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Michel CAMES MA in Development Studies Dissertation University of Leeds 1995/96

Linking Development and Poverty Alleviation in India: A Case for Action

Abstract Poverty alleviation has been a burning need in India since independence. Yet structural reforms, small-scale industrialization and reliance on growth have been unable to mitigate the hardships of the rural poor. The perceived need to directly sustain the poor then led to the introduction of poverty alleviation programmes (PAPs). This paper first analyses rural development policies whose weaknesses necessitated the establishment of PAPs. It then evaluates two types of PAPs, self and wage employment programmes. In the light of their inadequacies, it is argued that alone policies coupling land reforms, employment schemes and the provision of crucial inputs can seriously unfold long-term poverty alleviation.

Table of Contents

page I. Introduction ................................................................ II. Indias tryst with village industrialization .................. Small is beautiful: Gandhi and his legacy .............................. Small-scale equals labour-intensive? .................................... Virtuous or vicious circle: the debate about village industries ... III. The arduous approach: land reform .......................... The land reform issue: wavering, yet ever burning ................. Land Reform in West Bengal: The limited approach ................ IV. Promoting livelihoods by employment programmes: an assessment ................................................................ Self employment schemes: an expos .................................. The alternative: Wage employment schemes ......................... The miracle of Maharasthra? ............................................... The debate: Self or wage employment? ................................ V. Linking development and poverty alleviation .............. Options for action .............................................................. Prospects for overcoming the socio-economic constraints ........ Conclusion ........................................................................ Bibliography ................................................................... 18 21 24 29 30 32 33 38 40 41 3 4 4 6 7 10 11 14

I. Introduction In this paper I attempt to discuss the issue of poverty alleviation in India. The mere fact that specific programmes for the alleviation of poverty exist indicate that reliance on the trickle-down effect of growth has not worked adequately. Poverty alleviation programmes (PAPs) have become a common feature of Indian development policy since they have been introduced in the 1970s. Apart from alluding to their raison dtre, they have not been doing well. Self-employment, wage-employment and minimum needs programmes have been generally reported to be captured by the better-off and the benefits to the target group have left much to be desired. The question has been raised whether the current provision of relief to only a portion of the poor could be interpreted as an attempt of the ruling classes to scantily plug the incidence of agrarian unrest. The shift towards a more comprehensive and honest approach towards the alleviation of poverty including structural reforms has been advocated not only to mitigate poverty on a more sustainable basis but also as an avenue towards reviving growth. A policy based on the latter approach focused at linking growth with poverty alleviation could also ease the dilemma between growth and environmental deterioration and lead to a more sustainable road towards development. India is still basically rural. In 1991, the decennial record of the proportion of rural population had dropped just below the three quarter mark for the first time (Maheshwari, 1995:258). Therefore this is a paper on rural development. However, the discussion why PAPs have been introduced will make us consider Indias industrialization policies which have been unable to cause a sufficient number of the population engaged in agriculture to be absorbed by a growing industrial sector. The plan of this paper is as follows. Section II and III consider what has led to the necessity to introduce poverty alleviation programmes. It investigates the relationships between Gandhi and Nehru who formed a policy which has repercussions discernible in giving a favourable treat to small-scale industries in a way which did not encourage strong intra-rural linkages. The failure to implement fundamental structural reforms in

landownership represents the second major cause. The debate on West Bengal shows us how delicate and complex this issue remains. Section IV presents the two major poverty alleviation schemes: self-employment and wage employment programmes. It argues that each programme has its domain in which it is most effective and only a common and complementary adoption of such schemes is appropriate. Finally, Section V attempts to present a strategy in which structural reforms, PAPs and technological extension are linked in order to find a way out of the ratchet effect implications of poverty, growth and environmental degradation. It will be examined whether this strategy merely consists a vague and populist pipedream or whether it represents one basic option which could allude the way out of the dilemma. II. Indias tryst with village industrialization Small is beautiful: Gandhi and his legacy Mahatma Gandhis vision of development has often been referred to as a clog on progress and a deliberate turning away from efficiency. True, he did not consider one of the iron laws on efficiency in the secondary sector: economies of scale. He advocated basic consumer goods to be produced in village and small industries suggesting that in this way rural people could utilize best their idle time. His approach was holistic, he was concerned as well with mental and spiritual values as he recognized the need for satisfying basic material wants. He was not against technology and machinery. As Roy et al. argue, he simply wanted to control and regulate their use in such a way that human lives were not dominated. An improvement of a small machine which adds to the efficiency of cottage industries was welcome. As the authors continue, the concept of social cost which environmental economists want to incorporate in the conventional estimation of production cost was a prime concern to him. He was not opposed to the establishment of basic and key industries on a large scale as these industries would

facilitate the growth of the rural sector and village industries by providing them with necessary inputs (1992:3-7). After the demise of Gandhi in early 1948 it was Nehru who set the policy targets in now independent India. He did not openly reject Gandhis industrialization-from-below strategy but it seemed to him to be a transitional affair. Whereas Gandhi stressed the subordination of large-scale units to the needs of village industries, Nehru defined their role primarily as providers of employment and for activities with little opportunity cost. Rural development could only play a minor symphony in his overall development strategy. According to Roy et al., he was obsessed with the Russian form of socialism and planned development through large-scale industries. He implicitly assumed that the income of the poor could be increased this way. As Roy et al. assert, he thought that by socializing the means of production, the country would be able to get rid of the evils of capitalism (1992:12). His Fabian way of trying to avoid class struggle reminds us of the seminal debate in Russia at the second half of the nineteenth century on populism. Marx was infuriated by those who believed that a short-cut could be taken towards the establishment of both equity and growth. Whereas Gandhi frankly assumed that a trade-off between material wealth and spiritual wellbeing existed, Nehru even by adopting a crash-industrializing strategy emulating Stalinism hoped that its repercussions would be minimal and a wretched proletariat could be avoided. It is curious that it is Gandhi who is termed as a populist for the reason that he was trying to roll back technical progress (Lipton, 1977:137). It is the same author who argues that between Gandhis pastoral-populist view and Nehrus dream of instantindustrialization, the possibility of a prosperous, scientific, labour-intensive and egalitarian agriculture was crowded out (1977:138). This again incites his critics to vehemently dismiss this argument and Lipton in turn is being referred to as a liberal neo-populist, a reformer who leaves the basic structure of society unchanged (Byres, 1979:241). My point is not here to denounce Nehrus industrialization strategy as a whole. It has fared well during the first three Five-year-plans. Its strong bias on creating a producer goods sector enabled the economy to establish

an import-substituting path which for a country the size and population of India was literally essential. It was however the concomitant neglect of agriculture which created a wage-goods constraint, an excess of investment over planned savings which led in the mid-sixties to growing indebtedness alongside with worsening terms to pursue the import-substituting strategy in its mature phase. Also, and most important, as Harriss argues, the industrialization drive had a negligible impact on the employment situation: the annual growth rate of factory employment could only just absorb the natural growth of the employed labour force (1989:75-76). My main concern is here that the government, out of the necessity for maintaining some adherence to the Gandhian ideology half-heartedly adopted ideas from Gandhi but only paid lip-service to them. A few areas were kept reserved for the small-scale sector whereas most of the other production areas were going to be large-scale. In this way, small-scale industries were, according to Papola et al., insulated from the mainstream of the industrialization process. No serious effort to improve the efficiency of rural units was made (1980:1734). Development of village industries was mainly attempted through fiscal and other non-economic measures of financial bolstering. These protective measures remained. As Bhalla et al. (1994:16) object, India is known to be one of the rare countries in the Third World which explicitly is in support of rural small-scale industries and these measures have been in operation for nearly forty years now. Nevertheless, given the technological backwardness, the nonavailability of inputs and the absence of proper marketing channels, village industries were doomed to wither away with the years. Small-scale equals labour-intensive? The sustained protection of the small-scale industrial sector in India without a concomitant serious effort of its integration into the wider economy has produced a peculiar situation. Kashyap (1988) divides this sector into the village and small-scale enterprises sector and the modern small-scale enterprises sector. The latter is the aim of this section. The

