RURAL DEVELOPMENT AND POVERTY ALLEVIATION
Overview 2.1.1 Alleviation of rural poverty has been one of the primary objectives of planned development in India. Ever since the inception of planning, the policies and the programmes have been designed and redesigned with this aim. The problem of rural poverty was brought into a sharper focus during the Sixth Plan. The Seventh Plan too emphasised growth with social justice. It was realised that a sustainable strategy of poverty alleviation has to be based on increasing the productive employment opportunities in the process of growth itself. However, to the extent the process of growth bypasses some sections of the population, it is necessary to formulate specific poverty alleviation programmes for generation of a certain minimum level of income for the rural poor.
2.1.2 Rural development implies both the economic betterment of people as well as greater social transformation. Increased participation of people in the rural development process, decentralisation of planning, better enforcement of land reforms and greater access to credit and inputs go a long way in providing the rural people with better prospects for economic development. Improvements in health, education, drinking water, energy supply, sanitation and housing coupled with attitudinal changes also facilitate their social development.
2.1.3 Rural poverty is inextricably linked with low rural productivity and unemployment, including underemployment. Hence, it is imperative to improve productivity and increase employment in rural areas. Moreover, more employment needs to be generated at higher levels of productivity in order to generate higher output. Employment at miserably low levels of productivity and incomes is already a problem of far greater magnitude than unemployment as such. It is estimated that in 1987-88 the rate of unemployment was only 3 per cent and inclusive of the underemployed, it was around 5 per cent. As per the currently used methodology in the Planning Commission, poverty for the same year was estimated to be 30 per cent. This demonstrates that even though a large proportion of the rural population was `working' it was difficult for them to eke out a living even at subsistence levels from it. It is true that there has been a considerable decline in the incidence of rural poverty over time. In terms of absolute. numbers of poor, the decline has been much less. While this can be attributed to the demographic factor, the fact remains that after 40 years of planned development about 200 million are still poor in rural India. In 1987-88, the rural poverty line in terms of per capita monthly expenditure was Rs. 131.80. The average incidence of rural poverty conceals wide inter-state differences which suggests that greater attention needs to be paid to the regions which have a greater concentration of the rural poor. In recent years, several issues have been raised about the methodology of poverty estimation, both by professionals and State Governments. An Expert Group appointed by the Planning Commission is looking into these issues relating to the definition and measurement of poverty.
2.1.4 The decline in rural poverty is attributable both to the growth factor and to the special employment programmes launched by the Government in order to generate more incomes in the rural areas. Hence, in its more limited interpretation, rural development has been confined to a direct attack on poverty through special employment programmes, area development programmes and land reforms. These will be reviewed in this chapter. In addition, the role of the Panchayati Raj Institutions and voluntary organisations in the implementation of these programmes has also to be kept in view. A review of the on- going programmes is presented in the first part of the Chapter. In the second part, the approach and strategy for the Eighth Plan are spelt out.
Review of the Existing Programmes
Integrated Rural Development Programme (IRDP) 2.2.1 Under the IRDP, those living below the defined poverty line in rural areas are identified and given assistance for acquisition of produc-
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tive assets or appropriate skills for self-empjoyment, which in turn, should generate enough income to enable the beneficiaries to rise above the poverty line.
2.2.2 This scheme was launched in the Sixth Plan. Its assessment at the end of the Sixth Plan period revealed several shortcomings. Keeping this in view and the feed-back received from the State Governments, suitable changes were introduced in the guidelines for the IRDP in the Seventh Plan. The poverty line was based at Rs.6400, but those eligible for assistance under the IRDP had to have an average annual income of Rs.4800 or less. It was assumed that those households with income levels between Rs.4800 and Rs.6400 would be able to rise above the poverty line in the process of growth itself. It was targetted that 20 million families would be assisted under IRDP during the Seventh Plan of which 10 million were new households and 10 million old beneficiaries who had been unable to cross the poverty line and required a second dose.
