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Poverty and Poverty Dynamics in India: Estimates, Determinants and Policy Responses

Aasha Kapur Mehta and Shashanka Bhide1

Introduction

For six decades of planned development the challenge of poverty reduction has been and still remains a key policy concern for India. Despite high rates of economic growth that exceeded expectations and led to India being placed in the category of ‘lower middle income countries’, up from the category of ‘low income countries’, the rate of reduction in incidence of poverty has been slow. Achievement of the Millennium Development Goals and Plan targets are critically dependent on a significant reduction in poverty. Hence, the Eleventh Five Year Plan (Planning Commission, 2008) is concerned with achieving ‘inclusive growth’ rather than just rapid growth. What is meant by inclusive growth? Who is excluded? In his Foreword to the Eleventh Plan the Prime Minister explains that the benefits of rapid growth, in terms of income and employment, must be “adequately shared by the poor and weaker sections of our society, especially the Scheduled Castes (SCs) and the Scheduled Tribes (STs), Other Backward Classes (OBCs) and minorities”. For this, “growth must occur not just in our major cities but also in our villages and small towns. It must be spread across all states and not just limited to some. It must generate sufficient volumes of high quality employment to provide the means for uplift of large numbers of our population from the low income low quality occupations in which too many of them have been traditionally locked.” And that “the higher rate of growth that we have set out for ourselves, coupled with our thrust on the growth process being inclusive, should ensure that the struggle for the removal of chronic poverty, ignorance, and disease will register major gains in the Eleventh Plan.” What is the extent of poverty and chronic poverty in India? What are the norms or measures that are used to determine the poverty line and the extent of poverty? Budgetary allocations for poverty alleviation hinge on estimation of the percent of India’s population that is poor. Are these estimates accurate? If not, what are the reasons for challenging their accuracy? Has the State taken cognizance of these critiques especially in view of the linkage between poverty estimates and poverty alleviation related public expenditure?

This paper will first review some of the estimates of poverty, and critiques thereof, under discussion in India. It will then present the estimates of poverty persistence, entry and escape based on using panel data collected for more than 3000 households in 250 villages across the country in three waves, i.e., 1970, 1982 and 1998. Finally, it will use the literature on poverty and the limited panel data based research, to draw lessons with regard to policy responses and safety nets that may be effective in promoting escape from poverty and preventing persistence of or entry into it.

2. Poverty Incidence and Trends: estimates, critiques and re-estimates

                                                            

1 Aasha Kapur Mehta is Professor of Economics, Indian Institute of Public Administration and Shashanka Bhide is Senior Fellow, National Council of Applied Economics Research, New Delhi.

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Traditionally, discussion of incidence, trends and determinants of poverty in India is based on household sample surveys conducted on a quinquennial basis by the National Sample Survey Organisation. Detailed data on consumer expenditure from nationally representative samples are available from the early 1970s to the present at intervals of five years2. The official poverty estimates, patterns and trends in poverty are determined on the basis of analysis of data on household consumption expenditures on which poverty lines are juxtaposed to separate the poor from the non-poor and determine the extent of poverty. These poverty lines are “not arbitrary figures, but have been derived from age-sex-occupation-specific nutritional norms by using the all-India demographic data from the 1971 Census…based explicitly on estimates of the normative nutritional requirement of the average person in the rural and urban areas of the country separately (Sen 2005).

Despite high rates of economic growth that exceeded expectations and implementation of several poverty alleviation programmes by successive governments, India has the largest number of poor people in the world with 301.7 million poor - 220.92 million of them in rural and 80.79 million in urban areas3 (Table 2.1). The rise in population has also offset some gains in poverty reduction. Seven large sample consumer surveys have been conducted by the NSS on a quinquennial basis since 1973-1974. Poverty measured in terms of head count ratio (HCR) declined from 54.9% in 1973-74 to 27.5% in 2004-05 (Table 2.1). The pace of poverty reduction over the last decade has been much lower than anticipated. The decline in poverty was 12.4 percentage points over the decade, i.e. from 51.3% in 1977-78 to 38.9% in 1987-88 while the corresponding decline was only 8.5 percentage points over eleven years, i.e. from 36% in 1993-94 to 27.5% in 2004-05. Thus, income poverty in the country has declined over three decades by less than one million a year (Planning Commission, 2006) The slowdown in the pace of poverty reduction may indicate relative difficulties in addressing hard core poverty, much of which is likely to be chronic in nature. (Mehta et al in Shepherd and Moore forthcoming; Bhide and Mehta 2008).

The bulk of India’s poor live in rural areas. However, the relative distribution of the poor between rural and urban areas has declined from 81.33% in rural and 18.67% in urban areas to 73.2% in rural and 26.8% in urban areas between 1973-74 and 2004-05 (Table 2.1).

Table 2.1: Poverty Incidence and Rural-Urban Distribution in India, 1973-74 to 2004-05 Total population below poverty line (in million))

% of India’s poor located in

Year Percent Population below the Poverty Line

India Rural Areas

Urban Areas

Rural Areas

Urban Areas

1973-1974 54.9 321.3 261.3 60.0 81.33 18.67 1977-1978 51.3 328.9 264.3 64.6 80.36 19.64 1983 44.5 322.9 252.0 70.9 78.04 21.96

                                                            

2 The National Sample Surveys began in the 1950s with the launching of the first nation wide survey of household expenditures in 1950. 3 These are numbers based on national poverty line. The estimates based on international benchmarks show that India is home to the largest proportion of the world’s poor with 41.6 per cent of her population living below PPP$1.25 a day in 2005 (World Bank, 2008).

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1987-1988 38.9 307.1 231.9 75.2 75.51 24.49 1993-1994 36 320.3 244.0 76.3 76.18 23.82 1999-2000 26.1* 260.2* 193.2* 67.0* 74.3 25.7 2004-2005 27.5 301.7 220.9 80.8 73.2 26.8 Source: Planning Commission (1997), Press Information Bureau (2001), Press Information Bureau, (2007) and own calculations. Note: * = The estimates for 1999-2000 are based on the mixed recall period method and are not comparable with estimates for other years, which are based on uniform recall period method.

Poverty Lines Prior to Independence: Dadabhai Naoroji, National Planning Committee and the Bombay Plan The basis for identifying the extent of poverty in India has been evolving over time. Attempts to define a ‘poverty line’ which permits estimation of extent of poverty have had a fairly long history. Dandekar (1996) pointed to four measures: proportion of expenditure by a household on essential item such as food, the calorie value of food, the cost of a balanced diet and the cost of essentials of a tolerable human existence.

Providing a historical perspective to the preparation of poverty lines in India, Srinivasan (2007) identifies several efforts made in this regard. The earliest was Dadabhai Naoroji’s “Poverty and Un-British Rule in India” in which he estimated a subsistence-based poverty line at 1867-68 prices. Using the diet prescribed to “supply the necessary ingredients for the emigrant coolies during their voyage living in a state of quietude” (ibid, p 25), which includes “rice or flour, dhal, mutton, vegetables, ghee, and vegetable oil and salt” he came up with a subsistence costs based poverty line, varying from Rs 16 to Rs 35 per capita per year in various regions of India. Srinivasan draws attention to Naoroji’s submission that this does not include the energy requirements for work nor does it include the “little luxuries, social or religious wants, expense on occasions of joy and sorrow”. Comparing the Planning Commission Poverty Line for 2004-05 with Naoroji’s poverty line corrected for inflation, he concludes that “the official poverty lines for 2004-05 are much more modest than Naoroji’s”.

As Secretary of the National Planning Committee (NPC), KT Shah prepared a note dated June 4, 1939, stating that “the fundamental aim [of planning] is to ensure an adequate standard of living for the masses... . Estimates of economists in different parts of India have put down this irreducible minimum at figures varying from Rs 15 to Rs 20 per capita per month in the present value of the rupee” (IIAPR 1988, p 53).” The note also “drew attention to the need for bringing about a more equitable distribution of growing wealth. Clearly, the committee’s view was that rapid and inclusive growth was the primary instrument to ensure that every Indian had an adequate standard of living – in other words, to ensure that mass poverty was eradicated.” Tests to measure progress included improvement of nutrition, clothing and housing, increases in agricultural and industrial production, elimination of unemployment and elimination of illiteracy. Srinivasan concludes that under given levels of inflation, the two poverty lines could be equivalent and that both Naoroji and K T Shah “approached the definition of a poverty line from a subsistence or irreducible minimum standard of living perspective, in which nutritional requirements are implicit.”

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The third poverty line that Srinivasan traces is the Bombay Plan of Thakurdas et al (1944) and he concludes that the poverty line proposed by them is much more modest than that of the NPC.

Poverty Lines Post Independence

A Working Group of eminent economists appointed by Planning Commission recommended a poverty line in 1962, set at a minimum level of expenditure of Rs 20 per day for rural areas and Rs 25 per day for urban areas at 1960-61 prices below which households would not be able to meet basic requirements for living. This minimum per capita expenditure was determined taking into account the requirements of balanced food and in the case of urban areas some provision of housing expenditure. However, the expenditures on health and education were not considered as they were expected to be provided by the state (Dandekar, 1996). Since there was considerable inflation between 1938 and 1960-61, Srinivasan concludes that “the Working Group’s poverty line of Rs 20 per capita per month at 1960-61 prices is much more modest than the Rs 15-Rs 20 per capita per month at 1938 prices of the note of K T Shah.”

