• Since the dawn of human history, the problem of poverty has been an inherent and perpetual characteristic of any type of class or society based on private ownership of the means of production.
  • It can be defined as a social phenomenon in which a section of society is unable to get even its basic necessities of life such as food, house, clean drinking water, shelter, toilet, etc. When a substantial segment of a society is deprived of the minimum level of living (a bare subsistence level) that society is said to be plagued by mass poverty.
  • Further, poverty is a state or condition in which a person or community lacks the financial resources and essentials to enjoy a minimum standard of life and well-being that’s considered acceptable in society.
poverty
  • Besides, poverty has been associated, for example, with poor health, low levels of education or skills, an inability or an unwillingness to work , high rates of disruptive or disorderly behaviour, and improvidence. While these attributes have often been found to exist with poverty, their inclusion in a definition of poverty would tend to obscure the relation between them and the inability to provide for one’s basic needs.
  • Poor people stay in underprivileged living environment. Without adequate food and nutrition, many poor people suffer from malnutrition. Without clean drinking water, they are forced to either stay thirsty or drink unclean water. Young children are even engaged as child labourers. Without proper sanitation and toilets, they are forced to defecate on open fields. Ptomeless people have no choice but to live in the open.

Poverty in India: A Historical Account

  • Poverty was intense during colonial period in India. Numerous famines and epidemics killed millions of people. Since independence a vast percentage of population have been living in acute distress. In 1956-57, a good harvest year India’s poverty rate was found to be 65%.
  • The route of poverty lies in colonial legacy which brought the Indian economy from 25% of Global GDP in 1750s to less than 2%. The systematic exploitation in all areas from agriculture to industry plus discriminatory export-import left Indian economy in shamble. Very low growth during 1900-1947 caused havoc to socio-economic life of Indians inducing a lot of endemic , famine and drought taking millions of lives.
  • Such loot was unprecedented in human history. It plagued the generations to come causing poverty as high as 90% at the time of independence and even thereafter too, it took all effort to bring the population just out of deprivations.
  • The fear psychosis induced out of British capitalism and its mercantilist market economy made India to follow Socialist principle which proved counterproductive rather ensuring egalitarianism. Even post 1990s economic reform too could not be imbibed as per desired due to the entrenched “socialism with limited entry and marketism without exit” notion.
  • Nevertheless , it can’t be said poverty alleviation has not been significant. From 45% BPL population in early 1990s to present 22% is no less feat for such vast country. The similar sustained efforts need to go beyond it till India truly achieves the desired SDG 1.

Causes of Poverty

Historical-Economical

Slow Economic Growth and Development

A country that has slow economic growth due to bad governmental policies causes widespread poverty. Stagnant or slow paced economic development also leads to poverty. Historically slow economic growth has been one of the important causes of poverty in India.

Growing Unemployment

The population growth to jobs ratio if unbalanced can cause unemployment between masses and is a leading cause of poverty. Rapidly Increasing and uncontrolled population in any country is the biggest threat of unemployment related poverty.

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Declining Agricultural Output

This can be due to unpredictable weather patterns. Decreased agricultural output leads to some serious inflation issues. No country can be economically balanced without the aid of a strong agricultural backbone. Yearly agricultural produce governs a major part of a country’s economy and surplus is required to keep poverty away.

Infrastructure Deficit

Infrastructural development also drives the economic growth and hence determines the poverty situation of any place. Lack of infrastructure directly impact growth and employment generation, hence lower productivity and poverty.

Skewed Industrialization

Industries provide huge employment opportunities specially to the locals of the vicinity. Concentration of industries in any one state or place increases the employment in that particular place but, the deprived of areas face acute poverty. Areas having inadequate industrialization causes poverty since employment opportunities become inadequate in the area. Industries also offer well paid jobs as compared to part time jobs in unorganised sector.

Scarcity of Essential Items

Any insufficiency in the production of basic necessities causes nationwide poverty. Food as well as non-food essentials items are always to be ‘production in surplus’ to avoid scarcity.

Deprivation of Resources

Natural deprivation of resources as well as forced or situational deprivation can cause poverty. Lack of proper resources and opportunities deprive people from their target lifestyle and employment options and push them towards poverty. E.g., alienation of forest dwellers from forest pushed them towards poverty.

Concentration of Wealth and Income

A country having uneven concentration of wealth and. resources is much more prone to acute poverty than the one that has a uniform distribution. Uneven concentration leads to an extreme situation wherein some people are filthy rich and many are forced to live below the poverty line. Such unbalance is not good for a nation’s overall economy and development.

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Under-Utilized Natural Resources

Natural resources are God’s gift to us and a place with rich natural resources is considered to be blessed. Hence, natural resources of a place need to completely discovered and exploited to extract their complete economic benefit for welfare of people. This should be a governmental priority to ensure that there should be no scope of poverty in any place due to under-utilization of natural resources.

High Inflation

An economic inflation not only affects the poor but also the middle class of the society. That means more people will come under borderline poverty. High inflation is extremely detrimental for a nation and hit all sections of the society. High inflation along with low growth in a country may cause huge scale job loss and pushing people towards poverty.

Socio-Political

Social Evils Like Untouchability

Untouchability is an unfair social norm still prevalent in some of the backward parts of our country that limit people of certain lower castes from their democratic rights. They are rejected from the society and pushed towards poverty. They are not allowed to venture into the general employment opportunities and are forced to do meagre inhumane jobs like manual scavenging.

Casteism

Caste system segregates people (based on their job) in a society and does not allow them to venture outside their caste to seek employment. For example, a lower caste person will not be allowed to become a businessman or a trader. This system makes the poor get poorer and the rich get richer. This unbalanced and unfair system is another leading cause of poverty.

Abuse of Power

When power is abused, it always has a biased outlook in favour of elite and never helps the downtrodden and poor. A corrupt government would always want to keep the poor section of the society at status quo to exercise more control over the masses. This is one of the major cause of poverty in corrupt countries.

Widespread ignorance and Illiteracy

Illiteracy is another major cause of poverty. Uneducated people are unable to tap their complete potential and hence restrict their earning avenues. They are unable to compete with the educated counterparts of the competitive society and hence remain in poverty. Illiteracy also causes ignorance in people. They are left unaware of all the possible opportunities that any modern society has to offer and spend their life in destitution.

Over Population

Over population in any place increases competition in the employment sector. Too many chasing too little which generates scarcity as a result poverty creeps in as competition increases and opportunities decreases, thereby reducing labour productivity as well as wages.

Inequality of Opportunities

Exercising inequality in the society for whatever reasons can be a cause of poverty. Available opportunities should be offered equally to one and all in a society . Inequality leads to unfair loss of opportunities among the weaker sections of the society thereby making them more vulnerable.

Geographical

High Population Density

An area’s population density too determines its poverty graph. Densely populated places face scarcity of resource and overburdening, hence marked red when it comes to poverty.

Soil Fertility

The fertility of soil is not the same in all region of a country and varies from place to place. While the fertile areas have blessed agricultural produce, the unfertile lands are pushed towards poverty naturally.

Uneven Distribution of Fertile Land

Geographically, fertile lands are distributed in an uneven fashion and this is also a primary cause of poverty in naturally unfertile lands. Fertile lands generate sufficient agricultural employment to the local people and they do not have to look for job opportunities to earn a living. Unfertile lands completely deprive the natives from the agricultural sector and take away this employment scope, which is one of the popular choice of employed among the uneducated villagers.

Variable Agriculture Output

Farm output varies from season to season and year by year. A good year will lead to substantial produce while droughts and other natural calamities can limit the output at times. This variability also causes poverty in difficult times.

Floods

Natural calamities like floods can completely destroy farmlands and adversely affect the agricultural produce. This will lead to disruption of normal lifestyle and lead to poverty situations in the country.

Drought

Another climatic adversity that causes poverty is drought. Long dry spells adversely harm farmlands and the overall agricultural output. Droughts are a permanent cause of poverty in most nations specially in rain dependent irrigation cultivation.

Lack of Seasonal Rainfall

Any abnormalities with the seasonal rainfall also can cause some serious poverty problems. Agricultural produce gets disturbed due to the absence of the predicted rainfall and hence causes inflation related poverty.

Administrative

Mis-Governance

Due to bad governance resources are not fully utilized also several opportunities are lost with projects getting stuck dues to red-tapism. Bad business environment repels investment and job creation.

