This chapter deals with one of the most difficult challenges faced by independent India-poverty.
Poverty means hunger and lack of shelter. It also is a situation in which parents are not able to send their children to school or a situation where sick people cannot afford treatment. Poverty also means lack of clean water and sanitation facilities. It also means lack of a regular job at a minimum decent level. Above all it means living with a sense of helplessness. Poor people are in a situation in which they are ill-treated at almost every place, in farms, factories, government offices, hospitals, railway stations etc.
HOW POVERTY IS DEFINED?
Since poverty has many facets, social scientists look at it through a variety of indicators.
Usually the indicators used relate to the levels of income and consumption. But now poverty is looked through other social indicators like illiteracy level, lack of general resistance due to malnutrition, lack of access to healthcare, lack of job opportunities, lack of access to safe drinking water, sanitation etc. Analysis of poverty based on social exclusion and vulnerability is now becoming very common.
SOCIAL EXCLUSION
According to this concept, poverty must be seen in terms of the poor having to live only in a poor surrounding with other poor people, excluded from enjoying social equality of better-off people in better surroundings. Social exclusion can be both a cause as well as a consequence of poverty in the usual sense. Broadly, it is a process through which individuals or groups are excluded from facilities, benefits and opportunities that others (their “betters”) enjoy. A typical example is the working of the caste system in India in which people belonging to certain castes are excluded from equal opportunities. Social exclusion thus may lead to, but can cause more damage than, having a very low income.
POVERTY LINE
At the centre of the discussion on poverty is usually the concept of the “poverty line”. A common method used to measure poverty is based on the income or consumption levels. A person is considered poor if his or her income or consumption level falls below a given
“minimum level” necessary to fulfill basic needs. What is necessary to satisfy basic needs is different at different times and in different countries. Therefore, poverty line may vary with time and place. The present formula for estimating the poverty line is based on the desired calorie requirement. Food items such as cereals, pulses, vegetables, milk, oil, sugar etc.
together provide these needed calories. The calorie needs vary depending on age, sex and the type of work that a person does. The accepted average calorie requirement in India is 2400 calories per person per day in rural areas and 2100 calories per person per day in urban areas.
Since people living in rural areas engage themselves in more physical work, calorie
requirements in rural areas are considered to be higher than urban areas. The monetary expenditure per capita needed for buying these calorie requirements in terms of food grains etc. is revised periodically taking into consideration the rise in prices. On the basis of these calculations, for the year 2000, the poverty line for a person was fixed at Rs 328 per month for the rural areas and Rs 454 for the urban areas. In this way in the year 2000, a family of five members living in rural areas and earning less than about Rs 1,640 per month will be below the poverty line. A similar family in the urban areas would need a minimum of Rs 2,270 per month to meet their basic requirements. The poverty line is estimated periodically (normally every five years) by conducting sample surveys. These surveys are carried out by the National Sample Survey Organisation (NSSO).
POVERTY LINE ESTIMATES CONTROVERSY.
According to the latest estimates of the Commission, people with the daily consumption of more than Rs 28.65 in cities and Rs 22.42 in rural areas are not poor. It has been criticiesd by various “Social Activist” as a retrograde measure. According to it the number of poor in India has declined to 34.47 crore in 2009-10 from 40.72 crore in 2004-05 as per the estimates based on Tendulkar panel methodology which factors in spending on health and education, besides the calorie intake.
POVERTY LINE DEFINITION IN INDIA
The data pegged the poverty ratio at 29.8% of the population in 2009-10, down from 37.2% in 2004-05. However, in recent times, various committees led by economists have come up with different ways to measure the extent of poverty. The official line delivers a poverty rate of around 32% of the population. A committee under Suresh Tendulkar estimated it at 37%, while another led by NC Saxena said 50%, and in 2007 the Arjun Sengupta commission identified 77%
of Indians as "poor and vulnerable". The World Bank's PPP estimate of Indian poverty was higher than 40% in 2005, while the Asian Development Bank arrived at almost 50%. The UNDP's Multidimensional Poverty Index finds the proportion of the poor to be higher than 55%.
