A Redefinition of 'Poor' Roils India: Choudhury

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By Chandrahas Choudhury

How poor is very poor in India, home to a substantial percentage of the world's poorest people?

A quantitative statement on this subject last week in the Supreme Court by the Planning Commission of India, a government body involved with many aspects of the country's economic policy, was met with disbelief and derision by the media and the public.

The commission said that it had recommended that the poverty line be fixed at 965 rupees per capita per month (about $0.65 a day) for people living in urban areas and 781 rupees per capita per month (slightly more than $0.50 a day) for those living in rural areas. Based on this very conservative cut-off point -- itself a figure revised upward after the Supreme Court objected to an earlier projection -- the commission estimated the population in India living below the poverty line at a little more than 407 million people. That is almost one-third of the population.

The news immediately sparked a debate about how accurately poverty is measured in India, a matter of the greatest significance for a country that is struggling to improve the conditions of a great mass of people, and for a welfare state that has to decide how to apportion subsidies and disbursements of food and fuel. The commission's recommendations were based on a report submitted in 2009 by the Suresh Tendulkar Committee, which abandoned an older method of estimating poverty by a measure of calorie intake. Instead, it adopted a more sophisticated method that examines spending on food, clothing, education and health, and sets different poverty lines for urban and rural areas.

There was disbelief – even horror – in India that an arm of the government could insist that a person might earn such a small sum, or a little more, and still not be considered below the poverty line. The commission was excoriated by the main opposition party, the BJP, which alleged that the panel's head, the economist Montek Singh Ahluwalia, and Prime Minister Manmohan Singh (himself an economist) had "no idea of real poverty." It was also attacked by columnists, one of whom, Tavleen Singh, wrote:

Last week, the Planning Commission proved that its smug, cloistered officials have never met a poor Indian. If they had they would have known that beggars and homeless people in Delhi and Mumbai need Rs 100 a day just to survive. All of it goes on food. By telling the Supreme Court that Indians living in cities could not be officially poor if they spent more than Rs 965 a month, and in villages if they spent more than Rs 781, the Planning Commission showed how insulated it has become. [...] Even by the high standards of insensitive officialdom that we maintain in India, the Planning Commission’s latest appraisal is in a class by itself. The Planning Commission is clearly an idea whose time has gone.

Several periodicals, including Mint, sent journalists to interview the very poor and report their reactions to this news. Some, like the weekly magazine Tehelka, republished sarcastic pieces about the "new Indian rich," that is to say poor people who made a little more than the cut-off initially suggested by the commission, and found themselves north of the poverty line.

All this ensured that a wealth of valuable anecdotal data about the lives of the poor found its way into the newspapers (which are often accused, with some justification, of ignoring the poor at the expense of India's growing consumer class). Yet it might be said that the media's interpretation of the commission's assessment of poverty distorted the public's perception of an issue that requires a little more attention to context. While the commission's claim is definitely debatable – one commentator thought the figures should be doubled – it isn't as heartless as it appears.

Firstly, the commission was drawing a mathematical line not between the poor and the rich, but between the very poor and the rest. Secondly, and more importantly, one might argue that the error made by many journalists was in taking the idea of "per capita" literally and addressing the very poor as individuals. For example, a piece on the New York Times' India Ink site reported the reaction of Pyarelal, a cobbler in New Delhi:

Asked if he knew about the Planning Commission’s projected urban poverty line of 32 rupees a day, Pyarelal berated the government as “heartless.” When asked if 32 rupees is enough to provide three meals and shelter, he angrily singled out the head of the commission, Montek Singh Ahluwalia.

“Mr. Ahluwalia says 32 rupees? I’ll give him 50 rupees. Let them show me that he can find a decent meal for one person with that much. They should be ashamed of such statements. How can they say such things?”

This might not accurately reflect the commission's findings. The panel's head, Ahluwalia, when confronted with this question, explained in the Hindu that it was much more reasonable and realistic to compute the figure for a family than for an individual. He said:

“Many people…have sort of misread the affidavit, and I have heard people say things like, ‘How can you expect anybody to feed a family on Rs. 32 a day?',” he said. “The factual position is that this number is a per capita number …and if you are talking about a family of five, you have to multiply this by about five.

