http://ngkjrs69.sulekha.com/blog/post/2012/03/imaginary-line-of-poverty.htm

Not long ago, the Planning commission of India cut a serious joke by creating a new Poverty line at Rs 32/- per day and drew flak from all corners of the country. The commission was busy quibbling about the details of defining the poverty line. They came out with a new figure of Rs 28/- yesterday. With Bangladesh spoiling the dreams of India’s Asia Cup win, this story did not hog the limelight yesterday.



I am not an economist as our honourable PM is, who is supposed to be an expert in this field but did little with his expertise to improve the situation in our country. As a layman, i am perplexed at the manner in which this poverty line is defined. Do these statistics really measure the right factors and if it measured, is it being done accurately? With these measures, what are we trying to do? Don’t these measures indicate only the buying power of a household?



As I understand, this is the measure to indicate the Government on providing the subsidies to the really needed. However, by keeping this number low (obviously an imaginary number or a fake number), are we trying to prove the world that there are no poor people in India? Yet, the subsidies are not stopped. There are confusions in the manner these are calculated. Imagine a family with an income of Rs 4800/- per month and another with Rs 5000/-. Who is poor? Going by numbers obviously the first family is. However, imagine the expenses of the first family is less (considering the fact that they stay close to their workplace whereas the second family travels a longer distance thus paying more on transportation), who is poor here? Hence individual comparison is not ethical.



The calculation of these numbers was developed in the 70s. They decided the line according to average consumption expenses of households where per capita consumption of 2400 calories in cities and 2100 calories in villages. I am still confused why the calories intake in urban has to be more than the rural area. Since then, this line has been updated using consumer prices indices only.



Various committees have come out with different figures of poverty line by measuring it in variety of methods. The official line delivers a poverty rate of around 32% of the population. The Suresh Tendulkar committee estimated it at 37% (based on calories consumption), while another led by NC Saxena said 50% (based on nutrition values), and in 2007 the Arjun Sengupta commission identified 77% of Indians as "poor and vulnerable". The World Bank's PPP (Purchasing power parity) estimate of Indian poverty was higher than 40% in 2005, while the Asian Development Bank arrived at almost 50%. The UNDP's Multidimensional Poverty Index finds the proportion of the poor to be higher than 55%.



Congratulations to you if you had not still fainted after going through the figures. Is it not the time to separate the people’s real needs from the arbitrary assessments of poverty which have guided our Government so long? With the changing lifestyle, i am sure the calorie consumption too would have gone for a toss by now. Under such circumstances, what can these numbers have something to do with the calorie consumption?



This figure is a bone of contention to the State Governments too. The categories of BPL (Below poverty line) and APL (Above) were made to discriminate supply of cheaper grain (subsidized) through PDS. With federal system in practice, the responsibility of delivery of such services and goods to BPL lies with State Govts whereas Central Govt only allocates resources. Although the BPL is decided by the sample survey, the number of households (in reality) in BPL is far high from this imaginary figure.



Should we not include the shelter, clothing (power of buying here?), jobs, primary health care, basic amenities like availability of drinking water, toilet, electricity etc.,? A recent survey showed that 40% of 2011 batch MBAs are jobless as they could not find one. Where are projects to provide employment? Every year, a team of 9 million freshers seek employment. What are the plans to deal with such a situation?



How about the growing disparity between the rich and poor? The rich is becoming richer and the poor stays there. The volume of middle class families in India is increasing in multiple folds from year to year. Corporate Social Responsibility is one factor that has no mention among Indian entrepreneurs but for a few. Unless the corporate come out and give it back to the society, things will not improve.



Intentionally, i am avoiding the issue of corruption here as it is known to everyone that this has a major role to play, however, we are indifferent towards corruption as we have accepted this as a walk of life. Let the academic debate continue on the definition of poverty line. However, it should not be cooked to show a perception that the volume of poor population is getting shrunk. This is nothing short of cheating the public. The expertise of our super economist PM should not be wasted in cooking up figures but to be put in use as to give this country some constructive solutions!