Poverty Eradication – Definition, Debates, etc.

[op-ed snap] Prosperity in the 21st century:


Mains Paper 1: Social issues | Poverty and development issues

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Importance of agricultural growth for poverty reduction.


Indian experience of inequality(reduction) and poverty(elimination)

  1. Essentially, inequality can be reduced by taxing the rich, a form of ‘levelling down’
  2. but poverty can be permanently eliminated only by raising the incomes of the poor, a form of ‘levelling up’
  3. Public policy in India has paid far too little attention to the latter but also some of the measures adopted to tackle inequality may have exacerbated(worsen) poverty here

Long and short term solution

  1. The long-term strategy should be to tackle these two jointly through the equalisation of capabilities
  2. However, in the short-term, public policy must address livelihood opportunities for the poor

Is poverty in India declining?(after economic reforms of 1991)

  1. It is only the estimate for 2009-10 that shows a decline in the number of poor in India once again
  2. This is followed by a quite spectacular decline over the next two years
  3. To get an idea of the magnitude of the decline, the numbers for 2004-05, 2009-10 and 2011-12 are 407 million, 355 million and 270 million, respectively
  4. So while it is correct say that poverty had declined rapidly since the reforms, it actually declines only after about one and a half decades from 1991

Contribution of agricultural growth in poverty reduction

  1. The reduction took place when agricultural growth was at its fastest ever
  2. Experts have estimated average annual agricultural growth at 4% during 2005-06 to 2013-14 compared to 2.5% for the decade prior to this
  3. A 60% increase in the rate of growth of agriculture sustained for a reasonably long stretch is likely to have impacted poverty significantly
  4. Similarly, the 1980s, when poverty reduction first accelerated, had also been a period of accelerated agricultural growth

Agricultural growth has also contributed in reduction of urban poverty

  1. The economic reforms had mainly focussed on trade, industry and financial sector reforms
  2. Activity in these sectors is mostly based in urban areas
  3. For well over a decade after 1991 it had not succeeded in reducing the number of urban poor
  4. It is only after the agricultural sector began to grow faster from around the middle of the next one that the number of urban poor begins to decline
  5. It is only after 2004-05 that we see for the first time ever a reduction in the number of the urban poor
  6. Till that date this figure(urban poverty rate) has steadily risen while rural poverty had resumed its downward trend after 1993-94 itself

Why is agricultural growth important?: Contribution in reduction of urban poverty

  1. Two processes are likely to have been at play in this
  2. Rural prosperity could have fuelled demand for urban products and, following the significant decline in rural poverty, migration from the villages, swelling the numbers of the urban poor, may have slowed
  3. The role of agricultural growth in reducing poverty is apparent in the fact that between 2004-05 and 2009-10 the number of rural poor declined by 15% while the number of urban poor declined only by 5%
  4. This points to the possibility that economic reforms without a robust agricultural growth may not have made much of a difference to urban poverty
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