2006/02/28

India's war on poverty: Easy victory unlikely

Amelia Gentleman
International Herald Tribune

NEW DELHI - The fanfare surrounding the start of the latest poverty reduction program in India was exultant. Prime Minister Manmohan Singh of India described the initiative as "historic," the president of the governing Congress party, Sonia Gandhi, said it was "revolutionary," and the minister responsible for it declared that this was the "perfect" system for reducing hunger.

The government's public relations team made every effort to ensure that the significance of the announcement hit home with the nation.

Singh and Gandhi flew with a team of ministers by helicopter earlier this month to an impoverished village in a remote drought-ridden region of central India where they unveiled the new plan in front of expectant villagers - and with live national broadcast coverage.

The politicians were unstinting in the claims they made for the project. The National Rural Employment Guarantee program, they said, would reduce the number of people living below the poverty line from 26 percent of the population to 10 percent within about seven years, it would stem the flood of rural inhabitants to overcrowded cities in search of work, and it would create vital rural infrastructure.

The program "will help us get rid of the scourge of poverty, disease and indebtedness," Singh said. It "gives employment. It gives income. It gives a livelihood and gives a chance for all to live a life of self-respect and dignity."

But the government's optimism about the program is not universally shared by researchers in the field of poverty eradication. Many of them are anxious about whether the government really intends to commit the enormous funds needed to finance the legislation - this year, the government has allocated about 150 billion rupees, or $3.4 billion, to fund the program.

They are concerned that the process by which funds are distributed will promote corruption. Some are dubious about the core principles on which the program is based.

The act authorizing the program, passed last year, seeks to guarantee 100 days of work, at a minimum wage of about 60 rupees to one member of every rural household, if they are prepared to do unskilled manual labor.

Those who want to work must approach their local village councils, or panchayats, where officials are obliged by the law to provide work within 15 days. If no work is available then an unemployment benefit must be paid.

Most of those who take part in the program will be given work in new rural infrastructure projects - like drought alleviation, flood protection, road building and forest management - that are designed to improve conditions for the village as a whole.

"It is a permanent, perfect system for perfect food security," Raghuvansh Prasad Singh, the minister for rural development, said in an interview.

During the first phase of implementation, 200 of the most deprived Indian districts will take part. The program is scheduled to be expanded later nationwide. About 15 million households are expected to benefit in this first stage, potentially improving the lives of about 75 million people, he said.

The program will eventually cost 500 billion rupees a year. Singh said the government was committed to funding the program, although this will depend on future budget resources.

Sitting cross-legged and barefooted on a chair in his Delhi office, Singh, a member of Rashtriya Janata Dal, a minority party within the governing coalition, said that if India was to thrive, it was vital to help the rural masses.

"All the economic indicators are going high, but without helping the people below the poverty line this is meaningless," he said. Singh added that this was an initiative that Mahatma Gandhi would have supported.

"Gandhi said the litmus test for any program or scheme, was to think of the downtrodden, the poorest of the poor," he said. "If the program will affect the pitiable conditions of the poorest, then that program or scheme will be fit for the nation."

Aruna Roy, the founder of Mazdoor Kisan Shakti Sangathan, a peasants and workers movement, who has been advising the government on implementing of the program, said it would pull families above the poverty line.

"This will bring about social development, health will improve, children will go to school.

"These people will have time to exist rather than just worrying about where their food is going to come from," she said. "This is very progressive legislation. It is a great victory."

Activists working to reduce poverty in India have applauded the government's commitment to Gandhian ideals, but remain uneasy about the plan's viability.

Himanshu Jha of the National Social Watch Coalition, a Delhi-based nongovernment organization working on poverty and governance, said the government had underestimated the amount of money needed to pay for the program and questioned whether there was a long-term commitment to funding it.

"If you don't have enough financial allocation for such an ambitious plan, then how can it work?" he said. He also cautioned that there were no proper safeguards to prevent "leakage" of funds.

Analysts said that previous plans of this nature had encouraged the spread of corruption, with money paid to fictitious beneficiaries and the sums paid to genuine claimants had often been significantly less than the amounts recorded on the books, with the surplus siphoned off into the pockets of local officials.

They warned that Rajiv Gandhi's famous remark that less than 15 percent of each rupee of government spending on development actually reached the people may prove relevant once again.

Political imperatives partly explain the Congress Party's determination to be seen as addressing poverty. The Congress Party came to power on the back of an electoral campaign that promised to focus on the needs of the 720 million rural population, who often say they have not shared the benefits of the Indian economic successes under the previous government.

Despite the growing optimism about economic prospects in India, and the rise of Indian stock market indexes to unprecedented highs, life for many beyond the thriving Indian cities remains bleak. India has more people living below the poverty line than any other country in the world, and some 330 million survive on less than $1 a day. The World Bank estimates that 45 percent of children under 5 suffer from malnutrition.

The balance of power within the Indian government provides a further insight into why Manmohan Singh's administration has started the program.

John Farrington, a research fellow with the Overseas Development Institute in London, said the Indian government needed to pass this legislation to fulfill its election promises and to placate the leftist members of the coalition, but he was skeptical about its long-term prospects.

"They make these declarations of the moral high ground and get all the right kind of publicity, but the implementation of it is going to be very complex," Farrington said. "It is going to require a lot of bureaucracy and there will be corruption."

He suggested that the centrist parties had opted to allow it to pass, rather than provoking confrontation with the left, on the assumption that it would soon die a natural death.

"In a few years, there will be a review, and people will find that it is corrupt, and they will say it has to be cut back on the grounds that there is this corruption," Farrington said. "The leftist parties will find it hard to argue with this and they will allow it to wither away."

Officials at the World Bank are anxious about the way the plan will be implemented, although they stress that it has "great potential in principle," said Rinku Murgai, a World Bank economist. Greater attention needed to be paid to ensuring that the local projects funded by the program really benefited the poor, she said.

In a pilot program in the state of Maharashtra, the roads and dams built by the workers were often badly constructed and have swiftly deteriorated.

Beyond questioning the feasibility of implementing such an ambitious program, there is uncertainty over whether the plan's guiding principle - the need to return migrant workers to their villages - is misplaced and whether this is the best way to reduce poverty.

"Historically, if you look at any country in the world, there has been a shrinking of the rural areas," Farrington said. "India is not going to be any different."

China, which has seen the migration of millions from the poor rural regions to richer urban areas, had broadly benefited from the shift, he said.

"There have been difficulties, but for the large part they are better off now than when they were stuck in poor rural areas," he said. "There is new evidence that now shows this migration is progressive in terms of these people's development. India is not getting to grips with that."

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