The
Planning Commission's recent affidavit to the Supreme
Court stating that a person is to be considered 'poor'
only if his or her monthly spending is below Rs.781
(Rs.26 per day) in rural and Rs.965 (Rs.32 per day)
in urban areas, has exposed how unrealistic 'poverty
lines' are. Some television channels assumed that these
figures covered food costs alone and showed how they
could not meet minimal nutrition needs at today's prices.
These paltry sums however are supposed to cover not
only food but all non-food essentials including clothing
and footwear, fuel for cooking and lighting, transport,
education, medical costs and house rent. The total is
divided Rs.18/ Rs.14 for food and non-food in towns
and similarly Rs.16/Rs.10 in rural areas, and includes
the value of food that farmers produce and consume themselves.
Even a school child knows that working health cannot
be maintained, nor necessities obtained, by spending
so little. Amazingly, however, 450 million Indians subsist
below these levels. One cannot say that they 'live'
in any true sense: their energy and protein intake is
far below normal, they are underweight, stunted, subject
to a high sickness load but without the means to obtain
adequate food or medical treatment. The majority belong
to the Scheduled Castes and Scheduled Tribes. The official
poverty lines do not measure poverty any more; they
measure destitution.
The outcry against calling these destitution lines,
'poverty lines', is justified, for true poverty lines
are much higher than these, and show 75 percent of all
persons to be poor. Per head energy and protein intake
has been falling for the last two decades as the majority
of the population is unable to afford enough food. With
60 million tons of public food stocks, far in excess
of buffer norms, piled up by mid-year, the sensible
policy is to do away with targeting and revert to a
universal distribution system, combining it with an
urban employment guarantee scheme. Unfortunately the
neo-liberal policy makers today ask the wrong question:
'How can we reduce the food subsidy?', and not the right
question: 'How can we lift the masses of India from
the current level of the lowest food consumption in
the world, even lower than the least developed countries''?
Members of the Planning Commission and the Tendulkar
Committee are experts, so how have such laughable figures
of minimum cost of living emerged from their statistical
labours? The fact is that over thirty years ago the
then Planning Commission made a mistake of method, and
the present Commission stubbornly continues to cling
to that mistake despite its being repeatedly pointed
out by many, including this author (The Republic of
Hunger,2004). The mistake was to change the definition
of poverty line and de-link it from nutrition standards.
The original definition of 'poverty line' was a sensible
one, based on an Expert committee recommendation in
1979: using the National Sample Survey data on consumption
spending, that particular observed level of total monthly
spending per person, is to be called the 'poverty line',
whose food spending part allowed a person to obtain
2400 kilo- calories energy per day in rural and 2100
kilo-calories energy per day in urban areas. Later the
rural figure was scaled down to 2200 calories. The Commission
accepted the Expert Committee's nutrition based definition
but applied it only once, to the 1973-4 data, to obtain
correct monthly rural/urban poverty lines of Rs 49 /Rs.56
at which 2200/2100 calories were accessible, and found
that 56 percent of rural and 49 percent of urban persons
spent less than this, and so were poor.
Then the Commission, for reasons unknown, changed the
definition in practice, and never again directly looked
at the total monthly spending which permitted nutrition
'norms' to be maintained, even though every five years
the required information on this for every spending
level was available – the physical quantities of food
intake, and the corresponding daily average energy,
protein and fat. The definition the Commission actually
adopted was that the 1973-4 poverty lines were to be
adjusted for inflation using a price-index, regardless
of whether the lines so obtained still allowed nutritional
standards to be met. Price index adjustment is being
followed for the last thirty years, producing the present
absurdity of Rs26/32 as rural/urban daily poverty lines.
Why these economists should have such faith in the ability
of price indices to capture the rise in the cost of
living is not clear. Price indices are needed for short
period adjustment and are used for dearness allowance
calculation, but they do not capture the actual rise
in the cost of living over longer periods of time. The
starting gross monthly salary of an Associate Professor
in a Central University in 1973 was about Rs1, 000 which
was quite adequate, since ration cards could be used;
on this income one could even run a car. Applying the
Consumer Price Index for Urban Non-Manual Employees
which has risen 17- fold by 2011, the equivalent monthly
salary for an Associate Professor joining now should
be Rs.17, 000 on the Planning Commission's logic. But
this would not support the most modest middle-class
life-style of four decades earlier. The newly appointed
Associate Professor's actual salary today is three times
higher, thanks to the Pay Commissions which have periodically
hiked salary grades.
Yet denying all experience and evidence, these economists
assert that mere price-index adjustment is enough to
obtain current poverty lines from those of 40 years
ago. No wonder they have created such a mess with their
unrealistic estimates. An expressive bucolic Bengali
phrase is 'lyaje-gobare' or a 'cow's tail smeared with
dung', and this is a good description for official estimates.
As time passed, the actual spending at which minimal
nutrition could be accessed, the original definition
accepted by the Commission, cumulatively diverged upwards
from the Commission's calculations based on its changed
definition. By 2005 a rural person needed Rs.19 per
day to access 2200 calories while at the official Rs.12,
she could obtain only 1800 calories. (The Tendulkar
Committee merely tinkered with the problem, raising
the Rs.12 to Rs.13.8). An urban consumer needed Rs.33
per day in 2005 to meet 2100 calories whereas the official
Rs.18 permitted less than 1800 calories. Today at the
current official poverty lines of Rs.26/32 rural/urban,
the minimal cost of living is even more seriously understated:
the consumer can access even less food. State poverty
lines vary and in a number of states the energy intake
the official poverty line can command, is below 1500
calories per day.
The claim that poverty has declined is not true because
the method of indexation actually used has not kept
constant the nutritional standard against which poverty
is measured, but has lowered it continuously. China's
official poverty lines are equally absurd and for the
same reason. A nutrition norm was applied in 1984 to
obtain 200 yuan annual rural poverty line which thereafter
was merely indexed, giving 1067 yuan by 2007, or below
3 yuan per day. This is supposed to cover all living
costs but would not have bought even a single kilogram
of the cheapest rice, selling then at 4 yuan according
to information provided by China residents. Actual poverty
in China is far higher than is claimed. One wonders
if one will ever see honest estimates from official
sources anywhere, since by now hundreds of economists
are closely imbricated within a vast global poverty-estimating
structure with the World Bank at its apex, producing
increasingly misleading estimates every year in its
glossy Reports. The World Bank's global poverty line
is an equally large underestimate, for it is derived
using ''purchasing power parity conversion'' from local
currencies to US dollars, of these very same absurdly
low local-currency official rural poverty lines of developing
countries, including India and China.
What are the realistic poverty lines today based on
the officially accepted nutritional norms? The current
poverty lines allowing nutrition norms of 2200/2100
calories rural/urban to be met, are at least Rs.1085
per month (Rs.36/day) and Rs. 1800 per month (Rs. 60/
day). Since each full time worker needs to support nearly
two more dependants, these correspond to a minimum daily
wage of Rs.108 and Rs.180 respectively. But this is
inadequate: no margin exists for medical emergencies,
life cycle ceremonies, or old age. From the 2009-10
NSS data at least 75 percent of the total population
is in poverty on this basis. This high level of deprivation
is the rationale for going back to a non-targeted, universal
food distribution system, but this will not be enough.
The purchasing power of the poor has to be raised at
the same time through employment generation schemes.
Ironically, there has been a rise in unemployment according
to the latest surveys.
*The article was originally published
in The Hindu on September 30, 2011.
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