Poverty Eradication – Definition, Debates, etc.

Mar, 28, 2019

Global Multidimensional Poverty Report 2018

Note4students

Mains Paper 1: Social Issues | Poverty & development issues

From UPSC perspective, the following things are important:

Prelims level: Global MPI report 2108

Mains level: India’s efforts in reducing poverty and their outcomes


News

  • The Global MPI 2018 Report was recently published by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative.

What is global MPI?

  • The global Multidimensional Poverty Index (MPI) is an international measure of acute poverty covering over 100 developing countries.
  • It complements traditional income-based poverty measures by capturing the severe deprivations that each person faces at the same time with respect to education, health and living standards.
  • The global MPI was developed by OPHI with the UN Development Programme (UNDP) for inclusion in UNDP’s flagship Human Development Report in 2010. It has been published in the HDR ever since.

Global MPI 2018 Report

  • The report measures MPI, or multidimensional poverty index, which it says can be broken down to show “who is poor” and “how they are poor”.
  • This factor in two measures, poverty rate as a percentage of the population, and intensity as the average share of deprivations that poor people experience.
  • The product of these two is MPI. If someone is deprived in a third or more of 10 weighted indicators, the global index identifies them as “MPI poor”.

India’s progress

  • India has reduced its poverty rate drastically from 55% to 28% in 10 years, with 271 million people moving out of poverty between 2005-06 and 2015-16.
  • The report, covering 105 countries, dedicates a chapter to India because of this remarkable progress.
  • However, India still had 364 million poor in 2015-16, the largest for any country, although it is down from 635 million in 2005-06.
  • Of the 364 million people who were MPI poor in 2015-16, 156 million (34.6%) were children.
  • In India, poverty reduction among children, the poorest states, Scheduled Tribes, and Muslims was fastest, the report says.

Statewise Report

  • Bihar was the poorest state in 2015-16, with more than half its population in poverty.
  • The four poorest states —Bihar, Jharkhand, Uttar Pradesh, and Madhya Pradesh — were still home to 196 million MPI poor people, which was over half of all the MPI poor people in India.
  • Jharkhand had the greatest improvement, followed by Arunachal Pradesh, Bihar, Chhattisgarh, and Nagaland.
  • At the other end, Kerala, one of the least poor regions in 2006, reduced its MPI by around 92%.

Global Highlights

  • 3 billion people live in multidimensional poverty.
  • 83% of all multidimensionally poor people in the world live in Sub-Saharan Africa and South Asia.
  • Two-thirds of all MPI poor people live in middle-income countries.
  • Half of the multidimensionally poor are children aged 0-17.
  • 85% of MPI poor people live in rural areas.
  • 46% of those who are multidimensionally poor live in severe poverty.
  • In 2015/16, more than 364 million people are still MPI poor in India.
  • In India, 271 million people moved out of poverty in ten years.
Dec, 24, 2018

Odisha’s KALIA to attack poverty

Note4students

Mains Paper 3: Agriculture | Issues related to direct & indirect farm subsidies & minimum support prices

From UPSC perspective, the following things are important:

Prelims level: KALIA Scheme

Mains level: Various support schemes for farmers , labourers and their effectiveness


News

  • Instead of announcing farm loan waiver like other States, the Odisha govt has approved KALIA scheme amounting to ₹10,000 crore to accelerate agricultural prosperity in the State and to reduce poverty.

Krushak Assistance for Livelihood and Income Augmentation

  1. KALIA aims to make a direct attack on poverty by way of massive investment in the agriculture sector and making benefits reach the most needy through DBT.
  2. Under KALIA an amount of ₹10,180 crore will be spent over a period of three years till 2020-211.
  3. Crop loans up to ₹50,000 will henceforth be interest free, and the scheme will be reviewed in 2020-21 for further modifications.
  4. KALIA scheme covers the cultivators, loanee, as well as non-loanee farmers, share croppers and landless agricultural labourers.
  5. It also specifically takes care of vulnerable agricultural families identified through gram panchayats and crop loans are made available at 0% interest.

Other assistance

  1. All the small and marginal farmers of the State (92% cultivators) will be covered under the scheme.
  2. An amount of ₹10,000 per family at the rate of ₹5,000 for Kharif and Rabi shall be provided as financial assistance for taking up cultivation.
  3. This component is not linked to extent of land owned and will greatly benefit share croppers and actual cultivators most of whom own very small extent of land.
  4. Under this initiative, 10 lakh landless households will be supported to take up activities like small goat rearing units, mini layer units, duck units, fishery kits for fishermen and women, mushroom cultivation and bee keeping.
  5. As regards financial assistance to vulnerable agriculture households and landless labourers, an annual financial assistance of ₹10,000 per household will be provided.
  6. Deserving families will be identified and selected by gram panchayats.
  7. Further, life insurance cover of ₹2 lakh and additional personal accident cover of ₹2 lakh will be provided to both cultivators and agricultural labourers covering about 57 lakh households.
Sep, 24, 2018

World Bank endorses new Country Partnership Framework for India

Note4students

Mains Paper 2: IR | Important International institutions, agencies and fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: CPF

Mains level: Measures taken to alleviate poverty and generate employment.


