Just as in Pakistan independent economists and observers are not prepared to accept the government's claim that poverty has gone down by 4 per cent in the last couple of years, in the same way , independent economists in India are not ready to believe that India's poor are any better off today than they used to be about a decade ago, as claimed by the government.

On the one hand, there are re joicings and jubilations over the telecom revolution and advances made by India in the field of IT but on the other hand, alarming reports are pouring in from villages visited by drought, which lead to the apprehension that economic reforms had failed to help India's poor.

Those in India who support economic reforms of the 1990's fully accept that corporate restructuring of the last 10 years had caused unbearable hardships to workers. They also do not deny that millions are still living in absolute poverty.

However, they are of the view that despite the aforesaid facts, poverty in India had shown a decline during the last one decade. Official statistics suggested that poverty in India had dropped in the 1990's, although income inequality might have increased a little during the above period.

In India, poverty rates were calculated on the basis of regular surveys conducted by the National Sample Survey (NSS). The survey conducted in 1999-2000 revealed that the percentage of poor living below the poverty line in India had declined to 24 in 1999-2000 from 36 per cent in 1993-94.

It is believed that sustained economic growth is instrumental in bringing down poverty. India's GDP crawled at a snail's pace between 1950 and 1980 and there was reportedly no appreciable decline in poverty during the above period, From 1980 onwards, the GDP started picking up and between 1991 and now the average annual GDP growth rate in India had stood at over 6 per cent.

As a result, the average real income in India was reported to have risen by more than 50 per cent since 1991, which had helped over 120 million people to break out of the poverty trap.

Why is economic growth so crucial to poverty reduction? Economic observers in India had expressed the view that it could be due to a variety of reasons. In the first instance, marked increase in per capita income was likely to improve the lot of poor a bit, despite the unequal distribution of income.

Secondly, rapid and sustained economic growth led to greater availability of resources for financing anti-poverty schemes and, finally, higher GDP growth improved the access of the poor to public services like education, nutrition, health-care, etc.

However, in spite of the decline in poverty, there seemed to be a consensus among economic analysts in India on the point that income inequality had increased in recent years.

This was attributed, firstly, to the fact that the relative share of national output going to capital (as compared to labour) had gone up in recent years. Secondly, the rate of labour absorption had declined, presumably, due to automation and steps taken to improve productivity.

Lastly, it was because millions of workers were trapped in low productivity jobs. As a matter of fact, that was one of the reasons why the rate of poverty was so much higher than the rate of unemployment.

Situation in Pakistan: The poverty situation in Pakistan had been much more complex. The level of poverty in this country had been varying from decade to decade. Similarly the GDP growth rate had been higher in one decade and lower in another.

The level of poverty was reported to be the highest in the 1960's. It stood at 40.24 per cent in 1963-64. 44.50 in 1966-67 and 46.53 per cent of the population in 1969-70 (Table 4.3, page 50, Economic Survey, 2001-02).

This was in spite of the fact that the average annual GDP growth rate stood at 6.8 per cent during the decade, which was also called the decade of development. The higher poverty level in the 1960's could be attributed to a multitude of factors including concentration of incomes in a limited number of families, war with India in 1965, suspension of foreign aid following the war and, finally, the higher level of poverty in the eastern wing of the country, which constituted a part of Pakistan until then.

Although the next decade (of 1970's) began with another war with India and the average annual growth rate also declined (from 6.8 in the 1960's) to 4.8 per cent during the 1970s, the level of poverty had amazingly dropped from its higher level and it reportedly stood at 30.68 per cent of the population in 1979.

Both rural and urban poverty had registered marked decline during the decade. Rural poverty had gone down from 49.11 per cent in 1969-70 to 32.51 of the rural population in 1979, whereas urban poverty had declined from 38.76 per cent in 1969-70 to 25.94 of the urban population in 1979.

