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Poverty : Background & Perspective

 By Mari Marcel Thekaekara

"When I see it I know it," a US Supreme Court judge once said cryptically about obscenity. It is the same with poverty. When all the number-crunching is done, the lines of poverty defined and redefined, poverty is about the adivasi starving in Bolangir or Kalahandi, the widow of an Andhra Pradesh weaver driven to suicide, the drought-stricken in Rajasthan. Their poverty can only be alleviated if there is a redistribution of assets, an even and rapid spread of healthcare and education, and the creation of sustainable livelihoods

Poverty over the ages / Income poverty / Definition of poverty and the poverty line / Who are the real poor? / Gender and poverty / Indian states: Contrasts in poverty levels / Reforms and structural adjustments / Why things have not changed / Poverty eradication by 2005? / Where have we failed?

In 2008, with the hype of 60 years of Independence fading, the bottom line remains the same. In spite of the global rhetoric about India’s spectacular economic progress, in spite of the smug, almost gloating, self satisfaction about its emergent super-power-to-be status, its poor - the majority of its population - still remain in abject, unacceptably obscene levels of poverty.

Trying to make sense of the varying figures on poverty is a difficult business. Official estimates themselves differ. Six years ago, the Planning Commission, pro-liberalisation and eager to bring down the number of poor in India, claimed that just 19.3 per cent of our poor are below the poverty line. According to India’s first Social Development Report, published in 2006, 26 per cent, or about 260 million Indians (193 million in rural areas and 67 million in urban areas) are still below the poverty line. However, if we consider the Indian Council of Medical Research (ICMR) 1981 prescription that 2,400 calories are needed for light work, 2,800 for moderate work and 3,900 calories for heavy work, then the poverty ratios are much higher.

The poverty debate has two sides. The pro-liberalisation, India-is-an-economic-powerhouse lobby states that economic growth brought about by the '90s liberalisation reforms has led to a decrease in poverty. The opposite view is that so-called economic growth has led to an inflated middle class and an elite which is wealthy beyond words, leaving the poorest of the poor worse off than they were a decade ago. Both sides put forward convincing arguments to support their case.

However, in the war of statistics and semantics, someone has been left out. That someone is the faceless person at the bottom-most rung of our economy – the starving adivasi, the suicidal weaver’s widow, the desperate dalit. Does it bring them any consolation to know they are part of the bottom-most 9 per cent or 26 per cent? There is an enormous preoccupation with number-crunching, figures and statistics, which are notoriously easy to manipulate to present the required picture. It would be better if we got on with the job of feeding our hungry.


Was it always like this? Every literary tradition has quotations like "the poor will always be with us". The question is, were they always with us? We have historical accounts of our great and glorious past, as in the reign of Ashoka or the prosperous Maurya period where the poor were supposedly looked after. However, the only societies that practised egalitarianism and were economically homogeneous to a large extent were adivasi societies. This was especially true among hunter-gatherer tribes where there was no tradition of hoarding. Wealth, in the form of game hunted, was distributed equally. Hoarding and storing treasures, creating wealth to be amassed and passed on to heirs was the next step in settled societies.

Pre-modern Indian society was feudal and therefore inherently unequal. But an even more oppressive system began with the introduction of the Permanent Land Settlement Act by Lord Cornwallis in 1793, by which individuals loyal to the British were awarded huge tracts of land. They were turned into landlords or zamindars overnight, provided they collected revenue for the British Crown. This was the beginning of the zamindari system and life for the peasantry became infinitely worse. It also laid the foundation for the huge discrepancies in our economic system and an inequitable, exploitative pattern of land distribution, which kept the poor perennially oppressed.

Under the British, there were unprecedented famines, the last being the Great Bengal Famine in 1943 when foodgrain and wealth were diverted to the war effort even as people died slow, painful, tortuous deaths of starvation on the streets. It left a lasting and sobering impact on Indian leaders fighting for independence. Imbued with the spirit of patriotism, the founders of the nation produced a brilliant Constitution that held out a vision of justice and freedom for all. Nehru's words rang out passionately from the ramparts of the Red Fort on the eve of Independence. He sought "the ending of poverty and ignorance and disease and inequality of opportunity." A finer Constitution could not have been written.

So, in 1947, the Indian nation was born with the mission to eradicate poverty and bring prosperity to its people. How far have we succeeded, 60 years down the line?

