Business I Environment I Society - Rajesh K Satpathy

Social Issue

# 2

Poverty

Remedies for Poverty

Increase in Saving: In order to get rid of the supply side viciouscircle in these countries, efforts should be made to increase savingsso that investment in productive channels may be encouraged. Toincrease saving, expenditure on marriages, social ceremonies, etc.,should be curtailed. In under developed countries, the possibility ofvoluntary savings is slim.

Thus, in this regard, government interference is necessary. Thegovernment can increase saving, by altering its fiscal policy. Thegovernment can impose heavy taxes on luxury goods. Moreover, itcan increase the role of direct taxes. Thus, the government cancurtail consumption by altering the tax system

Remedies for Poverty

Increase in Investment: To break the vicious circle of poverty, apartfrom increasing savings, investment of saving in productivechannels is also of immense use. The policies of short run and longrun investment should be coordinated. By short period investment,people can get the necessary goods at fair rates, which will have afavourable impact on their skill.

Moreover, along with short period investment, investment in theestablishment of multipurpose projects, iron and chemicalfertilizers etc should be properly encouraged. In UDCs, propermonetary and banking policies should be adopted which mayprovide facilities and encouragement to small savings.

Remedies for Poverty

Balanced Growth: To resolve the demand side vicious circle inunderdeveloped countries, the extension of the market is to bedone so that people may get inducement to invest. In this regard,Prof. Nurkse advocated the doctrine of balanced growth. Accordingto the principle of balanced growth, investment should be made inevery sphere of an economy so that demand of one sector can befulfilled by another sector.

Thus, an increase in demand will lead to extension of the market,and would provide inducement to investments. On the other hand,economists like Hirschman, Singer, and Fleming do not consider thepolicy of balanced growth effective. According to them, the policyof unbalanced growth would be more useful.

Remedies for Poverty

Human Capital Formation: In underdeveloped countries, the mainobstacle to economic growth is the backwardness of humancapital. Human capital should no longer be neglected. Manysuggestions can be made to increase skill of manpower. Forinstance, in these countries, education, technical knowledge, andvocational training should be enlarged. Health facilities should beenhanced, which may increase the efficiency of the workers.Transportation and communication should be developed.

Remedies for Poverty

Industrialization: Poverty can be eradicated by a self-sustainingprocess of industrialization. All industries should have linkage tobuild a powerful process of ancillary industries and occupations.The percolation effect of industries can be strong through theestablishment of auxiliary industries. Industry should be linked toagricultural growth.

Agro-based industries should grow to provide employment tovillage people as they are very much labour intensive.Industrialization can contribute to the growth process and bringimprovement in the standard of living of people.

What is the government doing to eradicate poverty?

Ever since coming to power, the current government has come upwith several programmes in order to ease the burden of povertyholding India back. The Pradhan Mantri Jan Dhan Yojana (PMJDY) isone such programme. It looks to provide economically-disadvantaged people access to different financial services such asa basic savings account, insurance, credit as and when needed,pension and remittances.

People who invest in this scheme can earn interest on the amountdeposited by them, and have accidental insurance cover. Theprogramme does not have a minimum amount that has to bealways maintained.

What is the government doing to eradicate poverty?

The programme provides life insurance worth Rs. 30,000 andaccountholders can avail overdraft facilities after six months. Themaximum amount of overdraft in case of a single household is Rs.5,000.

The PMJDY also helps them get access to other insurance andpension-based financial products. The accountholders are alsoprovided RuPay debit cards. The programme was launched on 8th

April 2015.

Insurance Programmes

On 9th May, a couple of insurance programmes were launched formembers of lower income groups and economically-backwardsections – Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) andPradhan Mantri Suraksha Bima Yojana (PMSBY). The age groupcovered by PMJJBY is 18-50 years. People willing to be insuredunder this programme need to pay a yearly premium of Rs. 330 andthey will be provided a life cover amounting to Rs. 2 lakhs.

The PMSBY covers people between the age group of 18-70 years.The yearly premium for this policy is only Rs. 12. Theaccountholders get Rs. 1 lakh in case of partial disability in anaccident and Rs. 2 lakh for complete disability and death for thesame reason.

