The poor state of the economy in the early decades meant that growth was seen as the primary objective rather than efforts at redistribution and poverty alleviation.At a time when hardly any statistics were available for the Indian economy, Dadabhai Naoroji presented the first estimates of poverty in his 1877 paper ‘Poverty in India’, subsequently published in his book Poverty and Un-British Rule in India in 1899. These estimates by the Grand Old Man of the freedom struggle were closely linked to the idea of freedom not just from the British rule but also from a life of poverty. This idea continued as a thread in the freedom struggle as constant references to Antyodaya in Mahatma Gandhi’s speeches or later in the reports of the National Planning Committee of 1938, tasked with drawing up the plan for economic growth and progress after Independence. Clearly, our freedom fighters did not look at the fight against poverty and inequality as being separate from the struggle against British colonialism.
The idea of economic emancipation as a precondition for a vibrant democracy was echoed by all streams of the freedom struggle with Babasaheb Ambedkar being its most vocal champion. This spirit was also reflected in the Constitution in the Directive Principles of State Policy. Although not justiciable, as stated in Article 37, these principles are “fundamental in the governance of the country and it shall be the duty of the State to apply these principles in making laws”. These articles lay out the responsibility of the state in providing “adequate means of livelihood” as well as including provisions for ensuring equality in assets, opportunity and access for all citizens. The constitution-makers were conscious that the task of a free India was to ensure freedom from exploitation, poverty and inequality, not just in money metric terms, but also in terms of education, health, employment and nutrition. Unfortunately, the directive principles have hardly found relevance in economic policy-making.
The poor state of the economy in the early decades meant that growth was seen as the primary objective rather than efforts at redistribution and poverty alleviation. It was only during the late Sixties and early Seventies, following the call of “Garibi Hatao” by Indira Gandhi, that poverty became an issue of political mobilisation and a priority for economic policy-making. This period also saw a rise in the scholarship on the measurement of poverty, an area where India remained a pioneer. There was also a debate on what contributes to poverty reduction and its relationship with growth and inequality. The 1970s also saw the initiation of poverty alleviation programmes of the central government as well as a larger effort in different states, including the strengthening of food-related schemes in Tamil Nadu or the Employment Guarantee Scheme in Maharashtra.
Today, the average per capita income of Indians is 7.5 times that in 1950. India has moved from the so-called “Hindu rate of growth” of 3-4 per cent to an average growth rate of 7 per cent per annum and higher in recent decades. State-led dirigisme has given way to a more open and liberalised state with the dominance of the market. However, the acceleration in growth after the economic reforms in 1991 has also been accompanied by increasing inequality, with the level of inequality in assets and incomes being at its highest.
The experience with poverty reduction has been mixed. The last official estimate of poverty corresponds to 2011-12, according to which 22 per cent of the population was below the poverty line, suggesting a sharp reduction compared to the 2004-05 estimates. During this period, 110 million rural poor and 27 million urban poor moved out of poverty. The success in poverty reduction was as much due to faster growth of per capita income as it was due to several policies implemented during this period. Notable among them were the NREGA, Forest Rights Act, Right to Education, National Health Mission and the expansion in food programmes, which shifted the discourse from poverty alleviation to capability issues through a rights-based approach.
While there has been some success in poverty reduction, our experience pales in comparison to most other countries that became independent around the same time or started at similar levels of per capita income such as China, Vietnam or Bangladesh.
Also concerning is that we have no official estimates of poverty and inequality after 2011-12. The last consumption survey was conducted in 2017-18 whose report was leaked, but not released. It showed a decline in consumption expenditure in rural areas while it barely increased in urban areas. The net result was a rise overall poverty. This is the first time in four decades that consumption expenditure has declined and poverty risen between two quinquennial rounds. The government’s decision to junk the survey does not erase the fact that this decade seems to have seen a setback in the fight against poverty. Oher indicators such as unemployment, wages and incomes vindicate this. With growth also slowing down, the challenge to eradicate extreme poverty is even bigger than it was during the 1990s and 2000s. The severe economic disruption due to the pandemic will only make it more difficult.
More than a century after Naoroji’s work, we are once again at a phase where there is no data on poverty. Just as it was then, even now the belief that democracy is incomplete without equality of access to education, employment, nutrition, health and a decent quality of life remains valuable. Freedom from poverty is also a means to enhance the ability to participate meaningfully in the democratic process, free from discrimination based on caste, class, religion and regional considerations. Progress on all these is as important as the success in poverty alleviation.
The writer is associate professor, JNU