer from preventable ailments. These initiatives do not require special expertise or high technology. It requires commitment and minimal but sufficient financial resources.

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Why quality education is so important to India’s future

2007-10-26T12:54:00.000-05:00

As of 2006, there are only 34 million people employed in India’s organized sector which comprises the country’s bureaucracy, military, and those formally employed in the private and non-profit sectors (with registered organizations). Despite this small proportion of employment in the organized sector, much of India’s economic growth is directly attributed to their contribution (such as those in IT, heavy industry, textile, etc.). It is just a few – less than 2-5% of this 34 million people -- who are highly educated and who can give India the cutting edge superiority to create a comparative advantage over other developing countries that also provide low cost labor. It is the IITs, IIMs, and other good colleges in science, engineering, medicine and research that provide the continuing flow of highly trained young scientists and managers. The same is true of other fields like architecture, law, and environment. Without them, India’s workforce will still be digging manholes.

The question that we all need to answer is a simple one: should the highly educated and trained elites of India’s information technology and industrial sectors come only from well-to-do families and communities? Should we be offering to at least a few young people from deprived communities the same opportunity, or should they remain for ever at the low ranks?

The conventional way of thinking about poverty is to get the masses out of illiteracy and offer them some education to be able to hold jobs beyond being simply unskilled labor. Undoubtedly these are necessary initiatives. But it is not possible for any student to cope with good college studies without the right background all the way through high school. There are no shortcuts. Literacy programs and emphasis on primary education can give a valuable head-start but nothing more.

I am afraid most people are unable to visualize the impact of professional success among those from socially and economically deprived communities. There is no great aspiration on anyone’s part for them. We need to change that mindset. That is precisely why we started Shanti Bhavan nearly 11 years ago.

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Are Special Economic Zones (SEZ) Contributing to Rural Poverty Reduction?

2007-10-23T01:55:00.000-05:00

There is plenty of talk about Special Economic Zones (SEZ) bringing about an industrial revolution in India. Introduced in the year 2005, SEZs are intended to generate new economic activity that lead to greater investment, exports and employment. Currently, India has over 800 industrial units operating in 10 or so functional SEZs, each on 50-300 acres of land. So far, investments in excess of $10 billion have been made in these zones, and new employment generated has been around 100,000 persons. Official projections call for total investments in excess of $75 billion and new employment of over 1.8 million persons by the end of 2009.

SEZs are being set up under different institutional structures – fully public, fully private or a combination. However, the most common arrangement is a public-private partnership, with government offering off-site infrastructure, fiscal incentives in the form of tax and import duty exemptions, soft loans and equity investment. Operators of SEZs include both domestic and foreign companies like Mahindra, Reliance Industries, Nokia and Motorola. Within each zone, a number of companies set up their operations in industries such as information technology, pharmaceuticals, biotechnology and textiles.

The main advantage for companies operating within an SEZ is that its operator is responsible for ensuring adequate modern infrastructure for efficient industrial activity. With fiscal incentives from the government, these companies are able to reduce their costs, both in initial investment and on-going operating costs. Companies are able to obtain sufficient land at attractive prices to set up their factories outside major metropolitan cities. Cheap labor is also readily available from nearby villages.

All these sound like a win-win situation for all parties. There is no doubt that these zones attract companies that would otherwise have set up their new operations elsewhere without the benefit of good infrastructure. It is also likely that fiscal incentives might induce larger investment. The argument in favor of offering such incentives is that the incremental investment and ensuing business activity generate benefits to the economy in excess of its costs.

The trouble lies in how the benefits from SEZs get distributed. Sure, companies stand to benefit the most from efficient infrastructure and lower taxes; incremental employment is created from greater investment and business activity. But it is not clear as to whether SEZs generate the kind of jobs that would benefit the rural population.

For example, it is reported that Infosys, a major IT company, has recently purchased 200 acres of rural land outside the city of Hosur, Tamil Nadu. Many land owners were only happy to sell their land at prices far above prevailing levels, turning them into very wealthy individuals in short order. Some of the land is fertile and the remaining barren, and those who were previously employed in agriculture now expect to be employed as industrial labor. It is unlikely that a technology firm can expect any new employee from the nearby villages for its well-paying jobs as computer programmers and specialists. Those jobs will be filled by those coming from the cities.

Poor people who comprise over 80 percent of the rural population hardly own any land beyond what is occupied by their huts/houses. Few landlords and urban investors own most of the available land that are not state property. They are the ones who are benefiting from the land purchase by SEZ operators. Even these landowners complain that they are forced to sell their land by government officials at far lower prices than what prevail in nearby cities. While arguments and protests go on, the rural poor look on hoping that their lives might somehow improve.

The impact of switching some of the rural activity into industrial production is not clear. Some economists make the point that the agricultural sector will suffer and rural lifestyle will change. May be India will be better off exporting industrial goods and services and importing agricultural products!

Rural India offers opportunities for many industries in food processing, herbal products, alternate fuels, cement and tile, lumber and pulp, meat, dairy and poultry. Investments in these can create large numbers of sustainable jobs. Unfortunately, SEZs seem to attract mostly high technology companies that cannot offer well-paying jobs to the rural population. For the foreseeable future, the rural population will not have the educational background to be trained for those jobs.

At the very least, we should expect that companies operating within SEZs do not exploit the rural population. In the name of cutting down on bureaucracy, SEZs are given considerable free hand. Hopefully these companies will employee rural workers at fair wages, and offer proper health and pension benefits. Worker safety is another major consideration, especially since the industrial environment is new to those who have previously been working in the agricultural fields. Environmental controls to prevent water and air pollution and soil contamination must be strictly implemented.

Countries like China and Brazil have established major industrial centers around their SEZs. While those centers have raised the level of employment and income for many people, the rural population is still not sufficiently benefited. Lack of adequate environmental controls has made many areas unfit for human habitation. We can only hope that India will not follow the example of those countries. Economic activity that assures adequate and fair participation of the rural sector and with concern for the environment is what will reduce poverty in India.

