‘Garibi hatao’ is still a work in progress

By any measurable yardstick, post-Independence India’s record of lifting millions of people out of poverty is remarkable. And yet, a closer scrutiny of the data relating to the record of poverty alleviation in India, with all the imperfections of data sets, shows up a striking pattern. Much of the decline in poverty began to be registered from around the 1970s, but it was truly the high GDP growth of the post-1991 reforms era that contributed the most in that direction. It is a validation of the economic claim that high growth is the surest antidote to poverty.

And yet, despite the tremendous progress on this front, the “garibi hatao” (end poverty) enterprise is still largely unfinished. Today, the discourse over poverty alleviation has been clouded over by the lack of a consensus on the precise metrics to get a measure of the extent of poverty in India. Indicatively, it is hard to say with clarity precisely how many Indians live in poverty today.

While delivering the Union Budget 2020-21 in February this year, Finance Minister Nirmala Sitharaman said that in the 10 years from 2006 to 2016, as many as 271 million people had been lifted out of poverty. Last year, a World Bank report claimed that 90 million Indians had escaped extreme poverty between 2011 and 2016 largely owing to robust economic growth. But it also noted that 176 million Indians still live in poverty. The United Nations Development Programme, which devised a multi-dimensional poverty index (MDPI) for countries, said that multi-dimensional poverty in India dropped from a high of 55.1 per cent (640 million) in 2005-06 to 27.9 per cent (369 million) in 2015-16.

The varying time-scales, and the irreconcilable numbers render it difficult to get a true measure of poverty. It doesn’t help either that the 2017-18 quinquennial household consumption survey has been junked without ascribing any reason. So much so that the latest available data on poverty draws from the 2011-12 survey, which recorded that India had 270 million poor people.

Independent analysts acknowledge that India’s record in reducing povery has been mixed at best. “We did very well in poverty reduction between 2004-05 and 2011-12,” notes Himanshu, an Associate Professor of Economics at the Jawaharlal Nehru University. But, beyond that, there isn’t definitive data to go by, he adds. Yet, an independent study in late 2019, based on consumer expenditure data, established that between 2011-12 and 2017-18, India’s rural poverty rate may have actually increased by

4 percentage points, and that effectively 30 million people fell below India’s official poverty line and “joined the ranks of the poor”.

Developmental economist Ravi Srivastava, an honorary Director of the Centre of Employment Studies at the Institute of Human Development in New Delhi, acknowledges that that “levels of extreme poverty” have undoubtedly come down over time. In particular, he notes, between 2003 and 2013, economic growth, along with rural employment schemes like MNREGA and the Pradhan Mantri Grameen Sadak Yojana (the latter of which was conceived during the Atal Bihari Vajpayee-led NDA government), led to a significant decline in poverty. An expanded public distribution of foodgrains, under the National Food Security Act, the mid-day meal scheme and the integrated child development scheme, too helped in poverty alleviation, he says.

However, adds Srivastava, the slow rate of economic growth in recent years may have undone some of that good work. These have been accentuated by a series of policy-induced shocks, most strikingly the demonetisation of high-value currency notes in 2016, and the ban on livestock trade.

In response to heightened rural distress, the government in 2019 initiated an income support scheme for farmers, under which they receive Rs 6,000 a year in direct benefit transfer. The agrarian distress is, of course, linked to various other externalities, particularly the inability of farmers to secure remunerative prices for their produce. And they are being addressed through a series of agrarian reforms that the government recently unveiled.

More recently, the Covid-19 pandemic has resulted in loss of livelihoods of many migrant labourers across India, which has again undone some of the good work done in the area of povery reduction. The government has responded with an expansion of the MNREGA scheme and facilitated free distribution of foodgrains under the PM Garib Kalyan Ann Yojana. These may have a momentarily mitigating effect in softening the blow, but the biggest lesson from the experience of the past is that high economic growth is the biggest force multiplier in the ‘garibi hatao’ exercise. The sooner that high orbit is attained, the more impactful will be the effort to lift millions more out of poverty.

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