Economic Crisis and Rural Children in North-East India: A Study of Impact, Coping Strategies and Ongoing Responses

Abstract

Even though full effects of global financial crisis are yet to unfold at macro level in India, an attempt has been made to examine the impact of economic crisis on children of minority community at micro level, and to explore likely situation to evolve and ongoing responses and recommendations to mitigate sufferings and improve livelihood options. The study is based on primary data and information collected from 625 households confined to 25 villages of district Mamit of Mizoram State in north-east India. Before crisis, in 88 percent of poor households, at least one person per family had migrated as survival strategies. With onset of crisis, these households have affected adversely by fall in remittances. They are also affected by second-run effects on informal employment and depressed local economy. The deterioration of households’ economic situation is translating into poorer diet and decreased expenditure on children’s health and education, more poverty and debt, and engagement into low-earning, informal income earning activities. The main coping mechanisms adapted are reduced quality and quantity of food consumed, withdrawal of children from school and pushing them in labour, curtailing health expenditure, selling livestock and domestic assets including land and gold and raising credit for livelihood sustenance. In Mizoram, specific interventions to address effects of economic crisis, price rise and growing food crisis are not clearly spelled out yet. However, safety net measures taken by Government of India could be usefully expanded in Mizoram in response to high food and fuel prices too. The “inclusive” Budget 2010-11 of Government of India does not include children, who are over 42 per cent of population. Budget has allotted only 4.63 per cent to children. Although government has promised to soon bring in Food Security Bill, to ensure that poorest families are provided with 25 kg of wheat or rice every month at Rs 3 per kg, budget contains several measures that will actually fan inflation. Budget for Children must be looked within the framework of overall economic scenario. Budget has no concrete measure to counter seriously high food inflation, at 20 percent, with severe implications for nutrition of small children and new and would-be mothers. How then will we tackle growing malnutrition and hunger that children face? More importantly, out of every rupee spent in budget, 29 per cent is coming from borrowing even as 19 per cent is being spent on interest payment. Thus, even as growth has shrunk, fiscal deficit, or total new borrowing of government has dipped only a little, from 6.8 per cent of GDP in 2009-10 to 5.5 per cent in 2010-11. The high debt, described by economists as “a generational burden,” remains on India’s children who will keep paying cumulative interest burden and bear the price pressure. Interventions in response to slowdown should not only mitigate immediate effects on children in poor households but also continue to tackle basic causes of poverty and food insecurity, including improvement of services (health, water, sanitation, and education), infrastructures, agricultural productivity and access to credit.