Events & Issues

New Delhi, 17 October 2011

Poverty Line Sizing

NOT OUTRAGEOUS  ENOUGH?

Dr P K Vasudeva

(Author WTO, Implications on Indian Economy)

The affidavit filed by the Planning Commission in the Supreme Court that the poverty line for the urban and rural areas could respectively be placed at Rs 965 and Rs 781 per capita per month has shocked the conscience of the nation. It has raised questions about the Government’s sensitivity towards the less fortunate. The cut-off works out to around Rs 32 and Rs 26 per day for the urban and rural, respectively.

The affidavit had been filed by the Planning Commission in pursuance of the apex court division bench directing to ‘revise norms of per capita amount looking at the price index of May 2011 or any subsequent dates.’ It had observed that according to the expert group headed by Suresh Tendulkar at the price level of 2011, it was impossible for an individual in urban and rural area to consume 2100 calories with Rs 20 and Rs 15, respectively.

 
All this follows a PIL filed in the Supreme Court by the People’s Union for Civil Liberties (PUCL) with the prayer that the food grain rotting in the open air because of lack of godowns of the Food Corporation of India (FCI) should be distributed free to the people living below the poverty line. The Union Government objected to it on the ground that it is a policy matter and that litigation has been going on. The Planning Commission still feels that the judiciary is overstepping its jurisdiction by giving such directions, as it is not for the court to decide what should be the basis of identifying the poor.

Well, the BPL census is generally conducted on the eve of the Five-Year Plan. The Ministry of Rural Development conducted one in 1992 for the 8th Five Year Plan (1992-97) and suggested an income of Rs 11,000 per year as the poverty line, which the Planning Commission rejected outright as too high. That is when the Ministry conceded its jurisdiction to the Planning Commission. Interestingly, the poverty line suggested in 1992 is higher than what it is today.

The problem began in 1993 when the universal Public Distribution System (PDS) was converted into the targeted PDS. The Commission set up to look into the functioning of the PDS under the chairmanship of former Supreme Court judge, D P Wadhwa, in its report has lambasted the system saying that the entire mechanism of procurement and distribution of food grains was built on corrupt practices that denied food grains to the poor.

It stated that the PDS is ‘inefficient and corrupt,’ plagued by black marketing and diversion involving a ‘vicious cartel of bureaucrats, fair price shop owners, and middlemen.’ Debunking the whole system, it added that the Rs 28,000 crore subsidy spent by the Union Government was being pocketed by vested interests.

The exercise if identifying the poor began in 1972 when an income of Rs 2 was fixed as the cut off mark to count the BPL population. The criteria remains unchanged as changing it would create a lot of confusion. The value of Rs 2 has gone up since to Rs 32 now. Sukhatme, the renowned nutritionist, gave the concept of calorie intake. V M Dandekar and R Nath fixed it at 2400 calories for villages and 2100 for cities. The question is whether this amount is sufficient for the consumption of the required calories?

Supporters of the Planning Commission’s benchmark argue that the calorie norm used by Dandekar and Nath is over 50 years old, which is no more relevant. The problem is that the Planning Commission has provided State-wise estimates of poverty, which are to be used as cap, i.e., the number of the BPL population cannot be increased. The justification for this is that if States were allowed to give figures of their own, they would raise the numbers unilaterally.

For example, in Bihar, the number of the poor is 77 per cent but the number of the malnourished is only eight per cent and that of severely malnourished is one per cent. But, it must be realised that if there is a cap, there can never be a genuine count of the BPL population, and the underprivileged would not be able to share the resources of the country over which they have a rightful claim.

Apparently, perceptions about poverty are so different that there are different estimates of the BPL. While according to the Planning Commission, it is 21.8 per cent to 27.5 per cent, to Arjun Sengupta it is 78 per cent, to the World Bank it is 42 per cent and to the Tendulkar Committee it is 37.5 per cent.  Similarly, four different committees arrived at widely differing estimates of poverty.

For the Lakdawala committee, it is Rs 356 for rural area whereas for Tendulkar committee it is Rs 446.68. Perceptions may differ but it does not need great expertise to understand that with the prices of essential commodities going up sky high, no one can lead a dignified life with Rs 32 and Rs 26 in cities and villages respectively. However, stung by the national dismay and anguish at it, the Congress party has since said that the Planning Commission’s word is not final.

The Commission too has stated that the final poverty lines would be available only after the completion of the 2011-12 survey being conducted by the National Sample Survey. However, it must note that the objective of planning is to reduce poverty and inequality. When the country attained Independence, its population was 32 crore. Today, we have more than that number below poverty line when the benchmark is low. Compare this with the US definition of poverty, which is an annual income of $11,139 for a single person. When will the poor in India rise above the morass of poverty?

It is strange despite being roundly trashed, both the Planning Commission Deputy Chairman Montek Singh Ahluwalia and Minister For Rural Development Jairam Ramesh, continue to say precious little on the critical issue. Worse, the Planning Commission is unwilling to change its affidavit of Rs.26 in rural areas and Rs.32 for urban poor as the sign of poverty. It cannot shy away from its responsibility by claiming that the apex court cannot intervene in policy matters. Can it deny that there is no legal sanctity? ---INFA

(Copyright, India News and Feature Alliance)