Thursday, 14 June 2012 13:23



The fruits of economic growth have not benefited everyone uniformly. Some are left behind and some others are not touched by the benefits of economic growth. It is proved globally that the so-called trickle-down effect does not work in all the societies and India is no exception to this. There are various reasons for this uneven development in the society. Modern economy is technology driven and not labour-intensive.

High volume of high quality goods and services are produced with fewer labour hands. In short, the modern economy is not generating much employment and sometimes it displaces and replaces labour with machines and tools. The period of 1999-2000 to 2004- 2005 saw rapid economic growth in the country but it has not impacted on the unemployment problem of the country. During this period, the unemployment rate remained almost same for rural males and decreased by just one percentage for urban male. On the other hand, unemployment among females increased by one percentage for urban and rural females.

One-third of the country’s population is still illiterate and a majority are not educated up to the age of 15 years. Even among the educated, all do not have employable skills of the modern economy. The education system is not tuned to the changing economic scenario. The large agriculture workforce in rural areas is not sustainable with dwindling cultivable land and use of modern methods of cultivation. As a result, the rural labour is pushed into cities in search of work but they do not have any employable skills in the urban formal sector often end up doing odd jobs in urban areas.

Urbanization in this country is mainly due to acute poverty in rural areas, rather than due to the economic opportunities in urban areas. Further, poverty is not uniformly spread in the country. States like Orissa, Bihar and Madhya Pradesh have high level of poverty and the levels have not come down significantly in the post-economic reform era.

It is also pertinent to understand that some of the people are unable to be part of the economic reform and do not have the capacity to participate in the economic development process. Such groups need government intervention to ensure that they are not left behind in the development process and deprived of the benefits because they do not have the capacity to be part of the global economy. The government needs to develop safety nets for such groups and try to mainstream them in the development process. They need welfare measures in the form of poverty alleviation programmes to ensure that they survive, if not prosper, in this era of economic reform. Further, the poor are not a homogeneous population and their capacity to survive the economic reform varied from one group of poor to another. Especially, those who are below the poverty line or the poorest among the poor need more government help.

The government of India's poverty alleviation programmes can be broadly classified under five categories: (a) Self-employment programmes like the Swarnajayanti Gram Swarojgar Yojana; (b) Wage-employment programmes like the Sampoorna Grameen Rojgar Yojana and the National Rural Employment Guarantee (NREG) scheme; (c) Area development programmes like Drought Prone Area Programmes and theRashtriya Sam Vikas Yojana; (d) Social security programmes like the National Old Age Pension Scheme; (e) Other programmes like the Indira Awaas Yojana.

Self-employment programmes
Self-employment programmes were introduced at the national level in the late 1970s. Initially, the programmes were designed to provide skills, subsidized credit and infrastructure support to small farmers and agricultural labourers so that they could find new sources of income.

In the 1980s, the focus of the self-employment programmes was extended to cover target groups such as scheduled castes and tribes, women and rural artisans. The coverage also extended to specific areas such as animal husbandry, forestry and fishery.

The largest of these programmes was the Integrated Rural Development Programme(IRDP). According to a mid-term appraisal of the Ninth Plan done by the Planning Commission, the IRDP suffered from several defects including: sub-critical investment, unviable projects, illiterate and unskilled beneficiaries with no experience in managing an enterprise, indifferent delivery of credit by banks, overcrowding of lending in certain projects such as dairy, under-emphasis on activities like trading, service and even simple processing, poor targeting and selection of non-poor, rising indebtedness, and scale of IRDP outstripping capacity of government and banks.

Other self-employment programmes suffered from similar deficiencies.

In 1999, several self-employment programmes were integrated into the Swarnajayanti Gram Swarojgar Yojana (SGSY). The key feature of the SGSY is that it does not seek to promote individual economic activities. It seeks to promote self-help groups that are trained in specific skills so they can formulate microenterprise proposals. Such projects are based on activities that are identified for each block on the basis of local resources, skills and markets. The projects are supported by bank credit and government subsidies.

While the SGSY is implemented by district rural development agencies through panchayat samitis, NGOs are expected to play a major role in the success of the programme.

Wage-employment programmes
The first major wage-employment programme was introduced in the 1960s to provide employment to the rural unemployed particularly during the lean agricultural season.

Subsequently, several wage-employment programmes were launched by the Central and State governments. The largest of these was the Jawahar Rozgar Yojana (JRY), which was redesigned in 1999 as the Jawahar Gram Samridhhi Yojana (JGSY).

