POVERTY REDUCTION EFFORTS IN INDIA

A Short Presentation By Rajeev K Mital

INDIA (Bharat)

• Independence in 1947 • Democratic Republic- Elections every 5 years• Federal Setup with 28 Provinces• Population 1.2 billion• Lots of Diversity – language, culture, religion• Ranks third in terms of GDP (PPP)• Absolute number of poor 300-360 millions

I. AGGREGATE POVERTY MEASURES

1973 1983 1993 2004 20090

10

20

30

40

50

60

70

1973; 54.9

1983; 44.5

1993; 36

2004; 27.5

2009; 18.8

1973; 63.3

1983; 54.2

1993; 45.3

2004; 37.22009; 29.8

Changes in Percentage of People Below poverty lines in last thirty five years

Perc

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f beo

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belo

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over

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I(2). AGGREGATE POVERTY MEASURES

• Millennium Development Goal– Target of 50 % reduction of poverty estimates

between 1990 and 2015.

• With the recent trends of decline in poverty estimates India is well poised to achieve MDG target HCR of 23.9% by 2015

1980 1985 1990 1995 2000 2005 20100

0.1

0.2

0.3

0.4

0.5

0.6

0.7

II. HDI Index- India

HDI Index

III. KEY INTERVENTIONS

Rights based approach: Information Employment Education Food

New generation of Welfare programs programs Workfare programsMicrocredits and Self Help Groups.

Rural Infrastructure:Rural Road Connectivity

Delivery MechanismLocal self Government (Panchayati Raj)NGOs

IV. Full Picture: Population and Poverty

01020

30405060

30.7

51.2

15.5

2.7

26

54.7

16.7

2.621

.8

55

19.3

4

1993-941999-002004-05

V. Dynamic nature of poverty

• Anirudh Krishna’s framework Reasons for Descent into poverty  

Reasons for Escaping Poverty

Poor health and health related expenses Diversification of income

Marriage/dowry/ household related expenses Private sector employment

Funeral-related expenses Public sector employment

High interest private debt Govt assistance/NGOs

VI. Government Programs and Poverty Dynamics Government Programs

Prevent Entry

Enable Escape

Only Ameliorate

Employment and self-employment

Rural Employment Guarantee x Micro Credits and SHGs x Nutrition and education Targeted Public Distribution System x Integrated Child Development Scheme x Midday meals x Education program x Health and health insurance National Rural Health Mission (new ) x Health Insurance (new) x Infrastructure and basic services Rural Connectivity Roads x Housing Total Sanitation Campaign x Accelerated Rural Water Supply x Programs for specific groups Integrated Child Protection Scheme x National Old Age Pension Scheme x

VII. Chronic Poverty • Ref :Hulme, Barett– Threshold effects lead to multiple equilibria and

poverty traps• Ref: Mehta & Shah : In context of India – Agricultural Laborers and Construction workers– Less Favored areas- Forest based economies and hill

areas– Sociology- Scheduled Castes and Scheduled Tribes,

Muslim Segments– Geography -5 states /provinces ( UP, Bihar, Orissa,

Madhya Pradesh, Maharashtra)

VIII. INFERENCES • Health Initiatives including Health Insurance – strategic in combating

poverty.

• Microcredit programs have led to substantial diversification of income sources.

• However a large number of interventions aim to ameliorate persistent poverty and these programs may assist the poor in very gradually improving their capacity to earn better

• Self-employment, education, infrastructure development, seek to enable escape from poverty, although impacts of education-related schemes on the intergenerational transmission of poverty will occur only in the long run.

VIII(2). INFERENCES• The distinction between chronic (persistent ) and transient

poverty is not fully imbibed in the Indian context and poverty alleviation schemes need to address both chronic poverty and the dynamics of poverty.

• Uniform national policy may not be the best time. The various factors and forces associated with poverty and appropriate response could be better dealt at sub-national and local government levels.

• Sound Rural Credit and Insurance Systems are very critical for making dents into chronic poverty.

IX. Emerging Programs/ Initiatives

•Rural Health Insurance: •Started in 2007 ,Health insurance coverage for Below Poverty Line (BPL) families. •Objective :to provide protection to BPL households from financial liabilities arising out of health shocks that involve hospitalization. •Beneficiaries entitled to hospitalization coverage up to Rs. 30,000/- ($ 600) while Central and State Government pays the premium to the insurer

IX(2). Emerging Programs/ Initiatives

Mass/Community Marriages

• Many couples tie the knot under the same roof at the same time.

• They help parents spread the cost.

• State Governments are increasingly incentivizing such endeavors

Thank You