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People
& Their Problems
New Delhi, 2 May 2008
Understanding Poverty
RURAL REJUVENATION VITAL
By Dhurjati Mukherjee
An expert group of the Planning
Commission is reviewing the methodology used for poverty estimation and is
expected to submit its report to Parliament within three months. The group would go into the 13-point criteria
being used for estimation of below poverty line (BPL) households and
preparation of accurate BPL lists by States. Importantly, the identification of
individual poor households has come in for scrutiny from different quarters, to
assess the effects of the reforms initiated in the country since the last decade.
According the latest Economic
Survey (2007-08), the ratio of allocation of subsidies to the proportion of
BPL population was less than one per cent for many States, barring eight, between
2005-06 and 2006-07. And, as per the results of the 61st National Sample Survey,
in 2004-05, poverty estimates based on URP (uniform recall period) were 27.5
per cent of the total population below the poverty line, while corresponding
figures obtained from MRP (mixed recall period) it was 21.8 per cent. Earlier,
the government claimed that poverty had declined to 22 per cent from 36 per
cent in 1993-94, a decline of around 0.79 per cent during the period 1999-2005.
However, the Planning Commission, which placed the poverty level at 27.8 per
cent in 2004-05, disputed the earlier method.
The Commission in its Approach
to the 11th Five Year Plan (December 2006) pointed out: “Thus
the average decline in percentage of population below the poverty line over the
period 1993 to 2004 is 0.74 per cent points per year, much less than implicit
by the official 1999-2000 data. Because of the slower pace of reduction in the
percentage of the poor, the estimated number of poor is now estimated to be
approximately 300 million in 2004-05, larger than the official estimate of
1999-2000”. Thus it is quite clear that there is no evidence of a higher rate
of decline in poverty in the post-reform period and that inequality increased
significantly in this period as compared to the earlier decade.
However, according to unofficial estimates, the number of
poor may be around 300 million (officially around 237 million in 2004-05) of
which three-fourth live in the countryside Apart from this segment, there is
another major section of 150-250 million who have to struggle for existence
with very meagre earnings equivalent to $ 1.5-2 a day. One may also mention
that the number of rural landless families increased from 35 per cent in 1987
to 45 per cent in 1999 and further to 55 per cent in 2005.
The lowest poverty ratio was 5.4 per cent for Jammu &
Kashmir and highest poverty ratio was for Orissa (46.4 per cent). Five States
namely, Uttar Pradesh, Maharashtra, Bihar, West Bengal
and Orissa accounted for 166 million poor – about 55 per cent of the total poor
estimated at 303 million. The highest
percentage of BPL was registered in Bihar with
12.2 per cent but the State clocked a subsidy distribution ratio of only 0.3 per
cent. UP at 19.6 per cent BPL clocked a subsidy distribution of only 0.8 per
cent, while both Maharashtra with BPL
population of 10.5 per cent and Orissa with 5.9 per cent showed subsidy
distribution of 0.8 per cent each.
The currently used Lakdawala panel
mode of estimating the poor and their number used the per capita consumption
expenditure as a key criterion to determine the incidence of poverty in the
country. This has been fixed at Rs 49.09 per month in rural areas and Rs 56.64
per month in urban areas at the 1973-74 national level prices.
As the level of consumption has
come in for criticism, the Planning Commission has rightly thought it necessary
to review the whole issue. Moreover, as food and nutrition requirement of the
human body has undergone change, a fresh assessment was required. The exercise
is also significant at this juncture as the government is keen to reach food to
all those who are hungry. But with high inflation and rising cost of essential
commodities, BPL families have been struggling to ensure two square meals a
day.
Meanwhile, it has been found that
the Rs 5,000-crore National Food Security Mission (NFSM), launched to ensure
food security for all by the year 2012, may be inadequate to meet the demand
for foodgrains in the country. While the total production has been estimated to
touch 230 million tonnes by the year 2012, this will fall short of the demand
by 4.15 million tonnes, according to experts.
The Food & Agriculture
Organization (FAO) has estimated that one-fifth of the Indian population is
undernourished because of poverty. While general consumption has been on the
rise, on the one hand, and a changing pattern discernible, on the other, there
would be increasing pressure on foodgrains. One cannot deny that the effects of
the National Rural Employment Guarantee Programme (NREGP) and Bharat Nirman
will steadily have an impact on the rural areas and, as the poor and the
economically weaker sections use over 70-80 per cent of their income on food,
the demand projections may need to be revised.
The NFSM has been designed to only
produce more rice, wheat and pulses and does not take into account the demand
for coarse grains. But it is now considering it. This is necessary as demand
for coarse grains would increase immensely in the coming five years while, in
urban areas, the demand would be oriented towards meat, eggs and pulses.
In such a scenario, re-estimation
poverty would have to be simultaneously tackled with higher foodgrains output
so that the BPL population is assured of their daily meals. Moreover, the
economically weaker sections have also to be provided food at reasonable prices
in all parts of the country. This is indeed a big challenge for the government
during the coming years.
Thus, the basic element of poverty eradication strategy has
to focus on the development needs of the rural areas so as to rehabilitate the
poor, starving farmer and his family. More resources need to be allocated even
as some headway has been made in recent years by allocating increased resources
for infrastructure development.
Keeping in view the growing demand for food, there has to be
greater emphasis on modernizing agriculture and increasing foodgrain
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,
some form of cooperatives should be formed to cultivate a few holdings together
and then share the produce equitably. The output would increase considerably
and benefit the poor farmer. But for this, the panchayats have to come forward
and ensure that the land yields optimum and value-based products while all
sorts of inputs have to be made available free of cost to these cooperatives.
Moreover, the government has to ensure that agricultural land should under no
circumstances be used for industrial/township development.
Well-known economist Ignacy Sachs had way back urged the
need for a second green revolution. This has been reiterated by Prime Minister Manmohan
Singh. At conferences he has noted that: as the share of agriculture in
national income has been falling rapidly and the population dependent on it has
remained more or less static, science and technology must look into
agricultural productivity and affordable technologies for energy and water, efficient
and relevant farm and non-farm technologies. If put into practice this will go
a long way in rural regeneration, which, in turn, will reduce poverty.--INFA
(Copyright,
India News and Feature Alliance)
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