modern sector, so he argues has done amazingly well and has carved out a niche for itself. However most studies have shown that the labour absorption propensity need not decline with the size of the enterprise and small-scale enterprises are not necessarily capital-saving. As Kashyap continues, the unshaken belief that the goal of poverty removal, employment creation and the dispersal of industries could be achieved or approached by arranging the scales of protection rather than product choices is responsible for a situation in which small-scale industries are only efficient in general at the cost of very low wages (1988:674). Analogically, Seth claims that the fundamental weakness of small-scale production stems from its small size which prevents it from benefiting fully from economies of scale which can only be compensated by very low wages (Seth, 1995:M-133). This situation has been further immobilized by semi-feudal working conditions which have left little bargaining power to the workers. There is a striking lack of vertical mobility of workers succeeding in getting better paid jobs in the large-scale units, the entry into the formal sector is mainly determined by family background and influence, and the role of work experience in the informal sector is negligible (Kashyap, 1988:675). Also, these industries have few backward and forward linkages with the local economy. As Desai concludes, the plethora of privileges given to small industry has been of little consequence. Government policy in this area has only created favoured children (Desai, 1990:1159). Under the New Economic Policy introduced since July 1991 which is committed to structural adjustment policies, the comparative advantage of these sweatshop manufactories has been curtailed. Whether this move which undoubtedly will affect the competitiveness of this sector will worsen the employment situation over time will have to be seen as the opportunity costs of protection have been substantial. Virtuous or vicious circle: the debate about village industries Considering the large scope for employment creation the village and small-scale enterprises offer, their cost-effectiveness remains difficult.

Mellors (1976) model of decentralized production gives an account of the issue. His argument runs as follows. Increased demand by large cultivators for non-agricultural commodities generated by growing agricultural production based on cost-decreasing technology will stimulate the local consumer goods industry - which is generally labour-intensive - and hence generates increased employment. This again will provide the demand for further increases in food production given the income elasticity of food for the lower-income classes (in Harriss and Harriss, 1984:83-84). The virtuous circle of mutual sustained growth actually stands on basic economic growth theory. However, the structure of demand of the cultivators who start the cycle should not tend towards high-income urban consumption patterns which is either the case if the rural income distribution is strongly skewed towards the rich or if modernization and westernization tendencies join elaborated commercialization strategies of urban and imported commodities. Berger et al. refer to an urbanization of consciousness which has been brought about especially through modern media. this process which began with the spread of literacy pushed outwards from the city into the remotest rural hinterlands (1973:65). Unfortunately, as empirical studies reveal, a combination of these circumstances is generally the case. In a study of generative or parasitic urbanism in a South Indian market town, Harriss and Harriss argue that the virtuous circle has not materialized. Instead of feeding their surplus back into the rural economy, the farmers spend or invest it on urban-made goods. The essence of this is Kautskys view on Exploitation of the country by the town: As villagers become more and more dependent on cash, and as rural moneylenders acquire urban interests and compete with urban lenders, a process takes place in which spending that used to stay in the rural circuit (...) moves into the urban circuit instead (Harriss and Harriss, 1984:85, quoting in Lipton, 1977:117). This shift in the circulation of surplus value that comes about with the development of capitalism (Harriss and Harriss, 1984:85, cf. also Cames, 1996a) comes generally closer to mirror the reality than a model a la Mellor. It is also Papola et al who state:

Higher levels of agricultural development will lead to the growth of industries; but the pattern of new demand may not be favourable to the traditional sector. In this context, the traditional rural industries can still hold out as a subsidiary activity, mainly of the small landholders and landless population to supplement their income from agricultural work; but may increasingly become less and less adequate as the sole source of livelihood for the market of their products may not expand (1980:1737). They argue and so does Kashyap, that there is some evidence that industries not using local material and not producing for the local market such as subsidiaries of large firms are doing much better than the ones based on these linkages. It is Rath who tells us that The village potter is a steadily vanishing tribe; some may be finally left because the Hindu funeral rites require an earthen pot! Synthetics, iron, enamel, aluminium pots and pans have taken over. (...) The copper, brass and bell-metal smiths are almost gone; villages whose existence you could hear from miles away are today silent (Rath, 1990:1155). Only Dantwala (1990:1149) finds that despite a growing urban bias in rural consumption patterns, the demand for locally manufactured consumption goods is quite strong. Sandesera argues that the market for products from the traditional small-scale sector could be truly large would there not be some odd problems such as change of taste and the prevalence of products of poor quality and which are not very durable (Sandesera, 1990:1162). Most authors agree that a policy which aims at technological upgradation of small-scale industries with improvements in their organization and marketing set-up is called for (Dantwala, 1990:1149, Papola et al, 1980:1745). So either rural traditional industries are refurbished and a trade-off with some losses in employment is taken into account to make them more cost-effective or the market of these industries is integrated into the urban economic circuit which generally has a cost advantage through external

economies and economies of scale. It may be the fear of a fight against windmills of further subsidizing an even upgraded traditional industrial sector at intermediate technology level having difficulties in competing against the large-scale sector which has made the Economic Advisory Council recommend that the traditional industrial sector based on high labour intensity should produce commodities that satisfy the needs of higher income groups and exports while some essential wage goods which are required in large volumes and at affordable prices could be produced in the medium/large-scale industries (in Dantwala, 1990:1148). Some new economical strategies are certainly of great value for coping with Indias plight in the coming decades. With its population being expected to exceed one billion in only five years time and an employment growth rate only half the GDP growth rate, the industrial sector has to be counted on. But let us now turn back towards the primary sector. III. The arduous approach: land reform The issue of land reform has been perpetual in India since

independence. At times less, at other times more pronounced, it has remained on the political agenda. This section gives an account of this timeless approach to poverty alleviation: to share the available cultivable land in such a manner that the largest possible number of people can make a livelihood out of it. Here a contradiction arises: this approach does not necessarily respond to the largest possible amount of food which can be produced. The economic debate how land redistribution measures affect production has been a constant companion of the political issue. Whether growth and equity can merge however depends on a series of cultural, socioeconomic and political factors which preset the stage. Land reform in India can be generally reduced to three types of policies: ceiling-cum-redistribution policy, tenancy reform and the alienation of state-owned common property. How these distinct policies have intermingled over the short time-span of independent India will be examined

in the next section. The sub-sequent section will examine the situation in West Bengal where implementation of land reform measures have roused a lively debate on its adequacy. The land reform issue: wavering, yet ever burning The thrust for land reform after independence was unanimous. It pointed at the abolition of the colonial zamindari system which had resulted in a class of parasitic absentee landlords. Those had unfortunately betted on the continued existence of a British India making their political stake become intolerable. But instead of venturing a new start, the resulting vacuum was filled by the ex-tenants who were not necessarily the poorest and the most deprived denizens of rural society (Maheshwari, 1995:173-74). They climbed up the social ladder by purchasing additional land and became the new middle and upper peasantry. Those who were at the periphery were, however, barely affected by these changes in land management (Maheshwari, 1995:174). An expected tenancy reform directed at protecting tillers and share-croppers then triggered an opposite social process, namely the eviction of large numbers of tenants. Becoming anxious about losing out their land, the landowners resumed cultivation permitted to do so up to a certain ceiling limit, or at least pretended to do so. Also the customary way of regulating tenancy relationships only by word of mouth contributed to the planned reform turning out as a farce. Only the land of large landowners above the - vaguely defined - ceiling limit was available for distribution among the tenants. The surplus land finally distributed amounted to ridiculously little as exceptions were made and the landowners often managed to evade the law by extra-legal tricks. The ambivalence of politics and bureaucracy did its share. According to V.M. Rao, a good officer is one who accomplishes token implementation, for example, collectors who would allot land to the rural poor but will


