Some time ago I studied some households living in multi-dimensional poverty conditions in various states. I spent a considerable amount of time with all the members of the families, and accompanied working members to their places of work. I tried to understand their desperate livelihood strategies, their external environment, their needs for financial services, and their access to social protection. I am sharing some selected stories here.
Third of such stories relates to the household of Meena Devi, 47, who lives with her husband Mulchand, 50, and seven children. Sons are 26, 13 and 10 years old, while daughters are of 27, 20, 18 and 14 years. Only the eldest daughter is married. However, she remains sick and has been left by her in-laws at Meena’s place. Meena belongs to Katheriya, one of the Scheduled Castes.
Human capital development
As Meena was born and brought up at a town, Kanpur, she has studied until eighth standard and is the one of the most educated women in the village. In fact, none of the village women of her age and above is literate. She wants to educate her children properly but is unable to do that for want of money. Two younger sons and the youngest daughter currently go to the government school in the neighboring village. The villagers are not happy with the quality of education at the school and if they could afford, they would like to send their children to the private school located about 3.5 km from the village. Her daughter, currently in eighth standard could not recite multiplication table beyond five and could not read her Hindi textbook properly. None of her other children has studied beyond eighth standard. Nobody in her next generation has developed or appears to be developing their human capital sufficiently to rise beyond poverty despite the fact that she is one of the most educated women in the village.
Dwelling and assets
Meena’s family lives in a ramshackled one-room mud house. They have very basic utensils, mostly made of aluminium as they are the cheapest. They cook on a clay chulha (stove) with firewood collected by the children during the day. The house does not have an electricity connection or a toilet. They have four wooden cots in the name of furniture. Her husband owns a bicycle which he uses for commuting to his workplace.
Her father-in-law owns five bighas of ancestral land. He has five sons including Meena’s husband. They do not own any means to till the land and have to hire a tractor for the purpose. Hiring a tractor costs INR 300 a bigha. If they have money, they cultivate the land, otherwise it remains barren. Credit is not easily available and that is why the entire patch of land was left barren during Rabi harvesting season immediately preceding my visit. Moreover, productivity of the land has gone down over the years due to indiscriminate use of high-yielding variety of seeds, irrigation, chemical fertilizers and pesticides in the area. The land now needs more fertilizers and water to maintain its productivity. There is never enough money available at the household level to apply fertilizers to the field even when they are able to manage the money for tilling and seeds. Whenever there is yield from the fields, it is distributed among all his sons equally.
Her family used to have a cow but it died about one and a half years back due to diarrhea. She was also keeping goats and had two goats and a he-goat. They all died about six months back again due to diarrhea. They spent about INR 300 in their treatment but they could not be saved. She has now stopped keeping livestock.
Her husband works in a gas plant at Panaki, about 15 km from the village. He was hired through a contractor and gets INR 80 per day for week days. He is not paid for weekly offs and has no security on the job. He is not covered under any labor regulations and represents the massively growing tribe of informalized workers in the formal sector of economy. He commutes to his workplace on his bicycle and has developed various ailments including swelling in his testicles. The doctors are suggesting for an operation but she does not want him to be operated at a government hospital. She and the other villagers feel that the patients are not cared for in the government hospitals. She does not know the expenditure involved with such operations at a private hospital but estimates it to be somewhere between INR 10,000 and INR 15,000. In spite of being hard-pressed for money, people do not want to take risk with their health for obvious reasons, and prefer private hospitals and the doctors over the government ones. They feel that if they have money or connections, they will be treated well at government hospitals. Private doctors behave much better with them and are more responsive to their queries and concerns. It evokes a feeling of trust among them and they think that they are treated better at private facilities. Most respondents’ initial remarks on the issue always centered on them not being cared well in government hospitals and not on not being treated well. Not being treated well always comes during detailed discussions.
Meena is however scared for him as he is very weak and may not be able to cope well with the operation. Arranging for that kind of money is a major issue as they do not have any access to the cheap credit. Moreover, after the operation, he will not be able to ride the bicycle for at least six months, according to the doctors. That would effectively cost him his job and that the family can hardly afford, especially when they need money in lump sums to get their children married.
