Start with the states
Health and education continue to be India's Achilles heel. Only through improving these services for the bulk of the population will it be able to get rid of mass poverty. India has the largest concentration of poor people in the world. The 12th Five-Year Plan figures show poverty declining from 45 per cent of the national population in 1993-94 to 37 per cent in 2004-05, at 0.8 percent per year, slower than the rate of population growth.
The resulting rise in poverty numbers has been accompanied by increasing inequality between the poor and the rich. The Gini coefficient shows this trend, but it needs no verification. It is visible on the streets — great wealth exists along with acute poverty. While more than 60 per cent of Indians live in villages, less than 5 per cent of all students in engineering colleges and business schools have received K-12 education in village schools. The parents of an even smaller percentage continue to live in the villages. Research in slums has revealed a dominant pattern of intergenerational progression: sons follow fathers or uncles into low-paying professions.
A three-pronged strategy is necessary. Higher quality education and career guidance services need to be combined with a thrust on providing better healthcare services. Recent developments in these directions, innovations by different state governments, give cause for optimism.
Better healthcare is essential for resisting poverty. More than 3.5 per cent of the Indian population falls into poverty each year on account of unaffordable medical expenses, a greater share than in most other countries. Reducing the rate of new poverty creation requires innovating better access to quality healthcare for all. Simultaneously, enhancing people's capacities to rise out of poverty and move up in the world requires equipping them with better education and career guidance.
No magic bullets exist. The history of development practice repeats one lesson: advances occur through learning from initial small-scale innovations. The Chinese government has mastered this process, experimenting with diverse programme designs at the local level for a few years and then scaling up the most promising ones.
In this model of constant experimentation and evaluation, followed by scaling up, state governments are programme innovators. Staking all on national-scale policy experiments is not the best bet in all situations. Hardly anything works the same in Kerala as in Arunachal Pradesh.
Many of India's most noted development programmes were brought in by state governments. MGNREGA was tested first in Maharashtra. Important parts of the National Rural Health Mission were scaled up from programmes in Gujarat, and the National Rural Livelihoods Mission originated in Andhra Pradesh.
Other promising innovations in health and education are currently under way in other states. In the health sector, Rajasthan and Tamil Nadu have introduced programmes ensuring better availability of free medicines in government hospitals and clinics, helping poorer sections, in particular. Tamil Nadu is on the way to developing integrated online patient records. Once again, poorer sections will be helped the most. Bihar has revitalised its district hospitals using novel public-private partnership arrangements.
There are many differences among these projects, but there is one interesting similarity: in each case, the public's role has been enlarged, given both more purpose and meaning. Reacting positively, people have stretched out their hands to these government offices and programmes. Information flows more freely in these innovative programmes.
This last part is crucial. Conducting government operations in the open has helped win allies among the public. Smart bureaucrats have learned that without involving the public actively, their best efforts at reform will remain vulnerable to subversion by colleagues and others.
Innovative programmes that involve the public and are undertaken by state governments are helping us learn better ways of doing essential things. Creativity in developing solutions will be stimulated further by sponsoring competitions among innovating states and local jurisdictions. I would love to see an award being given to the state whose children record the highest three-year improvement in learning scores. Or to the one in which in the lowest number of people fall into poverty in any given five-year period. Or, for that matter, to the state from which the largest number of BPL kids are able to get into medical colleges and prestigious universities.