Monday, December 18

Dillemma of Poverty Line

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Government has consistently been providing differing figures about the extent of poverty in India. Therefore, it has been difficult to know the exact or even approximate figure about poverty in the country. It is obvious that in the absence of uniform statistical measure of poverty, programmes of poverty alleviation cannot be meaningful. The government to reduce poverty adopts various measures. Through PDS kerosene and cheaper grain and other foods are made available to poor population.
Government’s proposed food security legislation is also on the same lines, according to which all people living below the poverty line would have a right to draw food at subsidised prices.
But ironically till date the government has not been able to identify, even approximately, people living below the poverty line. Report of the Saxena Committee, constituted by Ministry of Rural Development Government of India, presented recently, is most shocking. In fact, 49.1 percent population in the country according to Saxena Committee is living below poverty line, but 23 percent of poor do not have any ration card( what to talk of BPL card).
Former Chief Economic Adviser to Prime Minister, Prof. S.D. Tendulakar submitted the Report of the Expert Group to Review the Methodology for Estimation of Poverty in December 2009. Submission of this report has brought the whole controversy into focus once again.  Prof. Tendulkar noted that the existing all-India rural and urban official poverty lines were originally defined in terms of per capita total consumer expenditure at 1973-74 market prices and adjusted over time and across states for changes in prices keeping unchanged the original 1973-74 rural and urban underlying all-India reference poverty line baskets of goods and services. These all-India rural and urban PLBs were derived for rural and urban areas separately, anchored in the per capita calorie norms of 2400 (rural) and 2100 (urban) per day. However, they covered the consumption of all the goods and services incorporated in the rural and urban reference poverty line baskets.
 
Prof. Tendulkar, finds that in 2004-05, 37 percent of Indian population was living below poverty line. This figure is significantly high as compared to figure given by Planning Commission; according to which 27.5 percent were living below poverty line. Prof. Tendulkar’s figure of head count is higher largely because of larger basket of consumption, which includes expenditure on education & health by the poor. Earlier studies on redefining poverty have also takan note of these variables and have suggested suitable modifications in the definition of poverty line. Prof. Tendulkar’s report is significant as it gives official sanction to the same. Prof. Tendulkar has recommended in his report that Planning Commission and also National Sample survey organisation (NSSO) make suitable changes in their approach in defining poverty line.
 
Interestingly, National Sample Survey Organisation, which undertakes sample survey of consumer spending, estimated people living below poverty line to be only 28.3 percent in 2004-05. In contrast to this figure some time back Arjun Sen Gupta Committee constituted by the government for unorganized sector the country  revealed that more than 77 percent of people are forced to live  on 20 rupees or less per day, which is insufficient even for minimum requirement of one person’s food, health, shelter and clothing. One may say that more than 77 per cent people in the country can not meet their basic needs. But the government always tries to under estimate the people living below poverty line and also show that number of poor people is constantly declining. According to official statistics in 1973-74, 320 million or 55 percent of population was living below the poverty line and then it was told that in 2004 the population living below the poverty line has declined to 28 percent. Well, it depends on government economists, how do they define poverty and poverty line, but logically a definition of poverty should be adopted which help in identifying the real poor. In the past, definition of poverty as adopted by the Government has been widely criticized. 
  
According to UN, 220 million people in India suffer from hunger. Prevalence of hunger is found in all age groups ranging from infants to old. Food production has been going down, food imports are rising and food insecurity is on rise. Whereas per capita availability of foodgrains was 190 kilogram per person per annum in 1979-80,it declined to only 186 kilogram in 2004-05. Since 2004-05, fast rising prices of food products have made the things worst for poor. According to Food and Agriculture Organisation (FAO), of United Nations about 100 million people have already moved to the category of hungry people around the world in the three years from 2004-05 to2007-08.
 
It is welcome that professor Tendulkar’s Expert Group has recommended that definition of poverty line be changed and a new methodology be adopted incorporating changes in price index and also widening of consumption bundle including expenditure on health and education. However, the poverty so reached would not be perfect one, but definitely, we would be moving from a mere starvation line to a better defined poverty line. Government might be feeling uneasy on two counts. First, that so far its policies have been based on ill-defined poverty line and second it will be forced to spend more money on welfare activities. However, in the long run Tendulkar’s report will set a bench mark in determining the methodology for the assessment of poverty line.

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