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Can We Rely on Government Surveys?

2007-09-03T13:05:00.000-05:00

Just this week the Central Ministry of Statistics, Government of India, released the results of the sample survey conducted by its National Sample Survey Organization (NSSO) for the year ending 2005. According to the survey, the following is the breakdown of the national population:

Other Backward Classes (OBCs): 40.94%
Scheduled Castes (SCs): 19.59%
Scheduled Tribes (STs): 8.63%
Other Classes: 30.80%

OBC figure of 40.94% is much less than 52% reported by Mandal Commission Report of 1981. Since this survey essentially aimed at measuring the level of consumption expenditure by different households, the caste/class breakdown may not be of much statistical significance. In fact a similar survey done is 1999-2000 had put the OBC population at about 35% and it is hardly likely that their proportion has gone up by 6% in just 5 years. This new figure is bound to become politically significant, however, given the controversy over OBC reservations in higher education and the Supreme Court’s question to the government on how it had decided on a 27% quota.

According to the survey, 91.4% of STs, 79.8% of SCs and 78.0% of OBCs were in rural areas. Conversely 8.6% of STs, 20.2% of STs and 22% of OBCs were in urban areas while 37.7% of ‘others’ lived in India’s towns and cities.

Booming economic growth reflected in the expenditure of urban India is seen in their spending -- nearly double the amount on average compared to rural areas. Per capita monthly expenditure of people living in urban areas was Rs: 1,052.36 a month ($0.85 per day) against Rs: 558.78 ($0.44) of those in rural areas. With minor exceptions, general level of spending of SCs and STs was lower than OBCs or others, while that of the OBCs in turn was lower than that of “Other Classes.”

According to NSSO survey, spending by rural STs was the lowest at Rs: 426.19 followed by rural SCs at Rs: 474.72, OBCs Rs: 556.72 and others Rs: 685.31 in a month. In Urban India STs spent Rs: 857.46, SCs Rs: 758.38, OBCs Rs: 870.93 and Others Rs: 1306.10 in a month.

Survey highlights the fact that in rural India 64.3% of the population continues to be dependent on agriculture, either through self employment in agriculture (39.4%) or as agricultural labour (24.9%). In urban India, proportion of population in regular wage/salary earning households was almost the same (42% to 42.9%) for all social groups except OBCs (34.3%).

I want to make a few observations on this survey. As this report shows, rural per capita was $0.44. This figure is fairly close to the published results of another study by a government commission last month that showed 78% of the population with daily income below $0.50. However, per capita expenditure and poverty levels are two different things. The per capita expenditure of $0.44 for rural areas appears an overestimation. It is unlikely that when the daily income for over 80% of the rural population is below $0.50, their per capita expenditure can be $0.44 per day. The George Foundation survey of 9 villages in Krishnagiri District in Tamil Nadu (close to the prosperous city of Bangalore) shows that their per capita expenditure is no more than $0.35 per day. Hopefully another study will reconcile these differences.

Mandal Commission Report of 1981 is considered by most people as one of the definitive surveys on the breakdown of castes and classes in India. It is also well known that the rate of increase in population among “lower castes” is higher than that of Other Classes – “Upper castes.” Hence, it is not likely that the OBC percentage of the population could decline from 52% to 41% over the 25 years since the Mandal Commission report was published.

The statistic showing 39.4% self-employment in agriculture and 24.9% as labor in agriculture (total of 65%) is probably erroneous. While some of the labor have a little land of their own, their main source of income is from employment at farms owned by landlords. Based on my observation, only few individuals in every village live on income from their own farms. In the two villages surrounding Shanti Bhavan, less than 10% of the people are self-employed in agriculture. The balance of 55% (65%-10%) of the rural population derives their main income from rural labor (mostly seasonal).

Given the present controversy and dispute over proposed quota for OBCs in educational institutions and in employment, there might be some incentive to reduce the percentage OBC population and increase that of Other Classes. The chances are that OBCs are at least what the Mandal Commission reported – 50% or 550 million people. Schedule Castes and Scheduled Tribes together are at least 30% or 330 million. The balance of 20% or 220 million is Other Classes. I hope we will find out the truth one day!

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“India lives in the villages” – but how?

2007-08-27T05:21:00.000-05:00

National indicators regularly published by governments and international agencies do not include any statistics on the living conditions as exemplified by the type of housing available. In my interviews with many poor village women in South India, practically everyone listed housing as their most important need -- above food, healthcare and education for their children. Without the security and comfort of a home, there is no escaping the difficulties resulting from poverty.

Adequate housing is considered by many as a fundamental human right. It is a basic necessity for all that cannot be denied in a fair and equitable society. Housing is interrelated with other aspects of life such as health and education. For example, children cannot study in a poorly lit house. Respiratory disorders among rural population in India are often the result of unfavorable housing and poor living conditions.

Present Rural Housing Situation

According to the National Family Health Survey, concluded in 2000 by the government, only 19% of the rural population lives in pucca (strong) houses, while the remaining live in kaccha (weak) and semi-pucca houses with mud walls and thatched roofs. Eighty-seven percent of the homes in the villages do not have toilet facilities. Cooking is usually done inside the house under inadequate ventilation with biomass such as dried cow-dung, fire wood, dry weeds or crop residue, exasperating the risk of tuberculosis.

Most villages have both lower and upper castes living in separate sections. People belonging to Scheduled Castes (SC) and Scheduled Tribes (ST) are required to live in an area designated for them. Those belonging to “Most Backward Classes,” “Backward Classes” and “Other Backward Classes” – as they are officially categorized -- usually live in the same area where “Other Classes (Upper Castes)” live, but they do not mix with even lower castes.

The rural poor live in huts and government supplied “houses” that are usually no more than 200 sq. ft. in floor area. Houses supplied by the government are constructed with cement blocks or bricks, the floor is of cement, and the roof is made of concrete or asbestos. Usually there is only one room in the house, but in some cases a half-wall may be built to separate out the kitchen. These houses do not have their own toilets, but common toilets are made available at some distance at one corner of the village for several families to share. More often than not, these toilets do not function nor are they maintained, doors are broken or absent, and there is limited or no access to water nearby. Hence, most people prefer to go into a wooded section or elsewhere in the village or nearby field where there is privacy.