In 2008, we are deluged by news of various state governments falling over backwards to abolish land ceiling legislations in order to hand over obscenely large tracts of land to SEZs or Special Economic Zones in order to grab business opportunities for their states. According to former Supreme Court Justice, Krishna Iyer, this is illegal and unconstitutional. We introduced land ceilings to move away from the feudal zamindari system towards equity and justice. Now, even an avowedly Marxist state like West Bengal is unashamedly shooting peasants (quite literally) to embrace capitalist multinational corporations (MNCs) with open arms. The MNCs who grab land offered to them at throwaway prices, displace the rural and urban poor in doing so. But this warped scenario is considered progress, helping the economy to gallop forward.

The fact that over 70% of our population depends on farming is ignored by our planners. The fact that MNCs employ fewer people than they displace is also disregarded. The displacement causes myriad problems, leaving the rural poor unemployed and starving, forcing them to migrate to cities where the pavement dwellings, slums and shanty towns they are forced to create are considered a blot on the urban landscape.


Poverty is declining but inequality is on the rise, says the International Monetary Fund. While poverty levels have shown a decline, there is huge disparity among the social classes with the percentage of the poor among the Scheduled Tribes being 43.8 per cent, Scheduled Castes 36.2 per cent, and Other Backward Classes 21 per cent, according to the Social Development Report 2006.

The proportion of income poor in India has fluctuated widely in the past, but the trend is downward. Trends in income poverty are far from uniform. They can be roughly divided into four periods.

Between 1951 and the mid-1970s:Income poverty reduction shows no discernible trend. In 1951, 47 per cent of India's rural population was below the poverty line. The proportion went up to 64 per cent in 1954-55; it came down to 45 per cent in 1960-61 but in 1977-78, it went up again to 51 per cent.

Mid-1970s to end-1980s: Income poverty declined significantly between the mid-1970s and the end of the 1980s. The decline was more pronounced between 1977-78 and 1986-87, with rural income poverty declining from 51 per cent to 39 per cent. It went down further to 34 per cent by 1989-90. Urban income poverty went down from 41 per cent in 1977-78 to 34 per cent in 1986-87, and further to 33 per cent in 1989-90.

1991 to 1995: This is the post-economic reform period that has witnessed progress and setbacks. Rural income poverty increased from 34 per cent in 1989-90 to 43 per cent in 1992 and then fell to 37 per cent in 1993-94. Urban income poverty went up from 33.4 per cent in 1989-90 to 33.7 per cent in 1992 and declined to 31 per cent in 1993-94.

1995 to 2007: In the last 12 years, from 1995 to 2007, India’s growth rate has been over 6.5 per cent. During the last four years, India has sustained an unprecedented average growth rate of over 8 per cent, making it the world's fourth-largest economy. India's middle class is already larger than the entire population of the United States. In 1991, Indians purchased 150,000 automobiles; in 2008, the number of cars on the road is estimated to be between 10 and 13 million.

Yet, despite this growth, 260 million people live below the poverty line, 150 million people live in slums, and one out of three of the world's malnourished children live in India. The world's largest slum, all 432 acres of it, is located in Dharavi, Mumbai;

The following table shows the overall poverty in India over various years given by the Tenth Five Year Plan.


Poverty Ratio (Per cent)

Number Of Poor (Millions)

























































It is ironic that an internationally envied IT industry, together with a rash of dish antennae and cyber cafes thrive in India alongside hovels with no electricity, shameful literacy figures, appalling malnutrition and maternal and child mortality rates rivalled only by Bangladesh in South Asia.

Among the SAARC countries, India has the worst figures, with the exception of Bangladesh, in the status of underweight children under age five. In 1975, 71 per cent of children were undernourished. From 1990-96, the figure stood at 53 per cent. Ten years later in 2007, it was down to 47 per cent. Compared to neighbouring countries like China, these figures are atrocious. Only 26 per cent of China's children were underweight in 1975; in 1990-96, the figure had come down to 16 per cent, and in 2004, to 8 per cent in the 0-5 age group. (‘Prevalence of Child Poverty in India and China’, S Chandrasekhar & M H Suryanarayana, paper presented at the session on ‘Demographic Billionaires: India and China Compared’, Annual Meetings of Population Association of America, 2007).

