[Economics/GK] Millennium Development Goals

MILLENNIUM DEVELOPMENT GOALS (MDG)

By	UN General Assembly
When	Framed in 2000 (but targets calculation done based on 1990 levels)
Deadline	2015

MDG and India:

India can achieve the following goals by 2015	India cannot achieve the following goals by 2015
1) Poverty Reduction 2) Hosueholds with water access 3) Gender parity, Universal Primary Education 4) Under 5 Mortality Rate (with some effort)	5) Maternal Mortality Rate 6) Share of women in non-agri employment 7) Birth attended by skilled personnel 8) Sanitation

 MDG has 8 goals and 18 targets:

Goal	Target Description
Poverty Hunger	1) Reduce BPL population by 50%
	2) Reduce Hungry People by50%
Education	3) All boys and girls complete primary education
Gender Equality	4) Eliminate gender disparity in primary and secondary education
Child	5) Reduce Child Mortality by two-third
Mother	6) Reduce Maternal Mortality Rate by 75%
Disease	7) Halt HIV / AIDS spread
	8) Halt Malaria
Sustainable Development	9) Integrate Sustainable Development into national policies, reverse environment loss
	10) Population without access to water-sanitation: Reduce by 50%
	11) Improve life of at least 10 crore slum dwellers
Partnership	12) Reform Training, financial system, good governance etc
	13) Needs of LDC countries
	14) Needs of Small island and land locked countries
	15) Debt problem of developing countries
	16) Youth productive work
	17)Affordable drugs with help of pharma companies
	18)New ICT technology with help of private companies

Sustainable Development Goals (SDG):

·        2015: millennium Development goals will expire.

·        Therefore, under RIO+20 summit, the leaders had decided to enact new “Sustainable development goals” (SDG)

·        UN general assembly has setup 30 member groups to design SDG.

Proposed focused area under SDG:

1.               poverty eradication 2.               food security and nutrition 3.               health and population dynamics 4.               education 5.               gender equality and women empowerment 6.               water and sanitation

7.               energy 8.               employment 9.               sustainable cities and human settlements 10.           sustainable production and consumption 11.           means of implementation

What is Sustainable Development?

Ø     “Development which meets the needs of current generations without compromising the ability of future generations to meet their own needs”.

Ø     Brundtland commission on World Commission on Environment and Development (1987) gave above definition.

 What is Rio+20 summit?

Ø     1992: Earth Summit in Rio de Janeiro, Brazil

Ø     2012: United Nations Conference on Sustainable Development, in same place.

Ø     but since 20 years had lapsed between two summit, therefore, second summit called “RIO+20”
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[Economics] Poverty Removal Schemes

Poverty Removal Schemes:

(1) MNREGA

Livelihood missions: (2) Rural (Ajiveeka) (3) Urban

Scheme#1: MNREGA Act 2005

·        under Rural Development ministry

·        Promises minimum 100 days of unskilled manual work

·        To each rural household. (not to each person)

·        In a financial year (1st April to 31st March)

·        1/3rd women participation

·        Unemployment allowance, if you can’t get work within 15 days

·        State governments have to appoint district level ombudsman to hear complaints

·        Wages: Material ratio = 60:40

MNREGA Wages are linked with CPI inflation for Agricultural laborers
Year	MNREGA Wages
2006	65
2013	132

MNREGA Performance:

 For the year 2013, average work days is 46 and the women participation is 52.9%

	Best	Worst
Workdays	1. Tamil Nadu	Assam
	2. Kerala	Punjab
Women participation	1. Kerala	Uttar Pradesh
	2. Andhra Pradesh	Assam

MNREGA Reforms:

Ø     Individual bank/PO accounts for All women

Ø     Widowed, deserted, and destitute women identified and covered under MNREGA scheme.

Ø     Designed “schedule of rates (SoR)” for physically handicapped laborers, so they get fair wages despite providing less output.

Ø     Provided convergence with other schemes such as Nirmal Bharat Abhiyan, Panchayat Yuva khel Kendra, ICDS Anganwadi centres etc.

MNREGA: Economic Survey Observations

§        MNREGA was supposed to a “panchayat-centric and demand driven” program. But ground reality is different.

