Poverty Alleviation Strategies

In one line

India attacks poverty on five fronts at once: grow the economy, guarantee some work, build livelihoods through women's groups, guarantee food, and transfer money and services directly.

In the wording a student can write in an exam: poverty alleviation in India has been pursued through a growth oriented strategy, wage employment programmes culminating in a statutory guarantee of rural employment, self employment and livelihood programmes built on women's self help groups, food and nutritional security through a statutory entitlement, social security and direct benefit transfer, and the public provision of basic services, the several approaches being complementary because the causes of poverty reinforce one another.

Strategy one: growth

The argument. Sustained growth raises employment and wages and enlarges the revenue from which everything else is paid for. On the evidence in [Poverty and the Poverty Line], estimates on the Tendulkar line fell from 21.9 per cent in 2011-12 to 4.7 per cent in 2022-23, and the Multidimensional Poverty Index from 55.3 per cent in 2005-06 to about 11.28 per cent in 2022-23. Growth did most of that.

Its limitation, stated honestly. Growth concentrated in sectors that employ few workers per unit of output reduces poverty slowly, which is the employment problem of [Structural Change in the Indian Economy]. Growth also does nothing directly about the shocks, chiefly illness, that push households into poverty.

Strategy two: wage employment, and the statutory change of 2025

The old regime: MGNREGA. The Mahatma Gandhi National Rural Employment Guarantee Act 2005 gave every rural household a legal right to 100 days of unskilled manual wage employment in a financial year, with an unemployment allowance if work was not provided in time. Its economic design is worth stating: it is self targeting, because only a person willing to do unskilled manual work at the notified wage applies, so no separate identification of the poor is needed; and it sets a floor under the rural wage, because an employer must beat the guarantee to hire.

Why it was reassessed. The Economic Survey 2025-26 records the Government's own findings: monitoring in several States revealed work not done on the ground, expenditure not matching physical progress, machines used on labour intensive work and digital attendance bypassed; misappropriation accumulated; and only a small proportion of households completed the full 100 days after the pandemic. Its conclusion is that the architecture of MGNREGA had reached its limits. It also records that demand for work under the scheme had declined by over 53 per cent, which the Survey attributes to workers moving to farm and other non scheme work.

The new regime: VB G-RAM G Act 2025. The Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 is a statutory overhaul of the scheme. The Survey's own comparison: