Poverty in India

POVERTY IN INDIA
- Dr. KarishmaChaudhary

What is Poverty?
■ Poverty is a state or condition in which a person or
community lacks the financial resources and essentials for a
minimum standard of living.
■ Poverty means that the income level from employment is so
low that basic human needs can't be met.
■ According toWorld Bank, Poverty is pronounced
deprivation in well-being, and comprises many dimensions.
It includes low incomes and the inability to acquire the basic
goods and services necessary for survival with dignity.
■ Poverty also encompasses low levels of health and
education, poor access to clean water and sanitation,
inadequate physical security, lack of voice, and insufficient
capacity and opportunity to better one's life.

■ In India, 21.9% of the population lives below the national poverty line in 2011.
■ In 2012, around 170 million people, or 12.4% of India's population, lived in poverty (defined as
$1.90 (Rs 123.5)), an improvement from 29.8% of India's population in 2009.
■ According to United Nations Development Programme Administrator Achim Steiner, India
lifted 271 million people out of poverty in a 10-year time period from 2005/06 to 2015/16
■ Inequality of Income-According to Oxfam, India's top 1% of the population now holds 73% of
the wealth, while 670 million citizens, comprising the country's poorest half, saw their wealth
rise by just 1%

■ https://www.hindustantimes.com/india-news/what-has-driven-india-s-poverty-
reduction/story-s83YduiFxOfFyQGIqdLW5L.html

Types of Poverty:
■ Absolute Poverty: A condition where household income is below a necessary level to
maintain basic living standards (food, shelter, housing).This condition makes it
possible to compare between different countries and also over time.
It was first introduced in 1990, the “dollar a day” poverty line measured absolute
poverty by the standards of the world's poorest countries. In October 2015, the World
Bank reset it to $1.90 a day.
■ Relative Poverty: It is defined from the social perspective that is living standard
compared to the economic standards of population living in surroundings. Hence it is a
measure of income inequality.
Usually, relative poverty is measured as the percentage of the population with income
less than some fixed proportion of median income.

■ Poverty Estimation in India
■ Poverty estimation in India is carried out by NITI Aayog’s task force through the calculation of
poverty line based on the data captured by the National Sample Survey Office under the Ministry
of Statistics and Programme Implementation (MOSPI).
■ Poverty line estimation in India is based on the consumption expenditure and not on the income levels.
■ Poverty is measured based on consumer expenditure surveys of the National Sample Survey
Organisation. A poor household is defined as one with an expenditure level below a specific
poverty line.
■ The incidence of poverty is measured by the poverty ratio, which is the ratio of the number of poor to
the total population expressed as a percentage. It is also known as head-count ratio.
■ Alagh Committee (1979) determined a poverty line based on a minimum daily requirement of 2400
and 2100 calories for an adult in Rural and Urban area respectively.
■ Subsequently different committees; Lakdawala Committee (1993),Tendulkar Committee (2009),
Rangarajan committee (2012) did the poverty estimation.
■ As per the Rangarajan committee report (2014), the poverty line is estimated as Monthly Per Capita
Expenditure of Rs. 1407 in urban areas and Rs. 972 in rural areas.

■ The first step in measuring poverty is to specify a threshold level of expenditure that
separates the poor from non-poor.The threshold expenditure, called the poverty line,
is the amount necessary to purchase a basket of goods and services deemed necessary
to satisfy basic human needs at socially acceptable levels.The basket itself may be
referred to as the poverty line basket (PLB).