INTER-STATE DISPARITIES
Poverty in India also has another aspect or dimension. The proportion of poor people is not the same in every state. Although state level poverty has witnessed a secular decline from the levels of early seventies, the success rate of reducing poverty varies from state to state. Recent estimates show that in 20 states and union territories, the poverty ratio is less than the national average. On the other hand, poverty is still a serious problem in Orissa, Bihar, Assam, Tripura and Uttar Pradesh. Orissa and Bihar continue to be the two poorest states with poverty ratios of 47 and 43 per cent respectively. Along with rural poverty, urban poverty is also high in Orissa, Madhya Pradesh, Bihar and Uttar Pradesh. In comparison, there has been a significant
decline in poverty in Kerala, Jammu and Kashmir, Andhra Pradesh, Tamil Nadu, Gujarat and West Bengal. States like Punjab and Haryana have traditionally succeeded in reducing poverty with the help of high agricultural growth rates. Kerala has focused more on human resource development. In West Bengal, land reform measures have helped in reducing poverty. In Andhra Pradesh and Tamil Nadu public distribution of food grains could have been responsible for the improvement.
GLOBAL POVERTY SCENARIO
The proportion of people in developing countries living in extreme economic poverty— defined by the World Bank as living on less than $1 per day—has fallen from 28 per cent in 1990 to 21 per cent in 2001. Although there has been a substantial reduction in global poverty, it is marked with great regional differences. Poverty declined substantially in China and Southeast Asian countries as a result of rapid economic growth and massive investments in human resource development. Number of poor’s in China has come down from 606 million in 1981 to 212 million in 2001. In the countries of South Asia (India, Pakistan, Sri Lanka, Nepal, Bangladesh, Bhutan) the decline has not been as rapid. Despite decline in the percentage of the poor, the number of poor has declined marginally from 475 million in 1981 to 428 million in 2001. Because of different poverty line definition, poverty in India is also shown higher than the national estimates. In Sub-Saharan Africa, poverty in fact rose from 41 per cent in 1981 to 46 per cent in 2001. In Latin America, the ratio of poverty remained the same. Poverty has also resurfaced in some of the former socialist countries like Russia, where officially it was nonexistent earlier. The Millennium Development Goals of the United Nations calls for reducing the proportion of people living on less than $1 a day to half the 1990 level by 2015.
CAUSES OF POVERTY
1. One historical reason is the low level of economic development under the British colonial administration. The policies of the colonial government ruined traditional handicrafts and discouraged development of industries like textiles.
2. High growth rate of population.
3. Unequal distribution of land and other resources.
4. Major policy initiatives like land reforms which aimed at redistribution of assets in rural areas have not been implemented properly.
5. Many other socio-cultural and economic factors also are responsible for poverty. In order to fulfil social obligations and observe religious ceremonies, people in India, including the very poor, spend a lot of money.
6. High level of indebtedness is both the cause and effect of poverty.
7. Low Productivity in Agriculture
8. Under Utilized Resources: The existence of under employment and disguised unemployment of human resources and under utilization of resources has resulted in low production in agricultural sector.
9. Inflation: The continuous and steep price rise has added to the miseries of poor. It has benefited a few people in the society and the persons in lower income group find it difficult to get their minimum needs.
ANTI-POVERTY MEASURES
Removal of poverty has been one of the major objectives of Indian developmental strategy. The current anti-poverty strategy of the government is based broadly on two planks (1) promotion of economic growth (2) targeted anti-poverty programmes. Over a period of thirty years lasting up to the early eighties, there were little per capita income growth and not much reduction in poverty. Official poverty estimates which were about 45 per cent in the early 1950s remained the same even in the early eighties. Since the eighties, India’s economic growth has been one of the fastest in the world. The growth rate jumped from the average of about 3.5 per cent a year in the 1970s to about 6 per cent during the 1980s and 1990s. The higher growth rates have helped significantly in the reduction of poverty. Therefore, it is becoming clear that there is a strong link between economic growths and poverty reduction. Economic growth widens opportunities and provides the resources needed to invest in human development.
However, the poor may not be able to take direct advantage from the opportunities created by economic growth. Moreover, growth in the agriculture sector is much below expectations.
This has a direct bearing on poverty as a large number of poor people live in villages and are dependent on agriculture.
NATIONAL RURAL EMPLOYMENT GUARANTEE ACT (NREGA) 2005
It was passed in September 2005. The Act provides 100 days assured employment every year to every rural household One third of the proposed jobs would be reserved for women. The central government will also establish National Employment Guarantee Funds. Similarly state governments will establish State Employment Guarantee Funds for implementation of the scheme. Under the programme if an applicant is not provided employment within fifteen days s/he will be entitled to a daily unemployment allowance.
POVERTY ALLEVIATION IN INDIA: CONCEPT NOTE OF 12TH FIVE YEAR PLAN
This concept note underlines the magnitude of poverty; strategies adopted and propose a policy plan required for poverty alleviation in India.
Introduction
“No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable” (Adam Smith, 1776). Recognising the problem, the Millennium
Development Goals of the United Nations also contain a commitment to halve the proportion of the world’s population living in extreme poverty by 2015.
