As per the 2016 world development indicator report of the World Bank, though global poverty declined from its past level of 44 per cent in 1981 and 37 per cent in 1990 to 13 per cent in 2012, calculated on the international poverty line basis of $1.90 a day per person on 2011 purchasing power parity (PPP), the size of world poor population still stood at a staggering 896 million.
If one adds to this have-not community, the 2.1 billion people ,who are lurking unstably just above the poverty line with an income of less than US $ 3.10 a day , then the size becomes too worrying for development planners, who used to believe in the trickle- down GDP model of growth.
The mitigation of poverty from the world was not possible over last 6 decades as economic growth was the main objective of development policies in the 1950s and 1960s .The recognition that growth by itself did not eliminate poverty led to the adoption of a series of poverty-reduction strategies, including the basic needs approach, in the 1970s. As adjustment issues surfaced to dominate the global policy debate in the 1980s, poverty was relegated again to the back burner.
The 1990s was the global liberalisation regime. When these global economic reforms did not mitigate poverty, a renewed interest in poverty reduction began again in the 21st century, culminating in the adoption of the Millennium Development Goals (MDG) by the UN in 2000 with poverty elimination as first goal. World Bank /IMF began to wake up from slumber and demanded submission of country poverty reduction strategy paper (PRSP) from loan and grant seeking countries. The UN renewed its MDG in 2016 with SDG (sustainable development goal)-2030, repeating poverty elimination as first goal.
The annual report of the Reserve Bank of India published in 2013, calculated the percentage of people living below poverty-line in India at 21.92 per cent, based on MRP-consumption. Comparing incidence of poverty in States, the report showed Goa carrying the least poverty at 5 per cent of State population and Bihar carrying highest poverty incidence with 40.6 per cent of population as poor. In India, the absolute number of poor increased from around 200 million in the 1950s to 312 million in 1993-94. While the decline of poverty since the early 1970s has been sizable (from an incidence of 56 per cent to 35 per cent in 1993-94), India’s progress in fighting poverty has been modest in comparison to some of its Asian neighbours. Between 1970 and 1993, for example, the proportion of Indonesia’s population living in poverty dropped from 58 to 8 per cent. It is well established that the percentage of the population in poverty has been falling consistently but the rate of decline was too slow. The size of poor population in India and its slow decline calls for a national and State level poverty mitigation policy.
The first need for NPMP arises due to new international environment. UN’s SDG 2030, which puts elimination of poverty as first goal, binds all ratifying nations to work towards the goals. The agenda calls for formulation of anti-poverty policies, strategies, programmes, database and institutions. Failure in this sphere will put India in low rank in world governance canvas. The IMF and the World Bank have already made it mandatory for the debt- relief or aid-seeking nations to submit a country PRSP (poverty reduction strategy paper) along with the application. Many nations have submitted the same. Bangladesh submitted one in 2015. India, however, was placing its five-year plan as PRSP documents. Unless India submits its separate PRSP, it will not get any bank assistance after the 12th plan that ends in 2017. As the Union Government has abolished Planning Commission, it is the right time to develop appropriate institution or give NITI Ayog the responsibility for preparation of a National Poverty Mitigation Policy and necessary systems. The Government of India might create a new Commission or a Ministry on poverty reduction.
The second argument for an anti-poverty policy in India arises from the absence of a national data base of poor and the recurring confusion over poverty- line during last six decades. While the World Bank and some nations use the international poverty-
line of $1.90 a day per person to identify the poor people, India creates its own poverty line. But it was seen in the past that the erstwhile Planning Commission of India kept on changing the poverty-line criteria from time to time. Further, the poverty measurement is done through NSS surveys once in five years but not on census basis. Such methods resulted in the absence of a transparent base-line data on the poor people. On the other hand, recent anti-poverty schemes like MGNREGS and NFSA schemes have created a very transparent baseline data of beneficiaries. 2011 census has also generated some data on weaker sections. Once a national policy on poverty mitigation is drafted, it will dissolve ambiguities relating to poverty line and create a working definition of poor (viz NFSA beneficiaries should be treated as poor) and form a database. The nation can easily move to the geographical household identification process of the poor. This shall be great achievement to combat poverty. The third logic for a policy arises for achieving efficiency in administration of “welfare” and “social security schemes”. There are social security schemes like OAP, WP which are meant for the destitute. These beneficiaries can be termed as ultra-poor and can be tracked due to their small size. But there are a plethora of other welfare schemes for the economically weaker sections, whatever way these schemes might be packaged. For instance, there is MGNREGS, which is meant to assist the rural unemployed people in distress time of the year. Similarly, the National Food Security scheme is designed to assist the food deficient households. As the intended target group of both schemes is poor, the beneficiaries of these schemes can be tagged for direct cash transfer so that benefit to each household under different schemes can be measured. The overlapping of schemes and financial assistance can be streamlined by formulating an anti-poverty policy and it will save wasteful populist budgetary allocation and check pilferage.
The fourth argument in support of a national policy is to give special direction to inclusive development effort that will end poverty. In 12th Plan documents, there is mention about how districts should be taken as poverty intervention units as State level indicators are not enough to fight poverty. Even in a developed State like Maharashtra, there are poverty stricken districts. The national policy shall identify the districts of India that are breeding grounds of poverty and direct measures to correct the socio-economic micro-system in collaboration with State Governments. It will also include caste, religion, tribal and gender factors by identifying such districts. Repeated disaster prone areas can be included too.
Finally, in the Indian federal structure, poverty eradication is the responsibility of both the Union and the State Governments. The fifth and the strongest argument in favor of a national policy is that the policy will pave way for creation of a financial assistance system for the poor States. After the special status demand of States like Odisha and Bihar has been scrapped, there is really fund crunch for the poor States to combat poverty. The policy shall allocate anti-poverty funds to the States on the basis of a number of poverty stricken districts and size of poor households/population. The State Governments shall come out with “State poverty mitigation polices” to allocate funds and programmes by taking Block/Gram Panchayat as a unit and create institutions for poverty eradication. Niti Ayog should start the process of National SDG -2030 exercise at Union and State level, at the earliest with flagship Poverty Mitigation Policy agenda.