When government builds homes for lower castes, it ensures this caste separation. In many instances, government sets up housing colonies exclusively for Scheduled Castes and Tribes, and hence, an entire new village might consist of families belonging to only those castes.

The George Foundation recently completed a field survey of two panchayats consisting of nine villages in Hosur Taluk with 986 huts and houses for a total population of 4,850 residents. The average number of people per dwelling was 4.9. Huts are very small in size, often without windows, and a narrow opening serves as the entrance.

Government supplied houses are around 190 sq. ft. in floor area which works out to 38 sq. ft. of floor space per person – just over the size of a full size bed. Every house has two small windows, a 4 sq. ft. opening each, but they are not sufficient to permit cross ventilation or cooking smoke to escape freely. Those who have domestic animals such as cows or goats usually keep them inside their houses during night.

At least a third of all houses required major repairs for leaky roofs, cracks in walls and damaged doors. None of the lower caste residents has the financial means to spend money on house repairs. While government-built houses are provided free of cost, residents are required to pay a small tax to the panchayat.

The Tamil Nadu government, for example, estimates that a typical house for the poor costs around Rs. 45,000 to build. The state allocates houses to families belonging to scheduled and depressed castes based on their economic status.

However, anyone officially classified as poor is eligible for a government grant of up to Rs. 45,000 (about $1,125) toward construction provided that the applicant owns suitable land for the house. The government offers different financial schemes through banks that permit families to borrow money at zero to low interest rates (10-12%) for purchasing or developing land, and for construction of the dwelling. It also offers grants of up to Rs. 10,000 ($250) for renovation of an existing house.

Government Housing Program is Failing

Despite the allocation of considerable funds by central and state governments, the housing program for the poor is failing for a number of reasons. The plan is ill-conceived, focusing on offering shelter as opposed to improving living conditions, and executed without sufficient thought about many inter-related considerations.

Currently, the total supply of new housing is far short of what is needed – around 100 million at the very least – if the goal is to offer adequate housing for every poor family. Bad construction and poor maintenance are causing the breakdown of houses that were built some time ago, adding to the need for substantial home improvement. The average floor space of 38 sq. ft per individual, not including the space taken by cattle kept inside the house, creates a very unhealthy indoor environment, not to mention the lack of basic necessities and the ensuing discomfort faced.

The focus on offering houses as shelters has motivated the government to look for cheap construction without offering even basic necessities. Without a small separate kitchen and adequate cross ventilation, the entire house is turned into a smoke stack not suited for human habitation. The absence of an adjacent toilet with each house is inconsistent with any reasonable concept of meeting minimal human needs. Unless existing houses are extended to include a separate kitchen with proper ventilation and a small toilet, they cannot be considered as livable dwellings.

Additionally, government housing perpetuates the centuries-old practice of separation of residences based on caste. Most Indian villages still maintain clusters of houses for each caste in different sections. Houses for scheduled castes are allowed in the village only in areas designated for them, away from the homes for upper castes. Instead of trying to break down this discriminatory practice, houses being built by the government for the scheduled castes ensure this separation. Further, the government has created a number of identical structures in new areas, effectively creating “scheduled caste colonies.” It is hard to reconcile government’s official position concerning discrimination and human rights, and what it actually practices.

Housing as Part of Community Development

The housing program as currently implemented will hardly improve the living standards of the poor nor will it contribute to social justice. Before more funds are expended toward public housing, the government is well advised to reconsider its approach to the problem. In arriving at a new strategy for housing, planners must not lose sight of its other interrelated goals such as offering basic amenities, preventing diseases, and assuring social justice.

The approach to housing must shift from its current focus on offering shelter to developing healthy and integrated communities. That might imply a departure from a caste-based approach to assistance based on income levels.

Instead of replacing huts with cemented houses at the same location, a better strategy might be to develop new communities at another location close by. That would offer considerable flexibility in properly laying out the entire housing complex. These new developments may incorporate facilities for sharing water, sewage processing, bio-gas production, fruit and vegetable gardens, and small shops.

Community development will certainly call for larger initial investment than what is required for building shelters. However, the long term benefits associated with creating healthy and sustainable communities is likely to be far greater than the short term savings from building low-cost housing. An appropriate partnership between government, donors, investors and financial institutions can pave the way for financial solutions that make it possible for beneficiaries to carry some of the burden.

The above is a summary of the article in knowledge@wharton. See http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4219

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Is India’s Prosperity Trickling Down?

2007-08-17T09:26:00.000-05:00

The National Commission for Enterprises in the Unorganized Sector reported just this month on the present state of India’s unorganized and informal sectors of the economy. You can read the complete paper at http://nceus.gov.in/Executive_Summary_08082007.pdf. This is probably the most honest report of its kind published in recent years by a government commission in India. The report revealed that over 77% of the country’s population lives on less than $0.50 a day. I have written about this shocking statistic in some detail in my last entry earlier this week (see http://abrahamgeorge.blogspot.com/2007/08/truth-hurts-but-will-eventually-help.html). I want to add a few more important conclusions from this report.

As of 2005, India had a total employment of 457 million, or nearly 42% of the population. Of this, 423 million people were employed in the unorganized sector (like agriculture) and the informal sector (laborers and other non-salaried workers employed in the organized sector) combined. That leaves only 34 million people employed in the organized sector which comprises the country’s bureaucracy, military, and those formally employed in the private and non-profit sectors (with registered organizations). Despite this small proportion of employment in the organized sector, much of India’s economic growth is directly attributed to their contribution (such as those in IT, heavy industry, textile, etc.).

The prevailing expectation is that the small organized sector in India will increase its wealth and income and employ many more people. But the reality is that this has not yet happened. It is true that those employed in the organized private sector have significantly improved their standard of living, and their purchasing power is reflected in increased consumption. The trickle down effect of this wealth creation among a few has not led to any significant employment creation.

