India, beyond the glittering economy: By Shreekanth Gupta

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INDIA IN THE 21 st CENTURY: LOOKING BEYOND A GROWING ECONOMY Shreekant Gupta Delhi School of Economics University of Delhi March 26, 2007 [email protected]

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Transcript of India, beyond the glittering economy: By Shreekanth Gupta

Page 1: India, beyond the glittering economy: By Shreekanth Gupta

INDIA IN THE 21st CENTURY:LOOKING BEYOND A GROWING

ECONOMY

Shreekant Gupta

Delhi School of EconomicsUniversity of Delhi

March 26, [email protected]

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OUTLINE

• Importance of the natural resource base

• Poverty and the environment: a 2-way street?

• Quantifying the linkages

• Mainstreaming the environment into poverty alleviation

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Importance of the natural resource base

• “Poor countries are for the most part biomass-based subsistence economies, in that their rural folk eke out a living from products obtained directly from plant and animals" (Dasgupta & Mäler, Handbook of Development Economics, 1995, p. 2373)

• “…tackling environmental degradation is an integral part of lasting and effective poverty reduction.” (World Bank, DfID, UNDP, EC, 2002)

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Importance of the natural resource base: practice

• Village Sukhomajri, Panchkula distt., Haryana– sustainable development through Chakriya Vikas

Pranali (P.R. Mishra) in the mid-1970s—regeneration & conservation of forests and fodder by and for the community

• Other examples of collective action to regenerate natural resources and its benefits--Ralegaon Siddhi (Maharashtra), Seed and Alwar (Rajasthan)

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Some specific examples• Water• Energy (fuelwood, dung)• Fodder for cattle – direct & through

grazing• Timber (agricultural implements, housing)• Forest products (mahua flowers, tendu

leaves, etc.)• Mitigate income inequalities, provide

nutrition, generate employment

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Examples of environmental goods and services in a primitive economy

• Wild foods (vegetables, animals, fish, insects, mice, birds), wild goods (gum, soap, oils, resins, dyes), wild medicines

• Multiple uses of wood (timber, firewood, agricultural implements, furniture, utensils, musical instruments, hunting implements, rope from bark

• Grass, reeds, rushes, canes and leaves (thatching, mats, baskets, leaf litter—fertilizer)

• Other (pottery clay, termite mounds—fertilizer, fodder, water)

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Poverty and the environment:two-way relationship

• Common wisdom – poverty causes environmental degradation

• Neglected link – environmental degradation causes poverty

PovertyEnvironmental

Degradation

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At the same time….• … lack of understanding of the effect of natural

resource degradation on household incomes…

and

• … a lack of studies that quantify this effect…

implies

• failure to recognize potential of improved natural resource management as a policy tool to alleviate poverty

• do not know who loses (gains) from natural resource degradation (regeneration)

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Public assets vs. private assets

• Environmental goods and services (common-pool natural resources) in effect serve as a public asset for rural poor…

• substitute for private assets (land, livestock, farm capital, human capital, financial wealth) that the rural poor lack

• If so, can natural resource management form the basis of poverty alleviation policies?

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Conceptualising the poverty- environment linkage

• Use of natural resources

• Dependence on natural resources

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Quantifying the linkages• Jodha (1986), 502 households in 21 Indian

villages, dependence on common-pool natural resources decreases with income:– poor households 9-26% of income from CPRs– (relatively) rich households 1-4% of income from

CPRs

• Reddy and Chakravarty (1999), 232 households in 12 Himalayan villages, similarly find dependence on resources decreases from 23% for the poor to 4% for the rich

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Quantifying the linkages (contd.)• Cavendish (2000), 197 households in 29

villages in Zimbabwe, finds much higher rates of dependency with poor households deriving as much as 40% of their incomes from natural resources and the rich deriving about 30%, but use of natural resources increases with income

• On the other hand, Adhikari (2003), 330 households in 8 “forest user groups” in Nepal, finds dependence increases with income, from 14% for the poor to 22% for the rich

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Quantifying the linkages (contd.)

• All four studies also examine the relationship between income and the absolute level of resource use, but find no consistent trend: Jodha finds that use, along with dependence, decreases with income, Reddy and Chakravarty find an initial slight increase followed by a decrease, and Cavendish and Adhikari find an increase throughout

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Research objective: Jhabua study

• Understand how use of and dependence on natural resources varies with household income

• None of the previous studies looks at who wins from regeneration or loses from degradation. We focus on this as well

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Other research objectives(work in progress)

• Estimate marginal contribution of natural resource stocks to household incomes, or their shadow values – measures impact of policy initiatives to increase these stocks

• Effects of natural resource availability on household division of labor (esp. women’s time allocation decisions)

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Target audience• Policy makers – district level (Collector,

Additional Collector, forest officials)

• Policy makers – state-level (rural development department, forest department, Chief Minister’s secretariat)

• Policy makers – federal level (Planning Commission, Ministry of Rural Dev., Ministry of Environment and Forests)

• NGOs – district, state, national (CSE)

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Jhabua• Land distribution – 54% agricultural, 19%

forest, 27% wasteland.• Only 49% of men and 26% of women literate.• Life expectancy 51 years.• HDI 0.356 – lowest of 48 districts in M.P.• Agriculture – main occupation (employs >90%

of work force) – primarily rain-fed.• Agricultural income supplemented with

income from livestock rearing and forest products (fuelwood, tendu leaves, mahua flowers/seeds).

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Research site

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Jhabua

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Jhabua

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Sampling procedure

• Two stage sampling design• First stage -- stratified random

sample of villages (ensure cross-section variablility in natural resource stocks)

• Second stage -- stratified random sample of households (landless, small and other)

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Data collection and quality

• Household-level and village-level data from 60 villages and 535 households for June 2000-May 2001

• Tests for quality and consistency at various levels (visual check by Field Supervisor, internal consistency check during data entry)

• Double entry of all household and village data

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Data entry and validationObjective—to generate a high quality,error free, internally consistent dataset

Step 1 – visual check by field supervisor(skip codes, incomplete/missed

entries)Step 2 – data entry in field (Excel spreadsheets)Step 3 – survey check programStep 4 – check by PIs

Step 5 – field researchers resolve queries

Step 6 – double data entry

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Field Research Team

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Field Research Team

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Field Research Team

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Income categories: Jhabua• Agriculture

• Livestock rearing

• Common pool resource (CPR) collection

• Household enterprise

• Wage employment

• Financial transactions (borrowing, lending)

• Transfers (state, NGOs, relatives, friends)

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Main CPRs collected: Jhabua

• wood for fuel

• wood for construction

• fodder

• mahua flowers

• mahua seeds

• tendu leaves

• dung

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Natural resource dependence, biomass, and total income (whole sample)

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Dependence, Biomass & Total Income (Collecting Households)

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Relationship between Use, Biomass, and Total Income for Whole Sample

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Mainstreaming the environment into poverty alleviation

• Need to go beyond cliches: Gross Nature Product vs. Gross National Product (Approach Paper 10th Five Year Plan, 2001)

• Move outside conceptualising and implementing poverty alleviation and natural resource management in separate boxes

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Conclusions• “green” policies that increase biomass

availability may benefit the non-poor as well as the poor

• Thus, design issues and implementation are important to ensure equitable distribution of benefits

• Need to mainstream natural resource management into poverty alleviation and take a holistic approach (education, employment generation, environmental regeneration)