Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social...

of 31 /31
Rural Poverty, Inequality and Rural Poverty, Inequality and Social Exclusion in India Social Exclusion in India Prof. S.Mahendra Dev Prof. S.Mahendra Dev Chairman, Commission for Chairman, Commission for Agricultural Costs and Prices, Agricultural Costs and Prices, Government of India Government of India

Transcript of Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social...

Page 1: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Rural Poverty, Inequality and Rural Poverty, Inequality and Social Exclusion in IndiaSocial Exclusion in India

Prof. S.Mahendra DevProf. S.Mahendra Dev

Chairman, Commission for Chairman, Commission for Agricultural Costs and Prices, Agricultural Costs and Prices,

Government of India Government of India

Page 2: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Contents of the PaperContents of the Paper

Dimensions of rural poverty, inequality and Dimensions of rural poverty, inequality and social exclusionsocial exclusion

Processes involved people moving out of Processes involved people moving out of poverty and falling into poverty: poverty and falling into poverty: Agriculture, food prices, employment, Agriculture, food prices, employment, wages, rural nonwages, rural non--farm etc.farm etc.

Measures needed for reduction in poverty, Measures needed for reduction in poverty, inequality and social exclusioninequality and social exclusion

Page 3: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Trends in Poverty, Inequality and Social Trends in Poverty, Inequality and Social ExclusionExclusion

Official estimates: Income poverty declined from 55% Official estimates: Income poverty declined from 55% in the early 1970s to 28% in 2004in the early 1970s to 28% in 2004--05. 05. Although there has been progress in decline still more Although there has been progress in decline still more than 300 million below poverty line.than 300 million below poverty line.Two unambiguous conclusions: Two unambiguous conclusions:

(1) There is no evidence of higher rate of decline in (1) There is no evidence of higher rate of decline in poverty in the postpoverty in the post--reform compared to prereform compared to pre--reformreform

(2) Inequality increased significantly in the post(2) Inequality increased significantly in the post--reform reform compared to precompared to pre--reformreform�� Tendulkar Committee estimates: Rural poverty 42%. Tendulkar Committee estimates: Rural poverty 42%. �� Arjun SenguptaArjun Sengupta’’ s Commission : 77% poor and s Commission : 77% poor and

vulnerablevulnerable

Page 4: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Poverty, Inequality and Social ExclusionPoverty, Inequality and Social Exclusion

Multidimensional poverty: 75% either poor or at Multidimensional poverty: 75% either poor or at least a stunted child in rural areas. 54% in urban least a stunted child in rural areas. 54% in urban areas areas

Poverty is getting concentrated on few states and Poverty is getting concentrated on few states and few social groups. STs have the highest few social groups. STs have the highest incidence of povertyincidence of poverty

Social exclusion in terms of caste (SCs, STs)Social exclusion in terms of caste (SCs, STs)

Financial exclusion: Credit and other servicesFinancial exclusion: Credit and other services

Education exclusion of rural populationEducation exclusion of rural population

Disparities: RuralDisparities: Rural--urban, regional, social, genderurban, regional, social, gender

Page 5: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Processes Involved in rise and fall of poverty Processes Involved in rise and fall of poverty and inequalityand inequality

Agriculture is the most important source of Agriculture is the most important source of employment and income generationemployment and income generation

GDP growth originating in agriculture is at least GDP growth originating in agriculture is at least twice as effective in reducing poverty as GDP twice as effective in reducing poverty as GDP growth originating outside agri.growth originating outside agri.

Structural Reforms and agriculture: Terms of Structural Reforms and agriculture: Terms of Trade had impact on agricultural growthTrade had impact on agricultural growth

Increasing agricultural growth is thus crucial for Increasing agricultural growth is thus crucial for reduction in rural poverty and inequalityreduction in rural poverty and inequality

Therefore, first, we look at the problems in Therefore, first, we look at the problems in agriculture and needed measures for growth agriculture and needed measures for growth

Page 6: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

AgricultureAgricultureConcerns in AgricultureConcerns in Agriculture

----Deceleration in growth from 3.5% during 1981Deceleration in growth from 3.5% during 1981--97 97 to 2% during 1997to 2% during 1997--2005. Decline in yield growth.2005. Decline in yield growth.

