Poverty alleviation has been one of the prime objectives of the five-year plans in India. Poverty has plagued India for a long and thereby, measures are required for addressing the issue. The government of India has adopted a three-dimensional approach for poverty alleviation. The following are the three aspects of the approach.
Aspects for Poverty Alleviation
Trickle-down approach: This approach is based on the expectation that the positive effects of economic growth will trickle down and benefit all sections of society, including the poor people.
Poverty alleviation programs: This approach is aimed at the creation of income-earning assets and employment generation opportunities.
Providing basic amenities: This approach is aimed at providing the basic amenities such as proper medical and health care facilities, better education, proper sanitation, etc. to the poor people. These basic amenities positively affect health, productivity, income-earning opportunities and, thereby, alleviate poverty.
Aspects for Poverty Alleviation #1
This approach is based on the assumption that the benefits of economic growth in the form of high GDP and per capita income will trickle down or spread to the lower and poorer sections of society. The policymakers assumed that the rapid growth rate due to industrialization and commercialization in agriculture would automatically spread to every section of society. They were of the view that the increased income from the economic growth will raise the overall standard and quality of living in the country.
Thus, in other words, it was assumed that a rapid economic growth rate will automatically pull the masses out of poverty. However, this belief did not turn out into reality. This approach was solely based on rapid economic growth. However, the economic growth rates in India remained at a low level. The average annual growth rate during the planning period has been a mere 4%. Moreover, the benefits of growth could not spread to the masses and the gap between the rich and the poor has actually widened over the years.
Aspects for Poverty Alleviation #2
Poverty Alleviation Programmes in India
To alleviate poverty from the economy, the Indian Government started various policies and programs. In this direction, various poverty alleviation programs have been started by the government. The basic motive of these programs is to eliminate poverty by generating employment opportunities for the people. Some of the important Poverty Alleviation Programmes initiated by the Government of India are discussed below.
Swaranjayanti Gram Swarozgar Yojana (SGSY): This program was launched in rural areas in April 1999. This program emphasized the establishment of a number of small-scale and micro-enterprises in rural areas on an individual and collective basis. Such enterprises are commonly known as Self Help Groups (SHGs). Under the yojana, grants were forwarded in the form of loans and subsidies to the poor. It also aims at providing training, credit, and technical facilities to the Self-Help Groups.
The amount of loan to be granted was fixed at 30 % of the cost of the project for an individual and 50 % of the cost of the project for the SHGs. The progress of the project is monitored by the banks associated with this scheme.
The expenditure on this scheme is to be shared by the Central Government and the State Government in the ratio of 75:25. Under this scheme, approximately, 27 lakh SHGs have been formed till December 2007, and around 93 lakh swarozgaries have been assisted.
Sampoorna Grameen Rozgar Yojana (SGRY): This program was launched on September 01, 2001. The main objective of this yojana was to provide employment opportunities to the workers with a view of regional, economic and social development.
Under this program, various infrastructural projects such as the construction of roads, wells, tanks, embankments, etc. were undertaken. This particular yojana targets to generate employment for 100 crore man-days of labor. The expenditure on this scheme is to be shared by the Central Government and the State Government in the ratio of 87.5:12.5. Later in 2006, this program was merged with National Rural Employment Guarantee Scheme (NREGA).
National Food for Work Programme (NFWP): This program was started in 2000-01 with the objective of generating ample employment opportunities for unskilled labourers concentrated in the drought-affected states of Chattisgarh, Gujarat, Himachal Pradesh, M.P, Orissa, Rajasthan, Maharashtra, and Uttaranchal.
This program provides food in exchange for the work done by the laborers. This program was aimed to protect poor people against a reduction in their purchasing power capacity in the natural calamities-prone areas. The work done by the labourers includes watershed development works, water harvesting, and construction of metal roads connecting rural and urban areas.
This program not only provides laborers with food but also creates semi-durable assets that facilitate the economic and social development of the backward areas.
Swaran Jayanti Shahri Rozgar Yojana (SJSRY): This yojana was launched in December 1997 by merging two yojanas, namely, Nehru Rozgar Yojana (NRY) and Prime Minister’s Integrated Urban Poverty Eradication Programme (PMIUPEP). The objective of this yojana was to provide self-employment and wage employment to the urban unemployed or under-employed people. The two important features of this program are as follows.
- Urban Self-Employment Programme (USEP): This program is aimed at providing assistance to the underemployed and unemployed urban poor for setting up self-employment enterprises/workshops such as petty businesses, manufacturing, etc. This encouraged local skills and local crafts.
- Urban Wage Employment Programme (UWEP): This program was launched with the motive of providing assistance to poor urban women for setting up self-employment enterprises/workshops.
Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA): Mahatma Gandhi National Rural Employment Guarantee Act was enacted in the year 2005. It aimed at enhancing the livelihood of the rural people by
guaranteeing the adult members (who are willing to work) of each rural family one hundred days of wage employment every year. This act was implemented in all the states of India except Jammu and Kashmir.
This act provided a minimum per day wage of Rs 120 (in 2009 prices). NREGA facilitated rural development by emphasizing the dual objective of achieving development by developing rural infrastructure and simultaneously providing employment opportunities to rural unskilled labor. The act aimed at the creation of infrastructure such as water conservation, canal irrigation facilities, afforestation, flood control, embankments, etc. Thus, it served the dual objective of infrastructure development and providing employment opportunities.
