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04/12/2023 [email protected] 2
Outline of Presentation
Motivation
• Macro dimension: Estimates, Resource Imperatives & Choice of Development Strategies
• Micro dimension: Programmes for Poverty Alleviation subject to Macro Constraints
• Development Puzzles and Policy Dilemmas
Conceptualization
Evaluation
• Food Security Oriented Strategy: A Policy Imperative
04/12/2023 [email protected] 3
Policy Imperative
• Colonial rule & consequences: – Only Law & order & Tax collection– No Development Expenditure– Abysmal living conditions:
• Stagnant real income and food production (first five decades of 20th Century)
• High illiteracy (84%); mortality rate (27.4 per 1000)
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Conceptualization
• Evolution constrained by information base• Macro Perspective with micro foundations:• Pre-Independence Era:
• (i) Naoroji (1901)‘Poverty and Un-British Rural India’:• Income generated insufficient to meet the
‘necessary consumption’ of the population• (ii) National Planning Committee (1938):
Emphasis on multiple dimensions
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National Planning Committee (1938)
Ten-year Plan Targets for Multiple dimensions:
i. Balanced Diet of 2400-2800 kilo calories per adult worker;
ii. Improvement in clothing from 15 yards to at least 30 yards per capita per annum;
iii. Housing: at least 10 square feet per capita;
iv. Liquidation of illiteracy;
v. Increase in life expectancy; and
vi. Access to adequate medical facilities.
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A Decade of Planning: Outcome Evaluation• Income Distribution Committee (1962) • Working Group on Poverty:
– Poverty line: Rs 20 per capita per month at 1960/61 prices.– Provide for a balanced diet as per the Nutrition Advisory
Committee of the Indian Council of Medical research.– Excluded expenditure on health & education to be provided
by the State.– To get food to meet minimum energy requirements for an
active and healthy life and also minimum clothing and shelter.
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Conceptualization: Post Independence era
• Official Indian definition of ‘Poor’: – “Those whose per capita consumption expenditure lies
below the midpoint of the monthly per capita expenditure class having a per capita daily calorie intake of 2400 calories in rural areas and 2100 in urban”
– Food (cereals) - a major source (85%) of calories; hence, emphasis on food
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Food Energy Intake Method
Food Energy Intake
Household Consumer Expenditure
Min Calorie Intake
( 2400 Kcal.)
PL
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Expert Group (1993):
• Endorsed the poverty norm anchored in a minimum calorie requirement
• Distinguished between issues of under-nutrition and measurement of poverty
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Incidence of Poverty (million): 1983-2004
1983 1993 2004
251.96244.03
220.92
70.94 76.34 80.80
Rural Urban
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Conceptualization: New Millennium
• Economic Reform Era: Bleeding rural India• Policy response: Expert Committees• Poverty line:
– Delinked from the calorie norm– Social perception of deprivation of basic needs– Validates with reference to calorie norm– Provides for a budget share of 54% for food– Poverty estimate of 37% - a case for Right to
Food Act
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Policy Choices
Composition of Rural Households (1983)
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40.72
11.7
30.7
6.57 10.31
Self Eemploy AgSelf Empl NonAgAgr LabourOther LabourOther Rural
Composition of Rural Unemployment (1983)
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16.32
8.5
59.54
10.215.43
Self Eemploy AgSelf Empl NonAgAgr LabourOther LabourOther Rural
Composition of Rural Poor Households (1983)
04/12/2023 [email protected]
32.04
10.2945.59
5.996.17
Self Eemploy AgSelf Empl NonAgAgr LabourOther LabourOther Rural
Incidence of Poverty across Households Type (1983)
04/12/2023 [email protected]
Self Eemploy Ag Self Empl NonAg Agr Labour Other Labour Other Rural All 0
5
10
15
20
25
30
35
40
45
50
24.08
26.93
45.45
27.93
18.32
30.62
Food Budget Share (%) (1972/73)
04/12/2023 [email protected]
0-13 13-15 15-18 18-21 21-24 24-28 28-34 34-43 43-55 55-75 75-100 100-150
150-200
200+ All0
10
20
30
40
50
60
70
80
90
Illiteracy (%) Across Expenditure Classes (1983)
04/12/2023 [email protected]
0-30 30-40 40-50 50-60 60-70 70-85 85-100 100-125 125-150 150-200 200-250 250-300 300+ All0
