Policies and Programmes towards Poverty Alleviation

The Indian Constitution and the five year plans state social justice as the primary objective of the government's developmental strategy. The First Five Year Plan (1951-56) said that "the urge to bring economic and social change under present conditions comes from the fact of poverty and inequalities in income, wealth and opportunity," and the Second Five Year Plan (1956-61) pointed out that "the benefits of economic development must accrue more and more to the relatively less privileged classes of society." Every policy document lays emphasis on poverty alleviation. The government's approach has had three dimensions.

1. The growth-oriented approach

This approach is based on the expectation that the effects of economic growth — a rapid increase in GDP and per capita income — would spread to all sections and trickle down to the poor. It was the major focus of planning in the 1950s and early 1960s, when it was felt that rapid industrial development and the transformation of agriculture through the Green Revolution in select regions would benefit backward regions and sections. In practice, overall growth and the growth of agriculture and industry were not impressive; population growth kept per capita income growth very low; the gap between poor and rich actually widened; the Green Revolution worsened disparities between regions and between large and small farmers; and there was unwillingness and inability to redistribute land. Economists conclude that the benefits of growth did not trickle down to the poor.

2. Specific poverty-alleviation programmes

Looking for alternatives that address the poor directly, policymakers sought to raise the incomes and employment of the poor through the creation of additional assets and work generation. This second approach began with the Third Five Year Plan (1961-66) and has been enlarged since; a noted programme of the 1970s was Food for Work.

Most such programmes are based on the perspective of the five year plans and rely on expanding self-employment and wage-employment programmes:

• Self-employment programmes include the Rural Employment Generation Programme (REGP), the Prime Minister's Rozgar Yojana (PMRY) and the Swarna Jayanti Shahari Rozgar Yojana (SJSRY). Under REGP (implemented by the Khadi and Village Industries Commission) one can get bank loans to set up small industries; under PMRY, educated unemployed people from low-income families in rural and urban areas get financial help to set up any employment-generating enterprise; and SJSRY creates self-employment and wage employment in urban areas.
• Since the 1990s, the approach has shifted from assisting individuals to encouraging beneficiaries to form self-help groups (SHGs): members first save and lend small amounts among themselves, and the government later provides partial financial assistance through banks. The Swarnajayanti Gram Swarozgar Yojana (SGSY) — now restructured as the National Rural Livelihoods Mission (NRLM) — works this way, with a National Urban Livelihoods Mission for the urban poor.
• For wage employment, in August 2005 Parliament passed the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), guaranteeing every rural household whose adult volunteers to do unskilled manual work at least 100 days of employment a year at the minimum wage. In 2013-14, nearly five crore households got employment under this law.

3. Providing minimum basic amenities …