Dandekar and Rath (1971) provided the first systematic assessment of the incidence of poverty based on the NSS data for 1960-61 using a cut-off level of expenditure that was adequate to provide 2250 kcals per capita per day both in rural and urban areas. The calorie consumption was estimated based on the consumption of various food items for different expenditure groups and the expenditure cut-off or poverty line was determined accordingly. The study estimated that about a third of the rural population and about half of the urban population ‘lived on diets inadequate even in respect of calories’. The study led to a series of critiques and debates and alternative estimates. The choice of calories as the key criterion for defining poverty line provided a further basis for a debate on the ‘norm’ for minimum level of calories for healthy living. Further work in this area led to calorie consumption norms based on age-sex distribution of the population separately for rural and urban areas.

The discussion on determining the nutritional or calorific norm in which the poverty line is rooted, has been long and complex. Sukhatme (1965) provided an additional dimension to the discussion pointing to the inter- and intra-individual variations in calorie requirements. He suggested a retail level consumption of 2250 to 2300 kcals per capita per day as the ‘norm’ for sustenance. The poverty lines specified a ‘minimum level of per capita consumption expenditure’ below which the households with such expenditure would be considered ‘poor’. A minimum level of consumption expenditure thus provided a ‘measurable indicator’ and required the availability of household expenditure data to estimate the proportion of poor in the population of the country. The National Sample Surveys of household consumption expenditure began in 1950 although the first comprehensive report on consumer expenditure surveys in the country became available only in 1959.

In fact one of the serious flaws in the early estimates was that the estimates of shares of population at different expenditure classes were not available and the estimates of incidence of poverty were based on the distribution of sample households (Dandekar, 1996).

Planning Commission Task Force and Expert Group for Estimating Poverty

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In 1977, Planning Commission constituted a Task Force, which submitted its report in 1979 and on the basis of a systematic study of nutritional requirements recommended poverty lines separately for rural and urban areas at national level. Based on observed consumer behaviour in 1973-74, it was estimated that, on an average, consumer expenditure of Rs. 49.63 per capita per month was associated with a calorie intake of 2400 per capita per day in rural areas and correspondingly Rs. 56.76 per capita per month with a calorie intake of 2100 per capita per day in urban areas. The poverty line for subsequent years is estimated by adjusting the poverty line for the base year 1973-74, for inflation.

Subsequently, in 1989, Planning Commission constituted an Expert Group to review the methodology used for the assessment of poverty. It recommended:

i) the continuation of the calorie based consumption expenditure as a cut-off to determine the proportion of population below the poverty line;

ii) disaggregation of national level poverty lines into state-specific poverty lines and then updating the poverty lines using the Consumer Price Index (CPI) for Industrial Workers in urban areas and CPI for Agricultural Labour for rural areas; and

iii) dis-continuation of adjustment for the difference between NSS estimate of mean consumption expenditure and the NAS estimate due to increasing divergence between the two and since the adjustment increased the level of consumption expenditure for all the households and decreased the estimated rate of poverty as compared to the unadjusted data (Planning Commission 1993).

Based on the above criteria, Planning Commission estimated poverty lines separately for rural and urban areas over the period from 1973-74 to 2004-05 are presented in Table 2.2. The Head Count Ratio (HCR) estimated on this basis became the key indicator of level of poverty in the country. The poverty line for 2004-05 is Rs.356.30 per capita per month for rural and Rs.538.60 per capita per month for urban areas (Table 2.2).

Table 2.2: Poverty Line for India (Rs. per capita per month, in current prices)

Year Rural Urban 1973-1974 49.63 56.76 1977-1978 56.84 70.33 1983 89.5 115.65 1987-1988 115.2 162.16 1993-1994 205.84 281.35 1999-2000 327.56 454.11 2004-05 356.30 538.60 Source: Planning Commission (1997), Press Information Bureau (2001), Press Information Bureau, (2007). The use of a minimum adequate level of nutrition as a key criterion for defining the poverty line has come under criticism both with respect to the level at which the norm has been fixed and also for the inadequacy of the expenditure level of households at which these norms were likely to be met in providing a minimum standard of living a society may desire for its citizens. It is now increasingly accepted that the poverty line is unrealistically low and that the numbers in poverty

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would be far larger if the poverty line was more realistic. High growth experienced in the 1990s and in the first decade of the 21st century has not been inclusive.

There is a large body of literature that has questioned the accuracy of official estimates of poverty, “the official poverty estimates have been severely criticised on various counts” such as the consumption patterns underlying the rural and urban PLBs remained tied down to those observed more than three decades ago in 1973-74 and hence had become outdated; changes in the consumption pattern of the poor are not reflected in the poverty lines; use of Consumer Price Index for Agricultural Labourers understated the price rise for the rural population and hence understated the extent of rural poverty relative to urban poverty; basic social services of health and education were to be provided by the state. Although private expenditure on education and health was covered in the base year 1973-74, no account was taken of either the increase in the proportion of these in total expenditure over time or of their proper representation in available price indices (Tendulkar Committee 2009)4. Additionally there are issues of consistency between the national accounts and the sample survey data; the deviation of the ‘official poverty lines’ from their original definition based on minimum calorie norms; unrealistically large ratios of official urban to rural poverty lines compared to the initial 1973-74 ratio etc. (Ray and Lancaster 2005, Popli, Parikh and Palmer Jones, 2005; Himanshu 2010; Mehta and Shah 2001, 2003).

The first official estimates of HCR from the 1999-2000 survey of consumer expenditure survey led to considerable debate on the comparability of these estimates with the previous surveys as the questions posed to the respondents in the 1999-00 survey varied with respect to the reference period of purchases used in the previous surveys. The HCR based on the original estimate (mixed recall or reference period) by the Planning Commission in 1999-00 was 26.1% marking a sharp decline from the estimates for 1993-94 at 36% which employed uniform recall period (URP). The estimate of HCR using the URP in 1987-88 was 38.9%. The decline in the HCR between 1993-94 and 1999-00 was therefore far steeper than between 1987-88 and 1993-94. Several researchers provided alternative adjustments to the 1999-00 estimates (Himanshu and Sen 2004a and 2004b; Sundaram and Tendulkar 2003; Deaton and Dreze 2002). These adjustments led to upward revisions in the estimated HCR. An alternative perspective was offered by Bhalla (2003a and 2003b) who suggested that the comparability of the surveys of 1999-00 and 1993-94 was far more seriously affected by the divergence of NSS and NAS estimates than the differences in recall periods in the questionnaire. Adopting an alternative approach, he pointed to the rise in real wage rates and provided estimate of HCR for 1999-00 well below the 26.1% obtained from the MRP estimates. Deaton and Kozel (2005) provide a comprehensive assessment of the debate on estimates of poverty during the period of 1990s which coincides with the sharp changes in India’s economic policies from one of licensing and controls to a more liberal regime.

Food and Non-Food Components of Expenditure

                                                            

4 We have referred to the “Report of the Expert Group to Review the Methodology for Estimation of Poverty (Planning Commission, 2009)” as the Tendulkar Committee here and in subsequent citations. Prof. S.D. Tendulkar was the chair of this expert committee.

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Saith (2005) highlights a fundamental problem caused by the use of different procedures to estimate the food and non-food components of the poverty line basket. “While dietary requirements are calculated on a “scientific” basis according to bodily needs, the non-food component of the poverty threshold is not calculated on a needs basis. Instead, the procedure essentially identifies households whose expenditure on food exactly matches the cost of the food component in the poverty line basket, and then checks how much such households actually spend on non-food items”. Hence there is no guarantee with regard to meeting basic non-food needs (ibid).

In 1973-74 the share of food in total expenditures of the poverty line class was 81 per cent and 72 per cent in rural and urban areas respectively (Planning Commission 1979). This fell to around 65 per cent and 59 per cent in 1999-2000 (Sen 2005). “Thus, the reduction in the share of food is 16 per cent and 13 per cent as compared to the shortfalls in calorie intake of 25 per cent and 15 per cent. Therefore, even if the poverty line classes were to spend the earlier fraction of their expenditure on food, they would yet fall short of the calorie norms, especially in rural areas” (ibid). Sen (2005) accepts the likelihood that the 1973-74 proportion of expenditure to meet minimum non-food requirements (especially rent and healthcare) is not sufficient, “thereby leading to a decrease in the income left available for food.” The health care system is in shambles (NRHM 2005) and serious concerns have been expressed regarding the poor state of State budgetary allocations for and State provisioning of healthcare. Ill health exacerbates the suffering of those who are already poor and leading those who are non-poor into poverty due to large expenses on health care (Duggal 2009; Mehta 2005; 2007; 2009).

Poverty lines and calories

In a major contribution to the literature on poverty measurement, Jaya Mehta and Shanta Venkatraman pointed out that the current poverty lines do not correspond to consumption of 2400 kcal in rural and 2100 kcal in urban areas. “Poverty statistics must conform to the definition of the poverty line so that we know what we mean when we categorise so many millions as ‘poor’…If the majority in this country are poor the government has to first admit it. Only then can poverty alleviation be given the priority that it deserves” (Mehta and Venkatraman 2000). Subsequently, Sen (2005), Srinivasan (2007) and Pattnaik (2007 and 2010) confirmed this serious deviation. “If we define the poor as those with energy intakes below the (nutritional) norm, as we should if we assume that anchoring of poverty lines in average nutritional norms makes sense” then poverty in India “increased significantly between 1993-94 and 2004-05” (Srinivasan 2007). However the “official poverty rates declined significantly between 1993-94 and 2004-05” as can be seen from the last three columns of Table 2.3 (ibid). Further, “it is true the two methods of estimating poverty are not strictly comparable, since the average per capita energy intake norms of 2,400 kcals in rural areas and 2,100 kcals in urban areas that are used in the official method could be below the average norm of 2,700 per consumer unit used by the NSS” (ibid).

Table 2.3: Proportion of Persons Below the Norm (2700 Kcals per Day) of Household Calorie Intake per Consumer Unit

Proportion of Persons Below Norm Poverty Proportions based on relevant Poverty Lines

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1993-94 1999-2000 2004-05 1993-94 1999-2000 2004-05 India Rural 0.575 0.607 0.662 0.372 0.373 0.283 India Urban 0.649 0.645 0.701 0.326 0.324 0.257 Source: Srinivasan 2007 based on NSS

A strong and scathing attack on the “official” poverty lines is made in Pattnaik (2007 and 2010) who estimates that 87% of the population in rural areas and 64.5% in urban areas lives in poverty (Tables 2.4 and 2.5 below). She argues that the “lowering of the nutrition standard over time, inherent in the official method, is the real reason” for the “claimed” poverty “decline” (Pattnaik 2007).

Table 2.4: The Rural Poor as Per Cent of Rural Population in India

Round No 28 32 38 50 55 61 1973-74 1977-78 1983 1993-94 1999-2000 2004-05 Direct method 1. MPCE giving 2400 kcal, Rs (poverty line) 56* 67 120 325 565 790 2. Per cent below poverty line 72* 65.5 70 74.5 74.5 (77.5) 87 Indirect method 4. Price adjusted poverty line, Rs official 49* 56 86 206 328 356 5. Per cent of officially 'poor' 56.4 53.1 45.7 37.3 27.4 (30.4) 28.3 6. Calorie intake at poverty line 2200* 2170 2060 1980 1890 1820 7. Deviation from RDA of 2400 kcal -200 -230 -340 -420 -510 -580 9. Modified price-adjusted poverty line, Rs, taking base year MPCE 2400 kcal 56 64 98 235 374 414 10 Per cent which should be officially 'poor' 72 63 54 49.2 39 41.5 Source: Patnaik (2007), Neoliberalism and Rural Poverty in India, Economic and Political Weekly, 28 July, p. 3138. Note: * 2200 calories was the actual norm accessible with Rs 49, the 2400 calorie norm required Rs 56 as the poverty line, and about 72 per cent of persons was below this.

Table 2.5: The Urban Poor as Per Cent of Urban Population All-India (1973-74 to 2004-05)

Round No: 28th 38 50 61 1973-74 1983 1993-94 2004-05 1. MPCE giving 2,100 Kcal, Rs (DPL 2,100) 65* 147 398 1,000 2. % of persons below direct PL 60* 58.5 57 64.5 3. Official poverty line OPL Rs 56.6 117.6 285 538.6 4. % of persons below official PL 49.2 42.2 32.6 25.7 5. Calorie intake ar Official PL 2000* 1905 1885 1795 6. Deviation from RDA of 2,100 Kcal -100 -195 -215 -305 7. Ratio of DPL to OPL 1.13 1.25 1.4 1.86 Source: Patnaik (2010), Trends in Urban Poverty under Economic Reforms: 1993-94 to 2004-05,

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Economic and Political Weekly, Vol.45, No.4, 23 January, p. 48. Figures marked with an ‘ * ’ are approximate values. The Rs 56.6 urban official poverty line in 1973-74 is not consistent with 2,100 calories intake and is likely to correspond to 2,000 calories as indicated. Direct poverty line and poverty percentage in the base year are approximate and derived by assuming the rural-urban differential to remain constant over 1973-74 to 1983.

Sen (2005) noted that the charge was serious; that the deviations were large and were cause for concern; that the actual calorie intake of the poverty line class in every state and in both rural and urban areas was significantly below the calorie norm (except in urban Orissa); that the average shortfall from the norms was about 25 per cent in rural and 15 per cent in urban areas. “Unless it can be convincingly shown that lack of income is not the primary cause of the observed non-consumption of the calorie norm, the poverty lines would have to be raised by about 15 per cent for rural areas and 10 per cent for urban” (ibid). It needs to be noted that for the poverty line class, in 1999-2000, based on their food consumption patterns, there were significant deviations from the official calorific norm in both rural and urban areas. For instance, only 58% of the calorific norm was met in rural Kerala, 64% in Tamil Nadu and 69% in both Tamil Nadu and Karnataka. However, Sen (2005) defends the level at which the poverty lines are set by asking whether it was possible to find a suitable basket in each state that, if consumed by the poverty line class, would provide the normative calorie values. Answering this in the affirmative he therefore concludes that “by and large, the poverty lines do not need to be revised on the count that they violate the calorie consumption norm (ibid). However, he accepts the argument that a purely calorie-based measure of food adequacy is simply wrong from a nutritional point of view and the need to “ensure sufficient intake of other nutrients, such as proteins, fats and micro-nutrients.” In view of all of the above, Planning Commission set up an expert group headed by Prof S.D. Tendulkar to re-examine the issue and suggest a new poverty line and poverty estimates. The Tendulkar Committee Report (Planning Commission 2009) has recommended four major changes in the methodology for estimating incidence of poverty. The recommendations include:

i) a conscious move away from calorie anchor while testing for the adequacy of actual food expenditure near the poverty line to ensure certain aggregate nutritional outcomes.

ii) use the same consumption basket as the urban poor for the rural poor also but apply the prices prevailing in rural areas to estimate the poverty line for rural areas. This exercise is to be done for each state and then the estimates of poor are to be built up to the national level for rural and urban areas.

iii) a price adjustment procedure that is predominantly based in the same data set that underlies the poverty estimation and hence corrects for the problems associated with externally generated and population-segment-specific price indices with out-dated price and weight base used so far in the official poverty estimation.

iv) an explicit provision in price indices for private expenditure on health and education which has been rising over time and test for their adequacy to ensure certain desirable educational and health outcomes.

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The Tendulkar Committee raised the poverty line for 2004-05 from:

i) Rs 356.30 per capita per month based on previous assessment to Rs 446.68 for rural and ii) Rs 538.60 per capita per month to Rs 578.80 for urban areas. The poverty headcount ratio correspondingly increased from 27.5% in 2004-05 to 37.2% in 2004-05 (Table 2.6 below). Table 2.6: Tendulkar Committee All India Poverty Line and Head Count Ratio 2004-05

Poverty Line Poverty Head Count Ratio Year Rural Urban Rural Urban Total 2004-05 446.68 578.8 41.8 25.7 37.2

Source; Planning Commission (2009) This is well above the level of estimates based on the earlier approach to poverty line. The Tendulkar Committee also recommended use of prices paid by the households as reported in the NSS survey to construct price indices to update poverty lines in the future. Using the same approach, the estimates derived for 1993-94 show that HCR had declined by nearly the same percentage points between 1993-94 and 2004-05 as indicated by the previous approach. The new approach, thus, essentially redefined the poverty line but did not find any sharp changes in the direction of trends in HCR over time as compared to the previous assessments. If we were to use the World Bank’s international norms of per capita expenditure of PPP$1.25 per day, the proportion of population in poverty would be even higher at 41.6 per cent in 2005.

The Tendulkar Committee has tried to raise the poverty line to more realistically estimate poverty to meet the rising volume of criticism that the “official” poverty lines were far removed from reality. However, several criticisms of the approach remain to be addressed. As in the past, the measure continues to ignore intra-household differences in consumption and poverty dynamics and persistence. The route taken to correct the poverty lines uses simplistic shortcuts on the assumption that urban poverty at 25.7% is “generally accepted as being less controversial than its rural counterpart at 28.3 per cent that has been heavily criticized as being too low” (Planning Commission 2009). The fact that the quantum of literature pertaining to urban poverty is less than that on rural poverty does not mean that either the urban poverty line or the level of “officially” recognized urban poverty is realistic or acceptable. Pattnaik (2010) questions the claim that at the Tendulkar Committee new rural poverty lines, overall rural poverty reduced between 1993-94 and 2004-05 from 50.1% to 41.8% and points out that at its new poverty lines giving these estimates, accessible daily calorie intake also declined from nearly 2,100 at the earlier date to 1,930 calories at the later one. Similarly, “the report claims that urban poverty at its new poverty lines declined from 31.8% to 25.7% comparing 1993-94 and 2004-05. It keeps quiet about the fact that at these new urban poverty lines accessible daily calorie intake also declined from 1,870 to 1,795 calories, making its figures non-comparable.” She concludes that the “poor continue to be wrongly counted below a changing standard” and that the Tendulkar Committee has “thrown away the valuable opportunity it had to

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correct the basic methodological error preventing valid comparison over time, which underlay previous estimates.”

High and Stubborn Poverty

However, the large amount of work during the 1970s and 1980s on conceptualising and measuring poverty did not translate into significant reduction in poverty. Dandekar (1996, p. 175) has remarked, “In the last two decades, this rich literature on poverty constitutes the main progress made on the problem of poverty”. Looking at the period from early 1950s to mid 1990s, the World Bank Report (1997) describes three phases of India’s experience in poverty reduction: (1) from early 1950s to mid-1970: fluctuations without a clear trend; (2) 1971 to 1986-87: steady decline in poverty; during this period HCR declined by an average 2 percentage points per year. The decline was slightly more rapid in rural areas. The squared poverty gap and poverty gap also declined significantly; and (3) after 1986-87: fluctuations at a lower level of poverty and divergence in measures of poverty and in rural and urban areas.