avoid intervention when allotted land is taken back from the rural poor by force or legal harassment (1992:A-51). Bandyopadhyay (1988:A-84) argues that anything between 8 and 9 million hectares could be redistributed if the land ceiling laws could be properly implemented. As a kind of consolation, the poor together with the non-poor parcelled out the common lands. This however further weakened the position of the poor as a whole who had been reliant on common property resources for sustaining their livelihoods (cf. Cames, 1996b). With a situation of virtual immobility in regard of land reform and the concomitant gradual political shift of power from the metropolis towards the states and a strengthening of the rural elites towards the end of the 1950s, the issue of land reform was more or less shelved. The focus of poverty alleviation moved towards participating in the growth process. The Green Revolution however did not hold its promise as equity was concerned. Instead of mitigating the gap between rich and poor, it widened it, and not for the sole reason of the poors scarce ownership of land and the resulting lack of economies of scale. The second wave of land reform legislation entered the political agenda during the early 1970s following Mrs Indira Gandhis dramatic election victory on a radical anti-poverty ticket (Copestake, 1992:219). The reappearance of structural reforms as a potential for sustaining the livelihoods of the poor may however only be looked upon as an emergency manoeuvre to curb the prospect of further social unrest. According to Maheshwari (1995), agrarian unrest became a significant feature of Indian life in the mid-sixties. This unrest was unequivocally a consequence of the prevalent land tenure system: Hithero, the large-sized landowners used to accommodate the poorer agriculturists to some extent by retaining them as sharecroppers or providing them with similar opportunities to enable them to eke out a living. But the Green Revolution monetized their thinking, land was suddenly discovered to be valuable (1995:181-4). Desai (1987) in a provocative article claims that

The struggles of the poor became widespread and took many forms. The ever-alert government at the centre fanatically concerned with maintaining law and order for the smooth functioning of the proproprietary profit-oriented economy began to analyse the nature and causes of agrarian discontent, [out of which] two policies evolved, [one] suppressing the assertions of the poor, [and another] assuaging a small section of the poor selectively chosen and throwing a few crumbs of relief to them (in Bandyopadhyay, 1988:A-77). The crumbs of relief Desai is referring to here are notably self and wage employment programmes which the centre began to introduce at that time. However the outcome of the structural reforms I am concerned here with can as well be filed without hesitation under this term. As Copestake argues, The new momentum [of land reforms] emanating from the centre appeared substantially neutralized by the states. The final legislation was expected to make available 4 million acres, but by 1975 the states had acquired only 62,000 acres. (...) Given the overall failure of the second wave of land-reform legislation it is not surprising that the policy received virtually no mention in the Sixth Plan (1992:219). It is literally the faith in the new introduced poverty alleviation programmes focusing on the poor which leaves the land reform issue quit the scene anew. Only by the end of the 1980s, structural reforms in Indian society were coming back to the fore. The third wave of land reform interest has, according to V.M. Rao, two sources. First, so he argues, linking growth and equity has turned out to be an illusion after two decades of Green Revolution and second, the last two decades have witnessed considerable experimentation with the strategy of direct attack on poverty consisting of Minimum Needs, Employment Generation and IRD Programmes. (...) However, the outcome of (...) [this] strategy has been far too modest as an approach for poverty eradication. (...) There is now growing awareness among social scientists that attempts to integrate growth with poverty eradication remained largely inefficient owing to the absence of


adequate structural reforms and improved access for the rural poor to agricultural and common lands (1992:A-50). Parthasarathy adds a third cause for the revival of interest: According to some scholars, the urgency of implementation has been enhanced because of the re-emergence of a class of rentiers among the large landholders in some parts of the country. This in a way is a reversal of what happened during the phase of the Green Revolution. (...) In the present circumstances, the affluent landlords find it more profitable to invest in non-agricultural occupations and assume the role of rent seeking absentee landlords rather than that of capitalist farmers (in Vyas, 1995:2565). Also J.M. Rao (1995:1750) notes that many states are in the process of reversing land ceiling laws to pave the way for the development of corporate farms and plantations. This takes us back to a situation similar to that one in the 1950s. How this new development might affect the prospect of a more successful structural reform in years to come will be analyzed in Section V. Let us now turn towards West Bengal. Land Reform in West Bengal: The limited approach West Bengal, a poverty-stricken state in eastern India bypassed by the Green Revolution has pursued a distinct route towards rural development since the 1970s: it has made land reform a main focus of its policies. Over the last decade a perceptible increase in agricultural production and a concomitant decrease in poverty have been associated with these reforms. So the official government statistics suggest that, during the 1980s, food grain production increased at an annual rate of around 6.5 percent, distinctly superior to the all-Indian figures (Lieten, 1996:116). The proportion of the population below the poverty line has shrunk fast, from 52.5 percent in 1978 to 27.6 percent in 1988. In terms op human development indicators, West Bengal has been working its way towards the top position, just behind the exemplary state of Kerala (Lieten, 1996:117).

A correlation however between land reforms and these improvements has been intensely denounced on two accounts: first, it has been claimed that is based on an uncritical acceptance of statistics and political positions (Mallick, 1992) and second, that not land reform but merely crucial inputs have acted as a kick-start mechanism to these improvements (Harriss, 1993). Compared to any other state, the relative amount of land declared surplus has been highest in West Bengal. The way this has been achieved however has been the focus of criticism. Baruah (1990:129) argues that the communist-led government mobilized the grievances among the villagers against the big and hated landlords after it realized that direct action could be stirred up against very few landowners. The subdivision of seized land to as many landless as possible could not create viable farms which would enable homesteading households to earn a minimum income. About half an acre only was allocated to each household. Obviously insufficient to make a living, such tiny plots are nonetheless of enduring importance, both in checking migration and in providing a secure living space (Lieten, 1996:113). According to Dasgupta, it was never the objective to create self-sufficient agriculturists: The objective was mainly social-psychological in nature, that is to curb land monopoly and make the poor agriculturist feel that the state is behind him (1995:2696). Whether this objective however has been achieved can be questioned. According to a case study, Baruah argues that many remained who did not get any land. Those who obtained land became CPM [Communist Party (Marxist)] followers, and some received land because of their alleged loyalty, the rest, resenting unequal treatment by the cadres became hostile to the party (Baruah, 1990:132, quoting Mitter, 1975:334). After The Left Front took over power again in 1977, the government refrained from taking further action of seizing surplus land. According to Baruah, the party concluded that the end of redistribution had been reached and that the political costs of pushing a redistributive agenda any further

were high. The author explains this capitulation as an adaptation of policy to an environment of resource scarcity and a low level of land concentration rather than to the power of the dominant classes (Baruah, 1990:121, 134). This line of thought has been vehemently contested as we will see. The focus of land reform now shifted towards the protection of sharecropping rights in order to emancipate tenants from local socioeconomic pressures in securing their status. Despite an impressive registration campaign however, Mallick (1992), who can only wonder how much of the massive Third World development literature represents local reality, argues that In trying to register as many sharecroppers as quickly as possible, those with the most Left Front political evidence were registered, often at the expense of legitimate sharecroppers who lost their tenancy right permanently since no appeals were to be considered. (...) Operation Barga was ended not by a lack of deserving bargadars [sharecroppers], but because the Left Fronts influential sharecropper supporters were already recorded and further work would threaten those supporters already in possession of land (...) The Communists, who in the early years of independence appeared credible challengers of the system, have been tamed, divided and coopted. He blames deep cultural reasons as the core problem when he states that even those who profess to be secular and who reject the caste system are imbued with values of status that are deeply imbedded in Indian culture (Mallick, 1992:740-747). Echeverri-Gent, who argues that since the rapid expansion of the CPM party membership has become a valuable commodity which has meant an influx of individuals who may be more attracted to the power and opportunities that accompany party membership rather than the ideological commitments professed by the party, pleads for political competition enabling to curb political patronage (1992:1413-14). Taking account of the failings of the Left Front government, Harriss denounces the importance of the governments classical preoccupation with agrarian reform and explains the expansion of agricultural production above

