VISION
Mission: “To work as a credible and sustainable institution, providing financial services for mitigating poverty, and catalysing social and economic transformation”
Vision 2020: “To emerge as a credible and sustainable microfinance institution serving one Million clients by 2020”
Description of key words and phrases in JAAGO’s Mission and Vision statement
Credible: Developing and maintaining the culture of trustworthiness to produce high customer equity. Credibility will help in building a loyal customer base, more loyal the customers the higher the equity.
Sustainable: By giving emphasis on client centric services, refining the service delivery methods, deriving new business development the organisation will work for improving the economic systems that last indefinitely. To bring in overall sustainability the organisation will strive to attract and retain quality human capital.
Financial services: By offering different types of value added financial services to the poor e.g. life insurance, general insurance, health insurance.
Mitigating poverty: Providing a whole bouquet of financial services to the target client base, i.e. economically active poor. JAAGO will try to reach to a large number of client bases through the financial services thus try to reduce poverty. Organisation strives to create an enabling environment for the poor so that they can have easy access to financial services.
Catalysing social and economic transformation: JAAGO believes that India needs change for that it is pertinent to bring about a transformation in the society. The organisation wishes to emerge as a viable alternative to serve the society. JAAGO will maintain the integrity and prestige of the organisation by keeping social mindset with commercial objective. The organisation will strive towards positive socioeconomic growth of its client base.
About Us:
Jaago is a not for profit Institution Registered under Section 25 of the Companies Act, 1956. Jaago was registered in august 2007. Jaago is exempted under Section 12A & 80G of the Income Tax Act. CIN Number of the company, Jaago Samajik Arthik & Harit Vikas Sangathan is U75302UP2007NPL033800.
In recent mF state, generally MFIs are working as finance providers to poor, the absence of any regulation on this subject give unconditional pull to the MFIs. Impact on the poor is far slighter. Most of the MFIs are laced with big Strategic Business Plan & outrage. Impact on the poor is almost lost in mF sector. Few likeminded professionals felt the need of the mF in its bona fide mean; hence Jaago was established with the sole objective to help the poor with microfinance & associated tools i.e. mF+. Jaago is an Institution (MFI) not for profit and working for livelihood promotion through mF+ in the five districts of Uttar Pradesh.
In the initial period, Jaago have established mF in Lucknow, Sultanpur and Raibareli; now institution is planning to start livelihood intervention in its present location, and as pilot, Jaago yearning to start the mf+ in the capital of the Uttar Pradesh, Lucknow. Our vision is to serve marginalised poor women with mF+ so that our members may live with due dignity. Jaago help poor with the credit & other linkage support to provide them an opportunity to promote themselves as small entrepreneurs on self sustainable basis. At present Jaago is serving around 4,000 poor urban and rural families.
Monday, September 6, 2010
Microfinance in Uttar Pradesh
How Jaago Started Microfinance in Uttar Pradesh:
“There was 1 person in the beginning, microfinance market was a mess in UP, and the global economy was declining. There was no reason for me to pursue this venture, other than to follow the dreams to support small entrepreneurs in Uttar Pradesh to empower the nation by empowering lives.”
Poverty Trends and Correlates in Uttar Pradesh.
Introduction
Generally poverty is looked as relative or absolute material deprivation reflected in low levels of income or consumption. However, poverty has many dimensions, though all of them are not equally amenable to measurement. Low levels of income not only result in low levels of consumption and material deprivation, but also restrict human capabilities by restricting the access of the poor to education and health facilities, thereby creating a vicious cycle of poverty. Poverty also involves various forms of vulnerability and exposure to risk, powerlessness and social exclusion. In this paer we focus on material deprivation as reflected in lowness of income/consumption.
Indian planners have defined poverty in terms of nutritional norm of 2400 calories per capita per day for rural areas and 2100 calories per capita per day for urban areas. The nutritional norm is converted into monetary equivalent in terms of per capita consumption expenditure using NSS consumer expenditure data. The proportion of population below the poverty line, i.e., the poverty ratio, is then calculated using the distribution of persons over different expenditure classes as given in NSS surveys, which are conducted quinquennially. The poverty line originally calculated for 1973-74 has been revised from time to time using the appropriate price index for rural and urban areas. Lately state specific poverty lines have been used for measuring the trends in poverty. Poverty line for 2004-05 for U.P. has been estimated by the Planning Commission at Rs.365.84 per capita monthly consumption expenditure in rural areas and Rs.483.26 in urban areas.
