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They don't buy it

By Sharmila Joshi

Inequalities will persist if we continue to look at India's poor only as consumers

Commentators in India increasingly refer to people exclusively as 'consumers'. Their analyses of a multiplicity of complex processes — economic growth, the lack of it, prosperity, poverty, practically anything — focus on the individual as consumer.

Some days ago, a journalist and 'civil society' activist (are there any 'uncivil society' activists?) wrote that "Indians are poor not because they do not work; they are poor because they fail as consumers". He went on to say that "when each working Indian has personal assets and consumption goods of high quality, then only will each Indian be rich".

According to a market strategy consultant and newspaper columnist, "The bottom 400 million [of Indians] is a disappointment and a social responsibility, and while it harbours value (though maybe not a fortune), it is a difficult market to tap." This columnist "...despair[s] the bottom" because, she says, it is "quite clear that we are not a consumption-shunning culture".

Along the same lines, an Indian professor of business administration at a US university argues that private sector businesses "can help alleviate poverty and at the same time make a profit by turning the poor...into consumers". He speaks of "build[ing] markets at the bottom of the pyramid as a way of eradicating poverty". The purchasing power of the poor, he cautions, must not be underestimated or ignored.

Analyses of this tenor usually argue for maximising consumption for greater economic growth. They search for a formula that will push those irresponsible non-consuming masses into being more active in the mysterious 'market'. They ignore the inconvenient fact that 'markets' at the 'bottom' already exist, though not perhaps for the kind of goods and services the analysts would want to promote.

The recently-released findings of a survey done in 2003 by the National Sample Survey Organisation for consumption expenditure of farmer households tell us that 55% of their monthly per capita consumption expenditure (MPCE) is spent on food.

The NSSO surveyed households which own some land and where at least one family member is a farmer. At least 100 million Indians are farmers and over 60% of the country's population depends on agriculture directly or indirectly, many of whom own no land at all.

The average Indian farmer household spends just over 20% of its MPCE on cereals and cereal substitutes, followed by about 10% on milk and milk products. Pulses and their products take up a little over 3% of the expenses, and edible oil takes up close to 5%. Items such as vegetables, meat, sugar and salt constitute another 15%. Next in terms of percentage of total are fuel and light at a little over 9%, clothing and footwear at almost 9%, medical expenses at almost 7% and education at just over 3%.

The MPCE for farmer households at an all-India level during 2003 was Rs 502.83. The poverty line in India is drawn at Rs 475 per month per person. As many as 27% of all households according to the NSSO survey had an MPCE of less than Rs 380. When more than 80 of the amount is spent on necessities such as food, fuel, clothing and healthcare, this leaves less than Rs 100 or Rs 80 (in the different categories) for people in these households to satisfactorily demonstrate that they too are not a "consumption-shunning culture".

How more than half of the country's population can acquire 'personal assets and consumption goods of high quality', owning which will make each Indian rich, is not explained by the 'equality of consumption' advocates. Neither do they substantively explain how this 'disappointing' portion of our population can even begin to participate in more vigorous 'markets', contribute to the profits of private businesses, and thereby eventually 'eradicate' poverty.

Lost in the thicket of economics jargon, in talk of GDP and pyramids and trickle-downs and in the advocacy of greater 'productivity' among the poor, the 'more consumption for all' chant may have sounded reasonable had it simultaneously expressed some real distress at the gross inequalities that persist in India and globally. Inequalities not just of consumption of food, water and housing, but also of opportunities, of access to education and to healthcare. Any number of reports point to the persistence of such inequalities.

A recent Maharashtra Development Report of the Indira Gandhi Institute of Development Studies, to be placed before the Planning Commission, speaks of increasing unemployment resulting from reduced large-scale industrial employment and a declining agricultural sector, high environmental pollution and huge regional disparities in education and health.

It says that 50% of people in rural areas in Maharashtra don't have easy access to drinking water. It comments on the state's inability to translate economic growth into poverty reduction. All this in a state that ostensibly ranks first in industrialisation, second in urbanisation, and third in wealth in the country.

The UNDP's Human Development Index (HDI) for 2005, which measures life expectancy, educational attainment and adjusted real income, puts India at 127 out of 177 countries on the index. India's HDI position was marginally better at 115 in 1999. In half a decade of growing consumption for a section of the population, the country has slipped down the human development scale.

The tunnel vision that sees people as consumers loses sight of the fact that they are human beings first — citizens of a nation-state with equal, but unrealised, rights as those at the top of the 'pyramid'. It ignores the structural processes that foster the formation and persistence of those infernal 'pyramids' (which is a graphic reference to acute inequality between the top and the bottom).

The global development debate has for decades now been replete with critiques of development viewed purely in terms of economic growth. Views that equate wealth only with the ability to buy. Which believe that 'development' is a matter of ceaseless accumulation. Where assets are only material and can be entirely bought in the market and consumed infinitely on a finite planet with finite resources that are inequitably distributed.

Some of 'us' may indeed not be consumption-shunning. But 'we' are also not a 'culture' that has uniform access to the means of consumption — even if that kind of ceaseless consumption were indeed desirable or sustainable.

(This article first appeared in Hindustan Times, November 25, 2005)