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Poverty Eradication Programmes in India: Actions Taken and Impacts Made

Paper Presented at the conference on “ Social Work and Social Development 2012: Action and Impact ” held in Stockholm, 8-12 July, 2012. Poverty Eradication Programmes in India: Actions Taken and Impacts Made. Manoranjan Pal, Bhola Nath Ghosh and Premananda Bharati

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Poverty Eradication Programmes in India: Actions Taken and Impacts Made

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  1. Paper Presented at the conference on “Social Work and Social Development 2012: Action and Impact” held in Stockholm, 8-12 July, 2012. Poverty Eradication Programmes in India: Actions Taken and Impacts Made Manoranjan Pal, Bhola Nath Ghosh and Premananda Bharati Indian Statistical Institute India

  2. Who are Poor? • A family may be defined as poor if its total earning is insufficient to obtain the minimum necessities of goods and services for the maintenance of day to day activities of life of members in the family. • The goods considered for this purpose are the basic need goods, e.g., food, shelter, clothing, etc. If the basic needs are not fulfilled by a family, the family will be declared as poor.

  3. Seven Basic Minimum Services • The Government of India has identified seven basic minimum services. These are: • Safe drinking water, • Primary health care facilities, • Universal primary education, • Nutrition for school and preschool children, • Shelter for the poor, • Accessible roads for all communities, and • A public distribution system with a focus on the poor. • The Ninth Plan (1997-2002) placed special emphasis on these seven basic minimum services.

  4. Some Important Poverty Alleviation Programmes • Integrated Rural Development Programme, 1978 (IRDP). • Jawahar Rozgar Yojana, 1989 (JRY). (Jawahar Earning Programme) • Swarnajayanti Gram Swarozgar Yojana 1999 (SGSY).(Golden Jubilee Rural Self-employment Programme) • Sampoorna Grameen Rozgar Yojana 2001 (SGRY). (Universal Rural Employment Programme) • (Mahatma Gandhi) National Rural Employment Guarantee Scheme 2006 (NREGS).

  5. Poverty Alleviation Programmes • Most of the poverty alleviation programmes are wage- or self- employment programmes aiming at raising income or income generation capacity of rural poor and other disadvantaged classes of people. E. g., • IRDP provided assistance to rural poor in the form of subsidy and bank credit for productive employment opportunities. Target Group: Poor, SC/ST, Women and the Physically handicapped persons in the rural sector. • JRY generated gainful employment through creation of rural economic infrastructure, community and social assets. Target Group: Unemployed and under employed men and women in rural areas. • SGSY encouraged SHGs to take up activities like distribution of old age pension, public distribution system (PDS) items, procurement of agriculture commodities including milk, on commission basis etc. and gave subsidy and bank loan. Target Group: The rural poor. • SGRYaimed to provide employment and food to people in rural areas who lived below the poverty line through Panchayati Raj Institution. Target Group: The rural poor. • NREGS guarantees 100 days of wage employment in a financial year to a rural household whose adult members are willing to do manual and unskilled work. Target Group: The rural poor, SC/ST etc.

  6. (Mahatma Gandhi) National Rural Employment Guarantee Scheme (NREGS) • The National Rural Employment Guarantee Act (NREGA) was enacted in 2005 to provide a guarantee of 100 days of wage employment in a financial year to a rural household whose adult members are willing to do manual and unskilled work. • Consequently the Mahatma Gandhi National Rural Employment Guarantee Scheme(NREGS) was implemented in 2006 as a Centrally-Sponsored Scheme on a cost sharing basis between the Center and the State in the ratio of 90 and 10 percentages. The scheme will run up to 2014. • It aims at enhancing the livelihood security of people in rural areas. Various types of activities such as rural connectivity, water harvesting structures, drought proofing, micro irrigation works, works for benefiting SCs/ STs are being implemented.

  7. NREGS • Any unemployed rural adult citizen, who is willing to do public work-related to unskilled manual work at a minimum wage, prescribed and updated from time to time, may avail this opportunity. The concerned person is required to contact the Gram Panchayat in order to avail the scheme. • Under this programme, a minimum of 50% of the funds are transferred to the Village Panchayats for final disbursement of fund.

  8. NREGS • NREG Scheme has so far become one of the most successful schemes of Government of India. • It has provided employment to more than 3 crore (1 crore = 107) households in recent years. • Average number of person days per household among those who benefitted by this scheme in a year has been increasing each year. It was 43 in 2006-07 and has almost reached 100 recently.

  9. Evaluation of the Programmes? • Anti-Poverty Interventions are too numerous to be thoroughly reviewed. • Instead we shall discuss in detail only one of these programmes, namely National Rural Employment Guarantee Scheme (NREGS), which seem to be important in terms of scale and number of beneficiaries. • We shall also discuss other important schemes in brief.

