Poverty and Politics
Some Empirical Observations

Amit Hazra

Paper presented at the conference Livelihoods and Poverty Reduction: Lessons From Eastern India, 25-27 September 2001
By Amit Hazra

Contents

Introduction

Section I
Background - a short history
Poverty Determinants
Methodology for identifying the poor
Poverty Line
Anti-poverty programmes in India

Section II: Some empirical observations
Study Area
Politics Of Beneficiary Selection
Politics Of Programme Implementation: A Case Study With Noaps

Section III Policy Recommendations

Introduction

This paper examines the way in which the poor are identified in India. The identification of the poor is important both for statistical purposes and to locate the most deserving of the beneficiaries of the various anti poverty programmes introduced over the years in the country. The first section provides a brief history of the country's official line on poverty and the anti poverty schemes created by the state. The second section is based on fieldwork in Bolpur, Birbhum district where I examine the way in which local and state politics lead to errors in 'counting' poverty. The paper ends with some policy recommendations.

Section I

Background - a short history

In the historic 'tryst with destiny' speech made by Jawaharlal Nehru on the eve of India's Independence, the nation was reminded unequivocally that "ending of poverty and ignorance and disease and inequality of opportunity" is the basic task of nation-building that lies ahead.

In the early years of the nation state, economists and the Indian National Congress took on fell the historic task of fighting poverty. Democratic planning was the means chosen to achieve the task. A careful reading of the first three Five Year Plans show adequate recognition of the facts that mass poverty can be tackled only as

(a)  A part of a developmental strategy integrally related to the process of growth, supported by a radical policy framework and institutional reforms and

(b) Fighting poverty is inextricably related to fighting inequality in income, wealth and social and economic opportunities.

Thus, since Independence, the Indian government has accorded great importance to poverty reduction. Poverty reduction has been a major goal of all Five-Year Plans. To measure its success in achieving this goal, the government commissioned a series of household surveys on poverty, beginning in 1951. These surveys provide an unparalleled record of a developing country's efforts to reduce poverty.

The progress of the anti poverty programmes in India has been uneven over time and across states and the number of poor has risen, albeit slowly. Between the early 1950s and the mid-1970s, the poverty rates fluctuated without a clear trend. In 1951-5, the average headcount index of poverty was 53 per cent, about the same as in 1970-4. From 1973-4 to the mid-1980s, the incidence of poverty declined steadily to 38 per cent in 1986-7. Poverty incidence dropped sharply in 1990. In 1991-2, a transitory worsening of poverty incidence occurred with the BOP crisis but by 1993-4 the incidence of poverty had fallen to 35 per cent. India also reduced the depth and severity of poverty even faster than the rate of poverty. Thus, the decline of poverty was not simply a process whereby a segment of population, previously been located just below the poverty line was able to lift itself above the line, while the remaining poor were left unaffected. Rather, the process through which poverty was being reduced improved the consumption of those far below the poverty line.

However, poverty in India remains predominantly rural: three of every four poor persons live in rural areas. Changes in urban and rural poverty followed a similar path over most of the last 25 years, with progress was more rapid in rural India through the 1970s and 1980s. By 1990, urban and rural poverty rates had nearly converged; an unusual pattern compared to other South Asian countries.

Chart 1

A state-wise distribution of poverty can be seen from chart-1. The interstate differences for 1993-94 show that Andhra Pradesh (AP), Gujarat, Haryana, Himachal Pradesh (HP), Karnataka, Kerala, Punjab and Rajasthan showed much lower rural poverty ratios - 30 per cent or less - as compared to the national average of 37.27 for rural areas. The major states inhabiting very large poverty proportions exceeding 45 per cent are Assam, Bihar, Orissa and Uttar Pradesh. The rest of the states lie in a narrow band around the mean. The so-called BIMARU (Bihar, MP, Rajasthan and UP) states inhabit more than 51 per cent of the poor in the country. Next, if one counts the poor in the eastern states of Assam, Bihar, Orissa and West Bengal (WB), they add up to about 57 per cent of the total in the country (see Chart 2). The combined rural poverty in the eastern and BIMARU states (out of total 32 states) adds to over 70 per cent.

