The real deprivation

V. Kulkarni (2008) ‘Deprivation, Disparity and Discrimination in Rural India’, Brown Journal of World Affairs (forthcoming)), there is a real risk of overlooking why poverty persists among disadvantaged groups and their failure to benefit from quotas and enhanced financial allocations.

Our estimate of the incidence of poverty in rural India, based on the 61st round of the NSS, is high — about a quarter of the households were poor in 2004-05. There was, however, substantial variation across the social groups. Among the STs, about 44 per cent of the households were poor, compared to 32 per cent of the SC households and about 19 per cent of the non-ST/SC households.

The factors underlying the poverty gaps are classified into two components: one is the characteristic component and the other is the structural component. The first attributes higher poverty to lower endowments (for instance, amount of land owned) while the second focuses on lower returns to these endowments (that is, income from cultivation). Pair-wise comparisons of ST and SC households are carried out with non-scheduled households as the reference group. The focus is on whether the poverty gaps are due largely to whether the former are not so well endowed as the latter (whether they own smaller amounts of land, are less well-educated but earn the same incremental amounts from such endowments as the reference group) or due to lower rewards or incomes, assuming that they own the same amount of land, possess the same level of education and engage in the same occupation as the reference group.

The contrast between the STs and SCs in terms of these components is striking. Between the ST and non-scheduled households, structural differences account for about 59 per cent of the difference in their poverty, while between the SC and non-scheduled households the larger component is differences in characteristics (about 55 per cent).

Disaggregating these components reveals that, first, between the ST and non-scheduled households, the highest contributor to the characteristic component is location (that is, the former are concentrated within remote areas with fewer remunerative options), followed by education, and then occupation; second, a very large share of the structural component is also attributable to location (even within the same location, STs earn lower amounts), with returns to occupation, demographic characteristics and education accounting for relatively small shares.

Between the SC and non-scheduled households, occupation accounted for the largest share of the characteristic component, followed by education and then land. Within the structural component, however, the largest component is location, followed by occupation and education. So, although SCs are more dispersed than the STs, they are also subject to lower returns on their endowments relative to the reference group.

Given our decomposition of poverty incidence gaps, the differences in endowments could be a result of oppression of some disadvantaged groups (social exclusion of STs and SCs restricted their access to education over a long period and restricted their children’s access to it). The differences in the returns to various endowments, on the other hand, may reflect discretionary valuation of performance and thus elements of current discrimination. This classification is, however, problematic insofar as current performance is shaped by personal identity and motivation in complex ways. In particular, social exclusion and discriminatory reward systems may undermine self-confidence, and consequently performance.

The legacy of past prejudices and deprivation perpetuates subordination of some groups. A low caste individual is more likely to submit to the authority of the high caste if he or she believes that others will do so, too. A high caste person is more likely to exercise that authority if he or she believes that the low-caste will submit. Thus, a shared system of beliefs stabilises expectations, and contributes to the reproduction of poverty over time.

Two policy insights seem important. One is that affirmative action should not be limited to enhancing the endowments or assets of the STs, SCs and other disadvantaged groups but must also address the issue of lower income gains. Related to the latter is the insight that identity has a potentially important role in perpetuating deprivation. Salience of caste and tribal affiliations together with mistrust of the reward system — if overlooked —could undermine the benefits of affirmative action.

The piece is co-authored with Vani S. Kulkarni. Gaiha is professor of public policy, University of Delhi; Kulkarni is research fellow, Harvard Centre for Population and Development Studies