Bilal Hussain (28) has a Master’s degree in Finance and Control from the Kashmir University and had worked as a financial writer and analyst for a telecom start-up company before joining the Greater Kashmir staff as a writer/sub-editor in 2007. His personal interests are reading, writing, and internet surfing. He can be reached at ibilalhussain@gmail.com.
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Over the past two decades, Jammu and Kashmir has suffered and is still continuously bearing the brunt due to the ongoing conflict, the consequences of which are already on the ground. Economic downturn of the people of Kashmir Valley has been observed over these years.
Overhauling of the macro- and micro-economy of the valley has been done to certain extent by the state. The New Delhi administration and non-governmental organisations too did contribute to Kashmir to some extent. However, what has been seen till date is that the government and the NGOs have worked and stressed on the development of rural areas of the valley. As to the reason why they do so, it apparently seems that politicians are safeguarding their vote banks by utilising development funds to secure their political settings in the area, while NGOs are showcasing rural Kashmir to the world outside to receive sustained funding from their donor agencies.
Recently a news report in a local daily mentioned how the state is mis-utilizing developmental funds to secure their vote banks in rural areas. “Indira Awas Yojana, the biggest housing scheme in the India, is aimed at providing shelter to homeless people living below poverty line in the rural areas. During the period of the previous government, Rs 25,500 in plain areas and Rs 27,500 in hilly areas were given under this scheme to the beneficiaries,” the report mentioned, “Sources said the list of beneficiaries has been prepared with the active influence of the Vigilance and Monitoring Committees, and most of the beneficiaries are the workers of different political parties.”
Till date I haven’t come across a single organisation working for the betterment of the urban poor in the valley. It seems to have somehow has gone out of the INGOs’ and NGOs’ ambit of work. They may have ignored it on the basis of the misconception that the urban space gives a notion of “developed” spaces. When seen on the ground this notion is defied, but to them it seems to need no focus.
In the Srinagar district itself, over these years, there has been a considerable rise in urban poverty. In Srinagar the majority of populace manage their livelihood from chief economic activity – the service sector – which provides far less opportunities these days owing to many reasons, the latest of them being the global economic meltdown. In this situation, there would certainly be a number of people desiring to shift to the primary sector for their economic survival, but they don’t have the resources – particularly land – at their disposal. Despite the difficulties, the urban population is left with no choice but to continue struggling in the declining service sector. Besides, with the increase in the urbanisation, the rural population continues to arrive to the city, occupying the urban space and putting a strain on the already limited resources available. Many experts believe that urban poverty is potentially triggered by this taking over of resources, opportunities and facilities meant for city dwellers by others who had not been taken into account. As a result, there are many parts of the city – particularly in the downtown areas – where every second house suffers due to unemployment, underemployment and lack of resources. Most of these families live jointly to share their income, which on an average would not be over 1 USD per day. Four or five dependants in a family are compelled to survive on this meagre income.
Urban poverty presents unique challenges quite different from those of poverty in rural settings, and the policymakers in the state will have to confront these. The first challenge that needs to be addressed is the lack of data on the conditions of the poor in urban areas. This is particularly relevant, as the urban inequalities are increasing, particularly with respect to such basic needs as food, water and sanitation, and such inequalities can result in serious strains in the society. The urban poor have insufficient income compared to the living costs in urban settings. They often don’t have access to resources through which they can manage their livelihood. Productivity and working conditions in the urban informal economic sector need to be studied closely to locate and address these inequalities. Food security, water and sanitation and informal settlements have to be addressed. Usually, it has been observed, the urban poor lack power and visibility because of the lack of participation from their side. Mainstreaming of human rights-based approach and good urban governance need to be stressed to build this bridge.
There is an existing trend of viewing poverty as a purely rural problem. In the coming years and decades, urban poverty threatens to be become a major challenge for policymakers in India in general, and the J&K region in particular. Urban poverty grows in direct proportion to the rise of urban population. Due to the different nature of urban poverty, the poverty reduction approaches that have been developed for rural conditions will fail to work in urban areas. Any organisation – at the local or national level – aiming for future work in this area requires to form their basis on a good understanding of the nature of urban poverty as well as accurate data that present its dynamics, trends and conditions. This essay provides a broad overview of the characteristics and the extent of urban poverty, using the three dimension of poverty: lack of income, lack of access and lack of power.