Other notable schemes were: the Employment Assurance Scheme (EAS), and the Employment Guarantee Scheme of the Maharashtra government.

According to a mid-term appraisal of the Ninth Plan done by the Planning Commission, the JRY suffered from the following defects: Provided inadequate employment (only 11 days as per concurrent evaluation); Resources were spread too thin; Violation of material-labour norms and corruption (fudging of muster rolls); Projects were executed by contractors who sometimes hired outside labourers at lower wages.

There were similar deficiencies in the EAS.

In 2001, the JGSY and EAS were merged to form the Sampoorna Grameen Rojgar Yojana (SGRY). The objective of the scheme is to provide additional wage employment with food security in rural areas. Beneficiaries are temporarily employed to build community assets and infrastructure. The cost of the scheme, which includes the distribution of foodgrain, is shared by the Central and State governments in a ratio of 87.5:12.5.

In August 2005, the Indian Parliament passed the National Rural Employment Guarantee Act (NREGA), one of independent India’s most ambitious interventions to address rural poverty and empower poor people.

The NREGA follows a set of legally enforceable employment norms. Its aim is to end food insecurity, empower village communities, and create useful assets in rural areas. It is based on the assumption that every adult has a right to basic employment opportunities at the statutory minimum wage.

Under the scheme, one member of every poor rural family is guaranteed 100 days of work at the minimum wage of Rs 60 a day. All rural poor are eligible, not just those designated below the poverty line (BPL). One-third of the beneficiaries must be women. If five or more children accompany their mothers to any site, the implementing authority must appoint a woman to look after them on the site.

Panchayats at district, intermediate and village levels will identify and monitor the project, together with a programme officer. Social audits of the work will be available at gram sabhas. Work will, as far as possible, be provided within a radius of 5 km.

The work to be undertaken will be public works such as water harvesting, drought-proofing, micro and macro irrigation works, renovation of traditional water bodies, flood control barriers and rural connectivity.

Medical costs necessitated by injuries at work will be borne by the implementing authority.

Area development programmes
Drought Prone Area Programmes (DPAP), Desert Development Programmes (DDP), Hilly Area Development Programmes and Tribal Area Development Programmes were introduced in the 1970s to prevent environmental degradation and provide employment to the poor in these regions.

In the mid-‘90s, the environment management aspect of these programmes was strengthened by the introduction of watershed development programmes.

Currently, several Central government, State government and non-government watershed development programmes are being implemented.

The government has mooted a “single national initiative” under the National Watershed Development Projects for Rain-fed Areas (NWDPRA) programme. A new Department of Land Resources has been created by merging all area development programmes with the Department of Wasteland Development.
The Tenth Plan has a new scheme called the Rashtriya Sam Vikas Yojana(RSVY) to tackle the problem of extreme deprivation in backward pockets of the country.

Started with an outlay of Rs 2,500 crore for 2002-03, the RSVY aims to promote focused developmental programmes for backward areas that would help reduce imbalances, speed up development and help backward areas overcome poverty. The programme also aims to encourage states to take up productivity-enhancing reforms.

Social security programmes
Social security programmes were launched, at the national level, in the 1980s with an old age pension scheme. Currently, there are four major national social security schemes:
—National Old Age Pension Scheme (NOAPS), which provides a pension to people above the age of 65 with no source of income or financial support.
—National Family Benefit Scheme, which provides Rs 10,000 to families living below the poverty line when their main earning member dies.
—National Maternity Benefit Scheme, which provides Rs 500 to pregnant women of families living below the poverty line.
—Rural Group Insurance Scheme, which provides a maximum life insurance of Rs 5,000 covering the main earning members of families living below the poverty line on a group insurance basis; the government pays half the premium of Rs 50-Rs 70.

Other programmes
The largest of the 'other' programmes is the Indira Awaas Yojana (IAY), which provides houses free of cost to below the poverty line scheduled caste and scheduled tribe families living in rural areas. Recently, several other poverty alleviation programmes have been launched, including Pradhan Mantri Gramodaya Yojana, which provides additional funds to States so that they can provide basic minimum services such as primary health, primary education and drinking water.

Under the Pradhan Mantri Gramodaya Yojana there are two schemes, Gramin Awas for rural shelter and the Rural Drinking Water Project for water conservation in DPAP and DDP programme areas.

