Joke on poor and poverty

Dr Ashwani Mahajan
Planning Commission presented data on poverty for the year 2011-12 and claimed that poverty in the country has receded to 22 percent in 2011-12. As per Tendulkar’s methodology this figure stood at 37 percent in 2004-05. In this way according to Planning Commission number of people living below poverty line have declined from 40.5 crore in 2004-05 to 26.9 crore in 2011-12, out of which 21.7 crore live in rural areas. On definition of Poverty line, Government says those with income less than monthly expenditure of Rs. 816 in rural areas and Rs. 1000 in urban areas are only considered to be poor. This implies that if a person has expenditure of rupees 27.2 in rural areas and rupees 33.33 in urban areas, is considered poor. As per these figures, according to Government today only 25.7 percent population in rural and 13.7 percent population in urban areas are poor.
Now if we compare this definition of poverty with that of 2009-10, we note that for 2009-10, cut-off line was rupees 26 and rupees 32 in rural and urban areas respectively. That implies that in the last two years, cut-off line has been raised by only rupee one in each case. It is notable that is these two years price of Food Products have increased by 17 percent. By this immature act Government is seemingly trying to wrongly add a feather to its cap, by showing major achievements in poverty eradication.
Two years ago, when the Government published poverty figures for 2009-10, even then Supreme Court, while hearing a Public Interest Litigation, questioned these poverty figures in view of widespread poverty and hunger in country, and had said that Government has been adopting grossly inappropriate, illogical and impractical definition of poverty, according to which, number of poor were underestimated. There is no denial of the fact that methodology adopted by Tendulkar’s Panel was better than the criteria adopted earlier, according to which in 2004-05 only 27 percent population was defined to be living below poverty line. Prof. Tendulkar’s Panel amended the same and decided raised cut-offs at rupees 578.8 and 446.7 in urban and rural areas respectively; which led to declaration of higher incidence of poverty at 37 percent of population, as compared to 27 percent earlier (according to previous methodology).
Last time when Government published poverty figures, Supreme Court asked the Government to file an affidavit to this effect; which could not make the Government budge from its stiff stand and stated once again that poverty line would be rupees 32 and rupees 26 in urban and rural areas respectively (for 2009-10). Today, when the people are reeling under hyper inflation, adamant stand of Planning Commission has caused major embarrassment for the Government. Latest data published by the Government has once again added salt to the injury. Under these circumstances, Government’s adamant stand on cut-offs for poverty line, has given birth to a new debate that whether Government is serious about eradication of poverty from the country.
Insensitive Government continue to defend the figures of Planning Commission and is trying to argue that poverty has actually receded significantly due to expenditure on Mahatma Gandhi National Rural Employment Programme (MGNREGA), Mid-day Meal Program, Public Distribution of Food grain  etc. It is notable that to arrive at poverty figures, Government is also taking into account the expenditure made on these programmes (without considering, whether these benefits are actually reaching the poor). Government is also claiming that incidence of poverty is coming down also due to Prime Minister Rural Roads Programme, National Health Insurance Scheme etc.
But if we go deep into the issue we find that Government is still adopting the same old definition, which has been objected to, by Supreme Court. Government also fails to provide any logic behind raising cut-off by merely one rupee, despite the fact that between 2009-10 and 2011-12, prices of food products have increased by 17 percent. After getting cornered on the issue, Planning Minister said that these figures are not final and are merely estimates of an expert group.
It is more than clear now that in India Governments don’t need any hard work to reduce poverty; this could be achieved by magic of interpretation of statistics. Demonstration of reduction in poverty by changing poverty line itself is no new thing. This was done by the Government in 1993-94 also, when Government suddenly came out with a big downfall in poverty by merely adopting new definition, which led to constitution by Tendulkar’s Panel to redefine poverty line.
As far as Government’s contention is concerned, that incidence of poverty has come down due to MGNREGA, perhaps is not correct. Sometimes back Government claimed that employment guarantee in rural areas under MGNREGA, lifted 4.8 crore people out of poverty. This relationship between MGNREGA and poverty reduction is not seen at ground level, and more importantly number of man days has actually declined and MGNREGA accounts for only 0.65 percent of rural employment. Neither economic growth is bringing any reduction in poverty. For instance, Bihar experienced economic growth at 10 percent per annum between 2004-05 and 2009-10, but without much impact on poverty. However Government then had put this blame on dismal performance of MGNREGA in Bihar; and now the planning commission has suddenly dropped poverty figures from 53.5 percent in 2011-12 to just 33.7 percent!
Though Government and the Planning Commission are adamant on official poverty figures; they do not seem to be confident of these figures. After conceding that these figures are not final, Government has constituted yet another committee under the chairmanship of Dr Rangarajan to redefine and appropriately estimate poverty. It is notable that figures published now by the Government, are supposedly based on methodology suggested by Late Suresh Tendulkar, for the year 2004-05. Prof. Tendulkar had improved upon earlier methodology for estimating poverty by taking into account the expenditure on health and education.
Whatever explanation Government may offer, none is ready of accept cut-off of rupees 27 and rupees 33 for poverty line in rural and urban areas respectively. Universally accepted definition of poverty line is two dollars a day. If we apply this definition of poverty line, the cut-off expenditure would be rupees 120 a day. Even if we take 1.25 dollars, as a cut-off point of acute poverty, cut-off expenditure would be rupees 75 a day. Therefore, one can conclude that from any standard, declared definition of poverty by planning commission is nothing but a cruel joke on poor and poverty in India.
But one aspect, which is being ignored by all, is the phenomenon of rising inequalities in the country. According to Central Statistical Organisation, according to which in 2011-12 per capita income in India reached rupees 61564 per annum (on current prices). Even the benefits of MGNREGA are also reaching the poor and unemployed, though partially, after adjusting for corruption. However, the benefits of growth are actually not fully reaching the poor, due to increasing inequalities. Even according to official data, Gini Coefficient, a measure of inequalities, value of which increased from 31.11 to 33.9 between 2005 and 2010. Therefore, income of the poor is not rising proportionately despite growth. This increase in inequalities is more or less found in all states. If we really want to get rid of poverty, benefits of growth must be more or less equally distributed.

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