2.2.3 During the Seventh Plan, the subsidy expenditure on IRDP was Rs. 3316 crores which was in excess of the target of Rs. 3000 crores. The total investment including the institutional credit amounted to Rs.8688 crores. In quantitative terms, the physical achievement of about 18 million households fell short of the original target of 20 million households but exceeded the cumulative target which was only 16 million families. The sectoral composition indicates that, of all the schemes selected under IRDP, 44 per cent were in the primary sector, 18.5 per cent in the secondary sector and 37.5 per cent in the tertiary sector. The salient features of the IRDP performance during the Seventh Plan and 1990-91 are given in Appendix I.
2.2.4 A system of concurrent evaluation of the IRDP programme was also introduced under which data were collected by independent re- search institutions for the entire country on a sample basis. Statewise details of performance are available. The findings suggest that the IRDP was quite successful in terms of providing incremental income to poor families. However, the number of households able to cross the poverty line was relatively small. It may be, partly due to the low levels of initial investment. On the other hand, it is also difficult to expect banks to raise the per capita loan assistance to beneficiaries, given the excessive overdues pending. In order to enhance the economic returns from an asset, it is necessary to integrate this scheme with the development plans of an area so that select activities become viable. This aspect will be discussed in Part E.
Training of Rural Youth for Self Employment (TRYSEM) 2.3.1 TRYSEM was introduced in 1979 to provide technical skills and to upgrade the traditional skills of rural youth belonging to families below the poverty line, Its aim was to enable the rural youth to take up self- employment ventures in different spheres across sectors by giving them assistance under IRDP. Later, in 1987 the scope of the programme was enlarged to include wage employment also for the trained beneficiaries.
2.3.2 During the Seventh Plan about 10 lakh youth were trained under TRYSEM, of which 47 per cent took up self- employment and 12 per cent wage employment. The remaining 41 per cent could not avail of either. On the other hand, a sizeable proportion of IRDP beneficiaries who needed training could not receive it. In fact, only 6 to 7 per cent of IRDP beneficiaries were trained under TRYSEM. During 1990-91 the number of youth trained were 2.6 lakhs, of which 70 per cent got employed.
Development of Women and Children in Rural Areas (DWCRA) 2.4.1 In 1982-83 an exclusive scheme for women was launched in the IRDP, as a pilot project, in 50 districts. In the Seventh Plan it was extended to more districts and at the end of the Seventh Plan period it was in operation in 161 districts. Under DWCRA, a group of women are granted assistance. to take up viable economic activities with Rs. 15,000 as a onetime grant to be used as a revolving fund. In the Seventh Plan about 28,000 groups could be formed against the target of 35,000 with A membership of 4.6 lakh women. During 1990-91, against a target of 7,500 groups, 7,139 were actually formed.
2.4.2 While, in principle, this scheme is a sound one, in operationalising it the impact has been inadequate. This is perhaps due to a lack-of cohesion among women groups formed under
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DWCRA and their inability to identify activities that could generate sustained incomes. In this sphere, the role of voluntary organisations would be crucial in organising women to take up group- based economic activities which are viable within the context of an area development plan. Experiments in some States to form women's thrift and credit societies first, and then start them on economic work have been successful.
Wage Employment Programmes 2.5.1 In 1989, the erstwhile -National Rural Employment Programme (NREP) and the Rural Landless Employment. Guarantee Programme (RLEGP) was merged into a single rural wageemployment programme called the Jawahar Rozgar Yojana. However, given that in the first four years of the Seventh Plan, the NREP and RLEGP were in operation, a brief review of these two programmes is given below.
