The fruits of economic growth have not benefited everyone uniformly. Some are left behind and some others are not touched by the benefits of economic growth. It is proved globally that the so-called trickle-down effect does not work in all the societies and India is no exception to this. There are various reasons for this uneven development in the society. Modern economy is technology driven and not labour-intensive.
High volume of high quality goods and services are produced with
fewer labour hands. In short, the modern economy is not generating much
employment and sometimes it displaces and replaces labour with machines
and tools. The period of 1999-2000 to 2004- 2005 saw rapid economic
growth in the country but it has not impacted on the unemployment
problem of the country. During this period, the unemployment rate
remained almost same for rural males and decreased by just one
percentage for urban male. On the other hand, unemployment among females
increased by one percentage for urban and rural females.
One-third of the country’s population is still illiterate and a
majority are not educated up to the age of 15 years. Even among the
educated, all do not have employable skills of the modern economy. The
education system is not tuned to the changing economic scenario. The
large agriculture workforce in rural areas is not sustainable with
dwindling cultivable land and use of modern methods of cultivation. As a
result, the rural labour is pushed into cities in search of work but
they do not have any employable skills in the urban formal sector often
end up doing odd jobs in urban areas.
Urbanization in this country is mainly due to acute poverty in rural
areas, rather than due to the economic opportunities in urban areas.
Further, poverty is not uniformly spread in the country. States like
Orissa, Bihar and Madhya Pradesh have high level of poverty and the
levels have not come down significantly in the post-economic reform era.
It is also pertinent to understand that some of the people are
unable to be part of the economic reform and do not have the capacity to
participate in the economic development process. Such groups need
government intervention to ensure that they are not left behind in the
development process and deprived of the benefits because they do not
have the capacity to be part of the global economy. The government needs
to develop safety nets for such groups and try to mainstream them in
the development process. They need welfare measures in the form of
poverty alleviation programmes to ensure that they survive, if not
prosper, in this era of economic reform. Further, the poor are not a
homogeneous population and their capacity to survive the economic reform
varied from one group of poor to another. Especially, those who are
below the poverty line or the poorest among the poor need more
The government of India's poverty alleviation programmes can be
broadly classified under five categories: (a) Self-employment programmes
like the Swarnajayanti Gram Swarojgar Yojana; (b) Wage-employment programmes like the Sampoorna Grameen Rojgar Yojana and the National Rural Employment Guarantee (NREG) scheme; (c) Area development programmes like Drought Prone Area Programmes and the Rashtriya Sam Vikas Yojana; (d) Social security programmes like the National Old Age Pension Scheme; (e) Other programmes like the Indira Awaas Yojana.
Self-employment programmes were introduced at the national level in
the late 1970s. Initially, the programmes were designed to provide
skills, subsidized credit and infrastructure support to small farmers
and agricultural labourers so that they could find new sources of
In the 1980s, the focus of the self-employment programmes was
extended to cover target groups such as scheduled castes and tribes,
women and rural artisans. The coverage also extended to specific areas
such as animal husbandry, forestry and fishery.
The largest of these programmes was the Integrated Rural Development Programme
(IRDP). According to a mid-term appraisal of the Ninth Plan done by the
Planning Commission, the IRDP suffered from several defects including:
sub-critical investment, unviable projects, illiterate and unskilled
beneficiaries with no experience in managing an enterprise, indifferent
delivery of credit by banks, overcrowding of lending in certain projects
such as dairy, under-emphasis on activities like trading, service and
even simple processing, poor targeting and selection of non-poor, rising
indebtedness, and scale of IRDP outstripping capacity of government and
Other self-employment programmes suffered from similar deficiencies.
In 1999, several self-employment programmes were integrated into the Swarnajayanti Gram Swarojgar Yojana
(SGSY). The key feature of the SGSY is that it does not seek to promote
individual economic activities. It seeks to promote self-help groups
that are trained in specific skills so they can formulate
microenterprise proposals. Such projects are based on activities that
are identified for each block on the basis of local resources, skills
and markets. The projects are supported by bank credit and government
While the SGSY is implemented by district rural development agencies
through panchayat samitis, NGOs are expected to play a major role in
the success of the programme.
The first major wage-employment programme was introduced in the
1960s to provide employment to the rural unemployed particularly during
the lean agricultural season.
Subsequently, several wage-employment programmes were launched by
the Central and State governments. The largest of these was the Jawahar Rozgar Yojana (JRY), which was redesigned in 1999 as the Jawahar Gram Samridhhi Yojana (JGSY).