■ In December 2005, the PlanningCommission appointed committee to look into the matter under
the chairmanship of economist SureshTendulkar.
■ In its report, submitted in 2009, theTendulkar committee recommended the adoption of the
consumption basket underlying the Alagh-Lakdawala national urban poverty line in 2004-05
as the PLB and aligning the national rural poverty line to it using an appropriate price index.
Thus, rural and urban poverty lines were now fully aligned around a common PLB.
■ The change led to an upward adjustment of the national rural poverty line and correspondingly
the national rural poverty estimate. Rural and urban poverty lines for the states were to be then
derived by evaluating the same urban PLB at the state-level rural and urban prices.
■ The latest official poverty estimates for years 1993-94, 2004-05, 2009-10 and 2011-12 are now
based on what is commonly referred to as theTendulkar poverty line

■ There remained dissatisfaction with theTendulkar line, however, leading the PlanningCommission
to appoint yet another committee in 2012 under the chairmanship of economist C. Rangarajan.
■ The RangarajanCommittee submitted its report in June 2014. It recommended separate
consumption baskets for rural and urban areas which include food items that ensure
recommended calorie, protein & fat intake and non-food items like clothing, education, health,
housing and transport.
■ The Committee once again de-links the rural and urban poverty lines.The recommended
methodology of Rangarajan committee has raised theTendulkar national rural poverty line from
Rs. 816 per-capita per month at 2011-12 prices to Rs. 972 and theTendulkar national urban
poverty line from Rs. 1000 per capita per month at 2011-12 prices to Rs.1407.The
recommended increase was 19per cent in the rural poverty line and 41 per cent in the urban
poverty line.
■ These revisions lead to the total national poverty estimate in 2011-12 to rise from 21.9 per cent
under theTendulkar line to 29.5 per cent.

■ Causes of Poverty in India
■ Population Explosion: India’s population has steadily increased through the years. During the past
45 years, it has risen at a rate of 2.2% per year, which means, on average, about 17 million people
are added to the country’s population each year.This also increases the demand for consumption
goods tremendously.
■ Low Agricultural Productivity: A major reason for poverty in the low productivity in the
agriculture sector.The reason for low productivity is manifold.Chiefly, it is because of fragmented
and subdivided land holdings, lack of capital, illiteracy about new technologies in farming, the use
of traditional methods of cultivation, wastage during storage, etc.
■ Inefficient Resource utilisation:There is underemployment and disguised unemployment in the
country, particularly in the farming sector.This has resulted in low agricultural output and also led
to a dip in the standard of living.
■ Low Rate of Economic Development: Economic development has been low in India especially in
the first 40 years of independence before the LPG reforms in 1991.
■ Price Rise: Price rise has been steady in the country and this has added to the burden the poor
carry.Although a few people have benefited from this, the lower income groups have suffered
because of it, and are not even able to satisfy their basic minimum wants.

■ Unemployment: Unemployment is another factor causing poverty in India.The ever-
increasing population has led to a higher number of job-seekers. However, there is not enough
expansion in opportunities to match this demand for jobs.
■ Lack of Capital and Entrepreneurship:The shortage of capital and entrepreneurship results in
low level of investment and job creation in the economy.
■ Social Factors: Apart from economic factors, there are also social factors hindering the
eradication of poverty in India. Some of the hindrances in this regard are the laws of
inheritance, caste system, certain traditions, etc.
■ Colonial Exploitation:The British colonisation and rule over India for about two centuries de-
industrialised India by ruining its traditional handicrafts and textile industries. Colonial Policies
transformed India to a mere raw-material producer for European industries.
■ Climatic Factors: Most of India’s poor belong to the states of Bihar, UP, MP, Chhattisgarh,
Odisha, Jharkhand, etc. Natural calamities such as frequent floods, disasters, earthquake and
cyclone cause heavy damage to agriculture in these states.

■ https://www.youtube.com/watch?v=TIFiVknKdPc

Schemes by Govt.-Poverty Alleviation
Programs in India
■ Integrated Rural Development Programme (IRDP): It was introduced in 1978-79 and
universalized from 2nd October, 1980, aimed at providing assistance to the rural poor in
the form of subsidy and bank credit for productive employment opportunities through
successive plan periods.
■ Jawahar RozgarYojana/Jawahar Gram SamridhiYojana:The JRY was meant to
generate meaningful employment opportunities for the unemployed and
underemployed in rural areas through the creation of economic infrastructure and
community and social assets.
■ Rural Housing – Indira AwaasYojana:The IndiraAwaasYojana (LAY) programme
aims at providing free housing to Below Poverty Line (BPL) families in rural areas and
main targets would be the households of SC/STs.