Chart 2

Poverty Determinants

In India, there is a broad consensus that the minimum standard of living should include (a) a nutritionally satisfactory diet, a reasonable standard of clothing, housing and other 'essentials'; (b) access to a minimum level of education, health care, clean water supply and sanitary environment. The income necessary for people to afford the elements constituting the first category defines the 'poverty line'. Ensuring the minimum standards for various social services and amenities, as described in second category, are deemed to be the responsibility of the state.

Methodology for identifying the poor

Of the various ingredients entering minimum income consumption, food has received the most attention. The emphasis on food is obviously justified. Nutrition experts have worked out the level of nutrients (calories, proteins, fats etc.) necessary for the healthy functioning of human beings. The normal practice has been to work out the per capita norm for a reference population of specified composition (in terms of age, sex, body size and activity) in rural and urban areas. There is a strong case for such uniform norms, which rests on four grounds.

1. It defines a standard of socially acceptable and desirable level of consumption including food and non-food items.

2. A uniform standard provides a yardstick for comparisons across regions and time.

3. A standard basket of food products corresponding to the calorie norm also helps comparability. One could in principle estimate the minimum cost food basket taking into account food habits and prices prevailing in different regions.

4. The levels and composition of non-food items included in the minimum standard are taken to be whatever happens to go along with the fulfillment of the calorie norm nationally. Together they are used to determine the value of per capita consumption expenditure, which defines the national poverty line for rural and urban areas.

Poverty Line

During the 1970s development economists measured poverty within and across countries by establishing a common poverty line. The concept of absolute poverty - a minimum level of income required to satisfy basic physical needs - was created. Naturally, the minimum subsistence level varies country wise and regionally.

The Planning Commission updates the poverty line based on the rate of inflation. During the Sixth Five Year Plan it was Rs. 3500 per annum for a family of five. It has been revised during the Seventh Five Year Plan to Rs. 6400. The poverty line was updated again in 1992 at Rs. 11000/- per annum. Expenditure replaced income as the measuring criterion during this period. For the purposes of this study an expendable sum of Rs. 274.35 /- per capita per month (Rs. 16461.00 per annum for family of five members) has been accepted as the poverty line to measure the incidence of poverty in the study area.

Anti-poverty programmes in India

As we have seen, poverty alleviation especially in rural areas has been one of the major objectives of the Five Year Plans.

The planners have adopted a two-pronged attack for poverty alleviation since the 1950s:

(a) Indirect Attack on Poverty or Trickle Down Hypothesis

This approach believes that rapid growth of per capita income will trickle-down to the poor. Thus programmes such as Community Development Projects (CDP), 1952 and National Extension Service (NES), 1953 were initialized in the First Five Year Plan. Other programmes were Intensive Agricultural District Programme, 1959, High-Yielding Varieties Programme, 1966-67 and Land Reforms had been introduced.

(b) Direct Attack on Poverty:

In 1962 the perspective Planning Division of the Planning Commission recognised that "widespread poverty is a challenge which no society in modern times can afford to ignore for long." This approach gave birth to some programmes such as beneficiaries oriented programmes like SFDA and MFAL, 1969-70, Rural Works Programme 1970, Draught Prone Area Programme (re-designated RRW), Minimum Needs Programme, Integrated Rural Development Programme (IRDP), National Rural Employment Programme (NREP) and Rural Landless Employment Guarantee Programme (RLEGP), Jawahar Rojgar Yojana (JRY), Indira Awash Yojana (IAY).

India's anti-poverty programmes (APP) are mainly run by the central government amount to 6-7 % of total GOI budgetary expenditure. There are three main types of APPs : rural programmes, self-employment schemes and food subsidies.

Food subsidy programmes make up about 55 per cent of APP spending. By far the largest food subsidy programme is the PDS, explicitly targeted towards the poor in 1997 and renamed the Targeted PDS (TPDS). In 2001, the Annapurna Prakalpa was introduced.

Self-employment programmes make up only about 5 per cent of total APP spending, but have received a lot of publicity, most of it bad.

