Experiments with poverty in AP and Rajasthan

IN 1973, Mr. McNamara (who was then the President of the World Bank) announced in Nairobi that the World Bank would be taking the lead in poverty alleviation and rural development. Before this the World Bank was supporting large-scale infrastructure, irrigation and power projects. This shift was reflected in the Bank's Rural Development Sector Policy Paper (published in 1975) which described the operational goals of rural development as ``improved productivity, increased employment, and thus higher incomes for target groups, as well as minimum acceptable standards of food, shelter, education and health.'' These are still the goals of rural development everywhere, but the question of how to bring it about eludes many. Since 1973, many more countries have come under the active care of the World Bank with varied social, economic and political situations. In India, social, political and administrative situations vary from one State to another.

The World Bank has been tackling rural poverty through anti- poverty projects. Following McNamara's Nairobi speech, a number of anti-poverty projects were funded by the World Bank mainly in Africa and South Asia. There were some projects in India too, such as the Drought Prone Areas Project (DPAP) in Ahmednagar and Solapur districts in Maharashtra. These projects belonged to the category of projects known as the Integrated Rural Development Projects (IRDP) and its variant, the Integrated Area Development Projects (IADP). The latter category consisted of projects focussing on disadvantaged regions such as the drought prone regions, whereas the former is not tied to specific regions. The manner in which rural poverty was tackled by the Bank, comprising these two categories of projects, was acknowledged by the Bank itself as having failed, despite the large quantity of money pumped in.

Two reasons for failure

These projects were managed by specially created Project Management Units (PMU), headed by a Project Administrator (or Executive Director as he (or she) was called in Maharashtra). PMUs were accountable to the State Government, and through them to the Government of India (GOI), and not to anybody (like the District Councils or Zilla Parishads as they are called in Maharashtra) below the State level. They were multi-sectoral in nature, as the programmes typically contained components from various sectors, such as roads, drinking water supply and education. There were two main reasons why these projects were considered failures. First the PMU was not a sustainable management entity. The Bank staff, while responding to McNamara's call for rural development, did not address the institutional issues adequately. Even in Maharashtra which had enough well- entrenched institutions in the rural areas (ZPs and Panchayat Samitis), the project set up the DPAP project office (which was the PMU), accountable directly to the State Government. The Bank tended to work away from sustainable rural institutions. It was not surprising that many of the IRDPs were neither managerially or financially sustainable. African continent is littered with graveyards of these failed projects. Secondly, the maintenance of the assets created under the project posed a problem. After the project was over, neither the Zilla Parishad (ZP) nor the State Government came forward to maintain the assets created under the project. It is a bureaucratic fact that the main line department does not recognise any activity not ``sired'' by it.

The Bank has now returned to rural development and poverty after nearly 25 years. The recent World Development Report deals exclusively with poverty. The President of the World Bank, Mr. Wolfensohn, (like Mr. McNamara) promises to eradicate poverty, some kind of a universal Garibi Hatao slogan. But it appears that the World Bank has not devoted sufficient thought to the institutions to be set up to carry out poverty alleviation programmes, if one goes by the anti-poverty projects of Andhra Pradesh and Rajasthan, and is repeating the past mistakes. These projects are setting up institutions which are not sustainable after the project ends.

A rough calculation has shown that in Andhra Pradesh (AP) the Bank assistance comes to about 15 per cent of the money spent by the Governments of India and AP together on the major poverty alleviation schemes such as Swarnajayanthi Swarojgar Yojana (SGSY), a self-employment scheme and Jawahar Gram Samaridhi Yojana (JGSY) and Employment Assurance Scheme, both of which are wage employment schemes. This does not include the major rural development programme on the anvil, called Rural Connectivity Programme (rural roads). In the case of Rajasthan the figure is higher at 25 per cent. These percentages have not been shown in the Bank documents; they have been worked out on the basis of the plan allocations, and the percentages of these two States during the current year from the Annual Report of the Ministry. These percentages being substantial we need to take a closer look at the manner in which these are spent.

There is no categorical statement in the Staff Appraisal Reports (SAR) of the District Poverty Initiative Projects (DPIP) in these two States that they will not have their own definitions of poverty line, different from GOI's. On the other hand, the AP report says on p.7: ``The targeting process would draw on local information, such as BPL list, interaction with Gram Panchayat, information collected by NGOs and the project's Mandal Community Support Cell''. The Rajasthan report says on p. 39: ``As the `excluded' poor are often very difficult to assess, contacts would be made with the help of village agencies, the Gram Sabha, etc.'' Both the reports suggest that the definition of poverty line could be different from that of the GOI. I am not a great fan of the GOI's definition of the poverty line, but having accepted it by a democratic process, I shudder to think of what will happen if every donor (following the World Bank) has its own definition of poverty line. The Rajasthan report also raises some other questions: Who are the `excluded' poor? Excluded from what? Are they different from the ordinary poor?

Beneficiary participation

If one goes by the statistics cited by the World Bank in these reports, poverty has increased in India. To quote from the AP report (p.3): ``The main rural sector issue throughout India, including AP, is the lack of success over many years of public anti-poverty programmes to reduce poverty''. Rajasthan report says (p.13): ``The Bank could assist on-going anti-poverty programmes such as ... However these programmes are centrally sponsored with limited State contributions and very little beneficiary participation and would require major improvements to achieve poverty reduction. These programmes were the subject of the 1998 India Poverty Assessment, which concluded that they have not reduced poverty to the extent needed.'' Very cleverly worded; what is `needed' is relative. But the reader is likely to get the impression that the reduction in poverty is marginal. If one goes by the official statistics given in the India - Rural Development Report 1999 published by the National Institute of Rural Development (p. 11) the percentage of poor in AP has come down from 48.41 in 1973-74 to 15.92 in 1993-94; in Rajasthan the figures are 44.76 and 26.46. According to official statistics these reductions are more than marginal. As far as all-India figures are concerned there is only a slight difference between the World Bank estimates and the official estimates. Neither report gives the percentages of poor according to official estimates and the World Bank. But it is fairly obvious that the World Bank has not selected the poorest States in India.