----Worse still growth of foodgrains output fell short of Worse still growth of foodgrains output fell short of population growth over this period. population growth over this period.

---- This led to rising rural distress and also farmersThis led to rising rural distress and also farmers’’suicides.suicides.

---- Land and water problems, vulnerability to world Land and water problems, vulnerability to world commodity prices, 45% of farmers want to leave commodity prices, 45% of farmers want to leave agri but no where to go.agri but no where to go.

--------Disparities in growth across regions and crops: Disparities in growth across regions and crops: growth rate declined more in rainfed areas. growth rate declined more in rainfed areas.

Page 7: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Problems in Indian agricultureProblems in Indian agriculture

Long term factors: Steeper decline in per Long term factors: Steeper decline in per capita land availability. Shrinking of farm size capita land availability. Shrinking of farm size

Slow reduction in share of employment (still Slow reduction in share of employment (still 55%) 55%)

Main problem is Main problem is low labour productivitylow labour productivity in in agriculture. Gap between agri. and nonagriculture. Gap between agri. and non--agri. agri. is widening.is widening.

We should blame nonWe should blame non--agriculture (industry agriculture (industry and services) for not absorbing workers from and services) for not absorbing workers from agriculture.agriculture.

Page 8: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Sources of growth in agricultureSources of growth in agriculture

Steering Group for 11Steering Group for 11thth Plan has estimated Plan has estimated sources of growthsources of growth

Sources of growth: Sources of growth: Five factors: (a) Public Five factors: (a) Public invest. (b) private invest. (c) Technology; invest. (b) private invest. (c) Technology; (d) diversification (e) fertilizer(d) diversification (e) fertilizer

There has been slowdown in all these factorsThere has been slowdown in all these factors

Terms of trade also declinedTerms of trade also declined

Higher growth in the postHigher growth in the post--reform period only in reform period only in the case of agricultural creditthe case of agricultural credit

Page 9: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Decline in growth (%) Decline in growth (%) 19801980--81 to 81 to 19901990--9191

19901990--91 to 91 to 19961996--9797

19961996--97 to 97 to 20052005--0606

TechnologyTechnology 3.33.3 2.82.8 0.00.0

Public Inve.Public Inve. 3.93.9 1.91.9 1.41.4

Private Inv.Private Inv. 0.60.6 2.22.2 1.21.2

Irriga.areaIrriga.area 2.32.3 2.62.6 0.60.6

Area under Area under Fruits&vegFruits&veg

5.65.6 5.65.6 2.72.7

NPK useNPK use 8.28.2 2.52.5 2.32.3

CreditCredit 3.73.7 7.57.5 14.414.4

Page 10: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Some Dynamism in Recent Years Some Dynamism in Recent Years 4% growth in agri. in the last three years. Record 4% growth in agri. in the last three years. Record foodgrain production last year (231 m.t.). Exports foodgrain production last year (231 m.t.). Exports in cotton, rice and sugar. It created rural demand . in cotton, rice and sugar. It created rural demand . Useful in financial crisis.Useful in financial crisis.

Revolution in cotton. (cotton production growth Revolution in cotton. (cotton production growth rates during 2003rates during 2003--04 to 200704 to 2007--08; 19.7%, 12.8%, 08; 19.7%, 12.8%, 22.2%,14%). Cotton prod. doubled in six years. 22.2%,14%). Cotton prod. doubled in six years. Some positive signs on bio technology (BT cotton). Some positive signs on bio technology (BT cotton).

Some increase in high value agricultureSome increase in high value agriculture

Lagging regions showing relatively high growth.Lagging regions showing relatively high growth.

Comfortable buffer stocksComfortable buffer stocks

Page 11: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Three Goals of Agricultural Three Goals of Agricultural DevelopmentDevelopment

1.Achieve 4% growth in agriculture and raise 1.Achieve 4% growth in agriculture and raise incomes. Increasing productivity (land, labor), incomes. Increasing productivity (land, labor), diversification to high value agri. and rural nondiversification to high value agri. and rural non--farm farm by maintaining food security. by maintaining food security.