Rural Works Programme account for about one-third of APP spending. There are two main schemes; the Employment Assurance Scheme (EAS) and the JRY, now renamed the Jawahar Gram Samridhi Yojana (JGSY). The EAS works as an employment-generation scheme targeted to the poorer states and districts. The JRY, earlier an employment-generation scheme, has now been redesigned to be implemented by the gram panchayats and focuses on infrastructure development, with employment generation as a secondary objective.

The rationalization and change in targeting underlying these reforms are big steps forward. All the programmes give a greater role to rural local government for implementation, beneficiary selection and monitoring.

However, the massive deployment of resources by the government and international agencies have yielded only marginal results. Why is this so? I suggest that excessive focus on financial inputs and target concentrations neglect the other facets of poverty. Besides, lack of provision of non-financial inputs, poor quality of perception and implementation mechanism, structural rigidities and corruption have frustrated the effectiveness of the schemes.

Section II: Some empirical observations

Study Area

This research has been carried out in Bolpur, Sriniketan Block, Bolpur Sub-Division of Birbhum district of West Bengal. The block is one of the agriculturally backward blocks of West Bengal. It is characterised by a single cropping pattern and low irrigation potential. Farmers are mostly dependent on rainwater for irrigation. Basic amenities, facilities and infrastructure are poorly developed leading to inefficient marketing of agricultural commodities. Due to the mono cropping system and paucity of non-agricultural jobs, farmers remain unemployed for a substantial period of the year. The recent import of low cost Thailand rice caused a glut in the local market, forcing the slashing down of the price of the local rice.

Table 2 acquaints us with the demography of the block.

Chart 3: Bolpur - Sriniketan block at glance:

Politics Of Beneficiary Selection

Target groups or beneficiaries of poverty eradication programmes are selected by the block level officials as per the norms of the Central government. To select BPL beneficiaries, a pre-framed rigid questionnaire is used. The questionnaire is divided into two parts. 'A' part is used to identify who are not poor, B the poor.

i. Household owning 5 acres land.
ii. Household owning a pacca house.
iii. Household having one or more member with an annual income exceeding Rs.20,000.

iv. Household owning consumer durables such as:
a) Televisions.
b) Refrigerators.
c) Electric fans.
d) Motor Cycles / Scooters / Mopeds.
e) Auto rickshaws.
f) Motorboats.

v. Household owning agricultural implements such as:
a) Tractors.
b) Power tillers.
c) Combined harvesters.

If the answer is 'yes' for any one of the above-mentioned items, then the household is not classified as a BPL family.

Then, Who Are Poor?

The respondents, who have answered 'No' to all the questions in Part 'A' part have to then go through the rigorous exercise of answering part 'B' of the questionnaire. In this part the following information is collected:

i. Family Background
ii. Social Status of the Family
iii. Religion
iv. Occupation
v. Caste
vi. Housing Condition
vii. Land Information (both residential and agricultural)
viii. Animal Husbandry Information
ix. Training taken for upgrading working skill (if any)

x. Expenditure on various consumptions in last 30 days
a) Expenditure on food items
b) Expenditure on pulses
c) Expenditure on oilseeds
d) Expenditure on milk and milk products
e)   Expenditure on clothing
f)   Expenditure on drinks and beverages
g) Expenditure on house maintenance
h) Expenditure on fuel
i) Expenditure on education
j) Expenditure on travel
k) Expenditure on medical purposes
l) Expenditure on recreation

xi. Any assistance received through government programmes in the last year
xii. If the family have enough Food security
xiii. If the family entangled with any kind of Indebtedness

The above-mentioned items of the questionnaire are supposed to be asked by a government official. In order to finish the study within a very short period of time, the most likely procedure to survey the village has been to take the help of panchayats. The elected member of the village, generally assist the surveyor.

Two types of benefits are known to accrue to the Panchayat members assisting the surveyor.

1. They are inclined to introduce individuals and families loyal to them or their political party as likely candidates for inclusion in the BPL list.
2. They are inclined to reject the genuine claims of loyalists of rival parties.

On the other hand, the government official intends to keep the number of beneficiaries as low as possible (as per the verbal instruction of the boss) so that the government's expenditure be kept as low as possible.

