Chapter IThough urban population is less than 30 per cent of the total, in states like Tamil Nadu and Maharashtraalmost half of the total population lives in urban areas. Urbanisation has been accompanied by its ownpitfalls - it is estimated that a quarter of the population in large cities lives in slums. In a city like Mumbai,a majority of 60 per cent of the population live in slum and slum-like housing. In a recent study, Mahajanet al 11 , have identified ‘the triple constraint’ on urban livelihoods – skills, space and services. The urbanpoor are largely unskilled manual workers, short of living and working/vending space and have verylimited access to financial services as well other civic services such as water, sanitation, electricity andtransportation.5. What are the main constraints on livelihoods?The Sustainable Livelihoods (SL) framework mentioned earlier helps indicate the types of constraints thatcould exist in the livelihood sector. These can be capital constraints: human, natural, financial, physical,and social. Other constraints can be related to the context – demographics, markets, institutions, andpolicy. Each constraint interacts with the others in order to set a livelihood context.5.1 Environment constraints – crowds, cattle and carrying capacityThe eco-systemof the Indiansubcontinentis being usedbeyond capacity.1.1 billionhumans andapproximately4.7 millioncattle all liveoff the 320-million hectareof landmass.Perhaps we need to begin by acknowledging that India has one of the highest densities of population persq km, and certain parts of India, particularly the Indo-Gangetic plain, have four times higher densitythan the national average. In addition to the biotic load caused by Homo sapiens, the eco-system has to putup with a very high cattle load. Thus 1.1 billion humans and approximately 4.7 million cattle 12 (as per1992 figures) all live off the 320-million hectare of landmass, of which no more than three-quarters ishabitable. Thus the eco-system of the Indian subcontinent (including Pakistan, Nepal and Bangladeshat least) is being used beyond capacity.In livelihood terms, this shows up first in terms of the small landholding size. Of the 116 millionoperational holdings in India, over 80 per cent are below two hectares, and in practice fragmentedfurther. The holdings are so small in some areas that let alone a tractor, it is hard to turn around a pairof bullocks. Coupled with this small size are other drawbacks – only about a third of the cultivated areais irrigated, and only 27 per cent of all farmers have access to credit from formal sources, as per NSS59th Round. In irrigated areas, with good credit supply, such as Punjab, the farms suffer from micronutrientdeficiency as the same paddy-wheat crop cycle has been practiced for decades, with only NPKfertilisers. In other areas, such as Vidarbha, farmers have been growing cotton using increasing amountsof pesticide, which meet with more and more pest resistance to a point where the farmer loses hope,and in some cases commits suicide.In vast areas of the heartland of India, farming is rainfed, and the yields unsteady depending on thevagaries of the monsoon and its seasonality. For example, only 10 per cent of Jharkhand’s cultivatedarea is irrigated. Moreover, shrinking grasslands due to overgrazing and dwindling tree cover now fail tostem the rainwater run-off, which earlier used to feed thousands of streams. Agriculture becomes lessand less adequate and reliable as a livelihood in such adverse environmental circumstances.28The same is true of the millions of hectares of forest areas of India, which at one time had dense canopyand tremendous bio-diversity. Today, the tree cover is thin, the number of species much less, and thenumber of people who eke out a living, manifold. The image of the tribal, living off the Mango, Mahua,Tendu, Imli and Sal trees is a romantic one, as even tribals living at the periphery of dense forests get nomore than 15-30 days of collection of non-timber forest produce. When the forest is gone, livelihoodis gone.11Mahajan, Vijay, VR Prasanth, Preeti Sahai and Sathyanarayana, “Urban Livelihoods in India – The Triple Constraint of Skills, Space and <strong>Services</strong>”,BASIX, Hyderabad. 2007.12Source: Department of Agriculture and Cooperation Ministry of Agriculture28
Overview5.2 Manmade constraints – inequitable access to five types of capitalEnvironmental constraints to livelihoods pale into insignificance when we look at the impact of manmadeconstraints. These include disabling policies, infrastructure shortages, and a lack of credit and limitedskills.Perhaps the most notable example of a well-meaning but eventually disabling policy is the 1956 IndustrialPolicy Resolution, which reserved “the commanding heights of the economy” for the public sector, andintroduced licensing of all other industries on the ground of capital shortage. This created a wholegeneration of rent seekers – both in the government and among industrialists, unable to grow and offermore wage employment.In addition, credit has been a severe constraint for both cultivators and non-farm entrepreneurs, as canbe seen from the fact that after nearly 40 years of bank nationalisation, only 27 per cent of cultivators getbank loans, as per the NSS 59th Round, and only 1.3 per cent of net bank credit goes to microenterprises(with plant and machinery worth Rs 5 lakh or less) as per the Reserve Bank of India (RBI).Infrastructure constraints exist in roads, irrigation, electricity, agricultural markets as well as storageand processing facilities for agricultural products. Roads provide access to markets, and are crucial inexpanding production. According to the Tenth Plan document, there were around 100,000 habitationswith a population of more than 500 persons, unconnected by road 3 .With respect to electrification, while only 20 per cent of the inhabited villages remain un-electrified, thenumber of un-electrified rural households is 56.5 per cent – it ranges between 5.5 per cent in HimachalPradesh and 95 per cent in Bihar. Electricity is an essential resource for home-based workers, and is amajor constraint to livelihoods.Irrigation potential has been greatly underutilised and creates a large constraint to agricultural livelihoods.By 1997-98, the 83 million hectare of irrigated area served only about 46.5 percent of total landholdings.At an average of one rural marketplace (haat) per 21 villages, and warehouses that can store only about10 per cent of the total production of fruits and vegetables, marketing and storage infrastructure iswoefully inadequate.One of the biggest constraints to better livelihoods is the lack of skill, and lack of opportunity to getskills training. According to the NSS 62 nd Round, of persons above 15 years of age only 1 per cent inrural areas and 5 per cent in urban areas have had any technical training. Only 7 per cent of rural youthbetween the ages 15-29 have received formal or informal vocational training; the number for urbanyouth is 9 per cent. In overall terms, only 2 per cent has had technical training and only 8 per cent of allworkers in India have had any kind of vocational training. This has significantly reduced their livelihoodoptions and earning potential.Credit hasbeen a severeconstraint forboth cultivatorsand non-farmentrepreneurs,as can be seenfrom the factthat afternearly 40years of banknationalisation,only 27 per centof cultivatorsget bankloans, and only1.3 per centof net bankcredit goes tomicroenterprises.5.3 Path dependency – inability to break away from the fate lineDouglass North, the Nobel laureate in Economics uses the concept of “path dependency” to explainwhy certain national economies are perpetually locked into low equilibriums. This has to do with earlyinstitutional choices made by these societies, often valid in those times, which then determine thesubsequent “rules of the game” and the pattern of institutional evolution, or lack of it. Thus progressbecomes dependent on the path initially taken, unless somewhere along the way, there is a major changedue to colonisation, a revolution, or deep-seated reforms.13Mahajan, Vijay, Sandeep Pasrija and Preeti Sahai, “ Financial and Institutional Arrangements for Rural Infrastructure” India Infrastructure <strong>Report</strong>,2007, Oxford University Press, New Delhi.29
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Mona DikshitMona Dikshit has been a