The high and stubborn levels of poverty in the 1970s led to the slogan “Garibi Hatao (Eliminate Poverty)” attributed to the late Prime Minister, Indira Gandhi.

There is increasing recognition of the persistence of poverty and its intergenerational transmission. Chronic poverty or “persistence of poverty on the scale at which it still exists is not acceptable” (Planning Commission, 2008, Eleventh Plan, Vol I). While the existing methodology provides valuable insights into the determinants of incidence of poverty, this method of analysis is less useful in understanding factors influencing entry, exit and persistence of poverty and their determinants.

Depth and Severity

The measurement of poverty through HCR has been supplemented by other measures such as poverty gap (PG), squared poverty gap (SPG) and Sen Index in many of the studies. The measures of inequality of distribution of consumption across population have also supplemented the monitoring of poverty over time. The measures relating to literacy and health have also supplemented HCR in assessing the level of living of different segments of population. The general perception that incidence of poverty measured by HCR has shown decline over the years has been criticised on account of the slow nature of improvement on the other indicators of health, especially the nutrition measures. The difficulties in relating consumption expenditures to nutrition have also been highlighted. For instance, Saxena Committee (2009)5 has argued that in order to enable households to consume 2400 kcals of energy the accepted poverty line (based on updating of the 1973-74 poverty line based on consumer price index) may have to be increased by 100%. The price line corrections used do not fully capture the actual price conditions faced by the consumers. The difficulty in assessing the level of living based on detailed consumption expenditure survey led to development of indicator based approach to classify households as poor and non-poor for issuing ration cards and other benefits (BPL survey).                                                             

5 We have referred to the “Report of the Expert Group to advise the Ministry of Rural Development on the methodology for conducting the Below Poverty Line (BPL) Census for 11th Five Year Plan (Ministry of Rural Development ,2009)”, as Saxena Committee report, as the Committee was chaired by Dr. N.C. Saxena.

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Multidimensional Issues

Although expenditure levels of the households remained the main measure of standard of living by which incidence of poverty was measured and the HCR became the main indicator of poverty, the need to look at other measures of quality of life was evident in many writings. The idea of ‘minimum needs’ was articulated in the fifth five year plan (FYP) covering 1974-75 to 1977-78 and a time bound goal for achieving universal access to minimum needs- beyond food, clothing and shelter to health, education, drinking water and sanitation was expressed in the Ninth FYP (Bhide and Srinivasan, 2004).

The multi-dimensional nature of deprivation in living standards was captured in the composite Human Development Index launched by the United Nations. Income should be regarded as a means to improve human welfare, not as an end in itself (Streeten, 1994). According to Mahbub ul Haq, “the defining difference between the economic growth and the human development schools is that the first focuses exclusively on the expansion of only one choice - income - while the second embraces the enlargement of all human choices - whether economic, social, cultural, or political” (Haq, 1995). Further, the “quality and distribution of economic growth, and not just on the quantity of such growth” matter and this has to be nurtured consciously and cannot be let to market mechanisms which benefit the “haves” and exclude the “have-nots” (ibid).

The Poor: An Occupational and Spatial Profile

Although the rural-urban differences and inter-state differences in the incidence of poverty were recognised from the beginning of exercises to assess the extent of poverty in the country a fairly comprehensive assessment of the incidence of poverty and other deprivations in different socio-economic groupings of households was presented in a 1996 report by NCAER (World Bank, 1997).

If one were to address the economic factors behind poverty, the profile of poor emerging from the 1996 NCAER study provided a stark picture: The households in the rural areas in the country whose chief earners were landless wage earners constituted 30% of all the poor households. The other poor landless, whose occupations included self-employment constituted 15 per cent of the rural poor households. The poor among the marginal farmers, cultivating less than one hectare of land, accounted for another 31 per cent of the poor rural households. The remaining 19 per cent poor were found in the cultivator groups who operated more than one hectare of land. The landless wage earners and marginal farmers accounted for 61 per cent of all the poor households.

The structural nature of poverty was also illustrated in the high rates of incidence of poverty in some socio-economic groupings. The incidence of poverty for the “wage earner” households was 65%; for SC households it was 50% and ST households it was 51%. For the rural population as a whole, the HCR was estimated as 39% in 1996 (these results are summarised in World Bank, 1997).

A more recent assessment of the occupational profile of the poor re-iterates the pattern seen in 1996 (Table 2.7). In rural areas, the chief earner in 63 per cent of the bottom household income quintile is ‘labour’. Another 30 per cent of the households in the bottom quintile are farmers, presumably operating very small land holdings. In the urban areas, ‘labour’ households account for the bottom 20 per cent of the households on income scale. Another recent study also shows

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that the bottom household quintile essentially depends on earnings from daily wages (54% of average income of the quintile) and agriculture (21%) (2.8). Bulk of the poverty, therefore, is in the population segment whose only means of livelihood is daily labour.

Table 2.7: Percentage distribution of households by the occupation of the chief earner and household income quintiles.

Occupation of chief earner Rural Q1 Q2 Q3 Q4 Q5

Regular salary/ wages 1.4 3.3 6.1 15.2 34.3 Self-employment in non-agriculture

4.3 7.4 13.1 18.4 16.9

Labour 63.1 48.4 31.0 18.0 5.7 Self-employment in agriculture 30.3 39.8 47.8 44.6 38.7 Others 0.9 1.1 2.0 3.8 4.4 Total 100.0 100.0 100.0 100.0 100.0

Urban Regular salary/ wages 10.6 9.7 22.3 36.9 56.2 Self-employment in non-agriculture

24.0 16.3 33.2 32.8 33.3

Labour 59.0 67.8 38.4 20.5 2.7 Self-employment in agriculture 3.3 2.8 1.9 3.8 2.1 Others 3.1 3.4 4.2 6.0 5.7 Total 100.0 100.0 100.0 100.0 100.0

Source: Tabulation provided by NCAER-CMCR based on data from a sample survey of households carried out by NCAER for the year 2004-05. Description of the sample is available in Shukla (2007).

Table 2.8. Percentage distribution of households by sources of income and household income quintiles

% of Household income from Q1 Q2 Q3 Q4 Q5 All Salary 7 9 17 29 49 21Agricultural wages 35 27 17 8 1 18Non-agr wages 19 28 25 17 5 19Family business 8 11 15 18 19 14Cultivators 21 20 20 20 17 20Other 10 5 6 8 9 8Total 100 100 100 100 100 100

Source: Desai et. al. (2010), p. 26

Note: Where necessary the largest number in a column was adjusted by one unit to have the column sum adds up to 100.

The regional concentration of poverty and in a related way unequal pattern of regional economic development has also been recognised in various policies right from the early days of planning The second five year plan (1956-60) articulated balanced regional development as a key goal for development effort (Bhide and Srinivasan, 2004). The World Bank (1997) cites the study by

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Dreze and Srinivasan (1996) to illustrate the variations in the incidence of poverty within a state. Nevertheless at the state level, the poverty in Bihar, Orissa and Uttar Pradesh is significantly high across the major states of the country. Even in 2004-05, the HCR exceeded 40% in Bihar, Jharkhand (previously part of Bihar), Orissa and Chhattisgarh (previously part of Madhya Pradesh). In Uttar Pradesh (excluding Uttarakhand which was part of UP previously), Madhya Pradesh (excluding Chhattisgarh) and Maharashtra the HCR was below 40% but 30% or higher (Ministry of Finance, 2009).

3. Poverty persistence, entry and escape: Estimates based on Panel Data

The distinction between chronic or extended duration poverty and transient poverty has generally been recognised in the discussion on poverty in the Indian context but estimation of the incidence of these two types of poverty has not been common. Continued large levels of poverty as measured by HCR indicate that significant proportion of population may have remained poor over long periods of time. Addison, Hulme and Kanbur (2009) introducing a set of contributions to the understanding of poverty dynamics note that static analyses of poverty do not shed light on processes that are central to the persistence of poverty and/ or its elimination. They point to the three approaches used in the collection of data on poverty dynamics: the panel data methods, one-off indicators such as those related to nutrition and retrospective data.

Before proceeding with an assessment of poverty dynamics in India, we point to the changes in occupation structure seen from the sample surveys and population Census. Table 2.9 points to the findings of a series of sample surveys showing rise in the ‘wage earner’ households, particularly in the rural areas during the period of 1990s. There is a reduction in the share of cultivator households during this period and increase in ‘wage earning households’.

Table 2.9: Estimated Percentage Distribution of Households by Occupation

Area/ Occupation 1989-90 1995-96 1996-97 1998-99 Urban Housewife 0.98 1.07 0.96 0.88 Cultivator 5.79 3.39 3.47 3.54 Wage Earner 18.37 20.74 20.77 20.87 Salary Earner 39.91 40.69 40.51 40.64 Professional 3.92 3.42 3.55 3.31 Artisan 6.87 7.01 7.08 6.77 Petty Shopkeeper 15.33 15.92 15.96 16.68 Businessman 4.13 3.46 3.63 3.77 Others 4.7 4.3 4.08 3.53 Total 100 100 100 100

Rural Housewife 0.63 1.12 1.07 1.04 Cultivator 50.52 41.02 40.86 40.89 Wage Earner 26.45 35.3 35.23 35.22 Salary Earner 9.86 11.11 11.2 11.26 Professional 1.01 0.64 0.7 0.72 Artisan 3.2 3.45 3.51 3.44 Petty Shopkeeper 5.37 4.86 4.95 4.99

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Businessman 0.81 0.37 0.43 0.44 Others 2.15 2.13 2.03 2 Total 100 100 100 100

Source: NCAER (2002).

