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Lecture 2

Week 4 Lecture 2 GEOG 2200 2013 Notes.docx

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GEOG 2200
John Milton

Page1GEOG 2200 Global ConnectionsJohn Milton Instructor SeptemberDecember 2013Week 4Lecture 2 Connecting Global Connecting Locally Call Centres and ICT Kiosks in IndiaIs India Better off Today because of GlobalizationThe process of globalization has been an integral part of the recent economic progress made by India One of the major forces of globalization in India has been in the growth of outsourced IT and business process outsourcing BPO services During the early years of the new millennium there has been an increase in the number of skilled professionals in India employed by both local and foreign companies to service customers in the US and Europe in particularThis is the result of MNCs taking advantage of Indias lower cost but educated and Englishspeaking work force and utilizing global communications technologies such as voiceover IP VOIP email and the internet This process has provided India with a new global economic base and a new Indian middle class that represents a new and growing consumer base It is also creating a new Indian business confidence and Indianbased MNCs are also becoming major players in globalization through international expansion From steel to Bollywood from cars to IT Indian companies are setting themselves up as powerhouses of tomorrows global economy But is it all good newsThe economic metastatistics look impressive Indias rate of growth from 1975 to 2007 was more than 55 per annum compared to the derisively termed Hindu rate of growth of 34 during the period 1956 to 1975 and especially to the pathetic 26 over the decade prior to the nascent liberalization in 1975 In the dozen years from 1995 to 2007 the growth rate has been more than 65 During the last four years India has sustained an unprecedented average growth rate of more than 8 The growth rate of manufacturing has been around 65 since 1975 and close to 7 during the dozen years up to 2006 At the latter rate the value of manufacturing doubles about every 10 years More recently India has been on a course of reverse imperialism with its firms on a buying spree abroad India is now the third largest investor in the UK It all sounds great New industries are creating new jobs for young educated Indians A new energy has been injected into the countrys economy and economic growth is still strong despite a slowdown in the past two years National statistics also suggest that poverty is down The proportion of population below the poverty line was 55 in 1973 after which there has seemingly occurred a spectacular decline Today it stands around 25 Optimism abounds in India The future is so bright I just gotta wear shadesBut lets pause here for a moment and consider poverty If the percentage of Indians living in poverty is down the absolute numbers remain overwhelming Even if one accepts the official level of poverty at 25 that means that more than 300 million still live in poverty and perhaps as manyif not morelive on the poverty cusp Recent reports indicate that more than half of Indian children are malnourished Given this it would be heartless indeed cruel to make the performance on poverty reduction an occasion to celebrate liberalization as much poverty still remains even when defined minimally in caloricintake terms The persistence of poverty for massive numbers inherited from the past underscores the passion that goes into critiques of globalizationConstructing PovertyI want to break off on a side tangent here and consider what we mean by poverty How would you define the poverty line The setting of the poverty line can be very arbitrary and yet it can affect the lives of millions if not tens of millions of people Vivek Kaul 2013 wrote A poverty line separates the poor section of the population from the nonpoor section Those below the poverty line are deemed to be poor and those who are above it are deemed to be not poor But this is unacceptable As even the World Bank World Bank 201144 noted in its 2011 Report on India little difference is evident in consumption levels between the poor and a large section of the middle class especially in rural areas The median rural person in India lives on Rs15 per day with a purchasing power parity or PPP of US130 spending Rs3 each day more than a person on the official Indian rural poverty line Indias poverty line is very low by international standards and 80 percent of the rural population lives below the median developingcountry poverty line of Rs 22 PPP US200 a day Qualitative surveys show that most Indians think of themselves as poor Moreover when the definition of poverty is expanded to include other dimensions of wellbeing such as access to education health care and basic infrastructure then poverty clearly continues to afflict more than half of Indias populationWhat can we learn from this extract First the defining of a poverty line is arbitrary and political in nature In the case of India the official poverty line is below the commonly accepted level of PPP US200day Second the setting of the poverty line in India does not include many basic necessities including housing clothing health care transportation and other essential goods and services It only considers the securing of adequate foodLets look at this in more detailbecause it is important to examine statistics critically Indias official poverty measure has long been based solely upon the ability to purchase a minimum recommended daily diet of 2400 kilocalories kcal for persons living in rural areas where about 70 percent of Indians still live and 2100 kcal for urban residents Up to 2011 the National Planning Commission NPC which is responsible for calculating how much income it takes to purchase the necessary food determined thata monthly income of Rs356 US774 per person is needed to provide the required diet in rural areas and a monthly income of Rs539 in urban areas This calculation does not include any other basic necessities Based on that figure the Indian government has determined that 29 percent of rural residents and 26 percent of urban residents live below poverty line BPLIn 2008 the NPC created a commission to look into the question of poverty Called the Tendulkar Committee after its Chair it proposed that the previous caloriebased poverty calculation be eliminated and that monetary cutoffs be raised immediately to RS447 per month for rural areas and Rs579 per month for urban residents The reason these income levels were so important is that they were used to determine who received government subsidies for foods and other basic needs so any increase in the minimum monthly income as defining the poverty line could mean millions of other Indian families would be eligible for government support increasing demands on government budgets Ramakumar 2010 stated that raising the rural daily minimum income from Rs12 to Rs15 as the bar for the poverty line alone would add more than 100 million people to the BPL populationIn 2008 the Union National Rural Development Ministry set up a commission to examine alternate methods of estimating poverty and in 2009 it came out with its recommendation that
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