all by improved technology, mainly irrigation (Lieten, 1996:122 on Harriss, 1993:1247). Lieten refutes this interpretation and after comparing the efficiency of recent investments in irrigation technology of eastern states, he concludes that the better results in West Bengal may be found both in terms of the political economy of corruption and in terms of an appropriate technology. Land reform, in the inclusive, comprehensive sense [including crucial non-land inputs] has been at the root of the West Bengal scenario. It has included a minimal restructuring of agrarian assets and the relations of production, a technologically appropriate upgrading of the forces of production, including irrigation, and a political realignment which has given small peasants more freedom of operation and direct access to the technological inputs. There is sufficient evidence that the approach has worked (Lieten, 1996:127). It seems that in West Bengal an improved provision of credit, seeds, fertilizer and above all irrigation technology had to step into the breach of a deficient land reform. This is barely surprising. As Osmani objects, the most difficult policies to implement are those that try to provide security through control over land. This could hardly be otherwise in a political system which is based on the primacy of private ownership rights (1991:347-48). This is all the more true in the context of South Asia, where land is scarce and ownership is not highly concentrated (Baruah, 1990:121). It is West Bengals Minister of Land Reforms who says: We do not have any illusion that a comprehensive agrarian revolution (...) can be executed under the present constitution of the country. (...) By imposing ceilings, the system can only be kept within bounds, it cannot be abolished (Lieten, 1996:121, quoting B. Chowdhury, 1987, pers. comm.). It might be worth discussing how any progress in the agrarian question might be assessed. Should we welcome any short step ahead or should we point at the ultimate goal in a realm possibly beyond reach? What can we expect to happen? The West Bengal government in any case has

chosen the pragmatic way. Instead of seeking to enforce a full-fledged programme of land reform at whatever costs, it has favoured integrating a limited land reform with a supply of crucial inputs to make the prevalent tiny plots viable. It has also made the village panchayats (councils) more autonomous to allow more public participation being concerned about the hearts and the minds of the people (Lieten, 1996:121, quoting Chowdhury, 1987). Devolution of governance to village panchayats certainly is a tricky subject and cannot be discussed at this point, the consideration however whether West Bengals policy has been populist in regard of poverty alleviation can certainly be abated in regard of its progress in linking growth and equity to a certain degree. I will now turn towards poverty alleviation programmes focusing on the needs of the poor and it will be seen that neither programme - self nor wage employment scheme - has substantial scope for success if there is not at least a minimalist programme of land reform providing a basic asset to the poor. IV. Promoting livelihoods by employment programmes: an assessment Reviewing the limited success of employment creation in the industrial sector and the stonewalled attempts at structural reform in agriculture discussed above, it has become apparent which part of the rural population is the most in need of poverty alleviation: the landless and the small and marginal farmers. Due to population growth and a rate of absorption by industrialization only levelling the growth figure in population, the bulk of the increase in people has to make a living in agriculture and the service sector. Considering an already underemployed and labour-intensive service sector and a decreased employment growth rate in agriculture due to the law of diminishing returns, the prospects for the rural poor owning no or little land are dim. Poverty alleviation programmes (PAPs) focusing on the needs of the rural poor have been devised to enable the poor to better their livelihoods

and to stimulate growth in order to integrate the beneficiaries into the mainstream economy in the long run. I am concerned here only with those programmes which have an impact on employment. Other programmes such as the Minimum Needs Programme focus on public provision of basic needs and have been quite successfully applied in certain states such as Kerala. PAPs have been denounced on a number of grounds. First, they are reputed not to aim at any basic structural changes in the agrarian society. As argued in the previous section, a major reason for the introduction of the PAPs was to prevent the Green Revolution from turning into red (Bandyopadhyay, 1988:A-79). Mathur refers to the landed elite who was careful to thwart any effort to implement land ceilings, but happy to welcome special schemes to alleviate poverty which marked the beginning of a period when comprehensive programmes began to give way to a segmental view of rural development (1995:2704). Second, there is the concern and anxiety in the industrial establishment regarding the narrow base of the Indian market economy: With a vast segment of the rural population being outside the market system because of abysmally low purchasing power, there is a genuine desire in these circles about expanding the market base by enhancing the income levels of the rural poor (Bandyopadhyay, 1988:A-77). Third, one major criticism relates to the perception of researchers and policy makers about the realities of the poor. According to the principle that what cannot be easily measured really does not exist, employment programmes often focus unilaterally on money incomes. As Dreze points out, this can seriously divert attention from a number of important influences on living conditions that are not captured by ordinary measures of purchasing power. Indeed, the obsessive concern of recent policy debates on poverty in India with income generation has gone hand in hand with a persistent neglect of other areas of public support such as basic health and education facilities (1990a:A-95). Jodha reports that when comparing fieldwork data from two villages in Rajasthan in the mid-sixties and early eighties, the households were in average more than 5 percent worse off in per capita real incomes but were better off according to all but one of their own criteria of

changing economic status. The improvements included quality of housing, wearing shoes regularly, less dependence in the lean season, and not having to migrate for work. He argues that there is a need for supplementing conventional measurements of income by qualitative indicators of change to arrive at a realistic understanding of rural socio-economic change (Jodha, 1988:2421ff and Chambers, 1995:14). Most of criticism however has been directed at the weak implementation of PAPs. The integration of PAPs with overall development has not been achieved. Worse, their proliferation has led to the inefficient use of the large chunk of resources allocated to them (C.H.H. Rao, 1992:2603). The author argues that, the tendency to view agricultural development programmes as different from those for poverty alleviation and vice versa has become quite pronounced. Those concerned with raising agricultural productivity are preoccupied exclusively with technologies and input combinations. (...) On the other hand, (...) [those concerned with PAPs do] not find adequate concern for undertaking activities (...) which raise agricultural productivity (1992:2603). It is a heavy burden of criticisms which rests on these programmes at this point in time. This should however not close our minds to the potentialities opened up by a superior implementation of PAPs. Despite socio-economic constraints, it might be just their inoffensiveness which turns out to be their asset. As their evolution has shown, employment programmes are less prone to be stonewalled right from the outset. Although the logic of rural elites in this regard is obvious - what is of little value need not be boycotted - PAPs may enable gradual empowerment of the poor through the back door. Their performance however needs to be strengthened rigorously. What has been done and what scope could they offer will be discussed in the remaining part of this paper. In what follows, the two major PAPs are presented: self employment and wage employment schemes.


Self employment schemes: an expos The self-employed family is the most common production unit in rural India. According to the National Sample Survey, 62.5 percent of the rural working force is self-employed (Hirway, 1985:562). This corresponds with the fact that the largest all-India poverty alleviation programme, both in significance and in money involved, is the Integrated Rural Development Programme (IRDP), introduced in 1979-80. The official guidelines of the programme run as follows: The objective of the programme is to assist selected families of target groups in rural areas to cross the poverty line by taking up selfemployment ventures. (...) The programme aims to achieve the stated objective by providing income-generating assets including working capital where necessary to the target group families through a package of assistance including subsidy and institutional credit (quoted in Dreze, 1990a:A-95). A number of studies based on quantitative data from large-scale surveys, mostly called for by government agencies or banks, provide a surprisingly rosy picture of the achievements of IRDP and advocate its continuation while providing beneficiaries with a second dose (Dreze, 1990a:A-95 and Copestake, 1992:214). One reason of the apparently favourable outcome has been their obsessive use of the poverty line approach. The focus on this mythical boundary (Dreze, 1990a:A-95) induces the implementing agency, intent on fulfilling its targets, to sustain as many beneficiaries as possible only marginally situated below the poverty line rather than lifting the destitute above a relatively distant poverty line. However there have been serious other flaws as a number of field studies have highlighted. As Dreze argues, basing on Rath (1985), integrated rural development is really a misnomer. In practice IRDP is little more than a subsidized credit scheme. Its main distinguishing feature is that eligibility for credit is restricted to the poor (Dreze, 1990a:A-95).

