My Views

Fall in Poverty levels

Posted in Economy, Reality Check, Reports by dullar on March 23, 2007

Two related stories in yesterday’s Mint regarding the issues of poverty and rural economy gave a new addition to the perspective of falling poverty levels and the reasons behind. These are- A new rural economy and ” Poverty at record low” ( i cudnt find the link for this on the website, though read in the paper yesterday).
The revealations are:
1) Substaintial fall in poverty levels( down to 21.8% in 2004-2005 from 26.1% in 1999-2000), thanx to the 2nd generation reforms.
2) Change in the consumption pattern all across the board, including rural india.
3) Fall in rural unemployment is greater than the fall in urban unemployment. It may be due to increasing diversification of agriculture, increase in enterprises(both service and industrial) in the rural areas, greater migration og unemployed youth from rural areas to urban areas in searc of employment thereby increasing the unemployment rate in latter.
4) New Urban enterprises grew at a lower rate than the rural enterprises.(former-3.71%, latter- 5.53%). Former may be due to the fact that in the urban areas starting an enterprise requires adequate skill level, approvals from government, and plethora of other issues. In rural areas, enterprises grew may be coz of increasing intervention by government, subsidies given for the equipments and various schemes of bank loans, SHG initiatives.
5) Increasing diversification and investments in non-farm activites at village levels. Youth are left to their own initiatives given that agriculture cannot absorb increasing population burden and consequent employment demands.


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