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Inequality in India: Income, access to healthcare and education for the poor

By Richa Nigam

Inequality in India has grown faster in the last 10-12 years than any other time in our history since the colonial raj

Income and health

“What do you dream of doing?” Mohammed Sanwar Sheikh looks taken aback for a moment. He is standing amidst the din of heavy machines at the construction site of yet another building in an erstwhile mill compound at Lower Parel , Mumbai. About 150 workers have been working day and night to build a spanking new office complex. “I want to build,” he says, “a home in my village. A pucca building.”

Sheikh, 17, arrived in Mumbai a month ago from Madhupur Donga village, 200 km from Kolkata. He says he earns between Rs 80-150 a day, a lot more than the Rs 40 he got as an agricultural labourer in his village, that too only when work was available.

He has already managed to send Rs 2,000 home to his parents and younger brother. The builder he is toiling to construct this building for perhaps earns Rs 100,000 a day merely by renting out the buildings that so many Mohammed Sheikhs have laboured to construct.

Not far from the under-construction site, a few of the builder’s cars are parked in an exclusive garage. The fleet includes a Porsche, a Lexus and a Mercedes. The next time he cruises by in one of them, if someone were to stop him and ask, “E, itna shining kaiko marta hai?” (Hey, why are you showing off so much?), he might well reply that his India is shining.

It’s true. He has nothing to worry about. As Jayati Ghosh, economist and chairperson of the State Commission on Welfare of Farmers points out in Income Inequality in India (People’s Democracy, February 2004), “The period since the neo-liberal economic reforms were introduced in India has been one of dramatically increased income inequality. The most dramatic and remarkable improvement in consumption has been of those who were already the richest people in India – that is, the top 20% of the urban population.”

The per capita consumption of this segment has increased by about 40% since 1989-90. The real figures may be higher since the National Sample Surveys ( the NSS is a nation-wide, continuous operation in the form of successive rounds) un derestimates the consumption of the rich, according to Ghosh. “This is the highest and most rapid increase in the consumption of the rich that has ever been recorded in India ,” she writes. On the other side of the scale, for Mohammed Sheikh, and 600 million like him who constitute the bottom 80% of India ’s rural population, per capita consumption has actually declined since 1989-90.

“Inequality in India has grown faster in the last 10-12 years than any other time in our history since the colonial raj,” P Sainath, senior journalist and Rural Affairs Editor at The Hindu, says. The evidence is especially stark in such areas as health. In 2003, a national newspaper reported the deaths due to malnutrition-related causes, of over 9,000 children below the age of 6. This was in 15 largely adivasi-populated districts of Maharashtra , just a few kilometres from super-specialty private hospitals in Mumbai.

All over the country people are dying of diseases that should not kill them. For instance, 199 per 1,00,000 people in India still die of tuberculosis every year (UNDP). And it is not specialised care they need, but basic preventive care. “Specialised care is highly overrated. It is possible to care intensively without Intensive Care Units,” Dr Subhash Daga, head of the paediatric ward at Cama & Albless Hospital , Mumbai, says. With low-cost technology and standardised protocols of treatment interventions, Dr Daga has nursed around 450 malnourished and anaemic children back to health in the last four years. This health turnaround costs the exchequer Rs 250 per child for 15 days of treatment. Dr Daga believes it is possible to replicate such low-cost treatment of diseases in rural areas.

Instead, the Government of India reduced its expenditure on the children’s nutrition programme from Rs 79.2 million to Rs 77.7 million in the 2003 budget (Ramachandran, P. ‘Unhealthy Policy’, Frontline, March 15, 2002). Government expenditure on health as a percentage of Gross Domestic Product (GDP) declined from 1.3 in 1990, to 0.6% in 2002. This is well below the 5% of GDP recommended by the World Health Organisation. While the budgetary allocation in the health sector by the central government over the last decade has been stagnant, in the states it has declined from 7% to 5.5% (Draft National Health Policy, 2001).

The Human Development Report 2002 (UNDP), drawing on data collected from 1995-2000 states that in India less than 50% of the population has access to essential drugs, only 31% has adequate sanitation facilities, 47% of children below the age of 5 are underweight, and only 42% of births are attended to by skilled health staff. In short, public health care expenditure does not match peoples’ health demands.

According to other recent estimates, there are only 4.48 hospitals, 6.16 dispensaries and 308 beds for every 100,000 of India ’s urban population. In rural areas, the situation is worse, with 0.77 hospitals, 1.37 dispensaries, 3.2 Public Health Centres and just 44 beds for every 100,000 people. In 1997, an estimated 68% of the hospitals, 56% of dispensaries, 37% beds and 75% of allopathic doctors were in the private sector (Ravi Duggal, 2002; ‘Right to Health’ (Mimeo), CEHAT, Mumbai).

Despite this dismal picture, today, in the name of sectoral reforms, many public health services are no longer provided free of cost. The Citizens Report on Governance and Development 2003, Social Watch India , says,The level of public expenditure in the health sector is the lowest in the world…[less than in Pakistan , Bangladesh , Sri Lanka ]. Of the aggregate expenditure on health, 83% is allocated to private spending while 43% of the poor depend on public sector hospitals for care. Privatisation and deregulation of the health system have resulted in rising drug prices. … [The] new National Health Policy 2002 legitimises the ongoing privatisation of health.”

The push for increased participation of private sector entities in health care services is evident, for example, in Andhra Pradesh. The state government in recent years has boosted the private sector in health, promoted corporate hospitals and pioneered the ‘user-fee’ system in government hospitals. This systematic dismantling of the public health system has turned poor people to private hospitals at significantly higher cost.