The UN Special Rapporteur on the Right to Food, Jean Ziegler, visited India in August 2006. His report to the UN stated that "levels of malnutrition and poverty remain very high and food insecurity has increased since the 1990s." He found that India had "one of the highest levels of child malnutrition in the world, higher than most countries in Sub-Saharan Africa". He calculated that 80 per cent of the Indian population was living on less than two dollars per day. He saw signs of increased concentration of land ownership and increased landlessness. He reported over 250 cases of starvation deaths from many parts of India and in particular from the tea gardens in West Bengal. He found hunger rampant among the dalits and tribals. He concluded that “India was not currently on track to achieve the goals set in relation to malnutrition and under nourishment” in the UN's Millennium Development Goals.

Until a few years ago, India was self sufficient in food grains and the complaint was that the surplus stocks were being eaten by rats in the Food Corporation of India godowns. Even then, there were reports of starvation deaths in Orissa, Bihar and drought-stricken Rajasthan. The rate of growth of foodgrain production decelerated to 1.2% during 1990-2007, lower than the annual rate of growth of population, which averaged 1.9%. The per capita availability of cereals and pulses, therefore, witnessed a decline during this period. Consumption of cereals declined from a peak of 468 grams per capita per day in 1990-91 to 412 grams per capita per day in 2005-06 -- a decline of 13% during this period.

The overall production of foodgrain was estimated to be 217.3 million tonnes in 2006-07, an increase of 4.2% over 2005-06, but lower than the target by 2.7 million tonnes (1.2%). The overall foodgrain production in 2007-08 is expected to fall short of the target by 2.2 million tonnes, though it is expected to be 10.1 million tonnes higher compared to the second estimates for 2006-07.

Self-sufficiency in food may no longer be an aim of the government. Apart from large tracts of agricultural land being given over to Special Economic Zones (SEZs) or for the rapacious expansion of cities (this somehow constitutes ‘common good’ and is excuse enough to pauperise and evict small farmers from their centuries-old land holdings) there is another threat to food security. In an alarming new trend, land is being given up to bio-diesel production, with the fight to prevent global warming providing a new justification for converting food farms into fuel ones. Additionally, the burgeoning cost of food production renders it financially unviable except in areas where wage labour is extremely low. A third factor threatening food production is the sky-rocketing price of land around cities and small towns that has created a thriving real estate industry.


One of the earliest absolute definitions of poverty was that of Dandekar-Rath, who defined it as an expenditure of Rs 15 per capita per month for the Indian rural population at 1960-61 prices, and Rs 18 per capita per month for the urban population.

The Government of India set up an Expert Group to suggest a methodology to measure poverty. The group submitted its report in 1993 and suggested a new poverty line: Rs 49 and Rs 56, for rural and urban areas respectively at 1973-74 prices. This line was higher in real terms by approximately 15 per cent.

The availability of an absolute poverty line allows comparisons across countries. But what should an international poverty line be? Over the last decade, most comparisons of international poverty have been made by the World Bank, and the definition used is a purchasing power poverty line of $1 per capita per day, at 1985 prices. The most recent publication of the World Bank, however, reports a new international poverty line of $1.08 per capita per day, at 1993 prices. This new line marks a historical first in that it reduces the original poverty line by approximately 15 per cent – that is, the new line of $1.08, at 1993 prices is equivalent to $ 0.82 at 1985 prices. The reasoning behind this large reduction in the absolute poverty line is not transparent, and is debatable.

Before getting into the growth and poverty reduction debate, it is necessary to understand that mysterious thing called the poverty line. The most widely used measure of poverty in India was the 'head-count ratio'. This is a measure of income poverty. In the early 1960s, the Government of India appointed a special working group of eminent economists to assess the level of poverty in India. The experts came up with a definition of the Poverty Line. This was based on a nationally desirable minimum level of consumption expenditure based on a standard balanced diet prescribed by the Nutrition Advisory Committee. In other words, any family who could not afford to buy a rudimentary food basket, which when consumed yielded a minimum level of calories, was considered poor. They declared that 50 per cent of Indians lived below the poverty line. And so began the war to push this figure down to preserve the country's izzat (honour).

However, a poverty line thus defined is something of a destitution line since it takes into account only the expenditure required for subsistence food, leaving out everything else needed for a minimally decent living, such as basic housing, clothing, education and health services. The view that these should be taken into account has gained weight since Amartya Sen's Nobel Prize. Sen succeeded in bringing into economics and the poverty debate a modicum of moral philosophy, which, until now, had been regarded as non-scientific because it was stated by lesser luminaries.

