Poverty Research Centre of Indian Institute of Public Administration (IIPA)

Working Paper
September 2008 No. 119








Escaping poverty: the Ralegan
Siddhi case


Aasha Kapur Mehta
Trishna Satpathy





Indian Institute of Public Administration (IIPA)
What is Chronic Poverty?
Indraprastha Estate, Ring Road

New Delhi 110002 India
The distinguishing feature





of chronic poverty is

extended duration in
absolute poverty.

Therefore, chronically poor
people always, o
r usually,


live below a poverty line,
which is normally defined in
terms of a money indicator
(e.g. consumption, income,
etc.), but could also be
defined in terms of wider or
subjective aspects of
deprivation.
This is different from the
transitorily poor, who move
in and out of poverty, or
only occasionally fall below
the poverty line.

Chronic Poverty Research Centre
www.chronicpoverty.org
ISBN: 978-1-906433-20-8

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Escaping poverty: the Ralegan Siddhi case


Abstract
Poverty remains to be the most important development issue facing India with an estimated
301.72 million Indians (27.5 percent) living below the poverty line in 2004-2005. In 1975,
Ralegan Siddhi was just another drought prone, poverty stricken village, but it has had much
success in poverty reduction since then. Ralegan Siddhi's success is not just a story of
change as a result of access to water. This paper provides evidence of the remarkable
economic, social and community regeneration in Ralegan Siddhi, due to a strong, selfless,
ethical and accountable leadership as well as its replication in Hivre Bazaar. Ralegan Siddhi
and Hivre Bazaar are outstanding examples of holistic development and sustainable poverty
reduction, with a large number of rural households successfully moving out of poverty without
slipping back below the poverty line. The dramatic transformation in these villages and the
improvements in the quality of life of the entire village community need to be understood,
analysed and replicated.
Key words: Best practice, poverty reduction, Anna Hazare, watershed, equitable
development, inclusive, holistic, replicable, reverse migration, selfless leadership.
Acknowledgements
Gratefully acknowledged are Dr. N.C.B. Nath and Shri V.B. Easwaran for initial discussions
about Ralegan Siddhi and Hivre Bazaar, Shri Swadheen Kshatriya IAS, Shri Umakant
Dangat IAS, Ms. Prajakta Lawangare IAS, Shri Dangade, Shri Vani, Ms. Sarika, Shri Bharat,
Shri Popat Rao Pawar (Sarpanch, Hivre Bazaar), Shri Bhagat Bhausaheb (Gramsevak,
Ralegan Siddhi) for discussions, support and inputs, Shri Raut Thakaram Lakshman
(Member Hind Swaraj Trust, Ralegan Siddhi and retired Headmaster), Shri Dinesh Patil
(Principal, National Training Centre for Watershed Management, Ralegan Siddhi) and Shri
Shinde (Training Coordinator, Training Centre) for answering many questions and enabling
us to understand what makes Ralegan a best practice case. Dr. Andrew Shepherd and
Professor Gopal Kadekodi are thanked for very valuable comments on earlier drafts and
Julia Brunt and Portia Reyes for partial editing. Special thanks to the men and women of
Ralegan and Hivre Bazaar whom we interviewed for long hours, for allowing us to invade
their privacy and for sharing their lives and experiences with us.
Aasha Kapur Mehta is Professor of Economics at the Indian Institute of Public
Administration, New Delhi and leads the work of the Chronic Poverty Research Centre in
India.
Trishna Satpathy is Research Officer at the Chronic Poverty Research Centre.
Email: aashakapurmehta@gmail.com, trishna.sy@gmail.com
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Escaping poverty: the Ralegan Siddhi case