National Rural Employment Programme (NREP) 2.6.1 The entitlement of each State to the Central fund was based on the incidence of poverty, and the population of agricultural labourers, marginal farmers and marginal workers with 50 per cent weightage to each. However, the Centre and State shared the expenditure equally on a 50:50 basis. Some broad indicators of the performance both physical and financial are set-out in the table below:
2.6.2 A concurrent evaluation of NREP revealed that several types of assets were created, with 24.6 per cent expenditure on rural roads and 19.1 per cent on social forestry. construction was a main activity with 11.9 per cent on schools, 12.1 per cent on houses and 6.4 per on panchayat ghars; 6.5 per cent was directed to minor irrigation and 3.3 per cent to wells for drinking water.
Rural Landless Employment Guarantee Programme (RLEGP) 2.7.1 This was a totally Centrally financed programme introduced in 1983. While most of the objectives and stipulations under this were similar to those of NREP, it was to be limited only to the landless, with guaranteed employment of 100 days. Moreover, there was earmarking of funds specifically for certain activities- 25 per cent for social forestry, 10 per cent for works benefitting only the Scheduled Castes/Scheduled Tribes and 20 per cent for housing under Indira Awaas Yojana. In the Seventh Plan, Rs.2412 crores were spent and 115 crore mandays were generated with an average expenditure of Rs.21.00 per manday. Only 16 per cent had been spent on social forestry but 22 per cent had been spent on housing,. with over 5 lakh houses created for SC/ST and freed bonded labourers. Rural roads accounted for 22 per cent while other construction, minor irrigation, soil conservation etc. each had a small share.
Performance of NREP in the Seventh Five Year Plan
Year Resource Expenditure Employment Monday Wage
availability (Rs. crores) Generation Cost(Rs.) Non-Wage
(Rs. crores) (in million Ratio
mandays)
1985-86 593.08 531.95 316.41 16.81 60:40
1986-87 765.13 717.77 395.39 18.15 60.40
1987-88 888.21 788.31 370.77 21.26 59:41
1988-89 845.68 901.84 394.96 22.83 57:43
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The physical and financial achievements, are presented below:
Performance of RLEGP in the Seventh Plan
Year Resource Expenditure Employment Manday Wage/Non-
availability (Rs. crores) Generation Cost Wage
(Rs. crores) (in million (Rs.) Ratio
mandays)
1985-86 580.35 453.17 247.58 18.30 57:43
1986-87 649.96 635.91 306.14 20.77 57:43
1987-88 648.41 653.53 304.11 21.49 58:42
1988-89 761.55 669.37 296.56 22.57 58:42
Jawahar Rozgar Yojana (JRY) 2.7.2 In the last year of the Seventh Plan, JRY was launched with a total allocation of Rs.2600 crores to generate 931 million mandays of employment. The primary objective of the programme is generation of additional employment on productive works which would either be of sustained benefit to the poor or contribute to the creation of rural infrastructure. Under this programme, Centre's contribution is 80 per cent, and 20 per cent is the State's share. The JRY is implemented in all villages in the country.
2.7.3 Central assistance is provided to the States on the basis of proportion of the rural poor in a State/UT to the total rural poor in the country. From the States to the districts., the allocations are made on an index of backwardness which is formulated on the following basis:
(i) 20 per cent weightage for the proportion of agricultural labourers in the total workers in the rural areas.
(ii) 60 per cent weightage to the proportion of rural scheduled castes and tribes population in relation to the total rural population; and
(iii) 20 per cent weightage to the inverse of agricultural productivity.
2.7.4 Of the total allocations at the State level 6 per cent of the total resources are earmarked for housing under the Indira Awaas Yojana (TAY) which are allotted to the scheduled castes and scheduled tribes and feed bonded labour. In addition, 20 per cent are earmarked for Million Wells Scheme (MWS). In fact, this scheme was launched as a special feature both under NREP and RLEGP in 1988-89. The objective is to provide open wells, free of cost, to poor SC/ST farmers in the category of small and marginal farmers, and to free bonded labourers. However, where such wells are not feasible, the amounts allotted may be utilised for other schemes of minor irrigation like irrigation tanks, water harvesting structures and also for development of lands of SCs/STs and freed bonded labourers including ceiling surplus and bhoodan lands. A maximum of 2 per cent of JRY funds are to be spent as administrative costs inclusive of any additional staff.
