Jul 3, 2010

Mainline economists have betrayed the poor; Economic sense has nothing to do with common sense.

Soon after I finished a one-hour panel discussion on poverty on the Lok Sabha TV yesterday, I was deluded with phone calls and text messages complimenting me for having the courage to stand up against the mainline economists. Well, it certainly is a revelation to know that I am not the lone voice.

Yes, I did say that there is a huge gap between economic sense and common sense. And this gap is no where more clearly visibly than the poverty estimates. Economists have actually betrayed the poor by deliberately keeping the poverty line low. And because of that historic blunder the poor will never be able to find schemes and programmes that can actually bail them out.

Let me illustrate this. A person falls in a deep well and cries for help. The well is more than 200 ft deep. An economist passing by hears the cry, and joins the onlookers. He quickly does his arithmetic and asks for a rope that is at least 100 ft long. Onlookers accept because they think an economist knows better. The economist had meanwhile worked out the cost of the rope and the energy that is needed to pull the person out from deep waters, and based on the formula he applied he expects the person to climb the walls of the well for some 100 ft and then catch the rope.

Now you tell me whether it would ever be possible to pull out the person from the deep waters. Wouldn't he eventually drown?

This is exactly what the mainline economists have done. They have estimated poverty in such a stringent manner that even the poor do not realise what has hit them. Some years back, if you remember the estimates, we were told that if a person earns Rs 14 a day in the urban centres, he is above the poverty line. That cut-off line today may be a little higher at Rs 15 or Rs 16. But please tell me how many of you can feed your pet dog in that amount? If you can't raise your pet dog, how do you think a poor person is able to survive in that paltry amount?

Though the economists swear by it, we all know that this imaginary line is meaningless.

It is on the basis of the flawed estimates that the government prepares its programmes and schemes to fight poverty. And as I illustrated with the example of the person who fell in a deep well, the poor can never be pulled out to safety because of the faulty estimates. Most of the programmes and projects would fall short of the real need of the poor.

You can say that the fault lies with that particular group of economists who first gave us the poverty estimates. I agree. But the present crop of economists is no better. They have simply accepted the blunder, and have made no effort to correct the historic wrong. In fact, they go on playing around with the algebra of poverty to suit the powers that be. I am aware that some economists have tried to make an effort but their voice has been marginalised. Their voice of sanity has been simply bulldozed into silence by the mainline economists.

After a lot of wrangling, the Planning Commission has finally accepted Suresh Tendulkar committee's estimates of 37.2 per cent population living in poverty. Earlier the poverty rate was 26 per cent. In the early 1990s, the then deputy chairman of Planning Commission Pranab Mukherjee had reduced it to 19 per cent. I am sure if he had continued to be with the Planning Commission, poverty would have disappeared from India by now!

The economists by and large do not agree with Arjun Sengupta committee's assertion that 77 per cent of the population or roughly 836 million people are unable to spend more than Rs 20 a day. But than that is because there is no convergence between economic sense and common sense. The best and the most realistic estimate of poverty actually came for a retired Supreme Court judge, Justice Wadhwa, who said that anyone earning less than Rs 100 a day should be considered poor. And let us not forget, Justice Wadhwa is not an economist. Probably that's the reason he could be close to reality.

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