Dr Saheb Sahu
“The greatest evils and the worst of crimes is poverty; our first duty, a duty to which every other consideration should be sacrificed, is not to be poor.” George Bernard Shaw, Major Barbara (1907)
Definition of Poverty
Poverty is more than just lack of income. Poor people themselves describe their experience of poverty as multidimensional-lack of money, lack of food, bad housing and sanitation, low education, poor health, social exclusion and much more. The best present definition of poverty by developmental experts is called Multidimensional Poverty Index (MPI). The MPI comprises of three dimensions-education, health and living standards. It has totalof 10 indicators -2 for education, 2 for healthcare and 6 for living standards.
India’s national MPI index in 2021 was 25.01%, for Odisha it was 29.35% and for Kerala it was 0.71%.
Poverty in Odisha
One in every three persons in Odisha is poor; seventy five years after the Independence! Despite multiple poverty reduction schemes, welfare programs, and some cash grants by state and central government 29.35 percentof the state’s population is multi-dimensionally poor. (NITI Ayog’s National Multidimensional Poverty Index, 2021).
Odisha is among the top-10 states with a significant share of the population living under poverty. The MPI poverty index in almost half of the districts is alarming. The MPI poverty index of district of Puri is 11.65%, the lowest in the state. But the MPI poverty index for Nabarangpur is 59.32%, Malkangiri 58.71%, Koraput 51.14%, Rayagada 48.14%, Kalahandi 44.75%, Mayurbhanj 44.9%, Kanddhamal 44.75%, and the mineral rich Kenduhar 41.78%. These are also among the 50 poorest districts in India. Only five districts have a poverty index below 20.
According to NITI Aayog, 37.26% of the state’s population is undernourished, 19.5% has no access to maternal health and 5% of population has no access to education. Almost half of Odisha’s rural populations are poor. On the whole the coastal districts are doing relatively well, the southern and some of the districts in Western Odisha are doing badly and rest of the districts are in between.
Addressing the 25th foundation day celebration of the BJD party, the Honorable Chief Minister of Odisha said, “Odisha will create history in bringing down the poverty rate to 10 percent. To achieve this goal, the government will take every step required” (The Hindu, Dec, 27, 2021). However, he did not specify what step or steps his government will take.
Based on my specific interest in poverty reduction in Odisha and knowledge of developmental economics over the last 25 years, I have the following recommendations for the Honorable C.M. to reach his target of 10 percent.
1- Direct Cash Transfer
The government of Odisha should directly transfer Rs, 1000.0 to Rs, 1500.0 each month to each poor person’s bank account, or to his/her debit card or postal saving account. This will give poor women some money of their own and give them a voice in decision making at home, which is important for many other reasons. Based on Odisha’s population of 4.7 crores (2011Census) and poverty rate of 29.5%, there are 1.38crores (13.8million)people in Odisha are poor. If each of them receives an annual amount of Rs 12,000, it will cost the state about 16,525 crores rupees a year (4.78*0.295*12000= 16525). The 2021-22 budgets for the state are Rs 1, 70,000 crores.It will cost the state about 10.5% percent of 2021-22 budget (1, 70,000/16525=10.28). The money can be found by eliminating many of the less effective poverty reduction schemes (Yojanas) and persuading the central government to take part in the poverty reduction experiment. The direct cash grant will eliminate all the middle men (politicians, babus, contractors and many others) who are siphoning off certain percentage of the money at various stages of the implementation of various schemes. They are all playing the percentage game. According to multiple studies, only 10 to 15 percent of the development money reaches the poor. This is a worldwide phenomenon and not unique to Odisha.
The direct cash grant concept is not a radical or new idea. It has been implemented in some form or other in more than 52 countries around the world including Brazil, Iran and China. The Brazilian program Bolsa –Familia reduced the poverty rate in Brazil by 28% in six years. During the last general election, the BJP government at the center was floating with the idea of the direct cash grant to the poor but did not come around to implement it. The Congress party openly advocated the plan but did not win the election to work on it.
Developmental economists from around the world are now moving towards the concept of direct cash grant (no question asked) as a quicker and more efficient way to reduce poverty. Studies after studies have shown that poor people do not use the money to drink or gamble (as widely perceived), they spend it on food, children’s education and healthcare. Economists Abhijit Banerjee and his wife Esther Duflo (Nobel Laureates) are in favor of the direct cash grant scheme.