■ Food for Work Programme: It aims at enhancing food security through wage
employment. Food grains are supplied to states free of cost, however, the supply of
food grains from the Food Corporation of India (FCI) godowns has been slow.
■ National Old Age Pension Scheme (NOAPS):This pension is given by the central
government.The job of implementation of this scheme in states and union territories
is given to panchayats and municipalities.The states contribution may vary depending
on the state.The amount of old age pension is ₹200 per month for applicants aged 60–
79. For applicants aged above 80 years, the amount has been revised to ₹500 a month
according to the 2011–2012 Budget. It is a successful venture.
■ Annapurna Scheme:This scheme was started by the government in 1999–2000 to
provide food to senior citizens who cannot take care of themselves and are not under
the NationalOld Age Pension Scheme (NOAPS), and who have no one to take care of
them in their village.This scheme would provide 10 kg of free food grains a month for
the eligible senior citizens.They mostly target groups of ‘poorest of the poor’ and
‘indigent senior citizens’.

■ Sampoorna Gramin RozgarYojana (SGRY):The main objective of the scheme
continues to be the generation of wage employment, creation of durable economic
infrastructure in rural areas and provision of food and nutrition security for the poor.
■ Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005:
The Act provides 100 days assured employment every year to every rural household.
One-third of the proposed jobs would be reserved for women.The central government
will also establish National Employment Guarantee Funds. Similarly, state
governments will establish State Employment Guarantee Funds for implementation of
the scheme. Under the programme, if an applicant is not provided employment within
15 days s/he will be entitled to a daily unemployment allowance.

■ National Rural Livelihood Mission: Aajeevika (2011): It evolves out the need to
diversify the needs of the rural poor and provide them jobs with regular income on a
monthly basis. Self Help groups are formed at the village level to help the needy.
■ National Urban Livelihood Mission:The NULM focuses on organizing urban poor in
Self Help Groups, creating opportunities for skill development leading to market-
based employment and helping them to set up self-employment ventures by ensuring
easy access to credit.
■ Pradhan Mantri KaushalVikasYojana: It will focus on fresh entrant to the labour
market, especially labour market and class X and XII dropouts.
■ Pradhan Mantri Jan DhanYojana: It aimed at direct benefit transfer of subsidy,
pension, insurance etc. and attained the target of opening 1.5 crore bank accounts.
The scheme particularly targets the unbanked poor.

■ In December 2005, the PlanningCommission appointed another committee to look
into the matter under the chairmanship of economist SureshTendulkar.
■ In its report, submitted in 2009, theTendulkar committee recommended the
adoption of the consumption basket underlying the Alagh-Lakdawala national
urban poverty line in 2004-05 as the PLB and aligning the national rural poverty
line to it using an appropriate price index. Thus, rural and urban poverty lines were
now fully aligned around a common PLB.

India’s Performance on SDG 1
■ India has not only committed to achieving the Sustainable Development Goals (SDGs),
it was a leading proponent of the first goal that addresses the issue of poverty.
■ This goal commits the signatories to eliminating poverty according to the common
international poverty line of $1.25 per person per day (at 2005 Purchasing Power Parity
or PPP) and cutting it in half “according to national definitions” (goals 1.1 and 1.2,
respectively)

■ First, we could track improvements in the average standards of living of different
deciles of the population at the bottom of the income distribution over time. For
example, we could think of the bottom 30 per cent of the population (defined in terms
of per capita income or household consumption) as poor.We could then track progress
in combating poverty by undertaking an analysis of how the average and median real
expenditures of the bottom three deciles of the population have been evolving over
time.

