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Measuring poverty: Gujarat model shows the way

Measuring poverty: Gujarat model shows the way
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First Published: Fri, May 18 2007. 12 11 AM IST
Updated: Fri, May 18 2007. 12 11 AM IST
Gujarat’s frustration with its poor has turned into a new poverty measurement tool for India.
Struggling with the Centre’s inability to force a national consensus on revising the country’s poverty level, which was last defined 34 years ago, the state has tweaked standard socio-economic measures to assess the number of its own poor, grading them by their level of deprivation.
A senior official of the Planning Commission, who did not wish to be identified, said the apex planning body had been so impressed by Gujarat’s effort that it is now recommending that as the standard for all the other 28 states.
The poverty line, computed in 1973-74, is currently defined as an average minimum income of Rs450 a month that allows a person to consume a certain amount of food and other services.
Now, Gujarat will be the first state to employ a below the poverty line (BPL) criterion, initiated by the rural development ministry in 1992, to rank the poor and direct spending programmes on poverty alleviation.
According to latest estimates of the commission, made from the consumption expenditure survey carried out by the National Sample Survey in 2004-05, there are between 226 million and 282 million people under the poverty line in India. It is unclear how the numbers will change under the BPL criterion.
India’s chief statistician, Pronab Sen agrees that the BPL “captures the poorest of the poor”, though he argues that it adequately serves the purpose of identifying beneficiaries for welfare schemes.
Since the new data will be available online for public access, it will also ensure a transparent implementation of the social spending by both the state government and the Centre. Santosh Mehrotra, senior consultant for rural development in the commission, says the transparent process adopted by Gujarat has the potential to cut out corruption.
The move is also expected to clear the logjam on Central spending on welfare programmes for the poor. The finance ministry has been holding back spending on the grounds that the targets in states were not clearly defined. As a result, in the last few years, actual annual spending has been lower than the amount budgeted initially. Some other states have also sent in estimates of their poor, but they have employed the standard practice of measuring poverty by consumption expenditures and not differentiated among the poor based on their economic status.
Apart from several state government schemes, six Central schemes are directly affected by a lack of clarity on how many Indians live below the poverty line and where.
They are: the national old age pension scheme, the family benefit scheme (on death), Annapurna foodgrain scheme, the Indira Awas Yojana for low-cost housing, Swarnajayanti Gram Swarozgar Yojana, and the most important, the targeted public distribution scheme—introduced in 1997, replacing the existing PDS, whereby government started providing heavily subsidized foodgrain only to the poor.
The BPL population is estimated, under 13 guidelines developed in 1992 by a task force set up by the rural development ministry, by every state separately.
However, the first time this line was computed in 2002, on the eve of the 10th Plan, it ran into trouble as several public interest litigations were filed against it by civil society groups such as the Right to Food. This resulted in the Supreme Court staying it till November 2006, when it was finally vacated.
Only six states—Jharkhand, Arunachal Pradesh, Madhya Pradesh, Punjab, Uttarakhand, and Uttar Pradesh—have since submitted their BPL lists. Some others, such as Gujarat, Rajasthan and Orissa, are now finalizing theirs.
With the help of the Institute of Rural Management (Irma), Gujarat has adapted the 13 criteria set by the ministry, which takes into account a range of deprivation from the status of children, type of indebtedness, literacy status and sanitation.
It has also used an easily understandable single-page query module, added a few additional criteria such as family status and composition (headed by a widow or having a member with a physical handicap, for instance) and surveyed its entire rural population of 6.8 million households.
The resultant list, with a score ranging from 0 to 52 (the higher the score, the less the vulnerability), has been ranked in order of high deprivation and has been put up on the site of its rural development department as also in offices across states. While the number of people will be known only after the state submits its list, the average score comes to around 16, which implies high poverty.
The commission estimates Gujarat’s rural poverty at 12-16%, or six-eight million, based on two methods of calculation. According to S.C. Gautam, economic adviser, ministry of rural development, the BPL card is the ticket to many rights and entitlements for the underprivileged population, thus making it an easy prey to corruption.
The Gujarat experiment, said Y.K. Alagh, chairman of Irma and original author of the poverty line in 1979, is a step in the right direction because “future exercises on poverty and its indicators must unequivocally define the rights of sections of population that are more vulnerable than others”.
A task force to look at the BPL guidelines for the 11th Plan will be set up soon, said Mehrotra.
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First Published: Fri, May 18 2007. 12 11 AM IST