Pradhan Mantri Gram Sadak Yojana, launched in December 2000, to provide road connectivity to 1.6 lakh remote habitations with a population of over 500 by the end of the Tenth Plan period

Antyodaya Anna Yojana, launched in December 2001, to provide 25 kg of foodgrain at highly subsidized rates to 100 million of India's poorest families living below the poverty line. In 2002, around 24 lakh tonnes of foodgrain were provided by the central government under this scheme.

The Annapurna Scheme to provide 10 kg of foodgrain per month free of cost to persons who are eligible for pension under the NOAPS but haven’t received any.

Swarnajayanti Gram Swarojgar Yojna: This programme was launched in April, 1999. This is a holistic programme covering all aspects of self employment such as organisation of the poor into self help groups, training, credit, technology, infrastructure and marketing.

The objective of SGSY is to provide sustainable income to the rural poor. The programme aims at establishing a large number of micro-enterprises in the rural areas, based upon the potential of the rural poor. It is envisaged that every family assisted under SGSY will be brought above the poverty-line with in a period of three years.

This programme covers families below poverty line in rural areas of the country. Within this target group, special safeguards have been provided by reserving 50% of benefits for SCs/STs, 40% for women and 3% for physically handicapped persons. Subject to the availability of the funds, it is proposed to cover 30% of the rural poor in each block in the next 5 years.

SGSY is a Centrally Sponsored Scheme and funding is shared by the Central and State Governments in the ratio of 75:25 respectively.

SGSY is a Credit-cum-Subsidy programme. It covers all aspects of self-employment, such as organisation of the poor into self-help groups, training, credit technology, infrastructure and marketing. Efforts would be made to involve women members in each self-help group. SGSY lays emphasis on activity clusters. Four-five activities will be identified for each block with the approval of Panchayat Samities. The Gram sabhawill authenticate the list of families below the poverty line identified in BPL census. Identification of individual families suitable for each key activity will be made through a participatory process. Closer attention will be paid on skill development of the beneficiaries, known as swarozgaris, and their technology and marketing needs.

Jawahar Gram Samriddhi Yojna: The critical importance of rural infrastructure in the development of village economy is well known. A number of steps have been initiated by the Central as well as the State Governments for building the rural infrastructure. The public works programme have also contributed significantly in this direction.

Jawahar Gram Samridhi Yojna (JGSY) is the restructured, streamlined and comprehensive version of the erstwhile Jawahar Rozagar Yojana. Designed to improve the quality of life of the poor, JGSY has been launched on 1st April, 1999. The primary objective of the JGSY is the creation of demand driven community village infrastructure including durable assets at the village level and assets to enable the rural poor to increase the opportunities for sustained employment. The secondary objective is the generation of supplementary employment for the unemployed poor in the rural areas. The wage employment under the programme shall be given to Below Poverty Line(BPL) families.

JGSY is implemented entirely at the village Panchayat level. Village Panchayat is the sole authority for preparation of the Annual Plan and its implementation.

The programme is implemented as Centrally Sponsored Scheme on cost sharing basis between the Centre and the State in the ratio of 75:25 respectively.

The programme is to be implemented by the Village Panchayats with the approval ofGram sabha. No other administrative or technical approval is required.

Indira Aawas Yojna: IAY is the flagship rural housing scheme which is being implemented by the Government of India with an aim of providing shelter to the poor below poverty line. The Government of India has decided that allocation of funds under IAY will be on the basis of poverty ratio and housing shortage.

The objective of IAY is primarily to help construction of new dwelling units as well as conversion of unserviceable kutcha houses into pucca/semi-pucca by members of SC/STs, freed bonded labourers and also non-SC/ST rural poor below the poverty line by extending them grant-in-aid.

IAY is a beneficiary-oriented programme aimed at providing houses for SC/ST households who are victims of atrocities, households headed by widows/unmarried women and SC/ST households who are below the poverty line. This scheme has been in effect from 1st April, 1999.

IAY is a Centrally Sponsored Scheme funded on cost sharing basis between the government of India and the States in the ratio of 75:25 respectively.

Grant of Rs. 20,000 per unit is provided in the plain areas and Rs. 22,000 in hilly/difficult areas for the construction of a house. For conversion of a kutcha house into in pucca house, Rs. 10,000 is provided. Sanitary laterines and chulahs are integral part of the house. In construction/upgradation of the house, cost effective and environment friendly technologies, materials and designs are encouraged. The household is allotted in the name of a female member of beneficiary household.

