As India booms, social welfare struggles to catch up

MADHOUN, India Mon Apr 19, 2010 7:30pm EDT

Related Topics

MADHOUN, India (Reuters) - India's government is spending billions of dollars on welfare schemes, and plans even more this year. But that is news to Poona, whose daughter may soon die from that stain on India's growth story -- malnutrition.

Poona, who married at 14 and breaks quarry stones for a living, shielded her daughter's sunken face from a harsh summer sun with her blue sari. She does not know Urmila's weight, but the whimpering 18-month child looked more like a new born baby.

"She eats nothing," said Poona, a lower caste woman from a northern Indian tribal community in Uttar Pradesh state. "I feel scared of losing my child."

Since helping the Congress party win re-election last year, welfare has fast become the government's knee-jerk answer to policy dilemmas as it tries to ease food inflation, help growth trickle down to the poor, and win hearts and minds in a Maoist insurgency, many experts say.

But these often corruption-ridden and badly-run programs may add to deficit spending and hinder India from following rival China by broadening an economic boom to transform millions of its population from poverty to well-fed middle class consumers.

In Madhoun village, a mobile phone tower stood near. But, while symbols of modernity seep in, welfare lags. Villagers complain no officials come here, and that upper castes siphon off pre-school porridge meals to fatten their buffalo.

Sonia Gandhi, Congress party head, has drafted a food bill to give each poor family 35 kg of grains a month, as the government provisionally upped its estimate of the poverty rate from 27.5 percent to 37.2 percent of the 1.2 billion plus population.

It also comes after Congress introduced a "revolutionary" program to ensure 100 days of jobs for villagers each year.

But these schemes' foundation stones may be built on sand, many experts say, threatening India's ability to narrow a yawning income gap that may endanger its economic success story despite Congress promises of "inclusive growth" since its 2004 election.

GROWTH NOT EVENLY SPREAD

Welfare programs can help millions in a country that has a third of the world's poor. Some schemes work well in states like Tamil Nadu which has a tradition of better governance.

But ridden by graft and often ill-conceived, welfare may have become an easy populist tool that is a second best solution to government reluctance to embrace difficult policies, like freeing up agriculture to markets -- that may make deeper inroads.

Sonia Gandhi's assassinated husband, former Prime Minister Rajiv Gandhi, famously said that out of every rupee spent on welfare, only 15 percent reached recipients.

"There are areas where these schemes certainly work," said political analyst Mahesh Rangarajan. "They are blunt instruments. It is easier to hand out a kilo of rice than reform agriculture."

India's growth is slow at lifting poverty, in contrast to China where child malnutrition, a key poverty indicator, is at 7 percent.

Malnutrition in India has fallen only six percentage points, to roughly 46 percent, since economic reforms began in 1991. GDP per capita boomed by 50 percent during the same period.

"There has been no improvement here," said Shreevai, a social worker in Bahuri, a cluster of villages near Lalitpur. "We want to be like the rest of India, but we don't have the income."

India ranked 65th out of 84 countries in the Global Hunger Index of 2009, below countries including North Korea and Zimbabwe -- hindering India's ambitions to channel its demographic dividend to fuel its global economic ambitions.

"I've never seen a country with such fast economic growth with such pathetic levels of nutrition," said Lawrence Haddad director of the UK-based Institute of Development Studies.

It is a stain that riles many in Congress after hopes its reelection would see it take on difficult issues like agricultural reform needed to boost incomes and productivity in the countryside where still half the population lives.

It has sparked pressure for more welfare after Congress won several elections helped by promises of cheap food as expectation of improved infrastructure and broader economic dissipate.

Welfare counts for a growing part of the budget, worrying investors that it will make cutting a 16-year-high deficit from last year hard. The rural employment scheme now costs 1 percent of GDP, while the food bill would cost an added $2 billion.

"People like (Sonia) Gandhi see their future is tied to how the under class and poor see them," said Rangarajan.

NO AID FOR MONTHS

But in Madhoun, a village of some 80 families, inhabitants said they had not received government aid for months. A health worker appeared once a week, signed attendance papers, and left.

Children stood aimlessly, many with potbellies and lighter-than-normal hair, malnutrition tell-tale signs. Few children go to school, spending instead days in quarries. Seven children recently died in one week in a bout of diarrhea.

Poona said doctors asked for a 1,000 rupee ($22) bribe for treatment -- a charge echoed across several villagers.

"I cannot afford to eat. How can I afford that?" Poona asked.

In theory, there is no end to welfare schemes. There is a midday school meal scheme, a pre-school scheme as well as the rural employment scheme. But few are felt on the ground.

"These programs have not been successful at targeting those that need it most," said one senior UN official, who asked to remain anonymous. Another UN aid worker estimated that only about 65 percent of pre-school foods reached the children in Lalitpur.

The schemes have also done little to alleviate food inflation at an 11-year-high. Prices of lentils, mainstay of India's diet, jumped by around 40 percent last year. So valuable are they that quarry owners paid villagers in lentils rather than cash.

"Kids here just eat stale bread. We can't get dal, prices have doubled. We just cannot afford it," said Shreevai.

In one of the few child nutrition centers in Uttar Pradesh, there were only six beds, three filled in a sign of the lack of awareness and distrust of government doctors by many villagers.

Kranti Sitaram said she has food. She can even afford a mobile. But her 7-month daughter Kirti lay listlessly, ill since the mother had fed her cow milk mixed with water from a well.

"For the rest of her life she will have problems," said Shipli Sahariya, a health worker.

(Editing by Paul de Bendern and Sanjeev Miglani)

($1 = 45 rupees)

FILED UNDER: