Essay: The Vicious Circle in India – reducing poverty and fostering human development

Achieving reduction in poverty and fostering human development are the prime issues for any developing economy as they serve as the fundamental prerequisites for achieving sustainable development. As we observe the cases of growing inequity among countries both at inter as well as intra level we realize the severity due to this troubling trend. The problem requires immediate addressing else it will lead to increase in social conflict and an increase in the deterioration of the ecosystem. There is a need to address these issues in novel ways. There are several studies which have been examined the relationship between poverty and environment and a few among these studies have done it so in the context of the ‘sustainable development’ too (Lele, 1991).
The focus of most of the available literature on the subject focuses on the ‘vicious circle’ linking poverty and environmental degradation. The circle is obvious as the farmers, under the pressures from the increasing population, high inflation, and poverty, indulge in cropping onto the fragile marginal lands. This leads to the further degradation of the already deprived lands. This has an adverse impact on the crop yield and reduces it to further impoverish the farmers as cited in various studies including Dasgupta and Mafiler(1994); Pearce and Warford(1993); Mink( 1993). The ultimate consequence of the vicious circle of poverty and degradation is poverty alleviation. Efforts to reduce degradation of the environment and to reverse the environmental decline will help the poor (Leonard, 1989; Cleaver and Schreiber, 1994).
India is a diverse economy which presents complexity in understanding of the various social issues owing to its variations across regions, social class set up and several other factors. The Indian economy has witnessed an impressive pace of growth over the last two decades which are due to a number of wide-ranging structural reforms for the opening up of the economy and make it more competitive. More recently, activity has slowed reflecting not only the weak global environment but also the emergence of strains created by the pressure that rapid economic growth has put on energy, natural resources, infrastructure, and skills. The policy-makers, NGOs and academicians all have unanimously agreed that proper as well as sustained ecosystem management can play an important role in the reduction of poverty at global level and also the relationship between ecosystems and human well-being are not simple but dynamic, complex and challenging because of their dependence on various factors like time-lags, geographical/temporal scales, cultures, institutions, traditions and many other specific characteristics of local ecosystems and the various constituents defining human well-being in the particular context.
But even when the complex and multidimensional nature of these links is known as well as acknowledged worldwide we observe a plethora of research studies using one-dimensional linear techniques (like environmental impact assessments, simple livelihood analysis to name a few) among researchers and policy-makers for the sake of reducing complexity of analysis. Recently the new initiatives including the UNEP’s Poverty-Environment Initiative has bought a revolution in the way to address the issue by making a comprehensive and systematic assessment of the complex poverty-environment linkage that matches the technical advancements. The focus of these initiatives is directed towards the use of multidimensional approach for the evaluation of human well-being and ecosystem services. The initiatives draw heavily on the Capability Approach and its implications for the establishment of a human development perspective which assesses the well-being in terms of distributive considerations and the concerns regarding the choice of criteria should to make normative assessments. Though the Livelihoods Approach has been a pioneer in the promotion of multidimensionality analyses of poverty-environment links we will not use this in the study as the Livelihoods Approach bases its assessment of impact on human well-being on the distribution of resources among different individuals or communities which may not be perfect indicators.
In the current case study we would like to explore the criterion and their relative importance while the assessment of the impact of poverty on ecosystems or the impact of ecosystem changes on poverty is made using Capability Approach. The Capability Approach is preferred over the other techniques for the reason that it takes into account the following:
(1) Multidimensional aspects of human well-being,
(2) The use of participatory approaches to improve the ownership and participation of local communities in the management of their natural resources,
(3) The choice of environmental and poverty indicators that reflect the importance of assessing the quality of processes not merely as the outcomes of policies,
(4) What people are actually able to do (ends) rather than the resources (means) they have to promote their well-being.
(5) Ethical considerations for assessing distributive issues in assessing human well-being.