News

Context

  1. The World Bank Group (WBG) Board of Executive Directors endorsed a new Country Partnership Framework (CPF) for India.
  2. The CPF aims to support India’s transition to a higher middle-income country by addressing some of its key development priorities — resource efficient and inclusive growth, job creation and building its human capital.

About Country Partnership Framework (CPF)

  1. The World Bank Group’s CPF aims to make a country-driven model more systematic, evidence-based, selective, and focused on the Bank’s twin goals of ending extreme poverty and increasing shared prosperity in a sustainable manner.
  2. Used in conjunction with a Systematic Country Diagnostic (SCD), the CPF guides the World Bank Group’s (WBG) support to a member country.
  3. A Systematic Country Diagnostic (SCD) informs each new CPF.
  4. The aim of the SCD is to identify the most important challenges and opportunities a country faces in advancing towards the twin goals.
  5. This is derived from a thorough analysis, and informed by consultations with a range of stakeholders.

Why such framework for India?

  1. The India CPF represents the largest country programme of the WBG, reflecting the strong collaboration between India and the Group’s institutions.
  2. These institutions include International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA).
  3. With a fast growing economy, global stature, and its unique experience of lifting the highest number of poor out of poverty in the past decades, India is well-positioned to become a high middle-income country by 2030.
  4. This CPF charts a path for how the World Bank, IFC and MIGA, will leverage their relative strengths to deliver stronger development outcomes for India, whose half of population is under the age of 25.

Areas of focus

  1. An important focus of the CPF will be to deepen engagement with India’s States and invest in the institutions and capabilities of the states and local governments to address their development priorities.
  2. The WBG will focus on three broad areas under the new CPF:
  • Promoting a resource efficient growth path, particularly in the use of land and water, to remain sustainable;
  • Enhancing competitiveness and enabling job creation and
  • Investing in human capital — in health, education, skills — to improve quality and efficiency of service delivery.
  1. Within these, other engagement will include addressing the challenge of air pollution, facilitating jobs for women, increasing the resilience of the financial sector and investing in early years of children’s development.
Sep, 22, 2018

UNDP report lauds India’s strides in reducing poverty in past decade

Note4students

Mains Paper 1: Social issues | Poverty & development issues

From UPSC perspective, the following things are important:

Prelims level: Multidimensional Poverty Index

Mains level: India’s efforts in reducing poverty and their outcomes


Context

Multidimensional Poverty Index 2018

  1. In the decade between 2005-06 and 2015-16, India has halved its Multidimensional Poverty Index (MPI) from 54.7 per cent to 27.5 per cent
  2. According to MPI 2018 released by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative, there are 271 million fewer poor people in India in this period

Findings of the report

  1. 364 million Indians continue to experience acute deprivations in health, nutrition, schooling and sanitation
  2. About 196 million MPI poor people in India, accounting for more than half of all multidimensionally poor in India, live in the four states of Bihar, Jharkhand, Uttar Pradesh and Madhya Pradesh
  3. Just over one in four multidimensionally poor people in India are under ten years of age
  4. Traditionally disadvantaged groups, in terms of castes, religions etc, continue to be the poorest though they have experienced the biggest decadal reduction in MPI

About Multidimensional Poverty Index

  1. The MPI measures multiple deprivations in the same households in education, health and living standards and 10 indicators, namely nutrition, child mortality, years of schooling, school attendance, sanitation, cooking fuel, drinking water, electricity, housing and assets
  2. Those found to face deprivations in at least a third of the MPI’s components are multidimensionally poor
Jul, 06, 2018

[op-ed snap] Is India winning the battle against extreme poverty?

Note4students

Mains Paper 3: Economy | Development and employment

From UPSC perspective, the following things are important:

Prelims level: Definitions of Poverty

Mains level: The news card talks about the dynamic nature of poverty and deprivation. Old definitions will dramatically reduce persons below the poverty line. It is outdated to see it in terms of income levels or extreme forms such as hunger. Poverty has now to be equated with inequality to address the present problem.


Context

India out of extreme poverty cycle

  1. India is perhaps no longer home to the highest number of people living in extreme poverty.
  2. Researchers at Brookings Institution say Nigeria had 87 million people living in extreme poverty in May 2018, compared to 73 million in India.
  3. They predict that the Indian number is expected to drop to around 20 million over the next four years.

Poverty – a disguise in India?

