ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Does India's Employment Guarantee Scheme Guarantee Employment?

An analysis of the National Sample Survey data for 2009-10 confirms expectations that poorer states of India have more demand for work under the Mahatma Gandhi National Rural Employment Guarantee Scheme. However, we find considerable unmet demand for work on the scheme in all states, and more so in the poorest ones, where the scheme is needed most. Nonetheless, the scheme is reaching the rural poor and backward classes and is attracting poor women into the workforce.

Corruption in the MGNREGS

There is corruption in the Mahatma Gandhi National Rural Employment Guarantee Scheme, no question about that. But simple indices that claim to measure corruption and make an assessment of interstate levels of corruption can end up offering us a wrong understanding.

Shining for the Poor Too?

The authors revisit the findings of their past research on poverty and growth in India in the light of the 14 rounds of the National Sample Survey now available for the period since economic reforms began in 1991. They find that the rate of poverty reduction has increased in the post-reform period, compared to the previous 30-year period, although it is still too early to say if this marks a new trend. In contrast to the pre-reform period, the post-reform process of urban economic growth appears to have brought significant gains to the rural poor as well as to the urban poor.

'How Many Poor in the World?': A Reply

A comment on the editorial (25 October) that critiqued the World Bank methodology for estimating the number of poor in the world. This response aims to refute the four major arguments made in the editorial.

A Global Perspective on Poverty in India

In 2005, one in three of the people in the world who consumed less than $ 1.25 a day (at 2005 purchasing power parity) lived in India - more than any other country. They accounted for about 40 per cent of India's population. Twenty-five years earlier, 60 per cent of India's population lived below the same real line. While this is clear progress, India's long-term pace of poverty reduction by this measure is no more than average for the developing world, excluding China. This article first discusses the methodology underlying the World Bank's recent revised estimates of global poverty and then analyses the Indian numbers.

Employment Guarantee in Rural India

This article assesses the impact on poverty and the likely cost of an employment guarantee scheme providing 100 days of work to the rural people during the lean season. At the current statutory wage rate, the scheme may help reduce rural poverty to 23 per cent (30 per cent year round), at a cost of 1.7 per cent of GDP. But, given the extra cost of the scheme, a greater impact on poverty would be achieved by taking the same fiscal outlay and allocating it equally to everyone, whether poor or not.

Fanciful Numbers and Fictitious Intrigues

Surjit Bhalla claims that India's poverty rate is now lower than China's, contradicting the estimates published by the World Bank, UNDP and others. However, while there are some puzzles in the data, particularly for India, Bhalla's calculations do not stand up to close scrutiny.

A Model-Based Assessment of India's Progress in Reducing Poverty in the 1990s

An econometric model of poverty incidence is calibrated to 20 household surveys for India's 15 major states spanning 1960-1994. The model builds on past research suggesting that the key determinants of the rate of poverty reduction at state level are agricultural yields, growth of the non-farm sector (depending on the state's initial conditions), development spending, and inflation. The model is used to predict the rates of poverty reduction over the period 1994-2000. The overall incidence of poverty is projected to have fallen from 39 per cent to 34 per cent over this period, suggesting that the rate of poverty reduction in the 1990s is slightly lower than the 1980s, and lower than one would have expected given the growth in the 1990s. We offer some explanations as to why the growth process in the 1990s has not done more to reduce poverty in India.

Have We Already Met the Millennium Development Goal for Poverty?

In a new book, Surjit Bhalla purports to overturn prevailing views on how much progress the developing world has been making against absolute poverty. Indeed, Bhalla claims that by 2000 we had already met the Millennium Development Goal of halving the 1990 incidence of extreme poverty - 15 years ahead of time. This would be good news, if it was right. The article offers a critical assessment of Bhalla's arguments and evidence.

Should Poverty Measures Be Anchored to the National Accounts?

If one replaces average consumption from India's National Sample Surveys with private consumption per capita from the National Accounts, while retaining the survey-based distributions, then one finds a faster rate of poverty reduction in the 1990s. However, the case made for this method of measuring poverty is questionable on many counts. There do appear to be problems in the poverty data for India in the 1990s, but this step is unlikely to solve them.

What Is Needed for a More Pro-Poor Growth Process in India?

A number of conditions determine how much India's poor share in economic growth. The extent to which growth stems from the rural economy, particularly agriculture, is the key. The gains to the poor from non-agricultural growth vary greatly between states, reflecting past attainments in human and physical resource development, especially in rural areas. The lesson for the future is clear: unless these conditions improve, don't expect rapid poverty reduction from growth-promoting economic reforms. There is, however, plenty that can be done now to change those conditions.

Food Prices and Rural Poverty

Martin Ravallion IN an article in the January 10, 1998 issue questioned whether the available data on poverty and food prices in India have been interpreted correctly in some recent debates on policy reform,1 In the April 4 issue of EPW, Mohan Rao disputes some of my argument,2 He presents no new data,3 but he does appear to question aspects of my methods of analysing the data that are available. The issues at stake here are too important to ignore, so I would like to take this opportunity to respond. I will confine my attention to Rao's main substantive concerns.4 My article began by confirming one claim often made by critics of policy reform in India, namely, that there is a strong positive correlation over time between the poverty rate, as conventionally measured, and the relative price of food (a correlation coefficient of 0.76 using 24 observations from the National Sample Surveys)' The article then tried to test various explanations for that correlation. It argued that there are plausible explanations which have little or nothing to do with the interpretation that critics of policy reform have given.the correlation.


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