Driving the poor man’s ascension into a progressive state from a poverty-stricken one

Published: April 12, 2019 1:18:44 AM

The government has provided shelter, sanitation, standard of living, social security, sustainable economic engagement. These elements form the poverty-eliminating architecture and sustainable strategy (PEAS).

There are multiple definitions on poverty from academicians, economists, governmental and international agencies.

By Sandeep Vempati

If ever there was a beautiful word in Indian polity, it shall be none other than ‘poverty’. Existence of poverty, the necessary evil, ensured the Congress and various regional parties win elections after elections through rhetoric, albeit repeatedly but in different forms, and finding a page on their election manifestos. Did any of the ideologically opposite previous dispensations ever knocked the door of the poor man for eliminating the poverty surrounding him and subsequent economic engagement.

Poverty was around 66% when the British left India, and the population during the time was 330 million. By 2011-12, the poverty level has been reduced to 29.5%, or 363 million people in absolute terms. More number of people lived in poverty in 2011-12 than the population of India during Independence.

There are multiple definitions on poverty from academicians, economists, governmental and international agencies. The one from the UN Committee on Economic, Social and Cultural Rights is comprehensive. It defines poverty as a human condition characterised by sustained or chronic deprivation of the resources, capabilities, choices, security and power necessary for the enjoyment of an adequate standard of living and other civil, cultural, economic, political and social rights. Fortunately, all the definitions on poverty converge on upholding human rights.

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A compassionate Narendra Modi set forth his journey of comprehensive development of the poor beginning with a call for banking the unbanked on August 15, 2014—popularly known as the Pradhan Mantri Jan Dhan Yojana (PMJDY). So far, 344.3 million PMJDY accounts have been opened along with inbuilt accidental cover of Rs 1 lakh and a life cover of Rs 30,000. Significant reduction in percentage of zero balance and inoperative accounts and increase in average balance is a testimony to its intent—financial inclusion as a precursor to poverty elimination.

The poor have the first charge on the exchequer and right to receive penny for penny transferred. The Modi government accomplished this through direct benefit transfer linking bank accounts with Aadhaar. Thus, fake beneficiaries, middlemen eliminated and Rs 90,000 crore saved. On a parallel track, 1.25 crore houses were built for the poor in comparison to 25 lakh houses in the last four years of the UPA. Moving from shelter to sanitation, 9 crore toilets improved the rural sanitation coverage from a mere 40% in 2014 to 98%.

Adequate standard of living was ensured to the rural poor—power through 100% rural electrification and Saubhagya scheme, subsidised LED bulbs through Ujala Yojana and free LPG connections under Ujjwala Yojana. And their physical connectedness greatly improved through the Pradhan Mantri Gram Sadak Yojana.

The National Food Security Act was implemented in all states by 2016 and this government allocated Rs 6,76,868 crore vis-a-vis Rs 3,72,109 crore during UPA-2. The MGNREGA, through higher budgetary allocations, efficient implementation and timely payments, ensured the poor could enforce their right to work and receive wages. Fasal Bima, procurement operations at MSP (1.5 times the cost) and Rs 6,000 cash transfer tackled the poverty prevailing in agriculture.

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Economic transformation is deemed to be meaningful if it uplifts people out of poverty and creates an environment for sustained economic engagement, while preventing people slipping into economic poverty. For sustained economic engagement, either starting an enterprise must be encouraged or self-employment must be fostered through skill training or suitable employment opportunities must be created. Creating a large number of jobs, especially in secondary and tertiary sectors, was a challenge to the government, more so after inheriting harsh economic realities from the UPA, gloomy global economic scenario and grim private capex. The government launched the Pradhan Mantri Mudra Yojana for funding the unfunded towards enterprise creation and consequent generation of jobs. More than 4 crore jobs have been created under it. The scheme’s success assumes significance given that gross bad loans touched as high as 11.5% in March 2018 as a result of RBI initiating AQR in 2015 (reclassification of previously restructured loans as NPA).

Further, 10.65 lakh self-employed jobs through skill development under the Prime Minister Kaushal Vikas Yojana, 14.75 lakh jobs under the Prime Minister’s Employment Generation Programme, 8.73 lakh IT sector jobs and 167.19 lakh jobs due to schemes and vacancies from various ministries have been generated, totalling 601.32 lakh jobs since 2014-15.

A single percentage point rise in GDP per capita can lift about 3 million Indians out of poverty. It is to be noted that out of pocket expenditure for healthcare in India is over 60%, which leads to nearly 6 million families slipping into poverty. Having realised that healthcare expenditure may play the spoilsport in GDP growth for economic transformation, Modi launched Ayushman Bharat—the world’s largest health insurance scheme—in September 2018. It aims to cover over 10 crore vulnerable families for providing quality secondary and tertiary healthcare cover up to Rs 5 lakh per family per year without any cap on family size and age—17.22 lakh poor have benefited from this scheme. Prior to this launch, the government reinvigorated a near dysfunctional Pradhan Mantri Bhartiya Janaushadhi Pariyojana from the UPA—availability of affordable quality medicines for the poor and the disadvantaged. Currently, 5,001 PMBJP kendras are functional in 651 districts and its product basket covers more than 800 medicines and 154 surgicals and consumables.

The government also introduced comprehensive social security schemes—the Pradhan Mantri Suraksha Bima Yojana for accidental death, Pradhan Mantri Jeevan Jyoti Bima Yojana for life cover, Pradhan Mantri Shram Yogi Mandhan (pension) for poor labourers from unorganised sector, Atal Pension Yojana or National Pension system for the poor from other sectors.

According to a study published in Brookings Future Development blog, India is no longer home to the largest number of poor, only 3% Indians shall remain poor in 2022 and extreme poverty could be eliminated by 2030. The reasons are the aforementioned measures along with the forecast GDP growth of 7-8%.

The government has provided shelter and sanitation, standard of living, social security and sustainable economic engagement. These elements form the poverty-eliminating architecture and sustainable strategy (PEAS), driving the poor man’s accession into a progressive state from a poverty-stricken one.

(The author is attaché to Sanjay Paswan, ex-Union-MoS HRD. Views are personal)

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