2- Education
Quality public education is a core strategy in fighting poverty everywhere. Education is the key to higher wages. Girls’ education is even more important. All developmental experts agree that the potential benefits of girls’ education are many: decrease pregnancy rate, delaying marriage age, increase productivity, reduction of under-5 mortality rate, gender equality in family decision making and many more. Women who are educated are more likely to work outside the home. Women who have independent income have higher social standing and more likely to run for public office. With power comes development.
The government of Odisha should see that all children, both boys and girls attend schools and stay in schools until they finish high school. The dropout rate for girls should be drastically reduced. In rural areas there should be adequate numbers of hostels. All primary and secondary schools should have adequate infrastructures- toilets, electricity, safe drinking water and sanitation and internet connection. The schools should provide adequate nutrition and preventive healthcare.
Students who do not want to or cannot attend college should be able to get vocational education at very low cost. The whole idea is to make them employable.
3- Facilitate Migration
Poverty in Odisha and India is mainly a rural phenomenon. Eighty percent of people in Odisha live in villages. Odisha has 53,135 villages compare to 1670 in Kerala with close to similar population (4.7crores vs 3.5crores). Tribal people of Odisha live in inaccessible areas of the state. It is expensive and difficult to bring roads, electricity, internet, clean drinking water, good education and healthcare to rural and remote areas. There are no jobs in rural areas except some seasonal labor works. Odisha will not be able to reduce its high poverty rate unless the government makes it a policy to help rural population to migrate to small towns, cities, to other states and even to other countries where they will likely to find job. Government should also promote small scale industries in rural areas and create more jobs. No country in the world has become a developed country where majority of its population reside in the rural areas. China’s population like that of India in 1970s was predominately rural. Now only 38 percent of the population in China lives in rural areas compare to 65% in India. In the Unites States, it is 19 percent.
Out of the total population of 3.4 crores, 40 Lakhs Keralites are working outside India and 14 lakhs are working in other Indian states, a total of 54 lakhs. Odisha has a population of 4.7 crores but only about 15 lakhs Oriyas are working outside the state and most of them as seasonal migrant workers. A farmer in Odisha makes about Rs 6000 to Rs 7000 a month. A migrant worker from Odisha working in brick factory makes around RS 10,000 to RS 20,000 a month. Instead of denying that large scale migration is happening, Odisha government should do everything in its power to help people migrate from the state for better job opportunities outside. Educated Oriyas in large number have already migrated to Delhi, Bengaluru, Hyderabad, Chennai and Pune. Migration is good for the workers and their families. In towns and cities their children get a better education and more employment opportunitiesand move out of poverty.
Conclusion
Odisha is making progress in poverty reduction but the pace is slow 1% to 1.5% a year. There is no easy or quick solution to poverty eradication. However, education and migration are two of the oldest actions against poverty. People, who get an education, usually get a better paying job and move their family out of poverty. Government of Odisha should see that all children attend school and stay in school until they finish high school. Make college education accessible and affordable. Provide low cost or no cost vocational education to those who cannot attend college. With proper education, Oriyas can get a job within or outside the state.
Poor people who are desperate enough or bold enough to leave their villages and move to a nearby town or city, escape the grinding poverty of their village. Late Harvard economist professor John Galbraith observed decades ago, “There is nothing great about blue sky and clean air when you are starving”.
In 1940s and 1950s people from coastal Odisha migrated to Calcutta and from Western and Northern Odisha migrated to Jamshedpur.Large number of poor Oriyas especially from Western and Southern Odisha are now migrating to other states for seasonal works. Instead of denying that large scale migration is happening, Odisha government should facilitate their migration. Odisha should follow the example of Kerala on education and migration policies.
If the Honorable CM of Odisha wants to achieve his goal of reducing the poverty rate of Odisha to 10 percent in next five years he has only one choice. He should direct his government to transfer Rs1, 000 to Rs 1,500 per month to each poor Oriya’s bank accountor postal account or debit card. It will cost about 10 percent of the state budget per year for next few years and will bring down the poverty rate to below ten percent.
Honorable CM, you have lot of political capital. Please use it. People of Odisha trust you. Take a bold step and implement the program of direct cash grant to all the poor people of Odisha without any delay. You will get some push back from other politicians, bureaucrats and other vested interest groups, please ignore them. You will achieve your target of reducing the poverty rate of Odisha to 10% in five years. This will be your lasting legacy!
PS: Dr Saheb Sahu is a son of small scale farmer parents, who grew up in a village in Bargarh district, Odisha. He is a graduate of AIIMS (New Delhi), settled in USA. He is a former Managing Director of Kalinga Hospital (BBSR) and an expert member of Western Odisha Development Council. He has published few articles, one booklet and one book on Odisha’s Poverty.