Poverty Trends at the State Level
Poverty ratios in Uttar Pradesh have been relatively high. According to the latest estimate of the Planning Commission based on NSS 61st round, about one-third of the population of the state was living below the poverty line in 2004-05 as compared to the figure of 27.5 percent for the country on the basis on uniform recall period. Only Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh and Orissa had a higher poverty ratio as compared to U.P. Around 80 percent of the poor in the state live in the rural areas. However, rural and urban poverty ratios do not show much difference in U.P.
Both rural and urban poverty have steadily declined in U.P. in the last three decades (Table 1). On the basis of the uniform recall period, poverty ratio declined by 8.1 percentage points in U.P. between 1993-94 and 2004-05, which compares well with the decline of poverty in India as a whole during the period. The decline was higher in rural areas where poverty ratio declined by 8.3 percentage points as compared to the urban areas where the decline was by 4.8 percentage points only.
* Director, Giri Institute of Development Studies, Lucknow
Table 1: Trends in Poverty Ratios in U.P. and India (%)
NSS Round Uttar Pradesh All-India
Rural Urban Combined Rural Urban Combined
1973-74 56.53 60.09 57.07 56.44 49.01 54.88
1977-78 47.60 56.23 49.05 53.07 45.24 51.32
1983-84 46.45 49.82 47.07 45.85 40.79 44.48
1987-88 41.10 42.96 41.46 39.09 38.20 38.86
1993-94 42.28 35.39 40.85 37.27 32.36 35.97
1999-00* 31.22 30.89 31.15 27.09 23.62 26.10
2004-05 URP 33.4 30.6 32.8 28.3 25.7 27.5
2004-05 MRP 25.3 26.3 25.5 21.8 21.7 21.8
Source: Planning Commission estimates based on NSS rounds.
* Based on 30 days recall period.
Doubts have been expressed about the comparability of poverty estimates between 1993-94 and 1999-00 due to differences in the reference period. However, a rough comparison based on mixed reference surveys reveals that poverty ratio declined from 31.2 percent in 1999-00 and further to 25.2 percent in 2004-05, i.e. a decline of 6 percentage point. This would suggest that the rate of decline in poverty was relatively faster during 1999-2005 as compared to the period 1993-00. It may also be noted that the mixed reference period estimates indicate a lower incidence of poverty (around 25 per cent).
It is remarkable that the decline in poverty in U.P. has taken place at the same rate as in India, despite of the fact that the growth rate in U.P. was markedly below the national average. Also, poverty ratio has continued to decline although agricultural growth has slowed down in the recent period. A number of factors including the gradual diversification of the economy, rise in real wage rate and government programmes for poverty alleviation and employment generation seem to be responsible for the decline in poverty.
Despite the substantial decline in the poverty ratio, the absolute number of poor has remained high in the state. Almost 6 million people in U.P. were living below the poverty line in 2004-05 constituting over one-fifth of the total poor in the country on the basis of uniform recall period (Table 2). In fact, the proportion of the poor living in U.P. has increased over time.
Table 2: No. of Poor in U.P. by Area
NSS Round Uttar Pradesh U.P. as % of All-India
Rural Urban Combined Rural Urban Combined
1973-74 449.99 85.74 535.73 17.22 14.28 16.67
1977-78 407.41 96.96 504.37 15.42 15.00 15.34
1983-84 448.03 108.71 556.74 17.78 15.32 17.24
1987-88 429.74 106.79 536.53 18.53 14.21 17.47
1993-94 496.18 108.28 604.46 20.33 14.18 18.87
1999-00* 412.01 117.88 529.89 21.32 17.59 20.36
2004-05 URP 473.0 117.03 590.03 21.41 14.48 19.56
2004-05 MRP 357.68 100.47 458.15 21.00 14.73 19.21
Source: Planning Commission estimates based on NSS rounds.
* Based on 30 days recall period.
URP=Uniform reference period using 30 day recall period.
MRP=Mixed recall period, where for some items recall period is 365 days, while for the rest it is 30 days.
Correlates of Poverty in UP
Studies reveal that poverty levels are associated with the social identity, source of livelihood, landlessness and level of education of the head of household.
The incidence of poverty is much higher among SC and ST households in U.P. (Figure 1). Nearly 60 per cent of SC households were below poverty line in U.P. in 1993-94. However, this proportion came down to 43 per cent in 1999-00. The pace of decline of poverty was faster for the SC/ST households as compared to other households during this period. Poverty level among Hindus and Muslim is roughly of the same order in the rural areas-around 31 percent in 1999-00. But poverty levels are much higher for the latter in the urban areas - 42.2 per cent as compared to only 26.4 per cent for Hindus.