The four prime issues (components) that will be dealt in the case study are:
1. Poverty,
2. Environment,
3. Sustainable development and
4. Inclusive Growth
Current Scenario in India:
Source: planningcommission.nic.in/news/pre_pov2307.pdf’
Source: http://www.dw.de/indias-poverty-statistics-may-be-flawed-critics/a-16999373
The statistics of Poverty in India exhibit a record decline to 22% in 2011-12(Planning Commission Report, 2013) with the number of poor in population estimated at 269.3 million (including 216.5 million from rural India). According to the release from the Planning Commission, 25.7% of people in rural areas were below the so-called poverty line and 13.7% in urban areas estimated on the basis of consumption expenditure captured in the five-year surveys undertaken by the National Sample Survey Office (NSSO). This is comparable with 33.8% and 20.9%, respectively, in 2009-10, and 42% and 25.5%, respectively, in 2004-05. The decline in poverty numbers was first reported by The Hindu on 16 July indicating that nearly 20 million people were pulled out of poverty every year.
Meaning behind the Trends:
Over the last decade there has been a consistent decline as the levels of poverty dropped from 37.2% in 2004-05 to 29.8% in 2009-10.These trends though not surprising has opened up a line of debate on the factors that are considered responsible for the change. These are reflections of the broader trends in the background. According to the Planning Commission the decline in poverty flows from the increase in real per capita consumption. The data in the report suggests per annum increase in real Monthly Per Capita Consumption Expenditure (MPCE) throughout the decade implying (1) the increase in real MPCE was much more in the second half of the decade (2004-05 to 2011-12) in comparison with the first half (1993-94 to 2004-05), (2) that the distribution of the increase was equally fair across all deciles, and (3) the distribution was particularly equitable in rural areas.
Some economists have a theory is that this decline is the realization of the trickle-down effect of the record economic and otherwise growth which the last decade witnessed. Even though this growth did not reflected itself in the commensurate rise in employment it did result in higher tax revenue, to enable the government for funding a large social sector spending programs including of rural job guarantee one etc. An alternative theory suggests that the increase in development expenditure between the seven-year period between 2004-05 and 2011-12 from 38% in 2004-05 to 45% of total expenditure in 2011-12 played a significant part in reducing India’s poverty levels.
The capability approach propagated by Amartya Sen argues that the integration of the above two theories of development expenditure along with growth combat poverty. The approach is questioned by an economist from Columbia University who emphasizes on rapid growth over and above the development expenditure.
Disputes about the estimates:
The experts show concerns about the comparability of the poverty numbers. The fresh estimations by the plan panel using the Tendulkar methodology have been criticized to have fixed the poverty lines at Rs.22.42 per person per day in rural areas and Rs.28.65 in urban areas which were too low to set the level. A committee under the chairman of the Prime Minister’s economic advisory council is set up for probing the methodology for determination of poverty lines and estimations of poverty numbers. However the release of the plan panel shows there would still be a decline in the poverty rates from 2004-05 levels regardless of methodology was used to determine the poverty line. The estimates do not make use of data from the NSSO consumption survey in 2009-10 as it was a drought year. Another issue that crops up in the context is the clarification regarding the additional imputed value and its effect on change in poverty levels. The sharp decline in Bihar and Andhra Pradesh in two years also needs to be analyzed in depth. The inclusion of the imputed spending for free meals from the mid-day meals program and the Integrated Child Development Services scheme in calculation of monthly expenditure for the first time in the five-yearly surveys in 2009-10; the Tendulkar committee recommendations applied to data collected with a mixed recall period, which was introduced only in 1999-2000 causes comparison of 1993-94 data difficult with later years. Some people from the political opposition to the government have also described these calculations as statistical jugglery while others have raised serious questions about the scientific correctness of these calculations.
Linking poverty and environment:
Poverty: Poverty may range from the paucity of various assets and the associated income flows: (1) natural resource assets; (2) human resource assets; (3) on-farm physical and financial assets; (4) off-farm physical and financial assets. Poverty measurement issues include (1) level, (2) distribution (over households), (3) time path (transitory or chronic), and (4) affect of the environment-poverty links.
