The Hindu Business Line : Policy poverty

The latest preliminary estimates of poverty in India would seem to suggest a mixed picture of its magnitude 15 years into reforms. The data compiled by the National Sample Survey (NSS) of those living below the poverty line (BPL) either present a grim picture or a happy one depending on the context one places the figures in. According to the NSS data, there has been a decline in the proportion of those living below the poverty line. Twelve years ago 36 per cent of the population was officially classified BPL; in 2004-05, the latest year for which data have been released, the the BPL figure had fallen to 22 per cent. Though doubts have been raised about the comparability of figures over time, the NSS gamely holds on to its conclusion of a decline in poverty. To its credit it does acknowledge that in terms of absolute numbers the reverse is the case and that is cause enough for alarm.

To understand just how alarming it is, one should consider the pattern of the country's growth process over the last ten years. While manufacturing has grown rapidly, in double digits some years, the rural sector has not gone beyond 2-3 three per cent. While a small segment of the economy has contributed the largest share of GDP (services, that is) and thus enjoyed a spurt in jobs and incomes, the farm sector, with the lowest growth in decades, has the largest number of mouths to feed and few resources to do it with. If employment is the best antidote to poverty it would be appropriate to consider how effective it has been. Studies show that through the second half of the 1990s employment in the organised sector declined even as real wages of more skilled categories went up. Over 190 million rural people below-the-poverty-line have no access to jobs. There is also a geographical concentration of poverty — the BIMARU States plus Orissa have a higher incidence of poverty than Punjab and southern States as do the Scheduled Castes and Backward Classes in them.

The geographical concentration of poverty is a result of the skew in investments and job opportunities not to mention the basic amenities of life. Policymakers have been aware of this pattern but are unable to redress it, focusing often on areas that were already developed. Nothing shows this up more than the dismal roads and communications in the poorer States. But the age-old dualism, the notion of "islands of prosperity," is unsustainable if the 8 per cent growth rate has to be exceeded in the next two years or even maintained. The NSS data suggest more than 200 million people live below the poverty line; nearly an equal number are underemployed and so are not much better off. Planners would do well to frame policies for this wider swathe of the deprived.