In rural areas poverty is found strongly associated with land ownership, which is the main productive asset. Only 7 percent of large landowners were poor in 1999-00 as compared to 41 per cent with marginal holdings (Figure 2). The latter comprised almost 60 per cent of the rural poor though their share in rural population was around 44 per cent. Significantly poverty incidence has declined over time in all the land size categories.
The incidence of poverty in the state is also related to the occupational status of the households. Poverty is the highest among labour households both in rural and urban areas. In general, poverty levels are lower among self employed workers as compared to labourers. Poverty levels are lowest for regular and salaried workers (Table 3). Poverty levels in all the occupational categories, including casual labourers, show a decline over time
Table 3: Poverty Incidence by Occupation of Household Head
Rural Areas Urban Areas
Main Occupation Poverty Incidence Percentage of: Main Occupation Poverty Incidence Percentage of:
Population Poor Population Poor
1993-94
Self Employed non-agriculture 44.3 13 14 Self-employed 39.9 53 61
Agriculture labor 63.5 18 26 Reg. wage / salary 17.4 31 16
Other labor 52.3 5 6 Casual labor 66.7 11 20
Self employed Agriculture 36.4 58 50
Other 25.9 6 4 Other 25.8 5 3
Over all 42.3 100 100 Over all 35 100 100
1999-00
Self employed non-agriculture 33.7 16 17 Self-employed 34.3 50 56
Agriculture labor 50.9 18 30 Reg. wage / salary 14.4 31 15
Other labor 36.9 6 7 Casual labor 67.3 11 24
Self employed Agriculture 24.2 52 40
Other 21.3 9 6 Other 20.0 8 5
Over all 31.1 100 100 Over all 30.7 100 100
Source: World Bank (2002), Poverty in India: The Challenge of Uttar Pradesh, New Delhi
Education is a crucial instrument for raising income levels of people and moving out of the vicious circle of poverty. Studies indicate a strong correlation between educational attainment and poverty levels. This is true for Uttar Pradesh as well. As educational attainment of head of household improves, poverty level declines sharply (Figure 3). In fact, poverty levels are almost four times higher among illiterates as compared to persons with higher education. Nearly 60 per cent of poor belong to the category of illiterates.
Regional Variations in Poverty
Considerable variations in poverty levels are observed across regions of the state. The relatively developed Western region has a lower incidence of poverty, while Eastern region had much higher incidence of poverty. Bundelkhand had the highest proportion of population below poverty line in 1993-94. However, 1999-00 NSS survey shows a much sharper reduction in poverty in this region, while Central region shows the highest incidence of poverty (Figure 4). Variations in population pressure, resource endowment and productivity levels lie behind the regional variations in poverty levels.
Poverty at the District Level
NSS sample design is not aimed at measuring poverty at the district level. The recent Below Poverty Line Survey (BPL) of the Ministry of Rural Development, however, makes it possible to study district level variations in poverty. The advantage of BPL survey is that it is based on a complete census of rural households and identifies BPL households on the basis of multiple indicators of deprivation. The results of BPL Survey are, however, not comparable with poverty ratios derived from NSS data on consumer expenditure.
Table 3 arranges districts according to the level of poverty according to BPL survey 2002. The variations in poverty levels among districts are very stark, ranging from a low of 6.7 per cent to as much as 74.65 percent in Kaushambi. In 16 districts poverty levels are above 50 percent. These districts mostly belong to central U.P. and Bundelkhand. In another 21 districts poverty ratios are high (between 40 and 50 per cent). Majority of these districts falls in Eastern U.P. In 18 districts poverty levels are between 20 and 40 percent. Poverty levels are relatively low in (below 20 percent) in 15 districts. All these districts except one belong to Western U.P. (see map).
