India has miles to go before eliminating poverty: Rangarajan
While economic growth has contributed to reduction of the poverty levels, it also needs to be acknowledged that the absolute level of poverty is still high. "Truly, we have miles to go before eliminating poverty," he said speaking on 'The Indian Economy - Prospects and Constraints' Tuesday night.
"We need to ensure that the growth process is such as to include every section of the economy. We must maintain, nevertheless a high growth rate which will alone enable the government to raise resources to meet various socio-economic obligations," he said delivering the 12th commemorative lecture of the Fedbank Hormis Memorial Foundation.
Rangarajan said while growth was important, it should be remembered that it was not the only dimension for measuring performance or achievement. "It is equally important to know who benefits from growth," he said.
"We need to translate growth into poverty reduction. In other words we need to generate poverty reducing growth i.e. growth to which the poor contribute and from which the poor benefit," he said.
The agenda for achieving growth and poverty reduction is formidable requiring as it does focus not only on identifying priority areas for action but also effective and efficient implementation of the policy agenda, he said.
People are considered absolutely poor if basic needs for survival absorb all of their income.
Rangarajan said there had been considerable dispute in the country in estimating the people below the poverty line.
According to methodology adopted by the Planning Commission until recently, the number of people below poverty line in 1993-94 was 36 percent. Using the same methodology, it came down to 27.5 percent in 2004-05.
However, the Tendulkar Committee by adopting a slightly different methodology concluded that the overall poverty ratio was 45.3 percent in 1993-94 and 37.2 percent in 2004-05. Both the methodologies show that the reduction in the poverty ratio was in the range of 8-8.5 percent, he said.
Rangarajan said there was need to expand employment opportunities and improve productivity across all sectors of the economy and narrow economic disparities across and within states without compromising on efficiency.
Stressing the need to improve on social indicators too, he said India still ranks a low 119th in the UNDP's Human Development Index in the bottom third of the league of nations.