Sep 24, 2011

The Poverty of Estimates

Everyone seems upset. Ironically, more upset with the definition of the poverty line and the criteria that has now become the butt of a national joke, are the economists and of course some members of the high-profile National Advisory Council. They have been doing the rounds of the TV channels expressing dismay at the threshold of what Planning Commission constitutes as the poverty line.

I was amused watching them express their concerns. In many ways it is like shedding crocodile tears. Amused because these were the same people who were either responsible for drafting the poverty line or were in a way the silent spectators. They had never challenged the 'below the poverty line' (BPL) criteria. Perhaps by remaining quiet or turning a blind eye to the gross injustice being perpetuated by the planners on country's vast army of poor and downtrodden, these economists stood to gain. I see no other reason why the entire community of economists had silently been using the same fraudulent BPL norms that they now find fault with (believe it or not, some of the most distinguished names are associated with the formulation of the poverty line).

This is what constitutes conspiracy of silence.  

I have no hesitation in saying that the entire controversy following the questioning of the BPL norms by the Supreme Court has actually brought the economist class into disgrace. For nearly 50 years, they had not only prepared but also backed a bogus poverty estimate. They went on using the same useless poverty estimates into all their economic analysis. I wonder with such a faulty foundation what kind of analysis these economists must have produced. How reliable is their analysis, perhaps we will get to know provided the Supreme Court now gets into questioning the merits of the econometric analysis (that uses the poverty data) has been churned out in volumes over the years.

I have also keenly followed many of the quick news analysis that many economists and others have written. This was expected. The best way to overcome your guilt is to paint a picture that show how pained you are now to know that Planning Commission's poverty line for urban areas is Rs 31/day and Rs 25/day for the rural areas. If you are earning more than this, you are above the poverty line. In reality, this estimate is nothing but a revised estimate based on the current prices. Otherwise, Tendulkar committee had earlier drawn a line of Rs 19 per day for the urban areas and Rs 14 for the rural areas. The parameters that go into defining this BPL criteria remain the same. (Spend Rs 32 a day? Govt says you can't be poor Times of India Sept 21, 2011 http://bit.ly/qMWYRc).

In an interesting piece Playing with numbers, and lives (Indian Express, Sept 23, 2011) Rajya Sabha MP Brinda Karat writes: "The National Advisory Council, headed by Sonia Gandhi, had in its draft also included a clause that 'identification will be based on the criteria notified by the Central government'. One wonders whether the veteran activists who were part of the drafting committee in NAC were unaware of the poverty line which at the stage of their drafting was even lower than the Rs 26 line they are so articulately criticising today." She is referring to the public outcry being made by Aruna Roy, Jean Derez and N C Saxena.

I have always considered India's poverty line to be actually a starvation line. For over a decade now, I have been questioning the wisdom of fixing a stringent poverty line in which you can't even feed a dog. How can a human being survive in that amount? But believe me, none of the economists or NAC members (I am not sure of there is an exception) ever stood up to pose the same questions. They were very happy following the poverty prescription laid out. They obviously stood the gain by not questioning the poverty norms.

I have been asked as to what I think should be the way to determine real poverty. You can read what I had to say when the NAC came up with what I consider is yet another faulty path to removing hunger (Path to hell they say is paved with good intentions. http://bit.ly/iB2HDj). I also draw your attention to another article How to keep poverty low http://bit.ly/o60BsA. In my opinion, what India needs is not one poverty line. We need two lines: Poverty Line (what Arjun Sengupta committee worked out at 77 per cent population unable to spend more than Rs 20 a day), and an Antyodaya Line comprising 37.2 per cent of the population (which incidentally is the present poverty line).

14 comments:

Anonymous said...

Great article...!!

INDRA VIKRAM said...

भारत के जनता माँग करती है की देश के सारे 'मुफ्तखोर कर्णधार' (मोंटेक सिंह के नेतृत्व में) 'मात्र एक सप्ताह' तक '32 रूपये रोज' में गुजारा करके के देश के गरीबों के सामने अपने फैसले का औचित्य सिद्ध करें....!!!

FACE IT said...

I agree to your views...I donn understand, why these people are called well educated and qualified enough to represent India in numbers when they don't even understand the practicalities..m sure none of them can buy even a coffee for self in such a high amount of Rs. 31...absolute heartless and impractical analysis...

Anonymous said...

Why MPs are not enjoing 32 rs/day stipend with subsididy on parliment mess. its too much......
plese stop making fun of Indians with their votes

Anonymous said...

Dug deep..Bull's eye! Keep going!

ALWAYS YOURS said...

well said

Sujai SD said...

I doubt the poverty line is so stringent because the government could claim poverty India has come down in numbers.

An other way of claiming success in poverty control.

Statistics/Numbers speak in future.

S. Majumdar said...

Montek Singh and the economic adviser kaushik basu must be sacked first.

they are just warming the seats and every time you ask, they give vague replies saying there is no solution. Montek even said rise in petrol price is a good thing.

shame on them

Anonymous said...

This is preciously what happens when you make your calculations under extraneous pressures and sitting in air conditioned rooms getting fat salaries for the job and cars to pick you up and drop. Even a person like Roy has sold herself shows the power of the ruling class and their potential to manipulate effectively. I would advise the whole NAC to be divided into two groups one going to rural area with Rs.25 per day per person for one week and the other spending one week in the urban area with Rs.31 per day per person basis. One group to be headed by Sonia Gandhi and the other by Montek Singh. I am pretty sure within a week they will have to drastically revise their data about BPL. These politicians have completely lost touch with the ground realities.

Ravi said...

Hi All,
Problem here in India is we are having degrees not education. As well as We do not have the guts to stand against injustice. For few days our media, intelligentsia people will shed crocodile tears. If you want to know poverty then no need to go to rural areas. I know all hunky funky educated people will have problems to travel where there is no roads,electricity. SO i am suggesting better search in metro then defien the criteria.

Anonymous said...

MONTEK SINGH is very good in his work except 1 thing that he is poor with mathematics while doing calculations for others (Poor People)....... when it comes to his own pocket he calculates very wisely.....

Anonymous said...

even their dogs would be having a better amount spent on a per day basis...But common man is a rung lower on the ladder for these people....

Anonymous said...

Even their dogs would be having a better amount spent on a per day basis...but common man is a rung lower on ladder for these people...

Anonymous said...

(1) We need to plug the leakages of MNAREGA fund. Nothing is being done!

(2) We need to safeguard food grains we grow in our country. We let hundreds of thousands of tonnes of food grain rot every year. Nothing is being done to prevent rotting of grains.

(3) Food Security Bill: If we take care of above problems then there will be no need of Food Security Bill at all! If implemented, I am worried that:

(a) It will open up avenue for yet another mega scam
(b) It will have detrimental effect on our already troubled economy
(c) Tax burden on all of us will increase.

For defining Poverty Line, we must take various aspects and not just the calorie, which human needs for surviving, into consideration. These may include:

(1) Cost of Food
(2) Cost of Water and Electricity
(3) Cost of Heath Care and Hygiene
(4) Cost of Cooking Fuel
(5) Cost of Residing
(6) Cost of Education for Children