CONCLUSION, RECOMMENDATIONS, LIMITATIONS OF THE STUDY AND DIRECTIONS FOR FUTURE RESEARCH

Transcription

1 CHAPTER 13 CONCLUSION, RECOMMENDATIONS, LIMITATIONS OF THE STUDY AND DIRECTIONS FOR FUTURE RESEARCH Poverty is a scourge that must be overcome, and this can only be accomplished through concerted international efforts involving effective partnerships between developed and developing countries and between government, the private sector and civil society. - Dr. Han Seung-soo, Former President of the UN General Assembly 13.1 Conclusion 13.2 Recommendations 13.3 Limitations 13.4 Directions for Future Research

2 13.1 Conclusion Poverty exists in every country of the world. Poverty exists in every State of India. Poverty exists in rural as well as urban areas of India. Growth of the economy has brought about gains for the people but disproportionately. The intention of the administrators of the country in the form of the ruling government or the ones who have been in power in the past is to bring about rapid reduction in poverty and eventually remove it. Since the impact of growth has not been very encouraging, poverty alleviation programmes have been set into design and motion to bring the desired changes in the poverty scenario. This thesis has explored the management of rural poverty by governmental interventions in India and the findings and recommendations draw heavily from the experience of three other countries which have some similarities with India despite their individual uniqueness of circumstances and priorities. The concluding remarks of the study are listed as - 1. Poverty has existed in India since very early times with its extent and intensity changing at varying rates due to presence or otherwise of its determinants. The causes of poverty have also been the consequences of poor life, thereby extending a reinforcing characteristic to poverty. 2. Measurement of poverty depends on its definition which is subjective and even after many years of continuous thought evolvement amongst the developmental economists and poverty experts, a broad view of poverty considering its multiple dimensions as the different forms of deprivation defining poverty have come to be accepted globally. Individual countries have their individual poverty lines and India is no exception. However, the latest on India s definition on poverty comes very close to the internationally accepted benchmark. 3. Growth of the economy brought about by market forces or economic planning, economic growth which is domestically driven or externally compelled, economic growth in general is very important factor influencing poverty reduction. The more the growth rate the better it is so as to help an economy cut down poverty rates. Managing Poverty in India through State Interventions: Critical Assessment and Learning from Abroad 245

3 4. Bangladesh has been successful in reducing poverty due to externally driven economic growth which brought about an increase in employment opportunities and improvement in income of the lower income segments. Indonesia also experienced reduction in poverty on account of good economic growth which was largely driven by the market forces. Brazil s economic growth has been low, yet it was able to reduce poverty. 5. State interventions have complemented the impact of economic growth in all the countries under study. Bangladesh and Indonesia have not gained enough due to these interventions due to errors in design or implementation in the poverty alleviation programmes. Brazil on the other hand has experienced good results of the specific poverty alleviation schemes. 6. India has not been able to convert the impact of economic growth on poverty reduction to the expected extent. Poverty alleviation programmes have yielded mixed results but the encouragement from the success stories is worth replicating with improvement alterations in scheme design, implementation and monitoring. 7. Replication of poverty reduction success stories elsewhere in the world in India is an unwise desire. As causes of poverty and societal as well as the environmental circumstances differ across countries, a strategy that has worked to the desired extent in a country may or may not work in another country. Similarly a strategy which has not worked in one type of settings may work or fail in another country. 8. Concerted efforts by the government to complement the role of economic growth to effect poverty reduction are required in India. India can speed up poverty alleviation in case the country experiences an improved income growth and the Stat interventions at poverty reduction are intensified. Based on the assumptions, this best scenario would result in near-elimination of poverty in 62 years whereas the worst scenario would yield in desired results in 137 years. 9. Efforts by the government to manage poverty must help poor rise above poverty and sustain their position above the poverty line. These efforts must impart ability and instill sense of financial independence in the poor beneficiaries of the poverty alleviation schemes. Managing Poverty in India through State Interventions: Critical Assessment and Learning from Abroad 246