The Commission report points out that employment increased by 60 million in all sectors combined during the 5 year period 1999-2000 to 2004-2005. That is an average increase of 12 million jobs a year or approximately 1.1% of the population per annum. However, the annual rate of increase in population during the same period has been around 1.6% per annum – nearly 50% over employment creation. Moreover, a large number of new jobs have been urban, leaving behind the great majority of people living in rural areas. Even gains in the urban, organized sector are misleading; most jobs created have been in the area of informal workers who lack job security and social security benefits.

Further, incomes have also not risen much, especially for rural workers. According to the Labor Ministry, the norm should be around Rs. 66 per day. However, the report finds that 88% of the rural workers were earning less than this benchmark, and 75% below Rs. 45. It is fairly obvious that urban prosperity has not led to any significant increase in wealth and income for rural employers and employees.

These statistics are very revealing of the state of India’s economy. 1-2% of the country’s population in the private organized sector is reaping much of the fruits of the recent rapid economic growth. Increased wealth and income remain mostly within this small minority; the gap between them and the rest of the nation is widening by the day. Those who have accumulated immense wealth are in a position of power and influence to further enhance it, often without sharing much with anyone else. The economic and social system seems to be inequitably structured and in the end, most Indians are unable to partake in the benefits of the aggregate growth in the economy.

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Truth hurts, but will eventually help

2007-08-13T05:32:00.000-05:00

After many years of official pronouncements that the poverty level in India has declined to below 30%, an agency of the government has finally made it known that 77% of the country’s population lives on less than half a dollar per day (Reuters, August 10, 2007 http://www.reuters.com/article/latestCrisis/idUSDEL218894). India’s official statistics on poverty, on the other hand, gives an erroneous impression that the country is making major gains in reducing poverty.

Most people do not know that India uses a certain measurement of daily caloric intake of food as its yardstick for determining whether a person is poor or not. By the government’s reckoning, a person consuming more than $0.30 worth of food per day is not poor. Apart from the fact it is very difficult (and hence, the statistic is suspect) to ascertain how much food each person is consuming, India’s poverty statistic cannot be compared against those of other countries using the international standard of one dollar per day. Unfortunately, even the World Bank has failed to challenge India’s official statistics on poverty.

The National Commission for Enterprises in the Unorganized Sector (NCEUS) just published a report based on data from 2004-2005 that 77% of Indians -- about 836 million people -- live on less than half a dollar a day. According to the report, most of those living on below 20 rupees (50 US cents) per day are from the informal labor sector with no job or social security, living in abject poverty.

I have been questioning the official statistics for many years now (for my recent blog on this, please see http://abrahamgeorge.blogspot.com/2007_02_01_archive.html). Based on our studies in Tamil Nadu state, we have observed rural poverty in excess of 80%, if the one dollar yardstick is used. Finally the government has confirmed what we have known all along as the truth about poverty in India.

Unfortunately, the media is still grossly behind the curve. Given that 3/4ths of India’s population lives on less than 50 cents a day, it follows that 3 out of 4 news articles on India would represent them and their plight. Yet, very few pieces on India deal with this humanitarian crisis; the emphasis is on “India Shining”, the wealthy minority, while the 836 million people living in poverty are given little voice. Until we are ready to look into the mirror and see our failings, nothing will change. It is my hope that this recent revelation will herald a new change in attitude towards facing the hard facts needed to find real solutions to poverty.

If you'd like to read the report by The National Commission for Enterprises in the Unorganized Sector, it is available here: http://nceus.gov.in/Executive_Summary_08082007.pdf.

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Is Social Justice Just a Dream?

2007-07-06T23:59:00.000-05:00

“Nothing is sadder than the waning dream of integration,” wrote David Brooks in his July 6, 2007 op-ed column for the New York Times. “…But it could be the dream of integration itself is the problem. It could be that it was like the dream of early communism — a nice dream, but not fit for the way people really are…Even today, people have a powerful drive to distinguish between us and them.”

There is a lot of truth, in my opinion, to what Mr. Brooks has described in his column. People prefer those of their own kind. “Integration” is only for others.

I returned to India twelve years ago, filled with idealism – I wanted to improve the lives of poor people, to help create a fair and equal society. But now, after struggling with that goal for many years, I have begun to give up on my dream. Our foundation’s work in those years has brought about considerable prosperity to the villages around us, and yet, people live segregated lives. “Lower caste” people live in one secluded section of the village; “upper castes” do not eat together with lower castes at any function; there are separate temples for both upper and lower castes; even classrooms for small children are segregated by castes. The government asks for an individual’s caste in every official document, and the constitution doesn’t attempt to abolish the caste system.

Discrimination based on religion, caste, race, ethnic origin, gender or sexual preference is all too commonplace. People do not wish to accept their differences and treat each other with dignity. What seems to unite one group of people is their differences from another group – all in the name of common good.

But if we can learn to be tolerant enough to interact with each other, work and play together, and not harm each other, it might be good enough – there may not be a need to live together and socially interact as an integrated community! Even a limited impersonal interaction might be too much to expect.

I often ask myself whether my children and I find ourselves part of mainstream American society. I am not sure of the answer. But I don’t think it matters a great deal. Education and professional accomplishments have allowed us to deal with anyone and everyone. I can’t worry too much about other people’s personal biases and prejudices.

Maybe the trouble is that people are afraid of others who are different from them. People are afraid of losing their jobs or property, fear for their physical safety, or resent others infringing upon their faith or beliefs. These negative forces are all too powerful to allow “outsiders” inside.

I think the trick to integration is dealing with all those fears. A society that offers plenty of opportunities can negate the fear of losing money and wealth – the primary factor behind discrimination. People who conduct themselves in a disrespectful manner toward others cannot expect others to accept them. People who preach their assumed superiority in values or faith will not find others to embrace them. These are lessons that political, community and religious leaders need to teach their people.

