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Targeting the poor

, February 26, 2019, 0 Comments

Targeting the poor has been a constant challenge for policy makers in India. In the early 70’s the social planners followed the strategy of growth mediated development policies with the assumption of ‘Trickle Down Hypothesis’ such that fruits of economic growth would automatically reach all sections of people irrespective of region, religion and castes (Ghoshal, 2012).

Indian economy is moving towards high growth path and is recognized globally as one of the fastest growing countries. However, high economic growth rates have not led to significant change in the welfare of the under-privileged. Accordingly, policy makers shifted their strategy towards targeted welfare programmes so that the benefits of the programmes could reach the poor. Poverty stems from structural inequality and therefore direct action is required to safe guard the rights of the poor, redistribute wealth where necessary, and develop the capacity of the poor people to engage fully in development process (GHK Research & Training, 2001).

Targeted programmes like Indira Awaas Yojana (IAY), National Social Assistance Programme (NSAP), Swarnjayanti Gram Swarozgar Yojana (SGSY) to name a few, have not been able to achieve their desired results; and one of the arguments is the lack of information forces poor quality of state intervention. The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme announced in the interim Budget for 2019-20 aims at proving direct income support to all farm households having cultivable land upto 2 hectares. While it is a welcome step given the growing unrest in the rural areas, concern lies in how quickly and effectively all targeted farmers can be reached. Lack of reliable statistics on the extent of poverty prevalent in India is one of the major hindrances to the success of any policy programs. Further, the conceptual variations in defining poverty line by the different committee estimates has been a growing concern.

An expert group on ‘Estimation of Proportion and Number of Poor’ constituted under the chairmanship of Prof. D.T. Lakdawala adhered to the calorie norm and associated with a fixed consumption basket approach. An expert group headed by Prof. Suresh D. Tendulkar redefined the methodology to include consumption expenditure method rather than the calorie norm approach. The Rangarajan Committee redefined the poverty line based on certain normative levels of adequate nourishment, clothing, house rent, conveyance, education and behaviorally determined level of other non-food expenses. Poverty estimates of the three committee widely differ from each other. The Lakdawala committee estimated poverty rate in 2004-05 at about 28% while Tendulkar Committee estimated poverty rate at 37% in the same year. The Rangarajan Committee estimated poverty rate at about 30% in 2011-12 while the Tendulkar Committee estimated poverty rate at 22% for the same year.poverty-poor

The wide variations in the estimates has often resulted in weak targeting of the poor. Various researchers have broadened the understanding of the related issues with poverty. For eg, Hamumantha Rao (1994) interrelated the five themes, viz, agricultural growth, rural poverty, environmental degradation, participatory rural development and economic reforms in relation to agriculture. Radhakrishna et al (2003) constructed a standard of living index for each household by using NFHS data and then established correspondence between NSS poverty line and Standard of Living Index. Dubey (2009) established the relationship between poverty and social discrimination.

While there is immense literature on poverty estimates, targeting the poor for policy benefits, continues to be one of the major challenges. Money metric and other quantitative indicators are an important measure of poverty. However, it is equally important to identify poverty in its broadest, multi-dimensional sense. Those who are chronically poor are likely to be poor in several ways and not only in the form of income.

The opinions expressed in this article are the author’s own and do not reflect the view of MarketExpress – India’s first Global Analysis & Sharing Platform or the organization(s) that the author represents in his personal capacity.
Reference:

  • Ghosal, Ratan (2012), “Growth, Poverty and Inequality Paradox in India: A Panel Data Approach”, Paper Prepared for the 32nd General Conference of the International Association for Research in Income and Wealth; http://www.iariw.org
  • GHK Research and Training (2001), “Addressing Poverty Through City Development Strategies”, Research Project for the Development for International Development (UK); http://r4d.dfid.gov.uk/PDF/Outputs/urbanisation/R7853-GHK_literature_review.pdf.
  • Planning Commission, Government of India (2012), “Report of the Expert Group to Recommend the Detailed Methodology for Identification of Families Living Below Poverty Line in the Urban Areas”; http://planningcommission.nic.in/reports/genrep/rep_hasim1701.pdf
  • Dubey, A. (2009), “Poverty and Under-Nutrition Among Scheduled Tribes in India: A Disaggregated Analysis”, Fourth Annual International Conference on Public Policy and Management, Indian Institute of Management, Bangalore; http://www.igidr.ac.in/pdf/publication/PP-062-13.pdf
  • Hanumantha Rao ( 1994), “Agricultural Growth, Rural Poverty and Environmental Degradation in India, Oxford University Press, New Delhi.