■ The 2015-16 Budget sets goals with respect to many of these components.Among the
target variables it mentions, the following may be readily capable of being tracked
(with the possibility of adding other similar indicators):
■ (i)Consumption of cereals, milk, meat, fruits and vegetables by the bottom three
deciles relative to the top three.
■ (ii)Progress towards housing for all by 2022.
■ (iii)Progress towards basic facilities in each house: 24-hour power supply, clean
drinking water, a toilet, and road connectivity.
■ (iv)Progress towards electrification of the remaining 20,000 villages in the country.
■ (v)Progress towards connecting each of the 1,78,000 unconnected habitations by all
weather roads.
■ (vi)Progress in various indicators of education and health

■ Next slides are for reading

Assessing the Need for Official Poverty
Lines
■ Potentially, poverty lines and the poverty estimates that they make possible can help
fulfil three objectives:
■ (i)Identification of the poor through a comparison of the poverty line with the
household (or individual) expenditure;
■ (ii)Tracking poverty in a region over time and comparing it across regions at a point in
time; and
■ (iii)Estimation of the required expenditure on anti-poverty programs and their
allocation across regions

Measuring Poverty and Identifying the
Poor
■ Poverty refers to socially perceived deprivation in terms of basic human needs. It has both
material and nonmaterial dimensions.
■ The material dimension relates to deprivation in consumption including items such as food,
clothing, durables, shelter, health, education and connectivity.
■ Nonmaterial dimension relates to deprivation associated with such phenomena as
discrimination based on gender, religion, race or caste.
■ In practice, the two dimensions are not distinct: deprivation in the nonmaterial dimension
partially manifests itself in deprivation in the material dimension and vice versa.Thus,
discrimination experienced by the Scheduled Castes and ScheduledTribes in the past
resulted in reduced access to food, clothing shelter and other sources of material
wellbeing. Equally, material deprivation may lead to a loss of social dignity.

■ Counting the Poor in India:A Brief History
■ The earliest poverty line figuring in the discussions on poverty in post-independence India was
Rs. 20 (rural) and Rs.25 (urban) per capita per month at 1960-61 prices.
■ Though not an official poverty line, it formed the basis of the extensive discussion of poverty
in the fifteen-year plan that the Perspective Planning Division of the PlanningCommission
produced in 1962.

■ Subsequently, in 1977, the PlanningCommission appointed an expert committee under the
chairmanship of economistY. K. Alagh to develop a methodology for the measurement of
poverty.The committee, which submitted its report in 1979, set the rural and urban poverty
lines at Rs. 49.09 and Rs. 56.64 per capita per month at 1973-74 prices, respectively.
■ Based on no. of calories

■ Another committee was, however, set up in 1989 under the chairmanship of economist D.T.
Lakdawala to look into the methodology for estimation of poverty at national and state level and
also to go into the question of re-defining poverty line, if necessary. In its report, submitted in 1993,
this committee retained the separate rural and urban poverty lines recommended by the Alagh
Committee at the national level.
■ In addition, it recommended a methodology to update these lines over time and extend them to
individual states using appropriate price indices.These recommendations led the erstwhile
PlanningCommission to adopt the practice of calculating poverty levels in rural and urban areas in
the states using state-specific poverty lines together with the national estimates

■ The Lakdawala methodology and poverty lines formed the basis of poverty estimates nationally
and across states until 2004-05.
■ In December 2005, the PlanningCommission appointed another committee to look into the
matter under the chairmanship of economist SureshTendulkar.
■ In its report, submitted in 2009, theTendulkar committee recommended the adoption of the
consumption basket underlying the Alagh-Lakdawala national urban poverty line in 2004-05
as the PLB and aligning the national rural poverty line to it using an appropriate price index.
Thus, rural and urban poverty lines were now fully aligned around a common PLB.
■ The change led to an upward adjustment of the national rural poverty line and correspondingly
the national rural poverty estimate. Rural and urban poverty lines for the states were to be then
derived by evaluating the same urban PLB at the state-level rural and urban prices.
■ The latest official poverty estimates for years 1993-94, 2004-05, 2009-10 and 2011-12 are now
based on what is commonly referred to as theTendulkar poverty line

■ TheTendulkar committee stipulated a benchmark daily per capita expenditure of RS
27 per day and RS 33 per day in rural and urban areas, respectively, and arrived at a
cut-off of about 22% of the population below poverty line.