In Table 2.10 we have summarised the change in worker population in the rural and urban areas during the period 1981 to 1991 and 1991 and 2001 as reflected in the data from decennial population census. The data here suggests much greater change in the structure of employment than indicated in the structure indicated by the occupation of the chief earner of the household. Between 1991 and 2001, relatively more rural workers have found employment in household industry and ‘other occupations’ than in farming as cultivators or labour. The trends reflect the situation where agricultural sector may not provide increased level of employment in the coming years. Alternatively, the non-agricultural sectors are emerging as growing sources of employment now than before.

Table 2.10: Percentage Change in the number of workers between the decennial population census years

Area/ Type of workers/ Year

Cultivators Agr Labour

HHD Industry

Other Total

Rural, Total Workers 1991 over 1981 20.9 32.5 -11.5 39.0 26.2 2001 over 1991 2.9 25.9 124.8 72.1 24.5

Rural, Main Workers

1991 over 1981 36.5 53.0 -12.7 39.7 37.7 2001 over 1991 -25.0 -6.8 123.7 46.9 41.7

Rural, Marginal Workers 1991 over 1981 21.2 33.5 -11.8 39.4 28.4 2001 over 1991 2.1 24.2 124.5 57.7 28.0

Urban, Total Workers 1991 over 1981 19.3 33.4 -11.5 35.8 26.0 2001 over 1991 -5.8 -14.0 73.2 49.1 3.1

Urban, Main Workers 1991 over 1981 32.5 52.9 -12.5 44.1 38.1 2001 over 1991 -27.2 -30.0 94.4 37.6 31.7

Urban, Marginal Workers 1991 over 1981 19.6 34.4 -11.8 40.5 28.5 2001 over 1991 -6.4 -14.9 79.4 42.5 9.5

Source: Derived from data on worker population available from selected population census (IAMR, 2009).

In one of the early studies referring to the period 1968-70, based on national level rural household survey, Gaiha (1988) pointed to the dynamics of poverty in rural India. Using a data set based on a household survey by the National Council of Applied Economic Research (NCAER), Gaiha provided estimates of changes in the levels of poverty for a panel of households over a three year period of 1968 to 1970.

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Gaiha estimated the following distribution of households in 1968-69 as compared to their status in 1970-71: • Poor in both the years (Still poor): 21.09% • Poor in 1968-69 and became poorer in 1981-82 (More poor): 12.18% • Poor in 1968-69 but non-poor in 1970-71 (exit): 24.00% • Non-poor in 1968-69 but became poor in 1970-71 (entry): 12.69% • Never Poor: 30.04% The survey pointed to considerable mobility across ‘poverty line’, although 33.27 per cent were ‘chronically poor’ (still poor and more poor) over the three year period. The study concludes that “the escape from poverty was not a result of growth trickling down to the poor; instead it was largely outcome of the direct involvement of section of the cultivating poor in the growth process itself, initiated by the new agricultural technology”.

In a follow up survey of the same households in 1981-82, NCAER (1986a and 1986b) reported extent of persistence, exit and entry into poverty between 1970-71 and 1981-82. The two estimates are based on different poverty lines and the number of households used in the panel also varies in the two studies because of attrition, and therefore the estimates differ to some extent with respect to the percentage of poor in 1970-71. The NCAER estimates show much lower incidence of chronic poverty (poor in both the periods considered) for 1970-71 to 1981-82 than the estimates for 1968-70:

• Chronic poor: 27.88% • Exit from poverty: 25.06% • Entry into poverty: 17.01% • Never poor: 30.05% • Panel: 100% The rates of exit from poverty are similar but rate of entry is higher in the second period considered. The two periods spanned very different length of time- the first study had only one intervening year whereas the second study had 10 intervening years- and therefore the variation in poverty dynamics are not surprising. A broad estimate that 30 per cent of the poor were unable to break through the poverty line emerges from these early studies. It may be pointed out that between 1973-74 and 1983, HCR in rural areas estimated from NSS data declined by 16 percentage points according to the estimates by the Task Force methodology (Planning Commission, 1979) and by about 11 percentage points by the Expert Group methodology (Planning Commission, 1993). Although these are large reductions, HCR remained 40-45% as per the alternative estimates. The chronic nature of poverty at the household level is one significant factor behind the persistence of high levels of poverty.

World Bank (1997) noted that its report “takes a longer term perspective by focusing on determinants of persistent chronic poverty”. The report refers to the transient poverty arising from unforeseen shocks to income and points to the role of effective safety nets to address this problem. The report also refers to a number of village studies which point to “widespread and pervasive poverty which has been slowly falling over time”. The studies which capture the ‘duration’ of poverty spells are few in India. World Bank (ibid) refers to the studies by Jodha (1989) in two villages and presents brief reviews of some village level studies.

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Results of studies by Gaiha and Deolalikar (1993), Singh and Binswanger (1993) and Krishna (2003) show that incidence of persistent or chronic poverty is by no means small. Gaiha and Deolalikar and Singh and Binswanger analysed the ICRISAT panel data from six villages in the semi arid region of rural South India that covered the period 1975-76 to 1983-84. Gaiha and Deolalikar indicated that 87.8% of sample households were poor some time during the 9 year panel period. Further, over 60% of households were poor roughly half the time (i.e. during 5 out of 9 sample years) and more than one-fifth of households were poor during all 9 years. They conclude that “the persistently poor are by no means a small subset of the poor.”  Singh and Binswanger in their study showed that 60% of the households in the panel were initially poor. After nine years, 37% of poor households escaped poverty while 63% were chronically poor. In other words, 38% of all households (and 63% of those in poverty) were chronically poor. Using qualitative techniques of enquiry, involving 25 year recall for 6376 households in 35 villages in the state of Rajasthan Krishna (2003) found that 17.8% of households remained poor over this period while 11.1% escaped poverty, 7.9% became poor and 63.2% remained non-poor. Rajasthan is a state that has experienced a decline in poverty. Shah and Sah (2003) also corroborate the findings on the magnitude of the long-term poverty using qualitative methods in two tribal villages in South Western Madhya Pradesh. They found that about 58 per cent of the sample households were in chronic poverty. Further, all the severely poor were also chronically poor.

Gaiha and Imai (2004) based on the ICRISAT panel data for 183 households belonging to 5 sample villages in Andhra Pradesh and Maharashtra in India for 1975-84 found that large segments of rural households experienced long spells of poverty (over 3 years) even without negative crop shocks Occurrence of crop shocks led to an increased proportion of households experiencing short spells of poverty (1 to 2 years).

There are a few studies of poverty dynamics in other countries of the South Asian region. Sen (2003) used longitudinal data for 1987-88 and 2000 for 379 households in Bangladesh, and found that 119 households or 31% of the sample were chronically or “always poor”; 25% of households were never poor; 26% ascended out of poverty while 18% descended into it.

These studies in India and Bangladesh seem to be somewhat different from the experience in Pakistan. Results of a 5-year longitudinal household survey of 686 households in rural Pakistan showed that while the incidence of income poverty was high at 60% only 35% remained in poverty for two years or more and only 3% of sample households were poor in all 5 years of the panel (Baulch and McCulloch, 1998).

Bhide and Mehta (2005) extended the analysis of NCAER rural household panel using one additional round of the survey in 1998. Between 1981-82 and 1998-99, they find that about 39% of the poor households remained poor, a measure of chronic poverty. The chronic poor were about 24 per cent of the total sample. This estimate is lower than estimates for the period 1970-71 to 1981-82 presented in NCAER (1986a) and 27 per cent reported by Dhamija and Bhide (2009). With some changes in the panel’s composition to enable further analysis, Dhamija and Bhide (2009) report that the chronic poor were 23 per cent of the entire sample (as compared to 24 per cent in Bhide and Mehta, 2005). Although the overall estimates of chronic poor among

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the total sample remained the same in Bhide and Mehta (2005) and Dhamija and Bhide (2009), the share of chronic poor among the poor varied significantly because of changes in the composition of panel. Nevertheless, the chronic poor among the total rural poor were an estimated 40-50% in the various formulations of the NCAER panel data covering the surveys in 1970-71, 1981-82 and 1998-99.

The fact that a fairly significant proportion of the poor continue to remain poor over long periods of time, significant proportion exit from poverty, and many non-poor enter into poverty highlight the need to understand the factors that influence this dynamics. A variety of programs have been implemented in India since the early 1950s to achieve economic development and poverty alleviation While some of them have long-term effects on the poor, many are short-term efforts to provide consumption support to the poor.

Several characteristics of chronic poverty have been identified in longitudinal studies. Casual agricultural labourers were identified as the largest and cultivators the second largest group among the chronically poor. Most of the chronically poor were either landless or near-landless and were more dependent on wages. Household size was about the same and dependency burden and illiteracy was slightly higher among them than the just poor. (Gaiha, 1989)

Poverty was closely associated with the resource base of the people in addition to their personal characteristics (Singh, 1990 cited in Singh and Binswanger, 1993). Compared to the non-poor households, the poor cultivating households had poorer quality land, poorer resource base, lower risk bearing capacity, stronger subsistence orientation and a stronger preference for coarse gains in their cropping pattern (Singh and Binswanger, 1993).

The correlates of entries and exits differ from correlates of poverty status (Baulch and McCulloch, 1998). Greater access to cultivable land combined with modern agricultural inputs enabled the cultivating poor to overcome poverty. “Escape from poverty was not a result of growth trickling down to the rural poor…”. (Gaiha, 1988) Among the factors associated with the upward movement of households in the lower income categories were more 'intensive use' of labour resources and acquisition of land (NCAER, 1986a and 1986b).