Poverty is widespread in India, with the nation estimated to have a third of the world's poor.
The World Bank (2005) estimated that 41.6 percent of the total Indian population lived under the international poverty line of US $1.25 per day (PPP), reduced from 60 percent in 1981.
Poverty eradication has been one of the major objectives of planned development in India.
According to the criterion of household consumer expenditure used by the Planning Commission of India, 27.5 percent of the population was living below the poverty line in 2004–
2005, down from 51.3 percent in 1977–1978, and 36% in 1993-1994 (Economic Survey 2009-10). The overwhelming fact about poverty in the country is its rural nature. Major determinants of poverty are lack of income and purchasing power attributable to lack of productive employment and considerable underemployment, inadequacy of infrastructure, affecting the quality of life and employability, etc.
1. Poverty Alleviation Programmes: Poverty alleviation programmes have assumed relevance as it is proved globally that the so-called 'trickle-down effect' does not work in all the societies and India is no exception to this. In recent times, there has been a significant shift in focus in the poverty literature away from the ‘trickle-down’
concept of growth towards the idea of ‘pro-poor growth’, which enables the poor to actively participate in and benefit from economic activities. Hence, the strategy of targeting the poor was adopted in India and the economic philosophy behind these special programmes was that special preferential treatment was necessary to enable the poor to participate in economic development (Raj Krishna, 1977). Inclusive growth also focuses on productive employment for the excluded groups. Poverty alleviation programmes have been designed from time to time to enlarge the income-earning opportunities for the poor. These programmes are broadly classified into:
2. Self-employment programmes: Creating self-employment opportunities began with the introduction of the IRDP in 1978-79, TRYSEM (1979), DWCRA (1982-83), supply of improved toolkits to rural artisans (1992) and the Ganga Kalyan Yoajna (1996-1997). To remove conceptual and operational problems in the implementation of these programmes, a holistic programme covering all aspects of self-employment such as organisation of the poor into SHGs, training, credit, technology, infrastructure and marketing called Swarnjayanti Gram Swarozgar Yojana (SGSY), was started on April 1, 1999. Based on the feedback provided and recommendations made by various studies, National Rural Livelihood Mission (NRLM) was launched during 2009-10 to facilitate effective implementation of the restructured SGSY scheme in a mission mode. NRLM aims at reducing poverty in rural areas through promotion of diversified and gainful self-employment and wage employment opportunities.
3. Wage employment programmes: The main purpose of the wage employment programmes is to provide a livelihood during the lean agricultural season as well as during drought and floods. Wage employment programmes were first started during the Sixth and Seventh Plan in the form of National Rural Employment Programme (NREP) and Rural Landless Employment Guarantee Programmes (RLEGP). These programmes were merged in 1989 into Jawahar Rozgar Yojana (JRY). A special wage employment programme in the name of Employment Assurance Scheme (EAS) was launched in 1993 for the drought prone, desert, tribal and hill area blocks in the country. Different wage employment programmes were merged into Sampoorna Gramin Rozgar Yojana in 2001. NREGS, launched in 2006, aims at enhancing the livelihood security of people in rural areas by guaranteeing hundred days of wage-employment in a financial year to a rural household whose adult members volunteer to do unskilled manual work. During 2008-09, 4.51 crore households were provided employment under the scheme.
4. Food security programmes: Under this, PDS is a very important poverty alleviation programme directly acting as safety net for the poor.
5. Social security programmes include National Social Assistance Programme (NSAP), Annapurna, etc. for the BPL.
6. Urban poverty alleviation programmes include Nehru Rozgar Yojana, Urban Basic Services for Poor (UBSP), etc involving participation of the communities and non-governmental organizations.
Besides, other initiatives undertaken to alleviate poverty include price supports, food subsidy, land reforms, Area Development Programmes, improving agricultural techniques, free electricity for farmers, water rates, PRIs, growth of rural banking system, grain banks, seed banks, etc.
Such endeavours not only reduced poverty but also empowered the poor to find solution to their economic problems. For instance, the wage employment programmes have resulted in creation of community assets as well as assets for the downtrodden besides providing wage employment to the poor. Self-employment programmes, by adopting SHG approach have led to mainstreaming the poor to join the economic development of the country. But the focus on the sustainable income generation still remains illusive. A review of different poverty alleviation programmes shows that there has been erosion in the programmes in terms of resource allocation, implementation, bureaucratic controls, non- involvement of local communities, etc.
