Blog #2: On poverty and prosperity, lot done, lot to do
India is home to the largest number of poor people in the world, as well as the largest number of people who have recently escaped poverty. Over the next few weeks, this blog series will highlight recent research from the World Bank and its partners on what has driven poverty reduction, what still stands in the way of progress, and the road to a more prosperous India.
We hope this will spark a conversation around #WhatWillItTake to #EndPoverty in India. Read all the blogs in this series, we look forward to your comments.
The rapid decline in India’s poverty levels in the recent decade augurs well for the country’s efforts to eradicate poverty. Though the decline was faster and more broad-based than in the preceding decades, examples from across the developing world suggest it could have been more inclusive and responsive to economic growth.
Philanthropists Bill and Melinda Gates cited “time poverty” as a top priority in their 2016 Annual Letter, referring to the unpaid work that disproportionately falls on women and shining a spotlight on one of the most vexing challenges economists and statisticians face: how to accurately measure women’s work.
New choruses demanding a data revolution to gauge progress toward the Sustainable Development Goals better than their predecessors, the Millennium Development Goals, are welcome—and indeed some challenges on the data front are new. Others, however, are very, very old. Accurate measurement of women’s work and contribution to productivity remains one of the latter.
Policymakers operate with a truncated view of the economy—with little idea of how growth impacts, or is affected by, women’s work. For the most part they fail to incorporate this work into their labour market policies.
Blog #1: Five key drivers of reducing poverty in India
India is uniquely placed to drive global poverty reduction. The country is home to the largest number of poor people in the world, as well as the largest number of people who have recently escaped poverty. Despite an emerging middle class, many of India’s people are still vulnerable to falling back into poverty.
Over the next few weeks, this series will look back and analyze publicly available data to better understand what has driven poverty reduction from the mid-1990s until 2012, and the potential pathways that can lead to a more prosperous India. Since it is clearly not feasible to elaborate on all the myriad pathways out of poverty available to India, we focus on a few key themes that the diagnostics show to be of particular relevance to the country. We hope this series will contribute to the ongoing discussions on how poverty can be eliminated from India.
We are thankful to the Indian Express for partnering with us in disseminating this series to its readers.
Two recently released World Bank reports — one on commodities and the other on remittances — lend insight into an unfolding dynamic in the world today. As oil prices dropped from more than $100 per barrel in June 2014 to as low as $27 in the last few months, the money sent home from people working abroad in oil-producing countries also fell. This drop is a major reason remittances to developing countries declined in 2015 to their lowest growth rate since the 2008-2009 financial crisis.
As anyone who has travelled around the country will testify, India is marked by glaring spatial disparities in well-being. On the one hand, New Delhi is relatively prosperous, and if you visit the recently renovated Connaught Place, you will find not only a bustling outdoor market, but also designer shops, upmarket restaurants and a gleaming new metro station.
However, take the Prayagraj Express train east for seven hours and you will find yourself in Kanpur, which is one of the largest cities in the densely populated state of Uttar Pradesh, where per capita income is less than one-fifth its level in Delhi and the poverty rate is three times as high.
Such large variations in well-being are a natural cause for concern among India’s policymakers and have generated intense interest in India’s spatial landscape of potential for economic development. Is it the case that less prosperous parts of the country lack the basic ingredients that can give rise to the high productivity that economists believe provides the key to well-being or is it the case that, while they may possess some of these ingredients, they are failing to make the most of them?
The Economic Potential Index
In an effort to provide some insights into both this and other key questions related to India’s spatial development, we have recently published a working paper that examines underlying variations in “economic potential” across Indian districts.
Our analysis is based on a composite “Economic Potential Index” ( EPI) that measures, in a single summary score, the extent to which a district possesses attributes that can be considered “universally” important to achieving a high local level of productivity, whether or not a high productivity level is currently actually observed.
India is the world’s largest producer as well as consumer of milk and milk products. India nevertheless faces a shortage of milk and milk products due to increasing demand from the fast growing middle class in the country.
The National Dairy Plan Phase I (NDP-I), a Central Sector Scheme of the Government of India, which is supported by National Dairy Support Project (NDSP), aim to increase milk productivity and market access for milk producers, which are both necessary to meet the growing demand for milk. NDP-I is being implemented with a total investment of about US$350 Million, out of which the Bank has extended a Credit of US$219 Million through the NDSP.
The National Dairy Development Board (NDDB) is the main implementing agency for the NDP-I. At the decentralized level, NDP-I is being implemented by about 150 end‐implementing agencies (EIAs) scattered over the country.
The Project involves some innovative procurement practices and improvements in upstream milk supply chain, which are described below:
At conferences, in meetings, and even during casual work conversations, I am asked the same two questions: “Which countries are ideal for investments in infrastructure? Where should the investors invest and what new opportunities should they look toward?”
While sitting in the World Bank gives us a bird’s-eye view of emerging markets and developing economies (EMDEs), it doesn’t offer the up-close-and-personal perspective that investors demand in order to answer these questions in a succinct way. Not that there’s any shortage of synoptic responses. Any number of “market gurus” can assess projects in a second, gathering all the low hanging fruits which are out there in EMDEs. If there is a private deal to be made, then the deal is already done.
Most of us would agree that when it comes to healthcare providers, some training is better than none. Yet even this seemingly innocuous statement is highly contentious in India, where training primary care providers who lack formal medical qualifications is anathema to the professional medical classes.
But the professionals are wrong. Training informal providers (IPs) could vastly improve the quality of care for millions of rural Indians and there is no evidence that it would make matters worse.
It is time to implement such training and critically evaluate its impact, to guide Indian states in deciding whether to treat these providers as an obstacle or an opportunity.