Poverty’s stubborn persistence

It is undeniable that there has been a reduction in the proportion of India’s population in poverty. However the high incidence of poverty, the large number of those who are poor, combined with the multiple deprivations that the poor experience, makes this the most important development challenge that faces us.

The Head Count Ratio (HCR), or percentage of population below the poverty line, is an important indicator of the extent of poverty in a country.

In 2005, $1.25 a day, was the average line of the poorest 15 countries. Further, $1.00 a day at 2005 prices was very close to India’s official poverty line and …“India’s official line is low by developing country standards” and it is a “frugal line”.

Commenting on the PPP $1.90 per day that has been adopted by the SDGs Hickel (2015) points out that “The World Bank picked the $1.90 line because it’s the average of the national poverty lines of the very poorest countries in the world, like Chad and Burundi. ...The bank itself admits that poverty in Latin America, for example, should be measured at about $6 a day. …Yet the SDGs use the $1.90 line to measure poverty even though it is an “implausibly low threshold”, perhaps because a “more honest approach would force us to face up to the fact that the global economy simply isn’t working for the majority of humanity.”

Regardless of what poverty line is used it is clear that poverty remains a massive problem in the Indian context.

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The dynamic view of poverty suggests that at a general level, the population at any given time would be composed of poor and non-poor. The poor would include those who have been poor for some time as well as those who were not poor earlier but have now become poor. The non-poor would include those who were non-poor for some time as well as those who were poor earlier and have successfully escaped poverty. Those who have been ‘poor for some time and continue to be poor’ are the ‘chronic poor’.

Analysis of panel data shows that dependence on casual agricultural labour, landlessness, illiteracy (Gaiha 1989), poorer quality land, poorer resource base, lower risk bearing capacity, (Singh and Binswanger 1993) household size and belonging to a scheduled tribe or ST (Bhide and Mehta 2008) are among the characteristics of the chronic poor that make it difficult for them to escape poverty. The ST households are characterised by remote habitations much more than the others... More than the caste status, occupation, assetlessness and inability to benefit from opportunities in nearby urban economies influence the persistence of poverty (Bhide and Mehta, 2008)...

Programmes such as employment guarantee, subsidised food, health insurance, crop insurance, old age pension, etc., aim to provide a protective umbrella for the households that are at low levels of income so that they do not slip further down the income and consumption ladder...

Downward mobility is a significant aspect of poverty dynamics and several factors drive people into poverty. For instance, the sudden onset of a long-term and expensive illness exacerbates the suffering of those who are already poor and drives many of those who are non-poor into poverty. For those who work in the unorganised sector, ill-health is often associated with having to forego income owing to inability to work. It drains the household of its financial resources and may lead to debt at usurious interest rates to cover expenses (Bhide and Mehta 2003; Mehta and Gupta 2006).

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While there are strong interconnections between many of the SDGs, the strongest link is between SDG1 and SDG3, i.e., “End Poverty in All its Forms Everywhere” and “Ensure healthy lives and promote well-being for all at all ages”.

The state of health and health care in India is grim for many reasons. Extreme poverty, disease burden, morbidity and mortality levels are significant. More than half of Indian children and women are anaemic and 36% of children below the age of five are malnourished. Government spending on healthcare in India is among the lowest in the world at only 1.15% of GDP. Financial support for medical emergencies is abysmal as 86% of Indians living in rural and 82% in urban areas lack health insurance (NSSO 2014). Access to public provisioning of health care is limited and out of pocket expenditure on health is high.

Since most households do not have insurance, they are forced to borrow at usurious interest rates or sell meagre assets to cover expenses (Mehta and Gupta 2006, Government of India 2010: 15). This can lead to intergenerational transmission of poverty. It is in this context that public provisioning of good quality health care is extremely important.

WHO (1995: 1) classifies extreme poverty as the world’s most ruthless killer and the greatest cause of suffering on earth. It notes that:

“Poverty is the main reason why babies are not vaccinated, clean water and sanitation are not provided and curative drugs and other treatments are unavailable and why mothers die in childbirth…It conspires with the most deadly and painful diseases to bring a wretched existence to all those who suffer it.”

NSSO (2014) estimates the prevalence of morbidity to be 8.9% persons in rural and 11.8% in urban areas. While morbidity is reportedly as high as 31% in Kerala and 16% in rural and 20% in urban Andhra Pradesh. It is only 3% to 6% Assam, Bihar and Chhattisgarh. These estimates cannot be taken at face value and need further investigation.

Budgetary allocation of funds to the health sector is far short of commitments that have been made. Estimates presented in the National Health Accounts show that Government Health Expenditure was only 29% of Total Health Expenditure in 2014-15, while out of pocket expenses are as high as 63%.

Excerpted from Poverty, Chronic Poverty and Poverty Dynamics -- Policy Imperatives by Aasha Kapur Mehta, Shashanka Bhide, Anand Kumar and Amita Shah (eds) with permission from Springer Nature

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