Prime Minister’s Rozgar Yojana: Prime Minister’s Rozgar Yojana (PMRY) is aimed at providing employment to the educated unemployed. The scheme was expected to provide employment to more than one million educated youth by setting up 7 lakh micro-enterprises. By 2003-04 approximately 30 lakh persons got employment under this scheme.
Pradhan Mantri Gramoday Yojana (PMGY): To improve the standard of living and quality of life in rural areas, PMGY was launched in the year 2001. This program includes five crucial areas – health, primary education, drinking water, housing, and roads. PMGY comprises the following three projects.
- Pradhan Mantri Gram Sadak Yojana which aimed at building all-weather roads by 2007 in all villages having a population of 500 persons or more.
- Pradhan Mantri Gramin Awas Yojana and,
- Pradhan Mantri Gramin Drinking Water Yojana.
Minimum Needs Programme: This program was launched during the fifth five-year plan with the aim of raising the standard of living of the poor. It lays emphasis on primary education, adult education, rural health, rural water supply, rural roads, rural electrification, rural housing, and improvements of the urban slums. This program was expected to raise the overall quality of life of the poorer sections of society.
Twenty-Point Programme: A twenty-point Programme was launched by the government on 14th January 1982, that includes (1) Increase in irrigation capacity (2) Increased production of pulses and oilseeds (3) Extension of Integrated Rural Development Programme and National Rural Employment Programme (4) Fixation of ceiling on landholdings (5) Minimum wages to agricultural workers (6) Rehabilitation of bonded labor (7) Expansion of scheduled castes and scheduled tribes programs (8) Drinking water in villages (9) Provision of houses in rural areas (10) Improvement of slum areas (11) Development of power capacity (12) Development of forests and gobar gas (13) Family planning (14) Setting up of primary health care centers (15) Welfare programme for women and children (16) Primary education for children between 6-14 years (17) Expansion of Public distribution system and fair price shops (18) Simple industrial policy (19) Checking of generation of black money (20) Efficient management of public sector industrial units.
Critical Appraisal of Poverty Alleviation Programmes
The absolute decline in the percentage of the population below the poverty line and increase in wages that helped in increasing the nutritional level of the poor is the commendable achievements of PAPs. However, despite these achievements, the PAPs can be regarded as unaccomplished due to the below-mentioned reasons.
Improper planning and management: The poverty alleviation programs require a comprehensive and complex management system. In the absence of proper planning and accountability, the administration and staff could not work efficiently. Insufficient manpower made the follow-up of plans difficult.
More inclined towards rich: These PAPs were often influenced by the rich and elite people to suit their own motive at the cost of the needy poor population.
Difficulty of reach: The benefits of PAPs did not reach the population living in the far-flung and remote areas. That is, the programs were not accessible by the people in these areas. As a result, the overall impact of PAPs remained diluted.
Lack of support: PAPs did not receive full support from the institutions such as banks, panchayats, etc. Such institutions failed to provide facilities such as marketing and credit to the needful.
Lack of Participation of people: These programs lacked the participation of the local people as these were largely government-sponsored programs.
Undue advantage by non-poor: The non-poor section of the population took undue advantage of these programs due to the absence of any specific definition of the ‘poor’.
Aspects for Poverty Alleviation #3
Providing Basic Amenities
This approach comprises of provision of basic amenities such as medical and health care facilities, better education, proper sanitation, etc. to the poor. To achieve this objective, efforts are made by the government to increase public expenditure on the social needs of the people. In this direction, Public Distribution System (PDS) has also been launched by the government to increase the access of poor on the essential commodities such as rice, edible oils, wheat, etc. Also, to ensure food security to the people, programs such as Integrated Child Development Scheme (ICDS) and Mid-Day Meals at school have been started by the Government of India.
Three Dimensional Approach
The steps taken by the government for the alleviation of poverty in the form of the three-dimensional approach have been commendable. We have been able to achieve the objective of poverty alleviation to a great extent. The number of people below the poverty line has reduced tremendously. However, a thorough analysis of the approach to alleviating poverty yields the following conclusions.
Lack of basic amenities: Although there has been a reduction in the percentage of absolute poor in some of the states still the poor people lack basic amenities, literacy, and nourishment.
Insignificant change in the ownership of resources: There has not been significant change in the ownership of income-earning assets and productive resources.
Failure of land reforms: The land reforms initiated by the government did not show successful results (except in the states of West Bengal and Kerala)
Lack of capital and technology: Lack of capital and availability of easy credit, lack of modern technology, and poor access to information and marketing became the major bottlenecks for the small production houses like cottage industries and other small-scale industries.
Improper implementation of programs: Improper implementation of poverty alleviation programs by ill-motivated and inadequately trained bureaucrats further worsened the situation.
Corruption: Corruption along with the inclination towards the interest of elites led to inefficient and misallocation of scarce resources.
Economic reforms refer to a set of tools and policies initiated in an economy in order to facilitate the process of growth and development. After going through this lesson, you will understand the Economic Reforms in India