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By Dr Sudhirendar Sharma Do loans actually help ease poverty? If one were to go by the results of the World Bank-supported District Poverty Initiatives Project in Rajasthan, it would seem not
The desperation is evident. With two years remaining and some 78% of the targeted 7,000 villages yet to be covered, the World Bank-supported District Poverty Initiatives Project (DPIP) in Rajasthan isn't on target. Tayaab Hussain, Rajasthan's minister for rural development, is a worried man, and so is the project staff. Operational since 2000, the Rs 643 crore project covers seven selected districts in the state, and aims to lift 350,000 BPL (below the poverty line) families out of abject poverty. The state government is contributing 15% of the total project cost against a World Bank loan of Rs 518. 25 crore, payable over an extended period of roughly 20 years. The project's anti-poverty recipe is simple: a facilitator will nag the community till they form village-level `common interest groups' of 18-20 people. He will urge the groups to come up with a viable income-generation proposal, land-based or otherwise. Meanwhile, the project bureaucracy will monitor all that's happening on the ground. Everything seems perfect, but the delivery mechanism doesn't seem to be in place. The project still has to garner support from the required number of non-governmental organisations to mobilise communities and set them on the developmental course. Things are so desperate that any organisation that toes the dotted lines of the project will do. This desperate search for project-implementing partners clearly reflects the inability of the government's rural development department to service the poor. The fate of districts other than the seven being covered under the project seems obvious. But that isn't the concern of non-government organisations that seek sustenance opportunities through such projects. Tragically, it is the poor who bear the brunt both ways. Evidence across projects indicates that the poor are driven into a world of income-generating illusions. From poultry to pottery, and from carpet-weaving to leather works, development projects have become the graveyard of income-generating activities. And yet the same mistakes are repeated again and again. It's no surprise, therefore, that Baran is one of the districts in which the poverty initiative project has been in progress. This district in Rajasthan shot into prominence following several controversial starvation deaths. Whether or not project intervention and the starvation deaths had any correlation would be a matter for investigation. But the project doesn't seem to have made a deep enough impact. The World Bank poverty initiative project in Rajasthan is just one of several such projects that are struggling to develop benchmarks for poverty alleviation in the country. Supposedly demand-driven and participatory in nature, such poverty-alleviation projects have a similar history chart. Read one and you've read them all. The crucial question remains: Can loans help eradicate poverty? Non-government agencies have never debated this issue; the implications of loans are never discussed with the beneficiaries. In fact, these so-called `participatory' and `demand-responsive' projects are often conceived without the consent and participation of the intended beneficiaries. Consequently, the targeted communities are no better than guinea pigs, ready for a new approach or methodology to be tested on them. No wonder then that the output of such projects diminishes as soon as the project ceases. Failures notwithstanding, governments are ever eager to raise loans to woo the poor electorate. No politician ever reveals the true implications of a loan and the impact it might have on the poor. Thanks to continuous borrowing, the aggregate outstanding loan (both short and long-term) burden on the country stands at a staggering US$ 100 billion. Though the government will only be able to repay 2% of the outstanding debt during the current year, new loans are being realised with increased frequency. For instance, to complete a rural roads project, the government is seeking support to the tune of Rs 60,000 crore from the World Bank and the Asian Development Bank. Another debt is on the cards! While announcing the much-hyped prime minister's rural road programmes, the government did not consider it wise to disclose how it planned to raise funds for the programme, or its repayment strategy. Instead, there were accolades for initiating the project, though in effect it plunges the country into further debt. Planners and politicians must be made to understand that poverty is not due to lack of cash, but lack of control over resources and the decision-making process. For millions of people who live in what is called a biomass-based subsistence economy, it is the oppressive non-monetary policies that need to be made more people-friendly if the issue of poverty has to be seriously addressed. (Dr Sudhirendar Sharma is a water expert and a development analyst attached to the New Delhi-based Ecological Foundation. He may be reached at
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This article first appeared in the Deccan Herald) InfoChange News & Features, February 2003
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