Poverty, Populism and Performance: Changing Contours Of

Poverty, Populism and Performance: Changing Contours of
Politics in India

by Barun S. Mitra,

with research inputs from Ravi Kapoor and Nitu Maurya

Abstract

This paper explores, on the one hand, the populist pressures in a democracy and, on the other, the demand for performance because of the shift in demographic characteristics. India became independent in 1947, and a constitutional democratic republic in 1950,
when poverty was endemic and society fragmented. While politics united the country, there was hardly any social demand for economic performance from the population. In that tentative beginning, poverty was accepted as given. At that time, through the tumultuous 1970s and 1980s, populism held the key to political success. Then came the economic growth trajectories of the 1990s and 2000s, when political competition became intense, and focus shifted to performance. This paper analyzes the changes in economic performance in the context of political changes driven by changing demography, and attempt to look at the near-, medium-, and long-term future direction India may take.

Key words: Poverty, Populism and Demographic change

Introduction

In March 2012, when the Planning Commission released the poverty estimates for 2009-10 and the estimates showed accelerating decline in poverty, critics accused it of having quietly dropped down the poverty line to make its exaggerated claims. This was, of course, an outright false accusation, grounded in the belief that growth could do nothing good for the poor. The prime minister withdrew the estimates and appointed a committee under the chairmanship of his chief economic adviser, C. Rangarajan, to review the poverty line. But the prime minister must think again. At the outset, it must be remembered that the purpose of the official poverty line has been to keep track of whether the government’s poverty alleviation programmes or policies are helping us pull the people at the bottom of the ladder out of destitution.

There are two important strategies of poverty alleviation. Firstly, an effort is underway to provide greater opportunity for the poor to participate in the growth process by focusing on specific sectors, which offer such opportunities. Secondly, poverty alleviation and social sector programmes have been strengthened and restructured with special programmes for the weaker sections of society.

The first strategy posits that more growth allows more people to benefit from it. The reality, however, is that although India’s gross domestic product (GDP) has increased substantially, much of increase has gone to only a small proportion of the population. India’s economic growth is driven by services sector, which means that growth has been very unevenly divided. While a small proportion of Indians (mostly educated) in services contribute to about two-thirds of the economy, agriculture’s contribution is just 8 per cent. This is despite the fact it employs over half the workforce (Economic Survey 2012-13, Ministry of Finance, Government of India).

The second strategy focuses on the betterment of weaker sections of society. India embarked upon a series of Five Year Plans, each containing some kind of poverty eradication and social justice component; both Central and state governments claim that they want to work towards social development and the eradication of poverty.

Much has been achieved in the past half century; poverty has come down, primarily because of economic growth and development. The government claims that the incidence of poverty declined from over 50 per cent in the 1950s to 26 per cent in the late 1990s, the literacy rate increased from less than 20 per cent in 1951 to 65 per cent in 2001, and the infant mortality rate declined from 146 per 1,000 live births in 1950s to 70 per 1,000 live births in 2000.

The next section of the paper focuses on that how genuine is the government claim that poverty eradication and social development are the main challenges they face, and that their commitment to address these issues have continued over time.

Indian Government Schemes, Corruption and Real Beneficiaries

At the turn of the century, around 260 million people in India had no income to buy food, which defines the poverty line; of these 75 per cent lived in rural areas. India had 22 per cent of the world’s poor. In order to overcome this social evil, India had launched various anti-poverty programmes. The rationale for introducing the programmes for the poor came to the fore in the late 1960s when government policies faced severe criticisms because the much anticipated benefits of economic growth had not percolated to the poor and the disadvantaged. The targeted poverty alleviation programmes are basically supply-side interventions on the part of the state in response to the needs of the poor and the disadvantaged.

However, most often these interventions fail to reach the intended beneficiaries as they are not demand-driven. The problems get further compounded with asymmetric information, lack of transparency and accountability and non-participatory nature of functioning of these programmes. Guhan (1994) estimated that for a budgetary expenditure of Rs 100, the final transfer to the poor was just Rs 21.60 through the Maharashtra Employment Guarantee Scheme (EGS), where the poor self-selected themselves by choosing to do manual labor on public works, and a paltry Rs 11.20 under the public distribution system (PDS).

These are the examples of some anti-poverty programmes launched by government which did little to improve the condition the poor but increased corruption in the system and society. Some other similar programmes are listed below.

Integrated Child Development Services (ICDS) programme

The Integrated Child Development Services (ICDS) scheme integrates several aspects of early childhood development and provides supplementary nutrition, immunization, health check-ups, and referral services to children below six years of age as well as expecting and nursing mothers. Additionally, it offers non-formal pre-school education to children in the 3-6 age group, and health and nutrition education to women in the 15-45 age group. ICDS was initiated in 1975 in 33 blocks and used below the poverty line (BPL) as a criterion for delivery of services. Following a 2004 Supreme Court order, ICDS was expanded in 2005 to cover the entire country. Between 2000 and 2010 approximately Rs 35,000 crore has been allocated to ICDS by the Central government.

ICDS began in 33 development blocks of the country and was extended to the entire country in 2005. It is delivered through a network of over one million AWCs (full form) and reaches more than 70 million children and 15 million pregnant and lactating mothers. However, the third round of the National Family Health Survey (NFHS) conducted in 2005-06 found that only 80 per cent of children in the 0-6 year age range were in areas covered by an AWC and that only 28 per cent had received any service from an AWC in the year preceding the survey. Additionally, only one in five mothers in areas having an AWC received any services from an AWC during pregnancy or lactation period.