DRDA Administration: District Rural Development Agency (DRDA) has traditionally been the principal organ at the District level to oversee the implementation of the anti-poverty programmes of the Ministry of Rural Development. Created originally for implementation of Integrated Rural Development Programme (IRDP), the DRDAs were subsequently entrusted with a number of programmes, both of the Central and State governments. Since inception, the administrative costs of the DRDA (District Rural Development Agency) were met by setting aside a part of the allocations for each programme. Of late, the number of programmes had increased and several programmes have been restructured with a view to making them more effective. While an indicative staffing structure was provided to the DRDAs, experience showed that there was no uniformity in the staffing structure. It is in this context that a new centrally sponsored scheme—DRDA Administration—was introduced from April 1, 1999, based on the recommendations of an inter-ministerial committee known as Shankar Committee. The new scheme replaced the earlier practice of allocating percentage of programme funds to the administrative costs.

The objective of the scheme of DRDA (District Rural Development Agency) Administration is to strengthen the DRDAs and to make them more professional and effective. Under the scheme, DRDA is visualised as specialised agency capable of managing anti-poverty programmes of the Ministry on the one hand and effectively relate these to the overall efforts of poverty eradication in the district on the other.

The funding pattern of the programme is in the ratio of 75:25 between the Centre and the States.

The DRDA will continue to watch over and ensure effective utilisation of the funds intended for anti-poverty programmes. It will need to develop distinctive capabilities for poverty eradication. It will perform tasks which are different from Panchayati Raj Institutions and line departments. The DRDAs would deal only with the anti-poverty programmes of the Ministry of Rural Development. If DRDAs are to be entrusted with programmes of other Ministries or those of the State Governments, it must be ensured that these have a definite anti-poverty focus. In respect of such States where DRDA does not have a separate identity and separate accounts.

Basic Minimum Services: The Government of India launched this scheme in 1997 incorporating seven vital services of importance to common people. The State Government has opted to provide shelter to shelter-less below poverty line under this scheme.

The objective of providing this scheme is to supplement the constitution of dwelling units for members of SC/ST, freed bonded labour and also non-SC/ST rural poor below the poverty line by providing them with grant.

The Central government provides additional funds for Basic Minimum Services subject to the condition that the State government will provide 15% of the required funds.

Additional Indira Awas are being constructed with the guidelines analogous to that for the Awas Yojana. The salient features are:
—Rs. 20,000 is provided to the beneficiaries for construction of the houses in phases. Sanitary latrines and smokeless chulah are integral part of the houses.
—Houses are allotted in the name of female members of the family or in joint names of both spouses.
—Selection of construction technology, materials and design is left entirely to the choice of beneficiaries. Contractors, Middlemen or the Departmental Agencies have no role in the construction of houses.
—Cost effective and environment friendly housing technologies/design and materials are provided.

Drought-Prone Areas Programme: The Drought Prone Areas Programme (DPAP) aims at mitigating the adverse effects of drought on the production of crops and livestock and productivity of land, water and human resources. It strives to encourage restoration of ecological balance and seeks to improve the economic and social conditions of the poor and the disadvantaged sections of the rural community.

DPAP is a people's programme with government assistance. There is a special arrangement for maintenance of assets and social audit by Panchayati Raj Institutions. Development of all categories of land belonging to Gram Panchayats, Government and individuals fall within the limits of the selected watersheds for development.

Allocation is to be shared equally by the Centre and State government on 75:25 basis. Watershed community is to contribute for maintenance of assets created. Utilisation of 50% of allocation under the Employment Assurance Scheme (EAS) is for the watershed development. Funds are directly released to Zila Parishads/District Rural Development Agencies (DRDAs) to sanction projects and release funds to Watershed Committees and Project Implementation Agencies.

Village community, including self-help/user groups, undertake area development by planning and implementation of projects on watershed basis through Watershed Associations and Watershed Committees constituted from among themselves. The Government supplements their work by creating social awareness, imparting training and providing technical support through project implementation agencies.

Credit-cum-Subsidy Scheme for Rural Housing: There were a large number of households in the rural areas which could not be covered under the IAY, as either they do not fall into the range of eligibility or due to the limits imposed by the available budget. On the other hand due to limited repayment capacity, these rural households cannot take benefit of fully loan based schemes offered by some of the housing finance institutions. The need of this majority can be met through a scheme which is part credit and part subsidy based.

The objective of this scheme for rural housing is to facilitate construction of houses for rural families who have some repayment capacity. The scheme aims at eradicating shelter-lessness from the rural area of the country.

The scheme provides shelter to rural families who have not been coveted under IAY and who are desirous of possessing a house. All rural households having annual income up to Rs. 32,000 are covered under this scheme.

The funds are shared by the Centre and the State in the ratio of 75:25, respectively.

