Eradicating extreme poverty - study in contrasts

The Economist has a very good article which outlines the strategy adopted by China to develop its most backward regions and end extreme poverty by 2020.

Since 2015, it has pursued a two-pronged strategy, relying on modern agriculture and moving people, in 832 identified counties (about 30% of the country's total) which were mostly inhospitable and mountainous and where extreme poverty was concentrated. 

The article writes, 

The first was to introduce industry—mostly modern agriculture. In Luomai, a village in Ziyun, the government created a 25-hectare zone for growing and processing shiitake mushrooms. About 70 locals work there. In the past their only options were either to migrate elsewhere or to eke out a meagre existence farming maize. But the shiitake are a cash crop, letting them earn about 80 yuan a day, a decent wage... The second approach to helping hard-up villages was more radical: moving inhabitants to better-connected areas. Between 2016 and 2020 officials relocated about 10m people. China has long moved people around on a huge scale to allow development—for instance clearing out homes to build dams. But in this case resettlement was itself the development project. The government concluded that it was too costly to provide necessary services, from roads to health care, to the most remote villages. It reckoned that moving residents closer to towns would work better.

The first, modernising agriculture, requires changing behaviours, agricultural practices, and embracing newer market opportunities. It requires awareness creation and high quality extension services. The highly decentralised and diverse nature of farming in India, and that too deeply rooted in tradition, means that such large scale change within a short period of time is impossible. 

Joe Studwell has described how East Asian economies created the conditions for long-term economic growth by deploying intensive agriculture on small land holdings which dramatically improved land productivity and farm incomes.

The second, moving people to where opportunities exist is even more difficult impossible at any reasonable scale. Democracies cannot undertake such large scale human resettlements. Besides, it is impossible for any country to mobilise and funnel the massive amounts of resources required for such projects. 

This highlights the challenge facing India.  

India has its version, the Aspirational Districts program, covering 117 districts across 28 states. This program has sought to focus on essential necessities of human development (education, health and nutrition), livelihoods (agriculture, skills, and financial inclusion), and basic infrastructure (water, electricity, and roads) in these areas. There cannot be any doubt that, instead of the Chinese program, this is far more comprehensive in scope and more sustainable. But it is also very difficult to implement. 

The human development interventions are among the hardest development challenges, one which has remained persistently elusive to public policy for long time. Since livelihoods are built on human capital investments, the weakness of the latter blunts the effectiveness of initiatives on the former. And infrastructure investments face the simple fiscal challenge - the demands are simply too much and the resources available too little, as to leave governments with spreading the butter to thinly to satisfy all constituents that its impact is diffuse and limited.