  10. Gaps in NREGS • Awareness about NREGA is very poor. • Hardly any permanent asset has been created out of NREGS fund. Repairs of dam and reconstruction of roads of the previous year seem to have consumed a major part of the fund. • Planning of work is poor. The expertise for planning is not available. • Supervision at worksite seems to be poor. In most places, no separate supervisor is appointed and the work is done as part time by some local village fellow. • Due to lack of proper monitoring system, the funds are sometimes distributed among the non-deserving people

  11. Recommendations for NREGS • More emphasis may be given to create permanent assets which can generate permanent employment. • Mass publicity drive to create full awareness about NREGA, preferably with help of suitable NGOs. • Ensure work proposal as per Gram Sabha’s(Village Representatives) recommendations – district level interference must be less and restricted to some suggestions only. • The works under NREGA should be more decentralised so that the Panchayats are free to decide on local priorities. • Strengthening training components. • Employment of qualified staff earmarked for NREGA. • Separate staff for work supervision. • Proper actions on social audit reports.

  12. Gaps in Other Programmes • Pace of development is either slow or lacking. Biasness, ignorance, lack of transparency etc. are the reasons for this slow development at most of the places. • Due to lack of proper monitoring system, the funds are distributed among the non-deserving people who are mostly the people related to the Sarpanch(Village head). • Lack of awareness about the benefit of various schemes is one of the major causes of exploitation among the rural poor. • Mismatch of the interventions with that of needs and expectations of the villagers was found at many places. It was found that the beneficiaries were hardly involved at any stages of these developmental schemes. • Due to backwardness and ignorance among people, caste-system and other social barriers still persist in many areas. People still believe in male dominance, presence of gender bias can be seen from the no. of female participants in the list of beneficiaries. However, in the weaker section, gender bias is less.

  13. Suggestions and Recommendations • The planning process for poverty alleviation programmes should be done at the local level with utmost participation of local level stakeholders. Decentralised institutions, like Gram Sabha, can play a greater role in the planning process, which overtly reflects the demand of the local people. • The vulnerable section of the society should be identified and augmented in the programmes. • Through SHGs, different inputs, such as information, technology, choice of enterprises, and training can be worked out, which are vital for the success of any poverty alleviation programme. • More awareness generation is required in these areas. Panchayat receipts and expenditure statements should boldly be displayed by the gram panchayats on banners/hoardings. It also increases the awareness of the programmes.

  14. Suggestions and Recommendations • Monitoring and evaluation of the various schemes and interventions are necessary. Since Panchayat funds were widely believed to have been mismanaged, there should be joint management involving Block Development Committee members (BDC) or Panchayat members, say. • More emphasis needs to be given on the infrastructure building part such as roads, community centers, public health centers, schools, markets, etc., which in turn would catalyze the whole process of development. Emphasis should also be given to undertake productive works and their maintenance, such as watershed development, rejuvenation of tanks, afforestation and irrigation. • To improve the efficiency of the anti-poverty programmes, governance issues have to be put centre-stage in the State in order to curb the enormous leakages, sometimes up to half or more of the public expenditure. Social audit, transparency and accountability must be ensured in implemented schemes. Stringent rules must be passed to ensure that corrupt practices do not hamper the progress of the schemes.

  15. Suggestions and Recommendations • Grass root women’s groups should be empowered and encouraged to implement poverty alleviation schemes. • The poor should not merely benefit from growth generated elsewhere; they should contribute to growth. • The budgetary allocation for these schemes should be increased. • Subsidies in the case of housing are much larger than those available for any other type of anti-poverty programmes. Some people argued that the increasing expenditure on the scheme without any specific goal is likely to lead to major distortions in the utilisation of public subsidies in poverty eradication.

  16. The role of SHGs • Self Help Groups (SHGs) have a great role in alleviation of poverty. This concept originated in Bangladesh through an action research project ‘Grameen Bank” pioneered by Dr. Muhammad Yunus. Basic features of the SHG approach are: • Women are taken as target group, • Instead of individual there is a group approach for achieving targets, • Savings are seen as a pre-condition for credit eligibility for loan and • The procedure is simple. • In 1991-92, National Bank for Agriculture and Rural development (NABARD) started promoting SHGs. There are more than 30 lakh (1 lakh = 100,000) SHGs in India today.

  17. The Remark by Mahendra Dev • To provide large scale employment to low skilled job seekers we need to focus on the manufacturing sector rather than the service sector which seems to approach saturation level (Mahendra Dev, 2012). • Thus the manufacturing sector must be more labour intensive. • Along with it the level of health, education and skill of the young generation should be improved for quality employment.

  18. Poverty Situations in India

  19. Findings • The table shows almost uniformly declining trend of the poverty rates up to 2004-05. A uniform methodology for calculations of the poverty rates had been adopted throughout up to 2004-05. • The problem arose when the poverty estimates using a new methodology as proposed by Tendulkar et al. (2009) was declared as official estimates by Planning Commission. • The latest revision of the poverty estimates by Government of India was made in March 2012 for the year 2009-10. It was based on the method recommended by Tendulkar et al. in their report in 2009.

