Just above subsistence level
IN the late autumn of 2015, my friend Himanshu Shekhar travelled to a small musahar village in Bihar’s Nawada. He was there to report on the upcoming state elections. Outside the local butcher’s shop, a group of children sat on their haunches, waiting. They hadn’t come to buy anything. As the butcher carved up a sickly, gaunt hen for a customer, he would throw the entrails at the children. The discarded debris was going to be boiled for dinner that night, to be served with a bit of rice. For the kids, this was nothing short of a feast.
Of course, in the sarkari ledgers, these children would be considered poor. Like others of their ilk, they probably never get what the State considers to be adequate food. A vast majority of them have ration cards, which the State uses to fill the gap between a half-filled belly and the official poverty line, with subsidised rice and wheat. It keeps most of India’s poor just above subsistence level, with a few square meals a week, a shanty with a leaky roof to live in, and torn, ragged clothes to wear.
That’s how little it takes to keep India’s poor satisfied. After all, what one gets determines what one wants. That is probably why a British commentator in the late 18th century complained that the reason wages in England were so much more than in France, was because the English worker lived ‘luxuriously’, consuming “brandy, gin, tea, sugar, foreign fruit, strong beer, printed linens, snuff, tobacco, etc.” The French worker, on the other hand, just ate “bread, fruit, herbs, roots, and dried fish; for they very seldom eat flesh; and when wheat is dear, they eat very little bread.”
The closer workers are kept to bare necessities, the cheaper is their labour power. That is why the Modi government has decided to give 12 kg of foodgrains to 80 crore of India’s poor, at highly subsidised rates, for the next three months. That’s 400 gm of the key staple every day for each person. Clearly, the government considers this to be an adequate amount of food at a time when the poor have no wages at all. Along with that there is an advance instalment of PM-Kisan, and Rs 500 in cash to poor women with Jan Dhan accounts, to take care of other expenses.
This is not new in the modern history of the world. This is precisely the principle that governed wages in early 19th-century England. That is why a wage regulator told the House of Lords, that each family is paid the equivalent of a “gallon loaf and 3 dimes per head. The gallon loaf per week is what we suppose sufficient for the maintenance of every person in the family for a week; and the 3 dimes is for clothes, and if the parish thinks proper to find clothes; the 3 dimes is deducted.”
You could say, these are extraordinary times and in normal circumstances, India’s working people earn much more. The data tells us otherwise. The government’s rural financial inclusion survey of 2017 tells us that 30 per cent of rural families earned less than Rs 3,558 per month. At today’s prices, that’s a monthly income of about Rs 4,000 for around 5.7 crore rural families. That works out to Rs 27 per head per day. Of this, about 1.9 crore families earned less than Rs 1,000 a month, which works out at less than Rs 1,250 per month now. That is a ridiculous Rs 8 per person per day.
Another government source, the employment-unemployment survey of 2015-16, gives us similar numbers. It says that over 27 per cent earned less than Rs 5,000 per month. At today’s prices, that is a monthly earning of less than Rs 5,700 for about 5.1 crore rural families. That is a monthly income of less than Rs 38 per person per day. No wonder, the government thinks giving Rs 204 per day under MGNREGA — the only source of employment for lakhs of workers — is a decent wage. Considering that the maximum they can earn would be Rs 20,400 from 100 days of work, it would work out at just Rs 1,700 per month. The data from 2015-16 tells us that about 22 per cent of the households depended on MGNREGA as a source of income. Even if that is just a top-up, it tells you how many workers in India need government employment schemes to keep their nose above water.
The 2017 rural financial inclusion survey also tells us that 30 per cent of the households in rural India earned less than what they spent every month. So, they would have had to borrow for their daily expenses, just to survive. In terms of daily expenditure per person, 30 per cent of the people spent just Rs 33 per day. This included all expenses — food, shelter, fuel, clothing, health, education, mobile phone. At today’s prices, that would work out at about Rs 37 per head per day.
This meagre income and expenditure of a large chunk of rural households sets the floor for the ‘living wage’ in India. It ensures that even those who leave their homes to go and work in factories and at construction sites can be paid very less, and it can be called a ‘just’ wage. In fact, the abysmally low levels of subsistence for a large part of India’s working people allows corporates and economists to complain that India needs tougher labour laws, so that businessmen feel encouraged to invest.
That is one reason why, instead of focusing on generating employment, both the Modi government and the Congress want to give some sort of universal dole. Increased employment opportunities push up wages; doles keep them on the floor. This is also a key reason why successive governments refuse to distribute the excess foodgrains that periodically flood the FCI’s godowns. Giving more food will get the poor used to eating more, and that will make them expect more as well. And we know, nothing makes people more restive than increased aspirations.
The author is a senior economic analyst