Table 3: Districts classified according to proportion of Rural Population
Below Poverty Line (%)
Very High (Above 50%) High (40% To 50 %) Moderate (20% To 40%) Low (Below 20%)
District % District % District % District %
Kaushambi 74.65 Kanpur (Nagar) 49.93 Gonda 36.95 Moradabad 19.77
Hardoi 74.00 Pratapgarh 49.09 Kannauj 35.85 Agra 19.43
Bahraich 72.11 Lucknow 49.06 Balrampur 35.69 Gautam Budh
Nagar 19.00
Mirzapur 68.38 Ghazipur 48.50 Azamgarh 32.87 Hathras 17.91
Sonbhadra 64.53 Jalaun (Orai) 48.34 Farukkhabad 32.64 Etah 17.26
Kanpur Dehat 60.87 Faizabad 48.22 Rampur 31.83 Mathura 16.24
Shravasti 60.53 Basti 47.64 Maharajganj 30.76 Aligarh 14.64
Unnao 59.51 Etawah 46.34 Lalitpur 30.47 Firozabad 13.61
Ambedkar Nagar 59.15 Barabanki 46.15 Jhansi 29.19 Budaun 12.24
Rae Bareli 57.78 Sant Kabir Nagar 45.99 Gorakhpur 28.24 Muzaffarnagar 11.68
Sitapur 57.46 Hamirpur 45.32 Allahabad 28.17 Deoria 11.67
Chitrakoot 55.13 Pilibhit 45.23 Bareilly 27.50 Bulandshahar 10.34
Sultanpur 54.62 Jaunpur 43.65 Saharanpur 24.56 Meerut 8.38
Shahjahanpur 54.11 Mau 43.34 Jyotiba Phulle
Nagar 24.45 Ghaziabad 7.12
Ballia 51.55 Orraiya 43.23 Varanasi 24.24 Baghpat 6.66
Lakhimpur Kheri 51.01 Chandauli 43.10 Bijnor 23.67
Fatehpur 42.77 Sant Ravidas
Nagar 22.74
Siddharth Nagar 42.74 Mahoba 21.33
Kushi Nagar 42.66
Mainpuri 42.52
Banda 40.85
Source: Ministry of Rural Development, Government of India, BPL Survey 2002.
Determinants of Poverty
The discussion on the determinants of rural poverty has emphasized the role of increase in agricultural output, relative prices of foodgrains, rural wages and government expenditure on rural infrastructure and poverty alleviation programmes in reducing rural poverty. In case of U.P. also the impact of agricultural growth and improvement in real rural wages on rural poverty is clearly visible. The spread of green revolution since the mid-seventies resulted in marked increase in real rural wage and a sharp decline in rural poverty. The relative decline in agricultural growth rate witnessed since the mid-eighties is also accompanied by a slowing down of the increase in real wages as well as the decline in rural poverty ratio.
Cross section analysis across districts based on districtwise poverty ratios for 1993-94 calculated from NSS unit data helps in identifying the main determinants of rural poverty (see Table 4). Per capita NDDP and per capita monthly consumption expenditure, both of which are strongly correlated, show statistically significant negative relation with rural poverty. Thus, higher growth helps in reducing poverty, even though accompanied by higher consumption inequalities. Higher agricultural productivity and a relatively high proportion of medium/large holdings are also associated with lower poverty levels, though the relationship is less strong. Districts with a higher proportion of agricultural labourers in total workers show higher level of poverty. Similarly a higher proportion of scheduled caste population, from which majority of agricultural labourers are drawn, exerts a positive influence on rural poverty.
Table 5.4: Some Correlates of Rural Poverty at District Level, 1993-94
Variable Value of Coefficient of Correlation at District Level (N=63)
1. Per Capita Net District Income -0.37***
2. Per Capita Monthly Consumption
Expenditure (Rs.) -0.45***
3. Gini Coefficient of Per Capita Monthly
Consumption Expenditure -0.36***
4. Value of Agricultural Output per Ha. of
Net Sown Area (Rs.) -0.23*
5. Gross Value of Agricultural Output per
Agricultural Worker (Rs.) -0.21*
6. Proportion of Medium Holdings -0.22*
7. Per cent of Scheduled Caste Population 0.48***
8. Per cent of Agricultural Labourers to
Total Workers 0.34***
Note : * Significant at 10 per cent level.
** Significant at 5 per cent level.
*** Significant at 1 per cent level.
Rural Poverty Alleviation Programmes
Since the early seventies a number of programmes for poverty alleviation have been introduced in the country. Integrated Rural Development Programme (IRDP) is the most well known of these programmes. Under the programme credit and subsidy were provided to the poor for income generating activities. Various evaluation studies revealed a number of weaknesses in the implementation of the programme. To rectify the situation, the self-employment programmes were restructured and a new programme known as Swarnajayanti Gram Swarozgar Yojana (SGSY) was launched from 1st April 1999 replacing earlier programmes like IRDP, TRYSEM, DWCRA, etc. The SGSY is a holistic programme covering all aspects of self-employment including training, credit, technology, infrastructure and marketing. The distinctive features of the SGSY are (i) a project approach for each key activity, (ii) provision of adequate investment, and (iii) group approach with focus on women groups. The new approach was thus conceptually superior to the early approach and was expected to yield better results. The programme is funded by the Centre and the State in the ratio of 75:25.