Other notable schemes were: the Employment Assurance Scheme (EAS), and the Employment Guarantee Scheme of the Maharashtra government.
According to a mid-term appraisal of the Ninth Plan done by the
Planning Commission, the JRY suffered from the following defects:
Provided inadequate employment (only 11 days as per concurrent
evaluation); Resources were spread too thin; Violation of
material-labour norms and corruption (fudging of muster rolls); Projects
were executed by contractors who sometimes hired outside labourers at
There were similar deficiencies in the EAS.
In 2001, the JGSY and EAS were merged to form the Sampoorna Grameen Rojgar Yojana
(SGRY). The objective of the scheme is to provide additional wage
employment with food security in rural areas. Beneficiaries are
temporarily employed to build community assets and infrastructure. The
cost of the scheme, which includes the distribution of foodgrain, is
shared by the Central and State governments in a ratio of 87.5:12.5.
In August 2005, the Indian Parliament passed the National Rural Employment Guarantee Act (NREGA), one of independent India’s most ambitious interventions to address rural poverty and empower poor people.
The NREGA follows a set of legally enforceable employment norms. Its
aim is to end food insecurity, empower village communities, and create
useful assets in rural areas. It is based on the assumption that every
adult has a right to basic employment opportunities at the statutory
Under the scheme, one member of every poor rural family is
guaranteed 100 days of work at the minimum wage of Rs 60 a day. All
rural poor are eligible, not just those designated below the poverty
line (BPL). One-third of the beneficiaries must be women. If five or
more children accompany their mothers to any site, the implementing
authority must appoint a woman to look after them on the site.
Panchayats at district, intermediate and village levels will
identify and monitor the project, together with a programme officer.
Social audits of the work will be available at gram sabhas. Work will, as far as possible, be provided within a radius of 5 km.
The work to be undertaken will be public works such as water
harvesting, drought-proofing, micro and macro irrigation works,
renovation of traditional water bodies, flood control barriers and rural
Medical costs necessitated by injuries at work will be borne by the implementing authority.
Area development programmes
Drought Prone Area Programmes (DPAP), Desert Development Programmes
(DDP), Hilly Area Development Programmes and Tribal Area Development
Programmes were introduced in the 1970s to prevent environmental
degradation and provide employment to the poor in these regions.
In the mid-‘90s, the environment management aspect of these
programmes was strengthened by the introduction of watershed development
Currently, several Central government, State government and
non-government watershed development programmes are being implemented.
The government has mooted a “single national initiative” under the
National Watershed Development Projects for Rain-fed Areas (NWDPRA)
programme. A new Department of Land Resources has been created by
merging all area development programmes with the Department of Wasteland
The Tenth Plan has a new scheme called the Rashtriya Sam Vikas Yojana(RSVY) to tackle the problem of extreme deprivation in backward pockets of the country.
Started with an outlay of Rs 2,500 crore for 2002-03, the RSVY aims
to promote focused developmental programmes for backward areas that
would help reduce imbalances, speed up development and help backward
areas overcome poverty. The programme also aims to encourage states to
take up productivity-enhancing reforms.
Social security programmes
Social security programmes were launched, at the national level, in
the 1980s with an old age pension scheme. Currently, there are four
major national social security schemes:
—National Old Age Pension Scheme (NOAPS), which provides a pension
to people above the age of 65 with no source of income or financial
—National Family Benefit Scheme, which provides Rs 10,000 to
families living below the poverty line when their main earning member
—National Maternity Benefit Scheme, which provides Rs 500 to pregnant women of families living below the poverty line.
—Rural Group Insurance Scheme, which provides a maximum life
insurance of Rs 5,000 covering the main earning members of families
living below the poverty line on a group insurance basis; the government
pays half the premium of Rs 50-Rs 70.
The largest of the 'other' programmes is the Indira Awaas Yojana (IAY),
which provides houses free of cost to below the poverty line scheduled
caste and scheduled tribe families living in rural areas. Recently,
several other poverty alleviation programmes have been launched,
including Pradhan Mantri Gramodaya Yojana,
which provides additional funds to States so that they can provide
basic minimum services such as primary health, primary education and
Under the Pradhan Mantri Gramodaya Yojana there are two schemes, Gramin Awas for rural shelter and the Rural Drinking Water Project for water conservation in DPAP and DDP programme areas.
Pradhan Mantri Gram Sadak Yojana,
launched in December 2000, to provide road connectivity to 1.6 lakh
remote habitations with a population of over 500 by the end of the Tenth
Antyodaya Anna Yojana,
launched in December 2001, to provide 25 kg of foodgrain at highly
subsidized rates to 100 million of India's poorest families living below
the poverty line. In 2002, around 24 lakh tonnes of foodgrain were
provided by the central government under this scheme.