Unfortunately, hatred is the longest running passion. Discriminatory remarks and incrimination are not often confronted in today’s society. Tolerance and acceptance of differences are rare commodities.

While I am pessimistic about the future of social equality, something deeper tells me that we should never give up on this noble goal. As for our foundation’s mission and work, we will continue to offer as many opportunities as possible to those who need it most. In doing so, we shall cultivate tolerance, focusing on “good values” as opposed to “good faiths.” Maybe over time we can make a little difference.

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Simple Solutions to the Rural Education Crisis

2007-06-29T00:44:00.000-05:00

It seems many people are trying to find innovative solutions to improving the quality of education in rural areas, especially among the poor. Since most rural children study at government-run schools, the focus of any effort to improve quality and performance must be on those institutions. Without waiting for the state government to act, NGOs can directly interact with the administrators of those schools, especially the headmasters, and village leaders to implement measures that can yield positive results. That is precisely what The George Foundation has been doing since 2004 in the 17 villages surrounding its own school, Shanti Bhavan.

Three years ago our foundation initiated a community development plan that included working with government-run schools in our area. Deverapalli Government School was the first one we took on, and within two years of starting the program, it was judged as the “best” in the district by the educational authorities. Based on this project and our Shanti Bhavan experiences, I have tried to compile what I consider as simple and low-cost measures that NGOs can take which will, in my opinion, make much of the difference we are looking for:

Hire young motivated teachers (even those who may not have teaching degrees or prior training), especially for lower grades, and give them 1 month training. In our case, we hired high school graduates from the local area as teachers and teaching assistants to complement government teachers.

Make sure that all students have the required text and note books, and teachers/classes have black boards and chalk.

Offer 1 hour after-school individual tuition to students who require special assistance.

Provide snacks for all students around 10 am, as many come to school hungry without sufficient breakfast. Government offers lunch.

Make sure that roofs are not leaking, classes have benches and desks, and toilets are functioning.

Have frequent (once a week) medical consultation for children who come to school sick. Also conduct an eye, ear and general check-up once a year.

Offer special “bonuses” to teachers if children do well in independent testing every 6 months. Let teachers know ahead of time what will be tested. No need for surprises.

These measures are relatively economical and easy to implement. Computers and libraries are lower priorities for most rural schools, though some reference books are essential. As and when financial resources permit, computers may be introduced when teachers trained in information technology can be found and electric power is reliable.

In summary, I urge everyone to figure out ways to motivate children. Make coming to school a fun event. Provide financial incentives to good teachers. Everything else will fall in place automatically.

I have copied below the response to my email on the subject from Bhamy Shenoy who has been involved with rural schools.

Extract from Mr. Shenoys email on his experience at a rural city school in Bantwal town in Karnataka State:

“I think you pretty much covered most of the essential elements. I would say with the first point you have mentioned, it should be possible to meet 90% of the needs. All others are useful and will contribute. But it is the first which is the most important.

Right now we are having an interesting experiment in our rural based town. As I wrote to you, I have been holding series of seminars for 30 students. My wife is taking classes in a government school where its strength has fallen from 250 to 35 over ten years. The reception she is getting and the level of interest shown in her classes are not matched even among college students. She had given as assignment last Friday to 7th graders to write a poem on any subject. Today when she had gone to the school, all the eight students in her class had written poems. They were not all of same standard. The important thing is that all of them had attempted. Each time she goes there for teaching, they ask her to come the next day. The difference is that she is making learning fun, she prepares before going to each class, tries to bring creativity in the students by asking them to do some activity. Can we inculcate such interest and concern in our teachers? She has found a very precocious student and we have decide to help him as much as possible by sending him to a private school in the town by giving scholarship after his graduation from this school. In fact we are even thinking of inviting him to the valedictory function at the college to distribute the certificates as a VIP.”

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Solving the Indian Puzzle of Public Services Delivery

2007-06-02T04:24:00.000-05:00

I used to play crossword puzzles, but lately I have stopped. With the passing years, I find it harder to complete the puzzle. Similarly, I have always thought of our dealings with the government in India as a puzzle to solve. And as the years pass, the puzzle of the Indian government becomes more convoluted and illogical, difficult to solve in an honest way. Yet, one is compelled to play it if he/she wants to function in India.

Consider the telephone service. The Shanti Bhavan School we run in rural Tamil Nadu has a dozen or so telephone lines installed by the government-run monopoly. Each line is charged a fee of Rs. 125 per month – a small sum by comparison to the monthly fee paid in the U.S. The fee is charged regardless of whether the service is provided or not. That is the rule, according to the telephone department.

At any given time, one or more lines are not functional. It is not uncommon to have all lines cut off for several days. The reasons given are numerous and varied: vandalism, digging of road by other government departments (such as electricity, sewage, etc.), “improvements” being made to the service, or “exchange problems.” In most cases, we have to send a vehicle to pick up the linesman to detect and repair the problem. Unless the linesman is paid a “fee” for his services, problems will not be solved. If the fee is low, he is likely to make faulty connections (line disturbances, wrong number connected to your line, more than one line connected together, etc.) and we will have to bring him back to make further repairs.

Regardless of whether the service is available or not, the monthly bill must be paid. We receive the bill for all our lines, and if full payment is not made, all lines can be disconnected. There is no use complaining about it.

For over 3 years, one of the lines has not been operational. We have tried to get it fixed, but to no avail. We wrote to the telephone department not to charge the monthly fee for this nonfunctional line, but that too is declined. It is likely that this line has been made available to someone else.

Try complaining to higher authorities, and soon you will find more frequent problems with all the lines. Politicians are not interested in setting these practices right – either there is no money in it for them to get involved in such issues, or they are receiving their share of the “benefits.” I am not sure there is an honest way to solve this Indian puzzle.