As he continues, poverty criteria fail to distinguish between chronic and temporary poverty, the latter only affected by a short-run decline in income. The relatively privileged among the poor - along with many nonpoor - have been able to capture the lions share of the benefits. The poorest, so he argues, not well placed to pay large bribes, fill in forms and influence the village headman undoubtedly have been marginalized. Also have the extreme difficulties in estimating reliable data of household income substantially fostered this lack of focus (Dreze, 1990a:A-96). One major flaw, so Dreze argues is that this programme promotes risky income-generating activities. This would go as far that a substantial part of the poorest may simply not be willing to participate for anxiety to be cheated or not be able to repay (Dreze, 1990a:A-96, 98). And if they were, subsidy appeared to be the centre of attraction. As Rath reports: Under IRDP they came to learn that the banks would give loan and government subsidy for buying a cow or a buffalo, (...) [etc.]. So they opted for one or the other. They know about the subsidy and decide that if that is all that is available, why not go for it? The poor cannot be choosers .... (1985:245). According to Copestake (1992:221), the problem of the inherent riskiness of small-scale enterprises such as tied-up capital in relatively few assets and lacking reserves to tide over temporary crises in cash-flow may deter small-scale entrants into any new activity. That IRDP expects too much in terms of the entrepreneurial capacity of many poor households, has been sustained by V.M. Rao (1987:A-4) who claims that the abandonment of IRDP schemes is highest among labourers, viz. those who have no experience in self-employment. Chambers argues that IRDP has increased the poors vulnerability: loss of the asset can lead to debt and being worse off than before. At the margin, poor people often prefer a lower income with less risk of debt and dependence (Chambers, 1995:20-21). It is this praise of an entrepreneurial spirit of doers embodied in the IRDP approach which represents a western-biased notion of man-of-actionmentality. It is reminiscent of Burgess who argues

In advanced capitalist and Third World countries alike (...) self-help philosophies are put forward as a solution: build your own house, (...) become an artisan and so on. To those in the Third World who have done all these things and who are still rarely from starvation, such appeals to be more self-reliant must strike them as being a rather curious form of radicalism (Dudley, 1993:5, quoting Burgess, 1982:92). Except for supplying credit, the IRDP strategy has not facilitated a move into self-employment for the poor. Most authors argue that IRDP has been a delinked programme isolated from the growth process. According to Osmani, basic economies of a massive self-employment programme have been disregarded. If assets are to become a viable basis of self-employment, at least three kinds of matching must be ensured. First, so he argues, the resulting structure of output must correspond to the pattern of demand for that output. However, excessive concentration of milch cattle is a clear example of the neglect of this law. In most areas, so Osmani, there has been simply too many head of cattle in relation to demand. Second, input required by the households must match the supply of assets. Also here, according to Osmani, the neglect is glaring. Millions of cattle have been purchased by households without that an adequate quality of supply was planned for. As a result, not only did the beneficiaries have to purchase inferior cattle, but sometimes even the required number of cattle was not available. As a result, the price of cattle went up ... (Osmani, 1991:327). Finally, so Osmani, the type of asset should match the pre-existing resources of a household. Here there have been similar failures. Cases were reported where animals were distributed in drought-affected areas although the purchasers were unable to feed the animals (Osmani, 1991:325-26). Rath quotes a study which shows that less than half of the recipients of loans were left with the asset at the end of two years:


the others either had sold it or the animal was dead. (...) The real problem was poor availability of common grazing land, inadequate supply of fodder and feed ... (1985:242). Over the years however, according to C.H.H. Rao (1992:2604), there has been a significant shift in the composition of IRDP activities away from the primary sector towards secondary and tertiary sector where the capitaloutput ratios are generally lower and the leakages smaller. Whereas the author advocates the reorientation of programmes towards these newly emerging fields, for which the demand would be highly income-elastic (1992:2607), underemployment in these sectors may be hard to meet. According to the findings of an IRDP evaluation in Karnataka (V.M. Rao, 1987:A-4), the reduction in the amount of poverty was the least among those taking up village industries and services. Rath (1990:1155) argues that the underemployment in these industries is so high and rising that expansion of the output may mean no net expansion of employment for a lomg time to come. IRDP has generally not done well. Yet all maiming about the deficiencies of its present state should not make us believe that selfemployment programmes are irrelevant. In Section V, workable modifications and, above all, linkages with other programmes are examined. It will be seen that self-employment schemes, or redistribution of renewable assets, are one component towards a process of sustained alleviation of poverty. The alternative: Wage employment schemes Wage employment schemes or rural works programmes (RWPs) as a poverty alleviation measure make sense when a significant part of the poor are unemployed. The efficacy of RWPs has been disputed for the reason that the correlation between poverty and unemployment would not be sufficient in India. However, this close to cynical assertion ignores the fact that the absence of unemployment benefits makes it quite impossible for the poor to remain unemployed for long. According to Narayana et al, it has to be

distinguished between current unemployment, namely the proportion of unemployed man days in total man days available for work and chronic unemployment which is the proportion of individuals classified as unemployed most of the year. It is the former indicator which is significantly related to poverty (1988:132). Referring to Nurkse, Hirway argues that the rationale of wage employment programmes in India can be explained as follows: the economy with surplus manpower and disguised unemployment simultaneously lags behind in social overheads such as economic and social infrastructural facilities for a minimum condition of economic growth. If the surplus labour is used in capital formation, the labour absorbing capacity of the economy will gradually expand and the surplus labour can be utilized gainfully. Such programmes are therefore essentially a transition programme (Hirway, 1985:562-63). RWPs are generally executed by non-market institutions. As the objectives are poverty alleviation by providing work and creation of durable assets, they are basically difficult to harmonize with the contracting system tending towards profit orientation in the short run. According to C.H.H. Rao, contractors generally generate less employment from a given investment level and they are ill-suited to undertake eco-development over a wide time horizon (1992:2605). Coukis and Jequier do not reject the contracting system, being more efficient than the traditional force account system and they recommend the slice and package principle fostering the participation of small local contractors which are generally more labour-intensive (1984:58-59). The substitution of labour for equipment in RWPs is generally feasible, considering the small number of repetitive and fairly simple operations required. According to Coukis and Jequier, obstacles in a RWP project are likely to be the choice of a particular equipment-intensive technology for a specific task which dictates the use of a similar technology for other tasks. They identify a significant scope for increasing productivity several-fold in better planning and organization, in improved tools and the payment system (1984:55-57).