2.Second goal is sharing growth (equity): focus on 2.Second goal is sharing growth (equity): focus on small and marginal farmers, lagging regions, small and marginal farmers, lagging regions, women etc. Share of women is increasing in agri. women etc. Share of women is increasing in agri. On lagging regions, focus on Eastern India and On lagging regions, focus on Eastern India and other rainfed areas.other rainfed areas.

3. Third is to maintain sustainability of agri. by 3. Third is to maintain sustainability of agri. by focusing on environmental concerns.focusing on environmental concerns.

Page 12: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Improving Agriculture GrowthImproving Agriculture GrowthSix deficits in supply of food and agricultureSix deficits in supply of food and agriculture

::(a) land and water management deficit(a) land and water management deficit

(b) investment, credit and Infrastructure deficit, (b) investment, credit and Infrastructure deficit, ; ;

(c) research and extension (technology) deficit, (c) research and extension (technology) deficit,

(d)market deficit, (d)market deficit,

(e) institutions deficit, (e) institutions deficit,

(f) education/skill deficit(f) education/skill deficit

Need for massive increase in outlays for agriculture Need for massive increase in outlays for agriculture and rural infrastructure by simultaneously improving and rural infrastructure by simultaneously improving the delivery systems.the delivery systems.

Govt. is thinking of big push to education in 11Govt. is thinking of big push to education in 11thth Plan. Plan. Such a big pushSuch a big push is needed for agriculture sectoris needed for agriculture sector

Page 13: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Employment: IssuesEmployment: IssuesFour major issues on employment. Four major issues on employment. First, rate of growth in employment. (quantity)First, rate of growth in employment. (quantity)Second, quality of employment. Second, quality of employment. Third structure in terms of diversification to rural Third structure in terms of diversification to rural nonnon--farm sector. farm sector. Finally, the policies for taking advantage of Finally, the policies for taking advantage of demographic dividend.demographic dividend.Employment growth has not improved in the postEmployment growth has not improved in the post--reform period (1993reform period (1993--94 to 200494 to 2004--05) as compared 05) as compared to preto pre--reform period (1983 to 1993reform period (1983 to 1993--94)94)Quality of employment is a concern as there is a Quality of employment is a concern as there is a mismis--match between growth and employment match between growth and employment across sectors. across sectors.

Page 14: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Issues in Employment and Issues in Employment and WagesWages

There are large working poor because of low There are large working poor because of low wages. wages. Employment growth in organized sector declined Employment growth in organized sector declined in the postin the post--reform period.reform period.There are 458 million workers in India in 2004There are 458 million workers in India in 2004--0505Out of this 423 million workers are Out of this 423 million workers are informal/unorganised workers (92%).informal/unorganised workers (92%).The growth of wages for casual workers in rural The growth of wages for casual workers in rural areas is almost same at 2.8% between pre and areas is almost same at 2.8% between pre and postpost--reformreformAgricultural wages have increased due to NREGA Agricultural wages have increased due to NREGA

Page 15: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Food Prices and PovertyFood Prices and PovertyLiterature shows higher relative food prices have Literature shows higher relative food prices have significant adverse impact on poverty.significant adverse impact on poverty.

There has been faster reduction in poverty There has been faster reduction in poverty during the period 1999during the period 1999--00 to 200400 to 2004--05 due to 05 due to lower relative food prices.lower relative food prices.

India has done well in insulating domestic prices India has done well in insulating domestic prices from world prices during 2005from world prices during 2005--08.08.

Recent food price increase is a concern from Recent food price increase is a concern from poverty point of view. poverty point of view.