Her elder son also goes to nearby towns of Panaki, Kalyanpur and Kanpur in search of work, as there is no employment opportunity in or around the village, and agricultural land is also not available on sharecropping. Meena is concerned for him as she feels that he is very naive and gets cheated while receiving his wages. He is also unable to negotiate for higher wages. He never gets more than 10 to 12 days of work and never earns more than INR 1,000 a month. Her other sons and daughters also work as agricultural laborers during harvesting season that gives them food grains to last two to three months every year. The younger ones collect 70 to 80 kg of potatoes from different fields. Traditionally, after harvesting the potatoes, the landowners allow others to come to their fields and take away the leftovers.
Meena’s parental house is at Kanpur and she stayed there before her marriage. Her father passed away and her brothers left her mother alone. She got her hand fractured and Meena had to stay with her to look after her. As they needed money, Meena started to look for some work based on the basic skills of midwifery and massaging the new mothers and their children that she had acquired as part of the customs of her caste. As she continues to get some work she is staying with her mother at Kanpur. She is living at Kanpur since October 2008 and normally gets work in the neighborhood, but sometimes needs to go to faraway places also. This way she earns about INR 1,000 to 1,500 per month. Her children and her husband continue to live at the village. She comes to the village for about two-three days in each month to meet her immediate family.
Food security and vulnerability
She has a below poverty line (BPL) ration card entitling her the public distribution system (PDS) food grains (wheat and rice) to meet the requirement of her household for about fifteen days through a payment of INR 205. For the remaining days, they buy it from the market whenever they have money. However, it is never bought at one go due to other necessary expenses on bathing and washing soaps, oil, spices etc. staking their claims on the household income. Food normally consists of potato curry with either rice or chapattis. They sometimes cook green vegetables, when Meena comes back from Kanpur with some money. Lentils, they feel, have become costly and are cooked very rarely, while it invariably used to be part of traditional Indian diet of the poor not very long ago. She had last cooked lentils about one and a half months preceding her first interview and had not cooked non-vegetarian food for more than a year. There are at least seven to ten days in a month for six to seven months in a year when they do not have anything to eat with chapattis and eat chapattis with salt. Before she shifted to Kanpur, there were times when she did not have any food at home at all and had to sleep hungry for three to four days at a stretch. There has been no episode of hunger for last one year. The diet is however chronically protein deficient and must be very detrimental to the health of growing children. They never had milk to drink; only milk they have is with tea. They purchase 250 ml milk for INR 5 every day to make tea for entire household. Ghee (purified butter) or butter is out of question.
Clothes for the children are made once in two years in such a way that half of them get it in one year during Diwali and the other half during next Diwali (October/November). Her husband also gets his clothes once in two-three years. She has never purchased a saree after marriage and manages with the sarees she gets during social functions at her household or her parental household. She had got six sarees during her daughter’s marriage.
They have to buy food grains, vegetables, salt, spices, sugar, tea leaves, cooking oil, soaps on a regular basis. The quantity of purchase depends on the availability of money. She and her husband chew tobacco and that also entails expenditure.
Financial transactions: Significant events and income shocks
One of her younger daughters fell sick about ten years back and they had to spend about INR 3,000 on her treatment. They borrowed money from her uncle without interest. That amount has since been repaid. They had to incur major expenditure three years later for the marriage of her eldest daughter that cost them about INR 25,000. As they were unable to give dowry and gave only five utensils as symbolic dowry, they could not search for an employed boy. They still needed to spend towards various customs and the feast for the villagers. She borrowed INR 20,000, out of which INR 5,000 were borrowed at the rate of 120% interest per annum, INR 7,000 at 60% per annum, and remaining 5,000 were borrowed from her SHG at 24% per annum. She could manage to borrow INR 3,000 without interest. She is repaying the interest bearing loans first but has not been able to repay it totally. An amount of INR 10,000 of the marriage loan is still outstanding.
