Poverty in Mountain Economy A Case of North-Eastern State-Sikkim Balwant Singh Mehta and Sadeep Tambe1 1.

Background In developing countries high poverty incidence is one of the major challenges. In the country like India, where around 27 per cent of the people live in poverty, the economic and social development of poor is a central issue for policy makers2. However, the major hurdle for eradication of poverty is to identify poor and their characteristics. There are several approaches have been used by development researchers, government agencies and social scientist for the identification of poor. But these methods are general and not area specific. In mountains, people livelihood is vastly different to plains. Therefore, using common approaches for identifying poor at both mountains and plains has always many limitations. In India, the north-eastern part is mainly covered by mountains, where people livelihood largely depends upon agriculture, forestry, animal husbandry, horticulture and tourism. Sikkim, is a landlocked state in the north-eastern region of India. The total geographical area of Sikkim is 7,096 sq km, which constitutes 0.22 per cent of the total geographical area of India. The State is divided into four districtsSouth, North, East and West. Sikkim is the part of the Inner Himalayas Mountain Ranges, the elevation ranging from 300 to 7000 meters above sea level. The entire state is covered with hills and forest; only the southern part of the state (in the lower Himalayas) is populated. The green cover of the State is critical for sustaining livelihoods in agriculture, animal husbandry, and tourism. Forest resources have catered to the requirements of local communities and tourism. The economy of Sikkim is largely dependent on agricultural with principal crops grown here include maize, paddy, millet, wheat and barley. Horticultural products include orange, potatoes, apples and cardamom. Sikkim has the largest area under cardamom production. Tea is also grown in the state. The tourism and handicrafts are also among other industries of economic importance. It is one of the prosperous states of India owing to its political stability and economic growth

According to the 2001 Census of India, total population of Sikkim was around 540 thousands with 89 per cent lives in rural areas. Social group wise distribution shows that about three-

Associate Fellow, Institute for Human Development, New Delhi and Special Secretary, Rural Management and Development Department, Government of Sikkim, Sikkim respectively 2 Planning Commission, Government of India, 2008

fourth of the population belonged to other category and 21 per cent were tribal. Overall sex ratio was 875 female per 1000 male with little higher in rural areas with 880 female per 1000 male. The literacy rate of the state was around 60 percent with 66 per cent of male and 51 per cent of literate female. About 47 per cent of the population was economically active with 57 per cent male and 37 per cent female. Overall majority of the workers were involved in agriculture and related activities (Annexure 1). According to Planning Commission estimate, about 20.1 per cent people in the state lives below the poverty line in 2004-5, which has come down drastically from 41 per cent in 1993-94. Although the states economy broadly depends on the agriculture but its progress remain limited due to difficult topography and other natural barriers. Recently, Sikkim government announced to make the state poverty free mission by 2013. Therefore, identifying the poverty and poor households in the mountain economy like Sikkim will be an uphill task for such mission. In this paper an attempt has been done in this direction by using various approaches to calculate poverty and identify poor. This study will help greatly to policy makers and development agencies for better policy formulation and implementation to eradicate poverty. 2. Objective of the Study The main objectives of the study are following: To measure poverty and identification of the poor. Identify the socio-economic characteristic of the poor. Major policy recommendation for eradication of the poverty. 3. Literature Review There are numerous studies on poverty, inequality and material poverty or well being. In India, mainly for hill regions very few studies have been done in the past. In this section few prominent studies done in the past on poverty in hill economy have been discussed. One major study on poverty especially for north-eastern state Poverty Eradication in North East India: An Approach done by National Institute of Rural Development (NIRD) to identify the factors contributing to poverty. This study emphasized on urgent need of four fold developments: Economic, Human Resource, Institutional and Infrastructural development. International level, The International Centre for Integrated Mountain Development (ICIMOD) has done a series of studies focusing on mountain economy and poverty. These studies explain that generally poor access to education and health, low level of infrastructure,

