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LATEST NEWS UPDATES | Debate on poverty does not alter the reality of declining poverty or strategy to combat it-PP Sangal

Debate on poverty does not alter the reality of declining poverty or strategy to combat it-PP Sangal

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published Published on Apr 20, 2012   modified Modified on Apr 20, 2012

The Planning Commission drew flak when it calculated that if an urban person spent 28 per head every day and someone in rural areas spent 22, that was enough to consider them to be above the poverty line. These figures are based on consumption expenditure data collected in the 66th round of NSSO for 2009-10.

From these new estimates, using the Tendulkar Committee methodology, the number of poor in 2009-10 was 29.8% of India's population, down from 37.2% in 2004-05.

The same controversy had arisen in June 2011 when the Planning Commission had submitted an affidavit to the Supreme Court saying that a person spending more than 32 per day in urban areas and more than 26 in rural areas would be above the poverty line.

But after opposition in media and from political parties, the commission went on the defensive, but emphasised that it had not fudged figures. These knee-jerk reactions by a professional body like Planning Commission are not tenable. It should have ratified the rationale of inputs to this data to manage the pressure of vote-bank politics.

In this context, we should remember that during the Janta government headed by Morarji Desai, the urban andrural below-poverty-line (BPL) figures were 2.30 and 2, respectively, in 1978-79. During the NDA's six-year rule under Atal Bihari Vajpayee, these figures were 15 and 11. But nobody contested the rationale of these figures in those years as ferociously as the poverty numbers are questioned now.

In the late 1970s and 1980s, economists Yoginder Alagh and D T Lakdawala defined the poverty line in terms of the spending on food required. This was measured as the expenditure incurred to get 2,400 calories in rural areas and 2,100 calories in urban areas per person per day. Expenditure on even basic requirements like clothing and housing were not considered while defining the poverty line.

This continued till 2009, when the Suresh Tendulkar Committee came out with a more realistic definition of poverty and devised a methodology for calculating poverty figures based on the new definition. Tendulkar thought that food worth 2,100 calories for rural people and 1,776 calories for urban people was sufficient due to lifestyle changes over time. In addition to food, he also took into account expenditure on housing, education, health, fuel, light, entertainment and so on.

They would have done better by covering essential items like potatoes, rice, milk and pulses while calculating per-capita daily expenditure. Adopting the comprehensive definition of poverty and using NSSO survey expenditure data for 2004-05, Tendulkar reworked the expenditure figure of 20 daily per capita and 15 for rural people to define the poverty line for 2004-05.

This number was higher than the norms used in the previous NDA regime, and were revised upward in June 2011, to 32 and 26, by applying inflation figures for industrial workers in urban and agricultural labourers in rural areas. With this seemingly rational process, the reduced figures for 2009-10, released now, are obviously raising eyebrows.

We can debate these figures till the cows come home. However, the figures are to be seen in conjunction with benefits the poor receive in the form of subsidised food grain, free school education, free treatment in government and charitable hospitals and midday meals for children at school.

After the June 11 affidavit, when the figure of 32 was announced for urban dwellers, we failed to realise that with 950 per month per family, the poor would fall short only when they either aspired to send children to private schools, or wanted better housing or had families bigger than four people. Considering the abundance of white goods, electronics and mobiles among slum dwellers in India, the positive effects of economic growth in last 20 years are visible. It suggests that the numbers below the poverty line are falling.

The perception of poverty varies from person to personand country to country. There is no sense in slamming a statistical methodology when eminent persons are involved in devising it.

The government is already carrying out a survey to count the BPL population and, hopefully, this will refine the data. We are free to review the methodology without being too ambitious but political parties must shun narrow vote-bank politics and their fancies, in the interest of the poor.

It does not matter whether the poor are 40% or 30% of the population. We are talking of at least 350 million Indians who are still poor. The focus of stakeholders ought to be on eradicating poverty in a sustainable manner. The way forward is focus on education, family planning and employment generation through growth. All of this would reduce the number of people below the poverty line, despite rising expenditure.

Whatever definition of poverty is evolved, it would decrease the number of people below the poverty line with a younger, more ambitious and urban Indian population.

Whichever government is in power, it has no choice but to find more resources to alleviate poverty by way of subsidies on basic food and education, while creating more jobs using funds locked up in needless subsidies. To better the plight of the poor, policy reform will be needed as well as political sense.

The Economic Times, 20 April, 2012, http://economictimes.indiatimes.com/opinion/comments-analysis/debate-on-poverty-does-not-alter-the-reality-of-declining-poverty-or-strategy-to-combat-it/articleshow

Tagged with: Poverty bpl



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