4 13.2 Recommendations On the basis of the limited literature review on poverty studies and poverty alleviation practices in India and some other countries and exploration of the information on poverty and poverty alleviation in the said countries, the following recommendations have been put forward to the effect of policy prescriptions. These recommendations are heavily interdependent and should not be considered as standalone suggestions but be viewed as an interwoven bundle - 1. Since economic growth has been found to be a necessary condition for progress of a nation and all sections including the poor segments, it is recommended that economic growth must be pursued as a means to end poverty. However, inclusive economic growth - one that includes the poor sections of the society in the participation and sharing of the fruits of economic growth, must be the goal. This is extremely significant as India in the past has succeeded in achieving commendable economic growth rate but was unable to convert it into growth for the masses and poverty reduction. Thus, strategies for economic growth and development must be formulated to intentionally achieve poverty reduction. Given the experience of Bangladesh, Indonesia and Brazil as well as India, improvements in farm income (Dutt and Ravallion, 1996) and non-farm incomes (Quizon and Binswanger, 1986) in the rural areas which make most of India must be the focus of the growth strategies. Given the natural resource constraints and technological constraints on agricultural productivity, it is suggested that the latter are stressed more than the former. 2. In view of the heterogeneity of the economic categories, concerted efforts by the government for poverty alleviation are indispensable in Indian context. Economic growth per se will be inadequate to reach the poorest of the poor who are weakly linked to the typical economic activities. Efforts by the government in addition to income growth are necessary to achieve the desired result. Thus, government interventions in form of poverty alleviation schemes are recommended. 3. The extremely poor in India reside in isolation from the web of economic activities that are generally characterized by a lengthy route from creation to the end-user. The reasons that give rise to their poor status are responsible for their continued disconnection and lack of access to economic and social infrastructure. Managing Poverty in India through State Interventions: Critical Assessment and Learning from Abroad 247

5 It is recommended to extend provision of basic infrastructure including clean drinking water, toilets, healthcare, education and road connectivity. This should not mean necessarily pulling them into the mainstream economic activities; provisioning of these facilities would connect them to those activities which have been an unknown territory for them till then and such exposure is likely to yield a capability as well as a desire to progress to a better standard of living. 4. As the poorest of the poor face economic deprivation in its worst form, fulfilment of their basic requirements is very important. The primary among these is the requirement of food. Thus it is recommended that food subsidy or provision of food-grains be extended to this miserably poor section of the poor in the country. 5. Offering food subsidy as a privilege to all or majority of the citizens is not advisable for any country. India faces resource constraint like any other country and successive governments face the huge task of containing fiscal deficit and meeting the burgeoning developmental requirements of the nation. A move by the current Central government in India to further increase the entitlement under the National Food Security Act is bound to add to the cost of subsidy and therefore the total expenses of the State. It is recommended that resource allocation for poverty alleviation must be conservative and expenditures be made narrowly to reach the extremely poor. Pulling the extremely poor away from their miserable state must take priority over any other governmental effort made for the poor in general. On the other hand, the relatively more fortunate ones below the poverty line generally have money enough to buy them their daily meals; however the other dimensions of deprivation may be an integral part of their life s poor state. These individuals and households would be better off, in case they are the recipients of cash transfer as that gives them the liberty to choose the type of expenditure they wish to make in light of their individualistic context of need and priorities. 6. Poverty is multi-dimensional deprivation which is both a social issue with economic connotations and an economic issue with social implications. Since the deprivation varies across individual and social groups as well as geographical regions, it is extremely difficult to identify the dimensions which are more important than the other and design a multi-pronged poverty reduction programme which attempts to delineate different aspects of deprivation and Managing Poverty in India through State Interventions: Critical Assessment and Learning from Abroad 248