Environment can be differentiated on the aspects of the disparities across the components of natural resources like: (1) land/soil, (2) water, (3) ground cover, (4) wild and domesticated biodiversity and (5) air.
Poverty tend to lead people to pursue desperate measures for living like cutting down of forests in quest of fuel, to keep large number of livestock, to sell off the natural resources for their commercial value. Thus the definition of poverty from a narrow financial sense may be concomitant with high ecological and biodiversity conservation. Improving the lives of the poor entails a pressure for increasing the food supply, sanitation, education, health care, housing and security and therefore has environmental implications of those increases.
Sustainable development: The term ‘sustainable development’ encompasses the design of development activities in a way that achieves the needs of present generation without compromising the needs of the posterior or future generations.
Inclusive growth implies advancements in equitable opportunities for the economic participants as the economy progresses towards the process of economic growth. Green economy and inclusive and sustainable development will now be the change agent in the discourse on development. The notion of the ‘green economy’ focuses on the usage of carbon-credits as well as market based mechanisms to cure the development ills. Social sustainability must be looked as the significant pillar to lay the foundations of sustainable development as the greening process will not result in lifting the vulnerable sections of the society. In order to stabilise the environmental change cycles, curb the ecological scarcity along with enhancing the ecological system there is a need to have integration of environment, society and investments; sustainability of the environment which is the supply, sustained access of resources to the society as well as the quality of investments. A green economy needs an international enabling environment in terms of trade to facilitate development decisions.
Suggested Policy
From the review of literature it can be ascertained that a healthy environment is surely required to lift the people out of poverty but it cannot be a sole factor to do so as it has also been observed that the tropical forests beyond the agricultural frontier have some areas with extreme marked poverty in spite of the fact that the place is environmentally enriched (Chomitz, 2007). Similarly it has also been observed that efforts to address social imbalances will be required for ensuring the sustainable resource use but it cannot be the sole determinant for this (Gilbert, 2010). At rural level a policy that integrates the improved practices of land use and the areas under forests along with the economic incentives and technical assistance will provide a win-win avenue for the poverty and environmental policy. It will prove itself to be the best alternative for stabilising the significant sectors of a developing country like India and in eradication of rural poverty. These efforts need to be complimented with large-scale agriculture, speculating the real estate. For the urban area a policy that addresses the water and sanitation issues is needed. The poverty-environment linkages are sure to yield substantial payoffs in terms of the improved health amenities, reduced exposure to the toxics, the systems of waste collection and recycling along with significant social rewards.
Implementation
Sustained interventions to keep a tab on the structural realities and focus on impacting the underlying causes of poverty are more likely to deliver the required transformations for anchoring the sustainable development. There is a need to modify development policy for addressing the poverty in its various forms including the poverty in energy sector, inaccessibility to water and sanitation facilities, insecurity in accessing food or malnutrition, lack of education and health facilities etc. These interventions must connect growth, gender, poverty and environment in a single thread for their interdependence is the key to sustained development.
There is an imperative need to focus efforts to check the decline of the quantity and quality of natural resources particularly water to avoid the possibility of conflict over resources.. Inclusive and sustainable development need to take the advantage of the ‘social technologies’ including the innovations in political front, true engagements, evaluations which are honest making a clear case for the strong representative state, identification of the roles of civil society as well as the private sector which can be a complimentary carrier to define and attain sustained development.
To tackle the issue of reducing poverty and foster human development, the prime concerns for any developing economy novel approaches are required. As we observe the cases of growing inequity among countries both at inter as well as intra level we realize the severity due to this troubling trend. The problem requires immediate addressing else it will lead to increase in social conflict and an increase in the deterioration of the ecosystem. There is a need to integrate the policies of poverty and environment together for the development as they have the potential to generate substantial social benefits. But in practice it has been observed that these policies do not produce a win-win situation for all sectors of society and therefore the implementation of such policies is often a great challenge.