However, as Hirway argues, a conflict between providing maximum employment to the poor and a permanent usefulness of the construction depending on technology may remain. Not all types of RWP assets of good quality can be achieved with highly labour-intensive technology (1994:2829). A number of issues of RWPs need to be considered carefully. First, according to Hirway (1985:563), as in self-employment programmes, demand and supply factors need to be well planned. With the introduction of an employment guarantee as has been the case in Maharasthra, this condition becomes even harder to fulfil. Second, massive RWPs are likely to create inflationary pressures in the economy as the abrupt increase in purchasing power is not matched by a concomitant growth in the supply of consumer goods. This condition however can be met, according to Hirway (1994:31) by either taxing the rich to decrease their consumption, or using some of the surplus labour to produce consumer goods or select capital formation works with a short gestation period which can yield consumption soon. Often such measures are used complementary. Third, RWPs may increase consumption and thus reduce the rate of investment in the economy. This time-worn argument however may be challenged on a large front. It is the discussion on the importance to be attached to raising consumption in the immediate future compared with the potential increase of consumption in the more distant future raised by the Dobb-Sen thesis. Based on several assumptions which I cannot go into here (cf. Cames, 1996c), its neglect of the fruits of a provision of basic needs however are manifest. Fourth, as most authors argue, RWPs are likely to generate assets which will benefit in first line the better-off. This reproach may be termed the main weak point of RWPs. In the absence of structural reforms, the benefits of assets created by RWPs will above all be reaped by those who own land. Whether a agreement can be achieved where the participants get a joint ownership of the assets constructed by them or where the main beneficiaries of such schemes pay part of the expected usufruct as a

compensation to the community, depends indeed strongly on the socioeconomic situation. In this regard it is of primordial importance that projects for RWPs are carefully chosen for not increasing the differentiation among the farmers. Hirway (1994:115) reports that whereas soil conservation works are particularly rich-biased, water development and roadbuilding works tend to spread their benefits better. However, there is a striking disagreement between different scholars. So do Vyas et al include in their counsels for a more equal spread of benefits soil conservation, minor irrigation, watershed development and afforestation (1995:2571). Osmani (1991:336) again evaluates irrigation as predominantly benefitting middle and large farmers. The difficulties faced by the programme in identifying unutilized or underutilized local resources with good growth potential and capable of being diverted to the poor are manifest. Given the marketization processes enabling the rich and the powerful to acquire - even corner - high value resources, the employment programmes find it necessary to search among resources at the margin, left aside by the marketization processes owing to their meagre economic potential (V.M. Rao, 1988:2410). And lastly, to obtain a serious impact on the livelihoods of the poor, the wages should not be below a minimum level and employment should be provided whenever desired. Ravaillon argues that when the budget available for poverty alleviation is limited, an employment scheme guaranteeing a minimum level of income to the workers enabling them to escape poverty and imposing limitations on coverage is preferable over a scheme open to all at whatever wage is possible (Ravaillon, 1991:75-76). This however has been heavily contested as the debate ensuing of the wage rise of the EGS in Maharathra in 1988 has shown. RWPs in India have their historical origin in relief works, however they have not been perceived as major instruments of poverty alleviation until the early 1980s. The National Rural Employment Programme (NREP) has been the most important programme until in 1990 all schemes merged into the Jawahar Rozgar Yojana (JRY). This shift has contributed to more public participation as the village panchayats have become responsible for the

implementation provided that the village panchayats truly represent the villagers. Considering the on-going drive to rejuvenate the panchayati raj institutions (rural self-government), the past experience of general manipulation by the better-off is hoped to be attenuated. From semi-feudal Bihar Sharma (1995:2597) reports that although it would be naive to expect spectacular results given the prevailing socio-economic milieu, the existence of various groups and intra-village rivalry exerts some pressure on the panchayat functionaries to do something. C.H.H. Rao (1992:2605) however argues that it is wrong to assume that the mere involvement of local-level elected institutions can ensure better choice of activities and more effective implementation. According to Hirway (1995:2611), in Gujarat after there had been a shift of activities under NREP towards programmes which could not benefit predominantly the non-poor such as afforestation and irrigation, this shift unfortunately did not continue in JRY which has in mind more the interests of the non-poor, such as the construction of communal buildings which are less used by the poor. She argues that the positive features in the design of JRY do not always pay because most village panchayats do not seem capable of bearing the responsibility entrusted to them as except in West Bengal, panchayats are more or less dominated by the better-off (1994:254). It is exactly from this apparently better-doing state that Echeverri-Gent points out that the implementation of the NREP, which has been handled by panchayats much earlier, has been more responsive to local needs, more sensible projects are planned making use of local knowdedge, it has increased public interest and made the programme more accessible, but there have been as well a number of defaults. So panchayat leaders often do not identify links between programmes, small projects tend to be favoured, and the lack of technical expertise and monitoring mechanisms does not contribute to their cost-effectiveness (Echeverri-Gent, 1992:1405-09). This stand of a mixed bag is also taken over by Maheshwari who concludes that the dilemma between the limits of central functioning and the embarrassment of controlled decentralization is genuine and still awaiting a satisfactory solution (1995:147). C.H.H. Rao (1992:2605) argues that the involvement of NGOs can provide a check on

the panchayats, but it may be illusory to expect them to achieve an exhaustive coverage. The miracle of Maharasthra? The centrally-implemented employment guarantee scheme (EGS) of Maharasthra is generally looked upon as the most successful state-wide scheme. Its feature is the entitlement approach which the employment guarantee implies. According to Echeverri-Gent, the EGS creates an incentive that shapes behaviour. It politicizes the rural poor by inciting them to demand employment from the state. In turn, it enhances responsiveness of politicians and officials to the demands of the poor, so the author. The concentration of large numbers of people in one place in similar conditions increases their interaction and helps to break down social differences. Also, as he argues, the provision of alternative employment to the poor makes them less dependent on the local elites, both politically and economically (Echeverri-Gent, 1988). However, there is a gap between policy and practice. In an article whether the 1988 wage increase had an impact on the work guarantee, Ravaillon et al (1992:2523,70) argue that the main mechanism through which rationing of projects and thus an undermining of the guarantee has been achieved were directives stipulating that existing projects be completed before new projects were opened. Given the size of most districts, to which the employment guarantee is associated, EGS employment is probably rationed, so the authors assume, according to the accessibility of desired participants to existing project sites. Despite comparatively many a other problems of implementation in the EGS, essentially not different from other employment schemes, the EGS is well administered scheme (Dantwala, 1985:475). Replicating the EGS in other states needs to keep in mind the special features of Maharasthra which lies in forming a triangle between a dominant rural elite, a materially prosperous urban sector and a poor but abundantly available rural labour-force (Osmani,



(1988:1295-96) talks about urban political leaders hoping that EGS will curb migration of rural labourers to already overcrowded Bombay while the rural elite is known for its hegemonic willingness to make concessions to subordinate groups in order to protect the legitimacy of its political and economic dominance. The debate: Self or wage employment? The controversy between IRDP and wage employment schemes appears to be rather sterile (Bandyopadhyay, 1988:A-80). I will therefore only touch upon Raths argumentation emphasizing wage employment schemes and Dantwalas counterclaim of favouring self-employment. Basically, Raths (1985) main plead was to alter the balance towards wage employment schemes against an ineffective IRDP. Dantwala (1985:475) in his reply attacks Rath on the grounds that first, wage employment schemes would suffer from the same infirmities (both are tarred with the same brush) and second, the poor are stylized as hewers of wood and drawers of water as their dependence on employers would be perpetuated on benevolence. Also he argues that in a few years time there would be hardly any able and enterprising left among the poor. This last criticism has been taken up by other authors not to denounce RWPs, but to emphasize the complementarity of both programmes. It is Bandyopadhyay who argues: There is no one vs the other option. What is required is an optimal mix which can be obtained through a process of planning at the lowest level to ensure that the families below the poverty line who have been beneficiaries of productive assets and skills can climb up and those who are in waiting-list are prevented from sliding down through wage employment programmes (1988:A-80). Whether wage schemes create dependence upon employers (Dantwala) or not, like Dreze (1990b:93) who argues that EGS on the contrary has enhanced the militancy of the masses, is of less importance considering different target groups of the programmes. While self-employment appears

to be more respondent to small farmers, landless labourers may not want to take the risks and troubles of independent occupations, yet a blanket denial of their entrepreneurial acumen is hard to sustain. The point is that the poor may choose what can best further the security of their livelihood. It is in this sense that Hirway (1985:562) advocates that only one major rural development programme integrating all employment schemes would be very useful. It may be said however, pointing to Nurkse, that self-employment programmes have usually proved to be more productive and better integrated with overall development in infrastructurally advanced regions whereas less developed regions are in greater need of RWPs for first developing this infrastructure (C.H.H. Rao, 1992:2604). The correlation of this assumption sustains the assertion that, if there is an employment guarantee, RWPs redistributes employment to backward areas and underprivileged groups and helps to reduce uneven development. However, this is contrasted with the fact that labourers often live in more developed areas or move towards these areas in search for a better income and hence RWPs may widen regional disparities. The main bonus of RWPs over self-employment is their superiority to focus the beneficiaries. While IRDP has attracted many non-genuine poor, wage schemes are not attractive enough to induce the rural rich to try to corner these schemes for themselves or to prevent the poor from participating (V.M. Rao, 1987:A-4). This advantage however is substantially attenuated if the assets created are of less value to the poor than to the better-off and a trickling up is taking place. So it may be restated that it is only a combined effort of employment programmes and structural reforms which can make a serious dent towards poverty alleviation. What scope there is and how forces could be linked towards a development which embodies poverty alleviation will be seen in the next section.