lack of employment opportunities in mountain areas, the complexity and fragility of mountain conditions, and the marginalisation of mountain communities from the mainstream, coupled with climate stresses and proneness to natural disasters, contribute to the high levels of income and food poverty. As a result, mountain people are increasingly exposed to growing physical, social, and economic risks and vulnerabilities (Papola, 2008). Studies on farming in mountain regions reveals that farmers are faced with a fragile and unstable environment. Their livelihoods therefore depend on the adoption of complex survival strategies involving a variety of enterprises (Yadav 1992, Demaine 1998). Wide variations in micro-climatic conditions and small land parcels that often fall on steep slopes provide limited scope for mechanisation and agricultural specialisation. Extreme poverty and relatively low natural capital have furthermore limited the ability of farmers to absorb risks of crop failure. Mountain farmers use forests and natural resources to gather a host of materials for food, fuel, medicines, construction materials, and other equipment. Livestock provides draught power, meat, and cash income. In order to meet household cash requirements mountain farmers have to resort to non-farm employment, sometimes in distant cities and countries (Yadav 1992). Mountain agriculture is, therefore, much more complex, diverse, and risk-prone than lowland agriculture. Sectoral policies and programmes designed to serve the lowlands, particularly in relation to field crops, have failed to address the diverse needs of mountain farmers that arise from the complex interdependencies between mountain agriculture and mountain livelihood systems. Further, studies shows that the human dimension of development processes in high mountain regions regularly escapes appropriate assessment due to a lack of applicable methods. Comparative data are lacking, and it is difficult to substantiate the position of mountain societies within nation-states (Kreutzmann, 2008). In India, State Human Development Reports have been prepared by many hill regions. These reports are more like evaluation or academic kind, containing information on human development indicators. The reports

highlighted by effective policy intervention and implementation of mountain specific skill development with education will enable the people themselves to avail of the services on offer, either within the region or beyond. States just need to provide opportunities for this to happen, within the boundaries of area fragility and resource conservation (National Human Development Report, 2001).

The Planning Commission, Government of India use National Sample Survey Data for calculating the poverty for North-Eastern State and takes Assam poverty ratio as the representative for all the North-Eastern States including Sikkim. But there is no sound logic behind it (Sarma Atul, 2004). The above brief literature review shows that in India, there is lack of studies on measuring poverty and especially identification of poor for mountain economy. Hence, there is an urgent need to study detail poverty analysis for hill economy. 4. Research Methodology and Framework The poverty related information on mountain regions is very scant, therefore we largely depends upon the primary survey based information. For collecting information both qualitative and quantitative tools have been used. A semi structured interview schedule including major socio-economic characteristics has been canvassed for the collection of quantitative information. For collecting qualitative information, wealth mapping and focus group discussion is conducted with the villagers. Two districts, one highly developed (East) and another backward (West) district of Sikkim have been covered under the study. Majority of people in West district have low literacy, low work participation and highly depend upon agricultural for their livelihood as compared to East district. Further, within the district, one block and one Gram Panchayat in each district have been selected for detailed household census survey. In each Gram Panchayat all the villages have been covered under the study. Thus, in some way it is representing the state with mixed population of backward and developed areas.

Poverty is a multidimensional concept. It encompasses both the prevailing welfare levels and capabilities (IFAD, 2001). Most often it is measured and portrayed in terms of the indicators of current levels of welfare, disregarding the capabilities of the population to sustain and enhance it. This approach to poverty has serious limitations in mountains areas. Level of welfare are also mostly seen in terms of some economic indicators-income and consumption. Non-economic aspects of welfare and poverty are not necessarily ignored but it is assumed that those poor in income and consumption terms are poor in other aspects as well, or those able to meet some objectively determined minimum level of consumption expenditure are also able to enjoy other social and political aspects of a decent living. These assumptions are

not always valid. Improved income and consumption may be accompanied by higher dependency and lower freedom while a great sense of empowerment and mobility could be had even at low income levels (Jodha, 1988). Yet, economic indicators of poverty, specifically private consumption or income below an objective poverty line, have continued to be the most commonly used measures for analysis and poverty. Another, simplest application of the summary economic statistic in this respect has been the dollar poverty concept used by the World Bank to consider all those as poor who have less than 1 or 1.25 US dollar per day expenditure in constant purchasing power parity. Apart from these two approaches, recent Tendulkar Committee poverty line has also been used.

These approaches only highlight proportion of people below the poverty line but do not reveal much about their characteristics. There have been attempt to both sharpen the concept of poverty by going beyond a single income or expenditure indicators or headcount ratio to assess the poverty gap and severity of poverty and to include socio-political dimensions by the multidimensional index of poverty such as the human development index (UNDP, 2002) for different countries and regions or by bringing in aspects like vulnerability, deprivation, lack of freedom and empowerment and exclusion in the analysis of poverty (Heninger, 1999). Therefore, income quintile concept (dividing households or population on the basis of per capita income) has been further used to identify the characteristics of poor people. The ratio method is just an extension of quintile approach, as how far is the richest from the poor or poorest. It measures the distance or gap of the lowest quintile (poorest) over the highest quintile (wealthiest) at a particular place. Lastly, qualitative approach of wealth ranking or mapping has been done to identify the characteristics of the poorest, poor and others in detail according to the villagers. 5. Findings of the Study The result shows that 502 households with a population of 2333 have been covered under the survey. Kaluk block (857 persons) in the East district has substantially higher population as compared to Ragoh (1476 persons) block of West district. Nazar Bartok (799 persons) and Middle Lingtam (270 persons) village has the highest and the lowest population respectively.