6 remedy them. Governments at the state level are better positioned as compared to the central government in terms of identifying these aspects due to the simple logic of spatial proximity and administrative focus. There is an appreciable degree of homogeneity in socio-economic situation and deprivation parameters within a state. In view of this it is recommended that interventions for poverty alleviation must not involve the central government and be the decision making area of the respective State alone. 7. Benefits of poverty reduction schemes being cornered by the non-deserving nonpoor is proven to exist widely in India especially in self-targeting anti-poverty programmes. As this not only diverts funds in the undesired direction, it defeats the goal of poverty alleviation. To overcome adverse self-selection, it is recommended to increase the opportunity cost of availing benefits of anti-poverty scheme. For examples - a. In case of State offered job opportunities, the wage rates must be lower than the market prevailing rates as this will ensure only the real needy - jobless and very poor come forward to avail the benefit. In contrast, the on-job poor or on-job very poor would not find it worthwhile to apply and avail State help for a job not meeting the returns available elsewhere. Thus a high opportunity cost would keep the non-deserving at bay. b. In case of State distributed subsidized food-grains, a compromise in the quality of food-grains can ensure that the deserving very poor will claim and avail the subsidized food-grains. The quality concession can be in terms of harmless adulteration with unwanted chaff, twigs etc. that do not lower the nutrient content of the food-grains. This can be consciously achieved by avoiding the sorting and cleaning of food-grins before they reach the distribution outlets. This will increase the opportunity cost of being a beneficiary of subsidized food-grains scheme for the non-deserving nonpoor and thus prevent adverse self-selection. 8. Within a State, cohorts of poor are present in identifiably separate geographical locations. This makes it easier to apply poverty alleviation strategies in such locations. Geographic targeting followed by self-targeting is recommended to improve the coverage of poverty alleviation schemes. Managing Poverty in India through State Interventions: Critical Assessment and Learning from Abroad 249

7 9. Benefits in the form of cash to the poor (other than the extremely poor) must be linked with contribution in the form of manual or non-manual labour. Linking benefits with work are in practice in India, for example the MGNREGA guarantees employment and extends wages to the poor who work for them. It is recommended that in addition to food subsidy for the very poor, workfare programmes such as MGNREGA must be continued under the aegis of respective state governments. 10. Poverty alleviation and its sustenance are possible by equipping the poor with the means to gain financial independence and therefore decisional independence. Lack of employability is a more grave and widespread issue in India as compared to the lack of jobs. There is excess supply of unskilled workers while there is excess demand for skilled workers. In conformity, it is recommended to encourage skill development to ensure employability for job fitness. Within the area of skill development, it is critical to impart and encourage skill development for opportunities that are most likely to expand or come up in the near future. With advancement in technology, the prospects of labour absorption in primary and secondary sector are likely to be limited and not likely to expand at the speed of expansion of job requirements. Also, building abilities and imparting skills is likely to help the poor fetch for themselves without being dependent on the benevolence of the State for their entire lifetime. The State run programmes which offer free or subsidized training, skill generation and enhancement would go a long way in making the poor to become non-poor and self-reliant financially. The gains extended and received through such programmes cannot be undone with the change in the ruling government or a change in the political setting Limitations 1. The usual limitations of reliance on secondary data sources are accompanying shortcomings of this study. 2. The assessment of various anti-poverty programmes run by the respective governments in India, Bangladesh, Indonesia and Brazil is a significant component of this thesis, however the assessment studies carried out by other agencies and their documented reports have been used to explore the success or otherwise of these in terms of their impact on poverty reduction. Managing Poverty in India through State Interventions: Critical Assessment and Learning from Abroad 250

