Public Intervention and Poverty Alleviation: A Study of the Declining Incidence of Rural Poverty in Kerala, India

In the context of the continuing and lively debate on the estimates, trends and determinants of rural poverty in India, this article examines the sharp decline, since the late 1970s, in the incidence of rural poverty in the state of Kerala, well known for its record of social development. It is argued that, given the slow rate of growth of the Kerala economy in general and agriculture in particular since the mid‐1970s, the ‘trickle down’ theory cannot explain the decline in poverty. Similarly, the fact that rural wages have increased faster than the consumer price index does not constitute a sufficient condition for crossing the poverty line. Expansion of state‐directed programmes is seen to be the single most important determinant in reducing rural poverty. The effect of public intervention programmes is roughly estimated to be equal to one fifth of the consumption of rural labour households. The lesson of Kerala for poverty alleviation is that social protection expressed in terms of meeting the basic consumption requirements of the poor, especially the vulnerable among the poor, should be a necessary component of development policy. However, this is not a sufficient condition: there should also be a growth strategy which would provide adequate employment to all members of the labour force from the poorer sections of the population. The current line of official thinking in India, in the context of economic liberalization, is hardly conducive to such a strategy.