India’s anti-poverty programmes stifled by corruption, mismanagement

(May 20, 2011) India spends more on programmes for the poor than most developing countries, but it has failed to eradicate poverty because of widespread corruption and faulty government administration, the World Bank has said. A nearly 400-page study released by the Bank on Wednesday, says that India spent 2 percent of its gross domestic product, or $28.6 billion last year, on social programmes to alleviate and prevent poverty, a higher percentage than any other country in Asia and about three times China’s spending. The programmes, central to the Congress party-led coalition include food distribution and health insurance initiatives that are supposed to reach hundreds of millions of households. One of the primary problems, the World Bank said, was “leakages” - an often-used term in development circles that refers to government administrators and middle men stealing money, food and benefits. The bank said that 59 percent of the grain allotted for public distribution to the poor does not reach those households. Instead of distributing food, the government might be better off giving out food stamps or cash transfers that can be easily traced through technology, the World Bank said. The report was written at the “request of the government of India” and with full participation from various government bodies, the report said. India, the world’s the second-fastest growing major economy, after China, has had an economic boom in recent years that is transforming urban areas and creating a new class of extremely wealthy people. But social problems, including poverty, disease and illiteracy, remain widespread. Though home to 69 billionaires, India has about 455 million of its over a billion people living on less than $1.25 a day, according to the World Bank’s poverty line. A United Nations study released last year found more people living below the poverty threshold in eight states in India than in all of sub- Saharan Africa.