Contents
1 Introduction ..................................................................................................................... 4
2 Raleghan Siddhi Village: a brief background ................................................................ 6
3 Raleghan Siddhi: pre-1975.............................................................................................. 9
4 Raleghan Siddhi after Anna Harare's return in 1975....................................................12
4.1 Water and community participation: key to prosperity................................................................ 14
4.1.1 Kukadi Canal lift irrigation system: success where others failed....................................... 16
4.1.2 Other conservation works.................................................................................................. 17
4.1.3 Increase in incomes and productivity ................................................................................ 18
4.2 Equitable access to water........................................................................................................... 21
4.3 Alternative source on income: dairy production ......................................................................... 22
4.4 Human Development .................................................................................................................. 23
4.4.1 Educational reforms........................................................................................................... 23
4.4.2 Health and environment .................................................................................................... 24
4.4.3 Other experiments in equity............................................................................................... 27
4.4.4 Food security ..................................................................................................................... 27
4.4.5 Community marriages and social inclusion ....................................................................... 28
4.5 Participatory governance: community-based needs, needs-based and gender-balanced ........ 29
5 Funding/ investment in Raleghan Siddhi......................................................................31
6 Replicability of the Raleghan Siddhi best practice model: the Hivre Bazaar case ....35
7 Conclusions: issue and concerns.................................................................................40
References..........................................................................................................................43
Annex ..................................................................................................................................45


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Escaping poverty: the Ralegan Siddhi case


1
Introduction
Despite well-intentioned policies and programmes, an estimated 301.72 million Indians
remained in poverty in 2004-2005. Poverty declined from 36 percent in 1993-1994 to 27.5
percent in 2004-2005, but the reduction in poverty was much less than was anticipated. The
poverty line is Rs. 356.30 per capita per month for rural areas and Rs. 538.60 per capita per
month for urban. In rural areas, 28.3 percent of Indians (220.92 million persons), and in
urban areas, 25.7 percent (80.79 million persons) are unable to earn even these low levels of
income (Press Information Bureau, 2007). Some of those who are poor are extreme poor
and are unable to find even two square meals a day. As such, the dramatic transformation in
Ralegan Siddhi and the improvements in the quality of life of the entire village need to be
understood, analysed and replicated: as succinctly outlined by Narain and Agarwal (2002:
18), Ralegan Siddhi is no longer a poverty stricken village:
By Indian standards, Ralegan Siddhi is a rich village now. By the 1990s, not a single
resident depended on drought relief programs. Incomes have risen to the point that more
than a quarter of the residents now earn more than 500,000 rupees a year, or over
$11,000. The village is so prosperous today that a major bank has opened a branch
there. Ralegan residents reportedly have private savings of Rs. 30 million, or about
$700,000. The progress in Ralegan is even more striking in light of the fact that only a
million households in India earn more than one million rupees a year, and such people
are considered `super rich' by the National Council of Applied Economic Research. For a
village that was once badly degraded both economically and environmentally, this is
indeed a miracle.

Ralegan is not just a story of change as a result of access to water. It represents remarkable
economic, social and community regeneration, only realisable under a strong, selfless,
ethical and accountable leadership, which enforced a principled value system to bring about
behavioural change. Since the rural poor are dependent on natural resources for their
livelihoods, natural resource conservation and access to water are central in poverty
alleviation strategies. The Ralegan model reinforces the normative principles of human
development - equity, efficiency, sustainability and people's participation - all of which were
realised. The human development strategy seeks to fulfil people's potential by enlarging their
capabilities, and this necessarily implies their empowerment to participate actively in their
own development.
What is a best practice for poverty reduction? Oyen (2002: 21) classifies interventions that
reduce poverty, reduce its sizeably, prevent loss of gains and prevent the slipping back into
poverty as candidates for best practice. Ralegan Siddhi qualifies as a best practice case of
poverty reduction since it has not only reduced poverty, but has led to sizeable poverty
reduction with the prevention of slippage or loss of gains. Such cases provide important
lessons and have tremendous potential for context-based replication and scaling-up. Other
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Escaping poverty: the Ralegan Siddhi case