Differences in methodologies and assumptions can lead to quite different estimates. Until recently, for example, there were two sets of poverty line estimates for India using the same criteria of minimum calorie requirements. In 1993-94, according to the Planning Commission, only 19 per cent of India's population was below the poverty line. This was the 'official' estimate. Estimates based on consumer expenditure surveys carried out regularly by the National Sample Survey Organisation (NSSO), however, placed the proportion of India's population below the poverty line, at 36 per cent. In February 1997, the Government of India accepted the recommendations of the Expert Group on Estimation of Proportion and Number of Poor (1993), which rejected the adjustments made by the Planning Commission to arrive at estimates of poverty. As a result, the official estimate of India's population below the poverty line was 35 per cent in 1993-94. Serious economists, those concerned with more than mere academic exercises and statistics, will dispute most official government figures. Economist Jaya Mehta’s work illustrates this quite clearly. (

The head-count ratio is computed on the basis of NSS data on consumption expenditure. People with an income below the poverty line are 'poor' and the proportion of the poor to the aggregate population is the head-count ratio.

Because of our alarming population rise, the absolute numbers continue to spiral even while percentages reflect a downward trend. So, the poor doubled from 170 million in 1951 to an estimated 301 million in 2007.

However, the India Shining economists continue to attempt to reduce the numbers of India’s poor in a pathetic attempt at white-washing reality. This, in spite of Amartya Sen’s much publicised Human Development Index. Mohan Gurusamy and Ronald J Abraham of the Centre for Policy Alternatives point out in a paper that “the poverty line in India measures only the most basic calorie intake, recording not nutrition but only the satiation of hunger. At present the poverty line stands at Rs 368 and Rs 559 per person per month for rural and urban areas respectively, just about enough to buy 650 grams of foodgrains every day. A nutritious diet itself would cost around Rs 573 per capita per month, let alone the cost of securing other basic needs. When such an inclusive measure of poverty is used, as many as 68-84 per cent of Indians would qualify as poor.”

While even the Planning Commission recognises the need to substantially redefine the poverty line, the official reluctance to do so appears to be linked to the mood to contribute to the ‘all’s getting better, India is Shining’ mantra which has been advertised in high places at considerable cost. Despite a change of government, the country is caught up in a euphoric “we have the worlds richest billionaires syndrome”, which continues to downplay the poverty in the country, choosing to focus on our achievements instead. The Centre for Policy Alternatives has attempted to outline a new poverty line using the Cost of Basic Needs (CBN) approach to set norms for all basic needs and then attribute a cost to achieving that norm. It has derived a new poverty line by adding up these costs. This is a more inclusive definition than the calorie-based poverty line. (See ‘The poverty line is a starvation line’)


In India, of our famous one billion people, 260 million are officially below the poverty line. There are not many poor people who earn more than a dollar a day. This figure means nothing because poverty is comparative.

In India, poverty is hunger. Real hunger. Never having even three basic meals a day. Poverty is hearing your children cry themselves to sleep because there is no rice and dal or a few chappatis to give them. Poverty is lack of shelter. In an urban area it might be fear of a slumlord. In a rural area it could be a creditor, the forest department waiting to evict you, or an alcoholic husband signing away the one fragment of land you live on, to drink his last drink. Poverty is being sick and not being able to afford a doctor. Poverty is not being able to send your child to school and not being able to read. Poverty is not having a job and insecurity and fear about the future. Poverty is living one day at a time. Poverty is watching your child die a senseless, needless death from malnutrition or diarrhoea brought on by unsafe drinking water. Poverty is powerlessness, lack of representation and lack of freedom. Poverty is shrinking from the contempt of others merely because you were born you.


In the last decade and especially since the UN Conference on Women in Beijing (1994), it has been accepted that almost everywhere in the developing world, women fare worse than men on most social indicators. Because of sociological factors, a woman will feed her husband first, then her kids and in a semi-starvation scenario, eat even less than the others in the family. A Gender-related Development Index (GDI) was therefore formulated with several criteria to chart the progress of women in the poverty scenario.

The Gender-related Development Index measures achievements in the same dimensions and variables as the Human Development Index (HDI), but captures inequalities in achievement between women and men. It is simply the HDI adjusted downward for gender inequality. The greater the gender disparity in basic human development, the lower a country's GDI compared with its HDI.

The Gender Empowerment Measure reveals whether women can take active part in economic and political life. It focuses on participation, measuring gender inequality in key areas of economic and political participation and decision-making. It tracks the percentage of women in parliament, among administrators and managers and among professional and technical workers – and women's earned income share as a percentage of men's. Differing from the GDI, it exposes inequality in opportunities in selected areas.

