Mean consumption, poverty and inequality in rural India in the 60th round of the National Sample Survey

This article reports on mean consumption, poverty (all three FGT measures) and inequality during 2004 for rural India using National Sample Survey (NSS) data for the 60th Round. Mean consumption at the national level is much higher than the poverty line. However, the Gini coefficient is higher than in recent earlier rounds. The headcount ratio is 22.9 per cent. Mean consumption, all three measures of poverty and the Gini coefficient are computed at the level of 20 states and 63 agro-climatic zones in these 20 states. It is surmised that despite impressive growth rates deprivation is pervasive, pockets of severe poverty persist, and inequality is rampant.     

National Rural Employment Guarantee Scheme, poverty and prices in rural India

The objective of this analysis is mainly to construct an intuitive measure of the performance of the National Rural Employment Guarantee Scheme (NREGS) in India. The focus is on divergence between demand and supply at the district level. Some related issues addressed are: (i) whether the gap between demand and supply responds to poverty; and (ii) whether recent hikes in NREGS wages are inflationary. Our analysis confirms responsiveness of the positive gap between demand and supply to poverty. Also, apprehensions expressed about the inflationary potential of recent hikes in NREGS wages have been confirmed. More importantly, higher NREGS wages are likely to undermine self-selection of the poor in it.     

Does Agricultural Growth Matter in Poverty Alleviation?

This article uses a panel survey of households in the Indian state of Maharashtra to demonstrate that agricultural growth takes too long to trickle down to the rural poor. Unanticipated inflation, on the other hand, aggravates rural poverty, as does domination of the agricultural growth process by large landholders. This affects the poor through the oligopsonistic influence of the landholders in rural labour markets, dampening employment and wages (as compared with the outcome in a competitive market). In the context of structural adjustment, while the emphasis on allocative efficiency through withdrawal of input subsidies and remunerative prices for output is justified, acceleration in agricultural growth by itself is unlikely to make a dent in rural poverty. Measures designed to accelerate agricultural growth must therefore be supplemented by direct anti-poverty interventions. Consumer price stabilization is particularly important, and would be assisted by an overhaul of the Public Distribution System. Major reforms would include improved flexibility in the scale of the PDS, better targeting through alternative distribution networks when private trade channels are weak or non-existent, and simplification of registration procedures. The oligopsonistic role of large landholders could be curbed through market-mediated land redistribution, scrapping of all tenancy regulations when tenancy markets function efficiently, and through large-scale intervention in rural labour markets along the lines of the Employment Guarantee Scheme.