criteria1 used in the literature of best practices include initiatives which have demonstrated
tangible impacts; are socially, culturally, economically and environmentally sustainable;
based on collaborative partnerships; allow full community participation and decision making;
and are replicable.
Careful documentation of best practice cases can provide guidelines for policymaking and
planning of new projects as well as their effective implementation (SAARC, 2003: 36-38).
However, caution must be exercised while analysing issues of replicability of a `best practice'
case. The concept of best practice is a fairly recent inclusion in the development discourse
and the literature does not provide an adequate explanation of when and how a best practice
can be replicated and transferred to another place or region.
An oft-cited `successful' best practice replication is the case of Grameen Bank in
Bangladesh, established by Nobel Laureate Professor Mohammad Yunus. The model has
been emulated across the world as an effective tool for fighting poverty and has disproved
the traditional notion that the poor are not `creditworthy'. However, its success in terms of
replication has been mixed. The reason most cited for this is that `certain socio-cultural
instructions' or norms that were part of the original Grameen scheme (such as the fact that
the loan could not be used for bridal dowry) were not transferred or replaced by other
dogmas relevant to the local context (Oyen: 8-9). Thus the `more limited and well-defined an
intervention is and the less culture-bound it is, the more manageable a transfer is likely to be'
(ibid: 11).
It must be recognised that poverty is a complex phenomenon, a result of interaction among
many socio-cultural, economic and environmental variables. It is often these socio-cultural
dynamics that play a defining role in the success of a development programme. Often, this
aspect is not analysed sufficiently. This results in transfer of a `physical idea' but not an
understanding of the socio-cultural dynamics at work. Thus, it is important to ensure that
there is analysis of the original cultural context (social norms) that underpins a successful
intervention and identification of norms prevailing in the new context where the replication is
to occur. The critical catalytic factor in the success of Ralegan is Anna Hazare's commitment,
sacrifice and selfless leadership, which influenced and inspired people to work towards
change.3 This must be taken into account when attempting replication. Anna used

1 The following paragraphs on best practice and replicability draw heavily on Oyen et al. (2002).
3 An example of this is the 1979 protest, led by Anna Hazare, when 20,000 people from Ralegan and surrounding
villages sat on the main highway and blocked the traffic, demanding that their villages receive electricity. All traffic
movement was stopped. Four people died and school children participating in the struggle were hurt. The result of
this was sanctioning of Rs. 350 crore (38 crore specifically for Ahmadnagar) by the government to set up a
substation.

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Escaping poverty: the Ralegan Siddhi case


participatory methods to empower the community, ensured equity and transparency,
improved the lives of almost all the households in this village and beyond and used the
system to work to the advantage of the poor. This paper tries to document some of the
learning, not just as a successful case of water conservation and watershed management,
but also in applying fundamental principles of human development - equity, sustainability,
efficiency and participation.
After a brief introduction, Section 2 provides a background of Ralegan Siddhi, its location,
demographics, occupational structure and poverty. Section 3 traces the history of Ralegan
Siddhi - a village plagued by drought, acute and persistent poverty, indebtedness, a fragile
ecosystem, neglect and hopelessness. Section 4 outlines the dramatic socioeconomic
transformation brought about by Anna Hazare, based on water harvesting and sustainable
use of water and soil; watershed management; participatory and equitable decision making;
putting the poorest first; eradication of hunger; fairness; transparency; gender balance; and
the struggle against corruption. Section 5 presents the different sources of funding - various
government schemes (central and state), bank loans, voluntary labour and expenditure by
villagers and personal donations. The question most often raised in the context of best
practice cases is that of replicability, and Section 6 outlines the successful adoption and
adaptation of the model in Hivre Bazaar. Finally, Section 7 raises issues and concerns that
need to be addressed.