Here is what the UNDP Human Development Report 2007 has to say: "A computation of the Gender-related Development Index (GDI) for Indian states reveals not only the low levels of human development and the extent of gender inequalities within India, but more importantly, it provides a measure of how badly Indian states are doing vis-à-vis other nations of the world. At the top of the list of Indian states is Kerala with a GDI value of 0.597. Uttar Pradesh is at the bottom with a GDI value of 0.310. Looked at differently, the GDI value for Uttar Pradesh is only half that of Kerala. There are only 13 countries in the world with lower GDI values than Bihar and Uttar Pradesh. Twice as many people live in Uttar Pradesh and Bihar (combined population of 225 million in 1991) in such abysmal conditions of human deprivation than in the 13 countries that had lower GDI values."

The feminisation of poverty needs an entire chapter to itself. The feminisation of poverty has been linked to, first, a perceived increase in the proportion of female-headed households (FHHs) and second, the rise of female participation in low return urban informal sector activities (

In India, the displacement of the rural poor due to lack of investment in agriculture and in the rural areas has led to mass migration. Women are left behind to manage the homestead farms and to look after the children and old people. There are huge social costs. There is a total breakdown of the fabric of village society when migration happens. Men living in urban slums take to drinking, gambling and visiting sex workers and\or abandoning their families completely.

Women are the hardest hit by globalisation. They are the first to be sacked when mechanisation takes place. They bear the brunt of the economic as well as the social fall out of migration, starvation and unemployment.

For over a decade, microfinance was viewed as the solution to poverty. Many microfinance schemes have a clear focus on women. This is probably because research shows that women are more reliable and have higher payback ratios. Moreover, women use a more substantial part of their income for health and education of their children (Pitt and Khadker 1998). Thus, women play a very important role in reducing poverty within households. However, the critics argue that often women are forced to hand over the loan to men, who subsequently use the loan for their own purposes. This may lead to an additional burden for women if they are held responsible for the repayment (Goetz and Gupta 1996).

In 2005, my husband Stan and I met Mohammad Yunus, the father of microfinance, at the Skoll World Forum in Oxford just before he was awarded the Nobel Prize. He readily agreed in a private interview that microfinance had been abused and misused by people all over the world, India being the biggest culprit. He had not intended for it to be subverted and used by NGOs and INGOs to fund themselves while charging exorbitant interest to poor women without entrepreneurial skills.

The downside of microfinance has been exposed repeatedly. Analyses have revealed that the loans usually finance some type of traditional ‘women’s work’ (such as papad-making or weaving and sewing) which is not seen as fit for men to do. Activists in Rajasthan have demonstrated how women take loans from village moneylenders at exorbitant rates to pay off loans from SHGs. Another problem is the capture of the loans by male relatives. In fact, the chances of a female-headed enterprise succeeding at all are often quite small in situations where women do not have access to, leave aside control of, markets. (Read more on microfinance here:

The gains of microfinance are more social than economic. Women, even traditionally veiled, house-bound ones, have been allowed out of the house because they can bring in money. Their confidence has grown and the emergence of women’s self help groups has often given them freedom, mobility and status.

What is rarely computed in poverty studies is the total effect of poverty on women’s status in general. Poverty is the main cause of the trafficking of women. I am haunted by a 17-year-old girl, a sex worker in a Kolkata brothel. She looked innocent and untouched. I asked her if someone had tricked or coerced her into the trade. “No,” she replied, “but my parents and little brothers and sisters were starving. So when the agents said I could feed them if I came for this work, I agreed. Could I watch my family die?” Her eyes were filled with tears. An image of poverty that will haunt me forever.

India is now one of the biggest centres for trafficked women. Every disaster, natural or man-made, makes more women vulnerable. This includes migration to urban slums, construction work in the building industry and factory work. There are huge, immeasurably harmful social costs which impact most lethally on women when the fabric of their traditional village society is destroyed and they are left in an urban vacuum.

While Haryana and Punjab are viewed as prosperous Indian states, the decades of female abortion and infanticide have resulted in an acute shortage of women of marriageable age. Poverty stricken women from as far east as Orissa, Bengal and Bihar are being “bought” as brides and often have to “service” all the men in the family. The state of Kerala, lauded for its progress on the economic, health and literacy fronts, is a state where women cannot walk down the street alone without being subject to filthy, sexually explicit remarks. It has one of the worst records for sexual harassment of women. This is rarely mentioned when the state is cited as worthy of emulation. Poverty of environment, and education, as opposed to mere literacy is not taken into account at all.

