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India: Antipoverty Programs
Country Study > Chapter 6 > Character and Structure of the Economy > The Role of Government > Antipoverty Programs

ANTIPOVERTY PROGRAMS


The government has initiated, sustained, and refined many programs since independence to help the poor attain self sufficiency in food production. Probably the most important initiative has been the supply of basic commodities, particularly food at controlled prices, available throughout the country. The poor spend about 80 percent of their income on food while the rest of the population spends more than 60 percent. The price of food is a major determinant of wage scales. Often when food prices rise sharply, rioting and looting follow. Until the late 1970s, the government frequently had difficulty obtaining adequate grain supplies in years of poor harvests. During those times, states with surpluses of grain were cordoned off to force partial sales to public agencies and to keep private traders from shipping grain to deficit areas to secure very high prices; state governments in surplus-grain areas were often less than cooperative. After the late 1970s, the central government, by holding reserve stocks and importing grain adequately and early, maintained sufficient supplies to meet the increased demand during drought years. It also provided more remunerative prices to farmers.

In rural areas, the government has undertaken programs to mitigate the worst effects of adverse monsoon rainfall, which affects not only farmers but village artisans and traders when the price of grain rises. The government has supplied water by financing well digging and, since the early 1980s, by power-assisted well drilling; rescinded land taxes for drought areas; tried to maintain stable food prices; and provided food through a food-for-work program. The actual work accomplished through food-for-work programs is often a secondary consideration, but useful projects sometimes result. Employment is offered at a low daily wage, usually paid in grain, the rationale being that only the truly needy will take jobs at such low pay.

In the 1980s and early 1990s, Indian government programs attempted to provide basic needs at stable, low prices; to increase income through pricing and regulations, such as supplying water from irrigation works, fertilizer, and other inputs; to foster location of industry in backward areas; to increase access to basic social services, such as education, health, and potable water supply; and to help needy groups and deprived areas. The total money spent on such programs for the poor was not discernible from the budget data, but probably exceeded 10 percent of planned budget outlays.

India has had a number of antipoverty programs since the early 1960s. These include, among others, the National Rural Employment Programme and the Rural Landless Employment Guarantee Programme. The National Rural Employment Programme evolved in FY 1980 from the earlier Food for Work Programme to use unemployed and underemployed workers to build productive community assets. The Rural Landless Employment Guarantee Programme was instituted in FY 1983 to address the plight of the hard-core rural poor by expanding employment opportunities and building the rural infrastructure as a means of encouraging rapid economic growth. There were many problems with the implementation of these and otherschemes, but observers credit them with helping reduce poverty. To improve the effectiveness of the National Rural Employment Programme, in 1989 it was combined with the Rural Landless Employment Guarantee Programme and renamed Jawahar Rozgar Yojana, or Jawahar Employment Plan.

State governments are important participants in antipoverty programs. The constitution assigns responsibility to the states in a number of matters, including ownership, redistribution, improvement, and taxation of land. State governments implement most central government programs concerned with land reform and the situation of small landless farmers. The central government tries to establish programs and norms among the states and union territories, but implementation has often remained at the lower bureaucratic levels. In some matters concerning subsoil rights and irrigation projects, the central government exerts political and financial leverage to obtain its objectives, but the states sometimes modify or retard the impact of central government policies and programs.




Last Updated: September 1995


Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for India was first published in 1995. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on Factba.se.

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