Table 5: Progress of Swarn Jayanti Swarozgar Yojana
Year Financial Progress (Rs. in crore) Physical Progress (Nos.)
Funds Available Expenditure %
Expenditure Target Achievement %
Achievement
2003-04 256.06 195.64 76 2.50,000 1,40.622 56
2004-05 315.24 276.30 88 2,50,000 2,46,824 99
2005-06 293.55 267.79 91 2,75,000 2,61,080 95
Source: Department of Rural Development, U.P. Government
Nearly 2.9 lakh Self Help Groups have been formed in U.P. since the inception of the programme under the SGSY covering 10.46 lakh beneficiaries. Cumulative expenditure on the programme amounted to Rs.1332.67 crore. Average investment per group has been Rs.23,575. The financial and physical progress of the scheme was unsatisfactory during 2003-04, but shows improvement after that (Table 5).
As can be seen the reach of the poverty alleviation programme has remained limited in terms of coverage and level of assistance and its implementation has been lackadaisical and uncoordinated with little local participation to have any significant impact on the poverty situation in the state.
“There was 1 person in the beginning, microfinance market was a mess in UP, and the global economy was declining. There was no reason for me to pursue this venture, other than to follow the dreams to support small entrepreneurs in Uttar Pradesh to empower the nation by empowering lives.”
Poverty Trends and Correlates in Uttar Pradesh.
Introduction
Generally poverty is looked as relative or absolute material deprivation reflected in low levels of income or consumption. However, poverty has many dimensions, though all of them are not equally amenable to measurement. Low levels of income not only result in low levels of consumption and material deprivation, but also restrict human capabilities by restricting the access of the poor to education and health facilities, thereby creating a vicious cycle of poverty. Poverty also involves various forms of vulnerability and exposure to risk, powerlessness and social exclusion. In this paer we focus on material deprivation as reflected in lowness of income/consumption.
Indian planners have defined poverty in terms of nutritional norm of 2400 calories per capita per day for rural areas and 2100 calories per capita per day for urban areas. The nutritional norm is converted into monetary equivalent in terms of per capita consumption expenditure using NSS consumer expenditure data. The proportion of population below the poverty line, i.e., the poverty ratio, is then calculated using the distribution of persons over different expenditure classes as given in NSS surveys, which are conducted quinquennially. The poverty line originally calculated for 1973-74 has been revised from time to time using the appropriate price index for rural and urban areas. Lately state specific poverty lines have been used for measuring the trends in poverty. Poverty line for 2004-05 for U.P. has been estimated by the Planning Commission at Rs.365.84 per capita monthly consumption expenditure in rural areas and Rs.483.26 in urban areas.
Poverty Trends at the State Level
Poverty ratios in Uttar Pradesh have been relatively high. According to the latest estimate of the Planning Commission based on NSS 61st round, about one-third of the population of the state was living below the poverty line in 2004-05 as compared to the figure of 27.5 percent for the country on the basis on uniform recall period. Only Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh and Orissa had a higher poverty ratio as compared to U.P. Around 80 percent of the poor in the state live in the rural areas. However, rural and urban poverty ratios do not show much difference in U.P.
Both rural and urban poverty have steadily declined in U.P. in the last three decades (Table 1). On the basis of the uniform recall period, poverty ratio declined by 8.1 percentage points in U.P. between 1993-94 and 2004-05, which compares well with the decline of poverty in India as a whole during the period. The decline was higher in rural areas where poverty ratio declined by 8.3 percentage points as compared to the urban areas where the decline was by 4.8 percentage points only.
* Director, Giri Institute of Development Studies, Lucknow
Table 1: Trends in Poverty Ratios in U.P. and India (%)
NSS Round Uttar Pradesh All-India
Rural Urban Combined Rural Urban Combined
1973-74 56.53 60.09 57.07 56.44 49.01 54.88
1977-78 47.60 56.23 49.05 53.07 45.24 51.32
1983-84 46.45 49.82 47.07 45.85 40.79 44.48
1987-88 41.10 42.96 41.46 39.09 38.20 38.86
1993-94 42.28 35.39 40.85 37.27 32.36 35.97
1999-00* 31.22 30.89 31.15 27.09 23.62 26.10
2004-05 URP 33.4 30.6 32.8 28.3 25.7 27.5
2004-05 MRP 25.3 26.3 25.5 21.8 21.7 21.8
Source: Planning Commission estimates based on NSS rounds.