The prevalence of HIV/AIDS has only recently been recognised by the government of India, which adhered to a policy of denial for a very long time. Here, again, women are hit hardest. Many women are infected and then left widowed and destitute. Vulnerable and unable to feed their children, they are in a desperate condition.

The average HIV prevalence among women attending antenatal clinics in India is 0.88 per cent. Much higher rates are found among people attending sexually transmitted disease clinics (5.66 per cent), female sex workers (8.44 per cent), injecting drug users (10.16 per cent) (


Among the states, Punjab has the lowest incidence of poverty (6.16 per cent as per 1999-2000 figures), followed by Haryana with 8.74 per cent, and Kerala with 12.72 per cent. Orissa has the highest number of people living below the poverty line (47.15 per cent), followed by Bihar (42.60 per cent), and Assam (36.09 per cent). While poverty levels have shown a decline, there is huge disparity among the social classes with the percentage of the poor among the Scheduled Tribes being 43.8 per cent, Scheduled Castes 36.2 per cent, and Other Backward Classes 21 per cent.

These figures were published in India’s first Social Development Report in January 2006. The report said further that Bihar, Uttar Pradesh, Madhya Pradesh, and Rajasthan, which account for 45 per cent of the country's population, also account for two-thirds of the infant mortality rate in the country (26 per cent in Uttar Pradesh alone), and two-thirds of the maternal mortality rate. Less than 25 per cent of the children in these states are immunised. Kerala has the lowest infant mortality rate of 11 deaths per 1,000 births, followed by Mizoram and Goa at 16. Orissa has the highest IMR of 83 deaths per 1,000 births, Madhya Pradesh has 82, and Uttar Pradesh 76.

We remain a country of unbelievable contrasts. Assessing levels of income poverty over time and across states is not an easy task. The UNDP report on Poverty and Human Development 2005 points out some interesting contrasts. ‘Some of our (Indian) states report levels of social advancement similar to leading industrialised countries. Others show achievement levels that are lower than the average of the poorest countries in the world. For example, only 39 out of 150 countries in the world -- and all of them by far richer -- reported a lower infant mortality rate than Kerala's in 1995. At the same time, only 24 countries had a higher rate of infant mortality than Orissa. A Kerala girl-child's life expectancy today is around 74 years, or 20 years more than that of a girl born in Uttar Pradesh.’

Similarly, disparities exist between and within communities in India. For instance, communities classified as Scheduled Castes and Scheduled Tribes have significantly lower literacy and higher child mortality rates than the rest of the population.

Of our 350 to 400 million poor, roughly 75 per cent live in the rural areas. Of these 75 per cent, the worst-off are women, children, adivasis and dalits.


There is a global outcry about the fact that climate change will have a huge and regressive impact on poverty. But while seminars and conferences abound, there appears to be the usual scenario of sound and fury signifying nothing. Unless developing countries cease aping the western model of consumerist development, the downslide will continue. India needs to stop boasting about the number of cars its burgeoning middle class can buy, and concentrate on mass public transportation. Likewise, the proliferation of malls, gadgets and throwaway matter which is slowly creeping into our culture needs urgent attention.

Developing countries are hit hardest by disasters caused by climate change, Though the number of disasters has not increased, the magnitude has. The numbers that die in a disaster in Japan, China or the US are impressively low compared to those in Bangladesh, India or Afghanistan. Volumes have been written on the subject, so we will not focus on this except to point out the link between poverty and climate change. (see UNDP HDR report 2007 at


In the 1990s, with foreign exchange reserves exhausted, India went with a begging bowl and pawned its gold to the World Bank and IMF. Conditionalities were slapped on the country urging liberalisation, privatisation and structural adjustment. Translated, this meant the country was to reverse years of socialist, pro-poor policies, cut subsidies to farmers for agriculture even while the United States and European Union pay their farmers to keep their fields fallow to prevent a glut of produce. We were forced to cut food or public distribution subsidies for staples like rice and wheat for the poor. MNCs were to be welcomed with open arms and we were forced to offer them hidden subsidies while cutting back on ration rice for the poor. But we needed foreign investment (read dollars) to pay back our loans. Proponents of the liberalisation creed point out that there has been unprecedented growth which, they claim, leads inevitably to poverty reduction. This, even though the 'trickle-down' theory had long been discarded. The economist Dr Surjit S Bhalla insists that his data shows that structural adjustment has led to growth that equals poverty reduction and discounts the theory that the poor have not shared in the growth.