Lack of Proper Education and Skills

Education is obviously essential for a growing economy, but relevant education is even more important. For example, students should be given more of technical and vocational skills than bookish knowledge which will help them to get technical jobs and reduce unemployment among the masses denting poverty.

Increasing Competition

A society that has a raised qualification standard faces increased competition in the job acquisition front. This also leads to increased competition and resultant unemployment even among the educated population. This government should induce generation of sufficient job opportunities according to rising education standards, especially in cities.

More Demand and Less Supply

The demand-supply relationship has to be balanced to achieve a poverty free nation. The key to a balanced demand-supply state is population control and optimum resource utilization. There is no escaping from the human resource management for a poverty free nation.

Openness and Adaptability

Rural population usually have a backward mindset and refuse to adapt with modernization. This does little to help them change their economic conditions and eliminate poverty. Open mindedness and adaptability of the population at large is an important quality to remove poverty from its very roots. This is the prime responsibility of government to create mass awareness programs.

Mass Migration to Cities

It is important to limit over-crowding of the cities. This is only possible by stopping the mass migration of the villagers to cities. Most rural people leave their village and migrate to cities in search of bigger employment scopes. If the government can develop the rural areas sufficiently and provide good employment as well as educational opportunities to the rural population, they will remain content and stay in their villages. This will reduce the burden in urban areas as well urban poverty ratio.


Poverty Measurement

Determination of poverty and poverty line has always been a tedious and debatable assignment. The method adopted in estimation i.e. income based method or expenditure based method, poverty line basket for bare minimum level of living or a respectable level of living condition or reference period etc. have always been subject of debate over the years vis-a-vis targeting absolute poverty or relative poverty. To address such issue several committee has been formed over the years as described below.

Poverty Estimation Committees

Pre-Independence
  • Poverty and the Un-British Rule in India: One of the earliest estimations on poverty was done by Dadabhai Naoroji in his book, ‘Poverty and the Un-British Rule in India’. He formulated a poverty line ranging from Rs. 16 to Rs. 35 per capita per year, based on 1867-68 prices. The poverty line proposed by him was based on the average cost of a ‘subsistence diet’ comprising of ‘rice or flour, dal, mutton, vegetables, ghee, vegetable oil and salt’.
  • National Planning Committee (NPC): Then, in 1938, the NPC formed by Subash Chandra Bose, the then Congress president, estimated a poverty line ranging from Rs. 15 to Rs. 20 per capita per month. Like the earlier method, the NPC also formulated its poverty line based on ‘a minimum standard of living based on nutritional requirements’.
  • Bombay Plan: Later in 1944, the authors of the ‘Bombay Plan’ suggested a poverty line of Rs. 75 per capita per year.
Post-Independence

Working Group of Planning Commission: This was first created by planning commission in 1962 to estimate a desirable minimum level of expenditure required to make a living.
It recommended ‘national minimum consumption expenditure’ for a household of five as Rs. 100/ month (Rs. 20/ Person) for rural areas and Rs. 125/ month (Rs. 25/ Person) for urban areas using recommendation on ‘Balanced diet’ by Indian council of Medical Research. But it excluded health and educational expenditure assuming that it has to be provided by state.
Task Force Under Y. K. Alagh: Poverty line of 1962 was used during 1960’s and 1970’s at both National and state level. But it attracted intense debate over its low figures. So, a new taskforce under Dr. Y.K. Alagh was created in 1979 by Planning commission to revisit poverty line. It estimated separate ‘Average calorie requirements1 for the all -India rural and urban areas on the recommendation of Nutrition Expert Group which resulted in different ‘Poverty line basket’ for urban and rural areas. The estimated calorific
norm was set at 2400 kcal per capita per day in rural areas and 2100 kcal per capita per day in urban areas.
Lakdawala Expert Group (1993): This panel didn’t redefine poverty line and retained mechanism defined by Algah expert group. Rather it disaggregated ‘All India poverty line’ to ‘State specific Poverty Line’ for base year 1973-74. For latter years these ‘Rural and Urban Poverty lines of states’ were updated taking into account ‘Consumer Price Index-Agricultural Labour’ for ‘Rural state specific poverty line’ and ‘CPI-Industrial workers’ for ‘Urban state specific poverty line’. Then an All India poverty Ratio (rural and urban) was derived through ‘population based weighted average’ of poverty ratios of various states by
Expert Group under Late Prof. Suresh Tendulkar in 2005. It adopted ‘Mixed Reference Period’ in place of ‘Uniform reference period’. During previous methodologies, a ‘uniform reference period’ was used that included 30 days just before the survey for all food and non-food items. But Tendulkar group changed ‘reference period’ to past one year for 5 non-food items viz., clothing, footwear, durable goods, education and institutional medical expenses. For other items it retained 30 days reference. This is called ‘Mixed reference period’.

Tendulkar committee used a uniform basket (for both rural and urban) based on previous urban poverty line basket. These changes were made for base year 2004-05 and ahead. This resulted in making past poverty lines incomparable with new ones as they were based on Uniform Reference Period and Separate baskets for rural and urban India. Poverty line was formed as ‘Rs. 32 per capita per month for urban areas’ and ‘Rs. 26 per capita per month’ for rural areas.
C. Rangarajan Expert Group (2012): It however used ‘Monthly expenditure of Household of five’ for the poverty line purpose which came out to be Rs. 4860 in rural areas and Rs. 7035 in urban areas and then divided by five. It is argued that expenditure of household is more appropriate than that of individuals. Living together brings down expenditure as expenses like house rent, electricity etc. gets divided into household members. It also reverted to old system of separate poverty line baskets for Rural and urban areas, which was unified by Tendulkar group. Then, instead of ‘Mixed reference Period’ it recommended ‘Modified Mixed reference period’ in which reference periods for different items were taken as:

  • 365-days for clothing, footwear, education, institutional medical care, and durable goods,
  • 7-days for edible oil, egg, fish and meat, vegetables, fruits, spices, beverages, refreshments, processed food, pan, tobacco and intoxicants, and
  • 30-days for the remaining food items, fuel and light , miscellaneous goods and services including noninstitutional medical; rents and taxes.

As per these estimates the 30.9% of the rural population and 26.4% of the urban population was below the poverty line in 2011-12. The all-India ratio was 29.5%.

The World Bank estimates of poverty based on the poverty line of US $1.25 per person per day measured at 2005 international price and adjusted to local currency using PPP (Purchasing Power Parity) are 23.6% of Indian population, or about 276 million people. The international poverty line is worked out as the average of national poverty lines in poorest fifteen countries (in terms of consumption per capita). Asian Development Bank too has its own poverty line which is currently at $ 1.51 per person per day.


Multidimensional Poverty

  • The Multidimensional Poverty Index (MPI) was developed in 2010 by the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme and uses different factors to determine poverty beyond income-based lists. MPI has replaced HDI (Human Development Index).
  • Like development, poverty is multidimensional – but this is traditionally ignored by headline money metric measures of poverty.
  • MPI complements traditional income-based poverty measures by capturing the severe deprivations that each person faces at the same time with respect to education, health and living standards.
The following ten indicators are used to calculate the MPI:

Education (each indicator is weighted equally at 1/6)

  • Years of Schooling: Deprived if no household member has completed five years of schooling.
  • Child School Attendance: Deprived if any schoolaged child is not attending school up to class 8.

Health (each indicator is weighted equally at 1/6)

  • Child Mortality: Deprived if any child has died in the family.
  • Nutrition: Deprived if any adult or child for whom there is nutritional information is malnourished.

Standard of Living (each indicator is weighted equally at 1/18)

  • Electricity: Deprived if the household has no electricity.
  • Sanitation: Deprived if the household’s sanitation facility is not improved.
  • Drinking Water: Deprived if the household does not have access to safe drinking water or safe drinking water is more than a 30-minute walk from home roundtrip.
  • Floor: Deprived if the household has a dirt, sand or dung floor.
  • Cooking Fuel: Deprived if the household cooks with dung, wood or charcoal.
  • Assets Ownership: Deprived if the household does not own more than one radio, TV, telephone, bike, motorbike or refrigerator and does not own a car or truck.

A person is considered poor if they are deprived in at least a third of the weighted indicators. The intensity of poverty denotes the proportion of indicators in which they are deprived.

The MPI can be used to create a comprehensive picture of people living in poverty, and permits comparisons both across countries, regions and the world and within countries by ethnic group, urban/rural location, as well as other key household and community characteristics.