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Mini-Loans to Small Rural Businesses can Reduce Poverty

2007-05-29T07:31:00.000-05:00

There is considerable publicity these days about micro-credit as a tool against poverty. There is no doubt that a loan of $100 to an impoverished person can help him or her tide over personal emergencies such as payments toward dowry for a daughter’s marriage, a medical surgery or fixing a leaky roof. In some cases, micro-loans to local merchants might help them overcome temporary financial difficulties. However, there is no substantiated evidence that micro-loans are creating sustainable businesses run by the poor (whose daily income are below $1 a day, or family income below $2 a day). Further, micro-loans barely add any significant new employment among the poor.

It is not possible for even a very small fraction of the 3 billion living in poverty (below $2 per day in income) to become successful entrepreneurs. Most of them do not have any education, business skills or financial resources. In countries like India, the poor are both illiterate and socially disadvantaged; there is little chance that micro-credit or even larger funds can help them plausibly start and run businesses. The present generation of impoverished people can only hope to earn a living by working in the fields for landlords or at businesses nearby.

If vibrant business activity and the associated new employment opportunities are what will reduce poverty, we have to think of ways to promote existing small businesses. In my social work in rural Tamil Nadu, India, I frequently get to meet owners of local businesses – furniture manufacturers, auto repair shops, welding and fabricating facilities, and so on – each employing a few workers. With meaningful financial assistance, many of them will be able to expand their businesses, while hiring several more employees. These are businessmen with the proven skill-base and sales ability to successfully run enterprises. As they employ more workers from nearby villages, poverty is correspondingly reduced.

Micro-credit is inadequate to meet the needs of businesses that have the potential to expand and add new employees. They require significantly larger credits – mini-loans of $1,000 to $10,000 or more for each activity – for such things as new machine tools, additional hardware and supplies, or a vehicle to transport the merchandise. Small contributions from individuals and institutions may be combined to offer such mini-loans. With additional capacity to meet the needs of a wider customer base, these small businesses have the potential to grow.

Hardly any venture can be expected to sustain itself when financing costs are exorbitant. If small businesses are to be helped, they must be able to borrow at reasonable interest rates. Regardless of the justifications given by lenders for charging 24-36 percent annual interest rates, there ought to be a realization that such practices are simply not viable if the goal is to help small businesses succeed. The business of credit to the poor cannot ride on exploitation.

Combined with efforts to attract large businesses to rural and other economically deprived areas, mini-loans at modest interest rates to small businesses with good track records can be an effective tool in addressing poverty. When the poor gain the opportunity for income generation from employment, they will one day become self supporting and in turn, their children will have expanded opportunities. Until then, the goal of poverty programs ought to be the delivery of basic services (such as education and healthcare) at affordable prices and the creation of employment.

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A Lesson From Climate Change: Grapes are Sweeter!

2007-05-19T02:24:00.000-05:00

Ever since The George Foundation started its operations in 1995 in Tamil Nadu, India, we have been working toward generating internal sources of income to fund at least part of the expenses for our various humanitarian projects. Baldev Farms is one such effort -- to empower poor women who work on our farms, while generating profits. In the initial two years, the farm was growing vegetables - tomatoes, beans, gherkins, etc. We even tied up a marketing arrangement with a French company in Bangalore. Despite high crop output, we couldn't make a profit. For example, tomatoes prices fluctuated between Rs.0.50 to Rs.4.00 per kg every year. One has to be lucky to harvest the crop when the price is high; usually prices are high only when the crop is out of season.

We switched to bananas in early 2000 when the rains were predictable and sufficient. It is one crop that maintains fairly steady prices – between Rs. 4.50 and Rs. 5.50 per kg most of the year (though prices haven't risen in these 6 years). The fact that bananas are the poor man's fruit was an added attraction. We knew that it needs plenty of water daily. Hence we joined forces (technology transfer) with Natafin (an Israeli company) to find ways to reduce the need for water. The techniques used were drip irrigation, mulching, compost (which holds water), and use of "good" bacteria. With these, one acre required around 7,000 litres of water daily. That quantity of water is only 1/3rd to 1/4th of what is usually given under flood irrigation (without drip -- 28,000 litres). Yet we were getting excellent quality bananas, with bunch weight mostly between 25 Kgs and 35 Kgs.

With nearly 200 acres of land under cultivation, the daily need for water was still 1.4 million litres. Since there are no rivers around, we drilled dozens of ground wells for water. We thought we could capture sufficient rain water each year to recharge the underground water. A check-dam was built, and nearly 100 collection pits were made. But with rain shortages in almost all the years since 2000 (30-60% less than the average rainfall in previous years), we were experiencing significant declines in ground water levels. We laid pipelines for a distance of 7 kms from wells in a dry lake-bed elsewhere, but this was still not enough.

Finally in 2006 we decided that we couldn’t wait any longer for a favorable climate change. If we are to believe in recent climate forecasts based on global warming, the chances are that rains will only decrease over the coming years. We decided to switch over to grape vine.

Vine is a semi-arid crop. It doesn't like much water. Watering once or twice a week is enough . Again, with drip, proper mulching and compost, water consumption can be kept to a minimum. If it starts raining as it used to 10 years ago, our vineyard will be in trouble!

So here it is. For us, grapes are sweeter than bananas. We are switching from a poor man's crop to a rich man's crop. While there is no revenue for the next 3 years until fruiting starts, we expect that grapes will soon cover some of the costs incurred for our other projects, and still employ lots of people. May be, we will get into the liquor business one day to help the poor! But it is no easy task. Vine requires lots of care -- grafting, pruning, etc. Diseases, termites, rodents and birds are problems to handle. Hopefully it is still a wise strategic decision not to fight mother-nature.

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Rain Shortfall Bodes Severe Hardships and Dangers for India

2007-05-14T08:25:00.000-05:00

Experts are predicting that the worsening climate change from global warming will result in lesser rainfall in regions close to the equator. India, Bangladesh and Pakistan are among the South Asian countries that are likely to be severely impacted. These countries depend on rainfall for much of their crops, and they have not utilized major rivers that run from the Himalayan ranges and other rain-dense sources for supplying water to interior areas. For many years there has been talk about diverting rivers like the Ganges and the Brahmaputra, and building dams, but thus far nothing has been initiated. There are no major projects underway to supply water from rivers to water-scarce areas through large pipelines. These projects take anywhere from several years to decades to complete, even if a plan is agreed upon by all parties. Successive central governments have been less than transparent about their plans, and only those private companies who might be beneficiaries of the potential work on design and construction seem to know what is being contemplated, if anything.