Urban poverty is not so much a lack of employment, because almost all urban poor are “working poor”. Their income is higher than that of the rural poor. Neither does the problem arise from an absence of basic services, since such services are highly concentrated in urban areas. But despite having a higher income, the urban poor cannot live a decent life as most of the extra income is spent away on a number of additional (often urban-specific) costs, leaving much less money to spend on basic necessities. Their sources of income are often insecure, and health is affected by poor living and working conditions.
Access to income and employment opportunities is critical for the urban poor. This often forces them to live in areas that are unsuitable for habitation, where environmental conditions are hazardous to health and the threat of eviction is constant. Informal settlements are situated on land along riverbanks, flood-prone areas, landfill sites or places with heavy air pollution. Housing on riverbanks poses particularly serious risks for children.
Besides, according to the International Labour Organisation, 65% of all workers outside agriculture in the J&K region are working in the informal sector. Informal enterprises do not follow regulations; they avoid taxes, minimum wages and social security regulations. They employ workers over long hours and utilise the labour of their relatives and friends. However, this practice reduces labour costs, which consequently decreases the costs of goods and services, making life more affordable for the urban middle and lower-middle classes. Because the formal and the informal sectors of the economy are closely linked, the informal sector also supports the formal sector with low-cost inputs.
In much the same way as the organisations working with poverty, the urban planning authorities tend to formulate plans, policies, laws, regulations and procedures with the urban middle class in mind, leaving the urban poor out of their scope. Policy interventions are required to ensure that the economic growth is broad-based and the benefits are passed on to the poor. Many of the urban poor are already housed and have access to basic infrastructure and services. What will help them most in this respect is support to enable the improvement of their housing and access to basic infrastructure and services at a lower cost, rather than programmes that evict them from their housing and prevent them from gaining access to public services.
Also, a non-negative approach should be taken to informal employment, providing the urban poor with support to develop their economic activities, enhance their productivity and increase their income, instead of policies that obstruct them in developing their informal enterprises. The phenomenon of informal employment is on the rise worldwide. In Indonesia, urban informal employment is almost 50% of the total urban employment. In Pakistan, two out of three urban workers are informally employed. In China, informal employment in the urban economy is estimated to have risen from 57 million (26% of the total) in 1998 to 99 million (38% of the total) in 2003. The informal sector plays a critical role in many urban economies, producing an estimated 47% of non-agriculture GDP in India, 37% in Indonesia and 33% in the Philippines. Without the urban informal sector, income poverty in urban areas would be even more severe.
Both the public and the private sectors may have to draw some lessons from the growth of the informal sector and its ability to meet the needs of the urban poor. Only recently, some formal-sector companies have started to adapt their marketing strategies to serve the needs of low-income customers. Similarly, microfinance institutions are extending the role of the formal banking sector to small-scale informal enterprises. Access to credit, equity and insurance on terms and conditions adapted to the needs of the informal sector could help informal enterprises to develop and graduate.
Through promoting micro- and small business entrepreneurship, it is possible to address the dire need to convert this immense pool of human resources into productive assets in such a manner that they become ultimately wealth creators and job providers instead of mere survivors or job seekers.
The need of the hour is not only to create opportunities for the poor city dwellers but to augment their income; financial assistance through soft and hassle-free loans need to be provided to them.
There is an immediate requirement of setting of a microfinance institution, which would focus on the urban poor and would identify the needy persons who have a positive bent of mind to work for themselves and for the society at large. This in no way should be taken as a step of dividing rural and urban populace, but it should be looked at as a positive framework. If proper and on-time steps are not taken, there is a great possibility that this divide will increase and have serious repercussions in near future. To avoid such a situation the issue of urban poverty needs to be taken seriously.
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