These characteristic make the MPI useful as an analytical tool to identify the most vulnerable people – the poorest among the poor, revealing poverty patterns within countries and over time, enabling policy makers to target resources and design policies more effectively.

Comparative Perspective: MPI and HDI
  • While both HDI and MPI use the 3 broad dimensions health, education and standard of living, HDI uses only single indicator for each dimension of poverty while MPI uses more than one indicator for each one.
  • However, though HDI is thus more universally applicable, its relatively less number of indicators also makes it more susceptible to bias. Indeed, some studies have found it to be somewhat biased towards GDP per capita. Hence, HDI has been criticized for ignoring other development parameters.
  • Thus, Multidimensional poverty assessments aim to measure the non-income based dimensions of poverty, to provide a more comprehensive assessment of the extent of poverty and deprivation.
Multidimensional Poverty

Potential additional indicators in modified MPI to better reflect the SDGs may include work; housing; violence; social protection; quality of schooling; health system functioning; teenage marriage or pregnancy; solid waste disposal; birth registration; internet access; farm assets and a household’s vulnerability to economic shocks and those posed by natural hazards and quality of work; and empowerment or psychological wellbeing.


Poverty and Associated Issues

Malnutrition

Poverty is the main cause of hunger and malnutrition (hidden hunger). Insufficient intake of nutrients results in malnutrition, thereby inhibiting physical and mental growth. Malnutrition at early childhood gravely affects the immunity and reduces productive abilities even in later ages. According to latest Global Nutrition report 2017, 38% children under age of five are stunted – much lower height for their age; 21 % of children under age of five are wasted – much lower weight for their height and 51 % women of reproductive age and 75% of children suffering from anemia which has long term impacts on health of mother and children. Poor has the only asset i.e. their body which is also affected by malnutrition, trapping them in vicious circle of poverty.

Unemployment

Poor people move from villages to towns and form one town to another in search of employment/work. Since, they are mostly illiterate and un-skilled, there are very few employment opportunities open for them. Due to unemployment, many poor people are forced to beg and sleep under open sky. Even those who are slightly better off fail to upgrade their skills due to lack of resource and end up getting trapped in mostly low wage job. In India agriculture employes around half of population but contributes only
around 15 % to GDP resulting in overburdened agriculture sector lowering agriculture productivity and plenty of disguised unemployment.

Illiteracy

Poor people constitute greater share of illiterate population. Education becomes extremely difficult when people are deprived of basic necessities of life. Lack of education and skills closes all doors of skilled employment in modern economy and chances of better employment in future. Lastly, they end up doing unskilled or manual labour or undignified manual scavenging.

Feminization of Poverty

  • Women are the worst victims of poverty. Poverty affects greater number of women than men. The total of poor women outnumbers the total population of poor men. The causes include low income, gender-inequality, gender wage disparity, lack of financial or property rights in inheritance etc. They are largely deprived of proper-diet, education and health care. Lack of property rights make them financially dependent on male members of family.
  • Specially condition of divorced, estranged and widow women are extremely poor. They are forced to live as beggar or in destitution.

Health, Hygiene and Sanitation

  • Poor people neither have adequate knowledge about hygiene and proper sanitation system nor means to maintain it. They are also not aware of the harmful consequences of not maintaining proper hygiene. The availability of clean drinking water, hygiene and proper sanitation system also affect their health. Health care being costly, they end up in vicious cycle of poor health, lower productivity and lost wages.
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Weak Civil Society

Due to weak civil society and dependence of NGO on government funding they fail to properly advocate the issues of poor. Also, agenda of NGOs are hijacked by MNCs who fund them to serve their interest.

Crime and Social Tension

Poverty is often characterized with income disparity and unequal distribution of national wealth between the rich and the poor. Concentration of wealth in the hands of few rich people lead to social disturbances and crimes. Fair or even distribution of wealth leads an overall improvement in general standard of living of people.

Child Labour, Modern Slavery and Bonded Labour

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  • Poverty forces children out of school to go and earn money for their family. The innocent lives are forced to work under unsuitable working condition for long duration affecting their health severely. Even after laws for prohibition of child labour we often find small kids working at roadside dhabas, as domestic servants, in harmful industries etc.
  • There are also several poor families who are so indebted that they are forced to work like bonded labour without fair wage and good working condition. Poverty has converted them into modern day slaves – with no rights and no voice.

Impact on Development of India

Poor people are the depressed and deprived class. They do not get proper nutrition and diet. Their conditions have not sufficiently improved even long after over 65 years of our Independence.

Poverty in Urban India

  • Just like most of the growing and developing countries, there has been continuous increase in Urban population. Poor people migrate from rural areas to cities and towns in search of employment/financial activity and better life.
  • The income of more than 8 crores urban people is estimated to fall below poverty line (BPL). In addition to this, there are around 4.5 crores urban people whose income level is on borderline of poverty level.
  • The income level of urban poor is highly unstable. A large number of them are either casual workers or self-employed.
  • Banks and Financial institutions are reluctant to provide them loan because of their unstable income. Five states that constitutes around 40% of all urban poor people of India are Uttar Pradesh, Bihar, Rajasthan, Odisha, and Madhya Pradesh.
  • Around 35% of the total population of the four metro cities (Delhi, Kolkata, Chennai and Mumbai) consists of slum population.
  • A large portion of people living in slums are illiterate. The initiatives taken to deal with the problem of urban poverty has not yielded the desired results. A lot need to be done to make cities a sustainable and liveable place.

Poverty in Rural India

  • It is said that rural India is the heart of India. In reality, the life of people living in rural areas is marked with severe poverty. Despite all efforts, the condition of poor villagers is far from satisfactory. The report on Socio-economic and Caste Census (2011) reveals the following facts:
    • SC/ST: Of all the rural households, around 18.46 percent belongs to scheduled castes, and around 10.97 belongs to Scheduled Tribes.
    • Major Source of Income: Manual causal labour jobs and cultivation are the major sources of income for rural people. Nearly 51 percent of all households are economically engaged in manual casual labour and nearly 30 percent of them is engaged in cultivation.
    • Deprived: Around 48.5 percent of rural households are deprived according to the census.
    • Assets: Only 11.04 percent of families own a refrigerator while there is a vehicle (including two-wheeler, boat, etc.) in around 29.69 percent of the rural houses.
    • Income Tax: Only 4.58 percent of rural households pay income tax.
    • Land Ownership: Around 56 percent of village households doesn’t own a land.
    • Size of Rural Houses: The houses of around 54 percent rural families consists of either one or two-rooms. Out of them, around 13 percent lives in a one-room house.

Growth and Development

Growth Oriented Approach

  • In the beginning, India’s Five-Year Plans laid emphasis on the growth of economy of the country as a whole through raising production and the per capita income. It was postulated that the benefits of rapid economic growth would automatically trickle down to the poor people and raise their living standard through providing them more employment opportunities, higher income and more wages. The Government began with the Community Development Project (CDP) in 1952. Under this project the whole community in a particular area was taken as a homogeneous unit. The emphasis was given on economic growth. The project covered the programmes like improvement in agriculture, animal husbandry, village and small industries, health and sanitation, social education etc.
  • Moreover, an effort was made to effect changes in the pattern of landownership through various land reform measures such as the abolition of the zamindari system, tenancy reforms, ceilings on landholding and distribution of surplus land to the small landholders and landless people.
  • Further, in the nineteen sixties, antipoverty programmes concentrated in places and in crops where these could significantly raise production. The important programmes comprised the Intensive Agricultural District Programme (IADP) and the Intensive Agricultural Area Programme (IAAP) launched in 1960 and 1964 respectively.
  • Since the mid-sixties, the Government has mainly helped the better off farmers and big landowners to raise agricultural production through adopting modern technology in the form of use of High Yielding Varieties (FtYV) of seeds, chemical fertilizers, tractors, water pumps etc.
  • In course of time it was realized that the benefits of these development programmes have been largely cornered by the privileged section of the rural population. The impact of land reform measures was also very limited. The conditions of the poor did not improve. In fact, their number increased both in rural and urban areas.

Growth with Social Justice

  • When it was observed that the growth oriented approach was a failure in effecting the trickling down of benefits of development to the poor, the five year plans started giving special emphasis on the cause of social justice.
  • Themotto of development since the early seventies became growth with social justice. Special programmes were launched to benefit the backward areas and backward section of the population e.g. small and marginal farmers and landless labourers and especially those belonging to the scheduled castes and the scheduled tribes.

