Gujarat’s gharib kalyan melas failed to reduce poverty: Planning Commission

By Rajiv Shah 
The Planning Commission of India’s new report put out in July 2013, “Poverty Estimates 2011-12”, which based on the National Sample Survey’s “Key Indicators of Employment and Unemployment in India, 2011-12”, published in spring 2013, has gone a long way to disprove state government propaganda that Gujarat’s gharib kalyan melas, held last year ahead of the state assembly elections, suggested a “model for other states to follow for reducing poverty”. A counterview.org analysis of comparison between 20 major states suggests that things have not been as rosy in Gujarat, as has been suggested. There is no doubt that, as data suggest, after 2004-05, there has been acceleration in the rate of poverty reduction. But this is true of the entire country, and not special to Gujarat.
In fact, an analysis of poverty line data of different states over the years suggests that the rate of poverty reduction in Gujarat between 2004-05 and 2011-12 was 15.2 per cent. This was worse than as many as eight out of 20 major states, including Andhra Pradesh (20.7 per cent), Bihar (20.7 per cent), Madhya Pradesh (17 per cent), Maharashtra (20.8 per cent), Orissa (24.6 per cent), Rajasthan (19.7 per cent), Tamil Nadu (17.6 per cent), and Uttarakhand (21.4 per cent). The national average for the rate of poverty reduction during this period was higher than that of Gujarat – 15.3 per cent.

Percent people below poverty line (rural)

A further analysis suggests that things are particularly not quite very good for Gujarat when it comes to poverty reduction in the state’s urban areas. Thus, as many as 10 per cent of the urban population of Gujarat was pushed out of the poverty level between 2004-05 and 2011-12, which is lower than as many as 11 Indian states out of a total of 20 major states, including Andhra Pradesh (17.6 per cent), Bihar (12.5 per cent), Haryana (12.1 per cent), Karnataka (10.7 per cent), Kerala (13.4 per cent), Madhya Pradesh (14.1 per cent), Maharashtra (16.5 per cent), Orissa (20.3 per cent), Rajasthan (19 per cent), Tamil Nadu (13.2 per cent), and Uttarakhand (15.7 per cent). The national average for urban poverty reduction during the period comes to 12 per cent, two per cent higher than the state.

Percent people below poverty line (urban)

A further analysis of the data suggests that, during the “gharib kalyan mela” period, between 2009 and 2012, there was a marked downslide in the process of rural poverty reduction. The melas were targeted at rural areas, and the main aim was to distribute government schemes to the poor people, by allegedly eliminating the role of the middleman. In the pre-gharib kalyan mela phase, between 2004 and 2009, rural poverty in Gujarat went down by 12.4 per cent, which was much higher than the national average of 8.2 per cent, and several major states. However, after 2009, till 2012, the Planning Commission data suggest, rural poverty went down by a mere 5.2 per cent, which is nearly seven per cent lower than the previous phase. The national average of poverty reduction during 2009-12 was two per cent higher – it stood at 7.3 per cent.

The Planning Commission data further show that in 2011-12, in Gujarat, 16.6 per cent of people were below the poverty line. A breakup suggests that in rural Gujarat, 21.5 per cent of people were below poverty line, compared to 10.1 per cent in the state’s urban areas. The states which had lower per cent of people below the poverty line are Andhra Pradesh (9.2 per cent), Haryana (11.2 per cent), Himachal Pradesh (8.1 per cent), Jammu & Kashmir (10.35 per cent), Kerala (7.1 per cent), Punjab (8.3 per cent), Rajasthan (14.7 per cent), Tamil Nadu (11.3 per cent) and Uttaranchal (11.7 per cent).

Percent people below poverty line (urban + rural)

Prof Indira Hirway, who presented a paper at a national seminar in Ahmedabad in 2012, titled “Is Gujarat’s Growth Inclusive”, has noted that “there is considerable jubilation about the accelerated decline in poverty in India. It is argued that “sustained fast growth works” (Surjit Bhalla), or that “it is time to celebrate” (Arvind Panagariya) and “decline in poverty of SC, ST is a big achievement” (Sukhdev Thorat and Amresh Dubey). There is no doubt that this is a positive development.
However, she noted, “It is important to note however, that though the rate of decline in poverty during 2004-05 – 2009-10 in Gujarat was 8.6 percentage point, the state ranked 10th among the major 20 states in India in reduction of poverty. The relatively slow growing states like Uttarakhand, Tamil Nadu, Orissa, Madhya Pradesh, Karnataka, Himachal Pradesh etc. have experienced much higher decline in poverty during this period. In fact, Gujarat, which stood 7th in the incidence of poverty among the 20 states in 1993-94, maintained its 7th rank in 2004-05 but dropped to 9th rank in 2009-10.”
Prof Hirway added, “In other words, in spite of being the fastest growing state during 2004-05 – 2009-10, Gujarat slipped in its performance in poverty reduction. This shows that the growth alone does not count for poverty reduction, and something more is needed to translate growth into poverty reduction. The question is – can we reduce poverty faster? With more than 10 percent (10.27) rate of growth of SDP per year Gujarat state has achieved 1.7 percentage point decline in poverty. This implies that the elasticity of poverty reduction to growth is very low, 0.17. At the all India level this elasticity is 0.27. Is it possible to go faster when a little less than one fourth of the population is under poverty?”