Income and Expenditure Switching Among the Impoverished During Structural Adjustment in India1

The impoverishment during 1991–1993 was largely a result of policy reforms. In the absence of income switching, the impoverishment would have been greater. The patterns of income switching differed among the three Indian states, viz. Andhra Pradesh, Maharashtra and Karnataka. Confining the analysis to household expenditure on food, medical care and education, however, little, if any, expenditure switching occurred. To some extent, the effects of household expenditure cuts were compounded by cuts in public expenditure. But, given the aggregate expenditure categories, there is a risk of overstating the effects on the poor. A more fundamental concern nonetheless remains. Given the acute deprivation of a large segment of the rural population, it is imperative that public provision of basic goods and services is strengthened. A case in point is the public distribution system for food (PDS). Despite the revamping, the benefits to the poor have not increased while the subsidy has. Short of drastic reforms, it is unlikely that the cost-effectiveness of the PDS will improve.     

Convictions versus Conviction Rates: The Prosecutor's Choice

It is natural to suppose that a prosecutor's conviction rate—theratio of convictions to cases prosecuted—is a sign ofhis competence. Prosecutors, however, choose which cases toprosecute. If they prosecute only the strongest cases, theywill have high conviction rates. Any system that pays attentionto conviction rates, as opposed to the number of convictions,is liable to abuse. As a prosecutor's budget increases, he allocatesit between prosecuting more cases and putting more effort intoexisting cases. Either can be socially desirable, dependingon particular circumstances. We model the tradeoffs theoreticallyin two models, one of a benevolent social planner and one ofa prosecutor who values not just the number of convictions butthe conviction rate and unrelated personal goals. We apply themodel to U.S. data drawn from county-level crime statisticsand a survey of all state prosecutors by district. Convictionrates do have a small negative correlation with prosecutorialbudgets, but conditioning on other variables in regression analysis,higher budgets are associated both with more prosecutions andhigher conviction rates.     

Inequality,earnings and participation among the poor in rural India

Emphasising that there is a relative dimension to deprivation, an attempt is made here to decompose income inequality among the rural poor into inequality in earnings per worker, in participation rate and covariance of earnings per worker and participation rate. From this decomposition, the effects of (small) changes in inequality in earnings per worker and in participation rate on income inequality are evaluated. The analysis is based on a cross‐section of rural households in 1970–71. The samples of poor cultivating households and poor casual agricultural labour households are analysed separately for each of two regions, based on a classification of villages in terms of technological advancement.     

On the Targeting of the Employment Guarantee Scheme in the Indian State of Maharashtra

Contrary to a widely held view, the targeting of the Employment Guarantee Scheme in the Indian state of Maharashtra was unsatisfactory and worsened over the period 1979–89. Among the participants, from a large group the non-poor became the majority. Some of them were in fact (moderately) affluent. The share of female participants – especially of poor female participants – also diminished. As a result, the overall share of poor in EGS earnings fell sharply. Although a greater targeting accuracy does not necessarily imply a greater poverty impact for a given outlay, some improvements in the design and implementation of this scheme are likely to enhance both.     

How dependent are the rural poor on the employment guarantee scheme in India?

An analysis of the ICRISAT data for two villages in the Indian state of Maharashtra points to mistargeting of the Employment Guarantee Scheme (EGS). There was a marked deterioration in it over the period 1979–89, reflected in not just a larger concentration of the more affluent among the EGS participants but also their much larger gains from participating in this scheme. Nevertheless, a large subset of the chronically poor depended heavily on EGS as an additional source of income, with significant welfare gains, during 1979–84. But a large subset — especially of relatively low income participants ‐ also withdrew from EGS when overall economic conditions improved. Besides, EGS earnings varied consistently with economic conditions. Although the present analysis raises some concerns about the mistargeting of EGS and, in this context, about the design and implementation of this scheme, the presumption that such public support makes the poor perpetually dependent on it seems somewhat exaggerated, if not mistaken.