Why are the poor in India mostly rural ?

In the last blog we have seen that almost 90% of the poor people in India live in villages. Why are people in urban areas less poor than those in rural areas?
For the urban middle-class population, village conjures up a romantic place with simple, hard-working people living happily. The reality is far from it. In most villages, women walk long distances to fetch drinking water and twigs to use as cooking fuel. Schools are inadequate, many times with a shortage of teacher, rooms and facilities. The village health center also has similar problems. For emergency health problems, the patient may have to be taken to the nearest hospital which may be miles away. Roads are mostly unpaved. Houses are made of clay and barely have any real-estate value. Many villages do not have electricity. Lack of modern toilet is a huge health problem. Most villagers defecate in the open, beside lakes and ponds or in open fields. In India, an estimated 100000 tons of feces is deposited on fields, lakes and rivers every day. This causes enormous pollution is ground water and water in lakes and rivers which are used for human consumption. As a result, diarrhea, dysentery and other related diseases are prevalent in rural India. Studies have shown that water pollution is the principal cause of malnutrition in rural India and not poverty. In fact, malnutrition is less in sub-Saharan Africa although they are poorer than rural Indians. Another cause of malnutrition is the inferior status of women in rural India. As a result, pregnant women are not provided the additional nutrients she needs. This causes the birth of underweight child.
The only advantage is that the man in the family, who works in the farm or fishes in the lake, lives close to the workplace.

In urban India, poor people live in slums. The environment of slums is less than ideal. But most slum dwellers get water from community faucet or tube well; usually have community bathrooms which are inadequate but not non-existent. The slums usually have electricity and cable TV connection. The children of slum dwellers usually go to school. They have access to government hospital in the town. In some cities, slum dwellers use cooking gas to cook.

Some state governments including West Bengal tried to force graduating physicians to serve in villages for a few years. There was a huge resistance among doctors against serving in villages. Most young villagers, who do well in education and get higher education, settle in urban areas. There is a clear tendency among rural folks to migrate to cities when possible. Yet the urban middle class is usually dead against massive migration of villagers to cities and towns.

We have not yet looked at the cause of poverty in rural India. Let us look at it. Almost two-thirds of Indians live in villages. There are about 600000 villages in India, some small, some large. The average village has a population of only 1500. Usually a village has mostly huts made of clay in close proximity of one another, separated by narrow, unpaved lanes. I have already discussed inadequacy or absence of bathroom, drinking water, cooking fuel, school, college, hospital. In some states, large numbers of villages do not have electricity. In West Bengal, even as of 2009, half the households, rural and urban combined, do not have electricity. Some states like Punjab, Haryana, Himachal, Tamilnadu have done better. Cable TV, which is no longer a luxury in middle class households, is almost non-existent in villages. Phones, be it landline or cell phone, are not available in villages far away from cities.
The problem is twofold. First, the small size of villages makes it very hard to provide required infrastructure to them. The average village of 1500 has roughly 300 households. (The average family size in India is 5). Providing electricity, drinking water or cable TV in such small community is not cost-effective. How can you provide a high school or college or a hospital for 300 families? The next village might be few Kilometers away so that facilities cannot be shared among multiple villages.
Second, the basic problem in villages is that most people are engaged in farming, fishery and related professions. Out of 510 million working Indians, 300 million or 60% work in farming and related areas. The process of farming is labor-intensive and archaic. Most farmers still use bullock and hoe to till the land. Except for a few states, mechanized farming using tractors, cultivators etc. are absent. This makes farming productivity and hence income very low. Also, in populous states like West Bengal, land holding of average farmer is very small. The land reform enacted 30 years ago has caused fragmentation of land today. Such small land holdings are insufficient for the farmer to earn a decent income. Besides, fragmented land prevents farmers to achieve economy of scale.
If modern farming methods using machines is introduced, the same amount of food can be produced, using perhaps only 20 million farmers and farm laborers. That will render the other 280 million unemployed. This is the primary dilemma of India and cause of rural poverty.
If you look at various countries, you will find a definite correlation between poverty and percentage of workers engaged in farming. Here is a list of nations with percentage of workers working in farms in parenthesis:
USA (0.6), UK(1.4), Australia (3.6), South Korea(7.2), France(3.8), Spain(4)
Bangladesh(63), Pakistan(43), Kenya(75), India(60), Somalia(71), Uganda(82)

In the first row, there are rich countries where percentage of workers in farming is very small. In spite of this, these countries produce and export massive amount of food. In the second row are poor countries. In these countries, most people are engaged in farming. Usually the mechanism is low productivity and hence the income from farms is very small in these countries.
To summarize, there are two problems in rural India.
1) Low income due to archaic, low productivity farming process
2) Small size of villages makes it impossible to provide infrastructure that we take for granted in cities

How poor is India?

In spite of having scores of billionaires, India remains an impoverished country where millions suffer from inadequate food, malnutrition, health problems and illiteracy. How many Indians are poor and whom do we call poor? Where do they live and what are the causes of poverty? Unless we answer these questions, we will not be able to solve the problem.
So how many Indians are poor? If you google the words “836 million” you will get plenty of sites that answer the question. The number of poor Indians is 836 million. Where does this magic figure come and does it change with time? I investigated this last year. What I found was astounding. The National Sample Survey Organization (NSSO) is a unit of Government of India that undertakes various surveys every year to collect data about the people of India. It does not survey household or per capita income. What it attempts to find out is per capita expenditure. For example, on an average a person in rural India might be spending Rs 25 per day to buy all the requirements such as housing, food, clothes, entertainment etc. Rs 25 per day are equivalent to Rs 750 per month. This quantity is called Monthly Per Capita Expenditure (MPCE).
In 2007, another Government of India body, National Commission for Enterprises in Unorganized Sector or NCEUS published a document http://nceus.gov.in/Condition_of_workers_sep_2007.pdf
where it came up with the magic figure of 836 million poor people in India. After reading this document, I found out that they have used the NSSO 61st round sample survey data that was collected in 2004-05. Based on Indian population at that time, NCEUS claimed that 836 million Indians or 77% of the population live in poverty. Their cut-off point for identifying a person as poor was a Daily Per capita Expenditure of Rs 20 or less. This is equivalent to MPCE of Rs 600 or less. In simple terms, if a person spent less than Rs 600 per month in 2004-05, he/she was identified as poor.
I wanted to cross check the veracity of this measurement. I did my own calculations based on the same NSSO 61st round survey of 2004-05 and found out that the number of poor people was actually 675 million and not 836 million. Only 62% of Indians spent less than Rs 20 per day as opposed to NCEUS’s claim of 77%. Also these figures are from 2004-05. In 2009, the number of poor people must have come down significantly.
My efforts to publicize this error failed. I had emailed the facts to the Prime Minister and Finance Minister of India but those emails failed to reach their destination. I wonder why Government of India publishes emails of important persons when attempt to send email fails.
If you are interested in my computations, here is the document:
http://spreadsheets.google.com/ccc?key=rowhR0mhtjbyoHbsR64kALw&hl=en
Unfortunately, even in 2009 politicians of all hues claim that 77% of Indians are poor. Now we know that the figure is false and the actual percentage is 62%. A very important point to note is that out of these 675 million poor people ( out of a total population of 1090 million in 2004-05), an overwhelming majority of 586 million live in villages while another 88 million live in urban areas. We can therefore safely infer that most of the poor are rural people. In the next blog we will see why there is huge poverty in rural India.