Water shortage is already affecting crops in many areas within several states in India. Pressured by money-lenders, some farmers have abandoned their land in search of immediate income from employment in the cities. Stories of farmer suicides are now heard more frequently. Government assistance by way of subsidies and employment guarantees is increasingly becoming their last main hope. With over 700 million people living in India’s villages, and most of them depending on agriculture, it is far from certain that handouts are sustainable. It appears that the projection made two decades ago by a major research institution in Los Alamos, U.S. that climate change and rain shortfall might be among the five gravest dangers to hundred of millions of people is beginning to come true. The report went on to add that desperate rural population might be forced to move into prosperous urban areas, occupying even five-star hotels!

The other day I read an op-ed column by Thomas Friedman of the New York Times about drought in some of the tall-grass lands of Africa where wild animals have for centuries made their habitat. I wrote to him about the drought conditions in Hosur Taluk, Tamil Nadu, for the past 5-6 years. When I first started our humanitarian projects in that area some 11 years ago, I was told that rains were fairly predictable in April, June-August, and November-December. The lake close to where we built Shanti Bhavan, the residential school for children from poor homes, was literally overflowing when I came to purchase the land for the school. Today, this lake and others in the area are mostly dry. There has been very little rain in recent years, and our attempts to gather ground water with collection pits (a major check-dam constructed and over 100 collection pits made in an area of 100 acres) don’t seem to be sufficient. Small farmers who depend on raggi grain grown once a year are not able to support themselves.

To make matters worse, farmers who depend on well water and free power for the pumps find both in short supply. Without sufficient rain for several years, ground water levels are going down, forcing many to dig deeper wells and use more powerful pumps. With little water outflow, pumps have to be run around the clock to meet the needs. As every well is pumping, the result is power shortage and lower voltage. Many pumps don’t function properly when voltage falls, causing even further depletion of water pumped for the crops. Today, power cuts for several hours in a day are common, and we are forced to run diesel generators to meet the needs of our school and farms. Unless sufficient rains come this year, the situation is likely to worsen to levels that might cause severe hardships and social unrest.

I do not know what the state and central governments are planning to do in addressing water and power shortages in rural areas. Today nothing appears on the horizon, except some passing clouds.

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Who can “fix” poverty?

2007-05-03T09:24:00.000-05:00

For long, we have been relying on the government to fix the problem of poverty. Then we thought that NGOs will somehow solve the problem. Now we think private companies, through their “corporate social responsibility” (CSR) programs, will significantly reduce poverty.

Many companies in India have formed CSR departments that make donations and involve themselves in initiatives designed to help the poor. But for the most part, the CSR movement appears to be a public relations campaign or a “feel good” effort, and less of any major assistance to the poor. The little that the companies do is somehow tied to publicity and favors to politicians, and often an indirect way to sell their products. Companies have figured out ways to extract government grants for their CSR activities, and hence, minimize their own contributions. Regardless of all these, if even small benefit goes to the poor, it is well and good.

I like to see corporations investing in the rural sector. They must be required to pay wages that allow families to support themselves. They must offer at least minimum benefits for employee healthcare and educational support. They must not damage the environment. If they would do just these – be socially conscious citizens --, it is more than sufficient. Unfortunately, even those companies that have CSR programs do not adhere to these simple principles.

Governments must offer sufficient incentives for companies to invest in the rural and deprived communities by way of soft loans, infrastructure improvements, tax breaks, etc., and keep out of the process except for enforcement of labor laws, worker safety and environmental protection. Market forces will automatically take hold. The trouble is that neither the government nor the companies do their part.

We are under the illusion that poverty can be solved by NGOs and the government. Now we are beginning to think that the CSR movement will. Both NGOs and governments have roles to play, but the real solution is in creating vibrant economic activity. This is the lesson I have learnt from our Baldev Farms and other work in Tamil Nadu.

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Who is interested in better governance?

2007-04-13T11:03:00.000-05:00

A few weekends ago (March 25, 2007), I was interviewed by a Malayalam media organization that publishes a weekly newspaper and a monthly magazine in Kerala and the Gulf. I got to talk to the editor confidentially, and asked how much independence he has in covering the stories he wants to. He says that no newspaper owner in India – even Malayala Manorama – will permit publication of articles that would hurt their revenues. As a rule, most papers do not publish articles criticizing any of the wrong doings of their advertisers. In fact, editors are encouraged to “consult” companies to obtain “stories of interest” (that benefit the company). Consequently, you would not see much by way of articles on pollution, consumer safety, fraudulent practices, and other misdeeds by companies.

It seems to me that there is very little incentive for companies to work toward reducing corruption or improving the press. They can afford to bribe the officials. A weak press might be in their best interest. It is the rest of the population – ordinary citizens– who are affected by bad governance.

I would appreciate your views on the above.

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Is Micro-Finance the Answer to Poverty?

2007-04-04T08:58:00.000-05:00

By Vivek George

These days micro-finance has gained considerable popularity and is seen by many as the answer to poverty. In this, micro-finance does not differ much from fad-diets; everyone is obsessed with it, many hope it will be the panacea to the world’s ills, and perhaps micro-finance even helps a little here and there, but in the end, the root problem still exists. The practice of micro-lending is not new, however. Micro-finance as we know it dates back to the 1970s, but within the last few years it has gained a great deal of momentum, especially through the efforts of last year’s Nobel laureate Mohammed Yunus. Mr. Yunus’ Grameen Bank (founded in 1983), is one of the leading micro-finance organizations, lending millions of dollars worth of micro-loans to the “poor”. But have these loans truly been directed to the poor and more importantly have they assisted in breaking the cycle of poverty? Well, let us see if we can answer that question.

