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Life on the Rs32 line

Life on the Rs32 line
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First Published: Wed, Oct 12 2011. 11 27 PM IST
Updated: Wed, Oct 12 2011. 11 27 PM IST
Somehow, the numbers don’t add up. In a city where you can get a dinner for two at a posh restaurant for Rs80,000, a poor individual is expected to make do with Rs32 a day. This apparently absurd figure is the benchmark for urban poverty, according to the Planning Commission (for rural India, the figure is slightly lower at Rs26 per person a day). As Niranjan Rajadhyaksha argued on Mint’s website last week, that figure gives an unrealistic estimate of India’s poor, and needs revision, but not for the reasons critics have cited.
Consider literary essayist Pankaj Mishra who picked up another indicator of inequality—the presence of a Western boutique in Himachal Pradesh and the Rs32-a-day figure. Also, in the left-leaning British daily, The Guardian, he drew on the Delhi-based academic Utsa Patnaik’s research to argue that the economic reforms of the past two decades have worsened the plight of the poor. Patnaik has spent much of the past 20 years criticizing economic liberalization, highlighting the decline in calorie intake, to make the stark point: Indians are getting less energy, they remain hungry. Ergo, reforms are failing. That, ultimately, is the central point of Patnaik’s argument.
Several problems arise: first, the presence of a boutique in Himachal Pradesh or Hauz Khas has little to do with what Indians eat; absence of one won’t guarantee the other, nor is the other due to the first factor. Even if there were no boutique in India, it wouldn’t make a difference to consumption patterns of the poor. The boutique’s presence in an unlikely part of India does, however, suggest that some businessman somewhere thinks there is a market large enough even there, where people want to buy aspirational clothing. Likewise, that Delhi restaurant: if it did not exist, calorie count of the poor wouldn’t rise.
The other problem concerns the use of calorie intake as a measure of poverty. It is nobody’s case that India has eliminated poverty. Poverty is ever-present, and always visible, a constant reminder that things aren’t going well for all Indians. Even so, Patnaik’s reliance on declining calorie intake doesn’t tell the full story. Angus Deaton and Jean Dreze have unpacked statistics to reveal something interesting: that calorie intake of Indians has fallen not only among the poor, it has fallen across all income levels. Furthermore, fat intake has increased.
Patnaik has also made much of the fact that the consumption of staple cereals has fallen among the poor. But as another economist, Surjit Bhalla, has shown in the past, that has to be seen in conjunction with higher consumption of other foods, including milk, eggs and meat. The uninitiated might think that Indians are eating less when they see a study of Mahendra Dev and Robert Evenson, which shows how among the poorest 30% of Indians, the share of household budgets spent on food has declined from 81.22% in 1972-73 to 62.71% in 1999-2000. But in the 19th century, a German statistician called Ernst Engel observed that as income rises, people spend a lesser proportion of it on food. Indian families, even the poor ones, are no different in their expenditure patterns, from what Engel observed. Increasing evidence suggests that while the share of staple cereals has remained the same or sometimes fallen, consumption of other superior foods has been increasing. Economists have another term for it, the so-called Giffen Paradox, where people substitute inferior goods for superior goods, even if the price rises. More eggs are being eaten, for example.
Relying on calorie consumption has a political purpose: to seize an indicator to show that after 20 years of reforms, India may actually be worse off. That might sound like a fine debating point in academic ivory towers, but it won’t lift more Indians out of poverty. Worse, if some populist politicians were to grab that idea, they might think of undoing economic reforms. That will push more people into poverty. Undoing reforms—that is the political import of calories.
India remains a poor country, with more people living in dire poverty than anywhere else in the world. But calorie intake is an inadequate indicator to measure it; to surmise from declining calorie intake that Indians are doing worse than a decade ago is either wrong or disingenuous. Mohandas Gandhi got it right when he said: “Whenever you are in doubt, apply the following test. Recall the face of the poorest and the weakest man whom you may have seen, and ask yourself if the step you contemplate is going to be of any use to him. Will he gain anything by it?…Then you will find your doubts…melting away.”
Would undoing reforms really help the poor and the weak? Will it not pull away the ladder that is helping many Indians emerge from absolute poverty, creating a better life for their family? That question is worth more than Rs32, more than Rs80,000.
Salil Tripathi is a writer based in London. Your comments are welcome at salil@livemint.com
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First Published: Wed, Oct 12 2011. 11 27 PM IST