Her daughter is however not treated well at her in-laws’ place. According to her, whenever she goes there, she comes back ill and Meena’s family has to spend money on her treatment. She has got a five year-old son. When she was pregnant, she became very sick and was sent to Meena’s house. Meena had to spend INR 2,000 in her treatment, out of which INR 500 were provided by Meena’s brother. Now she is pregnant again and has again been sent to Meena’s place. She has now developed asthma and a valve of her heart has got shrunk. She is admitted in a private hospital at Kanpur and an amount of INR 7,000 is already spent on her, including an amount of INR 2,500 that Meena had saved for the marriage of her second daughter. Remaining amount she borrowed at Kanpur on the goodwill of her mother as she has already exhausted her channels of informal credit.
She does not know how she will manage the money to marry off her other children, some of whom are of marriageable age and others are fast approaching that age.
Meena’s household requires money to meet their regular consumption needs, provide for the contingencies- particularly those related to health, build some productive assets as the household currently does not own any productive asset other than the small patch of land that it shares with other four households, and for the marriage of their six children. Moreover, they live in a house that barely provides them with shelter and is dangerous as it may collapse during monsoons. They therefore further require funds to reconstruct their house. Some of the required funds they can generate by saving regularly over a period of time as the household has at least three sources of cash inflow in addition to casual agricultural work by children. They thus require a savings mechanism that is not only reliable but also has provisions for smaller but frequent transactions. Moreover, it should not impinge on their working hours as that would amount to reduction of their incomes. Some needs, especially those related to the life-cycle events however cannot be met by savings alone. They therefore need reasonably priced credit to avoid chronic indebtedness. In addition, they require frequent access to smaller credit for their agricultural investments, to meet their emergency medical expenses, and smoothen their consumption during the periods of lean incomes.
Expenses on health related issues are major constraints on their finances. A part of it, especially that related to major expenses requiring hospitalization may be better managed with provision of reliable and broad-spectrum health insurance. Meena’s husband could very well get his testicles operated without spending much from the household kitty, if the household was covered under health insurance. It would have also ensured that he is operated at a competent hospital rather than at any hospital in order to save some money. Moreover, the household could have avoided much of her daughter’s hospital expenses if she was covered under health insurance.
It is also essential for them to be covered under insurance provisions for whatever productive assets they happen to own. Their cow would have fetched INR 10,000-12,000 before it died. Its death reduced the value of household assets by such a big amount at one stroke. Moreover, the household lost a productive asset as sale of its milk was contributing to the household income. Similarly death of goats further impoverished the household.
As the earning members travel far for their work and are also engaged in employments not providing them with any security they need to be insured against accidents and death.
Access to financial services and microfinance
An NGO, Shramik Bharti, organized a self help group (SHG) in the neighboring village, Dhool, and Meena along with two other women of Barakheda joined it. The SHG required her to deposit INR 20 per month. The SHG allowed to her to borrow on two occasions; INR 1,000 to provide treatment to the youngest son and the goats, and INR 5,000 for her daughter’s wedding. Both loans carried a rate of interest of 24% per annum. She continued with the SHG for about two years. After her daughter’s wedding, she was in a bad financial shape and hence could not repay her loan timely or make monthly deposits to the SHG and had to leave the group. She has however totally repaid her SHG loan. Leaders of the SHG were two Brahmin women from Dhool. She was not aware of the details of her SHG or the NGO. She was also ignorant of what was happening to her SHG savings. She however feels that SHGs are beneficial for the people as they provide an access to cheaper credit to people like her. On deeper probe, she stated that she would have been happier with better savings products and more incidents of loans with flexible repayment schedules. She also felt insulted within the SHG when she failed timely repay her loan installments. Currently she does not have any bank account or any mechanism to save her money.