10
20
30
40
50
60
70
80
90
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Development Strategy
• Growth with Redistributive Justice:– Planning production by physical controls– Food insecure poor; hence, emphasis on food
production & income generation
• Three-pronged strategy:– Macro: Increase food availability through
production (input subsidies for farmers) & imports– Meso: Food distribution programmes (PDS) (largely
Urban sector to promote eco devt)– Micro: Income generating programmes
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Strategy for Agricultural Growth
• Green Revolution:– (i) Price support for output; (ii) input price subsidy; &
(iii) PDS– Change in food grain production composition =>
increase in cost of calories – Increase in regional disparities– Increase in price dispersion worsened food security in
remote rural areas => inevitability of PDS – Targeting Errors in income generating programmes
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Economic Reforms
• Adjustment with a Human Face• Options for PDS reform – dismantle; mean-based
targeting; commodity-base targeting; food stamps/cash transfers
• PDS evaluation – Targeting a Penalty on the Food Insecure
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Identification for Targeting
• Universal vs. Targeted Programmes• Universal: Self-selection of beneficiaries• Targeted: Economic status of the beneficiary
– Targeted PDS with respect to • (i) occupational; • (ii) Household ; & • (iii) Social characteristics
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BPL Census
• Purpose: Classify rural households into BPL & APL categories
• Criterion:– Census 1992: Income per household (RS 11000 / annum)– Census 1997: Two-stage procedure
• 1st : Assets, durables & income• 2nd: Consumer expenditure (Poverty line)
– Census 2002:• Indicators of quality of life & scores
– Census 2009: Three Step procedure
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Development Puzzles & Policy Dilemmas
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Fig. 1: Rural Poverty
0
10
20
30
40
50
60
70
1951
-52
53-5
4
55-5
6
57-5
8
59-6
0
61-6
2
63-6
4
65-6
6
67-6
8
69-7
0
71-7
2
73-7
4
75-7
6
77-7
8
79-8
0
81-8
2
83-8
4
85-8
6
87-8
8
89-9
019
91
93-9
4
Year
He
ad
cou
nt
rati
o (
pe
r ce
nt)
Source: World Bank (1997)
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Fig. 2: Monthly Per-Capita Consumer Expenditure by the Poorest Decile Groups and Total Population: All-India Rural
0
5
10
15
20
25
301
96
0-6
1
61
-62
62
-63
63
-64
64
-65
65
-66
66
-67
67
-68
68
-69
69
-70
70
-71
71
-72
72
-73
73
-74
74
-75
75
-76
76
-77
77
-78
78
-79
79
-80
80
-81
81
-82
19
83
83
-84
84
-85
85
-86
86
-87
87
-88
88
-89
89
-90
90
-91
19
92
93
-94
93
-94
Year
Rs
at
1960
-61
pri
ces
Poorest Decile Group (PDG) 2nd PDG 3rd PDG 4th PDG 5th PDG Total Rural
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Average MPCE in different States 2004-05
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Average MPCE in different States 2004-05
Nutrition based Poverty Trap?Macro evidence
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Incidence of Calorie Deficiency (%)Norms: 2400 Kcal (Rural); 2100 Kcal (Urban)
1983 1987/88 1993/94 1999/00 2004/050
10
20
30
40
50
60
70
80
66.1 65.9
71.174.2
79.8
60.557.1 58.1 58.2
63.964.8 63.9
67.870.1
75.8
Rural
Urban
All India
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Per Capita Calorie Intake by Deceile Group: All India Rural
0
500
1000
1500
2000
2500
3000
3500
4000
4500
1972/73 1983 1993/94 1999/00 2004/05
Year
Kca
ls pe
r diem
Decile Group I II III IV V VI VII VIII IX X Norm
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Per Capita Calorie Intake by Decile Group: All India Urban
0
500
1000
1500
2000
2500
3000
3500
4000
1972/73 1983 1993/94 1999/00 2004/05
Year
Kca
ls pe
r diem
Decile Group I II III IV V VI VII VIII IX X Norm
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Measures of Health Status
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Infant Mortality Rate
Rural Urban All India0
10
20
30
40
50
60
70
80
90 85
56
79
73
47
68
62
42
57
NFHS-1NFHS-2NFHS-3
(Deaths at age 0-11 months per 1,000 live births)
NFHS-3, India, 2005-06
Child Nutritional Status
Stunted Wasted Underweight0
10
20
30
40
50
60
51
20
4345
23
40
NFHS-2NFHS-3
(% children age under 3 years)
NFHS-3, India, 2005-0604/12/2023 [email protected]
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Growth & Poverty Reduction: At what Cost?
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