Inclusive Development

  • When fruits of development reach to all section of society then such development is called as inclusive development. But in India Trickle down growth model has failed to uplift people out of poverty, rather it has widened the gap between the rich and poor after economic reforms. This has generated areas of extreme poverty, where living conditions are desperate and there is little or no access to basic services.
  • India has been ranked 60th among 79 developing economies, below neighbouring China and Pakistan, in the inclusive development index, released by WEF in ‘Inclusive Growth and Development Report 2017’.

Sustainable Development

  • Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
  • Changing social, political, cultural, technological and ecological conditions will exert new pressures on the natural resource base and the possibility of its misuse or overuse will always remain.
  • Sustainability thus demands the creation of a political order in which, control of natural resources rests to the maximum extent possible with local communities who are dependent on those resources; and, decision-making within the community is as participatory, open and democratic as possible. The more this happens, the more we will move towards sustainable development as poor pay the price for growth and rich reap the whole benefit without any cost.
  • It has been a great success for civil society with resolution to end hunger and poverty as first two goals in SDGs.
  • Goal 1: End poverty in all its forms everywhere
  • Goal 2: End hunger, achieve food security and improved nutrition and promote sustainable agriculture.
SDG Wheel
  • Poor are worst affected by climatic change and steps towards sustainable development will go in long way to pull them out of misery.
  • Steps taken by Government towards sustainable development are:
  1. Ratifying Paris Agreement
  2. The Clean Development Mechanism projects in India
  3. State Action Plans on Climate Change
  4. Coal Cess and the National Clean Energy Fund
  5. National Adaptation Fund for Climate Change

The expression popularized by Prime Minister Narendra Modi “Sabka Saath Sabka Vikas”, which translates as “Collective Effort, Inclusive Growth” and has been, forms the cornerstone of India’s national development agenda.

Financial Inclusion

  • Even after 70 years of independence, still a large section of Indian population remains unbanked. This malaise has led generation of financial instability and dependence upon private money lenders among the lower income group who do not have access to financial products and services.
  • The poor having no options are forced to borrow from money lenders at very high interest rates and are engulfed into indebtness perpetually.
  • The government launched Jan Dhan Yojana focusing on financial inclusion of Indian rural and semi-rural areas primarily for three most important pressing needs:
    • Creating a platform for inculcating the habit to save
      money.
    • Providing formal credit avenues.
    • Plug gaps and leaks in public subsidies and welfare programmes.

Initiation of no-frills account, Banking service in unbranched rural areas through business correspondents, payment bank etc has increased financial inclusion in India. Kisan Credit Card and over draft facilities has also lead to formalisation of borrowing among farmers.

Capability Approach

  • The Capability Approach was first articulated by the Indian economist and philosopher Amartya Sen in the 1980s.
  • The Capability Approach is defined by its choice of focus upon the moral significance of individuals’ capability of achieving the kind of lives they have reason to value.
  • A person’s capability to live a good life is defined in terms of the set of valuable ‘beings and doings’ like being in good health or having loving relationships with others to which they have real access.
  • The Capability Approach focuses directly on the quality of life that individuals are actually able to achieve. This quality of life is analyzed in terms of the core concepts of ‘functionings’ and ‘capability’.
  • Functionings are states of ‘being and doing’ such as being well-nourished, having shelter. They should be distinguished from the commodities employed to achieve them (as ‘bicycling’ is distinguishable from ‘possessing a bike’).
  • Capability refers to the set of valuable functionings that a person has effective access to. Thus, a person’s capability represents the effective freedom of an individual to choose between different functioning combinations – between different kinds of life – that she has reason to value. This allows analysis to focus on sets of functionings related to particular aspects of life, for example, the capabilities of literacy, health, or political freedom.)
  • Flere ‘poverty ’ is understood as deprivation in the capability to live a good life, and ‘development’ is understood as capability expansion.

Globalisation and Poverty: A Critical Perspective

  • Globalisation in the form of increased integration, though trade and investment is an important reason why so much progress has been made in reducing poverty and global inequality over recent decades. But it is not the only reason for this often unrecognized progress, national polices, sound institutions and political stability matters.
  • The Globalisation period has seen welfare enhancement through a long-term decline in poverty. The proportion of population below the poverty line was 55 percent in 1973, after which there has occurred a secular decline.
  • Globalisation gives rise to the creation, production, distribution and consumption of goods and services on an unprecedented scale. That process is meant to increase economic activity for people, enterprises and countries through free international trade, direct foreign investment, and capital market flows. For a capital deficient economy, it means opening up new avenues of investment and utilization of untapped natural resources and latent energies.
  • Export growth and incoming foreign investment have reduced poverty. Poverty has fallen in regions where exports or foreign investment is growing. In India, opening up to foreign investment has been associated with a decline in poverty. The rapid development of the capital market has been one of the important features of the current process of Globalisation.
  • Globalisation in India had a favorable impact on the overall growth rate of the economy. The pickup in GDP growth has helped improve India’s global position. The evidence strongly suggests that export growth and incoming foreign investment have reduced poverty everywhere from Mexico to India to Poland.
  • Though Globalisation has many advantages but it carries many fears in the current scenario. The first major concern is that Globalisation leads to a more unequal distribution of income among countries and within countries. The second fear is that Globalisation leads to loss of national sovereignty and those countries are finding it increasingly difficult to follow independent domestic policies.
  • Globalisation has so far opened up markets and reached the rural population as consumers. Branded products, durable consumer good, preserved food items have been offered in convenient small packs. They have been targeted as mobile consumers and attractive packages have been made available at their doorsteps.
  • But until and unless the rural population is intertwined into the production process, as service providers, workmen, or producers of intermediate goods/ inputs for the production chain of multinational companies, their poverty can only rise and in no case can decline.
  • Simply their earnings, their income receipts have to increase along with their consumption demand, if we have to safeguard them from being culprits of indebtedness, or corruption.
  • Otherwise, Globalisation will, in its present form, raise GDP figures, but not the welfare of the masses. Absolute poverty may and has reduced to some extent but relative poverty will increase due to increasing disparities of income distribution and job opportunities.

Politics of Poverty: Povertarianism

  • Povertarianism was coined by Indian Express editor Shekhar Gupta in an editorial as a pejorative term for what Gupta dubs as the ‘socialist’ and ‘welfarist’ worldview of the UPA government . The central postulate of povertarianism is, poverty is my birthright, and I shall do anything possible to make sure you have it.
  • The implication is, of course, that an economic policy focused on poverty and which includes interventionist programmes is anti-capitalist, and therefore by definition, anti-poor.
  • The current model of capitalism, dictated by American interests and executed by organizations such as International Monetary Fund and World Bank, is deeply flawed. It has turned capitalism, which is inherently democratic and democratizing, into an instrument to promote the interests of an influential few.
  • The single-minded emphasis on growth has led to structural imbalances in the economy and growing inequalities in several countries and created the threat of social destabilisation. The current model of capitalism is not delivering the results the way it was intended to. The one-size-fits-all approach to the economic problems of the poorer countries adopted by international institutions is unwise and sometimes counterproductive.
  • Economist Stiglitz emphasises that countries which have been smart enough to control the process of globalisation and adapt it to their conditions have prospered without making a lopsided trade off between growth and inequality.
  • Therefore, reforms are needed in the present model of capitalism providing safety nets to poor vis-a-vis building their capacity via education and skilling rather than political rhetoric of welfarist or povertarian. Labour laws shouldn’t be focused on protecting labour but on protecting production.
  • If production is protected labour will be automatically safeguarded and protection of production should not be mistaken as protection of capitalist and anti-poor.
  • Excessive intervention and state socialism has made public sector uncompetitive and burden on exchequer which steal the precious resource which could have been invested in infrastructure development which could have benefited the poor better. Politics of subsidy should give way to capital investment on creation of durable assets.

Government Efforts to Eradicate Poverty

Post-independence, the central and state governments have adopted the following important measures to reduce poverty:

Five Year Plans

  • The resonance of the Constitutional commitments implying removal of poverty has permeated into all the Five-Year Plans in tacit or categorical terms. For example, the Second Five-Year Plan stated that the benefits of economic development must accrue more and more to the relatively less privileged classes of society.
  • The focus of the Ninth five-year Plan was growth with social justice and equity. The Tenth Plan aims at economic growth with a stronger thrust on employment generation and equity.
  • But the efficacy of the approach and strategy adopted for resolving the problem is very doubtful.

