In State A, 80 per cent of the people living in rural areas use a ration shop, whereas in State B only 40 per cent of rural people do so. Where would people be better off and why?
Answers
2.1 Poverty Alleviation in Rural India : Programmes and Strategy
2.1.1 Poverty eradication is one of the major objectives of planned development. The magnitude of the problem is still quite staggering. Thirty six per cent of the Indian population was below poverty line (BPL) in 1993-94, the latest year for which the data are available and the absolute number of poor was 320 million, out of which 244 million (37 per cent of the rural population) lived in rural areas. The incidence of poverty declined from 54.9 per cent in 1973-74 to 36 per cent in 1993-94. But the absolute number of poor did not decline much over this period of 20 years. There were 321 million poor in 1973-74 and 320 million in 1993-94; in the rural areas the corresponding numbers were 261 million and 244 million.
2.1.2 The main determinants of poverty are (i) lack of income and purchasing power attributable to lack of productive employment and considerable underemployment and not to lack of employment per se; (ii) a continuous increase in the price of food, especially foodgrains which account for 70-80 per cent of the consumption basket; and (iii) inadequacy of social infrastructure, affecting the quality of life of the people and their employability.
2.1.3 Economic growth is important. Economic growth creates more resources and has the potential of creating more space for the involvement of the poor. But the involvement of the poor depends on the sources of growth and the nature of growth. If the growth is sourced upon those sectors of the economy or those activities which have a natural tendency to involve the poor in their expansion, such growth helps poverty eradication. Therefore, it is important to source a large part of economic growth in agriculture, in rural non-agricultural activities and in productive expansion of the informal sector which all have high employment elasticities, as well as in an export strategy based on labour intensive exports.
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