Has Narendra Modi government been able to make a big dent into tackling poverty over the last four and a half years? Well, NDA regime feels it has been able to achieve a lot by leveraging technology, plugging the loopholes in governance and empowering people to earn their living with honour.
Human Resources Development minister Prakash Javadekar made significant statements on alleviating poverty of millions during the first term of Modi government.
Javadekar cited Washington DC-based think tank World Data Lab findings to support his claims. Economic empowerment through projects like Sowbhagya, Mudra Yojana, rural housing and roads may have made the difference in the lives of people.
Contrary to opposition charges, World Data Lab concluded that extreme poverty in rural areas has fallen to 4 per cent as against 14 per cent found in 2012. In urban areas, the fall has been even steeper to 3.8 per cent from the earlier 9.5 per cent. World Bank had estimated in 2012 that over 276 million people accounting for over 23.6 per cent Indian population lived in extreme poverty. These were people earning less than $ 1.25 per day to eke out their living. After seven years, the bar has been raised marginally to define extreme poverty. People earning less than $ 1.9 per day have been bracketed as those not being able to meet their ends meet.
Global multi-dimensional index and Brookings reports have concomitantly stated that India’s poverty elevation index has improved substantively. Also, that every minute 44 Indians were getting out of extreme poverty conditions owing to huge campaign against economic and social impoverishment.
What’s the right strategy to tackle poverty is the moot question given the big debate on economic entitlements to empowerment as options? Cash dole outs, loan waivers and one time cash transfers may not be the right tools to attack poverty. Given the resource constraints and extremely hamstrung budgets that we have at centre and states, cash dole outs may not be sustainable in long run. Also, over the years, finance ministers have restricted flexibility to mobilize revenues to fund large payouts.
In a large Indian federal union, governments in 29 states and seven union territories have a big role in economic management especially with over 1.34 billion people to feed square meal a day.
Even having a minimum guarantee scheme or universal basic income project may not be workable. Neither Congress nor BJP may be on track if they try and win votes based on these politically inspired projects. Rightly, union minister Arun Jaitley had made it clear that universal basic income scheme proposed by then chief economic advisor Arvind Subramanian was not workable.
He vetoed the idea, given the fact that government did not have resources to run the scheme even for two years encompassing the entire population.
Similarly, Rahul Gandhi’s economic advisors may not have the faintest idea on the kind of resources required to run the minimum income scheme proposed by him at a rally in Raipur.
Carving out opportunities for people to set up businesses or offer services through schemes like Mudra may still be an option to consider. Investing substantively in social and economic rural infrastructure projects with creation of capital assets could be durable and providing work for people at lowest strata may still be an option to fight poverty. Thirdly, investing taxpayers’ funds on improving human development parameters may be the third option. Linking rural people including farmers to markets with adequate safety levers may have to be attempted on a large scale.