The Annapurna Scheme to
provide 10 kg of foodgrain per month free of cost to persons who are
eligible for pension under the NOAPS but haven’t received any.
Swarnajayanti Gram Swarojgar Yojna:
programme was launched in April, 1999. This is a holistic programme
covering all aspects of self employment such as organisation of the poor
into self help groups, training, credit, technology, infrastructure and
The objective of SGSY is to provide sustainable income to the rural
poor. The programme aims at establishing a large number of
micro-enterprises in the rural areas, based upon the potential of the
rural poor. It is envisaged that every family assisted under SGSY will
be brought above the poverty-line with in a period of three years.
This programme covers families below poverty line in rural areas of
the country. Within this target group, special safeguards have been
provided by reserving 50% of benefits for SCs/STs, 40% for women and 3%
for physically handicapped persons. Subject to the availability of the
funds, it is proposed to cover 30% of the rural poor in each block in
the next 5 years.
SGSY is a Centrally Sponsored Scheme and funding is shared by the
Central and State Governments in the ratio of 75:25 respectively.
SGSY is a Credit-cum-Subsidy programme. It covers all aspects of
self-employment, such as organisation of the poor into self-help groups,
training, credit technology, infrastructure and marketing. Efforts
would be made to involve women members in each self-help group. SGSY
lays emphasis on activity clusters. Four-five activities will be
identified for each block with the approval of Panchayat Samities. The Gram sabha will
authenticate the list of families below the poverty line identified in
BPL census. Identification of individual families suitable for each key
activity will be made through a participatory process. Closer attention
will be paid on skill development of the beneficiaries, known as
swarozgaris, and their technology and marketing needs.
Jawahar Gram Samriddhi Yojna:
critical importance of rural infrastructure in the development of
village economy is well known. A number of steps have been initiated by
the Central as well as the State Governments for building the rural
infrastructure. The public works programme have also contributed
significantly in this direction.
Jawahar Gram Samridhi Yojna (JGSY)
is the restructured, streamlined and comprehensive version of the
erstwhile Jawahar Rozagar Yojana. Designed to improve the quality of
life of the poor, JGSY has been launched on 1st April, 1999. The primary
objective of the JGSY is the creation of demand driven community
village infrastructure including durable assets at the village level and
assets to enable the rural poor to increase the opportunities for
sustained employment. The secondary objective is the generation of
supplementary employment for the unemployed poor in the rural areas. The
wage employment under the programme shall be given to Below Poverty
JGSY is implemented entirely at the village Panchayat level. Village
Panchayat is the sole authority for preparation of the Annual Plan and
The programme is implemented as Centrally Sponsored Scheme on cost
sharing basis between the Centre and the State in the ratio of 75:25
The programme is to be implemented by the Village Panchayats with the approval of Gram sabha. No other administrative or technical approval is required.
Indira Aawas Yojna:
is the flagship rural housing scheme which is being implemented by the
Government of India with an aim of providing shelter to the poor below
poverty line. The Government of India has decided that allocation of
funds under IAY will be on the basis of poverty ratio and housing
The objective of IAY is primarily to help construction of new dwelling units as well as conversion of unserviceable kutcha houses into pucca/semi-pucca
by members of SC/STs, freed bonded labourers and also non-SC/ST rural
poor below the poverty line by extending them grant-in-aid.
IAY is a beneficiary-oriented programme aimed at providing houses
for SC/ST households who are victims of atrocities, households headed by
widows/unmarried women and SC/ST households who are below the poverty
line. This scheme has been in effect from 1st April, 1999.
IAY is a Centrally Sponsored Scheme funded on cost sharing basis
between the government of India and the States in the ratio of 75:25
Grant of Rs. 20,000 per unit is provided in the plain areas and Rs.
22,000 in hilly/difficult areas for the construction of a house. For
conversion of a kutcha house into in pucca house, Rs. 10,000 is provided. Sanitary laterines and chulahs are
integral part of the house. In construction/upgradation of the house,
cost effective and environment friendly technologies, materials and
designs are encouraged. The household is allotted in the name of a
female member of beneficiary household.
