Module 2 Illiteracy, Poverty, Unemployment and Population Growth Lecture 10 Poverty Alleviation Programmes Remedies for Poverty Increase in Saving: In order to get rid of the supply side vicious circle in these countries, efforts should be made to increase savings so that investment in productive channels may be encouraged. To increase saving, expenditure on marriages, social ceremonies, etc., should be curtailed. In under developed countries, the possibility of voluntary savings is slim. Thus, in this regard, government interference is necessary. The government can increase saving, by altering its fiscal policy. The government can impose heavy taxes on luxury goods. Moreover, it can increase the role of direct taxes. Thus, the government can curtail consumption by altering the tax system. Increase in Investment: To break the vicious circle of poverty, apart from increasing savings, investment of saving in productive channels is also of immense use. The policies of short run and long run investment should be coordinated. By short period investment, people can get the necessary goods at fair rates, which will have a favourable impact on their skill. Moreover, along with short period investment, investment in the establishment of multipurpose projects, iron and chemical fertilizers etc should be properly encouraged. In UDCs, proper monetary and banking policies should be adopted which may provide facilities and encouragement to small savings. Balanced Growth: To resolve the demand side vicious circle in underdeveloped countries, the extension of the market is to be done so that people may get inducement to invest. In this regard, Prof. Nurkse advocated the doctrine of balanced growth. According to the principle of balanced growth, investment should be made in every sphere of an economy so that demand of one sector can be fulfilled by another sector. Thus, an increase in demand will lead to extension of the market, and would provide inducement to investments. On the other hand, economists like Hirschman, Singer, and Fleming do not consider the policy of balanced growth effective. According to them, the policy of unbalanced growth would be more useful. Joint initiative of IITs and IISc Funded by MHRD Page 1 of 6
Human Capital Formation: In underdeveloped countries, the main obstacle to economic growth is the backwardness of human capital. Human capital should no longer be neglected. Many suggestions can be made to increase skill of manpower. For instance, in these countries, education, technical knowledge, and vocational training should be enlarged. Health facilities should be enhanced, which may increase the efficiency of the workers. Transportation and communication should be developed. Industrialisation: Poverty can be eradicated by a self-sustaining process of industrialisation. All industries should have linkage to build a powerful process of ancillary industries and occupations. The percolation effect of industries can be strong through the establishment of auxiliary industries. Industry should be linked to agricultural growth. Agro-based industries should grow to provide employment to village people as they are very much labour intensive. Industrialisation can contribute to the growth process and bring improvement in the standard of living of people. Other Measures for Poverty Reduction More employment opportunities: Poverty can be eliminated by creating more employment opportunities, so that people may be able to meet their basis needs Minimum needs programmes: providing minimum needs to the poor people can help to reduce the problem of poverty. Social security programmes: Various social security schemes, like worker's compensation, maternity benefit. Provident fund, etc., can make a frontal attack on poverty. Small scale industries: Encouraging and establishing small scale industries can create jobs in rural areas, which can reduce poverty. Spread of education: Education can create awareness and build confidence among people to find methods to overcome poverty. Empowerment of poor: Poor people are voiceless due to the ruthless system of development. So, empowerment of poor people will reduce poverty. Land reforms: Land belongs to the absentee landlords in India. Therefore, land reform is needed for giving rights to the actual tiller of the soil. Asset creation: Productive assets must be created which will ensure regular income for the poor people. Joint initiative of IITs and IISc Funded by MHRD Page 2 of 6
Political will: Political will and thrust is needed to face the challenge of poverty. The Government policies should be designed with determination for having a poverty free country. Social change: Social strata and traditional values should be free from dogmas. The caste system should not discriminate any people for anything. Social reforms are also needed to remove poverty among the lower caste and women. Measures to Reduce Rural Poverty During different Five Year Plans, the Government of India has adopted several strategies and devised several schemes to remove poverty in India. The following are some steps. IRDP: The Integrated Rural Development Programme was initiated in 1976 in 20 selected districts of India. Then, it was extended to all blocks in 1980.The objective of this program was to enable the selected families to cross the poverty line by creating productive assets for the poor people. NREP: The National Rural Employment Programme was launched in 1980 in order to generate gainful employment in rural areas. RLEGP: The Rural Landless Employment Guarantee Programme was launched in August 1983 to generate additional employment opportunities for the landless people in the villages. TRYSEM: The Training of Rural Youth for Self Employment was launched in 1979 with the aim of