ADVERTISEMENTS:
This article provides information about “What extent the economic reform movement is successful to facilitate the eradication of poverty in our society?”:
Poverty in India is a predominantly rural phenomenon. More than three quarters of poor people in India live in rural areas. Also there is wide variation in poverty across different states. Moreover, progress in reducing poverty is also very uneven across different regions. Based on the data collected by Economic Survey, Dev and Ranade makes a comparison of poverty situation in pre- and post- reform period. According to them:
Image Courtesy : 121intl.org/images/custom/recentreports1.jpg
ADVERTISEMENTS:
i. Rural and urban poverty increased during the first two years of the reform period.
ii. The phenomenon of faster decline of rural poverty in the 1980s have been halted in the post 1991 period.
iii. There has been a decline in the absolute number of poor in the 1980s. In contrast, post-1991 period showed an increase in the absolute number of poor.
ADVERTISEMENTS:
iv. Urban poverty declined much faster than rural poverty in the post-reform period.
They reach the conclusion that the impact of economic reforms on the poor in India has been better than in some Latin American countries, but worse than in some of the East Asian countries.
Government of India adopted several poverty alleviation programmes to help the poor to improve their economic, physical and social conditions. These programmes are directly targeted at the poor and the benefits from them would accrue to the poor from the normal economic activities. The programmes, which aimed at directly helping the poor instead of the entire population, are termed as targeted poverty alleviation programme. The rationale for targeting the poor for development programmes is that the benefits or social returns are higher for the population at the lower end of the income distribution than at the upper end.
The existing major programmes for the poor in India can be roughly categorised into three: (i) wage employment programme, (ii) credit-based self-employment programme, (iii) the public distribution system and the nutrition programme. One of the impacts of opening up of the economy has seen the resurgence of the importance of large metropolitan cities. Private investment, both foreign and Indian have tend to be concentrated in and around these large cities. The local governments for attracting these investments offered a range of incentives to private investors.
The large metropolitan cities are undergoing a facelift exercise as part of the city cleaning, beautification and pollution control programmes. While the city spaces are being increasingly acquired by the private commercial and service industry establishments the poorest, mainly the slum dwellers, hawkers, destitute, street dwellers are being pushed out of the city to the peripheries. The city peripheries are getting degenerated with low value employment, poor living condition, thus making lot of the urban poor worse.
Opening-up in the developing economies was primarily visualised as a mechanism where trade would function as ‘an engine of growth’ and the fruits of growth would ‘trickle down’ to the poor. However, the results had been mixed, with many countries observing widening inequality in their economies, contrary to the conventional trade theory prescriptions.
The internationalisation of trade has opened up vistas for globalisation of production creating profound changes in the labour market, such as widening wage disparity, increasing contractualisation of work, skill based segregation of work etc. As per the 1991 census 90% of the Indian workforce is in the unorganised sector. There is hardly any legal backing, social spending, or any form of support to this class of workers who are the poorest among all groups of workers.
They do not have any collective bargaining capacity with an institutional backing. For the vast majority of them there is no fixed place of work, no fixed working hours, no regular wages, and no job security. Thus they have become one of the most vulnerable to poverty. Globalisation is argued to be ‘informalising’ and ‘casualising’ the employment opportunities in the economy thus further expanding the unorganised form of employment. It is seen that the economic reforms only vitiated this sector.