Another SHG was initiated under the village self employment scheme (SGSY) at Barakheda by one Deepu Dwivedi (again a Brahmin from a neighbouring village) in 2005, consisting of one woman each from twenty households in the village, including Meena. They deposited INR 20 per month with Deepu for eleven months but started distrusting Deepu when they did not get their bank passbook. They all decided to stop their savings and asked Deepu to refund their money. Some women were able to extract a part of their money from him but seven women including Meena could not get back any amount as her husband is considered to be very docile. This incident has made the villagers skeptical and may not trust any such initiative easily in future. In addition, they were deprived of subsidized credit available under SGSY.
Agents of Life Insurance Corporation (LIC) are very active in the area, and being local they are able to convince the people to purchase life insurance policies of LIC. Moolchand, Meena’s husband, had purchased an LIC policy about ten years back when he was working at another plant. He continued to pay the insurance premia for two years, but then his contractor started troubling him and his payment became irregular. As a result, he could not deposit the subsequent premia and lost his premium amount as such policies have a lock-in period of three years. Any discontinuance of a policy before three years does not entitle the policyholder to any refund. Moreover, he was also deprived of his insurance cover.
For cattle insurance the villagers thought that the provision of such insurance is only for the cattle, which are bought on government loan or under some subsidy scheme of the government.
Social protection measures available to the household
Meena’s household has BPL ration card entitling her 20 kg of wheat, 15 kg of rice and two kg of sugar on payment of INR 205 per month, which is sufficient for about 15 days consumption of the household. However she says that in spite of the provision of monthly distribution of the food grains and sugar, the PDS shopkeeper does not distribute it every month and in collusion with Gram Pradhan (elected head of the village) sells it in black market. They get their quota of food once in two months. Her ration card though bears the entries of distribution of food grains every month. She alleges that at the time of next distribution he makes entries of the previous month and as they desperately need whatever amount of subsidized food they can get. This was independently corroborated in almost all the interviews in the village, but there was no consensus for how many months in a year the shopkeeper black markets the subsidized provisions. The shopkeeper however denied these allegations
Her household is also supported to construct a latrine under total sanitation campaign and they were given construction material worth INR 1,500. It was however not enough to construct a roof and provide doors to the structure and hence is not usable. Needless to say, they were all falling apart because of disuse. As material was not enough, the structure also has only one brick deep foundation. The soak pit is also very small with a depth of one foot. With such small soak pits, the latrines may not be of much use even after their full construction. According to her, she would have preferred completing the construction and using it if the amount of shortfall was available to her as cheap credit.
During my visit an inner street was being laid in the village under national rural employment guarantee program (MGNREGA) and her son was engaged to work as a laborer. She was happy that he was getting work in the village itself and did not have to go out of the village. No woman was however employed for the work.
Additional financial needs generated by social protection programmes
In spite of the PDS shopkeeper’s allegedly dishonest ways, she acknowledges the role subsidized food towards food security of her household. This however creates a demand of INR 205 on the day of distribution. Sometimes when they do not have that amount and cannot arrange for it, they have to forego their entitlement of the subsidized food. This used to happen very often when she was not working at Kanpur. She feels that she would be much better off if she has an access to smaller loans for shorter durations. . This way she would also be in a position to complete the construction of latrine that may reduce her medical bills in addition to huge inconvenience of going out to defecate in the open. Such loans would enable her to utilize the subsidies available to her without burdening her much as the loans would be small and for shorter durations. That is precisely the reason that she cannot access such loans through informal channels as interest income against such loans would be small and unremunerative for the lenders.
Leveraging on their social capital to meet financial needs
Meena strongly feels that the extended family-based social protection systems have considerably weakened over the years. The extended family helps only when a household has capability of earning money. She says if she goes to ask for even one kg of flour, she has to listen to the other person’s taunts.
Their social capital networks however are useful in meeting the expenses especially on marriages. Everybody attending the marriage is required to contribute a small sum, sometimes as little as INR five, while bigger amount is expected from near relatives. Such contribution builds up to be a substantial amount as 200-300 people normally attend a marriage.
 As a part of ensuring clothing security to women, there is a custom, called bhaat, according to which their brother would get a saree for them at social functions, especially during marriages either at their in-laws’ place or at their parental household.
 As other loans through informal sources carried higher rates of interest, she chose to repay them first.