India is in the middle of a rancorous general election season in which economic development has once again turned out to be a major issue. In the runup to the polls, political parties across the country have promised schemes to uplift the lot of the nation’s poor.
While the ruling Bharatiya Janata Party (BJP) has tried to present a rosy economic picture, touting its efforts over the past five years to improve the well-being of the underprivileged sections of society, the main opposition Congress party has attempted to portray the BJP as a party for the rich.
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The BJP’s manifesto has outlined plans for pulling people out of poverty by promising proper housing by 2022 for those living in mud huts or lacking shelter, and piped water connections to every village household by 2024. The ruling party has also pledged to upgrade rural roads and improve connectivity between India’s villages and cities.
Indian PM Modi says he’s ‘on a mission to end poverty in the country’
Pledges to end poverty
Speaking at an election rally recently, Prime Minister Narendra Modi said he’s “on a mission to end poverty in the country.”
Finance Minister Arun Jaitley also stressed that the number of Indians who live in poverty would drop to below 15% in the next three years and to a negligible level in the 10 years after that. “Urbanization will increase, the size of the middle class will grow and the economy will expand manifolds,” Jaitley said in a Facebook post. “These will add to the number of jobs, and as the experience of the past three decades has shown in the liberalized economy, every section of citizens will benefit.”
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But some observers question Jaitley’s assertions. “It is not at all clear where Finance Minister Jaitley is gathering these numbers,” said Vamsi Vakulabharanam, associate professor of economics at the University of Massachusetts Amherst. “His own government has failed to release the relevant data. This seems like lofty and false speculation in the wake of absent data,” he told DW.
To come out with any precise numbers on poverty, the expert said, one needs reliable household survey data. “Over the last five years, the incumbent government has suppressed much of this data. If you visit the website of the National Sample Survey Organization (NSSO), the last available large-scale survey data pertain to 2014, just before the present government came to power.”
For his part, India’s main opposition leader and head of the Congress party, Rahul Gandhi, has vowed to mount a “final assault on poverty” if voted to power, by giving a guaranteed income to 250 million of the country’s poorest citizens. Under his plan, known as Nyay (Hindi for justice), the Congress is promising to hand out 6,000 rupees (€77, $85.57) per month each to 50 million poor households, transferred directly to their bank accounts. The plan has been slammed by critics as an unaffordable scheme that remains vague on the important question of where the money will come from.
Over the past couple of decades, rapid economic growth has allowed India to pull millions of its citizens out of poverty. Still, the problem persists. The World Bank defines a person as extremely poor if he or she is living on less than $1.90 a day, which is adjusted for inflation as well as price differences between countries. According to World Bank analysis of data from India’s most recent census in 2011, over 21% of the nation’s 1.3 billion people lived on less than $1.90 a day.
But a report from the Brookings Institution last year concluded that there’s a decline in poverty in India, and that the country is no longer home to the world’s most poor.
The 2018 global Multidimensional Poverty Index (MPI) released by the United Nations Development Program (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI) also noted that India had made remarkable progress in tackling poverty. The report said that more than 270 million people in India have moved out of poverty in the 10-year period since 2005-06.
Congress party chief Rahul Gandhi has vowed to mount a ‘final assault on poverty’ if voted into power
While standard poverty measures are based on how much people earn, the MPI looks beyond people’s incomes to understand how people experience poverty in multiple ways. The index attempts to provide a fuller picture of poverty’s impacts by looking at how people are being left behind across three key dimensions: health, education and living standards, lacking such things as clean water, sanitation, adequate nutrition or primary education.
“Poverty has been declining systematically — both at the national level and across the various socioeconomic and religious groupings — over the last couple of decades,” Pravin Krishna, professor of International Economics and Business at Johns Hopkins University, told DW.
He pointed out that the latest round of data collection on household consumer expenditures by the NSSO, from which the official poverty numbers are estimated, was completed last year, around July 2018. “I strongly expect that these data will reveal a continued drop in poverty. We will have to wait for the data to be analyzed to see by exactly how much,” Krishna said.
But poverty numbers have always been a source of heated debate in India, and the BJP’s claims that India is about to eradicate extreme poverty draw sharp criticism from the party’s opponents, who point to agrarian distress and growing concerns about a lack of jobs for the youth. The Congress party has also relentlessly criticized BJP’s economic policies, arguing that they have only benefited India’s elites.
Vakulabharanam believes that there are “serious setbacks” in the efforts to reduce poverty in India over the past five years.
He stressed that the Modi administration’s two signature policies — the so-called demonetization and the introduction of a Goods and Services Tax (GST) — were “colossal disasters” for the economy. According to estimates, the Indian economy has lost 5 million jobs just in the last three years, and the unemployment rate is at a 45-year high, Vakulabharanam said.
The government’s failures, the expert noted, have led to sharp increases in poverty, and escalation of the already existing socioeconomic inequalities. “If the policies of the current government are perpetuated over the next 3-10 years, poverty levels will inevitably rise, not decline.”
Analysts say to wipe out poverty the Indian government will have to focus on employment generation and social welfare policies. “Economic growth and job creation are key. So are improvements in health and education,” said Krishna. “Growth generates revenues that the country can use to alleviate poverty and to increase spending on social sectors.”
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