The post pandemic world is at risk of slipping down quite a few steps down the progress ladder of poverty eradication, which means, due to the Covid-19 pandemic the world poverty rate can increase with approximately 100 million people slipping down the poverty line, points out the World Bank. This can reverse the progresses made with the poverty eradication during the past 7-10 years. With this falling growth in economy of the entire world India stands apart with its own set of problems, as the World Bank warns that Indian Economy may contract by 3.2% during the financial year of 2020-2021. The latest survey by the World bank shows that the Sub-Saharan Africa, and the South Asia are likely to be the epicentres of this new poverty wave with expected 42 million new poor in South Asia and 39 million new poor in the sub-Saharan Africa. The poverty estimation for India is marred with lack of data as the last World bank survey was dated back to 2011-12, and the last round of consumption survey by NSSO, that forms the basis of the poverty estimation too was scheduled to happen in the financial year of 2017-18, but it was cancelled by the government and the survey of 2020-21 is unlikely to happen due to the pandemic. So, while for the entire world the base year for poverty estimation survey for 2020-21 is 2017 for India it is 2015, which can lead to a flawed prediction. With lack of surveys, India is on the verge of having no data of poverty in the country for almost 10 years.
The economists around the world, have stated that the prolonged lock-downs have increased the cost of the pandemic by considering the facts that the epicentre of the pandemic has shifted to the weaker economies with surging infections and increased death rates. This increased cost is set to have a sustaining effect on these economies as what will happen in 2021 is very uncertain. Although there is a chance of recovery but the number of people sliding under the poverty line will not go down so soon. Looking at the growth numbers, that were released by the World bank in the month of June, the analysts predict that the world economy is set to witness a downfall of 5-8%. It seems that the countries with the greatest number of poor people like India, Nigeria, Democratic republic of Congo, have to put on a mammoth effort to get on track with their growth for sustainable decreases in the poverty headcounts. For India, however, the challenge lies in estimating the impoverished population as well as figuring out a long-term plan for providing the poor with employment, education and nutrition. As Noble laureate economist Abhijit V. Banerjee and Esthar Duflo in their book Poor Economics write that being poor means living in a world whose institutions are not built for the person, India now has to concentrate on making the country more poor-friendly at a time when the pandemic-stricken world is getting ready to face a recession challenge head on. The pandemic has re-shaped the Indian economy by exposing the almost invisible classes of society and their struggles and pushed down the country in a situation similar to the pre reforms period of the economy. Now the primary task in hand, is to start again from the scratches and learning from the history at the same hand. This article will discuss at length the history of poverty eradication in India and how Indian economy can stand again after being hit by the pandemic.
The Poverty scenario of India and the efforts to estimate it:
After the freedom at midnight the first thing that India had to fight was the poverty, caused by the 200 years of continual drainage of resources and a sudden and ill planned partition. Although the poverty question is still does not have a satisfactory answer, with the time India has fought with the perils of poverty with success by the means of employment, nutrition, medical care and so on. Within the time span of 60 years, starting from 1958-2012, the poverty rate in India had steadily dipped at a 1.3% per annum rate. During the first few years after the independence, it was a huge task for the government to break down the jinx created by the centuries of British rule and start development. During 1958-1970 as the focus was on the construction sector or more precisely on the urban construction sector poverty kept rising, as more and more people kept crowding the cities and growing the head counts of the people living under the poverty line in the cities. In the financial year of 1991-92, Indian economy saw a marvellous reform by bringing in more pro poor development agendas and developing the agriculture and services sector for providing better living conditions to the masses.
Over the years the government of India has taken up multiple measures to estimate the real scenario regarding poverty. Some of the committees created to estimate the situation and providing the government with a proper poverty index or poverty line are The Algh commission (1979), Lakdawala commission (1993), Tendulkar committee (2004-05), Rangarajan committee (2011-12). At first the erstwhile planning commissions in the mid 70’s used to determine the poverty by the minimum daily requirement of 2400 kcal and 2100 kcal for urban and rural population respectively. In 1979 Algh commission estimated the poverty by the required nutrition of a person and the Lakdawala committee in 1993 set the benchmark of poverty on the basis of food consumption expenditures, the Tendulkar committee on the other hand took the other necessities such as health, sanitation, education in consideration and finally the C Rangarajan committee created a larger benchmark merging up food in the consumption basket along with the non-food consumptions. According to the Rangarajan committee created the poverty line of daily per capita consumption expenditure of rs.970 per month in rural areas and rs.1407 per month for the urban areas. The Rangarajan committee has submitted its report on 2014 and notified that the poverty rate of India o 2011-12 was 29.5%. Currently the poverty is estimated through the consumer expenditure surveys conducted by the National Sample Survey Organisation. But with the 2017 report of NSSO is still due the poverty condition is quite ambiguous in India.
