People & Their Problems

New Delhi, 30 July 2014

Poverty Estimation

SHIFT FOCUS TO RURAL INDIA

By Dhurjati Mukherjee

Successive governments have set up various committees for poverty estimation but precious little has been done to increase livelihood opportunities in rural areas, specially in the backward districts of the country. It is also distressing to note that a major section of economists, joined by some journalists of big groups, are forever against subsidies and welfare programmes for the poor and the economically weaker sections in the name of ensuring fiscal prudence.

This section is either ignorant or deliberately wants to ignore the indirect subsidies being given to corporate houses in the form of subsidized land and other facilities to set up industries. In recent times, we have also seen many State governments giving land at highly subsidized rates to set up academic institutions, which charge very high rates, where children of only the rich can afford to get admitted.

Now the Rangarajan committee has come out with its recommendations that those spending over Rs 32 a day in rural areas and Rs 47 in towns and cities in 2011-12 should not be considered poor! Earlier the Suresh Tendulkar panel had fixed the poverty line at Rs 27 in rural areas and Rs 33 in urban areas (as of 2011-12).

Thus the below poverty line population has been estimated at 363 million in 2011-12 out of which 260.5 million are in rural areas which, compared to 2009-10, has decreased from 326 million. This means that even in that year around 30 per cent of the population lived below the poverty line against 21.9 estimated by the Tendulkar panel. If, one considers the all-round rise in prices during the past two years, it can reasonably be expected that the population below the poverty line would be above 32 per cent or even higher (by the end of 2013-14).

Though the Rangarajan committee has improved upon the previous estimated of Lakdawala and Tendulkar and has calculated the number of poor in the country based on calorie and non food items, the report has come in for criticism. Economists feel the figures do not add up and the number of poor may have been higher in some States and lower in others.

Analysts point out that Rangarajan had tried to show that poverty declined in 2011-12 compared to 2009-10 mainly due to the rural job guarantee programme and changes in the structure of employment. Though there may have been some impact, the poverty figures are still quite conservative, even considering the methodology used may have been on par with global standards.

Considering the fact that three out of 10 people in the country are poor, it is now imperative for the Government to evolve proper strategies in tackling the situation. The neo liberal economy, which some harp as an ideal solution for the country, has, no doubt, brought a measure of affluence and security to millions of Indians but has left the poorest citizens untouched. It has hardly enhanced the status and dignity of the common man and the new wealth created has spawned appalling corruption, where the politician and industrial class are jointly involved.

The proponents of the growth strategy continue to argue that given a free hand, they could work wonders. But the reality is that neo liberal growth economy has not traversed downwards; only the rich and the upper middle class have benefitted. The affects are quite well known – fraudulent finance companies cheating the low income groups, illegal mining being carried out without environmental clearance and cheating the government exchequer, a section of industrialists and politicians amassing huge wealth through unethical means and poor farmers being driven out of their land and forced to commit suicide.

The poor have a right to the scarce resources of the country and cannot and should not be cornered by the upper echelons of society. Take for example the case of water. While the population living in slums and squatter settlements do not have adequate water and sanitation facilities, a small section constituting the urban rich and upper middle class consume 60 to 70 per cent of the available water.

What is needed at this juncture is a proper development strategy, which does not emulate the Western model -- where population is much less and resources are abundant – but keep into consideration the problems of the aam janta (common public) living below the poverty line and also those struggling for an existence. In evolving such a model, the priority should not be for huge defence expenditure and bullet trains but social and physical development of the villages.

Thus the poverty eradication strategy has to be so geared so as to focus on the development needs of the rural areas to rehabilitate the poor and half-starved farmer and his family. More resources have to be allocated for such development though some headway has been made in recent years by allocating increased resources for infrastructure development and the social services sector.

Keeping in view the growing demand for food, there has to be a strong emphasis on modernizing agriculture and increasing and diversifying foodgrains production. This would entail ensuring three crops per year, encouraging horticulture and floriculture production and keeping an eye on productivity increase. Since land holdings have become smaller and smaller over the years, formation of cooperatives should be encouraged to cultivate a few holdings together and then share the produce equitably. The output would have to increase considerably and benefit the poor farmer.

But for this, the panchayats have to be made more effective so that they can come forward and ensure that land yields are optimum and could diversify to value-based products while all sorts of inputs have to be made available free of cost to cooperatives promoted by panchayats. Moreover, the government has to ensure that agricultural land should under no circumstances be used for industrial/township development.

Well-known economist Ignacy Sachs and many eminent thinkers such as Dr. APJ Abdul Kalam and Dr Manmohan Singh have been emphasizing the revitalization of the rural sector to combat poverty. According to them, as the share of agriculture in national income has been falling rapidly with the population dependent on this sector remaining more or less static, it was very rightly suggested that science and technology must look into agricultural productivity, affordable technologies for energy and water and efficient and relevant farm and non-farm technologies to promote growth.

One may conclude with an estimate by Rangarajan himself, made as early as 1982, that a mere one per cent increase in agricultural output led to a 0.7 increase in national income and it may be added that most part of this enhanced income obviously reached the grass root levels of rural India and benefited the farming community. ---INFA

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