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Business Environment

Dr. Pallavi Mody

Email: pallavimody@spjimr.org


Copyright @SPJIMR Influencing Practice & Promoting Value Based Growth
Copyright @SPJIMR Influencing Practice & Promoting Value Based Growth
High GDP growth is necessary but not
sufficient condition to tackle the levels
of absolute poverty
Government Intervention through
affirmative actions
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What is poverty?
Who is poor?
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Global Poverty Indicators

Poverty headcount ratio at $1.25 a day (PPP)
1990 2010
(% of population) 43.1% 22.8%
Number (Million) 1,909 1,289
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International Estimates of Poverty
Percentage of Population
Countries In Poverty
(PPP $1.25 a day)
In Poverty
(PPP $ 2 a day)
India 32.6 68
China 13 29.7
South Africa 13.7 33
Brazil 6.14 10.8
Pakistan 21 60
Source: World Bank (2009) & UNESCO Institute for Statistics
Defining Poverty
World Bank: Those who cannot spend $1.25 (PPP) a day per person
Indian Definition: Expenditure required for a daily calorie intake of 2,400 per person in rural areas and
2,100 in urban areas.

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Poverty in India
1994 2005 2012
No. of people
below poverty line
403.7 million 407.1 million 269.3 million
% of total
population
45.3% 37.2% 21.9%
Planning Commission Estimates
2012 India Poverty line based on consumption spending:
Rs. 27 pp/pd or Rs. 4000 per month for a family of 5 in rural areas
Rs. 33 pp/pd or Rs. 5000 per month for a family of 5 in urban areas

2012 World Bank Poverty line based on consumption spending:
$1.25 at PPP amounts to $=Rs. 25 at PPP and $1.25=Rs. 31

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7
Major initiatives for inclusive growth
Mahatma Gandhi NREGS by NREGA
Guaranteed 100 days of employment at Rs.125 per day
Budget allocation 2010-11: Rs. 40,100 crs
Food Security
Antyoday anna Yojana
Food for Works Program
Food to BPL card holders
Social Infrastructure-Education & Health
Right to education bill
Sarva Siksha Abhiyan
Mid-day meal scheme
Adult & Teacher Education
National rural health mission
Physical infrastructure: Bharat Nirman
Power for all by 2012
Drinking water for all
Thrust on roads and housing
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Focus on The Inclusive Growth
Affirmative actions to take care of the
widespread dualism
National Rural Employment Guarantee
Act
Right to Education Act
Unique Identification Project UID
Imagination

The results
The percentage of people below
poverty line have reduced from 54% in
70s to 22% in recent period
Gross enrolment ratio in schools is close
to 100%

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What will be the impact of changing
poverty levels?
On the countries?
On my business?