Gist of EPW October Week 4, 2022

The Economic and Political Weekly (EPW) is an important source of study material for IAS, especially for the current affairs segment. In this section, we give you the gist of the EPW magazine every week. The important topics covered in the weekly are analyzed and explained in a simple language, all from a UPSC perspective.

TABLE OF CONTENTS

1. Bad News on the Poverty Front
2. Women’s Participation in Protests against the Three Farm Laws in India
3. Outreach of Formal Banking Services and Financial Inclusion: Evidence from Indian States

1. Bad News on the Poverty Front

• Reports published by various agencies in the past have highlighted the major failings in terms of poverty at the national level. It is pointed out that the pace of development in India has not only slowed down but has also rebounded during the global pandemic of COVID-19.
• Moreover, as a result of the large loss of livelihoods, the Global Hunger Index has slipped further.
• The level of poverty in rural India has gone up four times in comparison to urban areas.

Poverty and Shared Prosperity report

• The report is published by the World Bank.
• It is estimated that owing to COVID-19 and the Russia-Ukraine war, 70 million people across the world have been forced to live below the extreme poverty line.
• It has also highlighted that India experienced a pronounced economic contraction and it was one of the most affected countries.
• The initial figures indicate that there is a rise of approximately 56 million poor in the country. However, the final numbers for 2020 are yet to be determined.
• This translates to the fact that the welfare initiatives of the Government of India like the supply of free food and the Mahatma Gandhi National Rural Employment Guarantee programme could not neutralize the impact of increased unemployment during the pandemic.

Global Hunger Index

• The Global Hunger Index is released by Welthungerhilfe and Concern Worldwide.
• The recently published GHI 2022 corroborates the findings of the World Bank on growing deprivations. 
• The rank of India has slipped further by six positions to 107 out of 121 countries analyzed. The score is 29.1 which puts India into the serious food shortage category.
• The major factor responsible for India’s declining position in the index is the highest share of child wasting rate. This rate stands at 19.3% in the world as children fail to gain normal weight in India.
• In GHI, child undernourishment is one of the major components, covering three of the four indicators.
• The child nutrition parameter is given more importance in GHI because it captures the nutrition status of the most vulnerable and sensitive section of the population. The impact of malnutrition is clearly visible and can be easily measured through the physical and cognitive development of the child and their mortality rates.
• Hunger levels worsen with increasing poverty as the basic necessities of life like a balanced meal can not be afforded.
• However, the Indian Government has challenged the index citing that measuring the hunger level of the entire population based on the child indicators is inappropriate.

For more information on GHI, read here: Global Hunger Index [Latest 2022 Report]

Global Multidimensional Poverty Index 

• The report by the United Nations Development Programme and the Oxford Poverty and Human Development Initiative is titled ‘Global Multidimensional Poverty Index’.
• The report initially praises India’s performance in reducing poverty by nearly 415 million in a period of 15 years. However, a closer look reveals the following:
  • The number of poor fell by approximately 275 million in the first ten years that is 2005 to 2015.
  • Whereas the figure was 140 million in the next five years (till 2021). This has been criticized to be a gross overestimate as almost three-fourths of the data for estimating poverty in 2019–21 was collected before the pandemic.
  • It was also observed that the decline in MPI in the third period was one-third of the first. MPI value declined by 0.161 during 2005-16. However, it slowed to 0.053 between 2015-17 to 2019-21.
  • As a result, the incidence of poverty fell from 55.1% in 2005–06 to 27.7% in 2015–16, that is, by 27.4 percentage points in the first period, whereas the fall in poverty levels in the second period was just 11.3 percentage points with the incidence of poverty only going down from 27.4% to 16.4%.
  • This has held back 228 million in poverty which is the largest in the world.

For more information on the Multidimensional Poverty Index, read here: Global Multidimensional Poverty Index (MPI) 2020-21

Associated Challenges

• The deprivation scores in the above index/report show that a further one-fifth share of the population is vulnerable to poverty. This figure along with 16.4% living below poverty together comprises a third of the population.
• Another bigger concern is the plight of the rural sector. Despite the increased harvest, the share of poverty in rural areas is 21.2%. This is four times the poverty level in urban areas (5.5%).
• The total rural poor accounts for 205 million, which implies 90% of the 229 million living in poverty.

Conclusion

The need of the hour is that the government should look at these figures seriously, particularly the rural poverty numbers.

