Daily Current Affairs – 6th September, 2016Devendra Vishwakarma
Key requirements for sustainable poverty reduction
Poverty in India
- Since independence, the country has registered a significant overall growth rate, and there has been a progressive increase in the per capita income, yet there has been a deterioration in the living standards of a large section of the population.
- The world’s ability to end extreme poverty by 2030–a key element of the Sustainable Development Goals–hinges on India’s ability to make strong and sustained inroads in reducing poverty.
- According to World Bank report India is home to 26% of the global extreme poor. The poverty challenge in India remains broad, and sometimes contradictory.
- The country is home to the largest number of poor people in the world, as well as the largest number of people who have recently escaped poverty. Despite an emerging middle class, many of India’s people are still vulnerable to falling back into poverty.
- India’s performance on key non-monetary indicators of well-being such as child nutrition and improved sanitation facilities lags behind countries at similar stages of development, India’s middle income peers such as China, Vietnam, Brazil and Turkey.
- Nonetheless, the story of India’s transformation remains one of optimism. Although the full potential of economic growth to reduce poverty is yet to be unleashed, the links between growth and poverty reduction have become stronger than in the previous decade. In addition, the manner in which growth has impacted poverty in urban and rural areas, as well as in different sectors, has changed significantly.
Lessons from the past
India has made tremendous progress in reducing absolute poverty in the past two decades. Now, to sustain progress and bring about deeper changes for sustainable poverty reduction and shared prosperity in India, following are the key requirements:
- Accelerating rural poverty reduction:
- With four out of every five of India’s poor people living in rural areas, progress will need to focus on the rural poor.
- It’s not just about agricultural growth, which has long been considered the key driver of poverty reduction. In fact, rural India is not predominantly agricultural and shares many of the economic conditions of smaller urban areas.
- Capitalizing on growing connectivity between rural and urban areas, and between the agriculture, industry and services sectors, has been effective in the past two decades and holds promise for the future.
- Creating more and better jobs:
- The road out of poverty in India has been built on the performance of the labor market, but also benefited from rising transfers and remittances, and favorable demographics among other factors.
- Future efforts will need to address job creation in more productive sectors, which has until now been lukewarm and has yielded few salaried jobs that offer stability and security.
- Focusing on women and Scheduled Tribes:
- The most worrying trends are the low participation of women in the labor market and the slow progress among scheduled tribes.
- India’s women have been withdrawing from the labor force since 2005 and less than one-third of working age women are now in the labor force. As a result, India today ranks last among BRICS countries, and close to the bottom in South Asia in female labor force participation.
- Scheduled Tribes started with the highest poverty rates of all of India’s social groups, and have progressed more slowly than the rest.
- Women and Scheduled Tribes are at risk of being locked out of India’s growth and prosperity.
- Creating more “good” locations:
- Where people live largely shapes their prospects in life. India’s states continue to see large and growing differences in poverty levels and basic opportunities.
- More and more of India’s poor are concentrated in the poorest states, and even within relatively prosperous states, certain pockets of deprivation persist where people are unable to share in the state’s successes.
- Improving human development outcomes for the poor:
- This is central to improving their quality of life and income earning opportunities.
- The recent past shows that some problems, such as undernutrition and open defecation, are endemic and not only confined to the poor but others too, and have not improved with economic growth.
- Better health, sanitation and education will not only help raise the productivity of millions, they will also empower the people to meet their aspirations, and provide the country with new drivers of economic growth.