There is firm evidence that the war against poverty is being won.

Where there is no happiness for all, there cannot be happiness for any!

This is a fundamental truth successful nations around the world have discovered. They have structured their societies in such a way that, though there may be inequalities in incomes and levels of enjoyment of the good things of life, the basics of a modern life are not denied to any one.

What are these basics? Answers vary for countries. For India, these are: education, health care, housing, water, electricity, cooking fuel, old age support, sanitation, and employment.

Providing these for all citizens is to both attack poverty and pave way for growth.

Social sectors hold the key

For long, these have been the stuff of publicly-correct posturing. But, until about 5 years ago, when Amartya Sen emerged as a voice to be listened to, establishment economists did not see the linkage between a nation's investments in social sectors and it's prosperity.

In India's government, there is now a greater consciousness, of how caring for human resources, will lead to a sustainable growth. India appears to have agreed with this conclusion: the cold war was not between capitalism and communism; it was between man and the state and the winner was the former.

In the last few years, (when India's economy has begun to take-off, though not  fly) some good numbers on poverty are beginning to come in. Enough to make one think, how swiftly things can change overall, if one were to focus on more investments in the social sector.

In the Economic Survey 2000 - 2001, published by the Ministry of  Finance [the full report is available at the link below], 26.1% of Indians are reported to be impoverished. 

For the country as a whole, the poverty numbers since 1973-74 have been diminishing:

It is instructive to see in the following table, how the the rate of decline has accelerated since economic reforms began in 1990.

It must be admitted though,  that the econometrics of poverty is a thicket of controversies. The debate is joined by politicians, economists, statisticians, bureaucrats and social activists. They question integrities, numbers and their interpretations. In India no one has done more to bring objectivity to this debate than Dr. Surjit Bhalla, of Oxus Research. Many of his papers on the subject are available at the link cited below. For lay purposes, it is sufficient to quote three statements by him in a draft paper called 'FAQ's on Poverty in India' [July 20, 2000]

Dr Surjit Bhalla concludes:

"No matter what the data source, survey or national accounts, growth is shown to lead to poverty decline, almost one for one. No growth, no poverty reduction is the only conclusion."

"It cannot be concluded that there was economic growth in India in the nineties, and that there was an increase in absolute poverty. There is no evidence for this joint conclusion." and

"...economic reforms initiated in 1991 have led to a radical transformation in the well being of the bottom half of the population. From an approximate level of 38 percent in 1987, poverty level in India in 1998 was close to 12 percent"

Before we leave the subject, let us cut the data available in another way: What is the distribution of poverty? We can see from the following table, it is not uniform across the country. A few states are terrible, but then, several others will  rival countries of comparable size!

Dr Surjit Bhalla's papers on poverty issues are available from here.