India'S Anti-Poverty Schemes Flayed

The World Bank has reiterated that India's anti-poverty programmes and public spending on health and education are missing their mark.

The report says that the success of education and public health in reaching poor people depends not only on more spending, but also on improving the quality of services.

Though the incidence of poverty declined from 45 to 36 per cent between 1950 and 1993-94, population growth caused the numbers of the poor to almost double in the same period from 164 to 320 million. Of this, 76 per cent of the poor reside in rural areas.

"Fundamental reforms are needed in the way in which the public sector delivers health and education services to India's 320 million poor in order to allow them to take advantage of the opportunities for raising their standards of living that will come with rapid, labour-intensive growth," says Zoubida Allaoua, senior economist in the Bank.

The report has found that there is no significant correlation between child survival and the availability of public health facilities. Essentially, it reflected the failure of India's primary health centres to deliver the care needed to reduce infant mortality.

Further, bulk of the benefits of the anti-poor programme were accruing to the non-poor. "According to data from the 1993-94 National Sample Survey, 76 per cent of the wealthiest rural households, for instance, are likely to take advantage of the subsidised prices for food under the public distribution system, while at the opposite end of the wealth scale, fewer than 70 per cent of the poorest households benefit from food subsidies," the report said.

It then goes to outline that effective targeting need not mean exclusive targeting. "Some level of spillover to the non-poor is unavoidable if political support for such programmes is to be maintained," it says.

In this context, the study therefore suggests that such targeting can be done by setting the wage rate at a level which is no higher than the prevailing market wage where the scheme is introduced. Willingness to work at this wage rate can be made the only criterion.

The report has also called for increased public spending on expanding the poor's access to quality education and health care. "To avoid increasing the already large fiscal deficit, the funding for these needed increases, which could come from reducing the costly and integrated subsidies that are currently the source of the large fiscal imbalances," the report says.