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Tuesday, June 15, 2021

Explained Ideas: What ails with India’s poverty alleviation approach

India’s experience pales in comparison to most other countries that became independent around the same time or started at similar levels of per capita income such as China, Vietnam or Bangladesh

By: Explained Desk | New Delhi |
August 15, 2020 7:22:19 am
economic emancipation, independence day, india independence day 2020, india economy, india poverty, indian express The portrait of Mahatma Gandhi is displayed on an Indian 2,000 rupee banknote. (Bloomberg: Brent Lewin)

Our freedom fighters did not look at the fight against poverty and inequality as being separate from the struggle against British colonialism. The idea of economic emancipation as a precondition for a vibrant democracy was echoed by all streams of the freedom struggle with Babasaheb Ambedkar being its most vocal champion.

The poor state of the economy in the early decades meant that growth was seen as the primary objective rather than efforts at redistribution and poverty alleviation. It was only during the late Sixties and early Seventies, following the call of “Garibi Hatao” by Indira Gandhi, that poverty became an issue of political mobilisation and a priority for economic policy-making.

Today, the average per capita income of Indians is 7.5 times that in 1950. India has moved from the so-called “Hindu rate of growth” of 3-4 per cent to an average growth rate of 7 per cent per annum and higher in recent decades.

“The experience with poverty reduction, however, has been mixed,” writes Himanshu, associate professor at JNU.

The last official estimate of poverty corresponds to 2011-12, according to which 22 per cent of the population was below the poverty line, suggesting a sharp reduction compared to the 2004-05 estimates. During this period, 110 million rural poor and 27 million urban poor moved out of poverty.

“The success in poverty reduction was as much due to faster growth of per capita income as it was due to several policies implemented during this period. Notable among them were the NREGA, Forest Rights Act, Right to Education, National Health Mission and the expansion in food programmes, which shifted the discourse from poverty alleviation to capability issues through a rights-based approach,” writes Himanshu.

India’s experience, however, pales in comparison to most other countries that became independent around the same time or started at similar levels of per capita income such as China, Vietnam or Bangladesh. Also concerning is that we have no official estimates of poverty and inequality after 2011-12.

The last consumption survey was conducted in 2017-18 whose report was leaked, but not released. It showed a decline in consumption expenditure in rural areas while it barely increased in urban areas. The net result was a rise in overall poverty.

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“This is the first time in four decades that consumption expenditure has declined and poverty risen between two quinquennial rounds. The government’s decision to junk the survey does not erase the fact that this decade seems to have seen a setback in the fight against poverty,” he states. Other indicators such as unemployment, wages and incomes vindicate this.

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