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Resource centre on India's rural distress
 
 

Growth and reforms only way to reduce poverty -Mrityunjay Kumar
-Niti Central


According to a report, the Rangarajan committee has retained consumption expenditure as the basis for determining poverty according to which the total number of poor in the country at 36.3 crore or 29.6 per cent of the population.

After much public outcry over the UPA's poverty line, another expert panel headed by veteran economist C Rangarajan has come up with a report recommending that those who are spending more than Rs 47 in urban areas and Rs 33 in rural areas are not poor.

However, according to the UPA Government's yardstick, the poverty line had been fixed at Rs 27 in rural areas and Rs 33 in urban areas. UPA's poverty bar was an impractical approach to defining poverty and hence it was in a way offering a fraudulent way to curb the menace.

Given the prices of essential commodities in both rural and urban areas, both yardsticks seem to mock at the poor. Such parameters have actually been in existence for many decades but there has not been any substantial decline in poverty levels in India.

What should be remembered here is that the NDA Government has not yet accepted the recommendation of the C Rangarajan-led panel. It is also unlikely that the recommendation will be accepted as the new Government has always stressed on pushing forward economic reforms and increasing growth rate for alleviating poverty. It should be noted that the previous UPA Government played with figures to paint a goody-goody picture of Indian economy rather than addressing core issues. The process of reforms launched in the early 1990s and carried forward robustly during Vajpayee-led NDA regime was halted in the 10-year rule of UPA which blindly spent public money to carry forward its populist agenda - announcing food-for-all schemes, Direct Cash Transfer scheme and huge loan waiver worth Rs 52,260 crore to 3.73 crore farmers.

According to an Economic Times report, massive corruption in the loan waiver scheme was detected by the CAG.

Poverty is no doubt a curse on a society and its really shameful that even after a little less than seven decades after Independence, a large part of the population is struggling at the level of subsistence, let alone their need for education and healthcare.

It is important to note that when UPA Government's benchmark of Rs 33 and Rs 27 for urban and rural areas respectively was announced, there was huge public outcry and several Congress leaders like Raj Babbar and Rashid Masood came up with their absurd logic that one can easily get stomach full meal for Rs 12 or Rs 5, which sparked a debate over insensitive attitude of our politico towards poverty.

Clearly, such methodology to decide poverty is not going to work. Now the question is what can be the effective way to make India poverty free?

The new Government's thrust has, since the beginning, been to push forward reforms, attain a high economic growth rate, and skill-development of youth for equitable growth.

According to a Times of India report, on the basis of C Rangarajan panel's parameters, in 2011-2012, 29.5 per cent people in India live below the poverty line. The basis of this yardstick is that in 2009-2010, the population below poverty line was 38.2 per cent, translating into a decline in poverty ratio by 8.7 percentage points over a two-year period.

Speaking on the recommendations of C Rangarajan panel, noted economist Gautam Mukherjee asked what can Rs 47 buy in the urban India?

"The Rs 47 benchmark is very small even at a subsistence level for an individual, leave alone the question of living with dignity. All in all, it is a pretty sorry scenario for 67 years of self-rule," Mukherjee said.

He added that such poverty lines don't help in fighting poverty except to identify sections of our population which will be handed out doles and freebies. Mukherjee also said that one way which could be helpful in supporting the poor could be curbing the wastage of food grains as India is one of the major waster of food grains.

"We had green revolution in Indira Gandhi's time which made us food self-sufficient. After that we have become food surplus and we have ample supply of fruits and vegetables but 50 per cent of it is wasted - spoilt either in transit or in handling. So we need to modernise thoroughly the material-handling aspect and storage aspect, transportation aspect and cold storage chains," he added.

Yet another poverty bar has been recommended by the Rangarajan panel. Even in the past, many panels were set up on poverty but there has been no significant improvement on this front which means there is a need for some new and ways and means to address the issue. Mere panels are not cutting it. General Budget 2014 is to be tabled in the Lok Sabha on July 10 and it will be interesting to see what new measures are announced to give the economy a boost, generate more jobs, improve healthcare situation and education - all of which will ultimately have a bearing on the condition of the poor.