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.

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