No poor performance this

UP may not have achieved headline-making growth rates, but it has gone a step further, by reducing poverty over a decade

arvindmohan

Arvind Mohan | March 5, 2012



UP may not have achieved headline-making growth rates, but it has gone a step further, by reducing poverty over a decade.

Uttar Pradesh is often regarded as part of the backwaters of development in India. The picture, it seems, is changing and is changing fast. There are at least two threads of change, one that has been noticed by some and the other which has gone almost completely unnoticed. During the last few years UP has recorded a growth rate higher than 7%. This is in sharp contrast to the below 4% growth rates during the 1990s. This is a development which is now being noticed by many development analysts.

However, the release of the 61st round of the NSS data brings into sharp relief another transformation story from UP. During the 10-year period ending 2005 UP recorded an exceptional decline in poverty rates, hereto the decline is the sharpest for the most underprivileged social group, i.e., the SC/ST population. Similarly, the poorest region of the state, Bundelkhand, recorded the sharpest decline in poverty. 

UP’s decline in headcount poverty was approximately the same as in overall India, despite differentials in growth performance; the proportion of people in poverty went down by about 0.8 percentage points a year. These patterns painted a more nuanced picture of development in UP. With every one percent growth in India, poverty goes down by 0.13 percent; whereas in UP every one percent growth brings down poverty by around 0.2 percent. UP has been able to affect the sharp decline in the poverty levels of the poorest of the poor particularly amongst the SC/ST population. It is obvious that for every unit of incremental growth UP is able to impact poverty more than what the rest of the country has been able to do.

Although UP lagged in sectors that performed well in the rest of the country, namely, services and to some degree manufacturing, the state did better in agricultural growth than the country as a whole. Within UP, overall growth was higher in urban areas, but agricultural growth in rural areas brought about lower inequality and more pro-poor patterns. As a result, rural areas had a greater reduction in poverty.

As mentioned, poorer regions did relatively well in UP; poorer groups also did better than average. Between 1994 and 2005, poverty declined in the southern region by 29 percentage points (from 68.9 to 39.8) and in the central region by 18 percentage points (from 46.7 to 28.8). The central region benefited from its urban dynamism absorbing labour freed from agriculture and allowing non-agricultural sector to expand; the southern region had an impetus from the construction industry. Together these two regions represent only one-quarter of UP’s population, but had they been states (with populations of 10 million and 31 million people, respectively) they would’ve been among the country’s top third for their efforts to reduce poverty.

UP’s SC population registered a greater decline in poverty than majority groups there. Fifteen percentage points reduction was recorded for the SC group against nine percentage points reduction observed for the population on average. Agricultural, female and rural wages grew faster than non-agricultural, male and urban wages, respectively. Gaps in school enrolment declined and some age groups achieved urban-rural and gender parity. SC people, who are overrepresented in agricultural occupations, benefited from increasing agricultural wages, while those who entered labour market came with a boost in their education levels enabling them to increasingly take up self-employment and non-agricultural jobs. Between the mid-1990s and the mid-2000s, traditionally slow-growing regions and poorer people saw faster improvements in the state.

The poverty rate in UP declined from 41.7 percent of the population in 1993-94 to 32.7 percent in 2004-05. The steepest poverty decline took place in the southern region, closely followed by the central region. In terms of a regional contribution to a decline in poverty, the single largest contribution came from the central region. Between 1994 and 2005, this region accounted for almost 40 percent (out of a hundred) of the decline in poverty. The most developed Western region and the most populous eastern region experienced relatively lesser progress in reduction in poverty.

There is an apprehension that increasing political mobilisation and empowerment are used by the SCs as a force to improve their social status. There certainly is evidence that SC groups in UP advanced their relative economic position in the last decade. Although the prevalence of poverty is still the highest among SCs, on average, it has declined faster among them than the state as a whole. In addition, the wages of SC groups have risen faster than those of majority groups for men. SC/ST groups also started to be self-employed; they have left casual agriculture faster than other groups and have taken advantage of increased demand in the construction industry.

It is interesting to note that the Ambedkar yojnas were initiated in UP somewhere around 1995. These are integrated rural development interventions where those villages were picked up for development which had a higher SC/ST population. Once these villages were saturated then villages with lower SC/ST populations were picked for intensive development. As of now there is no study or specific effort to create concrete evidence to establish a relationship between higher reduction in poverty among the SC/ST population and the role of Ambedkar yojnas. Nonetheless, the period of exceptional decline in poverty levels coincides with the initiation of Ambedkar yojnas. The connect looks very direct and needs to be studied.

India’s development strategy has evolved around growth as the primary development objective as well as driver. Even social justice and poverty alleviation are expected to be achieved through rising levels of growth. Uttar Pradesh seems to have turned the corner and impacted poverty even before the change on the growth front became visible. Growth is just one pedestal of development; poverty alleviation and social justice constitute the other corner stone which define the purpose of development. One is made to wonder as to whether the poverty story of Uttar Pradesh points towards a paradigm shift where strategies have attempted to focus more on social justice which is in turn impacting poverty first and growth later.

This was first published in the February 1-15 issue of the Governance Now magazine.

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