Assessment of the growth experience: Poverty and Unemployment

Poverty and unemployment are closely related

High poverty has a multiplier effect on quality of life, deprivation, malnutrition, illiteracy and
low human resource development.

Poverty

Poverty lines
o Normative nutritional requirement per person per day at some base point.
o This is debated
o 2400 cal (rural), 2100 cal (urban)
o Nutrient requirement then needs to be translated to monetary terms.
Poverty has declined as per NSSO estimates.
However, recent committees like the Tendulkar committee have reviewed the methodology
of measuring poverty and concluded that poverty levels are much higher than those
presented through the NSSO estimates.
Data on poverty reduction <put>
Rural-urban and regional disparity
o Even when poverty has declined there has been a marked disparity in its reduction
in rural and urban areas as well as across different regions in the country
o --- states have poverty ratio below the national average
o Significant reduction in Andhra, Gujarat, Haryana, Karnataka, Kerala, Maharashtra,
Punjab and WB
o Most poor states of Bihar, MP, Orissa and UP have shown little progress in poverty
reduction
o Over 54 pc of Indias poor lived in these states in 2004-05
o These states have more poor than 26 sub-Saharan African countries according to the
2010 HDR
o North-western states (P, H, HP, J&K) comprise only 2.2 pc of Indias poor. Rural
urban disparity is minimal
o More than half of Indias urban poor live in the states of Maharashtra, MP, UP and
TN
o There is no evidence for convergence in the incidence of poverty across the states of
India
o Coeffcient of variation (CV) of poverty reveals widening inter-state inequalities in
poverty reduction. Between 1993-94 and 2004-2005 CV increased from 36 to 54.
Non-income dimensions of poverty
o NFHS-3 and District level Household Survey on Reproductive Health
46 pc children under 3 and 49 pc children under 6 malnourished
79 pc children anaemic
59 pc deliveries did not take place in institutional agencies
32 pc have no electricity, 55 no toilet
o Multidimensional Poverty Index
Economic Growth and Poverty
o Necessary for poverty reduction, but not sufficient

This is because
Poverty is not only income poverty. There are various other unfreedoms.
The MDPI captures this well
Enabling role of basic education, good health, land reforms, social security
The fruits of economic growth may not be automatically utilised to expand
basic social services
o Eliminating deprivation is as much a matter of public action as one merely of
economic growth.
o There has been no significant acceleration in the process of poverty reduction during
1980-2005 despite an acceleration in the growth of per capita GDP
Since public action is required, schemes such as NREGS and SGSY are important
Chronic Poverty
o Higher among rural casual labour households than urban casual labour households
o Varies significantly across social and occupational groups and is highest for SCs
Poverty in India vs other developing countries
o China
Poverty in China declined from 53 pc in 1981 to 8 pc in 2001. In the same
period India reduced poverty by 17 pc
India fares badly even on non-income dimensions of poverty like
malnutrition, infant mortality
Concerns about equity and disparity remain in China too. India has fared
better than China in achieving lower inequality
Poverty and Planning/inclusive growth <see poverty notes>
Strategy to deal with the problem
o Recognize that poor are hetrogenous. So strategies need to be specifically designed
to deal with chronic poor and other poor
o Design safety nets
o Strengthen livelihood and make them more productive

Obsession with economic growth? <Notes from Sens article>

Economic growth helps in advancing living standards and in battling poverty

Growth, however, should not be taken to be an end in itself
Sustainable economic growth
Focus on development
The good thing about economic growth is that it generates resources for the government to
spend according to its priorities

India-China comparision
Parameter
LE
IMR
U-5 MR
Literacy
Mean years of schooling

India
64.4
50
66
65
4.4

China
73.5
17
19
94
7.5