V. Linking development and poverty alleviation This section aims to present a policy strategy which develops a more comprehensive approach to the Indian dilemma of poverty alleviation undertakings. After having evaluated the actual outcomes of small-scale industrialization policies, land reforms and employment programmes, we can unequivocally assert that none of them have worked adequately of their own. In section III the interrelationship between land reforms and technological extension has been illuminated on the case of West Bengal. It has been discovered that their mutual collaboration has shown positive results even if each intervention of its own might have only had a marginal effect. Some scholars have advocated other combinations of interventions which might be more fruitful than a narrow-minded focus on one programme. In what follows, the possible links of strategies for poverty alleviation and development are presented and it will be attempted to evaluate whether such schemes are able to represent a viable modus operandi for the future or whether they can merely be added to the literature of desirable but fictitious designs which can be shelved without hesitation. Substantive as the scope for an employment-oriented growth strategy in rural areas may be, the socio-economic differentiation in India must be taken account of. V.M. Rao (1992:A-52) distinguishes among a number of regions which differ considerably in their socio-economic development such as semi-feudal (e.g. Bihar), intermediate (e.g. Karnataka), politically mobilized (e.g. West Bengal) and Green Revolution areas (e.g. Punjab). Also strong existing socio-economic intra-village differences (cf. Wade, 1988) cannot be neglected. Options for action Considering the vicious circle of prevailing poverty and deteriorating environmental conditions in India which make the poor mine the ecological

substance in order to survive, the sustenance of livelihoods of the poor does not only have an ethical and social, but also an ecological and hence economic dimension. Macro-economic policies will sooner or later have to face this reality in favouring a livelihood-intensive growth strategy. Chambers and Conway suggest not to accept professional pessimism: Negative approaches tend to be self-fulfilling: if the focus is only on problems, opportunities are easy to miss. Moreover, current poverty and future populations present such an enormous and acute challenge that it is irresponsible not to explore more positive approaches (1992:22). Similarly, J.M. Keynes appeals for not overvaluing socio-economic constraints: Soon or late, it is ideas, not vested interests which are dangerous for good or evil (quoted in Beardshaw, 1992:9). It is in this spirit that J.M. Rao presents the case of an alternative economic strategy to structural adjustment entitled needs-oriented economic and ecological development (NEED) which accords highest priority to the fulfilment of basic needs, RWPs with an employment guarantee and the refurbishment of the environment. The author advocates that massive employment could be created through activities aimed at the restoration of the ecological infrastructure through employment guarantee schemes. Afforestation and wasteland development can be a handsome complement to agricultural employment (1995:1750-51). So does C.H.H. Rao urge for water-shed and wasteland development, the latter could generate over 50 million person-years of work. He argues that since the employment demanded by the poor is not likely to be available locally in every region, some of the labour could be organized under a Land Army Corporation (1992:2605). Also Hirway (1994:130-31) pleads for such a scheme for mobile labourers which has a model in the existing Karnataka Land Army Corporation. Such schemes have precursors even in many developed countries. The most prominent example would probably be the employment programmes introduced in the USA of the 1930s under F.D. Roosevelts New Deal policies.

However, besides stepping up RWPs for capital construction in agriculture and for eco-development, the stimulation of growth of household and small industries by integrating them with self-employment programmes represents a major option of linking poverty alleviation. Vyasulu familiarizes us with the experiences in Karnataka of linking R&D (research and development) with PAPs. According to the author, the creative integration of scientific and technological R&D efforts with employment schemes may be an area in which Karnataka may have lessons to offer. The Karnataka State Council for Science and Technology (KSCST) has been able to bring together political authority, the rural administration and scientific talent. Among the efforts of KSCST have been ensuring perennial drinking water supplies, community biogas plants and development of effective kilns. As the author assures, such projects have not been accomplished in a top-down fashion. Training of village artisans, feedback to improve designs, collaboration with grassroots activists and diffusion have been major constituents of the programme. Employment creation has been provided in situ for villagers in repair, maintenance and production (Vyasulu, 1995:2646-47). Notwithstanding Karnatakas not too oppressive socio-economic system where extreme polarization in villages is not the common feature, we must ask whether the scope for more communal action could not be substantially expanded and some form of joint production or sharing of risks between households would not break even many activities which under the current focus on small-scale IRDP entreprises are not viable. Here we are faced with the inherent difficulties of establishing cooperatives. As far back as in 1928, the Royal Commission on Agriculture opined: We have great hopes that many millions of peasant proprietors may be led to a better life through a sound cooperative movement: if this is secured, much else is brought within the bounds of attainment. (...) If cooperation fails, there will fail the best hope of rural India (quoted in Maheshwari, 1995:155). By and large it did. The socio-economic base of the cooperatives has remained distinctly narrow, restricting the flow of its benefits only to the relatively better-off in the local community (Maheshwari, 1995:156). In

Gujarat however, according to Hirway, the cooperative movement is fairly successful. Agricultural and non-agricultural credit societies, marketing and service cooperatives, cooperatives in fishery, poultry, handloom, handicrafts and housing are covered (1995:2615). It is this philosophy of the cooperative movement which can be very relevant to reduce the risks for the poor and make them benefit from the inherent economies of scale. Also, as C.H.H. Rao argues, is the indivisibility-phenomenon becoming increasingly important in many activities with modern practices or where technical services are important. At the same time, group initiative and effort of the poor is promoted to check exploitation by middlemen (1992:2607). The scope for communal action with mutual benefit in India is large. It was for example demonstrated that by using the biogas technology, the wastes produced from a cow herd can be sufficient to reach self-sufficiency in green fodder with only a small pasture, a point of importance for a farmers cooperative with little available land. Biofertilizers could be utilized to improve grass yields and the result was improved by the use of irrigation, based on biogas powered pumpsets. However, unless a balance is struck by investing in people - creating local organizations that truly understand local needs and conditions - investments only in technologies are often wasted (cf. Cames, 1996d). What is certainly required in India is this link of communal activities, be it as joint ventures of a number of IRDP beneficiaries or at a larger scale at village level or beyond, a form of cooperative organization based on collective labour and supplying long term security to the participants. The multiplier effect of intensive interlinkages between different undertakings in this sense can be substantial. Village industries are not necessarily predisposed to dread the competition of the large-scale sector when they can make out their niche for themselves. The problem certainly lies in identifying areas of investment which first, do not already suffer from underemployment, second, are not cornered by the better-off and third, where the effective demand is allowed to meet the actual demand, viz. where the market is not restricted to those who can afford. Biogas diffusion is one example. Housing another. As Tulpule argues, housing as an urgent