2.7.5 After providing for the above earmarking, 20 per cent of the remaining funds are retained at the district level and 80 per cent are allocated to village panchayats by giving 60 per cent weightage to SC/ST population and 40 per cent to the total population of the village panchayat. The responsibility of implementation of JRY in respect of district share of funds is that of DRDA/Zilla Parishad, but at the village level it is that of the Gram Panchayat. In case two or more districts/gram panchayats decide to pool the resources together to take up a work for the common benefit of the concerned dis- trict/panchayat, the arrangement is permissible.
2.7.6 Works can be taken up for execution during any part of the year whenever the need for generating supplementary employment is felt, preferably during the lean agricultural season but could continue during the busy agricul-
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tural period too, if required. A maximum of 10 per cent of the annual allocation can be used for incurring expenditure on maintenance of such assets at the district/gram panchayat levels which have been created under the erstwhile programme of NREP/RLEGP or have been cre- ated under JRY and have not to be taken over by a department of the State Government.
2.7.7 There is earmarking of resources at the district level too but after deducting for administrative and maintenance costs, the funds available for sectoral works are untied. However, there is no sectoral earmarking of resources at the village panchayat level except that 15 per cent of the annual allocation must be spent on works directly beneficial to SCs/STs. The types of works, to be taken up under the village panchayats are to be based on the felt needs of the people. There is 30 per cent reservation for women. Sixty per cent of the total unit cost is to be spent on wages and 40 per cent on materials. Contractors and other intermediaries are not permitted in the execution of the works. Minimum wages, fixed by the State, are required to be paid. There are considerable inter- State variations in the minimum wage - rates, ranging from Rs. 13.70 to Rs. 34.00 per day for unskilled work. These differences account for variations in the Statwise unit cost of generating one manday of employment ranging from Rs.22.83 to Rs.56.67. While in the earlier wage-employment programmes, part of the wage payment had to be in kind, in terms of certain quantity of foodgrains, under the JRY this was made optional. Consequently, while in 1986-87 the offtake of foodgrains was as high as 22 lakh tonnes, in 1990-91 it was only 1.36 lakh tonnes.
2.7.8 The financial and physical performance during 1989-90 and 1990-91 are given below:
2.7.9 The assets created under JRY and the expenditure under each head is given in Appendix-4. Road construction was the primary activ- ity accounting for a little less than 30 per cent of the expenditure while minor irrigation, housing, construction of school and community buildings, wells and social forestry were the other sectors where JRY funds flowed. The expenditure on housing and wells increased between 1989-90 and 1990-91, while that under social forestry declined. The earmarking for housing under Indira Awaas Yojana and for wells and the MWS would definitedly have contributed to this. Under the JAY, 8.6 lakh houses have been constructed and 2.6 lakh wells have been dug under MWS. These would have benefitted the scheduled castes and the scheduled tribes.
2.7.10 A concurrent evaluation has been initiated which will be completed by the end of the year. In the meantime, a quick evaluation of JRY has also been undertaken.
Selected State level Employment Programmes Maharashtra Employment Guarantee Scheme (EGS)
2.8.1 The Maharashtra Employment Guarantee Scheme (EGS) is a unique experiment which was started in 1971-72 for providing gainful employment in rural areas and "C" class muncipal areas. Guaranteed unskilled manual work is provided to adults who register themselves for work. Only productive works with unskilled wage component of more than 60% are taken up under the scheme. In the last two to three years, the EGS has been improved and modified. Under the "Shram Shakti Divare Gram Vikas", individual beneficiary's scheme will be taken up at the cost of the Government in the case of lands owned by small and marginal farmers, but for other categories 50 per cent of the expenditure