* Based on 30 days recall period.
Doubts have been expressed about the comparability of poverty estimates between 1993-94 and 1999-00 due to differences in the reference period. However, a rough comparison based on mixed reference surveys reveals that poverty ratio declined from 31.2 percent in 1999-00 and further to 25.2 percent in 2004-05, i.e. a decline of 6 percentage point. This would suggest that the rate of decline in poverty was relatively faster during 1999-2005 as compared to the period 1993-00. It may also be noted that the mixed reference period estimates indicate a lower incidence of poverty (around 25 per cent).
It is remarkable that the decline in poverty in U.P. has taken place at the same rate as in India, despite of the fact that the growth rate in U.P. was markedly below the national average. Also, poverty ratio has continued to decline although agricultural growth has slowed down in the recent period. A number of factors including the gradual diversification of the economy, rise in real wage rate and government programmes for poverty alleviation and employment generation seem to be responsible for the decline in poverty.
Despite the substantial decline in the poverty ratio, the absolute number of poor has remained high in the state. Almost 6 million people in U.P. were living below the poverty line in 2004-05 constituting over one-fifth of the total poor in the country on the basis of uniform recall period (Table 2). In fact, the proportion of the poor living in U.P. has increased over time.
Table 2: No. of Poor in U.P. by Area
NSS Round Uttar Pradesh U.P. as % of All-India
Rural Urban Combined Rural Urban Combined
1973-74 449.99 85.74 535.73 17.22 14.28 16.67
1977-78 407.41 96.96 504.37 15.42 15.00 15.34
1983-84 448.03 108.71 556.74 17.78 15.32 17.24
1987-88 429.74 106.79 536.53 18.53 14.21 17.47
1993-94 496.18 108.28 604.46 20.33 14.18 18.87
1999-00* 412.01 117.88 529.89 21.32 17.59 20.36
2004-05 URP 473.0 117.03 590.03 21.41 14.48 19.56
2004-05 MRP 357.68 100.47 458.15 21.00 14.73 19.21
Source: Planning Commission estimates based on NSS rounds.
* Based on 30 days recall period.
URP=Uniform reference period using 30 day recall period.
MRP=Mixed recall period, where for some items recall period is 365 days, while for the rest it is 30 days.
Correlates of Poverty in UP
Studies reveal that poverty levels are associated with the social identity, source of livelihood, landlessness and level of education of the head of household.
The incidence of poverty is much higher among SC and ST households in U.P. (Figure 1). Nearly 60 per cent of SC households were below poverty line in U.P. in 1993-94. However, this proportion came down to 43 per cent in 1999-00. The pace of decline of poverty was faster for the SC/ST households as compared to other households during this period. Poverty level among Hindus and Muslim is roughly of the same order in the rural areas-around 31 percent in 1999-00. But poverty levels are much higher for the latter in the urban areas - 42.2 per cent as compared to only 26.4 per cent for Hindus.
In rural areas poverty is found strongly associated with land ownership, which is the main productive asset. Only 7 percent of large landowners were poor in 1999-00 as compared to 41 per cent with marginal holdings (Figure 2). The latter comprised almost 60 per cent of the rural poor though their share in rural population was around 44 per cent. Significantly poverty incidence has declined over time in all the land size categories.