2. Women’s Participation in Protests against the Three Farm Laws in India

• The Indian farmers protested against the three farm laws proposed by the Union government which were ultimately withdrawn on 29 November 2021. The three farm laws that created a churning in the agrarian social structure are:
  • Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020
  • Farmers (Empowerment and Protection) Agreement on Price Assurance
  • Farm Services Act, 2020
• This was one of the longest movements in the recent history of India, as it was suspended only when the Farm Law Repeal Bill, 2021 was passed by both houses of Parliament.
• The anti-farm law protests saw the participation of large sections of the peasantry and rural masses. The movement witnessed an unprecedented involvement of women on different platforms.

For more information on the farm acts, read here: Farm Acts, 2020 – Arguments For & Against. Farm Laws Explained.

Reasons behind the participation of Women:

• Some higher authorities in the judiciary were of the view that old people and women are kept in the protest by others and don’t have agency of their own. However, this statement invited criticism from civil society groups and activists.
• The enthusiastic and dynamic participation of women particularly in Haryana and Punjab is rooted in a series of historic, political, cultural, and socio-economical factors.
  • For instance, Rural women of Haryana are severely disadvantaged as they were involved in unpaid or exchange labour in the post-1990s phase. The introduction of the farm laws further aggravated the apprehensions of the already crisis-ridden peasantry with regard to losing the land and state protection mechanisms (including the provision of trade of agri-produce through the Agricultural produce marketing committees).
  • It should also be noted that the land continues to remain a major source of sustenance and central to the lives of people who joined the anti-farm laws protests.
• The Essential Commodities (Amendment) Act, 2020  also proposed some changes along with the three farm laws. These changes negatively affected the food and nutrition of the women and girl child. 
• Moreover, the dilution and weakening of PDS were held responsible for disturbing the kitchen budgets which are majorly managed by the women of the household. This was a major reason for the participation of women from non-farming communities and landless labour classes.
• One section of the leading women had some electoral aspirations and wanted to use this protest as an opportunity in the upcoming panchayat elections of Haryana.

Participation of Women in the protests:

• Spectators to Actors:
  • Initially, the women that got involved in the protests had some political consciousness and were exposed to some form of activism.
  • Once the camps were installed at the entry points of Delhi, the women from the neighbouring villages took responsibility for food arrangements. This soon translated into larger participation of women from Punjab which further motivated women from Haryana.
  • Moreover, social media also played an important role in garnering support for these women from across the country.
• Women’s assertion of identity as farmers and producers: 
  • Mahila Kisan Divas (Women Farmers’ Day) celebrated on 18 January and International Women’s Day on 8 March gave a huge boost to the women’s assertion of their identities.
  • It was further supported by events like Mahila Kisan Sansad (Women Farmers’ Parliament) which presented a number of resolutions like land rights, wages, access to credit, etc for women.
• Grassroots agitations and women as leading squads:
  • Women participated and led the grassroots agitations for several months across the state of Haryana and Punjab. These protests continued even amidst heavy downpours, humidity, and heat.
  • They played an important role in gheraos of government offices and police stations and the picketing of toll plazas across Haryana for almost a year. Thereby asserting their right to protest, public space, and dignity.
  • Women were also made part of the decision-making committees along with men from farmer organizations, trade union activists, and leaders of local khaps.
• Celebrating festivals as symbols of protest and use of folk art:
  • Women combined local festivals and folk arts with the protests. For example, women announced that they will be taking kothli (a basket of gifts and sweets), in the month of monsoon to the farmers sitting at the borders.
  • Various women cultural groups, performers, artists, and women’s sports teams actively participated in events occurring at different protest sites.

Influence of Women’s participation in the protests:

• Creation of alternative institutions and platforms:
  • A number of new platforms and institutions emerged during the protests to help the movement in specific ways. These included social media pages, YouTube channels, independent media platforms, and Kisan IT Cell.
  • Several initiatives were primarily conceptualized and managed by young women volunteers and activists.
  • These initiatives gave the protest visibility at the international level.
• Mechanisms to ensure safety and inclusivity:
  • The women’s organizations created pressure to establish appropriate mechanisms and procedures to redress harassment cases.
  • The women leaders of the All India Kisan Sangharsh Coordination Committee (AIKSCC) formed an 8-member Mahila Suraksha Samiti to look into the matters of sexual harassment during the protests.
  • This initiative was significant to ensure safety and security of women protestors.
• A fight for inclusivity:
  • Initially, women suffered from inadequate sanitation and bathing facilities, privacy, and sleeping arrangement. They were also perceived as subordinate partners by their male counterparts.
  • Women activists resisted such treatment and confronted this subjugation. A sustained fight against this attitude led to a regular presence of women speakers at different stages of protest.

