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Assessment of the growth experience: Poverty and Unemployment

Poverty and unemployment are closely related High poverty has a multiplier effect on quality of life, deprivation, malnutrition, illiteracy and

low human resource development.

Poverty

Poverty lineso Normative nutritional requirement per person per day at some base point.o This is debatedo 2400 cal (rural), 2100 cal (urban)o Nutrient requirement then needs to be translated to monetary terms.

Poverty has declined as per NSSO estimates. However, recent committees like the Tendulkar committee have reviewed the methodology

of measuring poverty and concluded that poverty levels are much higher than thosepresented through the NSSO estimates.

Data on poverty reduction Rural-urban and regional disparity

o Even when poverty has declined there has been a marked disparity in its reductionin rural and urban areas as well as across different regions in the country

o --- states have poverty ratio below the national averageo Significant reduction in Andhra, Gujarat, Haryana, Karnataka, Kerala, Maharashtra,

Punjab and WB

o Most poor states of Bihar, MP, Orissa and UP have shown little progress in povertyreduction

o Over 54 pc of Indias poor lived in these states in 2004-05o These states have more poor than 26 sub-Saharan African countries according to the

2010 HDR

o North-western states (P, H, HP, J&K) comprise only 2.2 pc of Indias poor. Ruralurban disparity is minimal

o More than half of Indias urban poor live in the states of Maharashtra, MP, UP andTN

o There is no evidence for convergence in the incidence of poverty across the states ofIndia

o Coeffcient of variation (CV) of poverty reveals widening inter-state inequalities inpoverty reduction. Between 1993-94 and 2004-2005 CV increased from 36 to 54.

Non-income dimensions of povertyo NFHS-3 and District level Household Survey on Reproductive Health

46 pc children under 3 and 49 pc children under 6 malnourished 79 pc children anaemic 59 pc deliveries did not take place in institutional agencies 32 pc have no electricity, 55 no toilet

o Multidimensional Poverty Index Economic Growth and Poverty

o Necessary for poverty reduction, but not sufficient

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o This is because Poverty is not only income poverty. There are various other unfreedoms.

The MDPI captures this well

Enabling role of basic education, good health, land reforms, social security The fruits of economic growth may not be automatically utilised to expand

basic social services

o Eliminating deprivation is as much a matter of public action as one merely ofeconomic growth.

o There has been no significant acceleration in the process of poverty reduction during1980-2005 despite an acceleration in the growth of per capita GDP

Since public action is required, schemes such as NREGS and SGSY are important Chronic Poverty

o Higher among rural casual labour households than urban casual labour householdso Varies significantly across social and occupational groups and is highest for SCs

Poverty in India vs other developing countrieso China

Poverty in China declined from 53 pc in 1981 to 8 pc in 2001. In the sameperiod India reduced poverty by 17 pc

India fares badly even on non-income dimensions of poverty likemalnutrition, infant mortality

Concerns about equity and disparity remain in China too. India has faredbetter than China in achieving lower inequality

Poverty and Planning/inclusive growth Strategy to deal with the problem

o Recognize that poor are hetrogenous. So strategies need to be specifically designedto deal with chronic poor and other poor

o Design safety netso Strengthen livelihood and make them more productive

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Obsession with economic growth? Economic growth helps in advancing living standards and in battling poverty Growth, however, should not be taken to be an end in itself Sustainable economic growth

Focus on development The good thing about economic growth is that it generates resources for the government to

spend according to its priorities

India-China comparision

Parameter India China

LE 64.4 73.5

IMR 50 17

U-5 MR 66 19Literacy 65 94

Mean years of schooling 4.4 7.5