2
Ralegan Siddhi village: a brief background
Ralegan Siddhi is a village located in the acute drought-prone and rain-shadow zone of
Parner Tehsil of Ahmadnagar district, in central Maharashtra (see Figure 1). It is at a
distance of 87km from Pune and 5km from the Pune-Aurangabad state highway. The village
has an area of 982.31 ha (Ahmadnagar District, 1991) and is characterised by erratic and
scanty rainfall, ranging between 450 and 650mm (Government of Maharashtra, nd).
Temperatures range between 12 and 44c (ibid). Most of the rain is received between the
months of July and September, with September receiving the maximum rainfall. The village
gets rain on approximately 35 days of the year (CSE, nda).

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Escaping poverty: the Ralegan Siddhi case


Figure 1: Location of Ralegan Siddhi in Maharashtra, India


Source: Food and Agriculture Organization. Available at: www.fao.org/docrep/X5669E/x5669e00.gif

Of the total village area of over 980 ha, over 300 ha is not available for cultivation (about 194
ha is under forest cover). The village is surrounded by small hills, 30-35m in height on the
northeast and southern sides (CSE, 1991). The undulating landscape, together with poor soil
quality and depth, prevents water from percolating during the rains. The soil depth of 70
percent of the land is shallow; the maximum depth is only 45cm. Before 1975, most of the
rainwater was wasted owing to water runoff, which also led to loss of valuable topsoil. In
1971, only 55 acres (or 22.26 ha) of land was irrigated (Ahmadnagar District, 1971).

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Escaping poverty: the Ralegan Siddhi case


Table 1: Ralegan Siddhi: Demographics 1971-1991

1971
1991
2001
No. of Households
178
310
394
Total population (including institutional and houseless)
1209
1982
2306
Male
596
1042
1265
Female
613
940
1041
Scheduled castes
83
233
171
Scheduled tribes
---
49
32
Literate and educated



Male
75
645

Female
293
364

Source: Ahmadnagar District (1971; 1991). 2001 data provided by the gram sevak (village-level worker), Ralegan
Siddhi.

Between 1971 and 2001, the number of households in Ralegan increased from 178 to 394,
or by 121 percent. The total population increased from 1209 in 1971 to 1982 in 1991 and
was 2306 in 2001 (Table 1). The female-male sex ratio declined from 1.029 in 1971 to 0.82
three decades later. This decrease has been attributed to `reverse migration' of males who
had gone to Mumbai, Pune and Ahmadnagar for work.4 The number of scheduled castes and
tribes declined in 2001. The explanation given was the tripling of their population between
1971 and 1991 had meant their landholdings decreasing significantly, which led to increased
migration to Mumbai.5 The number of literate and educated males increased by a factor of
7.6 over the two decades and the proportion of literate and educated males increased from
13-62 percent. However, only 39 percent of females were literate and educated in 1991. The
Maratha Rajputs (Khatri caste) are the dominant community. Scheduled castes and tribes
constitute roughly 8.8 percent of the total population. The backward castes include Mhar,
Chamar, Bharhadi, Pardi, Sutar, Barber, Fisherman and Matang. Of the 394 households in
Ralegan in 2001, 18.3 percent were below the poverty line (BPL) and 4.3 percent were very
poor (Table 2).

4 See http://www.rainwaterharvesting.org/Rural/Ralegan.htm.
5 Interview with Mr Dinesh Patil, Principal, National Watershed Training Centre, Ralegan Siddhi.
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Escaping poverty: the Ralegan Siddhi case


Table 2: Households above (APL) and below (BPL) the poverty line (2002-2007)
Total households
394
APL households
322
BPL households
72
(Of which) very poor households
17
Source: Data provided by the gram sevak, Ralegan Siddhi (2002-2007)/

Agriculture is the main source of livelihoods (Table 3). Non-agricultural employment
opportunities are limited. Those employed in the service sector work as cobblers, drivers,
teachers, blacksmiths, grocers, health workers and shopkeepers. To ensure that children are
able to compete and get jobs, the school places a lot of stress on exercise, play, extra
classes for children who lag in studies and familiarisation with the use of the computer. Thus,
the children of Ralegan are physically strong and this has helped many of them to get into
the armed forces. Several households have at least one family member in the army.6
Table 3: Ralegan Siddhi: Occupational classification of the workforce, 19991

