Rural Poverty Alleviation

Rural Poverty: In comparison to metropolitan areas, rural areas have a higher rate of poverty. According to the Planning Commission’s estimate for 2011-12, 25.7 percent of the rural population was living below the poverty line (Rs 816 per capita per month for rural areas), and 13.7 percent of the population in urban areas was living in poverty (Rs 1,000 per capita per month for urban areas). As a result, whereas more than a tenth of the urban population lived in poverty in 2011-12, a quarter of the rural population did (Planning Commission, 2013). As a result, poverty alleviation projects in India are becoming increasingly significant, particularly in rural India.

Rural Poverty in the Planning Process

Droughts, for example, can exacerbate rural poverty by reducing agricultural production earnings, hence geographical variables as an externality might be dominating in impacting rural poverty. In isolated rural locations, there may also be challenges with institutional quality delivery. Perera and Lee found that the quality of institutions has an impact on poverty reduction (2016). While some aspects of institutional quality, such as improvements toward a stable government and a better law and order regime, help to reduce poverty, others, such as improvements in bureaucratic quality and democratic accountability, as well as corruption, help to increase rural poverty because they are linked to an increase in income distribution inequality.

Improvements in bureaucratic quality and democratic accountability also make the economic system more centrally determined, obviating the possibility of multi-determined economics, in which income distribution is more centrally determined until policy dictates differently. However, the right policy configuration can help to promote more equitable income distribution. This involves the incorporation of public policy into India’s poverty reduction efforts. While policy infrastructure in metropolitan areas can be more extensive, rural areas demand special attention in terms of public policy delivery systems.

Due to their distance from policy organization hubs, rural areas in India may have challenges in delivering institutional excellence. Poverty alleviation programs in India that focus on rural poverty can considerably aid public policy efforts to improve the lives of rural people.

As a result of India’s history of high rural poverty rates, policymakers in the planning process regard poverty to be a critical part of the country’s growth. The NitiAayog, the Government of India’s top planning body, has a Task Force dedicated to this goal. However, the first stage in calculating poverty is an enumeration of poverty, and in this process, a poverty line (with incomes below which people are considered to be in absolute poverty) becomes extremely significant, and its exact number is frequently hotly discussed after it is established.

The first poverty threshold for rural communities was set at Rs 20 per capita per month in 1960-61, based on market pricing. Despite the fact that it was not the official poverty threshold, it sparked considerable discussions about poverty estimation in India’s Planning Commission.

These discussions on poverty in India culminated in the Planning Commission appointing an expert team in 1977, led by economist Y. K. Alagh, to develop a technique for assessing poverty in India. The committee issued a report in 1979 that established the rural poverty line at Rs 49.09 per capita per month, based on market prices in 1973-74. The report also recommended that various poverty lines be established for rural and urban areas. Following that, in 1993, the Lakdawala Committee proposed a system for updating poverty lines over time. Until 2004-05, the Alagh and Lakdawala Committee recommendations served as the foundation for national poverty estimates.

The Planning Commission created the Tendulkar Committee near the end of 2005, and it published its findings in 2009, making upward changes to the poverty level so that it could be revised. The Tendulkar poverty line, as it is currently known, is used to calculate the poverty level in India (NitiAayog, 2016). The poverty line’s values, on the other hand, are a disputed subject.

The poverty line can be highly useful in identifying poverty, tracking poverty across regions, and estimating the costs of certain poverty alleviation programs in India. The poverty line is vital in targeted poverty alleviation programs, but it is not so important in universal poverty reduction programs. In India’s universal poverty alleviation programs, the program’s benefits are available to all rural households and are not heavily reliant on precise poverty assessments. The Mahatma Gandhi National Rural Employment Guarantee Act is an example of a nationwide poverty alleviation scheme (MNREGA). In targeted programs, information on poverty is required, and budget allocations are sometimes made based on criteria other than the poverty line estimates utilized.

Rural Poverty Alleviation Programmes in India

The incumbent government has launched several rural poverty alleviation programs in India, including the Pradhan Mantri Jan Dhan Yojana (PMJDY), a financial inclusion scheme, the Pradhan Mantri Gramin Awaas Yojana, a housing scheme for the rural poor, the Atal Pension Yojana (APY), aimed at increasing pension scheme beneficiaries in India, and the Sansad Adarsh Gram Yojana (SAGY), aimed at fostering infrastructure development (Sarkari Yojana, 2018).