Agricultural Schemes

The Kisan Vikas Patra, which had been introduced for the first timeby India Post way back in 1998, was re-launched. Farmers caninvest in this programme in denominations like 1,000; 10,000;5,000; and 10,000. Investors can expect their money to be doubledafter 100 months. The saving certificate scheme can be issuedeither in the name of one person or many at a time. It can also beused as collateral to get loans and account holders get an interestrate of 8.7%.

The Krishi Ambani Bima Yojana tries to help the farmers who arefacing financial issues owing to natural causes that have hinderedtheir farming and affected their produce. The Pradhan Mantri GramSinchai Yojana attempts to provide water for irrigation to differentparts of the country.

Rural Schemes

Started on 11th October 2014, the Pradhan Mantri Sansad AdarshGram Yojana places the responsibility of rural development on theMPs. It is their duty to develop the infrastructural facilities –physical and socio-economic – of three villages each and this has tobe done by 2019. By 2024, they have to develop eight villages each.The first village has to be completed by 2016. It is expected that by2024, about 6,433 “Aadarshgram” will be created.

Rural Schemes

The Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY)programme is supposed to provide rural areas continuous supply ofpower. As a part of the plan, the national administration will investRs. 75,600 Crores. It has replaced the Rajiv Gandhi GrameenVidyuti Karan Yojana.

The Deen Dayal Upadhyaya Grameen Kaushalya Yojana waslaunched on 25th September 2014, which is the 98th birthanniversary of Pandit Deendayal Upadhyay. It looks to provide jobsin rural India to people between the age group of 18-35 years.

National Rural Employment Guarantee Act (NREGA)

The NREGA bill was passed in 2005 and it became effective from2006. It became the Mahatma Gandhi National Rural EmploymentGuarantee Act (MGNREGA) in 2008. As per the programme, 100days of work are guaranteed to people in villages across thecountry. It has been a successful programme as far as increasingthe income levels of poor people in the rural areas is concerned. Itprovides work opportunities to people as and when they ask for it.

Even though it involves mostly unskilled manual work, it doesprovide some sort of safety net for the economically impoverished.The income from this programme helps them build some assetsthat make their lives that much better. This programme isimplemented primarily by the Ministry of Rural Development.

Indira AwasYojana (IAY)

The Indira Awas Yojana provides rural housing benefits. The aim ofthe programme is to create 20 Lakh houses across the country and65% of these are supposed to be in the rural areas. As per thescheme, subsidized loans are provided in order to help people, whowould otherwise not be able to do so, make their own houses. Theprogramme had been originally launched in 1985.

Integrated Rural Development Programme (IRDP)

The Integrated Rural Development Programme is said to be one ofthe most ambitious ones of its kind in the world. The programmelooks to provide assets, generated by the dint of income, to thepoorest people in India. The programme was launched in 1978-79at selected locations. However, by November 1980, the wholecountry had come under the programme’s purview.

The programme’s main objective is to create sustainable assets andprovide them to targeted families, so that they can be broughtabove the poverty line. Self-employment is a major component ofthe assistance provided as part of the scheme.

Following are some other plans initiated by the Indian Governmentfor poverty alleviation in India keeping in mind with many aobjectives :

Annapurna

Prime Minister’s Integrated Urban Poverty Eradication Programme(PMIUPEP)

Minimum Needs Programme (MNP)

National Rural Employment Programme (NREP)

National Maternity Benefit Scheme (NMBS)

Rural Labour Employment Guarantee Programme (RLEGP)

National Family Benefit Scheme (NFBS)

TRYSEM Scheme

National Old Age Pension Scheme (NOAPS)

Swarna Jayanti Gram SwarozgarYojna

Modifying law to prevent centralization of wealth

National Social Assistance Programme (NSAP)

Antyodaya Plan

Rural Housing Programme

Small Farmers Development Programme (SFDP)

Pradhan Mantri RojgarYojna

Drought Area Development Programme (DADP)

Nehru RozgarYojna (NRY)

Twenty Point Programme

Self-Employment Programme for the Urban Poor (SEPUP)

Food for Work Programme

JawaharRojgarYojna (JRY)

Legal elimination of bonded labourers.

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