Measures taken by the Indian government so far for poverty eradication:
Adviser of United Nations, and director of The Earth institute at Colombia University in New York City, Jeffery Sachs believes that with a push from the outside world as foreign aid the initially poor countries can boost their economies and help them to become self-sufficient with time. Economist Willium Easterly argues that foreign aid corrupts the local institutions and creates self-perpetuating lobbies between the aid agencies. According to Easterly, free markets and right incentives help people to solve their own problems. In both ways many countries have strengthened their economies. India essentially gets no aid from the foreign countries still in the year of 2004-05 India had spent around $31 billion on primary education scheme for the poor. India by far has taken mountainous efforts and become successful in the task of poverty eradication with great schemes like ICDS (1975), Indira awas yojana (1985-86), Mahatma Gandhi National Rural Employment Guarantee Act (2005), Pradhan Mantri gramin awas yojana (2015) etc. The provision of multiple cash funding as allowances, provisions of food crops to the impoverished by the state governments too have seen landmark success in eradicating poverty for longer terms.
MGNREGA is one of the most successful schemes by the Indian government and the second longest running scheme, that has provided multiple unemployed rural units with employment. Although it did not create any asset from the time of its commencement till now, it has promoted equality in the workplace by offering same pay scale to all the workers. It restored many walls, ponds, built embankments in multiple areas of Sundarbans to contain the floods in order to restore the Sundarbans, collaborated with the fisheries to benefit the industry and promoted the recycling of resources. In spite of all the success, this scheme has its drawbacks too. The MGNREGA scheme lacks proper planning and implementation, the resources are not properly distributed and the implementing bodies are heavily corrupted, still this scheme has offered employment to almost 50% of the unemployed rural population that has released a huge pressure from the agricultural sector. So, this scheme cannot go unmentioned as a step towards poverty eradication in India.
ICDS is the longest running children and mother’s welfare scheme by India and the most successful scheme of this kind in the entire world. ICDS provides the children and the pregnant or lactating mothers with proper nutrition, education and healthcare. Within the ICDS scheme comes midday meal scheme that provides around 120,000,000 children in over 1,265,000 schools and Education Guarantee Scheme centres with nutritious food for one time, it is the largest of its kind in the world. The other ICDS schemes being the provision of iron and folic acid tablets to the school children, providing nutritious food and medication to pregnant and lactating mothers, providing polio and other vaccines to the children and providing medication to the TB patients. ICDS does all these for free as a part of the pro poor agendas taken by the government. With the wake of the global pandemic these schemes seem to be failing due to massive infections and prolonged lock downs. India needs a restart at this point of time with newer schemes that can sustain the poor not only during these horrid times but also during the times to come.
The Pandemic and the Protection of the poor:
As the prime minister announced a nationwide lock down on 25th of March 2020, the economy came to a standstill. Some questions immediately surfaced about the next plan which the government failed to answer. After some weeks of the announcement of lock down a gruesome sight came to the notice of the countrymen. The countrymen witnessed in shock that thousands of migrant workers are coming back to their native villages as they have no money and food in their workplaces. World bank notes that around 60 million migrant workers have lost their jobs due to the pandemic and the lock down. The government though took some measures but no long-term plans are still visible. When a survey by King’s College, London is notifying that, the poor can lose around $500 million of per day income, the Indian government is trying to seal the open pores with some short-term projects like providing migrant workers with works at their native villages, providing increased amounts of food crops etc. Basically, the government is trying to provide some short-term relief with measures not prone to contend with the current situation. The lock down brought forward some unsettled issues of the past. First being the migrant labour, in a country like India the migrant labours have always been a driving force. The inter country migration brings forth the issue of MGNREGA failing to distribute or generate equal amounts of employment and wage for the people, which forces them to leave their native place and migrate to another state looking for better opportunities. As the lock down was imposed by the Indian government these migrant workers hit a rock bottom. With no money and no assurance from the government they set off to their native village in the hope for surviving hunger. The very unique thing that was noticed in the mindset of these migrant workers that, they did not fear the infection but hunger. A similar story can be found from the care givers and the daily wage earners too. With lock down many households stopped taking services from their maids altogether and did not care to pay them even for the service they had already provided. Some small business and construction sights let go of their workers without paying their dues. All these things combined hollowed the future of these people as they slipped down the dungeons of impoverishment, and that can cause decreased investment in the education of their children, nutrition of the family and so on. Many children are already dropped out from their schools and forced to find work to sustain their families. There are growing inequalities in the unorganised sectors as construction contractors are wary of taking women into their workforce and pay them with the same wage as the men workers.