Many of these programs are still in their infancy, making performance evaluations challenging. The Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) and the Public Distribution System (PDS) were major measures for poverty alleviation in rural India in the decades after the turn of the century. The Integrated Rural Development Program (IRDP), the Mid-Day Meal Scheme (MDMS), the National Family Benefit Scheme (NFBS), and the National Old Age Pension Scheme (NOAPS) were some of the older schemes aimed at benefiting poor people in rural India before the MGNREGA and the PDS worked under the new legislation.

The MGNREGA was implemented in 2006, and it provides rural residents with 150 days of paid labor each year. The strategy intends to provide employment prospects for rural residents by guaranteeing pay employment for unskilled manual labor. The MGNREGA had enrolled 1.5 million households by 2018 (Ministry of Rural Development – Government of India, 2018).

PDS helped to eradicate Rural Poverty

Another program that helps in decreasing rural poverty and helped the impoverished populations improve their quality of life is the Public Distribution System (PDS). The National Food Security Act (NFSA) of 2013 ties in with the Public Distribution System (PDS) to provide subsidized food grains in India. The Act covers around 50% of the urban population and approximately 75% of the rural population, and beneficiaries are eligible to receive 5 kg of food grains per month at subsidized rates of Rs 3/2/1 per kg of rice, wheat, or coarse grains, respectively.

The Act has been implemented across all of India’s states and union territories, with the government claiming that the policy has touched a total of 807.2 million people in both rural and urban regions, out of a target of 813.4 million people (GoI, 2018). However, there are considerable inconsistencies in how some states have implemented the Act’s requirements (ET, 2017).

The Integrated Rural Development Programme is an example of an older government scheme that benefited rural India (IRDP). The program was implemented in 1979 with the goal of assisting micro-enterprises by providing loans for asset purchases and subsidizing asset expenses by 25 to 50 percent. Despite the fact that some of the poor have achieved some progress as a consequence of the strategy, just 1 in 5 persons have been able to escape poverty as a result of it (Saxena, 2013).

Policymakers in India can now look forward to more far-reaching rural poverty reduction measures thanks to increased funding available for social projects. On March 16, 2015, the NitiAayog established a task force to eradicate poverty, led by Dr. Arvind Panagariya, the NitiAayog’s vice-chairman. The task force determined that persons earning less than Rs 27.20 in rural areas are poor, based on the methodology given in the Tendulkar Committee’s recommendations. The assessment was divisive and sparked a lot of debate in policy circles.

According to these estimations, 22 percent of the country’s population might be categorized as poor, with the poverty line in urban regions set at Rs 33.33 per day, in addition to low income in rural areas (ET, 2017). Many people argued that India’s poor proportion may be substantially higher, while others questioned the poverty line’s extraordinarily low income. This is significant since many of India’s government’s rural poverty alleviation programs are targeted.

Enumerative mechanisms such as one’s UIDAI are becoming more important in terms of policy orientation in India’s rural poverty alleviation projects in recent years. For example, following the 2015-16 budget, insurance schemes based on bank accounts linked to the Adhaar scheme were introduced. Adhaar identification is being used in new poverty alleviation schemes in India, such as the Jan Dhan Yojana. Given that many of the target beneficiaries work in the informal sector, the UIDAI can be useful in poverty alleviation.

It can also assist in the establishment of identification regimes for poorer individuals on the edges, allowing the policy to meet their needs. One example is using one’s Adhaar Card to obtain compensation in the event of a natural disaster, such as floods.

Mobile phone banking is becoming more popular in financial transactions, however many people in rural India still prefer to deal in cash. However, one positive is that government programs have made it easier for rural residents to obtain cash. For a long time, the challenge in rural areas has been a lack of financial support and possibilities.

Rural poverty alleviation programs in India aim to enhance people’s access to jobs, food, finances, and other basic requirements in rural India, where many people live in distant places outside of the reach of large-scale development. Because access to developmental processes and infrastructure may be more limited in far-flung rural areas, a basic needs approach is all the more important in addition to addressing the rural poverty line.