There are at least 100 million more poor people in India than what official surveys suggest. The committee headed by Suresh Tendulkar had been asked to review the way poverty was calculated and has submitted its report to the Planning Commission this week.
The government identified a person as poor if he could not earn enough to buy a certain number of calories a day. That was India of the 1970s. The Tendulkar committee has widened the scope of household basics to include several other goods and services when counting the poor, including education and health services, a worthy change in a country of growing aspirations.
Illustration: Jayachandran / Mint
As reported in a front-page report in Mint on Wednesday, 37.2% of Indians live below the poverty line compared with 27.5% counted by the old method. Rural poverty is a far bigger problem than assumed: 41.8% rather than 28.3%.
The Tendulkar committee has recalculated poverty levels going back to 1993-94. This exercise shows that poverty ratios have been falling: There is little reason to draw broad anti-reform lessons from the new poverty numbers.
A hundred million more poor people may lead to demands for more funds to social sector programmes such as the Sarva Shiksha Abhiyan, the mid-day meal schemes and the National Rural Employment Guarantee Scheme.
The broader view of poverty is in line with attempts by Amartya Sen and others such as philosopher Martha Nussbaum to link development with human freedom and capabilities, rather than with incomes and consumption alone. The inability to get education and health services is a huge blow to the ability of the poor to participate in the modern economy.
Kaushik Basu, an economist in the Amartya Sen mould, took over as the government’s chief economic adviser almost the same day that the new poverty report was submitted to the Planning Commission. These could be indications of what the second Manmohan Singh government defines its development challenges to be.
It is wrong to conclude from the new poverty estimates that more money needs to be poured into rural schemes. Urban India has been able to move ahead because of its links to global markets and modern technology. India needs to attract more people out of low-productivity jobs on the farm and into productive employment in modern industry and services.
That alone is the long-term solution to poverty.
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