Food price inflation was nearly 19% for few Food price inflation was nearly 19% for few weeksweeks

Page 16: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Trends in Cereal PricesTrends in Cereal PricesYearYear InternationalInternational

Cereal PricesCereal PricesIndia Wholesale India Wholesale price Index price Index (Cereals)(Cereals)

20052005 100.0100.0 100100

20062006 121.3121.3 106.7106.7

20072007 158.7158.7 114.1114.1

2008 (12008 (1stst Qtr)Qtr) 237.4237.4 118.6118.6

2008 (22008 (2ndnd Qtr)Qtr) 257.9257.9 120.4120.4

2008 (32008 (3rdrd Qtr)Qtr) 231.1231.1 122.6122.6

Page 17: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Movement in Indices of Commodity Prices India vs International:Cereals

106.7

114.1 118.6 120.4122.6

100

257.9

231.1

100

237.4

121.3

158.7

50

100

150

200

250

300

2005 2006 2007 2008 Qtr I 2008 Qtr II 2008 Qtr IIIYear

India WPI International (IMF Indices)

Page 18: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Movement in Indices of Commodity Prices India vs International:Wheat

100

128.8125

124.6120.7

113

167.4

125.8

269.9

100

208.4

227.3

50

100

150

200

250

300

2005 2006 2007 2008 Qtr I 2008 Qtr II 2008 Qtr IIIYear

India WPI International (IMF Indices)

Page 19: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Movement in Indices of Commodity Prices India vs International:Rice

100

117115.8113.5

108.4102.1

115.5105.5

179.2

100

261.5

331.1

50

100

150

200

250

300

350

2005 2006 2007 2008 Qtr I 2008 Qtr II 2008 Qtr IIIYear

India WPI International (IMF Indices)

Page 20: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Rural nonRural non--farm sectorfarm sectorPoverty can not be removed with 55% of workers Poverty can not be removed with 55% of workers in agri.in agri. Need to promote rural nonNeed to promote rural non--farm sector.farm sector.

India currently produces about 50 million tonnes of fruits India currently produces about 50 million tonnes of fruits and 90 million tonnes of vegetables. Only 2% of these fruits and 90 million tonnes of vegetables. Only 2% of these fruits and vegetables are processed as against 23% in China, and vegetables are processed as against 23% in China, 78% in Phillippines, 83% in Malaysia. 78% in Phillippines, 83% in Malaysia. Half of those engaged in agriculture are still illiterate and Half of those engaged in agriculture are still illiterate and just 5% have just 5% have completed higher secondary educ.completed higher secondary educ.

Even in 2004Even in 2004--05, around 05, around 60% of rural male workers 60% of rural male workers and 85% of rural female workers are either and 85% of rural female workers are either illiterateilliterate or have been educated upto primary level. or have been educated upto primary level.

In other words, In other words, education and skills are constraintseducation and skills are constraints

India can learn from China on rural transformation. India can learn from China on rural transformation.

Page 21: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Social Protection in IndiaSocial Protection in IndiaIn order to take care of chronic poverty and risks, In order to take care of chronic poverty and risks, India has introduced many social protection India has introduced many social protection programmes in recent years.programmes in recent years.India has relied more on social assistance in terms of India has relied more on social assistance in terms of promotional measures.promotional measures.Protection or Contingent type of social security Protection or Contingent type of social security measures are mostly available for the organized measures are mostly available for the organized workers (8% of total workers). 92% have very limited workers (8% of total workers). 92% have very limited coverage of contingent socal security. coverage of contingent socal security. India has social protection programmes at three India has social protection programmes at three levels:levels:

(a) Universal Capability enhancing programmes ((a) Universal Capability enhancing programmes (Sarva Sarva Siksha Abhiyan Siksha Abhiyan and rural health mission)and rural health mission)

Page 22: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Social Protection Programmes in India: Social Protection Programmes in India: Protection and PromotionalProtection and Promotional