Conclusion and Way forward:

• The role of women in the protest should be seen as an expression of the assertion and ongoing transformation in the social sphere. Young women played an important role in the male-dominated agrarian setup of Haryana.
• They played versatile roles in leading the marches, gatherings, delivering speeches, writing articles, holding mock Parliament sessions, writing and singing songs, and even facing police action.
• Their active participation in the movement provided them with a space for developing an informed and vocal pressure group based on policy decisions that affect their lives. The experience gained through this movement can go a long way against everyday repression and suppression by the authoritative regime prevalent in society.
• They should be more involved in decision-making and leadership positions in different spheres.
• The experiences of women organizers also show that mobilizing women on economic and material issues where the household as a unit is a potential beneficiary is much easier than the social issues of patriarchal dominance.

3. Outreach of Formal Banking Services and Financial Inclusion: Evidence from Indian States

Context

This article examines the outreach of banking services and financial inclusiveness in major states of India by using the available banking services data. 

Financial Inclusion and its Significance

• Financial inclusion can be defined as the process of ensuring access to financial services such as timely and adequate credit where needed by vulnerable groups at an affordable cost.
• Financial inclusion broadly refers to universal access to a wide range of financial services at a reasonable cost. These include banking products and other financial services such as insurance and equity products. 
• The degree of penetration of the formal channels of banking services available to all segments of society indicates the degree of financial inclusion in an economy.
• Easy and timely access to the financial and banking services offered by various institutions plays a key role in ensuring that poor and vulnerable sections of society use various formal banking facilities thereby helping achieve financial inclusion.
• Further, evidence suggests that there is a direct relationship between financial inclusion and growth.
  • A lack of financial inclusion results in a loss of about 1% to the GDP.
  • Financial inclusion boosts inclusive growth and it has two dimensions namely:
    • Principle of equity
    • Ens­uring growth with financial stability
• There also exists a direct relationship between financial inclusion and poverty alleviation. 

Evolution of Financial Inclusion in India

Image Source: EPW

• The credit system in India has generally been characte­rised by “financial dualism” and there is strong competition between formal and informal institutions in rural areas. The farmers in rural areas were driven towards informal creditors for several reasons which include:
  • Easy, timely, affordable and convenient access to money
  • High transaction costs associated with formal institutions
  • Limited extension of banking networks in rural areas
  • Commercial banks have shown more interest in mobilising deposits from rural areas instead of providing credit
  • Inadequate bank employees and poor physical access to banks 
• However, the Reserve Bank of India (RBI) has made several efforts to ensure that the financially excluded segments of society are brought under the formal financial categories by implementing basic banking services for all in the name of no-frills accounts. Other interventions by RBI include:
  • Doorstep financial service delivery 
  • Relaxation of know-your-customer (KYC) norms
  • Expansion of branches in unbanked locations
  • Collaboration with self-help groups (SHGs) and NGOs
  • Facilitating Direct Benefit Transfers (DBT), General Credit Cards (GCC), and Kisan Credit Cards (KCC)
• The focus on financial inclusion has increased with financial sector reforms and financial inclusion has become a key objective since 2005.
• In the formal financial inclusion policy phase, schemes such as Pradhan Mantri Jan Dhan Yojana and National Mission on Financial Inclusion have increased the efforts for financial inclusion.

Analysis of Financial Inclusion in India

• According to the Census of India 2011, only 58.7% of the households availed formal banking services in the country. 
• CRISIL in 2015 estimated that about 40% of the population of the country still lacked access to even basic fin­ancial services. 
• Various individuals, agencies and firms have undertaken studies on financial inclusion in the country and most of these studies have ranked Kerala as the top state in India followed by states such as Tamil Nadu, Karnataka, Mah­arashtra, Punjab, Goa, Himachal Pradesh, and Delhi. 
• States such as Uttar Pradesh, Bihar, Rajasthan and Odisha have performed poorly in terms of financial inclusion.

Way forward

The authors of the article suggest RBI focus on:

• Expansion of bank branches into rural and remote locations.
• Increasing credit facilities to people living in states with a lower degree of financial inclusion.
• Loans with subsidised rates of interest and timely avail­ability must be extended to key priority sectors.
• Efforts to create more awareness among the rural people about banking services. 
• Taking into account the digital divide and digital technology consumption in the banking sector, financial and digital literacy levels in the country require a big push.

Conclusion

• Post-2005, a significant level of fin­ancial inclusion has been achieved with respect to banking access and penetration in the country as a whole. However, there has been a large variation and disparity between the poorer and richer states of the country. 
• Therefore, there is a need to focus more on the expansion of banking services and efforts to increase financial and digital literacy in the poorer states in order to achieve a higher degree of financial inclusion.

Read previous EPW articles in the link.

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