"[...] The Tendulkar numbers are expressed as per person per day, and some people have confused that with what it would require to feed a family.”

The position was amplified by the columnist TN Ninan, who explained in an article in the Business Standard called "Poverty Redefined":

The current ferment is an opportunity to reset the poverty debate, in two ways. First, the focus of poverty measurement has to move from the individual to the family, because the operational unit for living costs is the family, and costs per head are lower for larger families. In the US, which follows this logic, the poverty line is about $11,000 for an individual, but only twice that (about $22,000) for a four-member family. In India, the realistic norm would be a five-member family.

Ninan's suggestion echoed an under-reported part of the commission's statement, which said: "At June 2011 price level, for a family of five, this provisional poverty line would amount to Rs.4,824 per month [about $100] in urban areas and Rs.3,905 per month [more than $80] in rural areas." When put this way, the claim no longer seems as disturbing. Indeed, millions of single-income households in urban and rural areas in India make do on such sums every month.

The meaning of these figures can be cross-checked and better understood when compared with India's per capita income, which in 2011 is estimated to be 54,527 rupees, or a little more than $1,100. If the average income is less than $100 a month, it isn't very shocking that the very poor should make about that much as a household.

The issue then becomes not so much whether the commission is out of touch with Indian realities – it seems clear that it isn't – but whether food subsidized by the government should, at a time when food inflation is above 10 percent, be denied to households making marginally more than the poverty line. This was again a question posed to Ahluwalia:

According to the poverty estimate in the affidavit, the percentage of people below the poverty line, based on 2009-10 data, was 32, seen by many as too small a section of the population entitled to certain benefits. Mr. Ahluwalia stressed that it was incorrect to suggest [...] that the Commission wanted to restrict the food subsidy to 32 per cent.

“In all the internal discussions, I have certainly been quite supportive that we can manage 41 per cent,” he clarified.

It seems, then, that much of the Indian media, by emphasizing a single remark, missed the chance to ask more substantive questions about the poor and government policy. For instance, some commentators took the opportunity to address the more relevant issue of whether the government's public distribution system should be universal, and not targeted at just the very poor, as it has been since 1997. Much more constructive than the ire at the commission's estimates was a proposal endorsed by more than two dozen prominent economists to delink food entitlements from poverty measurement altogether. The Times of India reported:

More than 25 of the top economists of the country have written an open letter against the Planning Commission poverty line and said that the public distribution system should be universalised.

[..] "It is unacceptable and counterproductive to link the official poverty estimates to basic entitlements of the people, especially access to food," they have written.

Advocating undoing the targeted approach for public distribution system, they have written, "It is also widely recognised that the targeted Public Distribution System introduced since 1997 has done more harm than good by creating divisions even among the poor and has led to massive errors of exclusion. Recent evidence clearly establishes that states which have moved towards near universalisation of the PDS have performed much better in increasing offtake and reducing leakages."

With the National Food Security Bill pending, the academics have written, "Restoring the universal PDS appears to us is the best way forward in combating hunger and poverty. This is not only feasible within the available fiscal space of the Union government but must be a policy priority in the backdrop of high and persistent food price inflation."

More here.

And elsewhere there was debate over the government's proposed Food Security Bill, which would cover two-thirds of India's 1.2 billion people and almost double the annual expenditure on food subsidies. Earlier in September the government invited comments from the public on the draft of the measure.

Meanwhile, no matter how the poverty line is calibrated, it seems clear that India is still very far not just from rooting out the most desperate kind of poverty, but also from ending its status, in one observer's memorable but depressing phrase, as the republic of hunger.

(Chandrahas Choudhury, a novelist, is the New Delhi correspondent for the World View blog. The opinions expressed are his own.)

To contact the author of this blog post: Chandrahas Choudhury at chandrahas.choudhury@gmail.com

To contact the editor responsible for this post: Max Berley at mberley@bloomberg.net

-0- Sep/27/2011 22:10 GMT