need is highly labour-intensive, has extensive backward linkages and needs hardly any import content if the right materials and technology of construction are used (1990:1158). Other areas are certainly discernible given the increasing environmental degradation which affects the better-off as it does the poor. However they afford the interactive investment in relevant R&D focusing on the needs of the poor requiring cooperation of research institutes and participants. There is the need to look for need-based appropriate technologies which do not remain within the walls of laboratories. Field organizations must interact with the users for their dissemination. A lack of diffusion of more appropriate technologies is not only caused by socio-economic factors but also by an absence of effective and actual demand from the poor. Not fulfilled by market institutions, this demand can be contented by a stronger entrustment of non-market institutions in securing R&D and their diffusion. Due to the inherent weaknesses of governmental bodies to recognize the needs of the poor, nongovernmental organizations (NGOs) and local organizations can help to fill this gap. Anthropological understanding is essential in matching the villagers concerns with that of the intervener. While many public organizations take up problems only on request and the socio-economic situation in villages is such that no one comes forward to register a request (Maheshwari, 1995:194), voluntary organizations are generally more effective in detecting true needs. Paul (1989:100) argues that governments and NGOs have different strengths which are complementary and that in the case of poverty alleviation, there is a clear case for a division of labour that exploits their comparative advantage. An approach based on such a more participatory approach seeking for alternative solutions could lead towards more absorption of labour towards the secondary and tertiary sector. Nevertheless, if there is scope to mitigate the influx of labour into agriculture, an urgent need remains to upgrade extension for small and marginal farmers. V.M. Rao argues that a more interactive system of agricultural extension in Karnataka for dry-land crops, such as millets and pulses, which have been bypassed by the Green Revolution, can effectively make an impact on the livelihoods of the poor by integrating them in the

growth process. This new system of agricultural extension attempts to correct the current biases of extension which favour large farmers relying on empirical evidences that smallholders use scarce inputs with greater care and skills than large farmers (1988: 2411-17). Yet there will be no escape from the need for structural reforms. The case in West Bengal has shown that even a minimalistic land reform can have positive repercussions. As V.M Rao argues, land reform has to remain a component in a multi-dimensional package of measures even if it would be obviously unrealistic to assume that all the rural poor can be accommodated in agriculture as owner-cultivators (1992:A-60). The point is that in order to make employment programmes for poverty alleviation more effective, a minimum level of land concentration should not be overstepped. Whereas with a highly skewed distribution of land, IRDP activities in agriculture reach an upper ceiling very soon, the assets created under JRY schemes tend to benefit primarily the landowners. Also, as V.M. Rao argues, the provision of house-sites to landless labourers is an important item in land reforms enabling to take up supplementary land-based activities like vegetable growing, poultry, dairying, etc. (1992:A-60). In addition, Kannan reports from Kerala that this could have helped the process of decline in poverty indirectly through removal of the psychological barriers for bargaining for higher wages (1995:2655). It is in this regard that the recent decision of the government of India to permit loans for purchase of land under IRDP is a step in the right direction (C.H.H. Rao, 1992:2604). In this context it must be indicated that the consolidation of holdings to prevent further fragmentation is essential. V.M. Rao objects that the extremely slow progress in this matter is due to a virtually total neglect at highest policy-making levels (1992:A-62). Whether this denotes however a re-installation of the law of primogeniture, as Maheshwari (1995:21) alludes, is to say the least, very debatable.


Prospects for overcoming the socio-economic constraints The perspectives for revitalizing the objective of land reforms are mediocre. A strategy relying on the ultimate comprehensive success of structural reforms will have to fail. Yet, there are some indicators providing some glimmers of hope. According to V.M. Rao, unlike in the immediate post-independence years, the need for land reforms is now far more pressing since sustained growth itself depends on them: Growth in Indian agriculture now confronts barriers which cannot be overcome through primarily technocratic strategies which succeeded as admirably in the green revolution areas. (...) It is also realized that it is being achieved at a high and increasing cost in terms of scarce inputs (...). Growth in dryland agriculture (...) needs a combination of both technocratic and reformist strategies (1992:A-52). This, so he argues, may have the effect of strengthening the political will for reforms. Also, the present PAPs can be regarded as having a conscientizing influence on the poor ameliorating their countervailing power against the dominant groups and to build up entrepreneurial capabilities of their own to compete with the rural rich. Then, so he continues, is there a subtle difference between the absentee-cum-non-cultivating owners on one hand and the present dominant rural group on the other in the nature of the resistance they put up to land reforms. The former were rent-collectors whose resistance to reforms began to weaken only when they moved out of villages. The latter group, so Rao, consists of profit-earners who may be expected to respond more readily and positively to new growth opportunities in agriculture and rural sectors. If there are policies to ensure that the new opportunities are adequately labour-absorbing and - through a combination of farm and non-farm enterprises - bring a measure of affluence within the reach of even households with modest landholdings, the feasibility of effective implementation of ceiling and tenancy legislation might show a marked improvement (1992:A-52). Rao suggests that, since further growth in agricultural output is costintensive, the dominant capitalist farmers may rather diversify into agro38

related or other investments than merely relying on raising production. Vertical concentration seems more profitable than horizontal concentration at this stage. This is confirmed by recent literature pointing out the reemergence of rentiers among the large farmers (cf. Section III). If then a more open-minded class of capitalist farmers-cum-entrepreneurs which may not corner land reform schemes in a degree they used to before links with a more emancipated class of poor, land reform may become an issue again. However, the reversing of land ceilings under the auspices of SAP, pointed out above, steers towards the opposite direction. Hence it is of primordial importance to mobilize the poor at this point of time in order to achieve at least a minimalist solution. Evaluating the prospects of improved employment schemes, J.M. Rao points out the adverse consequences of economy-environment interactions for growth flowing from unequal wealth distribution: Soil erosion, waterlogging and salinization, deforestation and declining commons have doubtless reduced primary sector output and yields. He emphasizes the necessity to exploit the complementarity between income gains, employment growth and environmental refurbishment as an alternative to the present focus on SAP (1995:1760). Ecological degradation may well become the trigger to compel the better-off towards a more honest approach of poverty alleviation. Recognizing the need to restore the environment and perceiving the link between poverty and environmental degradation, they have a clear economic interest in improving the present corrupt state of employment schemes. RWPs with an employment guarantee and IRDP schemes, preferably joint-ventures, aiming at ecological restoration and/or improvement in rural infrastructure mutually benefit the rich and the poor. The large potential still untapped in these domains should provide enough room for expansion of employment programmes over the next few decades.


Conclusion This paper has attempted to reveal the scope for achieving poverty alleviation hand in hand with development. Although each programme to sustain the poor has only a limited impact of its own, mutually reinforcing structural reforms and PAPs are able to pave the way for a more sustainable development with a better integration of the poor in the growth process. It has been seen that employment schemes often only have the effect of providing temporary relief to the poor and do not contribute effectively towards long-term development. Likewise it was stated that the prospects of comprehensive implementation of structural reforms, which could have a poignant effect of their own, are almost illusory nowadays. Considering a minimalist approach to land reforms possibly within reach, yet it would have both for raising its probability of achievement and for guaranteeing its viableness to be complemented by extension, upgraded technology and employment schemes increasing the general level of productivity in the rural economy. Employment schemes again are in need of at least this minimalist structural reform in order to spread their benefits better and allow some incentive to the participants. Village industrialization coupled with IRDP and not directed to compete with urban products but to be involved in producing basic rural capital goods, construction of houses, etc. may as well help to start this virtuous circle which India is in need of. But yet, one of the most important spark-offs of a more efficacious operation of PAPs will have to be the strengthening of self-esteem of the destitute. Only if the hearts and minds of the people are gained, a better integration of the poor is assured. Self-confident people rely more on their own culture, knowledge and wisdom. Instead of a mere appeal to make the poor more self-reliant it is a kick which is in demand to overcome the culture of silence (Friere, 1972). This kick, inherent in policies enhancing the social sustainability of the poor, reveals the need and the moral task of present-day India - a true case for action.


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