Nationalization

Policy of nationalization was adopted in 1969 when 14 banks were nationalized. This was followed by nationalization of coal mines in 1972, and the government’s taking over the control of big private iron and steel company and a wholesale business in food grains. Nationalization aimed at granting credit to weaker sections.

Twenty Point Program (TPP)

Indira Gandhi propounded this program in July 1975 for reducing poverty and economic exploitation, and for the upliftment of the weaker sections of the society. The 5 important goals of this program were:

  • Controlling inflation
  • Giving incentive to production
  • Welfare of the rural population
  • Lending help to the urban middle classes
  • Controlling economic and social crimes
  • The programs included in 20 point programs were:
  • Increase in irrigational facilities,
  • Increase in production programs for rural employment,
  • Distribution of surplus land,
  • Minimum wages to landless labourers,
  • Rehabilitation of bonded labour,
  • Development of Scheduled Castes and Scheduled
  • Tribes,
  • Growth of housing facilities,
  • Increasing power production,
  • Family planning,
  • Tree plantations,
  • Extension of primary health facilities,
  • Programs for the welfare of women and children,
  • Increase in primary education,
  • Strengthening of the distribution system,
  • Simplification of industrial policies,
  • Control of black money,
  • Betterment of the drinking water facilities, and
  • Developing internal resources

At present, the Twenty Point Programme tracks progress of each state under schemes such as job creation, urban poor families assisted under Seven Point Charter, food security, number of houses constructed for economically weaker sections, electrification of villages, number of seedlings planted, roads constructed under Prime Minister’s Gramin Sadak Yojana, food security and number of self-help groups promoted.

Poverty Alleviation Programs

Poverty alleviation programs in India can be categorized based on whether it is targeted for rural areas or urban areas. Most of the programmes are designed to target rural poverty as the prevalence of the poverty is high in rural areas.

The programs can be mainly grouped into 5 types:

  1. Wage Employment Programmes, e.g. MGNREGA , Skill India, Deen Dayal Upadhyaya Grameen Kaushalya Yojana
  2. Self-Employment Programmes, e.g. MUDRA , UDAAN, Shyama Prasad Mukherjee Rurban Mission Stand Up India.
  3. Food Security Programmes, e.g. NFSA, PDS, ICDS
  4. Social Security Programmes, e.g. Atal Pension Scheme, Pradhan mantra Jan Dhan Yojana, Pradhan Mantri Fasal Bima Yojana, Housing For All.
  5. Other Schemes and Urban Poverty Alleviation Programmes, e.g. Make in India, Pradhan Mantri Sadak Yojana, Deen Dayal Upadhyay Gram Jyoti Yojana.

MGNREGA

Aims
  1. To enhance livelihood security.
  2. To serve as instrument of rural empowerment.
  3. Rural poverty alleviation.
Features
  1. Provides a legal guarantee for one hundred days of employment in every financial year to adult members of any rural household willing to do public work-related unskilled manual work at the statutory minimum wage.
  2. 33% of the jobs given to women.
Benefits
  1. Supplementary and sustains households when non MGNREGA work opportunities are few.
  2. Enhances rural income.
  3. Provision such as Work within 5 km from home, equal wages etc have provided greater work opportunities for women and improved gender parity.
    • Participation rate for women is more than 50%.
    • More than the statutory requirement of 33%.
  4. Demand driven legai framework gave it an open ended budget allocation.
  5. It has reduced distress migration
  6. Survey by NCAER showed that it has reduced poverty among advasis and dalits by 28% and 38% respectively.
  7. Revitalizing the labour market in rural areas
    • Creation of class of workers who are using MGNREGA as a safety net.
    • These workers are able to use it as a bargaining tool for extraction of higher wages.
  8. Single most important instrument for empowering gram panchayats.
    • Gram sabhas to plan their own works and untied funds to execute these works.
  9. Water related assets created which has increased quantity of water available and led to change in cropping pattern and increased area under cultivation.
Critical Perspectives of MGNREGA
  1. Act’s uneven implementation across states.
  2. Leakages: e.g. Ghost jobs
  3. Several studies show that the assets created under this scheme are not very productive
  4. Has not resulted in any significant capital asset. Rectified by adding permissible work in 2013- rural infrastructure (50%) including toilets and creating assets for marginalized community (23%)
Corruption
  1. Corruption is being tackled through IT and community based accountability mechanism like social audit. Digitisation of all information and putting it in public domain.
  2. Rural wages increased which has fuelled inflation
    • Inflation accelerates when nominal wages rise faster than productivity
    • Inflation hits poor the hardest
    • Paradoxically, the delinking of rural wages from productivity acted as an incentive for farmers to replace men with machines.
  3. Income from MGNREGA may not be sufficient to escape from poverty.
  4. Unnecessary spending
    • The average poverty gap (difference between average incomes of the poor and the poverty line) is Rs. 1,700 a year . The government spends, via the MGNREGA alone, Rs 32,500 a year or 19 times (32,500/1,700) what is needed to make an average poor person non-poor.
    • With perfect targeting (275 million poor receive Rs. 1,700 each), the government needs to spend Rs 47,000 crore to eliminate Tendulkar poverty on an annual basis — or about what it spends on the MGNREGA alone.
    • It is better to provide cash transfers to all the poor rather than just the odd poor person that falls into the well-intentioned MGNREGA net.

There is large scale delay in payment of wages.

Nevertheless MGNREGA is a bulwark against poverty prevalent in India and a strong reprieve for the poor populace.

Skill India

  • Skill India is an initiative of the Government of India. It was launched on 16 July 2015 with an aim to train over 40 crore people in India in different skills by 2022. The initiatives include National Skill Development Mission, National Policy for Skill Development and Entrepreneurship 2015, Pradhan Mantri Kaushal Vikas Yojana (PMKVY) scheme and the Skill Loan scheme.
  • The objective of this skill certification and reward scheme is to enable and mobilize a large number of Indian youth to take up outcome based skill training and become employable and earn their livelihood. Under the scheme, monetary reward would be provided to trainees who are successfully trained, assessed and certified in skill courses run by affiliated training providers.

Deen Dayal Upadhyaya Grameen Kaushalya Yojana

  • According to Census 2011, India has 55 million potential workers between the ages of 15 and 35 years in rural areas. At the same time, the world is expected to face a shortage of 57 million workers by 2020.
  • This presents a historic opportunity for India to transform its demographic surplus into a demographic dividend.
  • The Ministry of Rural Development implements DDUGKY to drive this national agenda for inclusive growth, by developing skills and productive capacity of the rural youth from poor families.
  • There are several challenges preventing India’s rural poor from competing in the modern market, such as the lack of formal education and marketable skills. DDU-GKY bridges this gap by funding training projects bench marked to global standards, with an emphasis on placement, retention, career progression and foreign placement.
  • Also, Regional Focus: Greater emphasis on projects for poor rural youth in Jammu and Kashmir (HIMAYAT), the North-East region and 27 Left-Wing Extremist (LWE) districts (ROSHINI).

MUDRA Bank Yojana

This scheme launched the promised Micro Units Development and Refinance Agency Ltd (MUDRA) Bank on 8 April, 2015 with a corpus of Rs. 20,000 crores and a credit guarantee corpus of Rs. 3,000 crores.

Most individuals, especially those living in rural and interior parts of India, have been excluded from the benefits of formal banking system. Therefore, they never had access to insurance, credit, loans and other financial instruments to help them establish and grow their micro businesses. So, most individuals depend on local money lenders for credit. The loan comes at high interest and often with unbearable
conditions, which make these poor unsuspecting people fall in a debt-trap for generations. When businesses fail, the borrowers become vulnerable to the lender’s strongarm tactics and other forms of humiliation.

As per NSSO Survey of 2013, there are close to 5.77 crores small-scale business units, mostly sole proprietorships, which undertake trading, manufacturing, retail and other small-scale activities.

