Understanding India’s Poverty Paradigm

In a conference I attended on the Indian Economy, I was delighted by the discussion undertaken on India’s poverty paradigm consisting of panelists coming from high-established backgrounds and experiences. The most fundamental notions around the topic were tackled displaying sentiments that worry most of us as Indians. Mr. N. C. Saxena, a former IAS Officer who also served the National Advisory Council, Ms. Mitali Nikore, an economist and consultant at the World Bank and Mr. Sanjeev Ahluwalia, former specialist at the World Bank, were the three panelists that engaged in this discussion surrounding poverty. The first question that was posed to the panel was -who are the poor and how do we define the poverty line? To this Mr. Saxena replied by rereading the question as how many people are currently below poverty line and why is poverty in India not declining as fast as it is in any other country. To this he said the reason takes the form of “bad governance” in terms of safety net programs that involve a serious “design flaw”. For example, the allocation of resources and cash transfers to aid the poor should be made in proportion to the rural population in the states, but this is found not to be true. Bihar gets limited funds as compared to Kerala, a more urban state.

Ms. Mitali Nikore added to this question by talking about the issue of affordability and access in terms of gender, caste and ethnic inequalities that exist in the Indian rural society. Even though the state provisions aim at reducing these gaps, it is still not “expected” for girls to go to school but instead get married at 19. This “poverty of access” is also affected by climate change, another economic concern, as it determines who the first-hand casualties are. The answer bends towards the poor as they have little means to escape these natural disasters. She also talked about how more importance should be given to the state government through decentralization of government policies because every state has a different poverty line. On the note of further defining the poverty line, Mr. Sanjeev Ahluwalia talked about the need for measuring poverty line as specific to different states since poverty is not uniform and is a “dynamic” concept. He also gave insight into how the more progressive a country becomes; inequalities grow which further show a rise in its poverty.

The next question that was posed was- how and why is the greatest burden of poverty especially shared by the two groups – the children and the aged? To this Mr. Saxena replied that the design flaw in programs like Integrated Child Development Services (ICDS), which provide food, primary education and healthcare facilities to children under the age of 6 and to their mothers, render the children accessible to “fast food”, not nutritious food. Here, fast food refers to food that is supplied on a larger scale and is, hence, impatient in ensuring its quality and hastily consumed by its recipients. On the question concerning the aged population, Mr. Ahluwalia remarked that because in today’s world the youth aren’t getting jobs, they’re feeding onto the income of their parents and, hence, the aged. The economy should thus involve “shared growth”, which refers to the growth of the young along with economic growth.

The third question posed to the panel was on the debate between providing transfers in cash or kind which was first taken up by Ms. Nikore who talked about how conditional cash transfers are important to simplify complex schemes that often stand in the way of getting the poor directly accessible to funds. These schemes give money to poor households under the condition that they comply with certain pre-defined requirements. Something like this was also popularly encourage by Nobel Prize winners of 2019 in Economics, Abhijeet Banerjee and Esther Duflo, who argue that for developing countries like India, having calculated an Ultra Basic Income, could qualify as a criteria for providing cash transfers. “There is no evidence that unconditional cash transfers lead to a life of dissolution”.

She also emphasizes the need for women labor force participation rates to rise, which are currently restricted due to laws like the Maternity Act of 2017 which grants more leave provided the employee pays for it themselves. On this note Mr. Saxena also remarked that women should become aware of such schemes that restrict their own growth by giving an example of one of the laws, Section 46(1), Tenancy Act in Rajasthan that renders women equal to “lunatics” and “idiots”. Mr. Ahluwalia finally ended the discussion by agreeing with Ms. Nikore on providing direct cash transfers and need for the government to improve its distribution systems.

The conference on India’s poverty paradigm came to few conclusions on the “need of the hour” policy actions that should be initiated by the government. However, India’s battle for doing away with poverty is not only about policies and structural implementations meeting its people, but also about the mindset of its entire population that falls behind the below poverty line. State provisions and the issues surrounding it pose questions of access and availability, while availing the benefits of it reflect willingness. Education and awareness, thus, need to be the key factors in this process of alleviating our poverty scenario. You can only take the horse to the shore but cannot make it drink the water.

Snehal Sreedhar is an undergraduate student of Ashoka University, pursuing her major degree in Economics.

 

 

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