The initially poor, who escaped poverty, experienced a decline in their family size by more than one member, were able to maintain their operational holding size in the face of increased demographic pressure and were able to increase its irrigation level (Singh and Binswanger, 1993) Escape from poverty was also associated with diversified income sources and information and contacts (Krishna, 2003).

Another study found that escape resulted from overcoming structural obstacles by pursuing multiple strategies such as crop intensification, agricultural diversification, off-farm activity and irrigation that permit rapid accumulation of a mix of assets Further, ascending households were faster accumulators of human, physical and financial assets, better diversifiers, with regard to adopting modern varieties of rice and occupational diversification to higher productivity non agricultural activities. They showed increased supply of labour with declining dependency. The pace of improvement in human capital (years of schooling) was highest for ascending households. (Sen, 2003).

The factors associated with downward mobility were symmetrically opposite to those associated with upward mobility (NCAER 1986a, NCAER 1986b). Other reasons for descent into poverty

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included high health care costs, high interest consumption debt from private money lenders, and social expenses on deaths and marriages (Krishna, 2003). Low caste households and small farmers were more vulnerable to long spells of poverty in the event of a large or severe crop shock (Gaiha and Imai, 2004).

Descent into poverty was found to be associated with lifecycle changes and crises like floods and ill-health. The key causes of downward mobility were crisis or discrete shocks, unfavourable lifecycle factors and structural factors such as loss of natural or human or financial assets or adverse market conditions. (Sen, 2003).

Similarly, based on a panel of 300 poor women informal sector workers and their households in Madras city over a five-year period, 1980-85, Noponen (1991) found that on average, four economic stress events affected the sampled households over the 5 year study period. The event with the greatest influence on the sampled households was illness. The stress of fire or flood related house damage was also prominent. The overwhelming response to economic stress events was ‘indebtedness.’

The likelihood of escape from poverty and entry into it, is sensitive to initial asset position. The pattern of livelihood change has been of a lower quality and potential and increased at a slower pace in the case of the chronic poor than were changes observed for ascending households.

Poor households who remained poor neither accumulated wealth nor reduced liabilities (Singh and Binswanger, 1993). Persistence of poverty was also seen to result from “deep-rooted characteristics" such as schooling of head of household, and drastic measures such as income transfers on a continuing basis were needed to compensate subsets of the poor for their innate disadvantages (Gaiha and Deolalikar, 1993).

Different types of anti-poverty interventions are needed to address chronic and transitory poverty. While interventions to improve human and physical capital of the poor are likely to be successful in the long run in reducing chronic poverty, in the short term large reductions in income poverty could be achieved through smoothing incomes for instance through provision of micro-credit, seasonal public works, crop insurance and food price stabilization schemes (McCulloch and Baulch, 2000).

The causes of poverty have been linked in the literature on poverty to 'capability' with which households utilise economic opportunities for income and employment. The capability can be innate to the households or external. For example, the social segmentation of the economic opportunities may limit a household’s access to different occupations. Poor infrastructure facilities such as roads or communication may limit a poor household’s access to information or markets. Lack of assets will restrict household’s access to credit or risk bearing ability. Lack of education limits a household’s access to opportunities for jobs. These very factors may also influence a poor household’s ability to break out of poverty.

Bhide and Mehta (2008) examine the factors or characteristics that explain the persistence of, and escape from, poverty.

The ST status of a household emerges as an important characteristic in explaining persistence of poverty. However, caste or SC status, is not a statistically significant variable in explaining persistence of poverty. The ST households are characterised by remote habitations much more

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than the others. More than the caste status, occupation, assetlessness and inability to benefit from opportunities in nearby urban economies influence the persistence of poverty.

Households that were poor in 1970/71 and had larger number of members tended to remain poor in 1981/82 relative to those with fewer members. Thus, even if poor households chose larger size for additional earning potential, it did not help them escape poverty. Increase in household size and in the proportion of children also increases the probability of persistence of poverty, whether moderate or severe. Incidentally, the proportion of females among the household members does not appear to have any impact on the persistence of poverty6.

Across three types of assets considered, the initial level of cropland is not a statistically significant variable in explaining the mobility of poor households out of poverty. However, the initial levels of ownership of house and income from livestock as also change in the area cultivated between the two data points, emerge as significant explanatory variables. An increase in the crop area cultivated by the poor household and improvement in asset positions relating to house and livestock are also significant in explaining the probability of reduction in persistence of poverty.

Households with literate heads in the initial period are found to have greater probability of moving out of poverty, more particularly in the case of households that were severely poor initially. Acquiring literacy over time does help moderately poor households escape from poverty although the results are ambiguous for the severely poor.

Larger villages provide relatively more diverse opportunities for employment than the smaller villages and therefore can be expected to reduce the incidence of poverty. This result was strong and unambiguous in the regressions of determinants of incidence of poverty. While the initial size of village does not have significant impact on the mobility of the poor out of poverty, increase in the village size does seem to reduce the probability of persistence of poverty, particularly severe poverty. Relatively larger urban population in the neighbourhood in the initial period reduces the probability of persistence of poverty. Increase in the urban population of the district also reduces the probability of persistence of poverty, although the results are not evident for severe poverty.

Better infrastructure is found to have significant positive impact on reducing the persistence of poverty, especially if the initial infrastructure levels are good, regardless of the severity of poverty. Thus, variation in the state of infrastructure at the village level does influence the mobility of poor households out of poverty.

In summary, factors that are related to the persistence of poverty are the scheduled tribe status, larger household size, increase in household size, larger number of dependent children and increase in number of dependent children. Escape from poverty is enabled by literacy, ownership of a house, increase in cultivated area and income from livestock. In addition, infrastructure and a large urban population in the                                                             

6 In the analysis carried out separately for the two years also the impact of gender-composition on incidence of poverty was found to be significant only in 1970/71.

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neighbourhood were other factors that helped exit from poverty. Escaping severe poverty was also enabled by the same factors. Additionally, increase in the size of the village was significant in creating opportunities for employment and income. Conversely, increase in literacy and larger urban population in the neighbourhood were not significant factors in reducing severe poverty, possibly indicating that it is not enough to become literate but income-opportunities relating to literacy must be available. Also, merely growth in urban population in the district may not be enough to bring more opportunities for the poor- the size of the population appears to be the more important determinant. In contrast, exit from moderate poverty was driven by access to and increase in income from cropland, increase in income from own house, increase in literacy and availability of infrastructure.

In the context of poverty related policy interventions then, it is important differentiate between those factors and conditions driving poverty, persistence of poverty, escape from and entry into poverty. While this paper does not specifically look at mobility into poverty, the literature stresses the importance of crises and shocks caused by ill health or floods or market fluctuation in demand for a given product in forcing descent into poverty. Policy may need to respond to the specific crisis to alleviate its impact, perhaps for an entire village or spatial unit or occupation. Escape from poverty and severe poverty is enabled by increased income earning opportunities through growth in size of the village, or proximity to urban areas, improved infrastructure, literacy, access to assets and income from assets, thereby highlighting the importance of employment and income generating investments in rural areas as also infrastructure development and growth. Scheduled tribe status of a household emerges as an important factor in explaining persistence of poverty. Since the scheduled tribes live in villages that are often far from good roads, lack electricity, clean drinking water, sanitation, schools and health care facilities, increased allocation of resources to enable human and infrastructure development in these areas should be a policy priority.

4. Policy Responses and Safety Nets: Adequacy and Effectiveness

Sections 3 and 4 of this paper clearly show that despite the many disputes around estimating poverty in India, there is agreement that while the percentage of those in poverty has declined, the numbers of those in poverty remains unacceptably high. Further, as noted in the Eleventh Plan, “given the chronic and multi-dimensional nature of poverty in India it is imperative that the programmes to address poverty rely on a multi-pronged approach.” There is a “geography of poverty” since it is concentrated in the rural areas of certain States as well as a “sociology of poverty” since the proportion of poor is higher among certain social groups. Additionally, there are “identifiable occupational features of the poor: they are concentrated in agricultural labour and artisanal households in rural areas, and among casual labourers in urban areas.” (Eleventh Plan Vol III p. 84; Bhalla 2004; Bhide and Mehta 2004; Kumar 2003; Mehta and Bhide 2003; Mehta and Shah 2001 and 2003). Despite the large number of programmes and schemes that have been in place in different forms for many years, the outcome is that there is “persistence of poverty” and “the scale at which it still exists is not acceptable.” Further, “a decisive reduction in poverty and an expansion in economic opportunities for all sections of the population should therefore be a crucial element of the vision for the Eleventh Plan” (Eleventh Plan, Volume 1: page 2).

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Panel data analysis shows that poverty incidence and chronicity are associated with absence of assets, especially land, lack of education, belonging to a scheduled caste or scheduled tribe and working as daily wage labourers or farming with extremely small land holdings. Factors enabling escape from poverty include ownership of or access to income from physical assets such as cropland, livestock, or a house, increased income earning opportunities such as due to proximity to growing urban areas, improved infrastructure and literacy status of the household head. Possible reasons for entry into poverty include shocks such as high health care costs, drought and crop failure, adverse market conditions, loss of assets, disasters, conflicts, and high interest from private money lenders. Many of these factors can be addressed through policies, programmes and schemes (Bhide and Mehta (2004; 2008); Mehta and Shepherd (2006)).

