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| Agriculture still plays role in poverty removal: World Bank study |
| BS Reporter / New Delhi Jun 10, 2009, 15:32 IST |
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Agriculture, whose share in India’s output is shrinking because of higher growth in services sector, is still cited as major reason for people in rural areas to come out of poverty, said a World Bank study.
The study, which covered 300 villages across four states, shows that 20 per cent of people who have come out of poverty in one decade up to 2005 cited agriculture as the reason.
However non- agricultural jobs contributed the most in bringing people out of poverty. “Agriculture plays a role in moving people out of poverty provided benefits of government schemes reaches and also access to farm markets,” said Soumya Kapoor, a consultant with social development unit of the World Bank.
Significantly only 2 per cent of people who moved out of poverty between 1995- 2005 cited migration and remittances as a reason.
The study is based on a perception survey covering 30,000 individuals. That is people are asked to define poverty instead of a pre-determined income level used in government estimate. So the estimates of poverty are subjective perceptions of people being interviewed.
Based on perceptions, World Bank has coined a term called, “Community Poverty Line (CPL)” based on how people defined poverty. The study indicates that 81 per cent of them put CPL above the official poverty line.
Another interesting finding is that people perceive responsive local government can aid mobility, but benefits may be captured by a few.
Though role of local democracy played a positive role in determining movement out of poverty in the four states surveyed, who had access to the state resources was determined by other factors.
For example, caste played a major role in Uttar Pradesh as to who had access to government resources. In West Bengal it was political membership.
Economic power determined who gained in Assam. “In government schemes, the number of people applying are more than allocated number, so political connections matter as to who receive the benefits,” said Deepa Narayan, editor and project director for the study titled, “Moving out of poverty”.
As to why people fall into poverty, the study found out that it’s mainly due to two shocks- health and social. Sudden illness resulting in huge medical expenditure or loss of earning member in the family or selling land during marriages are classified as health or social shocks.
“In sum our evidence reiterates the importance of health insurance and other safety net programs to arrest declines into poverty and destitution. Norms and practices around social expenditure also need to be addressed by policy makers and the middle class,” the report said.
In particular, Kapoor said government should look at asset creation as a tool to eliminate poverty as it seems to have larger benefit. At present, most state-run schemes like NREGS are oriented towards consumption expenditure.
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