§        Gram Sabha is unaware of its powers. Social audits not done regularly.

§        Hardly any Gram Sabha using MNREGA for public works such as Playground, Anganwadi etc.

§        Shortage of Technical staff => Delay in work measurement => delay in payment.

§        At many places, males find higher wage-work in nearby towns. Therefore only a few women come at MNREGA site. Big projects cannot be taken up due to worker shortage.

§        Suggested reform: Use MNREGA for tourism related infrastructure.

§        Budget 2014: promised to use MNREGA for creating Agriculture related “more productive” assets.

NRLM / Aajeevika:

·        By Rural Development Ministry

·        1999: Swarnjayanti Gram Swarozgar Yojana (SGSY). Later renamed to National Rural Livelihood Mission (NRLM). Finally renamed to Aajeevika.

·        Wants to lift rural families from abject poverty

·        By 2024, get one person (preferably woman) from each household, into an income generating Self-help groups (SHG).

·        By Giving (Bank loans + subsidy + training) to those SHG.

·        Economic Survey observation:

·        Scheme worked fine for agarbatti, pottery, tailoring and other small business activities.

·        But at some places, Government made too much infrastructure investment compared to scope of the given business activity.

Aajiveeka – Budget 2014:

Under Aajiveeka, Women-SHG in backward districts get loans at cheaper interest rate.

Budget 2014 increased the number of backward districts under this scheme.

Loan Interest Rate	Before 2014	After
4%	In 150 most backward district	+ 100 more added = 250
7%	Remaining districts	Interest Rate unchanged (7%)

Additionally, Budget 2014 also announced “Start Up Village Entrepreneurship Programme” for rural youth. But exact details yet to be worked out.

NULM

·        By the Ministry of Housing & Urban poverty alleviation

·        Earlier called Swarnajayanti Sahari Swarojgar Yojana. Then renamed into National urban livelihoods mission, with following features

·        self-help groups: bank credit + subsidies + skill training

·        street vendors also get easy loans and skill training

·        Shelters for the homeless.

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[Economics] Poverty Estimations in India

Who decides Poverty line?

Planning commission

How does it decide poverty line?

Monthly per capita Expenditure

Suresh Tendulkar designed its Formula.

Who provides the data of monthly Expenditure?

NSSO- National sample survey organization

Under Ministry of Statistics and Programme Implementation

Tendulkar’s Poverty Line
Area	Monthly Expenditure per person (in Rs.)
Rural	816
Urban	1000

According to Tendulkar formula, poverty has declined, as seen in following graph:

No of poors in India (Tendulkar Method)
	2004	2011
Poor (in %)	37.2	21.9
Poor (in cr)	41	27

Economic Survey 2013
Highest Rural Poverty	Lowest Poverty
1. Odisha and Madhya Pradesh	1. Kerala (7.1%)
2. Bihar	2. Himachal Pradesh (8.1%)
3. Assam	3. Punjab (8.3%)
Highest Rural Unemployment	Highest Urban Unemployment
1. Kerala	1. Bihar
2. Assam	2. West Bengal
3. Bihar	3. Andhra Pradesh
4. West Bengal	4. Haryana
Lowest in  Gujarat (3/1000)	Lowest in Gujarat (34/1000)

Committees	Tendulkar	C. Rangarajan
Set up by	Planning Commission	Planning Commission
Set up in	2005	May 2012
Submitted report in	2009	July 2014
Poverty Estimation Method	Monthly per capita expenditure	Monthly expenditure of family of 5

 Urban Poverty Line:

Urban Poverty Line (in Rs.)	Tendulkar	C. Rangarajan
Per day per person	33	46.90 (47)
Per person per month	1000	1407
Per family of 5, per month	5000	7035

Rural Poverty Line:

Urban Poverty Line (in Rs.)	Tendulkar	C. Rangarajan
Per day per person	27	32
Per person per month	816	972
Per family of 5, per month	4080	4860

Rangarajan Estimation and controversies:

Ø     C. Rangarajan has received lot of negative publicity because:

o       He kept poverty line to be ridiculously low – Rs.32 for rural and Rs.47 for Urban.

o       Therefore He is insensitive towards the poor.