According to data from the NFHS 3 (2005-06), there has been a marginal decline in stunted and underweight children under five years of age of 6 and 3 percentage points, respectively. However, there was a 3 percent increase in wasted children. In the same period, children affected by severe anemia increased by 25 per cent. Despite the moderate decline in infant mortality rates over the three national survey periods , the data reveal that more than one in 18 children die within the first year of life and one in 13 children die before they reach the age of 59, with the Scheduled Castes and Scheduled Tribes experiencing greater mortality rates. India ranks among the worst performing countries with respect to the prevalence of child under-nutrition. The high prevalence of under-nutrition, close to 46 per cent, is particularly foreboding for India’s large child population. According to the 2001 census, India is home to approximately 160 million children, making it one of the world’s largest populations of malnourished children.

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)

The minimum employment guaranteed under the Act is 100 days per person and though the programme is demand driven, barely 50 per cent of the days are being claimed. This can mean either that the poor do not need to access the MNREGA or that the scheme suffers from implementation glitches.

The survey would confirm some of these misgivings. The average number of days worked under MNREGA per person was 25, 22 and 38 in Andhra Pradesh, Madhya Pradesh and Rajasthan, respectively, and seemed a reflection of low unemployment rates of 7 per cent, 8 per cent and 4 per cent in these states. This might mean a high degree of employment in farm and other forms of labor.

An MNREGA survey, conducted in Andhra Pradesh, Madhya Pradesh and Rajasthan, showed that in 2010-11 the average number of days worked per household in projects covered by the scheme was 45, 37 and 52 for the three states, respectively. (Which of these two sets of figures are correct?)

Non-payment of full wages is a persistent complaint. The survey says the average wage received per day by a person in MNREGA works was Rs 94, Rs 98 and Rs 79 in Andhra Pradesh, Madhya Pradesh and Rajasthan, respectively.

The share of MNREGA work in total man-days worked was 4 per cent in Rajasthan, AP (3 per cent) and MP (1 per cent). About 2 per cent of MNREGA workers in AP reported availability of other work, while this was 10 per cent in Rajasthan and negligible in MP.

It was also found that 25 per cent, 17 per cent and 36 per cent households in AP, MP and Rajasthan, respectively, participated in MNREGA works. The monthly per capita expenditure for households who used the scheme was Rs 918, Rs 654 and Rs 930 in these states, respectively.

Swarnjayanti Gram Swarozgar Yojana

The Swarnjayanti Gram Swarozgar Yojana (SGSY) is a programme for the self-employment of the rural poor. The programme was started on April 1, 1999, after restructuring and merging the erstwhile Integrated Rural Development Programme (IRDP) and its allied programmes, the Training of Rural Youth for Self Employment (TRYSEM), the Development of Women and Children in Rural Areas (DWCRA), Supply of Toolkits in Rural Areas (SITRA), Ganga Kalyan Yojana (GKY), and the Million Wells Scheme (MWS).

A Comptroller & Auditor General (CAG) report said that a Central allocation of Rs 2,668.24 crore was provided for the SGSY during 1999-2002, of which only Rs 1,723.62 crore (64.6 per cent) was released. Of the total funds of Rs 3,326.16 crore available, Rs 3,061.33 crore (92.04 per cent) were reported as having been spent, leaving an unspent balance of Rs 264.83 crore.

The CAG said that against the targeted coverage of 30 per cent (167 lakh) of the BPL families to be covered in a span of five years, only 4.59 per cent (25.6 lakh) could be covered in the initial three years of implementation.

The CAG found that per family investment of Rs 19,678 against the contemplated level of Rs 25, 000 was inadequate and had largely failed to generate the desired level of income. The focus also did not shift from individual beneficiaries to self-help groups as emphasized in the scheme guidelines.

The National Rural Health Mission (NRHM)

The National Rural Health Mission (NRHM) was launched in April 2005 to provide accessible, affordable, accountable, effective, and reliable healthcare facilities in the rural areas of the entire country especially to poor and vulnerable sections of the population. The key strategy of the NRHM was to bridge gaps in healthcare facilities, facilitate decentralized planning in the health sector, and provide an overarching umbrella to the existing disease control programmes run by the Ministry of Health & Family Welfare.

According to a CAG report, during the period 2005-06 to 2007-08, the total outlay/expenditure on the NRHM was Rs 24,151.45 crore. During the first two years, the Centre contributed 100 per cent of the funds. Thereafter, states were to contribute 15 per cent of funds during the 11th Five Year Plan (2007-12).

The CAG said that the mission had developed the Indian Public Health Standards (IPHS) to assist health centres improve their quality of health care and thus upgrade the capacity of the health delivery system. However, the ratio of population to health centres remained low with the targeted number of new health centres not being established. Basic facilities such as proper buildings, hygienic environment, and electricity and water supply were still absent in many existing health centres. During 2005-07, Rs 720.2 crore was released to the SHSs for the upgrade of CHCs to IPHS without receiving proposals and plans of action. Consequently, most funds remained unspent. (Expand SHS and CHC)

A farmer’s Debt Relief Fund

A farmer’s Debt Relief Fund was created in March 2008 with the approval of the Cabinet. The fund was created with an initial corpus of Rs 10,000 crore in 2007-08. The closing balance in the fund as on February 2012 was Rs 3,483 crore.

Audit (Is it CAG?) had examined 25 cases of individual loan accounts in each branch visited where no benefit was given. It was noticed that out of the total of 9,335 accounts tested checked in the audit across nine states, 1,257 account (13.46 per cent) were those which were found to be eligible for benefit of Rs 3.58 crore under the scheme, but were not considered by the lending institution while preparing the list of eligible farmers.