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WB report moots spending reforms to reduce poverty in India

India's anti-poverty programmes and public spending on health and education are missing their mark, consuming significant resources but yielding little gain in raising living standards of the poor, the Word Bank says in a new report.

The central finding of the report Reducing Poverty in India: Options for More Effective Public Services is that the success of education and public health in reaching poor people depends not only on more spending but on improving the quality of services they receive.

Targeting government spending to primary education, reducing communicable diseases, improving water and sanitation, and reducing household insecurity through public works programmes would do most to reduce poverty, the report says.

According to the report, on the whole, public spending on education does not benefit the poor, who either do not send or do not keep their children in school on an equal footing with the better off.

The empirical findings in the report and those of other research in India produce a consistent picture that increased spending alone will not be enough to improve enrolment and attainment of the poor. For schooling to reach the economically-and socially-disadvantaged, the report recommends policies that can expand both the quantity and quality of schooling and work to eliminate social exclusion based on income, gender, or caste.

The twin pillars of India's strategy for reducing poverty are accelerated and sustained labour intensive growth and investments in developing human capital. Designed to provide supplementary but important support to that central effort, the various anti-poverty programmes have shown a disappointing performance in terms of reaching the poor.

Safety nets have a key role in achieving poverty reduction, but India urgently needs to formulate an anti-poverty strategy that is fiscally sustainable. The majority of India's safety net initiatives are misusing scarce financial resources that could be best invested to increase the poor's access to health and education services that have been shown to equip them to help themselves.

The message for India is thus clear: by accelerating economic reforms, redirecting towards infrastructure, health, and basic education the large resources now absorbed by ill-targeted subsidies, and improving the effectiveness and targeting of spending in education, health, and anti-poverty programmes, India can give its long battle to reduce poverty a new impetus.

UNI