SCALlNG UP POVERTY REDUCTION

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SCALlNG UP POVERTY REDUCTION

• INDIA COUNTRY STUDY
• Dr. Rohini Nayyar
• Adviser,
• Planning Commission,
• Government of India
• February 13, 2004

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TRENDS IN AGGREGATE AND RURAL POVERTY IN INDIA

• Year Rural Combined (Rural
  Urban)
• ------------------------------------------------
  ----------------------------------------------
• No. of Persons age No. of Persons age
• (in million)
  (in million)
• ------------------------------------------------
  ---------------------------------------------
• 1973-74 261.3 56.44
  321.3 54.88
• 1977-78 264.2 53.07 328.9 51.32
• 1983 252.0 45.65 322.9 44.98
• 1987-88 231.9 39.09 307.0 38.86
• 1993-94 244.0 37.27 320.4 35.97
• 1999-2000 193.2 27.09 260.3 26.10
• --------------------------------------------------
  --------------------------------------------------
  -------------------
• Source Planning Commission

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REDUCTION IN POVERTY Is it Real?

• The official estimates of poverty questioned by
  many.
• Problems of comparability between 1993-94 and
  1999-2000 survey data.
• 7/30 day recall period, 365 day recall period for
  consumer durables may have led to higher
  expenditure estimates.
• Evidence from thin samples between 1993-94 and
  1999-2000 indicates very little change in poverty
  estimates.
• Deaton Dreze and Tendulkar Sundaram indicate
  poverty reduction between 7-8.2 points as
  against over 10 reduction shown by the official
  estimates.
• Sen and Himangshu show poverty decline only by
  4-4.5 points.

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OTHER CO-RELATES OF POVERTY

• The other co-relates of poverty indicate that
  poverty would have decline at a lower rate than
  projected by the official estimates.
• The employment elasticity of growth declined to
  0.16 in 1990s as compared to 0.52 in the 1980s.
  
• The decline in employment elasticity of
  agriculture was more pronounced from 0.70 in the
  period 1983 to 1993-94 to 0.10 during 1993-94 to
  1999-2000.
• Growth in non-farm employment in the backward
  regions of the country more in the nature of
  refuge employment.
• Deceleration in the rural income growth rates
  during the 1990s.
• Higher rise in food prices in the post reform
  period.
• Deterioration in fiscal position of States,
  reduction in resource transfer from Centre to the
  States.

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ECONOMIC GROWTH AND POVERTY REDUCTION

• Economic growth is necessary for poverty
  reduction. But the link between the two is not
  automatic.
• The growth rates in the 1980s and in the post
  reform period broadly similar at 5.6-6 per
  annum.
• Deceleration in growth rate after 1997.
• Many States which have grown faster in the post
  reform period do not show rapid reduction in
  poverty.
• Some of the States which did not grow very fast
  show higher reduction in poverty indicating
  impact of other factors on incidence of poverty.
• Even in high growth States which have done well
  in reducing poverty, regions and communities get
  left out in the growth process.
• Scheduled Castes/Scheduled Tribes in high growth
  states witnessed little reduction in poverty.
• The links between agricultural growth and poverty
  reduction much more pronounced.
• High positive co-relation between physical
  infrastructure and reduction in poverty.

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DECENTRALISATION AND POVERTY REDUCTION

• Peoples participation in planning and
  delivery of development programmes
  institutionalised in the wake of challenges of
  liberalisation and globalisation. The urge of
  emerging middle classes for political
  representation was accommodated through
  Panchayati Raj Institutions (PRIs).
• Constitutional status provided to PRIs, regular
  elections, reservations for women and
  marginalised sections, independent finance and
  election commissions, separate functional domain.
• Notable successes in empowering panchayats in
  Kerala, Madhya Pradesh and West Bengal.
• Involvement of village community in programme
  implementation.
• Social audit institutionalised leading to
  transparency and accountability.