Male
Female
Total
Total main workers
382
325
707
Cultivators
248
254
502
Agricultural labourers
48
61
109
Livestock, fishing, hunting, forestry & plantations, orchards & related activities
4
-
4
Manufacturing, processing, servicing & repairs in household industries
12
02
14
Manufacturing, processing, servicing & repairs (other)
9
-
9
Construction
5
-
5
Trade & commerce
10
04
14
Transport, storage & communications
10
-
10
Other services
36
04
40
Marginal workers
04
107
111
Non workers
656
508
1164
Source: Ahmadnagar District (1991)


3
Ralegan Siddhi: pre-1975
Before 1975, Ralegan Siddhi was one of the many villages of India plagued by acute poverty,
deprivation, a fragile ecosystem, neglect and hopelessness. Population pressure,
indiscriminate use of natural resources, lack of efforts at regeneration, recurrent cycles of
drought, water runoff and soil depletion resulted in low productivity and low income. The only
option for dealing with the severe water shortage was to dig wells. However, even at depths

6 Interview with Mr Shinde, Training Coordinator, Training Centre Ralegan Siddhi.

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Escaping poverty: the Ralegan Siddhi case


of 400m, no water was found.7 At greater depths, well water could irrigate not more than 60-
70 acres (Anna Hazare, 1997). The majority of the villagers were farmers, with 70 percent of
households living below the poverty line (Selvarajan et al., 2001). Around 80 percent of
households owned two to five acres of land; only 5-10 percent owned around 30 acres. The
yield per acre was three to five quintals (CSE, ndb). The village was able to meet only 30
percent of its food requirements (CSE, 1991).
Since rain was erratic and no conservation work was undertaken, not even a single crop was
assured in a year. Low production of `green fodder' made it difficult to breed livestock.
Around 15-20 percent of the population was underfed and could barely manage a meal a
day. This was exacerbated by the fact that more than 50 percent of households had an
average family size of eight or nine members.8 Around 60% of the households borrowed
grains or money with the promise that they would return this with additional quantity of grain.
Owing to persistent poverty, they defaulted on paying back loans in cash or kind and were
caught in a vicious circle of indebtedness. This led to moneylenders exploiting the situation to
the extent that three or four moneylenders acquired almost all the land of the village (Anna
Hazare, 1997).
In order to fulfil their basic needs and to repay the loans, the villagers, who had tended to
their lands to earn a living, now resorted to breaking quarry stones outside the village (Anna
Hazare, 1997)., took part in drought relief work under the employment guarantee scheme
(EGS) or migrated to Pune, Mumbai and Ahmadnagar for work as casual or daily wage
labourers (Pangare and Pangare, 1992). It is important to note that the majority of those who
migrated belonged to the poorest households. By 1975, at least one member from each dalit
(scheduled caste) household had migrated for work (ibid). However, income earned was not
adequate, as the EGS did not provide work all year round and jobs outside the village
provided very low pay.
One person from the village resorted to illicit liquor vending, as this seemed most feasible
and profitable at the time. His success and visible improvements in his standard of living
attracted many others to this business. Most other households were living in a state of
absolute poverty. Persistent drought and alcoholism (owing to investment in the alcohol
business) drove large numbers of people into heavy debt and penury. Over time, 40 liquor
dens were established (Anna Hazare, 1997). This ensured a rise in income levels for the
alcohol-producing households but led to the breakdown of the socio-cultural ethos of the
village. Vandalism, street fights and thefts became commonplace. Women were the worst
sufferers, as domestic violence became the norm. Cases of theft of land, harvested crops,

7 Based on discussions with Shri Raut Thakaram Lakshman, a close associate of Anna Hazare for 22 years. He
started working as the headmaster of the secondary school in Ralegan in 1980. Since retiring in 2002, he has
continued to live in Ralegan and work with Anna Hazare.
8 Discussions with Shri Raut Thakaram Lakshman.
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