Ø     But Rangarajan never gave those daily numbers. He had given combined poverty line for a family of five members- Rs.7035, which is a plausible number. After all, if you live in a family of five, then some costs will get reduced per head (e.g. rent, light bill, LPG etc.)

Ø     Besides, if a family spending >7000 per month = their income would be definitely above 7000. So in reality, Rangarajan has not “insulted” the poor. Infact, He has tried to cover more poor under BPL & government schemes.

Ø     Media has derived those “insensitive” daily Expenditure figures (Rs.33, Rs.47) by dividing the monthly Expenditure of five people, then further dividing that number by 30.

Ø     If you objectively convert Rangarajan’s poverty line into purchasing power parity (PPP), it’s $2.44 per person, per day. And that figure even higher than World Bank estimate! Thus, Rangarajan included more poor in BPL, than even World Bank would!

Ø     Thus, journalists and politicians have misinterpreted the poverty line issue- just like they misinterpreted Anti-CSAT movement to be against those 8 easy English MCQs above Decision Making section!

How 100 million poors increased?

Since Rangarajan raised poverty line, obviously more people would become “below poverty line”.

Poverty in India: Year 2011
Formula	BPL in India (in crores)
Tendulkar	27
Rangarajan	37
Difference	10 crore = 100 million BPL increased

Calorie Expenditure:

Tendulkar	Rangarajan
Only calorific value in Expenditure	Calorie + Protein + Fat

Calories	Lakdawalla	Rangarajan
Rural	2400	2155
Urban	2100	2090

Observe that Ranga reduced the calorie requirement- why?

Because ICMR study report said so. Besides, over the years use of machinery and vehicles has increased, so today’s generation doesn’t require that much “calorie”.

Rangarajan also included Expenditure on Protein and Fats

Gms/day	Rural	Urban
Protein	48	50
Fats	28	26

  

Tendulkar	C. Rangarajan
Only counts Expenditure on food.	food + nonfood items such as education, healthcare, clothing, transport, rent
----------------	§                  Urban poverty increased on faster rate (40%) than rural poverty (19%) §                  This is obvious, because Rangarajan included non-food items like rent, education etc. §                  These items/services are more expensive in cities than in villages.
Static, fixed line- only calorie Expenditure.	Rangarajan recommends that at any given point of time, §                  Bottom 35% rural junta always be considered poor §                  Bottom 25% urban junta always be considered poor.
-----------------	§                  Poverty ratios should be disengaged from entitlements under Government schemes. §                  e.g. cheap food grain quota under Food Security Act should not be based on BPL-ness, but social-caste census.

  

Monthly Per Capita Expenditure (MPCE): NSSO 68th Round (2011 – 12)
Area	Average MPCE	Highest In	% of Food Expenditure
Urban	Rs. 2399	Haryana	38.5%
Rural	Rs. 1278	Kerala	48.6%

·        This indicates rural-urban disparity. City folks have more money to spend than Villagers.

·        Engel’s law says: when income rises, % of overall income spent on food item decreases.

·        We can see this happening in urban areas. City folks spending ~39% while villagers spending ~49% of their income on food.

·        Among states: Kerala spends the least money

 Changing faces of poverty:

Year	Poverty Ratio			Number of Poor (in million)
	Rural	Urban	Total	Rural	Urban	Total
Lakdawala Method
1973-74	56.4	49.0	54.9	261.3	60.0	321.3
1977-78	53.1	45.2	51.3	264.3	64.6	328.9
1983	45.7	40.8	44.5	252.0	70.9	322.9
1987-88	39.1	38.2	38.9	231.9	75.2	307.1
1993-94	37.3	32.4	36.0	244.0	76.3	320.3
2004-05	28.3	25.7	27.5	220.9	80.8	301.7
Tendulkar Method
2004-05	41.8	25.7	37.2	326.3	80.8	407.1
2009-10	33.8	20.9	29.8	278.2	76.5	354.7
2010-11	25.7	13.7	21.9	216.7	53.1	269.8
Rangarajan Method
2009-10	39.6	35.1	38.2	325.9	128.7	454.6
2011-12	30.9	26.4	29.5	260.5	102.5	363.0

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