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LATEST NEWS UPDATES | Instead of celebrating the fall in poverty numbers, critics within & outside UPA keep carping-Arvind Panagariya

Instead of celebrating the fall in poverty numbers, critics within & outside UPA keep carping-Arvind Panagariya

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published Published on Apr 18, 2012   modified Modified on Apr 18, 2012

Evidence that poverty has declined since India began to liberalise in the 1980s, that the acceleration in growth to 8-9% range since the mid-2000s has resulted in accelerated poverty reduction and that these trends hold for each broad social group rather than just the aggregate population is as irrefutable as it gets in social sciences.

In the accompanying graphic, taken from a recent study by Megha Mukim and the author, show the proportion of the population below the conventional poverty lines in rural and urban areas, respectively, in 1983, 1987-88, 1993-94 and 2004-05 among the scheduled castes (SC), scheduled tribes (ST) and non-scheduled (NS) castes.

The years selected in these figures are those associated with large-scale expenditure surveys conducted by the National Sample Survey Office (NSSO). The NSSO conducts these surveys only approximately once every five years.

Accordingly, a survey had also been conducted in 1999-2000 but since a change in the sample design made it non-comparable to the others, I have omitted the results from it.

The figures show that poverty by conventional measures declined for every social group in both rural and urban areas between every successive pair of surveys shown. No doubt the SC and ST exhibit higher rates of poverty than the NS but their status has improved uniformly and steadily.

Even the popular narrative, which paints the ST as the victims of development, is thoroughly falsified by the evidence. The Mukim-Panagariya study also documents poverty in individual states and shows that in every one of the 10 largest states for each social group, poverty declined between 1983 and 2004-05.

Evidence from the latest 2009-10 survey, reported in a paper by Sukhdeo Thorat and Amaresh Dubey, reinforces these findings. These authorsshow that the rate of poverty reduction has accelerated for each social group between 2004-05 and 2009-10 over that between 1993-94 and 2004-05. The acceleration is the greatest among Muslims followed by the ST.

It is curious that despite this unequivocal evidence, the dominant narrative today remains the one that paints a grim picture of the reforms and what they have delivered in terms of poverty alleviation. How do we explain the overshadowing of these positive facts by this negative and largely false narrative? There are at least two complementary explanations.

Wittingly or unwittingly, the United Progressive Alliance (UPA) leadership has aided the proponents of this narrative. Soon after coming to power in 2004, it chose to denounce the reforms and what they had delivered.

"We want reforms with human face," said its top leaders, inviting the obvious inference that the reforms over which the newly-selected Prime Minister Manmohan Singh had presided as finance minister under Prime Minister Narasimha Rao as also those that finance minister Yashwant Sinha had introduced under Prime Minister Atal Bihari Vajpayee had scarface.

The left critics, who had been waiting in the wings ever since the reforms under Prime Ministers Rao and Vajpayee had sidelined them, returned with vengeance to seize on this narrative. Henceforth, they would challenge every finding of the reforms having done good to India and its people.

They first argued that reforms had done precious little to stimulate growth. When that assertion became indefensible in the face of 8-9% growth, they switched to arguing that growth in any case had done little good to the poor. When evidence contradicted that claim as well, they shifted ground yet again to arguing that reforms had failed to benefit the socially disadvantaged.

If the UPA leadership is thus responsible for bringing the dissatisfied socialists back to the centre stage of the policy debate, the populist media is to be credited with giving them the dominant position. The television media, in particular, has been utterly inept in bringing the basic facts to the public.

Rather than consult scholars on the evidence and systematically explain it to the innocent public, with rare exceptions, it has readily embraced anti-reform commentators who would not shy away from making altogether false claims.

Ironically, having fuelled the anti-reform fire, the UPA government now finds itself in retreat against these same critics when trying to convince the public of its genuine achievements.

Nothing illustrates this better than the recent episode in which a Planning Commission report offered entirely accurate and professional evidence of accelerated poverty reduction between 2004-05 and 2009-10. The anti-growth crowd immediately descended on the commission like a brick, falsely accusing it of cooking up the numbers by lowering the poverty line.

Unable or unwilling to challenge the falsehood of the critics, the Prime Minister, who also happens to be the ex-officio chairman of the Planning Commission, quickly withdrew the report and appointed a committee that would presumably advise how best to downgrade genuine achievements made in combating poverty.

If television media is genuinely interested in informed debate, it would ask the anti-reform commentators the following three questions: (a) If you do not like the poverty line chosen by the Planning Commission, what precisely is your poverty line and on what precise grounds have you arrived at it? (b) Can you choose a plausible poverty line and show that according to it poverty has not declined? and (c)If you think the reforms have not helped the poor and the socially disadvantaged, do you have a policy package that would deliver an outcome that benefits these groups more and hurts no one?

The Economic Times, 18 April, 2012, http://economictimes.indiatimes.com/opinion/guest-writer/instead-of-celebrating-the-fall-in-poverty-numbers-critics-within-outside-upa-keep-carping/articleshow/1271

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