Experts question poverty definition as more find it hard to make ends meet7 min read . Updated: 03 Mar 2008, 11:41 PM IST
Experts question poverty definition as more find it hard to make ends meet
For 28 days every month, 35-year-old Bimlesh Singh makes the rounds of five houses, washing dishes and clothes and mopping the floor, for about Rs2,600. Her husband does odd jobs that fetch an additional Rs1,000, leaving her household with a per capita income of Rs720, which is more than Delhi’s prescribed poverty line of Rs613 per capita per month.
India’s poverty line is a monthly income that allows a person, such as Singh, to consume a basket of commodities, and a bit of health care and education, that gives her daily 2,100 calories in urban areas and 2,400 calories in rural, and keeps her alive and presumably well enough to work.
Singh, illiterate and married at 13, comes from a village near Agra. She hasn’t heard of the poverty line, and neither is she aware that, officially, she is not poor — unlike the 1.6 million residents of Delhi, or the 239 million Indians identified in 2005 to be living below the poverty line. But she considers herself poor anyway, and probably captures the extent of underestimation of official measures.
“I start late, after sending my three boys to school, else I’d do six houses and earn some more," she adds.
Will that make her rich? Or, would she need affordable medicines, good schools and a home of her own? Singh laughs: “All of these." Sangam Vihar, where she lives, is one of Delhi’s largest unauthorized colonies that might be regularized soon.
Like Singh, officials at the Planning Commission, the country’s top planning body, who compute the poverty line, have long debated what makes a person poor.
India measures poverty through a minimum household consumption level estimated by the National Sample Survey Organisation, or NSSO, part of the Central Statistical Organisation, the apex statistical body. The national poverty line, currently defined at Rs450 per person per month, is based on the average of the 29 states and six Union territories. This is periodically updated by an expert group, using state price indices. The rural poverty line is estimated using the consumer price index for agricultural labourers and that for urban areas, by the consumer price index for industrial workers.
But, what has not changed is the calorie count assumed in the original poverty line in 1973. This has been increasingly called into question as successive rounds of NSSO data have shown up significant changes in consumption patterns as well as a change in work pattern and age groups.
So, the new expert group, set up last year, is trying to come out with a new line that is comparable across states, with perhaps a new calorie count, and not simply recalculating the state poverty lines based on new prices, say Suresh Tendulkar, chairman, the National Statistical Commission, who heads the expert group, as well as Abhijit Sen, member, Planning Commission.
“The absolute poverty standard," says Tendulkar, “has remained unchanged for a variety of reasons, but it cannot be. So, (the) redrawing of the poverty line is being discussed."
The terms of reference of the group are clear: How to work out the state lines and the proportion of the population below the lines, and if need be, to redraw the line itself. It won’t be easy.
Since 2000, when estimates found poverty to have increased or remained stagnant, there have been controversies over the estimation methods.
These controversies, argues poverty expert Angus Deaton, Dwight D. Eisenhower professor of international affairs, Princeton University, “has meant other important issues have received less attention — such as poverty lines across states and sectors, updating of price indices over time, and understanding the decline in cereal consumption."
According to Tendulkar, “the 1993 expert group had pointed out other non-income indicators to measure poverty, but the Planning Commission has been essentially looking at the income method, so we’ll probably continue with that."
Also, he says, there is a problem of missing information. NSSO, which carries out market surveys, is facing a shortage of investigators. “We need an agency that is spread out over the country and has been doing this exercise for some time. It could even be outsourced," he added.
Economists argue that there is a need to revisit the definition of poverty, especially to address a piquant issue: Despite hundreds of schemes to help the poor, poverty isn’t declining fast enough. More precisely, what has caused some 10-15% of the population to remain steadfastly poor? Answers to these questions, they say, are linked to the way governments in India have historically looked at or estimated poverty. “There is a need to find out not only how many are poor, but who and where are the poor and why they remain so. Policymakers have not done a good job of identifying the poor so far," says Abu Saleh Shariff, chief economist at the National Council of Applied Economic Research (NCAER) and member of the 13th Finance Commission.
While the Planning Commission estimates the poor, state governments identify them, by making a list of the poorest on the basis of 13 parameters that include issues such as landownership and female members. But, these lists are more of a census and are allegedly inflated. Pronab Sen, chief statistician of India, agrees that poverty line needs to be recomputed, but argues that “the progress of anti-poverty schemes is a monitoring and evaluation issue, and much depends on the honesty and the sincerity of the state administration and panchayats."
Economists say the calorie-based poverty line or the international dollar-a-day approach is an arbitrary and error-prone one. Anirudh Krishna, associate professor, Terry Sanford Institute of Public Policy, Duke University, says: “No one except some statisticians places much faith on such measures. Even the consumption-based measures are unrelated to people’s own understandings of poverty, which are about possession of assets. For instance, he has a roof over his head, I don’t."
Shariff says estimating poverty in terms of expenditure may not reflect a movement out of poverty, as daily-wage earners often pay 200-300% more for food items because they buy in small quantities.
The problem thus lies in consumption-based measures, says Krishna, which “abstract from lived reality in order to derive something that can be ‘objectively’ measured", leading to errors in selecting anti-poverty scheme beneficiaries or disagreements over the numbers of poor. Krishna argues for poverty-mapping. In other words, if governments do not know why and how people in a region fall into, or climb out of, poverty — and in some regions routinely so — they can never design effective anti-poverty schemes.
While growth can sometimes help people climb out of poverty, it is not a sufficient condition to prevent descent into poverty, says Krishna who is working on supplementing conventional measures with a set that’s closely related to Nobel laureate Amartya Sen’s capability concept.
Sen said the ability of the poor to participate in economic growth suffers “if one is illiterate or unschooled…or weakened by undernourishment and ill health, or if one suffers from debt bondage."
Another way to measure poverty better, suggests NCAER’s Shariff, is to map vulnerability, which can even affect the relatively well-off. A recent NCAER survey on financial protection, funded by insurance provider Max New York Life, found 24.6% financial vulnerability among Indians, which is higher than the official poverty estimates.
What makes a person vulnerable to income shocks and, therefore, poverty? Health and regional economic situation can be as important as community concerns in determining vulnerability. Maharashtra generates three times more jobs than Bihar, so a Maharashtrian would be less vulnerable than a person from Bihar to sudden income shocks, says Shariff. Among economic classes, daily-wage workers are clearly the most vulnerable.
Vulnerability can increase even when the economy is growing at 9%. Jayati Ghosh, professor, Jawaharlal Nehru University, says, “the recent inflation and foodgrain supply problems have brought food security back to the centre stage of policymaking".
Sharif says poverty figures now do not identify the poor with social, economic and geographical characteristics. A simple way for that, for instance, “would be to identify the assetless, the migrants and the sick, or create a vulnerability index," he says.
That would benefit Singh. She doesn’t care about free foodgrains or kerosene. Even on winter evenings when she is going home, her clothes wet from all the washing, she’d be thinking of the savings. “I’d be shivering all the way home in the bus, but what else can I do?" she asks. For now, all she wants is that piece of land beneath her little home.