Hyderabad: The International Day of Eradication of Poverty, with the theme ‘Decent Work and Social Protection: Putting Dignity in Practice for All' was observed on October 17, weeks after the World Bank released the latest poverty estimates across countries. It is no secret that poverty is still high in many nations and despite the technological advancements of the 21st century, there are places in the world where hundreds of thousands live in abject penury, devoid of even the most basic needs.
According to the World Bank estimates, there are 700 million people living below the poverty line surviving at $2.15 per day and another 1,865 million below the poverty line of $3.65 per day. Around 44% and 38% of the world’s poor live respectively in South Asia and Sub-Saharan Africa.
Recently, the 2023 Nobel Prize for Economics was awarded to Claudia Goldin, an American Economist and Professor at Harvard University. Claudia was awarded for having advanced our understanding of women’s labour market outcomes. She trawled the archives and collected over 200 years of data, allowing her to demonstrate how and why gender differences in earnings and employment rates have changed.
She is the third woman to get the Economics Nobel Prize after Esther Duflo (2019) and Oliver Ostrom (2009). Claudia Goldin's work will be useful to improve women’s participation rates and reduce poverty.
Regarding India’s poverty, Niti Ayog released a report on the ‘National Multi-dimensional Poverty Index’ in 2023. According to this report, multidimensional poverty, which has 12 indicators on health, education and standard of living declined from 25% in 2015-16 to 15% in 2019-21. States like UP, Bihar, MP, Odisha and Rajasthan recorded the steepest decline in poverty. However, these states still have higher poverty ratios in 2019-21 compared to all-India: Bihar (34%), Jharkhand (28.8%), UP (23%), MP (21%), Assam (19%) and Chattisgarh (16%).
The multi-dimensional poverty declined in Telangana from 13% to 6% while in Andhra Pradesh it declined from 12% to 6% from 2015-16 to 2019-21. The improvements in nutrition, years of schooling, sanitation and cooking fuel played a significant role in reducing poverty in India. However, the ‘State of Food Security and Nutrition in the World 2023’ showed that around 74% of India’s population (around 1 billion) is unable to afford a healthy diet in 2021.
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The National Family Health Survey 5 reveals that 57% of women aged 15-49 were anaemic in 2019-21. According to Dr. MS Swaminathan who passed away recently, hunger has three major dimensions: The first one is calorie deprivation due to deficiency in cereals; protein hunger is the second due to inadequate consumption of pulses, milk, eggs, fish and meat, and the third is hidden hunger, caused by the deficiency of micronutrients such as iron, iodine, zinc, vitamin A and vitamin B12. Ensuring that Indians have access to a healthy diet is the most important task of economic policy today.
Providing productive employment is crucial for the elimination of poverty. People living in extreme poverty, many of whom work in the informal economy – unregistered, unrecognised and unprotected under labour legislation - face difficult and dangerous conditions. The International Labour Organisation (ILO) estimates that almost two-thirds of the world’s working population, over two billion people, are informal workers with Latin America, Sub-Saharan Africa followed by South Asia having the highest levels of informality. Globally, 58 per cent of employed women work in the informal sector.
They are likely to be the lowest paid, most marginalised and more susceptible to sexual harassment at work. In India, more than 90% of the workers are informal workers covering agriculture, manufacturing and services. A new type of informal worker is a platform worker. With an estimated eight million people employed in an industry built on the back of the smartphone revolution, ‘gig work’ has become a major source of jobs in India and other countries. This is especially true of youth and migrant workers, as they seek a ready and quick means of securing finances and flexible hours — an option used by informal workers.
Platform workers have been the subject of extensive debate, especially with regard to their incomes, work conditions, work status, social security, and health insurance, among other things. NCAER (National Council of Applied Economic Research) has recently released a report on platform workers.
The study finds that the food delivery platform sector is characterised by very high attrition rates. The study says that 61.9 per cent of the workers received rations. Only 12.2% had Ayushman Bharat card and 11.1% had State health insurance. Around 7.1% have registered e-Sharam portal and 4% had Atal Pension Yojna. Traditionally, social security covers health insurance and pensions. The question is who should provide it–the government or the platform companies? They are not strictly employees, which does not entitle them to any employer-given benefits. In that case, the government is the best medium to provide social security. Platform companies may provide additional revenue to the government in the form of welfare funds to finance social security in a centralised fashion. Platforms can tie up with the National Skills Development Corporation (NSDC) and provide skilling certificates to platform workers.
Also read: 13.5 cr people moved out of multidimensional poverty in India in 5 years: Niti report
Municipalities need to improve health facilities to enable walk-ins. Rajasthan government is probably the first state to introduce the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Bill, 2023 with the aim of ensuring social security for gig workers. While the draft Bill envisages a “welfare board” that will design welfare policies and hear grievances of gig workers on a piece-rate basis, the specificities of the policies and how they might benefit the workers are still unclear.
The board is expected to work towards a social welfare corpus which will be financed by a cess on the digital transactions made by consumers on the platforms that utilise the gig worker labour. This schema is not unfamiliar — platform workers in the transport sector in Thailand and Malaysia, for instance, benefit from health and accident insurance as well as social security that is financed by a deduction of 2% for every ride.
India has many social protection programmes. But one has to distinguish between real social protection schemes like food, education and health benefits and freebies. As the elections are approaching, freebies may increase in the next few months. This will lead to fiscal problems for the Centre as well as states. As Dr. Rangarajan, former RBI governor suggested, the overall fiscal support to social protection including freebies should be limited to less than 10% of the total expenditure of the central government and state governments until their revenue increases in a sustainable manner.
Across countries, there have been best practices in reducing poverty. The Chinese experience is well known. But, countries like Vietnam have reduced poverty significantly. How did Vietnam reduce poverty? Vietnam has achieved a historically rapid reduction of extreme poverty over the past three decades. This impressive result was achieved primarily because of sustained increases in productivity and rapid employment growth in the full range of sectors and industries. Agrarian reforms introduced in the late 1980s, and extended in the following decades, incentivized farmers to intensify and diversify production. Liberalization of trade and inward investment resulted in Vietnam’s rapid integration in East Asian and global production systems, contributing to the rapid growth of exports and job creation in manufacturing.
Rising incomes in rural and urban areas drove the development of domestic services including retail, transport and logistics, finance and business services. Viet Nam’s progress towards universal access to health care, education and basic infrastructure (electricity, water and sanitation and communications) are noteworthy. Rather than giving money or food, it was explained how the Vietnamese government would teach people how to farm or fish and by giving poor people fishing nets or farm buffalos, they could find a way to support them. Viet Nam has led the way for low-income developing countries committed to rapid and sustained poverty reduction.
To conclude, the ILO defines decent work as productive work for women and men in conditions of freedom, equity, security, and human dignity. It has to be ensured that enabling women and men to have decent work and social protection is key to increasing the incomes of the poor. India aspires to become a developed country by 2047. In order to achieve this goal, providing education and skills and having productive employment for everyone is crucial to ending poverty and achieving sustainable development goals.
(Author is former Vice Chancellor, IGIDR, Mumbai and Distinguished Professor, ICFAI)
