What are the measures taken by government to reduce poverty in India?
What are its consequences?
Answers
Answer:
The nine important measures which should be taken to reduce poverty in India are as follows: 1. Accelerating Economic Growth 2. Agricultural Growth and Poverty Alleviation 3. Speedy Development of Infrastructure 4. Accelerating Human Resource Development 5. Growth of Non-Farm Employment 6. Access to Assets 7. Access to Credit 8. Public Distribution System (PDS) 9. Direct Attack on Poverty: Special Employment Schemes for the Poor.
1. Accelerating Economic Growth:
In the fifties and sixties it was generally thought that poverty in India can be significantly reduced by accelerating economic growth. According to this view, benefits of economic growth will trickle down to the poor in the form of more employment opportunities, greater productivity and higher wages. With this it was expected that the poor will be raised above the poverty line.
Various growth models put forward in the fifties and sixties such as Harrod-Domar growth model, Mahalanobis growth model, Lewis’ model of economic development with unlimited supplies of labour suggested rapid growth of the modern industrial sector to tackle the problem of poverty in the long sun. For this purpose they suggested for increasing the rate of capital formation so as to generate more employment opportunities and increase productivity of labour.
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Though this is correct that higher rate of capital formation is necessary for accelerating economic growth and thereby for solving the problem of poverty, but this will not generate sufficient employment opportunities if labour – saving capital-intensive techniques of production are used in the process of growth.
This has been clearly brought out by the actual experience in India in the eighties and nineties whereas in the two decades of development, rate of growth in GDP achieved is in the range of 5.5 per cent to 6 per cent per annum there has been only little increase in employment opportunities, especially in the organised industrial sector.
Therefore, while efforts should be made to accelerate economic growth but if it has to make a significant dent on the problem of poverty the use of capital-intensive technologies imported from the Western Countries should be avoided. In fact, we should pursuer labour-intensive path of economic growth. Such monetary and fiscal policies should be adopted that provide incentives for using labour-intensive techniques.
2. Agricultural Growth and Poverty Alleviation:
Agricultural growth has been recognized as an important factor that contributes to marked reduction in poverty. A study made by Montek Ahuluwalia, former member of Planning Commission, brought clearly that agricultural growth and poverty are inversely related; the higher agricultural growth leads to lower poverty ratio. The experience of Punjab and Haryana in the late sixties and in the seventies confirmed this inverse relation between agriculture growth and poverty.
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The growth in agricultural output in these states propelled by the adoption of new-high yielding technology caused a marked reduction in poverty in these states. Rural poverty ratio in Punjab and Haryana was 6.4 and 8.3 per cent respectively in 1999-2000.
Therefore, other states have been urged to follow the path of Punjab and Haryana for reduction of rural poverty. Thus, Late Prof. S. Chakravarty states, “the solution to the problem of rural poverty requires that small farmers must also be given access to land-augmenting innovations”. By land augmenting innovations he means the new high-yielding technology represented by green revolution that occurred first in Punjab and Haryana.
However, in the recent years relationship between agricultural growth and poverty reduction seems to have weakened. For example, at all India level, employment elasticity of growth in agricultural output has been found to be zero during 1993-94-1999-2000 whereas it was 0.45 during 1977-78-1983.
It appears that at the all India level employment generated by new green revolution technology has been cancelled out by increasing mechanisation of agricultural operations in various parts of a country. Thus, even in the light of the finding of zero employment elasticity of agricultural output at the all India level, positive impact of agricultural growth on the incomes of small farmers and, more particularly on the wage income of agricultural labourors, cannot be denied.
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To ensure marked decline in rural poverty through agricultural growth, rate of agricultural growth should be accelerated by increasing public investment in irrigation and other infrastructure. In recent years since 1980, rate of capital formation in agriculture has been declining.
This trend has to be reversed by increasing public investment in agriculture, especially irrigation. Besides, higher agricultural growth can be achieved in semi-arid and rain-fed areas by increasing public investment in infrastructure and ensuring adequate access to credit to the small farmers.