India has implemented a plethora of poverty alleviation programmes and schemes over the last six decades. What is the Eleventh Plan strategy for reducing poverty? In order to alleviate poverty, the Eleventh Plan argues for the need for:

i) an area development approach for each agro-climatic zone for alleviating poverty. For instance, regions which have large number of chronic poor people include tribals who live in forests but suffer adverse incorporation into labour markets due to a combination of limited access to resources and low human capital endowment (e.g., low literacy and poor health services).

ii) watershed development as the strategy for poverty reduction in rainfed agriculture iii) special initiatives for backward districts/regions such as the Backward Regions Grant

Fund, Border Area Development Programme, and Hill Area Development Programme.

iv) effective land reforms and agricultural services for reducing poverty in areas with irrigated agriculture.

v) since dependence on casual labour has grown, and a large proportion of the chronic poor are dependent on wage labour, this calls for an effective wage employment programme in rural areas, especially focusing on women, of the NREG kind.

vi) diversification of incomes to non-farm sources through for instance formation of SHGs, and with credit etc support,

vii) safety nets to prevent the cycle of inter-generational transfer of poverty. Provision of homesteads to the houseless with a small plot of land where they can diversify their income by rearing goats and poultry and growing vegetables on the family plot.

viii) social assistance to the elderly destitute, widows and disabled. ix) improvement in the quality of public health services and the integrated child

development services as also the universalization of elementary education with quality.

However, the Eleventh Plan also argues that “an inclusive growth strategy that focuses only on human capital formation or directly targeted poverty reduction is likely to fail. The structure of growth and also the pattern of production have to be employment-generating, especially outside agriculture. Therefore the Plan strongly argues for strategy that is three-pronged, comprising economic growth, income-poverty reduction through targeted programmes, and human capital formation, so as to put India on a sustainable growth path (Eleventh Plan pages 84 to 86). Hence economic growth is critical to reduce poverty in a sustainable way. Composition of growth

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matters and has to generate jobs but growth needs to be reasonably high in order to provide the resources required for poverty alleviation schemes.

Poverty Alleviation Schemes and Poverty Dynamics: A Tentative Framework

Do the many poverty alleviation schemes try to address dynamics of poverty? Table 4.1 below lists some of the major direct and indirect poverty-alleviation programmes and schemes and categorises them into five groups, i.e., Employment and Self Employment; Infrastructure and Basic Services; Nutrition and Education; Health and Insurance and Programmes for specific groups. It tries to identify whether the scheme seeks to prevent entry into poverty, enable escape from it or ameliorate persistent poverty and improve quality of life.

Table 4.1: Poverty Alleviation Schemes and Poverty Dynamics

The Scheme Seeks to: Name of the Scheme Prevent Entry into Poverty

Enable Escape from Poverty

Ameliorate Persistent Poverty/Improve Quality of Life

Employment and Self Employment NREGS x x SGSY x SJSRY(a) USEP x SJSRY (b) UWEP x SJSRY (c) STEP x SHGs and Microfinance x x Nutrition and Education TPDS x ICDS x x x MDM x x SSA x Health and Health Insurance NRHM x x JSY x x NACP-III x x AABY x x RSBY x x Infrastructure and Basic Services PMGSY x IAY x x TSC x x Bharat Nirman x JNNURM x ARWS x x IWDP x x BRGF x

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Programmes for specific groups SC and TSP x x ICPS x NOAPS x KSY x Source: Mehta and Pratap (forthcoming)

Note: NREGS = National Rural Employment Guarantee Scheme SGSY = Swarnjayanti Gram Swarozgar Yojana SJSRY = Swarna Jayanti Shahari Rozgar Yojana USEP = Urban Self-Employment Programme UWEP = Urban Wage Employment Programme STEP = Support to Training and Employment Programme for Women Self Help Groups = SHGs TPDS = Targeted Public Distribution System ICDS = Integrated Child Development Services MDM = Mid-Day Meals SSA = Sarva Shiksha Abhiyan NRHM = National Rural Health Mission JSY = Janani Suraksha Yojana NACP = National AIDS Control Programme AABY = Aam Admi Bima Yojana RSBY = Rashtriya Swasthiya Bima Yojana PMGSY = Pradhan Mantri Gram Sadak Yojana IAY = Indira Awaas Yojana TSC = Total Sanitation Campaign JNNURM = Jawahar Lal Nehru Urban Renewal Mission ARWS = Accelerated Rural Water Supply Programme IWDP = Integrated Watershed Management Programme SCSP and TSP = Scheduled Caste Sub-Plan and Tribal Sub-Plan ICPS = Integrated Child Protection Scheme NOAPS = National Old Age Pension Scheme KSY = Rajiv Gandhi Scheme for Empowerment of Adolescent Girls SC and TSP= Scheduled Caste and Tribal Sub Plan

If these schemes were adequate and effective, a significant dent would have been made on poverty. Why has this gamut of schemes failed to deliver desired outcomes? Are there design flaws? Weaknesses in implementation? Inadequate funds? Errors of exclusion due to lack of access to scheme benefits due to inability to get BPL cards by those who deserve them? Issues identified in the context of some of these schemes are discussed below.

ICDS

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The ICDS is an extremely important government intervention that tries to provide nutrition, pre-school education and immunisation for children below six and for pregnant and lactating mothers. ICDS is a Centrally-sponsored Scheme implemented through the State Governments/UT Administrations. Prior to 2005-06, 100% financial assistance was provided by the Government of India for inputs other than supplementary nutrition, which the States were to provided out of their own resources. Since many States were not providing adequately for supplementary nutrition in view of resource constraints, in 2005-06 it was decided to provide support to States up to 50% of the financial norms or to support 50% of expenditure incurred by them on supplementary nutrition, whichever is less. From the financial year 2009-10, Government of India has modified the funding pattern of ICDS between Centre and States. The sharing pattern of supplementary nutrition in respect of North-eastern States between Centre and States has been changed from 50:50 to 90:10 ratio. So far as other States and UTs, the existing sharing pattern of 50:50 continues. However, for all other components of ICDS, the ratio has been modified to 90:10 (from 100% Central Assistance earlier).

The Government of India has recently revised the cost of supplementary nutrition for different category of beneficiaries as follows:

• For Children of 6-72 months of age the amount has been revised from Rs.2.00 to Rs.4.00 per beneficiary per day.

• For Severely malnourished children of 6-72 months of age from Rs.2.70 to Rs.6.00 per beneficiary per day.

• For Pregnant women and Nursing mothers from Rs.2.30 to Rs.5.00 per beneficiary per day (http://wcd.nic.in/icds.htm)

There are a large number of reasons why the ICDS has not significantly reduced malnutrition. First is the inadequate coverage of the supplementary nutrition programme. Based on the submission of the Supreme Court Commissioners, the Supreme Court has ordered that “ICDS be geographically universalized”, or in other words that there is an anganwadi centre in every habitation. In a judgment dated 13th December 2006, the Supreme Court ordered that “Government of India shall sanction and operationalize a minimum of 14 lakh AWCs in a phased and even manner starting forthwith and ending December 2008. In doing so, the Central Government shall identify SC and ST hamlets/habitations for AWCs on a priority basis” (Supreme Court Commissioners 2009).

Dreze (2006) notes that Tamil Nadu provides an example of the potential of Integrated Child Development Services since 96 per cent of the sample mothers in Tamil Nadu considered ICDS to be “important” for their child’s well-being, and half of them considered it to be “very important”. The FOCUS survey points out that 79 per cent of the anganwadi workers have been mobilised for non-ICDS duties during last six months and 60 per cent have not been paid for the last 30 days (FOCUS 2006: 88).

Problems in regard to the functioning of ICDS include poor quality of the supplementary nutrition provided; unsanitary conditions in and lack of regular cleaning of public spaces in slums and JJ clusters; poor and unsafe water; lack of funds for toys, weighing scales, charts, medical kits, mats, stationery, brooms etc that are inexpensive but important sources of support (Mehta and Ali 2008). The anganwadi worker and helper form the pivot that determines the success or failure of the ICDS project and yet the remuneration paid to the worker is just Rs

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1500/- and Rs 750/- per month respectively and that too is frequently delayed for several months. With overworked supervisors; scattered geographical coverage; poor supervision due to overloading of the workers and supervisors with non-ICDS tasks; lack of training, skills and motivation of workers and helpers; and it is hardly surprising that the programme is unable to make a dent on malnutrition. Rents provided for anganwadi centres are just Rs 500/- or Rs 750/- so they get housed in very small spaces such as verandahs. Absorption of food depends on cleanliness of the vicinities in which children grow as well as clean water. Having a Scheme in place is not enough. Unless ICDS Projects are adequately resourced, significantly strengthened and closely monitored, they cannot achieve the massive task that has been assigned to them (Mehta 2008).

NREGS

The NREGS is not just another wage employment programme. It draws on the experience of the Maharashtra Employment Guarantee Scheme (MEGS) that has been in operation for several decades and additionally the several versions of wage employment generation schemes. The flaws in the MEGS included the a) limited number of days of work actually provided, b) low wages paid, c) lack of worksite facilities, d) lack of upgradation of skills, e) limited administrative systems for monitoring and tracking the implementation of the scheme, f) poor sustainability of assets created under the scheme and g) lack of convergence with other schemes (Shah and Mehta, 2008). The NREGA has tried to correct many of these. Like the MEGS, it makes a provision for compensation and treatment in case of injury and for on-site facilities like safe drinking water, care of small children, periods of rest and a first-aid box. It bans contractors and restricts the use of labour-displacing machines. It requires that the wage component should be at least 60 percent of the expenditure in any project. It tries to create much needed rural assets through watershed development, water conservation and harvesting methods, irrigation works, forestry, land development, flood control, construction of roads etc. (CSE, 2008; PACS, 2006 cited in Ghosh, Satpathy and Mehta 2008). The programme is implemented as a Centrally Sponsored Scheme on cost sharing basis with the Central Government bearing the cost of payment of wages for unskilled manual workers under the scheme; upto 75% of the material cost and wages of skilled and semi-skilled workers; administrative expenses towards the salary of the Programme Officers and his supporting staff, Gram Rozgar Sevak and work site facilities.