Dr Padma Prakash, women's rights and health activist, says, “People are forced to go to private hospitals because there are no beds available in public ones.” She berates the lack of preventive care for undernourished and overworked people and the decreasing focus on preventive health care.

The result has been increasing health expenses, leading to rural indebtedness and impoverishment. Most people run out of money halfway through treatment. As P Sainath says, “Those who fall ill are selling land, gold, cattle and other assets to pay off medical bills. They also take loans that they can never repay.Health spending is amongst the fastest-growing components of rural family debt.”


Although India ranks a low fourth in South Asia in terms of both adult literacy rate and youth/child literacy, several achievements have been recorded in the field of education since independence, according to government data. The average literacy rate was 65% in 2001 (up from 18% in 1951). The number of uneducated persons declined for the first time since Census 1951 by almost 32 million in absolute terms between 1991 and 2001.

But the improvements pale when you consider that every third illiterate person in the world is an Indian (Samuel and Jagadananda, Eds. ‘Making Sense of Democracy: An Introduction to Social Watch India ). Of approximately 200 million children in the 6-14 age-group, only 120 million are enrolled in school. “Inadequate budget allocation, dismal school infrastructure in rural areas, high dropout rates, caste-bias, gender-bias etc, are the hallmarks of our education system,” this report states.

There have been consistently regressive budgetary allocations for education. Unplanned allocation in education declined in real per capita from a meagre Rs 15.40 to Rs 14.68 between 2002 and 2003. The planned allocation on education declined from Rs 0.30 per capita in 2002-03 to Rs 0.18 in 2003-04. Important educational schemes like the National Programme for Women’s Education have been scrapped.

While successive governments have been promising to increase education expenditure to 6% of GDP, central and state government spending on education has gone down from 4% in 1991/1992 to 3.2% in 1996/1997. Less than half of the total amount is spent on primary education.

Dropout rates are high in India —over 50% from Class I to VIII (CMIE , India’s Social Sectors, February, 1995). The high rates are not due to lack of demand for schooling from the relatively poorer households, as is sometimes assumed. The problems are mainly on the supply side. Even the minimal infrastructure, such as proper rooms, desks, drinking water facility, toilets, is missing in a large number of schools.

According to the fifth all-India education survey (NCERT, 1990): (i) Barely half of the primary schools have a stone building (ii) 42% have a single classroom (if any) (iii) Just over half have a usable blackboard, (iv) Less than half have drinking water facilities (v) only 16% have urinals (vi) More than 60% have only one or two teachers (if any) for classes I to V and only 15% have more teachers. While this is the average all-India figure, the corresponding figures for rural areas are even worse.

A Public Report on Basic Education (PROBE), prepared by a team of researchers based at the Centre for Development Economics, Delhi and other institutions, conducted a detailed survey of the school system in North India in 1996. In 188 randomly selected villages of Bihar and Madhya Pradesh, the report surveyed the school facilities and interviewed 1,221 households. It found that parents spend about Rs 366 per year to send a child to a government school. For an average agricultural labourer, sending two children to primary school would mean 30 days’ wages.

Similarly the teacher-pupil ratio has been falling from 26 primary school teachers for every 1,000 pupils in 1981, to 21 teachers per 1,000 pupils in 1996, according to the Probe report. According to Kiran Bhatty of the Probe team, “…These studies bear testimony to the apathy of the policymakers as rhetoric and reality so obviously continue to follow divergent paths. A misunderstanding of the real problems and a complete lack of commitment in tackling them are obvious from the fact that policy after policy and scheme after scheme, have failed to make any appreciable impact. What it indicates is a near total absence of responsibility in the system, in effect almost a refusal to take responsibility for ensuring the provision of this basic service, or rather of guaranteeing a fundamental right.” (Economic and Political Weekly, July 4, 1997).

On November 28, 2001 , parliament passed the 93 rd amendment making education for the 6-14 age-group compulsory but, significantly, not free of cost. It therefore imposes on parents the duty of sending their children to school while not requiring states to invest in making education accessible to all.

In such a scenario, there is an increasing dependence on market forces to fill the educational deficit. “Now your educational attainment has very little to do with your quality as a student and everything to do with your ability to pay,” P Sainath says. The education system in India has become a new source of inequality. Education is a right guaranteed by the Constitution but the monopoly of knowledge enjoyed by the upper castes in the past is being reproduced today through the educational institutions in a different form.

The Kerala government’s June 2001 ‘black order’, for example, withdrew support for 2,244 government schools for being unviable because they had less than 25 students. These schools are now being handed over to private institutions which charge high fees. As with ‘sick’ public sector undertakings, the government declares its schools economically unviable and places them in private hands. For example, 12 schools were shut recently in Indore , Madhya Pradesh, and the children transferred to other schools. The school lands were transferred to a commercial complex. In Andhra Pradesh, schools are being systematically closed, with the emphasis shifting to non-formal education.

“When people are illiterate, their ability to understand and invoke their legal rights can be very limited. This can be a very significant barrier to make use even of the rather limited rights that they do actually have,” Amartya Sen says in an essay titled ‘ How Does Basic Education Influence Human Security’. “It can muffle the political voice of the underdog and thus contribute directly to their insecurity.”

Last year, India dropped from 124 to 127 on the ranking of countries in the Human Development Index (HDI). The HDI focuses on three measurable dimensions of human development: life expectancy, education and standard of living. The report asserts that human development and the economy are intrinsically linked. Education, healthcare, water supply, sanitation and other social services require resources. Human development can only be achieved through the equitable distribution of the benefits of economic growth among people. This requires pro-people policies, especially in a region where, as the report finds, the benefits are limited to a small minority of educated urban populations.

(Richa Nigam is a freelance writer based in Mumbai)

InfoChange News & Features, January 2005