Post on 06-May-2015
description
REDUCE POVERTY
IN INDIA
Help yourself
Alphabet I comes before U
Stand before a good mirror and ask yourself, if the step you
contemplate is going to be of any use to him. Will he gain
anything by it? Will it restore him to a control over his own life
and destiny? Forget Gandhiji!
Even the Lord helps those who help themselves so that
others (politicians including) can also follow.
After 2011, there are more than 1210 million people in India,
including you. About 250 millions are considered „BPL‟.
Charity begins at home and of course does not stop there.
What should your public relations do?
Employ yourself fully utilizing your talents to earn money through legitimate activities.
Achieve your social security by keeping good company and maintain good family relations.
Provide drinking water and sanitation in your surroundings.
Can you avail (BPL) housing in a poor friend’s name?
Why don’t you write to government for rural connectivity?
Do water harvesting if it rains or from public tap.
Help others thru these:
Find if such SHP exist now, inform poor
How does prosperity spread?
Transmission of technologies
Science-based methods to organize production
Historical examples: Steam engine
Factory machinery
Railroads
Global steamers Suez, Panama canals
Electrification
Internal Combustion engine
Nitrogen-based fertilizer
Five development Interventions
Boost Agriculture
Improve basic health
Invest in education
Power, Transport and Communications
Safe Drinking water and Sanitation
Absence of these leads to poverty.
Oh poor, ask thyself
Can I guarantee to me at least a minimum level of
living necessary for physical and social
development?
Estimated cost of food, clothing, hut, oil for lamp,
barber and domestic utensils to arrive at
„subsistence per head‟ _ Legitimate Income for these
is removal of poverty. (Not becoming a JRI _ jail
resident Indian!)
In economics, what is poverty?
Poverty may be characterized by:
Deprivation in income, illiteracy, malnutrition,
mortality, morbidity, access to water and
sanitation, vulnerability to economic shocks.
Income deprivation is linked in many cases to
other forms of deprivation, but do not always
move together with others.
BPL Income: India 2004-05
A monthly per capita consumption expenditure of Rs.
356 and 539 for rural and urban areas respectively for
2004-05.
More than a quarter of India‟s population remained below
PL in 2004-05.
28.3% Rural 25.7% Urban 27.5% Total
Absolute no.: 302 million in 2004-05
(Statistics in Development Economics.)
Two basic ingredients in measuring
poverty:
(1)Poverty Line: definition of threshold
income or consumption level
(2)Data on size distribution of income or
consumption (collected by a sample
survey representative of the population)
Measurement of Poverty
Absolute PL refers to a threshold income (consumption)
level defined in absolute terms. Persons below a pre-
defined threshold income are called poor.
Relative PL defined in relative terms with reference to level of
living of another person; or, in relation to an income
distribution parameter.
Examples: 50% of mean income or median, mean minus one
standard deviation.
Poverty Line (PL): Absolute vs. Relative
n
mHCR
Head Count Ratio (HCR), Poverty Gap (PG)
and Squared Poverty Gap (SPG)
)(1
1
m
i
i
z
yz
nPG
2
1
1
m
i
i
z
yz
nSPG
m= no. of poor population, n = total population,
z= poverty line, yi =income of i-th person
Poverty Measures
Poverty depends on per capita household income which in turn
is affected by employment, wage rate, land productivity,
industrialisation, expansion of service sector and other general
growth and distribution factors.
Special role of:
per capita agricultural income
Employment and real wage rate
Inflation rate and relative food prices
Government expenditure
Per capita development expenditure
Social sector expenditure
Reasons for weak participation of poor:
limited access to education, land, credit;
low agricultural growth,
underdeveloped infrastructure such as irrigation,
roads and
electricity in poorer states
Poverty could be reduced faster provided
inequality is under control, labour intensive
activities must grow, removal of rigidities in land
and labour market critical for reallocation of
resources
Government can afford to devote more resources
for poverty removal programmes: wage
employment (NREGA) or self employment type
(SJSY).
This should not happen in villages:
• Growing unemployment and underemployment
• Falling purchasing power
• Declining per capita availability of food grains
• Reduced farm incomes and real wage growth
• Indebtedness and land alienation, esp. for small and marginal farmers.
• Deceleration in agricultural growth, productivity per worker and rural non-agricultural employment growth
• Slackening pace of poverty reduction and worsening poverty amongst marginalized social groups and ethnic minorities
The National Rural Employment Guarantee Act 2005 is a law
whereby any adult who is willing to do unskilled manual work
at the minimum wage is entitled to being employed on local
public works within 15 days of applying, with a guarantee of
100 days of unskilled manual work per household per year.
NREGA and Poverty Reduction
Potential: NREGA held a huge promise for poverty reduction
with a supplementary average annual household income.
Creation of social and economic infrastructure too would
have gone a long way in reducing poverty.
Poverty results either due to permanent non-
availability of two square meals a day because of
lack of work and income, or due to shocks such
as ill health or crop failure. These shocks can be
temporary if the households have assets to sell
or access to credit, otherwise these households
can eventually be pushed below the poverty line.
Income poverty is accepted to be an inadequate indicator of
actual conditions of life, as it does not capture various other
forms of deprivation, including the fulfilment of various social
and economic rights. The concept of human poverty is wider.
An alternative indicator to consider is that of nutrition and
calorie intake. Income poverty estimates in both China and
India are implicitly based on calorie intake, since the poverty
lines are derived from the income / consumption expenditure
level associated with the ability to purchase sufficient food to
meet some specified calorie intake.
In both countries, the per capita requirements on which the
original poverty lines were based were 2400 kcal per day in
rural areas and 2100 kcal per day in urban areas, and these
lines have been subsequently adjusted with consumer price
indices.
Compare poverty reduction more than economic
growth per se, what has mattered is the nature of the
growth: whether it is associated with inequalities that
do not allow the benefits of growth to the poor;
whether the structural change in the growth
generates opportunities for productive non-
agricultural employment; whether basic needs and
essential social services are provided.
Government mediation of these and of global
economic integration is important in determining
different outcomes.
China is typically described as becoming the
“workshop” or “factory” of the world through the
expansion of manufacturing production, and India as
becoming the “office” of the world, in particular
because of its ability to take advantage of IT-
enabled services off-shoring.
Factors behind the poverty
trends in India:
What explains this persistence of poverty
and the divergence between growth rates
and poverty reduction?
Increasing inequality is a factor. The
benefits of growth have been concentrated.
It has meant that the benefits of the growth have
been concentrated and have not “trickled down”
sufficiently to ensure improved consumption
among the lower income groups. But the pattern
described here also emphasizes the crucial
importance of the nature of the growth.
Thus, the period 1973–1974 to 1987–1988
witnessed faster reduction in rural poverty
because the pattern of growth especially in
the 1980s, involved a shift of public
expenditure at the margin to rural areas,
and this generated multiplier effects and
more employment that benefited the rural
poor to some extent.