District Rural Development Agency
(DRDA) has traditionally been the principal organ at the District level
to oversee the implementation of the anti-poverty programmes of the
Ministry of Rural Development. Created originally for implementation of
Integrated Rural Development Programme (IRDP), the DRDAs were
subsequently entrusted with a number of programmes, both of the Central
and State governments. Since inception, the administrative costs of the
DRDA (District Rural Development Agency) were met by setting aside a
part of the allocations for each programme. Of late, the number of
programmes had increased and several programmes have been restructured
with a view to making them more effective. While an indicative staffing
structure was provided to the DRDAs, experience showed that there was no
uniformity in the staffing structure. It is in this context that a new
centrally sponsored scheme—DRDA Administration—was introduced from April
1, 1999, based on the recommendations of an inter-ministerial committee
known as Shankar Committee. The new scheme replaced the earlier
practice of allocating percentage of programme funds to the
The objective of the scheme of DRDA (District Rural Development
Agency) Administration is to strengthen the DRDAs and to make them more
professional and effective. Under the scheme, DRDA is visualised as
specialised agency capable of managing anti-poverty programmes of the
Ministry on the one hand and effectively relate these to the overall
efforts of poverty eradication in the district on the other.
The funding pattern of the programme is in the ratio of 75:25 between the Centre and the States.
The DRDA will continue to watch over and ensure effective
utilisation of the funds intended for anti-poverty programmes. It will
need to develop distinctive capabilities for poverty eradication. It
will perform tasks which are different from Panchayati Raj Institutions
and line departments. The DRDAs would deal only with the anti-poverty
programmes of the Ministry of Rural Development. If DRDAs are to be
entrusted with programmes of other Ministries or those of the State
Governments, it must be ensured that these have a definite anti-poverty
focus. In respect of such States where DRDA does not have a separate
identity and separate accounts.
Basic Minimum Services:
Government of India launched this scheme in 1997 incorporating seven
vital services of importance to common people. The State Government has
opted to provide shelter to shelter-less below poverty line under this
The objective of providing this scheme is to supplement the
constitution of dwelling units for members of SC/ST, freed bonded labour
and also non-SC/ST rural poor below the poverty line by providing them
The Central government provides additional funds for Basic Minimum
Services subject to the condition that the State government will provide
15% of the required funds.
Additional Indira Awas are being constructed with the guidelines analogous to that for the Awas Yojana. The salient features are:
—Rs. 20,000 is provided to the beneficiaries for construction of the
houses in phases. Sanitary latrines and smokeless chulah are integral
part of the houses.
—Houses are allotted in the name of female members of the family or in joint names of both spouses.
—Selection of construction technology, materials and design is left
entirely to the choice of beneficiaries. Contractors, Middlemen or the
Departmental Agencies have no role in the construction of houses.
—Cost effective and environment friendly housing technologies/design and materials are provided.
Drought-Prone Areas Programme:
Drought Prone Areas Programme (DPAP) aims at mitigating the adverse
effects of drought on the production of crops and livestock and
productivity of land, water and human resources. It strives to encourage
restoration of ecological balance and seeks to improve the economic and
social conditions of the poor and the disadvantaged sections of the
DPAP is a people's programme with government assistance. There is a
special arrangement for maintenance of assets and social audit by
Panchayati Raj Institutions. Development of all categories of land
belonging to Gram Panchayats, Government and individuals fall within the
limits of the selected watersheds for development.
Allocation is to be shared equally by the Centre and State
government on 75:25 basis. Watershed community is to contribute for
maintenance of assets created. Utilisation of 50% of allocation under
the Employment Assurance Scheme (EAS) is for the watershed development.
Funds are directly released to Zila Parishads/District Rural Development
Agencies (DRDAs) to sanction projects and release funds to Watershed
Committees and Project Implementation Agencies.
Village community, including self-help/user groups, undertake area
development by planning and implementation of projects on watershed
basis through Watershed Associations and Watershed Committees
constituted from among themselves. The Government supplements their work
by creating social awareness, imparting training and providing
technical support through project implementation agencies.
Credit-cum-Subsidy Scheme for Rural Housing:
were a large number of households in the rural areas which could not be
covered under the IAY, as either they do not fall into the range of
eligibility or due to the limits imposed by the available budget. On the
other hand due to limited repayment capacity, these rural households
cannot take benefit of fully loan based schemes offered by some of the
housing finance institutions. The need of this majority can be met
through a scheme which is part credit and part subsidy based.
The objective of this scheme for rural housing is to facilitate
construction of houses for rural families who have some repayment
capacity. The scheme aims at eradicating shelter-lessness from the rural
area of the country.
The scheme provides shelter to rural families who have not been
coveted under IAY and who are desirous of possessing a house. All rural
households having annual income up to Rs. 32,000 are covered under this
The funds are shared by the Centre and the State in the ratio of 75:25, respectively.
