India lags in reducing poverty, hunger

R. Ravikumar | Updated on September 27, 2011 Published on September 27, 2011

Ms Uma Lele

Even Bangladesh has done much better on various social indicators such as women's education and child mortality. UMA LELE, DEVELOPMENT ECONOMIST AND FORMER SENIOR ADVISOR TO WORLD BANK.

India is clearly off-track as regards ‘Millennium Development Goals', particularly on issues such as reducing hunger, infant and child mortality and gender equality, says Ms Uma Lele, Development Economist and former Senior Advisor to World Bank. Ms Lele has done extensive research in areas including food, agriculture, health, environment, external assistance and partnerships.

With a Ph.D. from Cornell University, she began her career as Economist at the World Bank, and later served as a Policy Advisor in the World Bank's Development Economics Department, the Africa, East Asia and Pacific regions.

She cites a variety of UN and World Bank indicators to make the case that China and East Asian countries are far ahead of India in terms of poverty reduction and improvement in social indicators. In her recent interview to Business Line, she said even Bangladesh, where the political system is not known to be working all that well, has done much better than India on several counts.

Excerpts from the interview:

Where does India stand in terms of Millennium Development Goals?

India is definitely off-track when it comes to Millennium Development Goals such as reduction in poverty and hunger. If you compare India with China, China is far ahead. Even Bangladesh has done much better on various social indicators such as women's education and child mortality.

On the poverty alleviation front, China has done extremely well in the last 20 years. According to World Bank data, in 1990, China's share of poverty was the largest with 38 per cent of the world's below-poverty-line population. In the same year, India's share of that was 24 per cent. Now, 20 years later, China's share of global poor has come down to less than 15 per cent, whereas India's has gone up to 32 per cent.

How has China managed to reduce its poverty and what does India lack?

Since 1979, when China adopted policy reforms it gave land to its rural people with the rights to cultivate and take a significant portion of revenue from the sale of produce for their households, instead of the Government taking a chunk.

China has also invested a lot more in agricultural research and extension, rural infrastructure, education and rural institutions. That greatly incentivised households to be more productive.

In Bangladesh, the government paid more attention to girls' education and their uplift . Interestingly, not just the government; even NGOs played a significant role. This is surprising. The general view about Bangladesh in the West is that it won't even sustain as a country. When I visited it in 2007, at the time of the political crisis — neither of the two parties was in power; they had declared Emergency — the country was still growing at 6-7 per cent a year.

Though the political system in that country is not known to be working all that well, they are, obviously, doing some things right.

We have a lot to learn from our neighbours…

Yes. And, from neighbouring Sri Lanka too. The country is doing better than India on all social indicators, such as life expectancy, health, per capita income level, education, infant mortality, and so on. Even within India…Kerala, for instance, has a long tradition of good primary education.

Sanitation levels are much higher in Kerala. And that has a lot to do with people's education. Tamil Nadu too is one of the better performing States, for the same reason.

In general, State governments in the South have made a difference. In the West, Gujarat can be a good example. The State manages its electricity and water and the agricultural policy far better than any other State in the country.

It has been able to bring more sustainability to water usage without any compromise on productivity. After decades of mismanagement, Bihar is beginning to do well, thanks to good governance.

Of late, the State and Central Governments dole out a lot of subsidies targeted at the poor. Don't you think this will help in achieving our Millennium Development Goals?

Instead of giving subsidies for water, fertiliser, power and fuel, one needs to benefit from a comparative experience of other countries and better-performing States within India to identify what they are doing in the same areas and whether one can learn something from that experience. These resources can instead be used to improve productivity and put better infrastructure in place.

As we are pegging food prices artificially very low, in the name of subsidies, we are not able to pay farmers better.

Mr Nandan Nilekani has suggested direct cash transfers instead of subsidy…

Cash transfers have become very popular now. It started in Mexico and Brazil and is being popularised by various international organisations. If we take the example of Brazil, its per capita income is very high compared with India.

The percentage of people living in poverty is very small. And the poor are easily identifiable as they live in urban slums or in certain specific areas in the country. So, targeting them is easy.

But, in a country such as India, a third of the population is living below the poverty line, and I was told that 85 per cent of our population is living on less than $2 a day. If that is actually the case, then targeting becomes much more difficult.

Besides, evidence from all over the world clearly shows that if you target the poor, they typically do not get what they should; it reaches the better off.

Mexico, which first designed the cash transfer programme, tried it on schooling. This was a success as it was easy to monitor whether the children came to school. But, with direct cash transfers aimed at the poor in the hope that they will consume more food, if it goes to men rather than women, they may end up consuming more alcohol.

Where does India stands in terms of food security?

Since the early 1990s, our rate of growth of agricultural productivity has been diminishing. If you compare with China or South-East Asian countries such as Malaysia, Thailand and Indonesia, India's productivity growth has been slower…to the extent that the per capita cereal production is stagnant.

Though India is, by and large, self-sufficient in food, considering its growth in population, income and urbanisation, it needs a 4 per cent rate of growth in production.

India has to invest a lot more in research and development, and deploy technology in the farm sector to increase the per capita availability of food to a reasonable level. Even though the country is growing at 9 per cent a year, there is a huge backlog of people who do not seem to be participating in the growth process.

Over 350 million people in this country are under-nourished — a third of our population. We need to create an awareness amongst our political leaders that not paying attention to these issues will take its toll on the country's economy.

Published on September 27, 2011
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