Table 1: The population of and household of district

District/ Block/Village Lower Lingtam Middle Lingtam Upper Lingtam West (Ragoh) Nazar Bartok Yangsum East (Kaluk) Total HH N 67 62 74 203 164 135 299 502 % 13.35 12.35 14.74 40.44 32.67 26.89 59.56 100.00 Population N % 12.34 288 11.57 270 12.82 299 857 36.73 799 34.25 677 29.02 1476 63.27 2333 100.00

The social group wise distribution shows that around 42 per cent of the population belongs to schedule tribe, followed by other backward class (34.46 per cent), Schedule caste (7.97 per cent) and other caste (15.54 per cent). Further, religion wise distribution indicates majority of the population belong to Buddhist (48.4 per cent) followed by Hindus (39.8 per cent) and Christian (10.8 per cent) and others.

Social Group Wise Distribution Religion Wise Distribution

General
16% Others 1% Hinduism 40%

ST
42%

OBC
34%

Buddhism 48%

SC
8%

Christianity
11%

5.1. Poverty Analysis Overall poverty has been calculated by three major approaches by using income approach, i.e. monthly per capital income approach (MPCI). Accordingly, using Planning Commission and Tendulkar Committee poverty line, 24.1 per cent and 47.1 per cent people are below poverty line respectively. The International 1.25$ (dollar) approach, 29.88 per cent people are living below poverty line.

Table 4: Measuring Poverty through various methods

Planning Commission N % 121 24.1 Tendulkar Committee N % 236 47.01 World Bank N 150 % 29.88

Poverty

However, overall poverty, only indicate the proportion of people living below poverty line. It does not reveal much about the characteristics of poor people. In the subsequent section quintile approach has been used to study this phenomenon in detail.

5.1.1. Identifying Poor There are two approaches as discussed above have used to identify poor and their characteristics. In this sub-section, quantitative approach of income quintile has been used to further identify the poor people. 5.1.1a: Quantitative Approach The educational level clearly shows that educational level of the poorest household is lower than others. Household size of poorest household is almost double of wealthy or top quintile households. The result further corroborated by dependency ratio, as dependent among poor households are substantially higher as compared to others. Further, land holding size also reveal, poorest households have lowest landholding, although there is no such difference found among other income classes. Broadly, census results show that poor households have lower literacy, higher family size and dependency. However, land categories have significant importance among poorest households but productive land play major role among other income classes, not the average land size only. Per capita income of the poorest households is seven time lower than wealthiest indicate the poverty gap or distance. Table 6: Major Household Indicator by quintile wise
Bottom 20% 74.5 5.6 941 96.1 0.74 350 Q2 77.4 5.1 1012 74.6 1.67 563 Q3 78.1 5.4 894 62.5 1.01 765 Q4 78.2 4.2 1103 52.7 0.44 1018 Top 20% 81.1 2.9 849 40.0 1.22 2431 Total 77.6 4.6 961 66.5 1.02

Literacy Household Size Sex Ratio Dependency Ratio Land Holding Average MPCI

The social group wise distribution indicates schedule tribes are well off compared to other social groups. In hills, especially in Sikkim social groups or caste does not play any role in the poverty of the households. Table 7: Social group wise distribution
Social Group General OBC Schedule Caste Schedule Tribe Total Bottom 20% 21.8 21.4 20.0 18.0 19.9 Q2 25.6 17.9 22.5 19.4 20.1 Q1+Q2 [poor] 47.4 39.3 42.5 37.4 40.0 Q3 14.1 22.5 20.0 19.9 19.9 Q4 20.5 19.1 32.5 18.5 20.1 Top 20% 17.9 19.1 5.0 24.2 19.9 Q4+Q5 [wealthy] 38.5 38.2 37.5 42.7 40.0 Total 15.5 34.5 8.0 42.0 100.0