  1. The World Bank defines a person as extremely poor if she is living on less than 1.90 international dollars a day, which are adjusted for inflation as well as price differences between countries.
  2. The results of the recently concluded consumer expenditure survey conducted by the National Sample Survey Organisation are used to generate estimates of absolute poverty.
  3. It will show that there are only 50 million Indians now living below the poverty line defined by the Suresh Tendulkar committee, or one in 25.
  4. Poverty numbers have always been a source of heated debate in India and the claims that India is on the verge of winning the battle against extreme poverty sit uneasily with the current concerns about job creation or rural distress.

Comparing with China

  1. China began to score massive wins against extreme poverty at the turn of the century when its per capita income in terms of purchasing power parity (PPP) was around $4,000.
  2. It was thus very likely that India would see a similar result after it reached a similar average income level at the end of the previous decade.
  3. PPP incomes average around $7,000 right now, compared to around $2,500 in the year 2000.
  4. Chinese success has no doubt that rapid economic growth as the main reason why extreme poverty could be rolled back.

What pulled China out of extreme poverty?

  1. The centrality of economic expansion is often lost in the heated ideological debates in India.
  2. But there were also other factors at play—the shift of people to jobs in formal enterprises, investments in human capital, relatively equal land ownership in rural areas, and targeted interventions to help the extremely poor.
  3. These allowed China to pull most of its citizens out of extreme poverty despite rising inequality.

Indian Scenario of Poverty Reduction

  • Poverty Reduction isn’t the only Indicator
  1. It is time to close the tired debate about whether the economic reforms of 1991 have only helped the rich, though empirical proof will not come in the way of grand claims that poverty is actually increasing in India.
  2. Other indicators of well-being such as infant mortality and nutrition have also been improving.
  • Outdated poverty definition in India
  1. India will once again have to redefine what it means by poverty. Poverty lines have to be recalibrated depending on changes in income, consumption patterns and prices.
  2. The usual poverty line used in narratives is 1.90 international dollars a day, but the World Bank has two others—$3.20 per day for middle-income countries and $5.50 per day for rich countries.
  3. India is now a middle-income country, with an estimated per capita income of around $9,000 in purchasing power parity.
  4. Economists suggest that a poverty line of $3.20 translates into ₹75 a day, or 68% higher than the Tendulkar poverty line.
  • Poverty not to be assumed as Hunger only
  1. Third, the Indian political, policy and administrative systems have to adjust to the new realities of the transition to a middle- income country.
  2. Here poverty does not mean living at the edge of hunger but, rather, lack of income to take advantage of the opportunities thrown up by a growing economy.

Way Forward

  1. The focus of government spending should be on the provision of public goods rather than subsidies.
  2. Also, the rate at which economic growth translates into poverty reduction depends on what happens to inequality.
  3. India was battling the threat of widespread famine some five decades ago when even its ability to feed a growing population was questioned. There has been a lot of progress since then.
  4. Even the very possibility of a final victory against the sort of extreme poverty that was common not so long ago is no mean achievement.
  5. Inequality along with poverty needs to be targeted.

Back2Basics

Definitions of Poverty

Read more about the Poverty Line in India in this blog

Poverty Lines in India: Estimations and Committees

Apr, 21, 2018

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

Note4students

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.


News

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
Dec, 27, 2017

[op-ed snap] Countering growing inequality

Image source

Note4students

Mains Paper 1: Social issues | Social empowerment

From UPSC perspective, the following things are important:

Prelims level: World Inequality Report 2018, World Development Indicators data

Mains level: Inequality prevailing in India and ways to reduce it


Context

World Inequality Report 2018

  1. It has brought into focus an aspect of economic progress in India
  2. There is a continuous growth in inequality here since the mid-1980s
  3. The top 1% of income earners received 6% of the total income in the early 1980s, close to 15% of it in 2000, and receives 22% today

Comparison of economic progress made in India and China

  1. Since 1980, the Chinese economy has grown 800% and India’s a far lower 200%
  2. Inequality in China today is considerably lower than in India
  3. The share of the top 1% of the Chinese population is 14% as opposed to the 22% reported for India
  4. They had both been large agrarian economies at similar levels of per capita income when they had started out in the early 1950s

Growing inequality a sign of progress?

  1. Growing inequality need not necessarily accompany faster growth as inequality actually declined in China from the early 21st century
  2. By then China had grown faster for longer than most countries of the world ever did

Other indices also prove China’s success

  1. The World Development Indicators data released by the World Bank show that per capita income in China was five times that of India in 2016
  2. The percentage of the population living on less than $1.90 a day was about 10 times less at the beginning of this decade

What is it that China did better than India?