NABARD has also been contributing in Rural Poverty Allevaition through its various initiatives/
schemes like SHG Bank Linkage Programme, watershed development, tribal development, CDP, REDP, ARWIND, MAHIMA, support to weavers, RIDF, R&D Fund, etc.
Policy Plan required for Poverty Alleviation in India
To promote growth in agricultural productivity and non-farm rural activities
Public investment in rural infrastructure and agricultural research. Agricultural research benefits the poor directly through an increase in farm production, greater employment opportunities and growth in the rural non-farm economy.
Credit policies to promote farm investment and rural microenterprises
Policies to promote human capital to expand the capabilities of the poor
Development of rural financial markets
Self-Help Group Approach to be strengthened as it is a proven method of empowerment of the poor
Involvement of local communities and people’s participation in NRLM and MGNREGS.
Decentralization of the programmes by strengthening the Panchayati Raj Institutions
Public Distribution System (PDS) needs to be reformed and better targeted
Provision of safety nets like targeted food subsidies, nutrition programmes and health
Targeted poverty alleviation programmes to continue as the poor of the developing world may not have the patience to wait for the trickle-down effect.
Poverty Head Count Ratio: Major Indian States
Poverty By Social Groups: Rural 2004-05
States ST SC OBC OTHERS
Andhra Pradesh 30.5 15.4 9.5 4.1
Assam 14.1 27.7 18.8 25.4
Bihar 53.3 64 37.8 26.6
Chhattisgarh 54.7 32.7 33.9 29.2
Delhi 0.0 0.0 0.0 10.6
Gujarat 34.7 21.8 19.1 4.8
Haryana 0.0 26.8 13.9 4.2
Himachal Pradesh 14.9 19.6 9.1 6.4 Jammu & Kashmir 8.8 5.2 10.0 3.3 Jharkhand 54.2 57.9 40.2 37.1 Karnataka 23.5 31.8 20.9 13.8
Kerala 44.3 21.6 13.7 6.6
Madhya Pradesh 58.6 42.8 29.6 13.4 Maharashtra 56.6 44.8 23.9 18.9
Orissa 75.6 50.2 36.9 23.4
Punjab 30.7 14.6 10.6 2.2
Rajasthan 265 18.1 30.5 32.9 274 221
Tamil Nadu 325 22.8 39.8 222 350 225
Uttar Pradesh 423 33.7 35.4 31 409 331
West Bengal 408 28.6 22.4 11.8 357 211
India 373 28.3 32.4 25.1 360 215
Rajasthan 32.6 28.7 13.1 8.2 Tamil Nadu 32.1 31.2 19.8 19.1 Uttar Pradesh 32.4 44.8 32.9 19.7 Uttarakhand 43.2 54.2 44.8 33.5 West Bengal 42.4 29.5 18.3 27.5 All India 47.2 36.8 26.7 16.1 TERMS RELATED TO POVERTY
Head Count Ratio (HCR): proportion of total population that falls below poverty threshold income or expenditure. It is based on either national Poverty Line or dollar-a-day Poverty Line.
Poverty Gap Index (PGI): unlike HCR, it gives us a sense of how poor the poor are. It is equivalent to income gap below PL per head of total population, and expressed as a percentage of the poverty line.
Squared Poverty Gap index (SPG): Adds the dimension of inequality among the poor to the poverty gap index. For a given value of the PGI, population with greater dispersion of income among poor indicates a higher value for the SPG.
Lorenz curve: a curve that represents relationship between cumulative proportion of income and cumulative proportion of population in income distribution by size, beginning with the lowest income group. If perfect income equality, Lorenz curve will coincides with 45-degree line.
Gini coefficient: a commonly used measure of inequality; ratio of area between Lorenz curve and 45-degree line, expressed as a percentage of area under 45-degree line. If perfect equality, Gini coefficient takes value 0.If perfect inequality, equals 1. Internationally, Gini coefficient normally ranges between 0.25 & 0.7
Valmiki Ambedkar Awas Yojana (VAMBAY): The VAMBAY launched in December 2001 facilitates the construction and upgradation of dwelling units for the slum dwellers and provides a healthy and enabling urban environment through community toilets under Nirmal Bharat Abhiyan, a component of the scheme. The Central Government provides a subsidy of 50 per cent, the balance 50 per cent being arranged by the State Government.
Swarna Jayanti Shahari Rozgar Yojana (SJSRY): The Urban Self Employment Programme and the Urban Wage Employment Programme are the two special components of the SJSRY, which,
Swarna Jayanti Shahari Rozgar Yojana (SJSRY): The Urban Self Employment Programme and the Urban Wage Employment Programme are the two special components of the SJSRY, which,