RSTV: THE BIG PICTURE- ERADICATING POVERTY

insightsonindia.com/2019/09/01/rstv-the-big-picture-eradicating-poverty

September 1,
2019

RSTV: THE BIG PICTURE- ERADICATING POVERTY

Introduction:

India may have reduced extreme poverty far more effectively than most of us are
aware of. The last official data is eight years old. In 2011, 268 million people were
surviving on less than $1.90 a day, the World Bank measure for extreme poverty.
According to the World Data Lab — which monitors global poverty using advanced
statistical models — less than 50 million Indians may be living on less than $1.90 a day
now. Economists said rapid economic growth and the use of technology for social
sector programs have helped make a significant dent in extreme poverty in the
country. The BJP cited global think tank reports to say that India is moving fast towards
a poverty-free situation and gave credit to policies of the Narendra Modi-led government
for it.

Poverty is the general scarcity of a certain amount of material possessions or

money (< $1.25/day) and includes social, economic, and political concepts. Absolute
poverty (as defined by UN) is “a condition characterized by severe deprivation of
basic human needs, including food, safe drinking water, sanitation facilities, health,
shelter, education and information.”

Every successive government, since 1947, has tried to reduce poverty by making
various policies. But, it is still far from satisfactory, for about half of the labor force
working in agricultural sector and a majority of the population still living in rural areas.
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Poverty alleviation programs in India since Independence:

Integrated Rural Development Programme (IRDP): It was introduced in 1978-79

and universalized from 2nd October, 1980, aimed at providing assistance to the
rural poor in the form of subsidy and bank credit for productive employment
opportunities through successive plan periods.
Jawahar Rozgar Yojana/Jawahar Gram Samriddhi Yojana: The JRY was meant to
generate meaningful employment opportunities for the unemployed and
underemployed in rural areas through the creation of economic infrastructure and
community and social assets.
Rural Housing – Indira Awaas Yojana: The Indira Awaas Yojana (LAY) programme
aims at providing free housing to Below Poverty Line (BPL) families in rural areas
and main targets would be the households of SC/STs.
Food for Work Programme: It aims at enhancing food security through wage
employment. Food grains are supplied to states free of cost, however, the supply
of food grains from the Food Corporation of India (FCI) godowns has been slow.
National Old Age Pension Scheme (NOAPS): This pension is given by the central
government. The job of implementation of this scheme in states and union
territories is given to panchayats and municipalities. The states contribution may
vary depending on the state. The amount of old age pension is ₹200 per month for
applicants aged 60–79. For applicants aged above 80 years, the amount has been
revised to ₹500 a month according to the 2011–2012 Budget. It is a successful
venture.
Annapurna: This scheme was started by the government in 1999–2000 to provide
food to senior citizens who cannot take care of themselves and are not under the
National Old Age Pension Scheme (NOAPS), and who have no one to take care of
them in their village. This scheme would provide 10 kg of free food grains a month
for the eligible senior citizens. They mostly target groups of ‘poorest of the poor’
and ‘indigent senior citizens’.
Sampoorna Gramin Rozgar Yojana (SGRY): The main objective of the scheme
continues to be the generation of wage employment, creation of durable economic
infrastructure in rural areas and provision of food and nutrition security for the
poor.
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
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 15 days s/he will be entitled to a daily unemployment
allowance.
National Rural Livelihood Mission: Ajeevika (2011): It evolves out the need to
diversify the needs of the rural poor and provide them jobs with regular income on
monthly basis. Self Help groups are formed at the village level to help the needy.
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 National Urban Livelihood Mission: The NULM focuses on organizing urban poor
in Self Help Groups, creating opportunities for skill development leading to market-
based employment and helping them to set up self-employment ventures by
ensuring easy access to credit.
Pradhan Mantri Kaushal Vikas Yojana: It will focus on fresh entrant to the labour
market, especially labour market and class X and XII dropouts.
Pradhan Mantri Jan Dhan Yojana: It aimed at direct benefit transfer of subsidy,
pension, insurance etc. and attained the target of opening 1.5 crore bank accounts.
The scheme particularly targets the unbanked poor.

Challenges:

India is still far from achieving SDG 1.