The principal objectives of the MUDRA Bank are:

  1. Regulate the lender and the borrower of microfinance and bring stability to the microfinance system through regulation and inclusive participation.
  2. Extend finance and credit support to Microfinance Institutions (MFI) and agencies that lend money to small businesses, retailers, self-help groups and individuals.
  3. Register all MFIs and introduce a system of performance rating and accreditation for the first time.
    This will help last-mile borrowers of finance to evaluate and approach the MFI that meets their requirement best and whose past record is most satisfactory. This will also introduce an element of competitiveness among the MFIs. The ultimate beneficiary will be the borrower.
  4. Provide structured guidelines for the borrowers to follow to avoid failure of business or take corrective steps in time. MUDRA will help in laying down guidelines or acceptable procedures to be followed by the lenders to recover money in cases of default.
  5. Develop the standardized covenants that will form the backbone of the last-mile business in future.

To address these the three segments, MUDRA Bank has launched three loan instruments:

  • Shishu: Covers loans upto Rs. 50,000/-
  • Kishor: Covers loans above Rs. 50,000/- and upto Rs. 5 lakh
  • Tarun: Covers loans above Rs. 5 lakh and upto Rs. 10 lakh

MUDRA operates as a refinancing institution through State/ Regional level intermediaries. It refinances NBFCs/MFIs and also banks, primary lending institutions etc.

MUDRA Bank is a step by the government that can be a game changer in giving birth to a new set of entrepreneurs, some of whom may scale heights not imagined today.

This is far better than giving subsidy, which may seem welcoming at first, but does little to help an individual strive for a better life.

UDAAN

Udaan is a Special Industry Initiative for Jammu and Kashmir in the nature of partnership between the corporates of India and Ministry of Home Affairs and implemented by National Skill Development Corporation. The programme aims to provide skills training and enhance the employability of unemployed youth of J&K.

It has two objectives:

  1. To provide an exposure to the unemployed graduates to the best of Corporate India;
  2. To provide Corporate India, an exposure to the rich talent pool available in the State.

Shyama Prasad Mukherji Rurban Mission

Main elements of Rurban Mission

  1. Development of Rurban growth clusters, which have latent potential for growth, in all States and UTs to trigger overall development in the region. These clusters are essentially Smart Villages.
  2. Rural growth clusters would be developed by provisioning of economic activities, developing
    skills and local entrepreneurship and providing infrastructure amenities.

The scheme through development of rurban growth clusters aimed at catalyzing overall regional growth, would thus simultaneously benefit the rural as well as urban areas of the country, by achieving twin objectives of strengthening rural areas and de burdening the urban areas hence leading to balanced regional development and growth of the country.

Stand Up India

Stand Up India Scheme” to promote entrepreneurship among SC/ST and Women entrepreneurs. The Scheme is intended to facilitate at least two such projects per bank branch, on an average one for each category of entrepreneur.

The Stand Up India Scheme provides for:

  • Focus is on hand-holding support for both SC/ST and Women borrowers.
  • The overall intent of the approval is to leverage the institutional credit structure to reach out to these under-served sectors of the population by facilitating bank loans repayable up to 7 years and between Rs. 10 lakh to Rs. 100 lakh for greenfield enterprises in the non-farm sector set up by such SC, ST and Women borrowers.
  • The loan under the scheme would be appropriately secured and backed by a credit guarantee through a credit guarantee scheme for which Department of Financial Services would be the settler and National Credit Guarantee Trustee Company Ltd. (NCGTC) would be the operating agency.

Atal Pension Yojana

  • The APY Scheme was launched in continuation to the Jan Dhan Yojana Scheme to bring those employed in rural and unorganized sector under the ambit of Pension Schemes. The idea of the scheme is to provide a definite pension to all Indians .
  • However, in order to get pension during old age, one needs to contribute accordingly. The more one would contribute the more pensions one gets during old age. The scheme would mostly touch those working under unorganized sector.
  • Eligibility: Any Indian national within the age group of 18 to 40 years is eligible to contribute under APY .

Pradhan Mantri Awas Yojana: Housing for All

The government of India had earlier launched ‘Housing for All’ scheme, which has now been reformed as Pradhan Mantri Awas Yojana. The Scheme has been launched on 25th June 2015. The target beneficiaries of the scheme would be poor and people living under EWS and LIG categories in urban establishments of the country.

The features of Pradhan Mantri Awas Yojana are as following:

  • The government would provide an interest subsidy of 6.5% on housing loans availed by the beneficiaries for a period of 15 years from the start of loan.
  • The houses under Pradhan Mantri Awas Yojana would be allotted to preferably the female member of the family. Along with this, preference would be given to the female applicants, in general.
  • While allotting ground floors in any housing scheme under the PMAY, preference would be given to differently-abled and older people.
  • The construction of houses under PMAY would be carried out through technology that is eco-friendly.
  • An average of Rs. 1 lakh would be granted by the Government of India to all the beneficiaries under the scheme.

Pradhan Mantri Jan Dhan Yojana

  • Pradhan Mantri Jan Dhan Yojana (PMJDY) is a nationwide scheme launched by Indian government in August 2014. In this scheme financial inclusion of every individual who does not have a bank account is to be achieved.
  • The scheme will ensure financial access to everyone who was not able to get benefits of many other finance related government schemes. These financial services include Banking/Savings and Deposit Accounts, Remittance, Credit, Insurance, Pension which will be made available to all the citizens in easy and affordable mode.
  • In Pradhan Mantri Jan Dhan Yojna the entire individuals irrespective of their area (rural or urban) can get a bank account without depositing any amount if they fulfill other eligibility criteria. This scheme is very beneficial for the rural population where banking services and other financial institution are rarely available.
  • The account holders under the Jan Dhan Yojana will be given a RuPay debit card which can be used at all ATMs for cash withdrawal and at most of the retail outlets for making transaction for purchases.

Rashtriya Swasthya Bima Yojana (RSBY)

  • RSBY was launched for the BPL families, who are susceptible of any sort of disease. It was found in previous by years that the BPL family groups have a tendency to acquire cash from others, which makes them at last in debts. Rashtriya Swasthya Bima Yojana gives full insurance to them next to high medicinal costs.
  • Coverage: It gives coverage to five family members, including three members who are dependent on the main member of the family.
  • No Cash utilization: There will be no hard cash use in the entire services of health given to the BPL family groups. It will be absolutely a Cashless Coverage. No age limit to enlist for RSBY.

Pradhan Mantri Fasal Bima Yojana

  • The main motto of this crop insurance scheme is to provide a more efficient insurance support to the farmers of the country and become a financial support to thousands of farmers. Government has decided to provide low premium insurance cover to the farmers so that they can sustain even if the yield is damaged.
  • This scheme was launched on 13th January, 2016. This crop insurance scheme is administered under the Ministry of Agriculture and Farmers’ Welfare, Government of India.
  • It has replaced the existing two crop insurance schemes National Agricultural Insurance Scheme (NAIS) and Modified NAIS. The new scheme will come into force from the Kharif season starting in June 2016.
Crops Covered

The scheme covers kharif , rabi crops as well as annual commercial and horticultural crops. For Kharif crops, the premium charged would be up to 2% of the sum insured. For Rabi crops, the premium would be up to 1.5% of the sum assured. For annual commercial and horticultural crops, premium would be 5 per cent. The remaining share of premium will be borne equally by the central and respective state governments.

Losses Covered

Apart from yield loss, the new scheme will cover postharvest losses also. It will also provide farm level assessment for localised calamities including hailstorms, unseasonal rains, landslides and inundation.

Use of Technology
  • The scheme proposes mandatory use of remote sensing, smart phones and drones for quick estimation of crop loss. This will speed up the claim process.
  • Thus, new crop insurance scheme has the potential to deal with the vagaries of nature on Indian farming. The premium to be paid by the farmers is kept low when compared with earlier crop insurance schemes.

Pradhan Mantri Gram Sadak Yojana

The Pradhan Mantri Gram Sadak Yojana or PMGSY is a nationwide plan in India to provide good all weather road connectivity to unconnected villages. This will help accelerate economic activity of rural areas which in turn will help bring prosperity in the region.

Gram Uday Se Bharat Uday Abhiyan

  • Starting from Dr. Ambedkar’s 125th birthday on 14th April 2016 and culminating in Panchayati Raj Day on 24th April 2016, in the period between 14th April to 24th April 2016, the Central Government, in collabouration with States and Panchayats, organized a ‘Gram Uday Se Bharat Uday Abhiyan’ (Village Self Governance Campaign).
  • The campaign aims to generate nation-wide efforts to increase social harmony across villages, strengthen Panchayati Raj, promote rural development, and foster farmers’ Progress.

