Decreasing Poverty Level

In context

• A recent World Bank Report has shown that extreme poverty in India more than halved in the last decade.

About

• The report shows that the poverty level has decreased from 22.5 per cent to 10.2 per cent between 2011 and 2019.
• The reduction level was greater for rural areas (26.3 per cent to 11.6 per cent).
• Poverty decline was greater in the latter half of the decade compared to the first half.

Reasons for fall in poverty levels

Pro-poor policies: 

• Government’s thrust on improving the ease of living of ordinary Indians through hosts of development schemes such as the Ujjwala Yojana, PM Awas Yojana, Swachh Bharat Mission, Jan Dhan etc.

• Robust identification of the target group: 

• SECC (Socio-Economic and Caste Census), 2011 data has been instrumental in better targeting the beneficiary groups of the poor irrespective of caste, creed or religion.
• SECC data was released in 2015 which was critical in accomplishing the objective of identifying potential beneficiaries. With the data set, SC and ST communities and marginal communities of backward regions were better identified by the state for the sake of policy execution.

• Ensuring balanced development:

• Social groups that were often left out earlier from the government programmes were included this time.
• In addition, the development programs were given more thrust in backward regions of the states like Jharkhand, Bihar, Rajasthan, Uttar Pradesh etc.

• Increased focus on women:

• Under Deendayal Antyodaya Yojana the number of women beneficiaries increased from 2.5 crore in 2014 to over 8 crores in 2018.
• Around 75 lakh SHGs involving women as well, were operational by 2019, working along with Panchayati Raj representatives (40 per cent women) for the execution of the programs.
• This has led to women-led development and also created a social capital that helped every development programme.

• PRI-SHG partnership

• Increased synergy between the third tier of government and the SHGs led to better monitoring and execution of the programs. 
• The bonhomie between the two catalyzed changes that increased the pace of poverty reduction and participation.

• JAM trinity

• Use of Aadhaar alongside mobile and Jan Dhan accounts weeded out middlemen while delivering the benefits of the program. 
• This has led to the removal of corruption at several levels and ensured that the funds reached those whom it was meant for.

• Direct funds to Gram Panchayats

• The Finance Commission directly provided funds to the gram panchayats thus giving the latter more agency in the utilisation of the funds without being cornered by the state governments.

• Rural penetration of infrastructure:

• The high speed of road construction under the Pradhan Mantri Gram Sadak Yojana has created more opportunities for employment, mobility and connectivity among rural hamlets and kasbas with the cities.

• Availability of credit with ease:

• Schemes like MUDRA, and STANDUP INDIA along with the increasing social capital of SHGs have ensured the availability of easy credit through banks, micro-finance institutions and government.

• Livelihood diversification

• Schemes like MUDRA, NRLM, and Krishonnati Yojana have led to livelihood diversification for the farmers and the marginalised. Its impact is more pronounced in rural areas.
• New businesses related to both farm and non-farm livelihoods were taken up by women’s collectives and others on a large scale with community resource persons playing crucial hand holding roles, especially with respect to skill development.

• Reinvigorating rural India

• Schemes like Gram Swaraj Abhiyan has disbursed the benefits such as gas and electricity connections, LED bulbs, accident insurance, life insurance, bank accounts and immunisation to the rural population
• The gains are reflected in the findings of the National Family Health Survey-5 of 2019-2021.

• Universal coverage:

• Increased thrust on universal coverage regarding certain policies for subsistence goods like household latrines, LPG connections and pucca houses for those who lived in kaccha houses ensured that no one was left behind.

• Community led growth

• The center of all development programs is the community on the lines of the concept of ‘Antyodaya: The last man in the line’.
• The tectonic shift to community led development from top down approach along with focus on Gram Panchayat Development Plans for human development, economic activity and infrastructure laid the foundation for robust community participation involving panchayats and SHGs, especially in ensuring accountability.

• Effective social audits

• Increasing awareness among the masses through community-led growth has led to the strengthening of social and concurrent audits
• The phase marked better utilisation of resources. Several changes were brought about in programmes like the MGNREGS to create durable and productive assets. This helped marginal and small farmers in improving their living and livelihood.

• Competitive federalism:

• The concept has generated competition among states to improve performance on rural development indicators. Irrespective of the party in power, nearly all states and UTs focussed on improving livelihood diversification in rural areas and on improving infrastructure significantly.
• Indexes released by NITI Aayog pertaining to performances in rural sanitation, employment generation, potable water availability etc have reinforced states’ commitment to improving their positions in the ranking chart.

Way Forward

• With improved ease of living for deprived households and improving their asset base, India has come a long way from a poverty level of approximately 70 per cent at independence to 10.2 per cent.
• State policies should now focus on taking out the last Indian from below the poverty line and at the same time focusing on the livelihood improvement of those who have just moved out of the poverty trap.

The pandemic and the negative shock from the Russia-Ukraine crisis pose challenges to the gains made in poverty reduction up to 2019. The focus of the government should be to cushion the masses from the ramifications of the events with appropriate policy prescriptions.