■ TheTendulkar committee stipulated a benchmark daily per capita expenditure of RS
27 and RS 33 in rural and urban areas, respectively, and arrived at a cut-off of about
22% of the population below poverty line.

Poverty Lines in India
■ The poverty line defines a threshold income. Households earning below this threshold are
considered poor. Different countries have different methods of defining the threshold
income depending on local socio-economic needs.
■ Poverty is measured based on consumer expenditure surveys of the National Sample
Survey Organisation. A poor household is defined as one with an expenditure level below a
specific poverty line.
■ The erstwhile Planning Commission was the nodal agency in the Government of India for
estimation of poverty. It estimates the incidence of poverty at the national and state level
separately in rural and urban areas.
■ The incidence of poverty is measured by the poverty ratio, which is the ratio of number of
poor to the total population expressed as a percentage. It is also known as head-count
ratio.

■ Time Line of Poverty Estimation in India
■ The first Poverty line was created in India by the Erstwhile Planning Commission in the mid
1970s. It was based on a minimum daily requirement of 2400 and 2100 calories for an adult
in Rural and Urban area respectively.
■ YK Alagh Committee (1979):
■ In 1979, a task force constituted by the Planning Commission for the purpose of poverty
estimation, chaired byYK Alagh, constructed a poverty line for rural and urban areas on the
basis of nutritional requirements.
■ Table 3 shows the nutritional requirements and related consumption expenditure based on
1973-74 price levels recommended by the task force. Poverty estimates for subsequent
years were to be calculated by adjusting the price level for inflation.

Lakdawala Committee Tendulkar Committee Rangarajan Committee
The committee was constituted
in the year 1993.
The Committee was constituted
in the year 2004-05
The Committee was constituted
in the year 2012.
The criteria suggested by the
committee was Calorie intake
based on consumption
expenditure.
The committee estimated
poverty by using basic
requirement of the poor such as
housing, clothing, shelter,
education, sanitation, travel
expense and health etc., to make
poverty estimation realistic.
The committee suggested to do
away with the calorie-based
criteria.
The committee also suggested to
have a uniform poverty line
across rural and urban India.
The Rangarajan Committee goes
back to the idea of Lakdawala
committee method of calculating
Rural and Urban Poverty
Separately.
The Rangarajan group took the
view that the consumption
basket should contain a food
component that satisfied certain
minimum nutrition requirements,
as well as consumption
expenditure on essential non-
food item groups (education,
clothing, conveyance and house
rent) besides a residual set of
behaviourally determined non-
food expenditure.

Lakdawala Committee Tendulkar Committee Rangarajan Committee
The committee recommended for state-
specific poverty lines.
TheTendulkar committee stipulated a
benchmark daily per capita expenditure
of RS 27 and RS 33 in rural and urban
areas, respectively, and arrived at a cut-
off of about 22% of the population below
poverty line.
C Rangarajan expert group report,
recommended a monthly per capita
consumption expenditure of RS 972 in
rural areas and RS 1,407 in urban areas as
the poverty line at the all-India level.
Assuming five members for a family, this
will imply a monthly per household
expenditure of RS 4,860 in rural areas
and RS 7,035 in urban areas.
The Rangarajan committee estimated a
daily per capita expenditure of RS 32 and
RS 47, in rural and urban areas
respectively as the poverty line, and
worked out poverty line at close to
29.5%.

As per Ladkawala committee the
percentage of population living below
poverty line in the year 2004-05 was:
Rural: 28.3%
Urban: 25.7%
All India: 27.5%
As perTendulkar report, the percentage
of people living below poverty line in the
year 2004-05 were as follows:
Rural:41.8
Urban: 25.7
Total 37.2
In the year 2011-12,
Rural:25.7
Urban: 13.7
Total: 21.9
The Rangarajan expert group estimates
that 30.9 percent of the rural population
and 26.4 percent of the urban population
were below the poverty line in 2011-12.
The all-India ratio was 29.5 percent.

