ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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How Have the Poor Done?

Despite the good performance on the growth front, progress in reducing poverty in the 1990s has left much to be desired. Concerted policy action is needed to lift the 350 million poor, increasingly concentrated in the poorer states, out of poverty. This requires not so much additional resources - which would only result in further leakages and swelling of the already bloated bureaucracy - as better policies and sound delivery mechanisms. The focus needs to shift from maximising the quantity of development funding to maximising of development outcomes and effectiveness of public service delivery.

Pokhran economic sanctions, Kargil, and the rise in international oil prices, the Indian economy has shown resilience and has continued to be one of the 10 fastest growing economies of the 1990s. Price stability was maintained and the growth momentum has not been affected seriously. India’s average growth of GDP since 1991-92 has been 6.3 per cent. During the last three years, the economy has grown at 6.1 per cent annually, and the last two years of the Ninth Plan may even see some improvement.

There has been concern whether growth in the 1990s has been accompanied by a reduction in poverty. Official Planning Commission estimates are likely to be available by the year-end when NSS full sample data are released. Quick analysis of the six months data shows that the percentage of the poor in the total population may have declined from a level of 36 per cent in 1993-94 but not at the targeted pace to reach 16.5 per cent in 2001-02, the level which was projected to be achieved by the end of the Ninth Plan period. This may be due to: sluggish agricultural growth which was also less well spread out; inadequate reach of TPDS to the poorest in the northern and eastern states, failure of watershed development and poverty alleviation schemes, fiscal crisis caused by the Fifth Pay Commission that led to reduced ability of the states to spend on social sector and maintenance of assets, and declining governance leading to inefficient utilisation of resources and even leakages.

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