  1. Its leadership combined the drive for growth with the spreading of human capital
  2. Human capital may be understood as a person’s endowment derived from education and robust health
  3. China had by the early 1970s achieved the level of schooling India did only by the early 21st century
  4. The spread of health and education in that country enabled the Chinese economy to grow faster than India by exporting manufactures to the rest of the world
  5. These goods may not have been the byword for quality but they were globally competitive, which made their domestic production viable
  6. The resulting growth lifted vast multitudes out of poverty
  7. An ingredient of this is also the greater participation of women in the workforce of China

Is democracy pulling India behind?

  1. India has lower per capita income, persistent poverty and by all accounts rising inequality
  2. Democracy per se cannot be held responsible for this
  3. There are States in India with superior social indicators than China
  4. This shows that democracy not a barrier to development
  5. It also shows that similar political institution across India have not resulted in same development outcomes across its regions

Way forward

  1. There is need to spread health and education far more widely amidst the population
  2. We now need to reorient public policy so that the government is more enabling of private entrepreneurship
  3. This has to be done while being directly engaged in the equalization of opportunity through a social policy that raises health and education levels at the bottom of the pyramid
Nov, 02, 2016

[op-ed snap] Rural vs Urban: the better poverty alleviator

  1. Current pattern of Urbanisation: Taking place on the fringe of cities- unplanned and outside the purview of city codes and bylaws, imposes high costs
  2. Urban population growth effects on poverty: Consumption linkages, rural non-agricultural employment, remittances, rural land/labour ratios, rural land prices and consumer prices
  3. Rural transformation effects on poverty reduction: Modernisation of agriculture reduces rural poverty and overall poverty
  4. This is possible through greater demand for chemical fertilisers, pesticides, machine services, processed seeds or fuels, which promote non-agricultural production
  5. Higher incomes in rural areas promote demand for processed foods produced mainly in urban areas and generate employment
  6. Decrease in food prices results in better food security and overall poverty reduction
  7. Reduction of food prices lowers the real product wage in the non-agricultural sector, raising profitability and investment
  8. As a country grows and shifts from the low income to the middle income category, the nature of agriculture typically changes from subsistence-oriented farming to more commercialised and market farming
  9. It then has a closer linkage with the non-agricultural sector
  10. Rural transformation possible through easier access to new technology, credit and market
  11. Strengthening of extension services, rural infrastructure and skill formation will not only raise productivity and living standards but also curb rural-urban migration
Sep, 12, 2016

Task force moots new panel on BPL

  1. Context: A task force headed by NITI Aayog Vice-Chairman Arvind Panagariya to prepare a road map for elimination of poverty has submitted its report to PMO
  2. It suggested setting up of a committee to identify people below the poverty line (BPL) & has also suggested participation from the States in defining the BPL population
  3. Background: Official measures are based on the Tendulkar poverty line
  4. But the line is not without its share of controversies, with many terming it being too low
  5. This had prompted the previous government to appoint the Rangarajan Committee, which has recommended higher rural and urban poverty lines
  6. Discuss: Present poverty line level in India is too low to capture real poverty. In this context, discuss the need for a new poverty line. What factors should be considered to make it real representative of poverty in India?
Jul, 09, 2016

Earlier poverty lines

  1. Suresh Tendulkar panel: Those spending at least Rs 27 in rural and Rs 33 in urban areas daily in 2011-12 were identified as being above the poverty line
  2. Led to a public outcry as these numbers were considered unrealistic and too low
  3. C Rangarajan panel: Set up to review the line, raised the limit to Rs 32 and Rs 47 for rural and urban areas, respectively
  4. However, the report, submitted in 2014, wasn’t accepted by the Modi government
Jul, 09, 2016

New poverty line

  1. News: The government may soon come out with a new definition of poverty, with the Niti Aayog likely to set up a panel of experts to formulate a new poverty line
  2. The new line, which will be different from the existing Tendulkar line and Rangarajan line, will also be based on the latest consumption expenditure survey
  3. Reasons: To set a target for poverty reduction while preparing its first 15-year vision document and 7-year strategy paper, which have replaced the 5-year plan
  4. Also, to measure the impact of the government’s anti-poverty schemes and other welfare initiatives
Mar, 19, 2016

Niti Aayog task force backs ‘Tendulkar poverty line’

  1. News: A panel tasked with devising ways to reduce poverty has backed the controversial Tendulkar poverty line
  2. Context: Tendulkar poverty line, computed for 2004-05 at a level that was equivalent, in PPP terms to Rs 33 per day
  3. Tendulkar Committee: Computed poverty lines for 2004-05 at a level that was equivalent, in purchasing power parity (PPP) terms, to 1 U.S. dollar per person per day
  4. PPP model: Refers to a method used to work out the money that would be needed to purchase the same goods and services in 2 places
  5. Niti Aayog’s Task Force Report: Argues that the poverty line is not the basis of identification of poor in India
  6. It is the BPL Census on the basis of which state govts identify the poor. Latest of these is the Socio-Economic Caste Census 2011
Jul, 08, 2015

MDG report: India on track in reducing poverty

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