Poor just above the poverty line are entitled to get the benefits of the scheme. A maximum subsidy of Rs. 10,000 per unit is provided for the construction of a house. Sanitary latrine and smokeless chulha are integral part of the house. Cost effective and environment friendly technologies, materials, designs, etc. are encouraged. Sixty per cent (60%) of the houses are allocated to SC/ST rural poor.

Appraisal of Anti-poverty programmes
On review of all the poverty alleviation programmes, one gets the impression that these programmes are not benefiting the poor in terms of increasing their income. For example, the PDS is plagued with seepage, corruption, high administrative cost and targeting errors. Self-employment are better utilized by the non-poor or those who are above BPL. Wage employment programme is caught in red-tapism and administrative delays leading to poor utilization of the allocated funds. All these factors have been used by some economists to argue against these programmes and to suggest the winding up the programmes.

Looking at purely narrow economic point of view is not the right approach to poverty alleviation. Poverty does not mean not having enough income alone. Poverty means not having access to a whole lot of services like education, health services, water supply, sanitation and so on. It also means loss of status in the community, exclusion from certain social functions, and a sense of inferiority in the group or community. In short, poverty means marginalization of an individual or household in the community.

There is no denial that poverty alleviation programmes should lead to high income to the poor, but to come out of the culture of poverty, one needs to be empowered and also requires access to basic services. While some of the poverty alleviation programmes may not be performing well in terms of utilizing the allocated funds and increasing the income of the poor, these programmes have contributed to the social arena of poverty. For example, wage employment programme was not very successful in terms of utilizing the allocated resources and generating additional employment for the BPL. But this programme has created village level assets and infrastructure in terms of schools, health centers, roads and ponds.

Similarly, Self-help Groups (SHGs) formed by the women has given them tremendous confidence and empowered them to become entrepreneurs. Today, SHGs are not only active in creating micro-enterprises but also they are involved in implementing community programmes like immunization programmes, literacy programmes and so on. Some of them have empowered to the level of contesting panchayat elections and become members of Panchayat Raj Institutions (PRI). Again, there is no denial that all these cannot be achieved without an increase in income. Therefore, the economic and social aspects of poverty alleviation are interlinked to one another. Economic upliftment alone cannot alleviate poverty but it must lead to social upliftment in terms of access to services, empowerment and independence. Therefore, the current poverty alleviation programmes in the country should broaden their focus and goal in addition to increasing income to achieve the target of removing poverty from the country.

Also, involvement of the local communities is key to the success of poverty alleviation programmes. In the absence of community involvement, the programmes are plagued with bureaucratic muddle and corruption at every level. Unfortunately, States still lag behind handing over these programmes to Panchayati Raj Institutions (PRIs). While PRIs are created in most of the States and elections are held, these institutions are not given the financial resources, administrative powers and the capacity to run programmes. State governments still hold the financial powers and the PRI is not in a position to plan and decide based on their needs. The administrative machinery of the PRI is very week to carry out these national level programmes. Also, the PRI does not have the capacity to handle resources and technical capacity to implement programmes. These issues have to be addressed immediately to strengthen PRI to implement poverty alleviation programmes.

Apart from decentralization and community involvement, participation of the poor in the programme that affects their welfare, is important. Some of the self-employment schemes failed to take off because no effort was made to involve the poor in identifying the skills which they can learn easily. Some of the skills imbibed may not have job potential in the community. On the positive side, micro-enterprise under the self-employment programme was successful because of the role of SHGs. The SHG members actively participated in the whole process and decided for themselves for the kind of skills they wanted to learn and also the kind of credit they needed from the bank to start the microenterprise. Many well-intentioned programmes fail to take off because of lack of understanding of the ground realities due to lack of participation of the beneficiaries.

At the macro-level, there is a need to co-ordinate a myriad of poverty alleviation programmes of the central government and the State governments. The transfer of central funds to the States for different programmes should be efficient. Currently, such funds and goods like foodgrains are not fully utilized by the States. There is a need to strengthen the financial management capacity of certain States to use the funds efficiently. These are the States where the percentage of the BPL is more than the national average.

Poverty is more of social marginalization of an individual, household or group in the community/society rather than inadequacy of income to fulfill the basic needs. Indeed, inadequate income is one of the factors of marginalization, but not the sole factor. The poverty alleviation programmes should not aim merely to increase the income level of individual, household or group, but mainstreaming marginalized in the development process of the country.

Last Updated on Thursday, 14 June 2012 13:27