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Poverty line: Myths, perceptions and reality by Sriram Balasubramanian

The Planning Commission is back in the news. The latest round of poverty levels that have been disclosed have created another debate in the country. Once more, people are stunned at the meager rate of Rs 28 that has been defined as the poverty line. Even though I addressed some apprehensions in an earlier post, this time around the issue seems to be more about myths, perceptions and lack of clarity than distorted facts.

Middle Class Perceptions:

Anyone who sits down to discuss the role of these figures needs to understand some basic things. First, the people who are doing the data analysis for the commission are not a bunch of jokers. These are people who are renowned for their statistical thinking and the late Professor Tendulkar was a renowned statistician with a Phd from Harvard. Second, the value of Rs 32 or Rs 28 (per member per family) comes to about Rs 5,000 odd for a 5 member family over a complete month. Now, go over to your mother and ask her how much she pays her maid. It would be around this figure. More often than not, maids are either single breadwinners of the family or their other half earns very little to help the family. So in reality, this figure is not far too away from what your maid gives to support her family. Our oblivion to this reality makes us get exasperated at the figures and the people who have arrived at such figures. It is very easy to sit in an arm chair and criticize; however, one needs to acknowledge the ground realities of the country.

Myths and Lack of Clarity:

The biggest issue in this entire fiasco is the lack of clarity from the authorities with regards to the poverty numbers. A strong communication strategy from the planning commission, post the release of such data could have helped people understand the issues better. Here are some myths that need to be busted:

1) There are no 3 poverty figures, there are only 2. Most of us don't realize that the current report has actually increased the poverty line from the 2004-05 figures. The figures from the Tendulkar committee report for July 2011 (i.e the Rs 32 line),were a mere estimate on consumption patterns based on the older CPI-AL modeling and not concrete NSS survey data. The recent value of Rs 28 is based on the real NSS survey data which gives solid consumption patterns. So there are only two major data. So there are only two findings, one of Rs 19 in 2004-05 and Rs 28 now. As such the poverty line has increased compared to 2004-05, not decreased.

2) Another major issue is what this data used for. This data is not used for benefits in the Public Distribution System, that is used from the Ministry of Rural Affairs own caste based census that is being undertaken along the way. However, these poverty figures could be used for other activities such as pensions and other forms of income distribution.

3) Poverty has reduced not increased. Poverty in absolute numbers has actually reduced over the years by 7% or so, but over a six year period it amounts to about 1-1.6% a year. However, in an economy growing at 7+%, whether this is effective poverty alleviation is a valid point. This shows that the delivery mechanisms are not proper and does not denounce the veracity of data.

Redefining the Line, Parameters and Clarity

As I see it, there are three major suggestions to the figures that have been released. One, the parameters that have been used in the process could be improved. One appalling assumption (in the 2004 report) that has been made is that healthcare and sanitation is taken care by the government. How can one evaluate without taking into account health care? Even if Tendulkar's recommendations have been incorporated (in the current report), the definition of health standards is a subjective notion that needs debate. Second, the concept of poverty line needs to be revised in India. Poverty as a definition is different in India compared to the West due various factors. The measurement of poverty line should be rechristened as say Hunger Line, the basic minimum with which people can prevent starvation over a day. Another layer could be constituted as the actual poverty line, which people can aspire to earn a decent living. Third, most importantly, there has to be a certain level of clarity with which the figures are presented. The worlds largest democracy needs a transparent and non confused set of figures so that people can judge based on it. The more the authorities try to camouflage with multiple figures, multiple theories with varied blame games, the more the public perception dwindles.

In retrospect, to my mind, the figures that have been released are convoluted and are not necessarily factually wrong. The process needs to be more open and there has to be a focused campaign on explaining the authenticity of the statistics behind this. The poverty numbers are utilized and misrepresented to suit various people needs and this is reflected even more glaringly in a society which is, truth be told, completely out of sync with the state of poverty in India.

The best solution to this is to instill greater clarity in the parameters, the process and with the people rather than playing around with figures. From a citizen's point of view, it is better to understand the data more before criticizing the people who have acquired the data.

Myths and perceptions can come to terms with reality only with greater clarity