■ Indian states have applied a variety of alternative criteria to identify below poverty line
(BPL) households. In particular, states have used the information from BPL censuses
to implement various anti-poverty programmes. In future, Socio-economicCaste
Census 2011 (SECC-2011)will be one of the leading sources of data for identification of
beneficiaries under welfare schemes.

Programs of Poverty alleviation
■ There are two kinds of anti-poverty programs: universal and targeted. For programs
that are universal, identification of the poor is not required.The program is available
to all.
■ For example, the MahatmaGandhi National Rural Employment Guarantee Act
(MNREGA) scheme guarantees hundred days of employment per year to one adult in
every rural household.This benefit is available to all rural households and therefore
requires no information on poverty.

■ India has not only committed to achieving the Sustainable Development Goals (SDGs),
it was a leading proponent of the first goal that addresses the issue of poverty.This
goal commits the signatories to eliminating poverty according to the common
international poverty line of $1.25 per person per day (at 2005 Purchasing Power Parity
or PPP) and cutting it in half “according to national definitions” (goals 1.1 and 1.2,
respectively)

■ The 2015-16 Budget sets goals with respect to many of these components.Among the
target variables it mentions, the following may be readily capable of being tracked
(with the possibility of adding other similar indicators): (i)Consumption of cereals,
milk, meat, fruits and vegetables by the bottom three deciles relative to the top
three.(ii)Progress towards housing for all by 2022. (iii)Progress towards basic facilities
in each house: 24-hour power supply, clean drinking water, a toilet, and road
connectivity.(iv)Progress towards electrification of the remaining 20,000 villages in the
country.(v)Progress towards connecting each of the 1,78,000 unconnected habitations
by all weather roads.(vi)Progress in various indicators of education and h

■ Subsequently, in the post-reform era, growth accelerated and poverty saw a definite
decline across all groups.To illustrate, Figure 3 shows poverty levels at theTendulkar
poverty line in rural and urban India and Figure 4 those forthe Scheduled Castes,
ScheduledTribes and the overall population in 1993-94, 2004-05 and 2011-12.The
figures show a steady decline in poverty across all groups.Additionally, the decline is
much sharper during the seven-year period between 2004-05 and 2011-12 when
growth was significantly more rapid than during eleven years from 1993-94 to 2004-
05.We also see that poverty rates between groups with higher poverty and those with
lower poverty levels have converged.That is to say, the percentage point reduction in
poverty among groups with higher rates of poverty than the general population was
larger

■ It is sometimes asked whether these poverty reductions are to be attributed to growth
or anti-poverty programs such as the MahatmaGandhi National Rural Employment
Guarantee (MGNREGA)and the Public Distribution System (PDS).Clearly, the
evidence represents the direct effect of growth plus that through anti-poverty
programs.The key point to emphasize, however, is that without rapidgrowth that
made enhanced revenues possible, anti-poverty programs could not have expanded at
the pace they did.This point was driven home during the years 2012-13 and 2013-14
when the pace of the expansion of social spending had to be arrested due to slow
growth in revenues. Rapid growth is not a sufficient condition for rapid expansion of
social spending, but it is necessary.

