THE recently introduced term of “transitory poor” by the Centre for Research on Poverty and Income Distribution is indeed interesting and appears like an extension of the view of ‘transitory feudalism,’ if you will, introduced by those change-seekers who seek change under the guise of status-quo for their own specific population segments.

And, who wish to somehow sell their view of a transformation through incremental changes thus appeasing the populace to not worry too much as change is on the way for the multitude.

We, therefore, need to examine if societal drift can be arrested at all through either more of the same or policy improvements in the same paradigm that may be a sectoral paradigmatic change for sure but are actually incremental steps against the backdrop of the enormous socio-economic gap that this society needs to bridge.

Government agencies insist that the levels of poverty below the poverty line have decreased in the last one to two years. Whenever a decrease is notified, it is very important to determine how the indicator was measured before and after the change. If the gauge has changed to improve the result favourably, then clearly the claim for a favourable improvement is not tenable.

Further, it is not the percentages that communicate the levels of poverty when poverty is writ large with very high visibility throughout the length and breadth of the country. It is, therefore, not important whether people are “chronic poor” or “transitory poor.” The fact that they are poor most of the time during a defined period, which state defines “transitory poor,” shows that poverty is a big enough socio-economic issue that can neither be explained away by i) changing the yardstick nor by ii) changing the definition nor by iii) ascertaining the duration for which they have been poor during the period studied.

Poor are poor regardless. If there can be no concept whatsoever of “transitory wealth,” there can be none of “transitory poor” either. For, the poor should not just be lifted well above the poverty line, they should be integrated into the country’s socio-economic mainstream.

Uplift from poverty does not mean that they still continue to exist in an outer circle on the fringes of affluent parts of the society providing cheap goods, labour, and other services to the upwardly mobile well-integrated into the global village. This is a scenario that appears to be looming on the horizon if micro-credit remains the only plank of poverty-reduction strategy popular with the wealthy, intellectual, and policy elite alike.

During mid-1990s, small loan windows and credit for the poor was advocated by many of us as a part of changing the big loans paradigm of the banking sector. The idea was that the banking sector should contribute to poverty reduction to the extent it can. Never was it intended to be the country’s main poverty reduction strategy for this would not make a feasible all-encompassing proposition.

That the banking sector wishes to take up this mantle may be “nice” on their part but while the central bank may contribute to growth and development through its monetary and credit policy outlook, it cannot assume the charge of overall development strategy formulation.

So, while it is encouraging to see that the small/micro loans idea caught on and banking paradigm changed to this extent; what is not so encouraging is that it is crystallizing into about the only fall-back position of the government on the issue of poverty reduction. While helpful to the limited number of poor reached, micro credit, by itself, will not be able to transform the landscape as even the ones reached are not able to bridge the many divides that plague this society.

First, the breadth and depth of outreach will remain restricted as has also been the case with the self-help idea of kutchi abadis’ development. The models in this regard notwithstanding, the idea did not travel fast enough. Also, the government could not be sent packing in the process as not everybody can be made to substitute the role that the government must play.

Secondly, the residents of the model ‘kutchi abadis’ too are far from integrated with the urban mainstreams on whose fringes they exist. Sure, their rate of employment is higher but it is the informal sector in which they are engaged. To pass on informal sector’s employment as increase in employment is again mixing various grades of fruits to say that total output increased.

One needs to know whether A-grade output increased or B- or C- grades’ as some of the inferior grades may not be acceptable enough output that can be treated at par with quality output. Similarly, informal sector employment may be viewed as engagement to get by but the conditions under which work is done in the informal sector is considerably inferior to the conditions prevailing for employees in the formal sector.

While something may be better than nothing, attainment of ‘something’ is not success enough and is hardly a reason for satisfaction on this score. With employment in the two sectors, formal and informal, being qualitatively different; we cannot be sanguine about employment increase in the informal sector. Unless employment conditions match the ones mandated, it cannot be said that employment has increased by merely enabling the poor to eke out an existence. The road to proper employment, poverty reduction, and poverty eradication is indeed a long and arduous one.

However, can we say that this is where it begins? That is, identifying pockets of poverty and loaning them small amounts so they may then help themselves. Yes, very basic amenities they may be able to secure but even the food divide they will not be able to bridge with their meagre incomes.

Even if the consumption of basic necessities was to be reviewed, a vast difference will remain between the micro borrowers and the middle classes in terms of the quality of food, clothing, shelter, and above all health care and education. Quality education, and not mere education, being the eventual equalizer will remain prohibitively expensive for their wards with the current emphasis on fee increase as a pre-requisite for quality education.

The current education policy outlook is paradoxical. On the one hand, there is emphasis on universal primary education and on the other hand there is emphasis on high fees for providing high education. So, hypothetically speaking, even if the children of micro borrowers go past the primary level, how will they rise to higher levels of education with constantly increasing levels of fee? Are they to then just engage in family trade of providing cheap goods and services to the affluent?

And, are higher levels of education going to be preserved only for the children of the affluent who alone can afford education becoming increasingly expensive? This situation alone will serve to intensify the dualism already plaguing our society.

A common response is that scholarships will be provided for the meritorious. This again would mean that only the meritorious of the poor will be able to study further while the average of the affluent will continue to buy expensive education in the marketplace. The gap will, therefore, not narrow. And, the redistributive equalizing impact of education will not be captured.

So, first, the outreach of micro credit is restricted. Even if it is not, the borrowers’ progress will run into the above kind of snags and borrowers might be found marking time generation after generation. At the macro level, growth-orientation is likely to continue that will distribute in favour of owners of assets thus exacerbating the inequalities in not just incomes but also in education that will further impede integration of the various population segments.

Irrespective of these outcomes, the World Bank will emphasize growth through market reform and liberalization as a part of their global paradigm they impose due to its more favourable impact on their financing countries. When we cry ‘poverty,’ they are ready to help through micro credit solutions which maintain their rapport with the recipient country interests as it is the latter’s applecart that must not be upset too much.

Why do national governments in developing countries accept micro credit as a sure-fire all round solution to poverty? This is done pretty much for the same reason that the interests of their liaising and supporting groups have to be protected if the government has to guard its own political interest, survive, and continue. And, a lot of times, it is from these interests that the government itself hails from.

So, they have a strategy for the poor on paper and on the surface and some progress to show and to get by during their tenure. Real integration calls for “redistribution (of assets) before growth” and land reforms to begin the march to a society whose members will be able to bridge the various divides discussed above through an enlargement and enrichment of the economic sectors that we try to keep propped up through mere credit policies.

Unless this growth comes intrinsically from the various sectors, we will also experience “transitory growth.” To make poverty ‘transitory,’ it is the poverty in policy that must be overcome through a bold macro solution.