Sampoorna Gramin Rojgar Yojana (SGRY)

Sampoorna Gramin Rojgar Yojana was started in September 2001 by Prime Minister. The main objective
of this scheme was to provide gainful employment and food security to villagers. Employment Assurance Scheme (EAS) and Jawahar Gram Samridhi Yojana (JGSY) have been merged in this scheme because both have the same objectives. District Rural Development Agencies was the nodal agency for this scheme. The expenditure for this scheme is shared by the centre and state in the ratio 80:20.

Swarna Jayanti Gram Swarozgar Yojana (SGSY)

Swarna Jayanti Gram Swarozgar Yojana (SGSY) was launched on 1st April 1999. It was an integrated single self employment programme for rural poor . It replaced the following self employment programmes:

  • Integrated Rural Development Programme (IRDP)
  • Training of Rural Youth for Self-Employment (TRYSEM)
  • Development for Women and Children in Rural Areas (DWCRA)
  • Supply of Improved Tool kits to Rural Artisans (SITRA)
  • Ganga Kalyan Yojana (GKY)
  • Million Wells Scheme (MWS).

The main features were:

  1. The objective of SGSY was to provide th^ opportunities of self-employment to rural poor.
  2. It aims at establishing a large number of small enterprises in rural areas. These enterpises will cover all aspects of self-employment
    • Organisation of rural poor into self-help groups
    • Infrastructure building
    • Technology
    • Credit and
    • Marketing
  3. Persons assisted under this programme were called Swarozgaris
  4. The scheme will organize rural peop e into self-help Groups (SHG). Woman must be giver] representation in each SHG.
  5. The programme will provide bahk credit and government subsidy for starting a bus ness.

Swarna Jayanti Shahari Rozgar Yojana (SJSRY)

Swarna Jayanti Shahari Rozgar Yo ana is being implemented, on all India basis, with effect from 1st December,1997. The scheme strives to provide gainful employment to the urban unemployed and underemployed poor, through encouraging tpe setting up of self-employment ventures by the urban poor living below the poverty line, skills training and also through providing wage employment by utilizing their labour for construction of socially and economically useful public assets. The scheme of Swarna Jayanti Shahari Rozgar Yojana (SJSRY) has been comprehensively revamped with effect from
2009-2010 having following five components:

  • Urban Self Employment Programme (USEP).
  • Urban Women Self-help Programme (UWSP).
  • Skill Training for Employment Promotion amongst Urban Poor (STEP-UP).
  • Urban Wage Employment Programme (UWEP).
  • Urban Community Development Network (UCDN).
National Food Security Act, 2013
  • National Food Security Act aims to provide subsidized food grains to approximately two thirds of India’s population i.e. 75% in rural areas and 50% in urban areas. It converts the various existing food security schemes into legal entitlements i.e. from welfare based approach to rights based approach. It includes the Midday Meal Scheme, ICDS scheme and the PDS. It also recognizes maternity entitlements.
  • Under this scheme, each beneficiaries is entitled to 5 kilograms of food grains per month at Rs. 3, Rs. 2, Rs. 1 per kg for rice, wheat and coarse grains respectively. However, the beneficiaries under Antyodaya Anna Yojana will keep getting the 35 Kg per household per month at same rates. It also has provision for age appropriate meal , free of charge through local anganwadi for children up to 6 months and one free meal for children in age group 6-14 years in schools. Every pregnant and lactating mother is entitled to a free meal at the local anganwadi as well as maternity benefits of Rs. 6,000, in installments.
  • The identification of eligible beneficiaries is left to statev governments.

Antyodaya Anna Yojana (AAY)

The scheme aims to make Targeted Public Distribution System (TPDS) more focused and targeted towards the poorest of poor. Beneficiary families under the scheme are entitled to 35 kg of rice and wheat at the rates of Rs. 3 per kg and Rs. 2 per kg respectively. Coarse grains to be distributed at the rate of Rs. 1 per kg. Under the scheme, subsidies are fully borne by the central government and States/UT will bear the distribution cost. The scheme has been expanded to cover 2.50 cr households.

Pradhan Mantri Ujjawala Yojana (PMUY)

  • Pradhan Mantri Ujjawala Yojana was launched on 1st May 2016. It aims to provide 5 crores free LPG connections to BPL Households by providing financial support of Rs. 1600 for each new LPG connection. Connection to be provided on women’s name to promote women empowerment. Recent budget has increased this target to 8 crores.
  • The identification of eligible BPL families will be made in consultation with the State Governments and the Union Territories based on the socio-economic and caste census data. Providing LPG connections to BPL households will ensure universal coverage of cooking gas in the country which will empower women and protect their health.
  • It aims to address serious health hazards associated with cooking based on fossil fuels. Non -communicable diseases such as heart disease, stroke, chronic obstructive pulmonary disease and lung cancer and Indoor air pollution causing acute respiratory illnesses in young children is addressed through this scheme. It will also provide employment for rural youth in the supply chain of cooking gas.

Deendayal Antyodaya Yojana (DAY)- National Urban Livelihood Mission (NULM)

  • National Urban Livelihood Mission (NULM) and National Rural Livelihood Mission (NRLM) has been subsumed into Deendayal Antyodaya Yojana (DAY).
  • NULM aims at universal coverage of the urban poor for skill development and credit facilities. It focuses on organizing urban poor in their strong grassroots level institutions, creating opportunities for skill development and helping them to set up self-employment venture by ensuring easy access to credit.
  • It is aimed at providing shelter equipped with essential services to the urban homeless in a phased manner and also addresses livelihood concerns of the urban street vendors. Funds for the scheme will be shared between the Centre and the States in the ratio of 75:25. For North Eastern and Special Category States the ratio will be 90:10.

Deen Dayal Antyodaya Yojana (DAY)- National Rural Livelihood Mission (NRLM)

  • National Rural Livelihood Mission or Aajeevika has been subsumed into Deen Dayal Antyodaya Yojana (DAY). It has following features:
  • Universal Social Mobilisation: At least one female member from each identified rural poor household, is to be brought under the Self Help Group (SHG) network.
  • Participatory Identification of Poor: Target Group is identified through the Participatory Identification of Poor (PIP) method and it is delinked from BPL. The beneficiary vetted by the Gram Sabha and approved by the Gram Panchayat.
  • Community Funds: NRLM provides Revolving Fund (RF) and Community Investment Fund (CIF) as resources in perpetuity to the institutions of the poor to strengthen their institutional and financial management capacity.
  • Inclusion: Promotes financial literacy and financial inclusion among the poor.
  • Livelihoods: Promotes existing livelihood portfolio of the poor through its 3 pillars – ‘Vulnerability reduction and livelihoods enhancement’, ‘employment’ and ‘enterprises’. Partnerships with NGOs and linkages with Panchayat Raj Institutions.

Aajeevika Grameen Express Yojana

  • Aajeevika Grameen Express Yojana is a new sub-scheme under Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM). Its aims to provide an alternative source of livelihood to members of Self Help Groups (SHGs) and facilitate them to operate public transport services in backward rural areas.
  • Thus, it will provide safe, affordable and community monitored rural transport to connect remote villages with key services and amenities. It will be implemented in 250 blocks in the country on a pilot basis for a period of 3 years from 2017-18 to 2019-20. Under this scheme, Community Based Organisation (CBO) will provide interest free loan from its own corpus to the Self Help Group members for purchase of vehicles.

Government Efforts: A Critical Analysis

  • More than 70 years have passed since we attained independence but still most of the people lead a subhuman life, while a microscopic minority lives in excessive luxury.
  • In spite of all the above poverty alleviation programs poverty continues to remain a blot on Indian democracy.
  • Something more drastic is required to remove poverty from India. No programme for removal of poverty can succeed in an economy plagued by inflation. Inflation, by its very nature, accentuates inequalities, eats into the income of the poor classes and thus leads to deterioration of their economic condition.
  • A poverty eradication programme, therefore, must mop up surpluses with the elite classes (landlords, money-lenders and capitalists). Since the bulk of the surpluses exist in the form of black money, it is necessary to adopt radical measures to unearth black money so that resources are not diverted to luxurious consumption.
  • The deep-rooted and traditional poverty of India poses a colossal problem which cannot be solved by any magic wand. Gradual eradication of poverty has been the aim of five-year plans, but the disparities between the rich and the poor have increased even as the Government sought to bridge the gap.
  • Implementation of the various planks of this programme has already made a notable impact on the poor people and has helped to improve their lot. For instance, the very first item fighting the challenge on the price front by stimulating production and distribution of essential commodities – has brought much relief to people, especially in the lowest income brackets.
  • Similarly, the series of measures to ensure relief to rural people – agriculture labourers, through distribution of surplus land, liquidation of indebtedness, provision of housing sites, ending the barbarous practice of bonded labour, supply of books and essential commodities to
    poor student, and more employment opportunities through development – all help to relieve poverty.
  • But the question arises why the five year plans in India failed to eliminate poverty? This was due to the fact that the planners assumed that the “growth plus” strategy aiming at increase of national income, and supplemented by policies of progressive taxation and public expenditure, would lead to a rise in the level of living of the poor .
  • However, the production-oriented approach of planning, without altering the mode of production, resulted in the appropriation of the gains of development by the owners of the instruments of production – the richer class. The problem is one of providing employment and raising the productivity of low-level employment. In this connection, the basic issue is to make employment the focus of planning; the policies of production have to be woven round this central objective.

