The Poverty Puzzle

I Satya Sundaram

The June 2015 issue of Finance & Development (a quarterly publication of the IMF) contains some information about Poverty situation. The article 'Aiming High' by Charles Kenny presents a rosy picture :
—   Between 1999 and 2011 alone, the proportion of the population in the developing world living on less than $1.25 a day fell from 34 percent to 17 percent—a halving in just 12 years.
—   China's spectacular growth performance was a large part of this story, the number of people living under $1.25 fell from 451 million to 94 million in the country, but it was not the only reason.
—   The proportion of children born in developing countries who died before their fifth birthday fell from 8.4 to 5.0 percent (p. 9).
—   Across developing countries as a whole, debt service as a percentage of GDP, for example, dropped from 5.0 percent in 2000 to 3.1 percent in 2013 (p.11)

What one has to remember is that growth alone will not improve social conditions. Moreover, the growth itself may be preposterous. Take the case of India. In terms of cell phones used, the country's rank is very good, but in terms of toilets available, it is poorly placed.

What is germane to the issue of poverty is, how far the anti-poverty drive is effective. India spent crores of rupees on the co-called anti-poverty schemes which suffered from high incidence of leakages. The importance good governance has been skirted.

According to a recent UN Report relating to Millennium Development Goals, India could reduce poverty ratio to 21.9 percent by 2011-12. It, however, regretted that the progress was 'uneven'. In 2012, over 270 million Indians experienced extreme poverty.

The Report said that nearly 60 percent of the world's one billion extremely poor people lived in just five countries in 2011—India, Nigeria, China, Bangladesh and the D R Congo. The Report pointed out that India is home to one quarter of the world's under-nourished population, over a third of the world's underweight children and nearly a third of the world's food-insecure people.

The Report lays stress on widening the poverty alleviation schemes such as MGNREGA, and food security in poorer states, improvements in the Integrated Child Development Schemes and Public Distribution System and speedy execution of the National Food Security Act among others.

It is not possible to eradicate poverty so long as India does not give up its preposterous plan priorities.

Vol. 48, No. 5, Aug 9 - 15, 2015