A K Shiva Kumar, however, points out in ‘Poverty and Human Development in India: Getting Priorities Right’, UNDP, 1996 (, that the link is never automatic. Between 1950 and the mid-1970s, despite decent growth there was no consistent drop in poverty. The reason was that all government efforts went into building up heavy industry and public enterprises rather than micro industry where the bulk of the poor are employed. In the 1990s, the same mistake was made: MNCs promised growth and employment opportunities, and this is implicitly believed by almost everyone. Yet they achieve profits by downsizing the labour force in a country with a large labour force that requires employment.

The Green Revolution did not benefit the poor because abundance did not imply equitable or even half-decent distribution. Orissa's poor in Kalahandi and Bolangir suffer from chronic starvation as floods one season followed by drought the next leave them helpless. Bhubaneshwar might have overflowing godowns but the poor in Orissa starve all the same. We have centres of excellence comparable to the best in the world, but not primary education for all. Kerala, despite slow economic growth, has achieved poverty reduction by education for all and by political activism that curbed rampant exploitation. Shiva Kumar concludes that poverty reduction is dependent on several other criteria, such as effective public policy interventions, redistribution of assets, equitable expansion of physical and social infrastructure, an even and rapid spread of health, education and employment opportunities and people’s participation.

There are a number of unexplained controversies in the positions of the pro-reform groups. Since Amartya Sen won the Nobel Prize, no one dares differ from his view that investments in social sectors - health, education and combating malnutrition - are necessary for the well-being of any society.

These, concede the economists, are investments in society that will pay off economically in the future. However, there are inherent contradictions. With the liberalisation package came conditions that affect the little benefits the poor had, which trickled down to them because our Constitution declared India a welfare state in the Nehruvian socialist mode. So, while economists of all hues nod sagely that investing in the poor is a good long-term bet because the poor equal a labour force, and a healthy labour force will ensure good dividends later, we continue to obey IMF diktats that decree all subsidies must go. The basic ration rice that helped ward off malnutrition thus becomes more expensive and decreases in quantity, leading to the poorest of the poor eating less, even while ice-cream wars in Bangalore and Mumbai increase obesity problems for rich city kids. There are enormous gaps between the rhetoric and ground reality.

The gaps were always there. Till the last decade, however, in Planning circles, there at least appeared to be an attempt to bridge the gaps -- a concern for the poor. Now, that is left to 'market forces'. Starting with the Five-Year Plans, to the regular slogans of ‘Garibi Hatao’ and 20-Point Programmes, the concern was articulated and spelt out in translatable plans of action because it would have been unthinkable not to do so. That was considered the business of government.

Now, poverty reduction appears passé, something each government has to talk about in passing before moving on to the real business of the day, which is attracting foreign investment.

In spite of sensational growth figures, the economic boom in India has not filtered down. The British newspaper Evening Standard came across some leaked consultancy documents suggesting that at least 30,000 executive positions in Britain’s finance and insurance industries were likely to be transferred to India over the next five years. The American consultant Forrester Research has predicted that the US will lose 3.3 million white collar jobs by 2015; most of them will go to India. In October 2003, The Guardian reported that HSBC, British Airways, Lloyds TSB, Prudential, Standard Chartered, Norwich Union, BUPA, and Reuters had begun to move their call centres to India.

While we may rejoice at the poetic justice of jobs moving from the former colonisers to the colonised, Stan Thekaekara points out that jobs are moving from the poor in Britain to the middle class in India (‘Globalisation: Who benefits’, Feasta Review). These jobs do not benefit India’s poorest people who are not qualified to take advantage of them. Moreover, as recent events have shown, such jobs depend on the health of western economies and as the American economy heads into a recession, the numbers of job cuts in India have grown.


Immediately after Independence, the Government of India began in earnest the fight against poverty, largely based on the Russian model, greatly admired by Jawaharlal Nehru, India's first prime minister. Thus began a series of Five-Year Development Plans, formulated by a set of handpicked planning experts - the 11th Plan is currently being followed. Successive governments have come out with schemes, albeit populist, such as the Garibi Hatao (Eradicate Poverty) of Indira Gandhi in the 1970s, followed by a Ten-Point programme, followed by numerous less well-known ones. The main problem has always been implementation. Successive prime ministers have deplored the fact that for every rupee released, hardly ten paise reaches the poor. Basic agrarian reforms and land distribution, the crux of the problem, did not take place except in Kerala and to some extent in West Bengal. Unless the problems of the vast numbers of landless, exploited people are solved, band-aid solutions will not work. Additionally, India needs to address the enormous exploitation of the poor that takes place aided by caste and class, which keeps the poor in feudal bondage.