Eradication of Poverty

Besides programme and policies, various multiple efforts need to be put simultaneously to spur the growth, streamline the efforts and achieve the efficiency and effectiveness.

Some indicatives perspectives are:

Increase in Per Capita Food Production

The rate of growth of production of food grains as a whole has barely kept ahead of population growth. An increase in per capita food production would ensure steady supply and stable price. An examination of the different components of food grain output is very revealing. Superior food grains, i .e., wheat and rice have done perceptibly better than the coarse grains, and wheat has done very significantly better.
It is true that the Green Revolution strategy, particularly in relation to wheat has been very successful. However, there is much that need to be done.

Agricultural and Land Reforms

In Indian conditions, radical socio-economic changes are required to ensure the self-reliant, long-term growth of the economy. These changes should ensure reforms of the land tenure system helpful to the poor and middle peasants, liberate them from the hard grip of the moneylenders, ensure supply of agricultural inputs to working farmers, widen irrigation facilities and help a quicker advance of agro-industries.

Increase in Production of Essential Items

In the industrial sphere, units manufacturing luxury consumer items must be made to refashion their patterns of production in terms of export potential and the limited range of internal consumption potentialities, and use the rest of the productive capacity towards producing low cost essential commodities like inexpensive textiles, bulbs, tube lights, transistors, shoes, cycles, etc. Make in India can play a vital role here.

Tackle the Problem of Income Disparity

To bring about this change in our private sector production mix, however, exhortations will be self-defeating, since production thus conceived, is much less profitable per individual commodity produced. Apart from considerations of social justice, even purely in terms of economic development, glaring income disparities have to be quickly tackled.

Tackle the Problem of Black Money

The black money menace, of course, has to be frontally attacked at all levels along with these measures. This is urgent to bring about a balance between the available goods and services and money in circulation in short to fight the inflationary pressures on the economy; to mobilize maximum public finance for developmental activities and to eradicate the chances of corruption, market manipulation and conspicuous consumption.

Massive investment in Public Sector

  • A massive investment and expansion programme in the public sector is required. This expansion has to embrace not only infrastructural areas like power, energy and so on but also the key and consumer sectors of the industry along with the commercial and distributive agencies.
  • This expansion has become urgent to safeguard the working people from the vagaries of hoarding and price manipulation of the traders.

Education

Illiteracy is a major national problem and a major cause for poverty. Illiterate people living in villages and small towns find it hard to get employment. Around 51 percent of rural families are engaged in casual labour jobs, while another 30 percent is engaged in agriculture. Education will empower them to engage in better jobs, which in turn would help them come above the poverty.

Skill Development

  • Most industries engage skilled labours. There is a decline in demand for unskilled labours in most factories and mills.
  • In such a situation, there is a need to stress on development of skills for specific trade, so that these modern industries can get skilled labours.
Skill India
  • This step would a big step towards the eradication of poverty from our country. Proper implementation of Skill Mission can be a very good first step to tackle the problem related to skilling in India.

Check on Population Growth

  • Due to massive increase in population, the demand for basic necessities such as housing, food and shelter is at its peak. The resources are limited. The growth in demand for essential commodities far exceeds the supply of these commodities.
  • Leading to a situation of price-rise (inflation). Awareness campaigns explaining the benefits of controlling the population growth should be widely circulated.

Women Empowerment

  • Women (and girls) forms around 50 percent of the world population. Since ages, they have been treated as a burden to the society. They were deprived of equal opportunity for education, food, nutrition, and economic participation leading to the situation of ‘Feminization of poor’. Women empowerment and education would strengthen them to bring economic benefits both at individual and national level.
  • The government and social organizations are taking significant steps towards creating awareness regarding the importance of education of girl-child.

Decentralized Planning and Its Execution

It is essential to reflect the grass root reality in policy making and policy implementation. The bottom up approach is sine quo non for addressing the concern of people at the bottom of the pyramid.


Alternative Model of Poverty Alleviation

Role of Voluntary Organization

NGO have come up as an alternate medium for service delivery where administration has failed to provide service and as an advocate and voice of poor people. NGOs have been actively engaged in various poverty alleviation activities, education and health care services, awareness generation etc. They have deep reach to local people as well gained sufficient trust among people. Government should utilize their social network to provide services and deliver benefits cutting red tape. Pratham has been doing
good work in education. Akshaya Patra in providing coked food in mid-day meals.

Corporate Social Responsibility

  • India is the first country in the world to make corporate social responsibility (CSR) mandatory, following an amendment to The Company Act, 2013. They can invest contribute in areas such as education, poverty, gender equality, and hunger.
  • Companies have been doing several poverty alleviating projects under Corporate Social Responsibility for example.
  • Tata Group: Through self-help groups, it is engaged in women empowerment activities, income generation, rural community development, and other social welfare programs. In the field of education, the Tata Group provides scholarships and endowments for numerous institutions. The group also engages in healthcare projects such as facilitation of child education, immunization and creation of awareness of AIDS.
  • Ultratech Cement: Its CSR activities focus on healthcare and family welfare programs, education, infrastructure, environment, social welfare, and sustainable livelihood.
  • The company has organized medical camps, immunization programs, sanitization programs, school enrollment, plantation drives, water conservation programs, industrial training, and organic farming programs. ITC Group: Their e-Choupal program, which aims to connect rural farmers through the internet for procuring agriculture products, covers 40,000 villages and over four million farmers. Its social and farm forestry program assists farmers in converting wasteland to pulpwood plantations. Social empowerment programs through micro-enterprises or loans have created sustainable livelihoods for over 40,000 rural women.

Public Private Participation

  • Infrastructure deficit has put constraints on employment generation and growth opportunities which has a direct bearing in putting a dent on poverty. But as government neither has the resources nor man power to take up work to fill the infrastructure deficit so role of private sectors come up to supplement the government efforts with their funds, technical know how and expertise.
  • Public Private Partnership has met with several successes in building infrastructure as providing maintenance services. Several airports, highways and ports have been constructed and is being operated under PPP model. They have a potential to reduce infrastructure deficit and open new avenues for employment generation and reducing poverty.

Entrepreneurship

  • Entrepreneurs come up with innovative product and ideas to solve problems of society. They generate new job opportunities as well. There has been a need to orient focus of entrepreneurs towards addressing problems of poor, providing new innovative ways to eliminate hunger and malnutrition, effective and efficient service delivery, new ways to streamline service delivery via government agencies.
  • As the purchasing capacity of poor is low there should be adequate focus on needs of poor – cheap and quality products or alternatives like cheaper and reliable water purifier, efficient cooking stoves, cheaper and faster means of communication etc.

Conclusion

  • With rapidly growing economy the poor is getting left out day by day. India can’t afford to become as aspiring global power with millions of population unable to get two square meals a day. Poverty is a big blot on our democracy. As long as there is poverty there can’t be equity and equality of opportunity. The promises of constitution and dreams of our forefathers of an egalitarian society remains unfulfilled.
  • Time has come to think out of box solution to eliminate poverty and provide basic necessities to all. The discussion about Universal Basic Income in economic survey has been a praise worthy beginning. The government needs to walk the talk and put a large dent in poverty through effective implementation of poverty alleviation programs.
  • E-governance, Direct benefit transfer , rationalising subsidy, effective monitoring etc. can check leakages and tools like JAM (Jan dhan – Aadhar – Mobile) could provide necessary boost to provide better services. Time is ripe to wipe every tear from every eye and to fulfil Gandhi’s dreams of Antyodaya and Sarvodaya.

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