2. 2. Targeted programmes Targeted programmes for the poor and vulnerable: for the poor and vulnerable: provide socioprovide socio--economic security. Major programmes are:economic security. Major programmes are:Food and Nutrition Programs (PDS, ICDS, MidFood and Nutrition Programs (PDS, ICDS, Mid--day meals)day meals)Self Employed Programmes (SGSY, Self Help Groups)Self Employed Programmes (SGSY, Self Help Groups)Wage Employed Programmes (NREGA)Wage Employed Programmes (NREGA)Protection for socially disadvantaged sections (SCs and Protection for socially disadvantaged sections (SCs and STs) and other vulnerable groupsSTs) and other vulnerable groupsCash and kind transfers: Housing program (Indira Awas Cash and kind transfers: Housing program (Indira Awas Yojana), National Old Age Pension (NOAP), Yojana), National Old Age Pension (NOAP), widow/disabled pension, widow/disabled pension, 3. 3. Social protection for the Unorganized/informal workersSocial protection for the Unorganized/informal workers: : old age, accident and deathold age, accident and death

Page 23: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Self employment programmesSelf employment programmes

Self Employment programs: Micro creditSelf Employment programs: Micro creditEarlier micro credit to individuals (IRDP)Earlier micro credit to individuals (IRDP)Now group approach mainly (Grameen Bank of Now group approach mainly (Grameen Bank of Bangladesh)Bangladesh)Several institutional innovations. Following RBI Several institutional innovations. Following RBI guidelines in 2000, several MFIs started guidelines in 2000, several MFIs started intermediation including Nonintermediation including Non--banking financial banking financial institutions.institutions.Due to self help groups and MFIs, interest rates in Due to self help groups and MFIs, interest rates in the market have come down.the market have come down.

Page 24: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Two important models on SHGsTwo important models on SHGsOne is Kerala model: One is Kerala model: Kudumbasree Kudumbasree programme programme improved empowerment and reduced povertyimproved empowerment and reduced poverty

Andhra Pradesh : The government is implementing Andhra Pradesh : The government is implementing a statewide rural poverty eradication programme a statewide rural poverty eradication programme based on social mobilization and empowerment of based on social mobilization and empowerment of rural poor women.rural poor women.

This programme is popularly known as This programme is popularly known as ‘‘Indira Kranti Indira Kranti PathakamPathakam’’

Self Help Groups: It is relatively successful in Andhra Self Help Groups: It is relatively successful in Andhra PradeshPradesh

Social and economic empowerment of women improved.Social and economic empowerment of women improved.

Page 25: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

National Rural Employment Guarantee Act National Rural Employment Guarantee Act (NREGA): Salient Features(NREGA): Salient Features

The NREGA was notified in September, 2005The NREGA was notified in September, 2005Objective: To enhance livelihood security in rural Objective: To enhance livelihood security in rural areas by providing at least 100 days of areas by providing at least 100 days of guaranteed wage employment guaranteed wage employment in a financial year in a financial year to every householdto every householdPrimary Objective: Employment CreationPrimary Objective: Employment CreationAuxiliary Objective: Regenerating natural resource Auxiliary Objective: Regenerating natural resource base and creating productive assetsbase and creating productive assetsThird is process objective: Strengthening grass Third is process objective: Strengthening grass root processes of democracy infusing transparency root processes of democracy infusing transparency and accountability in governanceand accountability in governanceFirst time a rights based approach for employment First time a rights based approach for employment throughout India.throughout India.This is the largest ever public employment This is the largest ever public employment programme visualised in human historyprogramme visualised in human history

Page 26: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Conclusion on NREGSConclusion on NREGSMost evaluationsMost evaluations--official and nonofficial and non--official show that official show that implementation has been more effective than any of implementation has been more effective than any of its predecessor schemes.its predecessor schemes.In particular, the leakages have been reduced In particular, the leakages have been reduced significantly in many placessignificantly in many placesSignificant rise in agricultural wage shows its success.Significant rise in agricultural wage shows its success.The success of course is by no means uniformThe success of course is by no means uniformMuch needed relief during financial crisis even for the Much needed relief during financial crisis even for the urban poor returning to rural areasurban poor returning to rural areas1111thth Five Year Plan indicates that NREGS is going to Five Year Plan indicates that NREGS is going to be one of the important programs for poverty be one of the important programs for poverty reduction in India reduction in India NREGS can transform livelihoods of the poor but also NREGS can transform livelihoods of the poor but also will also lead to revolution in will also lead to revolution in rural governancerural governance..