In 1996, the United Front national government announced a definite poverty goal for the country: poverty eradication by the year 2005. According to the then prime minister, "Programmes for generation of employment, creation of assets, imparting of productive skills and raising the incomes of the very poor people would all be strengthened and provided with larger funds. At the same time, there is need to review these programmes, sharpen their focus, improve their delivery system and involve the poor in their implementation. Effective steps will be taken to ensure that the benefits reach the needy people."

Success in eradicating poverty was to be contingent upon three factors:

  • A GDP growth rate of at least 6 per cent per annum over the next 10 years.
  • Provisioning of at least seven basic minimum services -- universal access to safe drinking water, 100 per cent coverage of primary healthcare centres, universalisation of primary education, public housing assurance to all shelterless deserving families, extension of the mid-day meal scheme throughout all primary schools, road connectivity to all villages and habitations, and streamlining the public distribution system targeted to families below the income poverty line.
  • Ensuring that the income poor and the socially disadvantaged groups receive special attention and priority.

In addition, agricultural growth was to be stepped up by improving productivity in regions with a high concentration of poverty -- which are also regions with the highest potential for growth. Efforts were to be made to promote actively both rural farm as well as non-farm employment and improve access to credit and other resources.

It is more than two years past the 2005 deadline and the changes are barely significant. Agricultural distress has only grown and farmer suicides in many states have mounted to proportions than can no longer be ignored. The government’s most significant response was to waive all debts of small and marginal farmers in the 2008-09 Union Budget, a step that is universally acknowledged as being a short-term solution only.

India is a rural based country highly dependent on the agricultural sector. Yet successive governments continue to neglect the rural sector while blindly wooing foreign investment and the corporate sector as the only way forward.

The Government of India has taken various steps to reduce rural poverty in India. Some of the most recent ones are:

  • Small Farmers Development Programme
  • Drought Area Development Programme
  • Food For Work Programme
  • Minimum Needs Programme
  • Integrated Rural Development Programme
  • National Rural Employment Programme
  • Rural Labour Employment Guarantee Programme
  • Assurance on Employment”


We are preoccupied with the symptoms of poverty while the causes continue to be largely ignored. This is because we measure and understand poverty in economic and not human and social or political terms. To accept that pure economic growth through market reform will reduce poverty is to accept that the State has no role to play; that the economic process supersedes a political process and that the market is superior to State sovereignty.

Perhaps the time has come to recognise once again what history has proved -- that true and lasting change, even an economic one, is brought about through a political process and not the other way around.

From the time of Independence, it was recognised that land reform was necessary if real economic and social change was to take place. However, with the exception of Kerala and West Bengal, few states bothered to implement land reforms. This exacerbates complex social problems linked to economic ones. For example, it is difficult to break the stranglehold of bonded labour and the shackles of caste because the people in bondage work under feudal conditions for landlords who are their only potential employers. Where land distribution has taken place, social reforms too have occurred.

We have the most brilliant legislation in the world; we have pro-poor policies spelt out in the most moving rhetoric. Yet, implementation of these plans and strategies was ignored, circumvented and in many cases deliberately prevented. There has to be the will to eradicate poverty.

However, there is hope. Things have changed. The fact that we have three times more primary schools and primary health centres is a sign of hope. We have eradicated smallpox. We have had a Dalit President. And currently have a woman head of the nation. The Indian pharmaceutical company Cipla is offering competition to MNC drug companies in the AIDS war. In December 2007, the struggle against mining giants in Orissa got a shot in the arm after Mukta Jhodia, a tribal woman leader fighting against the Hindalco-led Utkal Alumina's bauxite mining and processing project in Kashipur, Orissa, won the first Chingari Award for Women Fighting Corporate Crime. Many young IT professionals are returning home satiated by consumerism, opting to work in education or for the poor. Non-resident Indians (NRIs) are doing likewise.

Every individual success story is one step forward. We need to concentrate less on meaningless figures and get on with fighting the good fight. The struggle to beat poverty, and for human rights and justice, will continue. It has done so since time began.