Incidence of extreme poverty continues to be much higher in rural areas than in
urban areas.
Despite rapid growth and development, an unacceptably high proportion of our
population continues to suffer from severe and multidimensional
deprivation.
While a large number of poverty alleviation programmes have been initiated, they
function in silos. There is no systematic attempt to identify people who are in
poverty, determine their needs, address them and enable them to move above
the poverty line.
The resources allocated to anti-poverty programmes are inadequate and
there is a tacit understanding that targets will be curtailed according to fund
availability. For instance, Mahatma Gandhi National Rural Employment Guarantee
Act (mgnrega) does not provide the guaranteed 100 days of work in many states.
There is no method to ensure that programmes reach everybody they are
meant for.
Lack of proper implementation and right targeting
There has been a lot of overlapping of schemes.
Every year a huge number is added to the population pool of the country. This
renders the scheme ineffective.

Way Forward:

Accelerating rural poverty reduction:

It’s not just about agricultural growth, which has long been considered the
key driver of poverty reduction. In fact, rural India is not predominantly
agricultural and shares many of the economic conditions of smaller urban
areas.
Capitalizing on growing connectivity between rural and urban areas,
and between the agriculture, industry and services sectors, has been
effective in the past two decades and holds promise for the future.
Creating more and better jobs:
The road out of poverty in India has been built on the performance of the

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 labor market, but also benefited from rising transfers and remittances, and
favorable demographics among other factors.
Future efforts will need to address job creation in more productive sectors,
which has until now been lukewarm and has yielded few salaried jobs that
offer stability and security.
Focusing on women and Scheduled Tribes:-
The most worrying trends are the low participation of women in the labor
market and the slow progress among scheduled tribes.
India’s women have been withdrawing from the labor force since
2005 and less than one-third of working age women are now in the labor
force. As a result, India today ranks last among BRICS countries, and close to
the bottom in South Asia in female labor force participation.
Scheduled Tribes started with the highest poverty rates of all of India’s social
groups, and have progressed more slowly than the rest.
Women and Scheduled Tribes are at risk of being locked out of India’s
growth and prosperity.
Creating more good locations:-
Where people live largely shapes their prospects in life. India’s states
continue to see large and growing differences in poverty levels and basic
opportunities.
More and more of India’s poor are concentrated in the poorest states, and
even within relatively prosperous states, certain pockets of deprivation
persist where people are unable to share in the state’s successes.
Improving human development outcomes for the poor:
This is central to improving their quality of life and income earning
opportunities.
The recent past shows that some problems, such as undernutrition and
open defecation, are endemic and not only confined to the poor but others
too, and have not improved with economic growth.
Better health, sanitation and education will not only help raise the
productivity of millions, they will also empower the people to meet their
aspirations, and provide the country with new drivers of economic growth.

Banking and credit sector reforms.

We need to start taxing wealth and not only income.

Would a Universal Basic Income (UBI) have been better?

It would probably have been easier to implement, but would have come with a bigger
financial tab even if the top two income deciles are excluded.

Remember, however, that developed economies have experimented with UBI, but have
not been persuaded of its efficacy.

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Even Arvind Subramanian, who commended the UBI when he was Chief Economic
Adviser and wrote a whole chapter on it in Economy Survey 2016-17, appears to have
retraced his steps, and is now pitching for a ‘Quasi-Universal Basic Rural Income’
(QUBRI).

It is difficult to begrudge a welfare measure targeted at the poorest people in a country

that even to this day.

Government offers subsidies to the middle-class and the rich on everything from
cooking gas to power to gold to aviation turbine fuel to the tax breaks on small savings
instruments (which are a form of implicit subsidy) — to the tune of ₹1 lakh crore a
year.

For Instance, in Agricultural sector, As per a report published by the State Bank of India,
the central government’s most recent budgetary allocation to subsidy and farmer
support schemes totalled around ₹981 billion – which is roughly 2.9% of India’s GDP.

Conclusion:

Poverty eradication should not be the goal of the government but goal of the
government policies should be to create prosperity.

The indicator is based on the health and education status of a population apart from
per capita income, bringing us back to the relevance of income generation to poverty.

As the Central government is common across regions, differences in the human

development index must arise from policies implemented at the State level.

This further implies that a nationwide income support scheme that channels funds
from a common pool to households in the poorer States would be tantamount to
rewarding lower effort by their governments.

There is a crucial role for services, of both producer and consumer variety, in
eliminating the capability deprivation that is poverty.

At a minimum these services would involve the supply of water, sanitation and
housing apart from health and education.

It has been estimated that if the absence of such services is accounted for, poverty in
India would be found to be far higher than recorded at present.

The budgetary implication of the scale at which public services would have to be
provided if we are to eliminate multi-dimensional poverty may now be imagined.

This allows us to appraise the challenge of ending effective poverty and to assess the
potential of the income-support schemes proposed by the main political parties.

Source: click here

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