generating self employment opportunities for unemployed educated rural youth. It has been laid down that the coverage of youth from SC and ST communities should be at least 50 per cent of the rural youth trained. Out of the total beneficiaries, at least 40 per cent should be women. DWCAR: The Programme of Development of Women and Children in Rural Areas (DWCRA) aims to improve the socio-economic status of the poor women in the rural areas through creation of group of women for income generating activities on a selfsustaining basis. JRY: Jawahar Rozgar Yojana (JRY) is a wage employment programme with its main objective of generation of employment in the lean agriculture season to the unemployed and underemployed rural people both men and women living below the poverty line. The significant aspect of the scheme is that it is implemented by the Joint initiative of IITs and IISc Funded by MHRD Page 3 of 6
Panchayats at the village, block and district levels in the ratio of 70:15:15 respectively. DPAP: The Drought Prone Area Programme was started in 1970 for drought areas with a view to create jobs through labour intensive schemes. DDP: The Desert Development Programme was started in 1977 to control the expansion of deserts and raise local productivity of desert areas. MNP: The Minimum Needs Programme was introduced in the Fifth Plan, in order to achieve growth with justice. PMRY: The Prime Ministers Rozgar Yojana was implemented in 1993 for providing self-employment to educated unemployed youth had been designed to provide employment to more than a million persons by setting up of seven lakh micro enterprises in Eighth Plan. During the Eighth Plan, loan in 7.70 lakh cases were sanctioned and 5.76 lakh cases disbursed. SGSY: The Swarnjayanti Gram Swarozgar Yojana was launched with effects from April 1999 as a result of amalgamating certain erstwhile programmes viz. IRDP, DWCRA, TRYSEM, MWS into single integrated programme. It is aiming to promote micro-enterprise through SHGs Scheme is being implemented on cost sharing basis in ratio of 75:25 between Center and State. PMIUPEP: The Prime Ministers Integrated Urban Poverty Eradication Programme was implemented in 1995 to reduce urban poverty. EAS: The Employment Assurance Scheme (EAS) has been universalised so as to make it applicable to all the rural blocks of the country. It aims at providing 100 days of unskilled manual work up to two members of a family in the age group of 18 to 60 years normally residing in villages in the lean agriculture season, on demand, within the blocks covered under EAS. A sum of Rs.1990 crore has been provided during 1998-99 (BE). During 1998-99, a total of 237.61 million man-days have been generated under the scheme with an expenditure of Rs.1572 crore up to November 1998. MSW: The Million Wells Scheme (MWS), which was earlier a sub-scheme of JRY, is funded by the Centre and states in the ratio of 80:20. The objective of the MWS is to provide open irrigation wells free of cost to poor, small and marginal farmers belonging to SCs/STs and freed bonded labour. Joint initiative of IITs and IISc Funded by MHRD Page 4 of 6
SJRY: The Swama.Jyanti Rozgar Yojana was launched in 1997 for the urban poor. JGSY: The Jawahar Gram Samridhi Yojana is the new name of Jawahar Rozgar Yojana with effect from 1999. PMGY: Pradhan Mantri Grarnodaya Yojana. AAY: Antyodaya Anna Yojana. JPRGY: Jai Prakash Rozgar Guarantee Yojana. VAMBAY: Valmiki Ambedkar Awas Yojana. SJSRY: The Swarna Jayanti Shahari Rozgar Yojana (SJSRY) which came into operation from 1.12.1997, sub-summing the earlier urban poverty alleviation programmes viz., Nehru Rozgar Yojana (NRY), Urban Basic Services Programme (UBSP) and Prime Minister s Integrated Urban Poverty Eradication Programme (PMIUPEP). The scheme aims to provide gainful employment to the urban unemployed or underemployed poor by encouraging the setting up of selfemployment ventures or provision of wage employment. It is being funded on a 75:25 basis between Centre and the states. It comprises two special schemes i.e. The Urban Self-Employment Programme (USEP) and the Urban Wage Employment Programme (UWEP). The scheme gives a special impetus to empowering and uplifting the poor women and launches a special programme, namely, Development of Women and Children in urban areas under which groups of urban poor women setting up selfemployment ventures are eligible for subsidy up to 50% of the project cost. MGNREGA: The National Rural Employment Guarantee Act (NREGA) of 2005 is perhaps the most significant social policy initiative in India in the last decade. The NREGA states that,[its main objective is] to provide enhancement of livelihood security of the households in rural areas of the country by providing at least 100 days of guaranteed wage employment to every household in unskilled manual work. During 2006 07, NREGP involved an expenditure of Rs 88 billion and generated a little less than one billion person days of employment. A controversial aspect of NREGP is the provision of employment on demand at the minimum wage rate. As argued elsewhere, given that the slack season agricultural wage rates are typically way below the minimum wage rates, there is a strong incentive for the (relatively) affluent to masquerade as poor. As a result, the self-selection mechanism of workfare is weakened and the poor are crowded out. Joint initiative of IITs and IISc Funded by MHRD Page 5 of 6
References http://planningcommission.nic.in/plans/annualplan/ap2021pdf/ap2021ch4-1.pdf http://indiabudget.nic.in/es2004-05/chapt2005/chap103.pdf Questions 1. Discuss the remedies for poverty in India. 2. Discuss various poverty alleviation programmes adopted by the Government of India. Joint initiative of IITs and IISc Funded by MHRD Page 6 of 6