May 19: Universal anti-poverty schemes best for poverty alleviation
May 19, 2011
http://timesofindia.indiatimes.com/india/Schemes-that-dont-seek-to-identify-poor-cover-them-best/articleshow/8430757.cms
NEW DELHI: The first-ever comprehensive review of India’s anti-poverty schemes has found that schemes like the MGNREGS that do not specifically seek to identify the poor are most successful in actually covering them. This is a significant finding given that many in the government have been arguing for the opposite — more rigorous external targeting — ahead of the 2011 BPL census.
The World Bank on Wednesday released a review of centrally-sponsored social security schemes, including the Mahatma Gandhi National Rural Employment Guarantee Scheme, the Public Distribution System, the Rashtriya Swasthya Bima Yojana, Indira Awas Yojana and Indira Gandhi Old Age Pension Scheme. The review was commissioned by the Planning Commission.
With regards to targeting, the World Bank report finds serious problems with the current BPL measure: over a third of the poorest 10% of the country were incorrectly identified as non-poor in the 2002 BPL census. This under-coverage rises to over a half and close to two-thirds for the poorest 20% and poorest 30%, respectively. The report also points to serious problems in the methodology proposed for the 2011 BPL census.
The schemes with the best coverage of the poorest 20%, on the other hand, are the MGNREGS, as well as the Annapurna grain scheme and the widow pension scheme. The proportion of SC and ST households in these schemes is also much higher.
While the MGNREGS is not restricted to poor families, the low wage rate and high opportunity costs ensure that there is self-selection, in other words that those not intended to be the beneficiaries are not attracted to it. The Annapurna scheme and the widow pension scheme are restricted to the elderly and widows respectively, groups that are likely to include many poor people. The result, as data compiled by the Bank shows, is that these schemes have the greatest success in covering the genuinely poor.
Overall, the review finds large inter-state differences in spending and outcomes in anti-poverty schemes. Even though the poorest states are allotted the highest proportions of central funds, they have the lowest administrative capacity to spend the funds effectively.