Improvement in the poverty situation during the decade was attributable inter alia to upward revision of support prices of agricultural crops, pro-workers policies, creation of jobs in public sector enterprises after the nationalisation of basic industries and sending of workers overseas for employment in large number. Besides, the above-mentioned figures were for the western part of the country only, as the eastern wing had no longer remained a part of Pakistan.

The trend continued in 1980's and the poverty level further dropped (from 30.68 per cent in 1979) to 17.32 per cent of the population in 1987-88. Again, both rural and urban poverty had registered remarkable decline during the decade.

In the 1980's, the GDP growth had once again gone up and the average annual growth rate stood at 6.5 per cent during the decade, of which growth of the agriculture sector had stood at 5.4 per cent and that of manufacturing sector at 8.2 per cent.

Income from remittances from overseas workers, also, remained at a higher level during the decade. Lastly, the Afghan war led to increased inflow of foreign aid into the country. However, it also brought the drugs and arms culture with it, which played havoc with the economy in later years.

The decade of 1990's brought miseries for the people and poverty increased (from 17.32 in 1987-88) to 25 per cent in 1993-94 and further to 30.6 in 1998-99. With the end of Afghan war, foreign aid had dried up and incomes from workers remittances also showed a downward trend.

Over and above all that the GDP growth rate had once again registered a decline and the average annual growth rate stood at 4.6 in the 1990's as compared to 6.5 per cent in the 1980's.

With rapid increase in indebtedness, debt servicing was now consuming bulk of the federal budget, with the result that the government had little to spend on development, poverty reduction and human resource development. Development expenditure as percentage of GDP had gone down from 7.6 per cent in 1991-92 to only 3.4 per cent in 1998-99.

Between 1998-99 and now, also, the level of poverty had been recording rise and fall. As reported in the Economic Survey, 2002-03 and 2003-04, poverty as a percentage of population had gone up from 30.6 in 198-99 to 32.1 per cent in 2000-01. But, later, it was reported to have declined to 27.9 per cent in 2004.

The government is of the view that higher GDP growth in 2002-03 and 2003-04 of 5.1 and 6.4 per cent respectively and the government spending of Rs860 billion on social sector and poverty-related programmes during the last five years had helped in improving the conditions of the poor.

A survey covering 5046 rural and urban households, that is one-third of sample covered in PIHS 2000-01 from all the four provinces of Pakistan, conducted by the FBS at the instance of the government had also indicated that the incidence of poverty at the national level had declined by 4.2 per cent since 2000-01 and that the living conditions of the people had shown marked improvement during the period.

The government reiterated that a number of social indicators had - recorded improvement during the last few years. For instance, the number of households living in one-room apartments had declined significantly, while that of households living in 2 to 4-room apartments had shown marked increase in 2004, as compared to 1998.

In addition, the use of electricity as a source of lighting and the use of gas as cooking fuel had shown marked improvement during the last 3-6 years. Furthermore, all education-related statistics had shown improvement with the gross enrolment at the primary level increasing from 72 to 87 per cent.

As against the above, the independent economists maintained that higher GDP growth in recent years had virtually remained jobless. It had not been able to reduce unemployment and the unemployed work-force had increased from 2.37 million in 1999 to 6.65 million in 2003, while the unemployment rate had gone up from 5.89 to 8.27 per cent during the above-mentioned period (Table 11.9, page 102, statistical appendix, Economic Survey, 2003-04).

Besides, spiralling prices of wheat flour, onion, beef and mutton, vegetable ghee and other items of daily use during last year had further eroded the limited income of the poor. In addition, the growing burden of indirect taxes was also making the life of the common man miserable.

The independent economists were of the view that in order to make the poverty alleviation programme of the government successful, the work relating to distribution of government land among landless farmers and grant of ownership rights to 'katchi abadis' would have to be expedited.

Besides, much higher budget allocations for education and health care would be necessary to improve the access of the poor to these services. An educated and healthy population was the best safeguard against poverty. When prosperity makes its way to a country, it is noticeable by every one and there is no need for any argument and counter-argument.