The biggest flaw in the NREGA in the context of efforts to address poverty, is that while the MEGS provides round the year guarantee (except for the peak agricultural season) to all adults willing to do unskilled manual work provided they are above 18 years of age, the NREGA provides the guarantee at the level of the household and not that of the individual. Therefore, the rights of women get subsumed under those of the household, (though the Act requires that at least one-third of the beneficiaries should be women). Additionally, the NREGA waters down the entitlement provided by the MEGS by limiting work on demand to 100 days. 100 days work per household per year is not enough to move poor households out of poverty. Committing to that would require at minimum doubling the entitlement in terms of days and providing access to work on demand to all adults instead of limiting the entitlement to the level of the household (Mehta 2008).

The track record of different states in implementing NREGS varies; performance differs across villages and worksites; deviations from guidelines continue to occur; delayed payment of wages

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remains an issue as does payment below minimum wage. However, none of the audit reports mention lack of demand for work or villagers not needing the job opportunities required by NREGS. However, long term increase in agricultural productivity and generation of future livelihoods requires the use of NREGS allocations are used for building quality assets that are sustainable.

Kishori Shakti Yojana (KSY)

Kishori Shakti Yojana (KSY) is implemented by Ministry of Woman and Child Development (MWCD). The scheme covers all the blocks in the country and grant-in-aid of Rs. 1.10 lakh per block is released to the States/UTs every year. The Supreme Court Commissioners (2009) draw attention to the fact that “since the programme is implemented in 6,108 blocks, the total grant in aid released would be around Rs. 6,718.8 lakh. According to the norms for per beneficiary per day allocation of funds the amount to be allocated for adolescent girls is Rs. 2.30 of which the centre’s share would Rs. 1.15. Therefore the budget allocated is sufficient to cover 19.4 lakh girls”. The Supreme Court Commissioners (2009) estimate that “since as per the 2001 census, the total female population in the 11–18 year age group stands at approximately 844 lakh, therefore only 2.3% adolescent girls are being covered under this scheme, even if there are no leakages.”

Clear from the above is the existence of a combination of inadequacy of resources allocated to each of these programmes – limited number of days of work to make a dent on poverty in the case of NREGS; inadequate provision of funds for functioning of anganwadi centres whether in terms of rent or equipment and infrastructure or remuneration/ honorarium of staff; or supervisory resources as in the case of the ICDS; funds that can cover only 2.3% of adolescent girls in the case of KSY.

In the case of other schemes these problems apply but additionally there are other issues such as mis-allocation of BPL cards; targeting of program benefits based on ownership of a BPL card, resulting in errors of exclusion. Cash payments into bank/ post office accounts are often proffered as solutions. However, in the case of the Indira Gandhi National Old Age Pension Scheme (IGNOAPS) village visits and rapid assessments reveal irregular payments of sums well below the amount due in a year with no explanation of the reason for delays in payments

Conclusions:

Poverty is the largest and most serious development challenge facing India. Although there has been sustained overall economic growth performance since the early 1980s, the reduction in the rate of incidence of poverty has been extremely slow. Performance has been unsatisfactory not only with regard to income poverty but it has also been weak with regard to measures such as life expectancy and literacy.

India has undertaken periodic assessment of the incidence of poverty right from 1950s. The consumption expenditure surveys have been used to identify the cut-off levels of expenditure below which households have been classified as being poor. There have been a number of improvements and changes in the methodology for assessing the poverty lines used to estimate poverty and in gathering the information. Despite the various changes, the incidence of poverty measured by officially accepted measures remains at about a third of the population. The

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differences in approaches provide estimates of HCR in the range of 27.5% to around 80% of the population. By the measure of international poverty line of PPP$ 1.25 per capita per day, the HCR is estimated at 41% in 2005. The latest World Bank assessment points out that India is home to the largest proportion of poor in the world.

Nevertheless, it must be recognized that it is difficult to measure the incidence of poverty in a comparable manner over time and across regions. This complexity has given rise to alternative approaches. The ‘absolute poverty’ measures such as calorie norms are also not devoid of controversies. Besides the HCR, it is also common to use the measures of depth of poverty and its severity. The consumer expenditure surveys permit the estimation of these measures. The latest expert group on the measurement of poverty in India has revisited the issues and recommended adoption of a common ‘basket of consumption’ of poor in both rural and urban areas for construction of the poverty line, unlike the previous practice of adopting different consumption baskets in the rural and urban areas. The measurement methods have been strengthened by using household data on prices of consumption goods rather than estimates obtained from other sources. The revisions also include use of ‘mixed recall periods’ in obtaining consumption expenditure data from households rather than the ‘uniform recall period’. It, however, recommends continuation of the practice of not reconciling the difference between the sample survey findings on consumption and the estimates provided by the National Accounts.

Besides the measurement of poverty based on detailed information on consumption and consumption expenditure, there have been attempts to apply alternative measures of poverty in India. For example, households have been classified into “Below Poverty Line” and “Above Poverty Line” based on a selected set of indicators such as type of house of the household, assets owned, occupation, social class and so on. This classification is used to target certain welfare program benefits to the poor. Poverty status has also been linked to measures of hunger.

The analysis of pattern of incidence of poverty has shown that there is a “geography of poverty” since it is concentrated in the rural areas of certain States. There is also a “sociology of poverty” since the proportion of poor is higher among certain social groups. Additionally, there are “identifiable occupational features of the poor: they are concentrated in agricultural labour and artisanal households in rural areas, and among casual labourers in urban areas.”

In the context of systematic and regular measurement of the extent and nature of poverty, attempts to understand the ‘duration of poverty’ are fewer and episodic. Alternative approaches have been used by the researchers to assess the duration dimension of poverty. Panel data approach has been followed in the studies based on NCAER and ICRISAT. These studies have covered rural India. The urban panel studies have been far more limited in the Indian context. Additionally, anthropometric measures of nutrition or under-nutrition have been used to assess chronic poverty and life-history methods have also been adopted for assessing dynamics of poverty.

The studies on dynamics of poverty indicate that significant proportion of households remain in poverty for long periods of time. The estimates of high levels of incidence of poverty over long periods, is a reflection of persistence of poverty faced by the poor. Absence of ladders for the poor to move out of poverty can only mean persistence of poverty.

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The various assessments show that India continues to face enormous challenge in reducing the incidence of poverty. Although the measurement of the complex phenomenon is not easy and requires continued improvement, it is necessary to address the problem of poverty with urgency. The resources available for poverty alleviation are scarce and the numbers are large. Making the poverty reduction programs effective is a severe challenge facing the policy makers.

India has used a large variety of programs to achieve poverty reduction. Poverty reduction can not be viewed simply as a welfare issue in isolation of the need for creating opportunities for income growth. It also cannot be achieved without addressing the issue of population growth. The need for combining economic growth, targeted anti-poverty programs and human capital formation can not be over-emphasised in the context of the enormity of the problem.

Economic growth remains central to the poverty reduction strategies. It is well known that the bulk of the poor are daily wage earners in rural and urban areas and/or belong to cultivator households who have meager land holdings. Improvements in labour productivity are needed to increase real earnings of labour. It is also necessary to improve the skills of labour force and create employment opportunities for semi-skilled and skilled labour. While these are relatively longer term solutions, for sustained reduction in poverty these remain essential conditions.

A review of the major programs for poverty reduction in India points to the inadequacy of resources and the need for improving effectiveness of program delivery. Economic growth has increased the quantum of resources now available for poverty reduction programs. But despite this, the resources remain inadequate. Delivery of social services such as health and education needs priority attention.

The need for improving implementation of the poverty reduction programs has seen some convergence with the push for decentralisation of governance in rural and urban areas. In the rural areas, the Panchayati Raj Institutions (PRIs) have begun to take increased responsibility for the delivery of some of the poverty reduction programs, especially in the identification of beneficiaries of targeted programs. In urban areas, the resources of the local body governments are being strengthened for more effective delivery of public services. The issue of decentralisation is critical not only in terms of the role of PRIs but also the role of Central and State governments. The need for flexibility in the design of poverty reduction programs has also led to support for greater role for the states in the design of programs.

So as to improve the targeting of benefits to the poor, efforts are being made to provide Unique Identity Numbers to the residents. The program aims to pay particular attention to identifying the poor among the population so that targeting of the programs to the poor becomes more effective, reducing the leakages.

One final point we wish to note in the context of the policy response to persistence of poverty and the need for more effective ways of delivering poverty alleviation measures is the growing prominence of cash transfers in policy thinking. The direct delivery of services is seen as costly and more vulnerable to corruption and inefficiency. The cash income transfers- conditional where relevant- are seen to provide more efficient means of providing purchasing power to the poor. Arguments in favour of and against cash transfers are many. In either case, these are not substitutes for creating necessary infrastructure for health and education and providing access to

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these services to the poor. However, improvements in the efficiency of service delivery remain critical to maximize coverage of the poverty reduction programs.

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