By Rajiv Ranjan Prasad
Edited by Liz Maria Kuriakose, Associate Editor, The Indian Economist
Addressing the joint session of the Parliament on June 9, 2014, President Pranab Mukherjee laid out the roadmap for the new government headed by Prime Minister Narendra Modi. In his address, he said that the greatest challenge is to end the curse of poverty, and highlighted that the government will not be satisfied with mere “poverty alleviation” but commit ourselves to the goal of “poverty elimination”. Let us examine how we can accelerate the process of poverty elimination by identifying the critical areas for intervention.
India’s poverty picture is largely reflected in the figures of rural poverty. Therefore, a significant gain in rural poverty elimination is important. For the elimination of poverty in rural areas, a logical step is defining which areas are rural and which areas are urban. Unfortunately, there does not exist a single methodology, much less a single definition of what constitutes rural. Rural is an inexact term that can mean different things to different people.
The existing urban-rural classification systems in India suffer from the significant deficiencies as they do not help in formulation of development indicators which can be used for delineating development deficits. Targeting of development programmes, allocation and eligibility of funds from the programmes should depend on how rural areas are defined and classified. Policies and programs can be better targeted when rural definitions are combined with key demographic, economic, educational, or health care provider characteristics. Data used to conceptualize the rural definition in India have no direct and corresponding relationship with rural poverty elimination. The primary failing of the rural development policy is that it does not identify opportunities and constraints.
In India, a natural definition of rurality is to define it by exclusion, as that which is not urban, where urban is defined on the basis of population agglomerations. In practice there are two main methodologies to define rural. The first methodology is to use a geopolitical definition in which urban is defined by law as statutory towns having places with a municipality, corporation, cantonment board or notified town area committee, etc. and by exclusion all the rest is defined as rural. The other popular methodology is to use observed population agglomeration to define urban. An area is considered ‘Rural’ if it is not classified as ‘Urban’. In India, such urban areas are called census towns if they satisfy the following criteria simultaneously:
i) A minimum population of 5,000;
ii) At least 75 per cent of male working population engaged in non-agricultural
pursuits; and
iii) A density of population of at least 400 per sq. km. (1,000 per sq. mile).
Other countries consider the availability of services for defining urban area. For example in Honduras, an area is urban if, in addition to having a population of 2,000 inhabitants, it possesses services of water, electricity, education and health infrastructure. For Latin America, a rurality indicator was developed based on population densities and distance to a major city. The cutoff point to define rurality is areas with populations living in densities below 150 inhabitants per squared kilometer andliving more than 1 hour of travel away from a major city (defined as an agglomeration larger than 100,000 inhabitants).
Rural definitions can result in different outcomes from those intended when target areas and populations have not have been carefully specified in a manner that development deficits of the areas are fully delineated and captured. Consequences of narrow exclusionary conceptualisations of the parameters of urban and rural areas are that policies become contradictory rather than complementary, and that strategies and initiatives fail to maximize on development opportunities because they do not take account of fundamental socio-economic realities. A re-orientation of policies around an understanding of socio-economic trends, and around commonly accepted developmental approaches and concepts will provide the basis for overcoming contradictions and achieving complementarity. Such complementarity is fundamental to the formulation of a focused rural development strategy, which makes the most of the region’s potential to create income-generating and employment opportunities, and which takes account of what people need and want.
Poverty rates are positively associated with greater rural distances from successively larger metropolitan areas. As distance from the nearest town increases, poverty for those villages also increases as compared to villages which lie in closer proximity to a town. Distance can affect poverty through influencing both rural labour demand and supply. More remote rural communities have more inelastic labour supply, which causes them to have higher poverty when labour demand is weaker, but allows them to capture more poverty-reducing benefits ifthey were to have stronger local job growth. Further, distance and travel time to roads are not highly correlated with welfare, while distance and travel time to urban centres are highly correlated with wealth indices: welfare decreases rapidly as access to urban centres gets worse. Thus, understanding the spatial dimension of socio-economic processes in rural areas is important.
If we understand the term ‘rural development’ literally, it only has a neutral meaning of “development” in a geographically specific “rural” area. Rural development is a non-linear and highly contextual process; so traditional and horizontal approaches fail to give answer to territory-specific questions. It is therefore imperative to revisit the conceptual understanding of rurality and “rural development” and the different approaches in describing these. It is necessary to transcend these differences to see on what basis an agreement on rural, and then development, could be applied at both ends of the spectrum.
Policy formulation for rural poverty elimination would become more effective if we adopt a broader definition of rural area by including census data as well as status of physical, economic and social infrastructures that are necessary for poverty reduction. There is perhaps an urgent need to revisit the static concept of rurality and develop a dynamic definition of rural area which should be reviewed before the each new five year plan. The policy makers should identify the demographic and economic changes which affect the character of rural area. Rural development should focus on people-based policies, relying on spatial equilibrium processes. The realities of spatially concentrated poverty and lagging regions should get captured in place-based and place-targeted interventions for bringing about rapid socio-economic transformations. Rural poverty elimination policy should be focused on maximizing economic opportunities through recognizing and understanding socio-economic realities, and using these as the building blocks for policy interventions, and effective action, rather than regarding them as stumbling blocks.