Page last updated at 13:26 GMT, Tuesday, 12 August 2008 14:26 UK

Poverty still grips millions in India

By Kumar Malhotra
BBC News

Children in India
Not everyone in India faces a bright future

Every now and then, India gets a stark reminder that the feel good factor created by high growth rates in recent years eludes millions of its people.

One came earlier this month when Unicef said that India had some of the worst rates of child survival in the world. In 2006, 2.5 million children under five died in India and China, of whom 2.1 million were in India.

When you talk to officials and experts in India, they say poverty in is in decline.

"In the decades of the 1980s, there was a very rapid reduction in poverty," according to Dr Pronab Sen, chief statistician for the Indian government.

"The decade of the nineties and the beginning of the two thousands - the last 15 years - has been a little slower, but there's still been a perceptible decline."

Jayati Ghosh
People tend to forget that in all this talk of India Shining, that our development project is still very incomplete
Economics professor Jayati Ghosh

The most recent government figure is that about 26% of India's population are officially classed as poor - that is people getting less than the minimum number of calories regarded as necessary for survival .

Data from other sources such as the World Bank support the notion that absolute poverty is in decline, although there always seems to be some variation between different sets of figures.

But some experts like Jayati Ghosh, an economics professor at Delhi's Jawaharlal Nehru University (JNU) in Delhi, believe that the poor in India are far more numerous that these figures suggest.

"We are not including people who do not have access to running water, sanitation, schooling, health and education. They may well not have any of these things, yet still not be considered poor because they earn enough to have the minimum calorie requirement."

Impoverished farmers

This is the key part of being poor in today's India - a lack of access to basic services and infrastructure. It all points to the need for massive intervention by the state.

Beggar in India
Poverty alleviation programmes are blunted by corruption

This does happen in India - and has done for many years through anti-poverty programmes and schemes to develop both rural and urban areas.

Quite how much difference they can make is often debated. In the budget this year, the government announced a plan to help out impoverished farmers by writing off huge debts they have no hope of repaying.

It was certainly headline grabbing, but critics argue that its impact is limited because it doesn't amount to fresh money being spent in rural areas - just banks writing off bad loans.

Generating more growth in the rural economy has to be a priority, if only because some 70% of the 1.1bn population lives there.

It has lagged behind the manufacturing and especially the service sector. The government is currently rolling out a huge rural employment scheme, guaranteeing some work for the poorest households.

But if the rural poor do manage to earn money, they don't want to rely on the state to provide the services they need. This is illustrated by education, where the poor take their children out of barely functioning public schools so they can educate them privately.

Blunted by corruption

"This is the tragedy of Indian policy: the government is sitting there paying its teachers and they don't turn up to school," says Surjit Bhalla, an investment manager and economic analyst in Delhi.

The same neglect can be seen in the health sector. The World Bank says that less than 10% of public spending on health goes to the poorest 20% of the population.

When we talk about rural roads, irrigation, rural telecommunications, we really need to carry those through much, much faster than we are doing now
Pronab Sen, chief statistician

Poverty alleviation programmes can also be blunted by corruption, often colluded at by self-interested bureaucrats and unscrupulous politicians at various levels.

The result is that India now shows stark inequalities - often along caste, religious and gender lines. And in some ways, this has become a vicious circle.

"What is happening is that as the country prospers, the willingness of educated and skilled people to stay in the villages is going down," concedes Pronab Sen.

Does the current approach need to be rethought? Some would argue in favour of a greater focus on the small-scale sector in towns and villages across India to create more jobs.

This should be combined with a massive increase in spending on health and education as well as physical infrastructure like electrification, water supplies, irrigation, roads and so on.

The debate over poverty and inequality is a crucial one for the future of India's social and political stability.

Economic progress is creating huge opportunities for boom areas and more privileged classes. But those left behind look unlikely to catch up without sustained and carefully targeted intervention.

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