The incidence of poverty in the state is also related to the occupational status of the households. Poverty is the highest among labour households both in rural and urban areas. In general, poverty levels are lower among self employed workers as compared to labourers. Poverty levels are lowest for regular and salaried workers (Table 3). Poverty levels in all the occupational categories, including casual labourers, show a decline over time
Table 3: Poverty Incidence by Occupation of Household Head
Rural Areas Urban Areas
Main Occupation Poverty Incidence Percentage of: Main Occupation Poverty Incidence Percentage of:
Population Poor Population Poor
1993-94
Self Employed non-agriculture 44.3 13 14 Self-employed 39.9 53 61
Agriculture labor 63.5 18 26 Reg. wage / salary 17.4 31 16
Other labor 52.3 5 6 Casual labor 66.7 11 20
Self employed Agriculture 36.4 58 50
Other 25.9 6 4 Other 25.8 5 3
Over all 42.3 100 100 Over all 35 100 100
1999-00
Self employed non-agriculture 33.7 16 17 Self-employed 34.3 50 56
Agriculture labor 50.9 18 30 Reg. wage / salary 14.4 31 15
Other labor 36.9 6 7 Casual labor 67.3 11 24
Self employed Agriculture 24.2 52 40
Other 21.3 9 6 Other 20.0 8 5
Over all 31.1 100 100 Over all 30.7 100 100
Source: World Bank (2002), Poverty in India: The Challenge of Uttar Pradesh, New Delhi
Education is a crucial instrument for raising income levels of people and moving out of the vicious circle of poverty. Studies indicate a strong correlation between educational attainment and poverty levels. This is true for Uttar Pradesh as well. As educational attainment of head of household improves, poverty level declines sharply (Figure 3). In fact, poverty levels are almost four times higher among illiterates as compared to persons with higher education. Nearly 60 per cent of poor belong to the category of illiterates.
Regional Variations in Poverty
Considerable variations in poverty levels are observed across regions of the state. The relatively developed Western region has a lower incidence of poverty, while Eastern region had much higher incidence of poverty. Bundelkhand had the highest proportion of population below poverty line in 1993-94. However, 1999-00 NSS survey shows a much sharper reduction in poverty in this region, while Central region shows the highest incidence of poverty (Figure 4). Variations in population pressure, resource endowment and productivity levels lie behind the regional variations in poverty levels.
Poverty at the District Level
NSS sample design is not aimed at measuring poverty at the district level. The recent Below Poverty Line Survey (BPL) of the Ministry of Rural Development, however, makes it possible to study district level variations in poverty. The advantage of BPL survey is that it is based on a complete census of rural households and identifies BPL households on the basis of multiple indicators of deprivation. The results of BPL Survey are, however, not comparable with poverty ratios derived from NSS data on consumer expenditure.
Table 3 arranges districts according to the level of poverty according to BPL survey 2002. The variations in poverty levels among districts are very stark, ranging from a low of 6.7 per cent to as much as 74.65 percent in Kaushambi. In 16 districts poverty levels are above 50 percent. These districts mostly belong to central U.P. and Bundelkhand. In another 21 districts poverty ratios are high (between 40 and 50 per cent). Majority of these districts falls in Eastern U.P. In 18 districts poverty levels are between 20 and 40 percent. Poverty levels are relatively low in (below 20 percent) in 15 districts. All these districts except one belong to Western U.P. (see map).
Table 3: Districts classified according to proportion of Rural Population
Below Poverty Line (%)
Very High (Above 50%) High (40% To 50 %) Moderate (20% To 40%) Low (Below 20%)
District % District % District % District %
Kaushambi 74.65 Kanpur (Nagar) 49.93 Gonda 36.95 Moradabad 19.77
Hardoi 74.00 Pratapgarh 49.09 Kannauj 35.85 Agra 19.43
Bahraich 72.11 Lucknow 49.06 Balrampur 35.69 Gautam Budh
Nagar 19.00
Mirzapur 68.38 Ghazipur 48.50 Azamgarh 32.87 Hathras 17.91
Sonbhadra 64.53 Jalaun (Orai) 48.34 Farukkhabad 32.64 Etah 17.26
Kanpur Dehat 60.87 Faizabad 48.22 Rampur 31.83 Mathura 16.24
Shravasti 60.53 Basti 47.64 Maharajganj 30.76 Aligarh 14.64
Unnao 59.51 Etawah 46.34 Lalitpur 30.47 Firozabad 13.61
Ambedkar Nagar 59.15 Barabanki 46.15 Jhansi 29.19 Budaun 12.24
Rae Bareli 57.78 Sant Kabir Nagar 45.99 Gorakhpur 28.24 Muzaffarnagar 11.68
Sitapur 57.46 Hamirpur 45.32 Allahabad 28.17 Deoria 11.67
Chitrakoot 55.13 Pilibhit 45.23 Bareilly 27.50 Bulandshahar 10.34
Sultanpur 54.62 Jaunpur 43.65 Saharanpur 24.56 Meerut 8.38
Shahjahanpur 54.11 Mau 43.34 Jyotiba Phulle
Nagar 24.45 Ghaziabad 7.12
Ballia 51.55 Orraiya 43.23 Varanasi 24.24 Baghpat 6.66
Lakhimpur Kheri 51.01 Chandauli 43.10 Bijnor 23.67
Fatehpur 42.77 Sant Ravidas
Nagar 22.74
Siddharth Nagar 42.74 Mahoba 21.33
Kushi Nagar 42.66
Mainpuri 42.52
Banda 40.85
Source: Ministry of Rural Development, Government of India, BPL Survey 2002.
