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Allow the poor their dignity
Shafeeq Rahman on how the poverty line cannot merely be an arithmetic calculation
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Illustration: Tanmaya Tyagi |
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RECENTLY RELEASED poverty estimates by the Planning Commission for the year 2009-10 show a decline in the number of poor in India from the last estimates in 2004-05. The poor population has supposedly declined by 7.3 points from 37.2 per cent in 2004-05 to 29.8 per cent in 2009-10. Rural poverty has supposedly declined by 8 percentage points from 41.8 per cent to 33.8 per cent and urban poverty by 4.8 percentage points from 25.7 per cent to 20.9 per cent.
These estimates are based on the poverty line recommended by the Tendulkar Committee, which used implicit prices derived from quantity and value data collected in household consumer expenditure surveys by NSSO. The poverty line is defined as per capita consumption expenditure in a month by a person. If we take the earlier released figures for 2004-05 without applying the Tendulkar recommendation, the number of below poverty line (BPL) people has increased in India in 2009-10. But the committee recommended a methodology for updating the 2004-05 poverty line which ultimately resulted in ‘decline’ in number of BPL people. A higher poverty line obviously results in a larger number of BPL people and vice versa.
The Planning Commission last week admitted that there is serious discrepancy in NSSO data and national accounts which led to pegging the poverty line at Rs 28.65 per capita daily consumption in cities. “I do believe that the discrepancy between the consumer survey and national accounts, is a serious statistical problem,” Planning Commission deputy chairman Montek Singh Ahluwalia has admitted.
In the past also, it has been the practice to periodically review the poverty line as per price inflation, with certain changes in living standards. Therefore, the poverty line for rural and urban areas and state-to-state varies, as the prices and standards are different in particular locations. The controversy that has erupted on the recent BPL line is mainly due to updating of the previous survey year poverty line and the low budget of expenditure given to a person in a month for poverty line estimation. As reported, the poverty line in 2009-10 is very low, Rs 673 per month in rural areas and Rs 859 in urban areas. Many have termed this a starvation line instead of a poverty line, for with a budget of below Rs 1,000 a month, a person can only avoid starvation and not live a life of any dignity.
After being widely criticised by media and opposition political parties, the government had taken a decision to set up a technical group to revise/revisit the methodology for estimating poverty in a manner which is consistent with the current realities and ensure that the ongoing Socio Economic and Caste Census (SECC) will accommodate all apprehensions.
COMMITTEES IN the past too reviewed the poverty line for the government to adjust for inflation. The Alagh Committee (1977) and the Lakdawala Committee (1989) were constituted before the Tendulkar Committee (2005) which submitted its recommendations in 2009. If we analysed the changes in poverty line for a given period of time since 1973, it is quickly found that every government has manipulated the poverty line each time to show a decline in poverty — per cent in order to take credit for reduction of poverty and to avoid the blame for increase in the population of the poor. The table shows a comparison of BPL percentage population and poverty line in rural and urban areas.
The table shows that the budget for the poverty line was undervalued in the previous survey years too. Comparison of Indian BPL estimates with the United Nation Human Development Report (HDR) 2010 reveals sharp contrast with the national estimate that roughly half of India’s population suffers from poverty. HDR released two different dimension of poverty: one is Purchasing Power Parity (
PPP) at $1.25 a day, a UN-calculated international line. It shows population below income poverty line is 41.6 per cent. The second classification as per the national line is 28 per cent. HDR data also estimates that the headcount of population with multi-dimensional poverty in India is 55.4 per cent and intensity of deprivation is 53.5 per cent.
Largely, widespread poverty in India raises moot points about development and growth, especially in rural areas. India, of course, progressed well in the last few years but the sign of progress should be comprehensive and accompanied with social development in society. The poverty line is a key indicator for government schemes to gauge the real deprivation in society. It should be well articulated, not merely an arithmetic calculation and must be predicated on earnings which can satisfy the basic human needs to ensure a life of dignity to all. The government can also utilise different development indices to cross-check the real development in the country, as the UN development report has a basket of indicators to examine real social development like multi-dimensional poverty, below income poverty and deprivation of health and education. Further, poverty estimation need to be more simplified with the availability of raw data so that a layman can easily understand the government poverty estimates.
Shafeeq Rahman is a researcher on India-centric socioeconomic and political databases.
rahman.shafeeq@gmail.com |