The other day a close friend sent an email to me and a few others entitled, “Interesting”. Being interested I decided to give it a look. What I found was a link to the New York Times article, You, Too, Can Be a Banker to the Poor, by Nicholas Kristof. After reading a few lines, I realized this was yet another one of those micro-finance articles, the type that has become ever-increasingly popular in the press, touting that the end of poverty was simply a few clicks away. Annoyed by a lack of informed reporting on the subject, I decided I would write to my friends to provide them a more realistic view of the subject.

From the first line it was clear that Mr. Kristof did not understand how micro-finance works in the real world. “For those readers who ask me what they can do to help fight poverty, one option is to sit down at your computer and become a microfinancier,” he wrote. The key flaw of this line is “fight poverty”. This is because, for the most part, micro-finance does not help the poor (those who live on less than $1 per day, the UN yardstick for poverty). Mr. Kristof cites a man who owns a TV repair shop as an example of a person who has benefited because of loans from organizations such as Kiva (a leading micro-finance organization). But let’s be honest--do we really think a man who owns a TV repair shop or carries a mobile phone lives on a dollar a day (I doubt there are many poor Americans who can afford a TV repair shop)?

In India, roughly speaking, the family income bracket breaks down as follows:

Families with less than $1 per day – 300 million
Less than $2 per day – 600 million
Less than $10 per day – 900 million
Over $10 per day – 200 million
(Note: A family is defined as consisting of 4 members)

The TV repairman in India is likely to be in the $2-$10 (or higher) bracket. While people in the West might consider such incomes as low and hence, "poor", those who work among the impoverished do not think of shopkeepers as poor. It is misleading to talk of assisting those living on $2-$10 or more per day as helping the poor.

And what about illiteracy and lack of education? Can we really expect a poor, illiterate person from the rural, third world to create a sustaining business from a $100 micro-loan? It is hard to find any meaningful number of entrepreneurs among the truly poor. Even in a superpower like America, most of us would not be able to start and run a successful business, so how can we expect every loan we send to India, Angola, or Haiti to initiate an entrepreneurial endeavor?

Kiva and other micro-finance institutions (MFIs), for the most part, help the lower middle class – those in the $2-$10 range in family income – who may not have easy access to credit from commercial banks. For this reason MFIs may be their best and only option to pay for emergency hospital care or dowry for their daughters' marriage. But these organizations are not real charities that focus on the poor and their needs(education, healthcare, infrastructure, etc). Nor do MFIs care to know what the borrower uses the funds for as long as there is an assurance (usually collectively guaranteed by a group) for the return of loan principal and payment of interest.

This leads to the next issue which Mr. Kristof’s article and most others on the topic miss – interest rates. Most micro-finance organizations charge interest rates between 24% - 36%. Can you imagine ever taking a loan out at that rate? MFIs trumpet a loan repayment rate of 95 percent or higher (to make a point that the poor are very credit-worthy), and yet they justify these exorbitant interest rates by claiming a high risk of default.

Fundamentally there isn’t anything seriously wrong with most micro-finance firms; the issue is the context of what they really do and who they really help. Micro-finance firms must be honest about who their borrowers are, and what they do with the loans. To determine whether these firms are truly fighting poverty or if they are just running another business for profit (Kiva is not-for-profit, but this is not the case for many MFIs) I return to the question I first asked – is their goal to truly reach the poor and more importantly break the cycle of poverty? I think it is clear that these firms are far from genuinely trying to eradicate poverty.

I apologize if this is discouraging, but fighting poverty is going to take more than just throwing money at the problem from the comfort of our homes. You may be saying now, how can I fight poverty with the little time and resources I have? There are different answers to that question, but what is important is that we seek real solutions, not comfortable myths, to this global problem.

Please visit us at www.tgfworld.org and www.indiauntouched.com

The George Foundation Video

2007-03-23T13:23:00.000-05:00

A PICTURE IS WORTH A THOUSAND WORDS.

If you are having any trouble with the video or would like to see it in a larger format, copy and paste the link below:
http://video.google.com/videoplay?docid=-2963801976172275189&hl=en

Please visit us at www.tgfworld.org and www.indiauntouched.com

Is Government’s Data on Poverty in India Acceptable?

2007-02-22T12:53:00.000-05:00

Abraham M. George

The World Bank's definition of the poverty line for developing countries like India is US$1 per day/person or US $365 per year. According to the Indian government, poverty line is based on the cost of consuming certain number of calories in food intake -- for the urban areas it is Rs.296 per month and for rural areas it is Rs.276 per month. That works out to less than Rs.10 per day. Based on this measure, the government claims that less than 29 percent of the national population is poor.

It is hard to believe that anyone can live on Rs.10 per day ($0.22) and claim to be not poor. My personal observation of the population we serve in the 17 villages of Hosur Taluk in Tamil Nadu has convinced me that a great majority are indeed poor by any reasonable standard. Without arguing about at what income level poverty should be defined, our foundation decided to survey the four villages close to our projects at different income levels. This house-to-house survey by our social workers was conducted in January-February 2007. The results are as follows:

The above data shows that 83 percent of the population is below the World Bank’s definition for poverty at $1 per day. However, as per the government’s definition of poverty at $0.22 per day, less than 16 percent of the population is poor – a far better scenario than the national average of 29 percent. This significant difference can be explained by the fact that Tamil Nadu is a more prosperous state than most others. (Note that the four villages surveyed are only 40 km from Bangalore, the technology center of India, and 15 km from Hosur, one of the industrial cities in South India).

However, if 83 percent of the population in the same four Tamil Nadu villages is below $1 per day, it is very likely that a higher percentage of the nation’s population is poor by the same definition.

This blog does not attempt to define the income level at which poverty should be defined. The World Bank has set those levels at $1 and $2 respectively as per its narrow and broad definitions. Successive national governments in India have defined poverty very differently, and have achieved a lower level of poverty in India.

Please visit us at www.tgfworld.org and www.indiauntouched.com