Further, educational level data reveal that majority of households members of poor households are illiterate and below secondary level qualification. The people belong to wealthiest category have higher number of secondary and above qualified people. This analysis clearly indicates educational level or human capital in the households play an important role in coming out of poverty. Table 8: Education level by quintile wise
Education Level No education Below secondary Secondary and above Total Bottom 20% 26.00 24.65 8.82 22.91 Q2 21.99 23.04 15.81 21.87 Q1+Q2 [poor] 47.99 47.69 24.63 44.78 Q3 22.83 22.89 27.21 23.43 Q4 18.18 18.71 19.85 18.74 Top 20% 10.99 10.71 28.31 13.05 Q4+Q5 [wealthy] 29.18 29.42 48.16 31.78 Total 22.44 64.66 12.90 100.00

The distribution by main occupation reveal that majority of poor households are involved in agriculture and non-agriculture wage employment followed by small and marginal land holders involved in self agriculture (cultivator, plantation and animal husbandry etc) activities. Whereas, majority of wealthy households are big land holders involved in self agriculture (large landholders, plantation, animal husbandry) and salaried employment. Other categories like pensioner, Remittances, interest and rental income belong to wealthiest categories in the village.

Table 9: Main occupation by quintile groups

Main Occupation Self employment in agriculture Self employment in non-agriculture Wage employment in agriculture Wage employment in non- agriculture Salaried Others Total Q1 19.2 14.7 37.1 21.8 2.7 10.0 19.9 Q2 21.2 26.5 19.1 25.6 9.3 10.0 20.1 Q1+2 [poor] 40.4 41.2 56.2 47.4 12.0 20.0 40.0 Q3 19.9 14.7 23.6 21.8 16.0 15.0 19.9 Q4 21.2 29.4 10.1 22.6 22.7 15.0 20.1 Q5 18.5 14.7 10.1 8.3 49.3 50.0 19.9 Q4+5 [wealthy] 39.7 44.1 20.2 30.8 72.0 65.0 40.0 Total 30.1 6.8 17.7 26.5 14.9 4.0 100.0

5.1.1b: Qualitative Approach The qualitative tools, wealth mapping and focus group discussion have been conducted in Lower Lingtam village to get perception of people on poverty in the village. The villagers have been facilitated though group discussion on identifying the wealth class of people in the village. As per the focus group discussion with the villagers, four classes have been emerged, poorest, poor, medium and wealthiest families. Out of total 48 households in the village, 16 households (36 per cent) are classified as well-off; 10 households (22 per cent) as medium; 12 (27 per cent) households as poor and 7 households (16 per cent) are the poorest. Focus Group Discussion of Wealth Classes in Village Lower Lingtam

Table 10: Criteria of wealth mapping or ranking according to focus group discussion
Criteria Housing Income source Poorest Kuccha or Semi-Pucca house Casual labour Poor Pucca House Casual labour Medium Pucca House Salaried government employee (temporary or contractual), small contractor (4th grade) 6 to 10 acres Taxi vehicle owner Illness of household head 7HHs (16%) Well-Off Pucca House Regular Government Employee, Big contractor (1-3 grade) 10 acres or more Private 4 wheel motor vehicle -

Land ownership Assets Vulnerability

Less than half acre Single women headed Household 12HHs (27%)

to 6 acres

No. of Household

10HHs (22%)

16 HHs (36%)

The villagers indicated that poorest and poor categories in the village are those having no land (landless) or marginal lands, Kachha Houses/Semi Pucca houses, involved in casual labour activities, high dependency ratio and single women headed households. However, medium class category are mainly having pucca houses, land between 6 to 10 acres, taxi or vehicle owner (four wheeler), shop owner and regular salaried. Finally, wealthy people in the village are having regular government employment, land holding more than 10 acres, pucca houses, private motor vehicle and pensioner or retired government service holders. These results further explain the quantitative finding of the study and more specifically indicated the category of poor people. The poor households of hill economy are involved in casual labour activities, landless, residing in Kachha houses and female headed in the Sikkim. 6. Conclusion and Policy Recommendation Finally, the results of both quantitative and qualitative survey indicate that identification of poor has two major dimensions. One set of poor people those who have productive and nonproductive assets, other who have better human capital base like skills or educational level. The above analysis shows that poor people are mainly involved in unskilled casual labour. The identification of human capital will help policy makers to provide income generating activities or employment (like in hotel and tourism industry like driving, hotel jobs and guide etc.) to skilled poor by imparting training. One the other hand poor people those who have non-productive land due to irrigation problem, thus government can provide them irrigation facilities to make their land productive.

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Another, set of people those who are unskilled can be not be provided direct income but through the development of local infrastructure like improvement of road, transport and electricity, local employment opportunities in non-farm sectors will be available. In this direction MGNAREGA is already generating lot of employment opportunities for local unskilled labour but due to large family size 100 days of employment is not sufficient for them.