■ The Central Role of Agricultural Growth in Poverty ReductionAny strategy for poverty
reduction must tackle the issues facing rural India, which accounts for68.8 per cent of
the population or 833 million individuals as per Census 2011.As per the poverty
estimates of 2011-12, about 80% ofIndia’s poor live in rural areas, and livelihood of
most of them is dependent directly or indirectly on the performance of agriculture.
The rural farm and non-farm incomes are interdependent such that a strong non-farm
rural economy requires a vibrant agricultural econom

■ According to the 2011-12 Employment-Unemployment Survey by the NSSO,
agriculture and allied activities employed 49% of the total workforce in India. But the
share of agriculture in the GDP at 2004-05 prices that year was only 14.4 per cent. One
of the reasons for this skewed distribution of labour force in agriculture is the paucity
of alternative livelihood opportunities either at village level or in the nearby townships
and cities. Excess manpower coupled with traditional agricultural practices
hasresulted in low farm yield and income.To break this cycle of poverty in rural areas,
a two-pronged strategy is required: we must improve the performance of agriculture
and create jobs in industry and services in both rural and urban areas

■ A parallel taskforceoffersdetailed recommendations on how to modernize Indian
agriculture and accelerate its growth. But it is pertinent to consider in brief some
possible steps here. First, changes are required with respect both quality and efficient
use of inputs. Improved irrigation leading to “more crop per drop” should be on top of
thislist.Water tables in western India have dropped to dangerously low levels and we
need to massively shift towards micro irrigation methods that water crops in a more
targeted and controlled manner thereby yielding higher output per hectare while also
conserving water. Budget 2016-17 proposes to take some important concrete steps in
this direction.

■ We also need better seeds and more efficient use of fertilizer. China has been highly
successful in raising productivity via the use of hybrid and other seed varieties and we
must look into this more closely. More than a decade has passed since Bt. Cotton
seeds were introduced with very positive overall effect on the income of the vast
majority of farmers who adopted them. It is now time to seriously consider
theintroduction of new seed varieties.The large subsidy on urea has resulted in
excessive use of this fertilizer in some regions with detrimental effects on productivity,
soil quality and the environment.This too requires attention.

■ Second, it is important for famers to receive remunerative prices. Currently, a highly
fragmented supply chain has meant that the farmer gets a tiny proportion of
■ 16the final price paid by the consumer.3Budget 2016-17 proposes to create a national
e-spot market along the lines of the recent Karnataka e-spot market under the
auspices of NCDEX Spot Market.This is a welcome development.The reform of the
Agricultural Price Marketing Committees (APMC) Act also needs to be completed.
Most states have initiated this reform but stopped well short of implementing it fully.
It mayalso be worth considering building warehouses at the village level to make them
accessible to small and marginal farmers. Also essential is the expansion of cold
storage facilities to minimize wastage, especially in fruits and vegetables.

■ Third, regionally, there is a need for a ‘second green revolution’ in rain-fed areas in
general and eastern India in particular.We must bring modern irrigation technology to
these so far underexploited areas.The high priority accorded to this objective by the
present government is a welcome development in this regard.

■ Fourth, Indian agriculture disproportionately consists of small and marginal farmers who
are particularly vulnerable to crop failure.An important step that would help small and
marginal farmers is to reform the tenancy laws.These were originally meant to help small
and marginal farmers but now operate against them. Even limited legalisation of
agricultural tenancy and freeing the land lease market with proper record of ownership and
tenancy status will help such farmers. Some small farmers may prefer to lease their land in
favour of alternative occupations if they had assurance that they would be able to return to
farming if they wished. Some large farms may lease in land and even employ the small
owners on their own farms to grow specific crops under supervision. Moreover, a stark
reality today is that educated young men in rural households want to exit farming. Many
large and absentee owners are leaving land under-cultivated.This land could be cultivated
more fully if it could be leased out without fear of loss of ownership.The NITI Aayog is
currently working on a Model Land Leasing Act n close consultation with states.

■ Finally, diversification into high value crops such as horticulture and fruits and
vegetables, livestock, poultry and fisheries may offer avenues to higher income o even
small and marginal farmers.The experience of undivided Andhra Pradesh offers
important pointers in this context.

■ Based on 2019's PPPs InternationalComparison Program,According to the United
Nations Millennium Development Goals (MDG) programme,88 million people out of
1.2 billion Indians, roughly equal to 6.7% of India's population, lived below the
poverty line of $1.25 in 2018–19.

Tomorrow
■ MakingGrowth in Manufacturing and Services Employment Intensive

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