In both the States the projects are being implemented as if the 73rd Constitutional Amendment did not take place and that the World Bank is writing on a clean slate ignoring the rural development efforts that have taken place in the past 50 years. For instance there is no mention of DRDA when the managerial arrangement at the district level is discussed. The past mistakes (cited earlier) are being repeated, and it is proposed to have PMUs accountable to the State Governments bypassing the local elected governments. Contrary to what has been claimed, there is no beneficiary participation at the district level. It is not mentioned in either report as to who will look after the assets created under the projects once they are over. Extra staff positions are being created at the State and district levels. The projects thus contribute to an increase in bureaucracy.

Common interest groups

The projects envision common interest groups (CIG) at the village level. Any person who is familiar with the rural scene in India knows that the term ``Group Formation'' is an oxymoron. Groups tend to get formed if there is a common interest which brings people together. One does not start by forming groups by training and spending money on the effort. It suggests a social engineering. The GOI sponsored SGSY, on the contrary, has both group and individual components. Individuals later on tend to form groups.

If the sub-projects (to be sent by CIG to the district level for funding) are infrastructural, how are the sector departments going to be involved? Who is going to coordinate their working? Whom are they accountable to? Many such other questions arise. Many sector staff are reluctant even to go on deputation to the local PRI sector much less to the PMU. If the sub-projects are individual beneficiary-oriented do the project funds go towards the margin money (the rest coming from the banks) or towards subsidy? I do not think that the World Bank has thought through these practical problems.

Both the projects sidestep the Panchayati Raj Institutions (PRI), the AP project more blatantly so. To quote from the AP report (p.15); ``In AP, the PRI model was deemed to be of less immediate value for the project in view of the present status of the PRI institutions with respect to how adequately they represent the poor, their transparency in decision-making and their capacity for resource management''. Rajasthan report says on p.13: ``This (i.e. the Panchayati Raj model) would be a `democratic' alternative, as PRIs are elected by the people, have the potential to respond to communities at the local level, and can be voted out if they do not perform well. However, the model would be problematic at the current time because panchayats frequently do not represent the poor or excluded''. The PRIs are by far the best step taken so far by the GOI towards democratic decentralisation. The World Bank's research extols the value of decentralisation. Perhaps there is a communication gap within the World Bank so that the research of the World Bank does not trickle down to their staff.

Bengal, Kerala experience

If all the donors shun the PRIs giving arguments like the World Bank does, the PRIs will never develop; does not the World Bank know that the best way to build capacity is not to throw away money on training but to trust institutions and carefully monitor their performance? West Bengal experience has shown how the PRIs respond when something tangible is given to them. Kerala experience (which I have seen at first hand) will confirm this. On the contrary, many other States, like the World Bank, for their own political reasons, do not want to give more responsibilities to the PRIs.

The reports are full of vague statements which make no meaning. I am reminded of the Bard: ``Words, words, words''. Let me give some examples. On p.3 of the AP report there is a classic statement; ``Janmabhoomi is being implemented at the habitation level with a close involvement of Gram Sabhas''. Either Janmabhoomi is accountable to the Gram Panchayat or it is not; ``...close involvement of Gram Sabhas'' makes no sense. I have attended the meetings of Gram Sabhas. First, there is no place in our villages to accommodate more than 300 people maximum; in the villages I went to, the only places where one could hold a Gram Sabha meeting is the local temple or the chavdi. Secondly, does the World Bank really think that the ``Roman Forum'' kind of democracy will work? Gram Sabha is like a General Body and the Gram Panchayat is like the Board of Directors. Why have representative democracy at all? For some purposes, Gram Sabha is fine, but not for all purposes. There are many other statements which constitute meaningless verbiage.

Where public moneys are concerned we have to be very careful. After all, it is our money and GOI has to return it to the World Bank, not Mr. Chandrababu Naidu or the World Bank. After all the Gram Panchayat is a constitutional body unlike the CIGs which are merely the creatures of these projects. Yet the World Bank wants to give them the authority to handle cash. The Bank says in the AP report (p. 23) that ``CIGs would be able to receive project funds without being registered legal entities''. Who will receive the funds on behalf of the CIGs, and what are the safeguards built into the project that the moneys are not misused?

`Money-devouring' NGOs

We know that there are more `money-devouring' NGOs than good ones. The World Bank is aware of this. Yet it wants (p. 50: AP report) to give to an essentially political body, the responsibility of selecting the NGOs. What will be the fate of these NGOs after Mr. Naidu leaves? The new government would like to have its own team of NGOs; Indian politics is replete with such instances. Further, what is the credibility of the NGOs selected by a government body? Do we not have a set of persons in every State who are respected and non-political, like the UGC? Why did not the World Bank think of this alternative?

There is no question that the borrower is the GOI; it is mentioned in the first page of both the reports. Yet in the paragraphs relating to the borrower commitment there is no mention of the GOI. How did the GOI agree to all the institutional arrangements described above, particularly after pushing through the constitutional amendments?

I can go on and on. There are more absurdities in both these reports. I have two specific suggestions to the World Bank. First, can it give on the first page the cost of preparing these projects? After all, since the Bank preaches transparency, it is only fitting that it practises what it preaches. My second suggestion is that the Bank should give in bold letters (not in small print stuck inside) the salient features; for example, in AP report it should say: the project does not propose to work through the PRIs and so on.

V. VENKATESAN

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