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Business News/ Opinion / The troubling figures of poverty in India

The troubling figures of poverty in India

The govt and the middle classes must collectively affirm the right of every person to a decent living standard, and construct its poverty line on this basis

Illustration: Jayachandran/MintPremium
Illustration: Jayachandran/Mint

How much money does a poor person need to survive with elementary human dignity? And have these numbers rapidly come down in the recent years that coincide with high economic growth?

These questions troubled even the middle classes when India’s Planning Commission reported in 2011 to the Supreme Court that if a city dweller earns more than 32 a day and a villager 25, she is not poor. This affidavit was widely reported: therefore not just judges but ordinary citizens understood for the first time in simple language how governments estimate poverty in India. And national outrage resulted.

The same poverty line is the basis for new claims by the Planning Commission that the last 10 years have seen significant declines in the level of poverty in India. Since the data on which these claims are founded are based on official National Sample Survey Office (NSSO) studies, we can accept their findings at face value. But the problem is how we interpret the data. Does the data really confirm that India has 138 million fewer poor people compared with 10 years ago? I think surely not. What it does indicate is that millions of poor people have become somewhat better off in these 10 years, but we must recognize that the majority of them have still not been lifted out of poverty.

The crux of the problem goes back to how poverty is measured, and where the poverty line is fixed. The minimalist interpretations of poverty on which the 32 and 25 daily expenditure caps were fixed in 2011 were based on the Tendulkar committee report, and the same criteria are the basis of the current interpretations of rapidly declining poverty.

Such low interpretations of poverty lines have been a standard and recurring part of planning and budgeting in this country for several decades. Many official committees have published long reports, difficult to understand by anyone who has not had a formal training in economics. These have estimated poverty from national sample surveys of consumption, income and expenditure. Based on these estimates, planners would calculate that a certain percentage of the population is poor. Lay people usually accepted these estimations at face value. Debates about these estimates tended to remain confined to somewhat opaque academic literature, isolated from lay people—until recently.

When the Supreme Court in 2011 asked the government to explain how it estimates the number of poor households in the country, the Planning Commission replied that 25 and 32 a day for rural and urban households, respectively, “ensures the adequacy of actual private expenditure…on food, education and health". Our core disagreement relates to how the Tendulkar committee report, on which the Planning Commission bases its current estimates, calculates what expenditures are considered “adequate" for a poor household to live on.

There is an extraordinarily circular argument used to justify its computations. The committee calculated the median expenditures on food, education and health, which means half the population spends less than this amount. They then went on to interpret these median expenditures as “adequate". On this basis, for instance, it allows less than 1 a day for health expenditure, barely enough to buy an aspirin. The word used by the committee is “normative". In economics this means something that involves a value judgement, as opposed to matters of fact. In simple words, the committee, and the government that accepted its findings, judges that such abysmally low expenditures are morally sufficient for the poor to live on.

The assumption that it is all right for poor people to live on so little is the problem we have with the recent estimates of declining poverty. On the one hand, middle-class aspirations of living levels “adequate" for us have climbed to global standards, but we believe it is fine for the poor to subsist on cheap rough food, poor quality education, open defecation, fouled drinking water, sub-human urban housing, and almost absent public health care.

Before we can hastily conclude that poverty is indeed vanishing from our land, both government and the middle classes must collectively affirm the right of every human being to a decent living standard, to nutritious and diverse food, to safe housing, to clean water, to quality education, to healthcare, and construct its poverty line on this basis. Only when people are able to access decent wages, sufficient food, good education, healthcare, decent housing, clean water and sanitation, should they be deemed to rise above poverty. That clearly has not yet happened for most among the millions that the Planning Commission claims have been freed from poverty.

Harsh Mander is a former member of the National Advisory Council.

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Published: 26 Jul 2013, 06:28 PM IST
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