Economy

How India remains poor: Has poverty become ‘hereditary’

Millions of Indian households transfer poverty to the next generation, making poverty eradication nearly impossible

 
By Richard Mahapatra
Last Updated: Tuesday 14 January 2020
Chronic poverty. Photo: Vikas Chaudhury

Something that has haunted me through my 22 years of reporting the rural India is how some people in certain regions always remain poor. I have visited them multiple times for various assignments, but have always found them talking about poverty.

Like me, they too always wonder: “Why do we remain poor?”

I have mostly reported the country’s 200 poorest districts, now called “aspirational districts”. These have been the beneficiary of expansive poverty eradication programmes since 1951, when the first Five-Year Plan came into being.

These districts have since become the focus of all development plans in India. In each of them, on an average, 195 development programmes — everyone with an anti-poverty component — have been implemented.

The image of a chronic poor household became starker when I started revisiting them, though not planned but as part of various assignments. A curiosity to know why they remain poor turned into a serious enumeration effort.

In small samples of households across these districts — to name a few Kalahandi and Nuapada in Odisha; Jhabua and Tikamgarh in Madhya Pradesh; Gumla and Khunti in Jharkhand; the Bastar region in Chhattisgarh; and Ananthapuramu in Andhra Pradesh — I started inquiring about the economic conditions of their next generation. Are they also poor?

That is when the disturbing reality of India’s poverty getting concentrated and chronic emerged.

The next generation of most poor households are also poor; in fact, the intensity and distress is greater. Also, the new generation is without access or with restricted access to livelihood resources such as land, forest and water.

With an apology to biologists, poverty has arguably become genetic. If caste and religion were two default hereditary burdens, poverty is the next.

Cut to 2020

In the next two years, poverty would be eradicated, Prime Minister Narendra Modi has promised. That would be eight years before India’s global commitment of eradicating poverty by 2030 as mandated by Sustainable Development Goal (SDG) No.1

Modi made the promise on September 25, 2017 at a national executive meeting of the Bharatiya Janata Party. This was at the centre of his promised “New India”.

Ironically, his government doesn’t know exactly how poor India is.

In November 2019, the Union government stopped the release of a consumption expenditure survey that would have indicated the exact level of poverty in the country.

The 75th round survey of the National Statistical Office — done every five years — on consumer expenditure was leaked to the media. Officially, India would have its next headcount of the poor only in 2023, a year after Modi’s promised poverty-free India.

The survey report exposed exactly what we have been experiencing: A rise in India’s poverty, but mostly among the traditionally poor communities in traditionally earmarked geography of the poor, eg: the districts of Jhabua, Khunti, Nuapada and the Bastar region.

Going by the leaked NSO survey report, consumption expenditure declined 10 per cent per annum in rural areas and 4 per cent / annum in urban areas. Consumption expenditure is used as a proxy for income in India, in turn forming the basis for measuring poverty.

“The immediate implication is that poverty headcount ratios would, in all likelihood, have increased between 2011-12 and 2017-18, against a sharp decline between 2004-05 and 2011-12,” said Himanshu, an associate professor at Jawaharlal Nehru University, who analysed the leaked survey report.

That the reduction in poverty hasn’t been impressive has also been pointed out by an assessment released in January 2020 by government think-tank NITI Aayog. Going by the states’ progress on poverty reduction, India is far behind the ‘zero poverty by 2030’. States rather slipped in their efforts to reduce poverty in 2019, in comparison to 2018.

Those are the states that have been traditionally marked as the geography of poverty in India. Ironically, they also host India’s richest mineral resources and forests and have plenty of the country’s water resources.

This raises the pertinent question: Why are we not able to raise people above the poverty line despite pumping in huge funds into anti-poverty programmes?

There are three probable scenarios.

First, our poverty reduction rate is not adequate, given the level of poverty: India has 220 million poor according to the last poverty count.

Second, we may be adding more poor to the existing list.

Third, we may be temporarily raising people above poverty levels, but not being able to keep them there.

While the above scenarios play out together, a significant number of poor have turned chronic poor.

Chronic Poverty Research Centre (CPRC), a group of economists tracking poverty for more than three decades, has come out with reports that show that India’s poverty is getting chronic and concentrated in pockets.

For CPRC economists, the definition of chronic poverty is:

“People, households, and social groups who are poor for sustained and significant or extended periods of their lives and whose families and children may inherit this persistent condition. While chronic poverty is dynamic in that people do climb out of, or fall into poverty in significant numbers, exiting such poverty can prove difficult.”

According to their study: “Those who are chronically poor may pass on poverty to their next generation.”

Economists studying chronic poverty indicate that it is a thumb rule that 50 per cent of India’s poor could be termed as chronic poor.

It means 111 million Indian will remain poor forever; their next generation remaining poor — inheriting the same level of poverty — will be highly probable.

The lapsing back of people climbing above the poverty line is the most important reason of chronic poverty, according to the CPRC study. It means our poverty-eradication efforts are not successful in keeping people above poverty line.

Half the poor remained poor, despite India’s utmost focus on poverty eradication in the 1970s and 1980s, said economist Shashanka Bhide. He attributes it to social and ecological reasons.

Most of the chronic poor live in natural resource-dense areas — most likely in forest areas. Second, their dependence on natural resources is high. Third, they have a long history of being poor and, thus, do not have the capacity to absorb unforeseen natural shocks like disasters or personal emergencies like health issues.

With each disaster, with each health cost and with each government decision that impacts these factors, poor persons takes the first and fast step towards chronic poverty.

The CPRC study tracked 3,000 poor households for over 30 years. An interesting finding of this long-term tracking is that those residing in tribal and forested regions have remained poor forever.

The survey identified 15 regions spread over six states — Odisha, Madhya Pradesh, Uttar Pradesh, Chhattisgarh, Bihar and Telengana — where poverty was getting concentrated and chronic. These areas also host India’s 200 poorest districts.

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