At this point of time the government needs sustainable plans to protect the poor from hunger and death. The government needs to implement safety net procedures by funding the poor. An allowance of Rs750 per month can cost the government around Rs. 46,800 crores but this DBT for six months can help them to recover the shock of the pandemic. Microlending programmes can also be employed as these programmes, along with the distribution of food crops, fund the household of the poor so that the person can stand again and think about the other requirements. The pandemic has stopped the midday meal programme for almost six months and the remote learning programmes are not very poor friendly. For these reasons, many children are deciding on letting their education go in order to become an earning member of the family as the food in the stomach is more important than education. The government has to provide employment as well as education to the poverty ridden sectors in a post pandemic India. The unemployment and lack of money in the hands of the people are adding to the dooms of child abuse, child exploitation, early marriage and domestic violence. In any way the picture is not seeming to change in the near future. But some thoughtful and well executed plans by the government can at least better the situation.
Facts and future:
The World Bank had estimated a rise in the poverty headcount back in April with around 40-60 million new poor. With the growth numbers being out in June it is evident that around 71-100 million people set to slip down the poverty line along with a downfall of 5-8% in economic growth in the world economy. To estimate the poverty the World bank has set up some bench mark regarding the consumption expenditure in monetary units. With the benchmarks of per capita expenditures of $1.9 per day, $3.20 per day and $5.50 per day, World bank estimates the poverty around world. A King’s College, London survey warns about a sudden rise in the impoverished head count with an additional 400 million approximately living under the $1.9/ day line and over 500 million people living under the $3.2/ day and $5.5/day line, due to the pandemic and subsequent lock downs. This alone pushes back the progress made by the world in poverty eradication during last 7-10 years. During last 10 years the poverty rate has come down from 36% to 10% but with the poor set to lose a massive amount of daily income in terms of losing their jobs rapidly the severity of the situation intensifies.
The covid-19 pandemic has only punctured the balloon of self-praise of the countries and UN over the issue of poverty eradication. With the downfall of global economy, it is becoming more and more clear that how dated and ragged most of the poverty eradication schemes for most of the countries including India have been. UN’s special rapporteur and a professor of law in the New York University of Law, Philip Alston informs in his latest report that this pandemic can push around 250 million people at the risk of hunger. The pandemic bursts the colourful bubble of growth and self-acclaimed success rates in poverty eradication by throwing a sum of 150-390 million people living under the poverty line after enduring a 5%, 10% or 20% dip in their income. India with its rising hunger index and falling SGD index is set to become the leading contributor of the global poverty headcount with around 353.4 million people living under the $1.9/day line which according to the World Bank is extreme poverty. Also, the estimation for India is well burdened with the lack of data but nothing can change the fact that with the end of this year a sum of 47 million women will be pushed down the poverty line adding to the gender-based poverty and inequality of the country. Children are likely to be withdrawn from school as the remote learning procedure is not very accessible to them and their family. These are testing times for most of the middle-income economies like India. These economies have to put at least 60% of more resources in order to lift the incomes of the poor for sustaining changes.
Economists are fearing that the Covid –19 pandemic will leave behind a fragile, unequal, unfair and smaller economy that the economists name as the “90% economy”. With the growing trend of poverty visible in the 2015 NSS report India can have a huge growth in terms of impoverished population. This can lead to hunger, malnourishment and multiple other long-term effects. It is the high time for India to take these red flags into consideration otherwise this pandemic will leave the Indian masses and economy in the looming bane of destructive recession. As the hope of the vaccine becoming brighter so is the hope for a recovery of the economy but a recovery like the vaccine will not come over night. Continuous effort, sustaining plans and better implementation is the key for the recovery of economy. But with the massive fall in GDP and the growing issues of unemployment this seems to be a longer journey.