Suddenly, there seems to be a new awakening on poverty alleviation, amid all the talk of ‘India Shining’, and the ‘India Growth Story’. It does feel good when fund managers rain lavish praise on the economy, but both the prospect of polls and recent studies are bringing back into focus poverty and unemployment. The Arjun Sengupta report argued that 70 per cent of the population has to live on less than Rs 20 a day, while a study by the Society for Participatory Research in Asia says that only 6 per cent of the households registered under the National Rural Employment Guarantee Act got the assured 100 days of employment in 2006-07 and a good number did not receive the minimum prescribed wages.
One may recall the debate the job scheme generated when the UPA came to power, with economists arguing whether this constituted a drain on the exchequer. The fact is that such schemes and anti-poverty programmes are administrative measures, and studies and anecdotal evidence reveal a cocktail of inefficiency and corruption in their implementation. The late Rajiv Gandhi had stirred a controversy by remarking that only 15 paise out of every rupee spent on anti-poverty programmes reached the targeted people. It is true that administrative measures involve challenges, but the alternative is not to abandon administered programmes for reducing poverty or rural unemployment.
The answers could lie in a combination of measures. Robust economic growth is a long-term answer as it can trigger urban migration and remittances. Better prices for farm goods and easier micro-finance could provide a more market-friendly path to rural prosperity. Beyond this, the government could think of introducing relatively corruption-proof food coupons while strengthening literacy and public awareness to help the poor go where the jobs are. The Right to Information Act can be used by NGOs, and even the rare diligent politician, to bring to the poor a sense of empowerment so that public expenditure is effectively funnelled for the poor. But there is no running away from the fact that wealth creation with a fine institutional mechanism for the flow of credit, aided by a more even pattern of urbanisation, could do more to help job growth across the country than administrative schemes that need frequent resuscitation.