Page 27: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Some other IssuesSome other IssuesCash transfers: Latin American Experience is Cash transfers: Latin American Experience is good. Whether they work in India.good. Whether they work in India.

Skill Improvement: This is crucial for rural Skill Improvement: This is crucial for rural transformation in Indiatransformation in India

Voices of the Poor: World Bank study In 300 Voices of the Poor: World Bank study In 300 villages with 30,000 women and men in Indiavillages with 30,000 women and men in India

----Moving out of poverty: Rural nonMoving out of poverty: Rural non--farm sector, farm sector, multiple sources of income, local democracy multiple sources of income, local democracy panchayats, access to assets including housingpanchayats, access to assets including housing

----Falling into poverty: Health shocks or death in Falling into poverty: Health shocks or death in family, panchayats captured by elite, corruption family, panchayats captured by elite, corruption

Impact of urban growth on rural povertyImpact of urban growth on rural poverty

Page 28: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

What should be done for reduction in What should be done for reduction in poverty, inequality and social exclusionpoverty, inequality and social exclusion

FirstFirst one is that one is that growth and equity policies should be growth and equity policies should be followed simultaneouslyfollowed simultaneously rather than rather than ‘‘growth first and growth first and equity nextequity next’’ approach. approach. Growth and equity are complements rather than tradeGrowth and equity are complements rather than trade--offs. offs. Economic growth is important. It improves tax/GDP Economic growth is important. It improves tax/GDP ratio. You can spend on agriculture, social sector. ratio. You can spend on agriculture, social sector. Growth is necessary but not sufficient for inclusive. Growth is necessary but not sufficient for inclusive. Second, Second, agriculture development should be given agriculture development should be given prioritypriorityThirdThird, macro pro, macro pro--poor policies are more important than poor policies are more important than having only safety nets for poverty reduction. having only safety nets for poverty reduction. Investment in infrastructureInvestment in infrastructure

Page 29: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Reduction in poverty and inequalityReduction in poverty and inequalityFourthFourth, women, women’’s social and economic empowerment is s social and economic empowerment is importantimportantFifthFifth, economy should follow agriculture, economy should follow agriculture--industryindustry--service sequenceservice sequenceSixthSixth, employment (both quantity and quality) should be , employment (both quantity and quality) should be the focus of inclusive approach.the focus of inclusive approach.Skill improvement and youth employment need to be Skill improvement and youth employment need to be the focus areas. Otherwise you can not shift people the focus areas. Otherwise you can not shift people from agriculture to nonfrom agriculture to non--farm sector.farm sector.SeventhSeventh, equality of opportunity is important. Even if we , equality of opportunity is important. Even if we do not follow equitable distribution of assets, everyone do not follow equitable distribution of assets, everyone should get equal opportunity for better education and should get equal opportunity for better education and health. Social inequality has to be reduced.health. Social inequality has to be reduced.

Page 30: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

Reduction in poverty and inequalityReduction in poverty and inequalityEighth,, South East Asian and East Asian Eighth,, South East Asian and East Asian experience shows that globalization with better experience shows that globalization with better initial conditions led to equitable development. India initial conditions led to equitable development. India should learn from china on rural nonshould learn from china on rural non--farm farm employment.employment.Ninth, development of technology is important for Ninth, development of technology is important for inclusive approach.inclusive approach.Tenth, rights approachTenth, rights approachEleventh, Inclusive governanceEleventh, Inclusive governanceSome people say that when things are not working, Some people say that when things are not working, democracy is responsible for lack of governance. democracy is responsible for lack of governance. Instead of blaming democracy, there is a need to Instead of blaming democracy, there is a need to strengthen democracy by decentralizing and strengthen democracy by decentralizing and inclusive governance.inclusive governance.

Page 31: Rural Poverty, Inequality and Social Exclusion in India · Rural Poverty, Inequality and Social Exclusion in India ... Dimensions of rural poverty, inequality and social exclusion

THANK YOUTHANK YOU