The following empirical evidence drawn through primary survey in the Bolpur - Sriniketan Block reveals the ground reality of BPL beneficiaries.

At first the list of BPL beneficiaries were collected from the panchayats. Then it was verified in some villages by using the questionnaire through interview method taking households as the primary unit of the study.

Chart 4: Gram Panchayat (GP) wise BPL households:
Source: Bolpur - Sriniketan Block Office

From Chart 4, it would seem that the poverty in this region has already been eradicated. But if we take an account of the primary census data of the Bolpur - Sriniketan Block, we can find the following noteworthy figures:

Mostly all of these households come under below poverty line. For the sake of national average of poverty percentage (i.e. 37.27), if we consider out of these 16338 households only 37.27 per cent households might be considered under BPL, the figure is 6089. That means at least 6089 households (20.94 per cent out of total households in the study area) should come under BPL categories, but the real figure is only 1064 (3.66 per cent). This facts and figures, as supplied by the Block officials are therefore concocted and misleading.

Now, if we compare and try to verify the government data with our survey results carried out in some of the villages in the study area, we get some idea about the ground reality of the BPL goblins.

Table 5: Comparison of government data with household survey data done by researcher:

From Table - 4, it is clear that the calculations of the BPL households by the government officials do not provide real picture of the study area.

A member of a Gram Panchayat, when interrogated personally, confessed that identification of BPL would serve two purposes. One, for SGSY to form self-help groups and another, for Annapurna Prakalpa to facilitate TPDS for the poorer section of the population. So, the identification of BPL is crucial because a wholesome vote bank of the weaker section depends on this process.

Politics Of Programme Implementation: A Case Study With Noaps (National Old Age Pension Scheme)

The National Social Assistance Programme (NSAP) has been launched in 1995. NOAPS is one of the components of the NSAP and is designed to alleviate the situation of the aged people in the BPL category. The scheme aims to give the aged people a better life and some security to restore respect and sympathy for old members within their families. They are given a pension of Rs. 75/- per month.

The survey on NOAPS has been carried out in Bahiri (Panchshoa GP under Bolpur), Sriniketan Block. The panchayats have identified 88 beneficiaries from 8 villages out of 17 villages in the GP.

To judge the effectiveness of the programme implementation, a survey was carried out to enquire whether the beneficiaries are rightly chosen and why the area of the scheme was concentrated only in 8 villages out of 17 villages. It was estimated that 17 beneficiaries out of 88 beneficiaries have been wrongly chosen and the selection was politically motivated. Almost 33 eligible candidates were left out from the scheme. What is interesting is that most of the villagers were not aware of the scheme and the identification of the beneficiaries depended on the members of the panchayats. The members, who are politically motivated botched up holding the firm determination that their loyalists should not be discarded and could take advantage from the programme.

Section III - Policy Recommendations

These anecdotes disinters the grass root levels' real story on poverty alleviation programmes and reveals the jugglery of government / secondary sources. Politics play its own game in every step in rural life. Political polarization provides benefits to one section keeping another vast section in deprivation.

The real facts and figures on poverty cannot be revealed to the India's common people unless impartial and efficient techniques for counting poverty are evolved. For this, awareness should be developed among politicians, government officials, academicians, researchers and NGOs.

I suggest that the following flow chart can be followed for a proper and efficient programme implementation steps:

GOVERNMENT LAUNCHED PROGRAMME
I
DETAILED INFORMATION TO ALL LEVELS OF ADMINISTRATORS
I
UNDERSTANDABLE GUIDELINES TO BE DISTRIBUTED TO ALL PRIs
I
NECESSARY FUNDS TO BE RELEASED TO THE PRIs
I
WIDE PUBLICITY AMONG THE GRASS ROOT PEOPLE
I
AWARENESS CAMPAIGN ABOUT THE PROGRAMME
I
IDENTIFICATION OF ELIGIBLE BENEFICIARIES
I
EVOLVE CRITERION FOR SELECTING BENEFICIARIES
I
SELECTION OF BENEFICIARIES
I
PROGRAMME ADVANTAGE DISTRIBUTED TO THE BENEFICIARIES