8 a. Most of the assessments considered in the study are conducted by governmental agencies such as Planning Commission/Programme Evaluation Division in India and therefore may carry a high performance bias. b. Almost all of the assessment studies have been based on sample surveys and sampling has its obvious limitations of generalization of the results obtained. Thus they may not be a true reflection of the performance of the antipoverty scheme in the entire area of the scheme s application. c. Also, many of the assessment studies have been carried out in the immediate short run of the launch of the scheme. The impact of these in terms of poverty reduction may be too early to judge. Many times the early assessment results have revealed poor outcomes. But it may be too early to write-off a scheme as ineffective or inefficient as they too suffer from birth-pangs. For instance, generating awareness about a scheme and gathering interest among the targeted population may involve time. On the contrary, anti-poverty schemes which may appear to be working initially may be on account of initial buildup but may suffer from flaws that may become visible later or may offer benefits that are temporary or non-sustainable in nature. d. Post-scheme launch changes may be confounded by changes occurring in the several extraneous factors which are difficult to control or hold constant to allow the scheme to show its true impact. 3. The scope of the study is restricted to conveniently selected component dimensions of poverty, sub-components of poverty in India and sub-categories of State interventions to check poverty. a. Urban poverty which is equally critical has not been covered in this thesis. Nature and causes of urban poverty have a separate identity and the efforts by the government for its management are also different from those adopted for managing rural poverty. b. India has a federal structure and each state government also runs several poverty alleviation programmes in addition to the central government s antipoverty interventions. The poverty alleviation programmes that are centrally funded alone are considered in this research study. Managing Poverty in India through State Interventions: Critical Assessment and Learning from Abroad 251

9 4. Exploration of foreign country cases in management of poverty by governmental interventions has been restricted to cover only three countries. One country in each of the income categories closest to that of India s income category (as classified by World Bank) have been considered. a. With nearly 200 countries, a similar number of country cases are possible and a study of only three is a small representation. b. Choice of foreign country cases leaves out many examples of intense poverty as well as some well acclaimed success examples. 5. Comparisons are extremely useful to yield significant insights but comparisons of parameters placed on an uneven playing field may yield misleading answers. a. Since a number of parameters in each country render a marked uniqueness to its circumstances, the applicability of a country s experience to another nation can be questioned. b. Also, poverty estimates across countries are based on their respective official poverty lines. Though the underlying principles in the definition/meaning of poverty being measured in absolute terms are largely similar, differences in specific definition of what is a poverty line for a country are present. Use of international poverty line as prescribed by the World Bank and the corresponding poverty estimates would not have been a feasible option due to non-availability of the same for the countries under study for their post-independence years. 6. In case of India the poverty estimates are available for all-india, rural and urban India whereas such segregation is not available for the other countries. The national level estimates in the other countries have been used as a representation to reflect rural poverty levels in in these countries. 7. The thesis is an exposition on the macro-level efforts to alleviate poverty specifically directed by the Central government. Though the issues and solutions for poverty at the disaggregated micro-level may not be very different from the macro issues and suggestive solutions but the same have been largely ignored in this study. The policy recommendations are of aggregate nature, pronouncing broad changes at the level of policy decision making. Managing Poverty in India through State Interventions: Critical Assessment and Learning from Abroad 252

10 13.4 Directions for Future Research The findings of the study and the recommendations are significant in view of the stubborn nature of poverty and the fact that existence and perpetuation of poverty dilutes the successes in the other dimensions of socio-economic existence. The study in context has been able to bring out synthesized assessment of poverty reduction experiences in India, Bangladesh, Indonesia and Brazil along with their specific experience with State interventions to the effect. The directions for future research which would further enrich the literature of studies in the area include - 1. Exploration of additional foreign country cases in management of poverty by governmental interventions can be undertaken. Countries with similar circumstances and poverty interventions can be researched to widen the scope of learning from abroad. More nation studies to know the experiences of those nations is likely to enhance the credibility of the findings of this study. 2. State interventions to tackle urban poverty in India can be explored to further the understanding of poverty management at an all-india level. Though urban poverty is similar yet some of its causes and dimensions possess their own unique characterization. Poverty alleviation is required all over - urban as well as in rural India. Extending the research to include urban poverty - issues, strategies used for poverty reduction, their assessment will not only help bring out additional solution options but also lead the research into a more exhaustive direction. 3. Indirect interventions by the Government which have been able to make a dent in the prevalence of poverty can also be explored. This is likely to augment the possibilities of poverty correction measures. Managing Poverty in India through State Interventions: Critical Assessment and Learning from Abroad 253