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DECENTRALISATION AND POVERTY REDUCTION

• Problems in many States especially in the Central
  and Eastern parts of the country.
• Continuing struggle between the political
  leadership at the State level and between the
  panchayati raj functionaries for control on
  economic resources.
• Panchayats viewed as agencies of Govt. and not as
  peoples organisation.
• Panchayats more concerned with construction
  projects, no vision of long term livelihoods for
  the people.
• In many States political empowerment has yet to
  lead to economic betterment.
• Panchayats more effective where people are
  politically aware and educated.

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DECENTRALISATION AND POVERTY REDUCTION

• Role for other civil society organisations in
  the development process.
• Influenced policies at Central and State levels,
  generated awareness, helped in capacity building,
  active in development work and service delivery.
• Major role for NGOs in programmes for population
  stabilization, health programmes, provision of
  education under Sarva Siksha Abhiyan, control of
  land degradation.
• Self-Help Groups and users associations promoted
  by the Government. Programmes implemented
  through SHGs.
• Greater accountability and transparency in the
  functioning of PRIs and the other Government
  Departments.

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LESSONS FROM INDIA..1

• Agricultural growth is the key to reduction in
  poverty.
• Investment in irrigation facilities to increase
  crop productivity. Regionally differentiated
  strategy.Ground water exploitation in high
  rainfall areas of Eastern India.
• Focus on water harvesting, water conservation and
  improvement in land capability through watershed
  development in dry regions of the country.
• Investment in agricultural research and extension
  for crop diversification. Provision of marketing
  linkages and promotion of primary processing in
  rural areas for employment generation.
• Tenancy reform to create a land market in the
  rural areas to facilitate access to land by the
  rural poor.
• Promotion of rural non-farm employment through
  upgrading the technological base of rural
  enterprises and by providing a package of
  facilities including training, credit and market
  linkages.

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LESSONS FROM INDIA..2

• Physical Infrastructure
• Increased focus on creation of a rural road
  network to link villages.
• Rural electrification.
• Rural drinking water supply and sanitation.
• Provision of housing and shelter to the rural
  poor.
• Social Infrastructure
• Investment in health and education and
  improvement in quality of these services.
• A shift in approach to service delivery through
  community participation and community
  contribution.

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LESSONS FROM INDIA..3

• A food for work programme to meet the
  nutritional needs of the transient poor.
• Self-employment through development of micro
  enterprises financed by a mix of credit and
  subsidy.
• Availability of food at affordable prices.
  Strengthening the targeted Public Distribution
  System.
• Special programmes for the aged, vulnerable and
  the socially excluded.
• Mid-day meals in schools and coverage of
  pre-school children and lactating mothers.
• Social Security Scheme.
• Programmes for removal of regional imbalances.

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LESSONS FROM INDIA..4

• Good governance has been highlighted as a most
  crucial factor for achievement of poverty
  reduction and improvement in the social
  indicators in the Tenth Five Year Plan.
• To improve accountability and transparency in the
  delivery system, strengthen Panchayats
• by providing them clearly defined
  functions
• financial resources and
• administrative support.
• Strengthen the Gram Sabha to oversee and enforce
  effective implementation of development
  programmes by institutionalising social audit.

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LESSONS FROM INDIA..5

• Create an enabling environment for
  Non-Governmental Organisations to play a greater
  role in strengthening communities capabilities.
• Strengthen the spirit of cooperation and
  self-help by integrating SHGs in the development
  programmes as attempted under programmes like
  SGSY, RMK, NABARD.
• Greater role for community organisations in
  ensuring preservation of land and environment
  through mechanisms such as joint forest
  management, watershed associations, etc.
• Innovative approaches to service delivery through
  peoples participation and contribution.

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UPSCALING LIMITATIONS

• There is no unique solution for poverty
  reduction. Even within a macro-economic
  environment conducive to growth, specific
  micro-interventions are required based on natural
  resource endowments and the prevailing
  socio-political cultural milieu. The case study
  of India shows that strategies, policies and
  programmes that have been successfully
  implemented in one State/Region have not been
  replicated in others. Even in reforming states
  with high economic growth, pockets of
  backwardness and poverty persist. Therefore,
  there are limitations to replication of
  successful interventions that originate in a
  specific country, which should be kept in mind.

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Thank You