Success Story of September
Even as Gujarat Chief Minister, Narendra Modi, hard sells his “poverty mitigating development agenda,” Andhra Pradesh has silently out beaten his State by dramatically halving the number of poor over the last two years from 176 lakh to 80 lakh, the latest National Sample Survey Organisation data has revealed. Not just Gujarat, no other Indian State comes close to this rate of poverty reduction from 21.1 per cent to 9.37 per cent during the period 2009-10 and 2011-12. If it looks quite surprising for a short two-year period, the figures for the longer seven-year term, from 2004-05 to 2011-12, are equally impressive with poverty rate dropping by about 20 percentage points, against the Indian average of 15 percentage points.
And if one goes beyond and looks at the last 20 years, poverty is down by a significant 35 percentage points.
Two other States that come second and third to AP are Tamil Nadu and Gujarat but both these States took seven years to halve and nearly halve the number of poor. Some experts now compare the AP’s poverty rates to those of China, stated to have lifted more people out of poverty in the last 30 years than any country in history.
How did AP achieve this feat? Is it because of poverty alleviation programmes? Or is it owing to schemes like Mahatma Gandhi National Rural Employment Guarantee programme or agriculture growth? Economists however have extremely differing views both over the figures put out by the NSSO and the manner of achieving poverty reduction.
For eminent economist and former member of the Planning Commission, C. H. Hanumantha Rao, the reduction in poverty in Andhra Pradesh was to be expected. “I am not surprised at all, given the way rural income has grown with wages being pushed up significantly from schemes like MGNREGA and agriculture growth rate. The 4 per cent growth in agriculture may still be elusive but in some years it was close to 3 per cent.”
This growth was satisfactory over the years and the welcome feature was that it came from crop diversification, Prof. Rao said. Wages in rural areas have gone up to such an extent that farmers were complaining of shortage of farm hands, though it is debatable whether payment of wages has led to creation of productive assets. Income levels have gone up also because farmers diversified into sectors such as dairying. Migration to urban areas is now not so much of distress- driven but for better opportunities and living conditions. Äll these factors appear to have contributed to reduction in poverty, he explained. He found the NSSO data credible.
But for another economist, Dr. Vamsi Vakulabharanam of University of Hyderabad, the NSSO finding is to be taken with a pinch of salt. “A dramatic reduction of poor by 90 lakh in two years is usually to be treated with great scepticism. There are serious problems in comparing data of 2009-10 with 2011-12, as the former was quinquennial survey on more than 100,000 households where as the latter was based on small sample of annual survey which may have significant sample bias. Drawing inference from such small survey is seriously problematic.”
Moreover poverty line used in these computations was totally arbitrary based on Tendulkar Committee recommendations that have become controversial for using money value of the indexed urban poverty line in 2004-05 to calculate rural poverty, he said. The current poverty line based on this committee has no basis in any real consumption requirements of the poor, calorific or otherwise. “This entire exercise seems like a publicity stunt on the part of the government and the Planning Commission.”