Great shrillness has marked the current furore over the Planning
Commission’s latest poverty estimates. No surprise, therefore, that
understanding and wisdom have flowed in an inverse proportion.
Surprising and sad, however, is the fact that some political leaders
have at times spoken in a manner deeply hurtful to the aam aadmi and others have shown complete lack of understanding of what these estimates are all about.
A Committee chaired by one of India’s finest economists, former Chairman
of the Prime Minister’s Economic Advisory Council and the National
Statistical Commission, the late Suresh Tendulkar, computed poverty
lines for 2004-05 at a level that was equivalent, in purchasing power
parity (PPP) terms, to one U.S. dollar per person per day, which was the
internationally accepted poverty line at that time.
Tendulkar line
PPP refers to a method used to work out the money that would be needed
to purchase the same goods and services in two places. Across countries,
this is used to calculate an implicit foreign exchange rate, the PPP
rate, at which a given amount of money has the same purchasing power in
different countries. The 2004-05 Tendulkar poverty line was Rs.16, which
in PPP terms, is equivalent to one U.S. dollar per person per day.
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There could not be a more ridiculous tragedy of errors on all sides. All
that the Planning Commission has done is to use the most credible
source of consumption data available in the country (the National Sample
Survey Organisation) to compute poverty estimates that are both on
parity with international standards and enable comparisons within India
over time and across States. There is no value judgment being made about
the adequacy of this amount of money for any meaningful purpose. All
that is being done is to provide an estimate (using the very same
methodology) that allows one to compare the number of people below a
certain consumption level (aka poverty line) in 1993-94, 2004-05 and
2011-12. Nothing more, nothing less.
Huge decline
The data show that the rate of rise of consumption expenditure in the
last decade far exceeds the rate in the previous decade. While those
below this consumption poverty line actually went up marginally between
1993-94 and 2004-05, they fell dramatically from 41 crore in 2004-05 to
27 crore in 2011-12. This huge decline in the number of people below
this poverty line needs to be taken very seriously.
Ascertaining precisely the contribution of the Central government in
this achievement is not a straightforward matter, since it is not
government action alone that determines the course of an economy. And
State governments also play a crucial role. This is a matter of research
and more satisfactory answers will emerge only over time.
However, there can be no denying that Verdict 2004, in which the people
of this country voted with their feet to reject the slogan of India
Shining, placed great public pressure on the new government at the
Centre to move in the direction of more inclusive growth. And it is
clear that since 2004, there has been an enormous and unprecedented rise
in expenditure by the Government of India on programmes of social
inclusion, such as MGNREGA. There is also overwhelming evidence of a
rise in wages of the poorest people in rural India. How much of this is
directly or indirectly attributable to MGNREGA is another scholarly
question, on which divergent views have been expressed. But no one
disagrees that MGNREGA certainly played a role here. Nor can it be
denied that during this period India became one of the fastest growing
economies in the world.
What is even more important, however, is to clarify what the poverty
line does not signify. Contrary to popular misunderstanding, there is no
suggestion whatsoever that the benefits of government programmes will
be restricted to those below this poverty line. The aim is not, as many
canards make out, to artificially or falsely reduce the poverty numbers
in order to score political brownie points or to bring down the
allocations that have to be made on anti-poverty programmes.
Landmark contribution
Quite to the contrary, the incontrovertibly clear landmark contribution
made by the UPA-II government is that for the first time in the last 20
years, the poverty line has been delinked from entitlements of the
people of India. Indeed, with the 12th Plan, this government has taken
the first steps in acknowledging that poverty is a multi-dimensional
concept that cannot be reduced to consumption expenditure alone. To
illustrate, till now if you were to be regarded as a beneficiary of the
Indira Awaas Yojana (IAY) or the Total Sanitation Campaign, you needed
to possess a BPL card. The distribution of these cards was plagued by
humungous errors of inclusion and exclusion, such that many of the
really poor would not be included but those with muscle power at the
local level managed to hustle BPL cards even if they were not poor.
During the 12th Plan, all this is poised to change with the enshrining
of the principle — “programme-specific indicators for programme-specific
entitlements.” This is a clear recognition that poverty has many
dimensions, each of which is to be tackled by different programmes and
the benefits of each programme will either be universal (as in MGNREGA,
health, primary education, sanitation, mid-day meals, etc.) or be based
on data on specific deprivations such as homelessness.
The Socio-Economic and Caste Census (SECC) conducted by the Government
of India, in partnership with all State Governments, is nearing
completion. The SECC data will be presented in gram and ward sabhas
across the country over the next few months and this will enable a kind
of social audit of this data and foster citizen awareness and
participation in the process. The SECC contains invaluable information
on homelessness, manual scavenging, disability and a host of other
deprivations, all of which are major constituents of poverty. These will
be used to identify the people entitled to specific benefits. Thus, the
homeless will be the beneficiaries of IAY and the disabled will get
disability pensions, irrespective of whether or not they have a BPL
card. The food security legislation will cover 67 per cent Indians,
which is more than three times the number of people living below the
consumption poverty line (22 per cent).
Of course, whether the consumption poverty line should remain as low as
$1.25 is a relevant question. This is the internationally accepted
definition of absolute poverty. There is also a notion of moderate
poverty pegged at two U.S. dollars. But my counter-questions are: even
if we were to raise the poverty line to two U.S. dollars, would it be
right to exclude people from benefits of government programmes such as
PDS, based on such a line? And should a uniform line, at whatever level,
be at all used, in an indiscriminate manner, across programmes? As has
been done for decades now?
To its abiding credit, UPA II answers these questions in the negative.
Almost all its programmes are now either universal or based on
deprivation-specific data. They have no reference to any kind of poverty
line. The data on consumption expenditure poverty are used only for the
purpose of comparison over time and across States. There is a clear
recognition that poverty has many dimensions and data on each of these
are used to guide programmes meant to overcome those forms of poverty.
Thus, nutritional poverty data come from the National Family Health
Survey, housing poverty and disability data from the SECC, sanitation
poverty from the 2011 census and so on.
In fact, the 12th Plan clearly acknowledges that even if the figure of
people below the consumption poverty line were to fall to zero, removing
poverty in India will remain a challenge till every Indian has access
to safe drinking water, sanitation, housing, nutrition, health and
education. That is the challenge we need to focus on, rather than
splitting hairs over the singular estimation of poverty.
(The writer is Member, Planning Commission)
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