Determinants of Poverty
The discussion on the determinants of rural poverty has emphasized the role of increase in agricultural output, relative prices of foodgrains, rural wages and government expenditure on rural infrastructure and poverty alleviation programmes in reducing rural poverty. In case of U.P. also the impact of agricultural growth and improvement in real rural wages on rural poverty is clearly visible. The spread of green revolution since the mid-seventies resulted in marked increase in real rural wage and a sharp decline in rural poverty. The relative decline in agricultural growth rate witnessed since the mid-eighties is also accompanied by a slowing down of the increase in real wages as well as the decline in rural poverty ratio.
Cross section analysis across districts based on districtwise poverty ratios for 1993-94 calculated from NSS unit data helps in identifying the main determinants of rural poverty (see Table 4). Per capita NDDP and per capita monthly consumption expenditure, both of which are strongly correlated, show statistically significant negative relation with rural poverty. Thus, higher growth helps in reducing poverty, even though accompanied by higher consumption inequalities. Higher agricultural productivity and a relatively high proportion of medium/large holdings are also associated with lower poverty levels, though the relationship is less strong. Districts with a higher proportion of agricultural labourers in total workers show higher level of poverty. Similarly a higher proportion of scheduled caste population, from which majority of agricultural labourers are drawn, exerts a positive influence on rural poverty.
Table 5.4: Some Correlates of Rural Poverty at District Level, 1993-94
Variable Value of Coefficient of Correlation at District Level (N=63)
1. Per Capita Net District Income -0.37***
2. Per Capita Monthly Consumption
Expenditure (Rs.) -0.45***
3. Gini Coefficient of Per Capita Monthly
Consumption Expenditure -0.36***
4. Value of Agricultural Output per Ha. of
Net Sown Area (Rs.) -0.23*
5. Gross Value of Agricultural Output per
Agricultural Worker (Rs.) -0.21*
6. Proportion of Medium Holdings -0.22*
7. Per cent of Scheduled Caste Population 0.48***
8. Per cent of Agricultural Labourers to
Total Workers 0.34***
Note : * Significant at 10 per cent level.
** Significant at 5 per cent level.
*** Significant at 1 per cent level.
Rural Poverty Alleviation Programmes
Since the early seventies a number of programmes for poverty alleviation have been introduced in the country. Integrated Rural Development Programme (IRDP) is the most well known of these programmes. Under the programme credit and subsidy were provided to the poor for income generating activities. Various evaluation studies revealed a number of weaknesses in the implementation of the programme. To rectify the situation, the self-employment programmes were restructured and a new programme known as Swarnajayanti Gram Swarozgar Yojana (SGSY) was launched from 1st April 1999 replacing earlier programmes like IRDP, TRYSEM, DWCRA, etc. The SGSY is a holistic programme covering all aspects of self-employment including training, credit, technology, infrastructure and marketing. The distinctive features of the SGSY are (i) a project approach for each key activity, (ii) provision of adequate investment, and (iii) group approach with focus on women groups. The new approach was thus conceptually superior to the early approach and was expected to yield better results. The programme is funded by the Centre and the State in the ratio of 75:25.
Table 5: Progress of Swarn Jayanti Swarozgar Yojana
Year Financial Progress (Rs. in crore) Physical Progress (Nos.)
Funds Available Expenditure %
Expenditure Target Achievement %
Achievement
2003-04 256.06 195.64 76 2.50,000 1,40.622 56
2004-05 315.24 276.30 88 2,50,000 2,46,824 99
2005-06 293.55 267.79 91 2,75,000 2,61,080 95
Source: Department of Rural Development, U.P. Government
Nearly 2.9 lakh Self Help Groups have been formed in U.P. since the inception of the programme under the SGSY covering 10.46 lakh beneficiaries. Cumulative expenditure on the programme amounted to Rs.1332.67 crore. Average investment per group has been Rs.23,575. The financial and physical progress of the scheme was unsatisfactory during 2003-04, but shows improvement after that (Table 5).
As can be seen the reach of the poverty alleviation programme has remained limited in terms of coverage and level of assistance and its implementation has been lackadaisical and uncoordinated with little local participation to have any significant impact on the poverty situation in the state.
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