  20. The Tendulkar Estimates • The official poverty estimates, calculated by Tendulkar/s method, released by Government of India in its Press Note on 19th March 2012 are 33.8%, 20.9% and 29.8% respectively for rural, urban and all India. • The poverty lines in terms of monthly per capita expenditure for rural and urban India by this method were Rs. 672.8 and Rs. 859.6 respectively. • There was a huge uproar about these figures. Per day figure for rural India came out to be Rs. 22.43 which was thought to be quite insufficient compared to the amount fulfilling the minimum basic needs.

  21. The Controversy • A supplementary Press Note (Government of India 2012b) was released on the next day explaining the stand of Planning Commission adding to it that the trends (and relative positions) would remain almost same whatever poverty lines, if within reasonable bounds, are taken. • Still the people were not pacified. Thus Government of India announced “New Expert Panel on Poverty Estimates” in a Press Note on 24 May, 2012 (Government of India, 2012c). The Technical Group was formed comprising eminent economists namely Dr. Mahendra Dev, Dr. K. Sundaram, Dr. Mahesh Vyas and Dr. K.L. Datta under the Chairmanship of Dr. C. Rangarajan, Chairman, Prime Minister’s Economy Advisory Council. We are looking forward to the report of this Technical Group.

  22. Inequality Situations in India The trend in the inequality as judged by the Gini Index is just the opposite. While the urban India showed almost an increasing trend in inequality the situation in rural India was oscillating, but did not show any decreasing trend. This is one aspect where serious attention is needed by the Government of India.

  23. Literacy Rates in India for the Years 1981, 1991, 2001 and 2011 • Along with poverty and inequality one has to see the literacy status also. Both male and female literacy status have increased steadily. • Credit should go to different Government Programmes like Adult Literacy Programme, Sarva Shiksha Abhiyan (SSA) (Universal Education Programme), the National Programme for Education of Girls (NPEGL), implemented in the last decade of the last century or in the beginning of this century. NPEGL also had some role in reducing the gender gap in literacy.

  24. Conclusions • During the last ten years there has been a steep increase in the economic growth; however this has not resulted in a commensurate decline in poverty ratios. Because Growth did not have the trickle down effect. Also the inequality has not decreased at all during the entire period. • Food security is a fundamental right under Article 21 of the Indian Constitution. Still we have starvation deaths in states like Orissa, Rajasthan and Madhya Pradesh at the onset of the millennium. A more prompt action was called for. The government initiated steps towards guaranteeing development benefits to the poor. The enactment of ‘Right to Information Act, 2005’, the ‘National Rural Employment Guarantee Act, 2005’ and making education for children aged 6 to 14 a fundamental right are some of the important steps initiated by the Government of India towards that end.

  25. Conclusions • Krishna and Shariff (2011) examined panel data for more than 13,000 rural Indian households over the 12-year period 1993–94 to 2004–05 and investigated the ways by which the poor people escaped poverty and non-poor people fell into poverty. Reasons vary considerably for the inward and outward flows and also across and within states. • Escape from poverty has been seen to be positively associated with smallness of household size, women’s media exposure, presence of adult son, women work, education of head of household etc. • The decrease in the poverty is linked with morbidity, presence of adult daughter, onset of disability, etc. • These results clearly point out why every poverty alleviation programme should include awareness programme as part of it. Along with it education, especially women’s education, should be given maximum weight.

  26. Conclusions • 12th Five Year Plan has just started from April, 2012. We look forward to see how inclusive growth, which is one of the main objectives of the plan, is achieved by the next five years. • In the 12th Five Year Plan, Government will invest Rs. 14,000 crore (1 crore = 107) for rural drinking water schemes (The Economic Times, 28th March, 2012). • We look forward to a big boost to sanitation in rural areas, because Planning Commission has allocated Rs. 36,000 crores for the 12th Five Year Plan, up from Rs. 7800 Crore in the previous Plan. At present, out of Rs 3400 allocated for individual toilets, the Centre gives Rs. 2100, state's share is Rs 1000 and Rs 300 comes from the beneficiaries. But after the cabinet approval on 8 June 2012, the Centre has to dole out Rs. 3200, the state Rs. 1400 and families have to provide Rs. 900 (The Economic Times,8 June, 2012). • Most of these money will come from while MGNREGA funds.

  27. Conclusions • The optimal strategy for poverty alleviation is bound to be a mixed strategy involving some combination of the direct and indirect approach (Ahluwalia, 1990). • The indirect approach has effects on the whole economy in the long run. In the short run it may fail to have the trickledown effect. • The direct approach has immediate effect on target groups. Government strategy should be such that the need for the direct approach diminishes gradually.

  28. Have we Succeeded? • The greatest proof that the poverty alleviation schemes have not been completely successful is that most of the programmes are still running with new names. • However, we have learnt from our failures and deficiencies. Hopefully these experiences will help us in making the present programmes successful.

  29. Thank You

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