Poor just above the poverty line are entitled to get the benefits of
the scheme. A maximum subsidy of Rs. 10,000 per unit is provided for
the construction of a house. Sanitary latrine and smokeless chulha are
integral part of the house. Cost effective and environment friendly
technologies, materials, designs, etc. are encouraged. Sixty per cent
(60%) of the houses are allocated to SC/ST rural poor.
Appraisal of Anti-poverty programmes
On review of all the poverty alleviation programmes, one gets the
impression that these programmes are not benefiting the poor in terms of
increasing their income. For example, the PDS is plagued with seepage,
corruption, high administrative cost and targeting errors.
Self-employment are better utilized by the non-poor or those who are
above BPL. Wage employment programme is caught in red-tapism and
administrative delays leading to poor utilization of the allocated
funds. All these factors have been used by some economists to argue
against these programmes and to suggest the winding up the programmes.
Looking at purely narrow economic point of view is not the right
approach to poverty alleviation. Poverty does not mean not having enough
income alone. Poverty means not having access to a whole lot of
services like education, health services, water supply, sanitation and
so on. It also means loss of status in the community, exclusion from
certain social functions, and a sense of inferiority in the group or
community. In short, poverty means marginalization of an individual or
household in the community.
There is no denial that poverty alleviation programmes should lead
to high income to the poor, but to come out of the culture of poverty,
one needs to be empowered and also requires access to basic services.
While some of the poverty alleviation programmes may not be performing
well in terms of utilizing the allocated funds and increasing the income
of the poor, these programmes have contributed to the social arena of
poverty. For example, wage employment programme was not very successful
in terms of utilizing the allocated resources and generating additional
employment for the BPL. But this programme has created village level
assets and infrastructure in terms of schools, health centers, roads and
Similarly, Self-help Groups (SHGs) formed by the women has given
them tremendous confidence and empowered them to become entrepreneurs.
Today, SHGs are not only active in creating micro-enterprises but also
they are involved in implementing community programmes like immunization
programmes, literacy programmes and so on. Some of them have empowered
to the level of contesting panchayat elections and become members of
Panchayat Raj Institutions (PRI). Again, there is no denial that all
these cannot be achieved without an increase in income. Therefore, the
economic and social aspects of poverty alleviation are interlinked to
one another. Economic upliftment alone cannot alleviate poverty but it
must lead to social upliftment in terms of access to services,
empowerment and independence. Therefore, the current poverty alleviation
programmes in the country should broaden their focus and goal in
addition to increasing income to achieve the target of removing poverty
from the country.
Also, involvement of the local communities is key to the success of
poverty alleviation programmes. In the absence of community involvement,
the programmes are plagued with bureaucratic muddle and corruption at
every level. Unfortunately, States still lag behind handing over these
programmes to Panchayati Raj Institutions (PRIs). While PRIs are created
in most of the States and elections are held, these institutions are
not given the financial resources, administrative powers and the
capacity to run programmes. State governments still hold the financial
powers and the PRI is not in a position to plan and decide based on
their needs. The administrative machinery of the PRI is very week to
carry out these national level programmes. Also, the PRI does not have
the capacity to handle resources and technical capacity to implement
programmes. These issues have to be addressed immediately to strengthen
PRI to implement poverty alleviation programmes.
Apart from decentralization and community involvement, participation
of the poor in the programme that affects their welfare, is important.
Some of the self-employment schemes failed to take off because no effort
was made to involve the poor in identifying the skills which they can
learn easily. Some of the skills imbibed may not have job potential in
the community. On the positive side, micro-enterprise under the
self-employment programme was successful because of the role of SHGs.
The SHG members actively participated in the whole process and decided
for themselves for the kind of skills they wanted to learn and also the
kind of credit they needed from the bank to start the microenterprise.
Many well-intentioned programmes fail to take off because of lack of
understanding of the ground realities due to lack of participation of
At the macro-level, there is a need to co-ordinate a myriad of
poverty alleviation programmes of the central government and the State
governments. The transfer of central funds to the States for different
programmes should be efficient. Currently, such funds and goods like
foodgrains are not fully utilized by the States. There is a need to
strengthen the financial management capacity of certain States to use
the funds efficiently. These are the States where the percentage of the
BPL is more than the national average.
Poverty is more of social marginalization of an individual,
household or group in the community/society rather than inadequacy of
income to fulfill the basic needs. Indeed, inadequate income is one of
the factors of marginalization, but not the sole factor. The poverty
alleviation programmes should not aim merely to increase the income
level of individual, household or group, but mainstreaming marginalized
in the development process of the country.