To sum up the human capital, productive assets and infrastructure holds key role in coming out of poverty. Therefore, following are some of the key issues need to be address to eradicate poverty in rural areas: Providing facilities for skills and higher education to rural poor people Enhancing, rural non-farm employment opportunities by providing better

infrastructure like road, transport, electricity and communication facilities Encouraging rural youth towards mountain specific non-farm activities like animal rearing, horticulture and handicraft etc through providing training and credit facilities So, there is an urgent need to identify poor people across their activity level, assets and human capital base. This profile will help policy makers in formulation of better and target specific policy for poverty eradication. If these policies are properly designed and address by government, poverty free State is possible in long run. Bibliography Banskota, M. (1997) Mountain Accessibility and Rural Roads: Innovations and Experiences from Nepal. In Issues in Mountain Development 97/5. Kathmandu: ICIMOD Banskota, M. (2000) The Hindu Kush-Himalayas: Searching for Viable Socioeconomic and Environmental Options. In Banskota, M.; Papola, T.S.; Richter, J. (eds), Growth, Poverty Alleviation, and Sustainable Bhatia, A. (2000) Participatory Forest Management (PFM): Rediscovery of a Promising Mechanism for Poverty Alleviation in the Mountain Areas of South Asia. In Banskota, M.; Papola, T.S.; Richter, J. (eds). Demaine, H (1998) A Livelihood Systems Approach to the Sustainable Development of Upland Farming Systems. In Upland Farming Systems in the Lao PDR: Problems and Opportunities for Livestock, Chapman, EC; Bouahom, B; Hansen, PK (eds). ACIAR Proceedings No. 87. Canberra: Australian Centre for International Agricultural Research Human Development Report, 2001, Government of Sikkim, Sikkim, 2008

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Jodha N S (1998), Poverty Debate in India: A Minority View in Economic and Political Weekly, Special Article, 23, 1998 Quick Estimate of Poverty, 2004-05 (2008), Planning Commission Government of India, 2008 Papola, T.S. (1996) Integrated Planning for Environment and Economic Development in Mountain Areas. Discussion Paper Series No MEI 96/2. Kathmandu: ICIMOD Papola, T.S. (2002) Poverty in Mountain Areas of the Hindu Kush- Himalayas: Some Basic Issues in Measurement, Diagnosis, and Alleviation, Talking Point 2/02, Kathmandu: ICIMOD Poverty Eradication/Alleviation in North East India: An approach, National Institute of Rural Development (NIRD), North Eastern Regional Centre, Guwahati, Assam,2008 Prakash, S. (1997) Poverty and Environment Linkages in Mountains and Uplands: Reflections on the Poverty Thesis. CREED Working paper Series No. 12. London: International Institute of Environment and Development

Yadav, Y (1992) Farming-ForestryLivestock Linkages: A Component of Mountain Farmers Strategies (Nepal). In Sustainable Mountain Agriculture: Perspectives and Issues, Vol. 1, pp. 143161, Jodha, NS; Banskota, M and Partap, T (eds). New Delhi: Oxford and IBH Publishing Co. Pvt. Ltd
Annexure 1: Demographic Indicator, Sikkim and East & West District Sikkim Total 540,851 875 5.0 20.6 74.4 58.9 65.5 51.2 48.6 57.4 38.6 47.5 4.3 1.5 46.7 100.0 East Total 245,040 844 5.8 18.5 75.7 65.1 71.4 57.7 47.6 58.0 35.2 27.4 4.5 1.5 66.6 100.0 West Total 123,256 929 4.7 19.3 76.0 49.2 56.1 41.7 43.2 52.2 33.6 67.3 5.4 2.1 25.2 100.0

Population Sex Ratio Social Group

N Percentage in Rural SC ST Others Persons Male Female Persons Male Female Cultivator Agriculture Labour Household Activities Others

Literacy

WPR

Main Occupation

Total

Rural 480,981 88.93 880 5.0 21.2 73.8 56.8 63.8 48.9 49.7 57.7 40.6 53.1 4.7 1.5 40.7 100.0

Rural 192,188 78.43 845 6.0 19.1 75.0 62.3 69.2 54.1 49.6 58.7 38.8 34.7 5.7 1.7 57.9 100.0

Rural 121,432 98.52 931 4.6 19.5 75.9 48.9 55.8 41.5 43.3 52.0 33.8 68.4 5.5 2.0 24.1 100.0

Source: Census of India, 2001

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