October 9, 2011
by Sunil Gupta
The recent uproar over poverty line brings into focus few stark points. For those joining late here is the summary of the latest crisis engulfing the UPA government. Planning Commission (PC) files an affidavit in the Supreme Court that it considers 32 and 26 rupees per day consumption expenditure per head as bench mark for poverty lines in urban and rural India respectively. News papers pick up the story. TV news channels, late to start off the block given their allergy for non-entertaining sad stuff, nonetheless puts it in breaking news. NAC members dare Montek Singh Ahluwalia to survive on 32 rupees a day (They were assuming Ahluwalia is non-poor. One wonders if there is any PC affidavit supporting the assumption.) In the end managers enter the picture. Jairam Ramesh, union minister for rural development and a man known for radical views, presents a photo-op with Ahluwalia, holds a joint press conference. Planning Commission figures would not be the bench mark for distributing government benefits they say. Peace is restored.
Several points come out the episode. First, media sensationalisation of the issue. Even the venerable The Hindu heaves a sigh of relief: “data collected by the Socio-Economic Caste Census (SECC), 2011 will be the basis for identifying those deemed eligible for entitlements under various central government programmes. India’s official poverty estimates based on the Planning Commission’s ‘methodology’ will not be used to cap the number of households considered eligible.”
However, PC estimates were never a marker for distributing entitlements. Ever since BPL and APL were invented – for reasons best known to the IMF, World Bank and their Indian fans – beneficiaries are determined by BPL census undertaken by the union ministry of rural development. In other words, managers have told us the obvious: PC estimates are not going to be the bench mark to decide who is to get entitlements. But this was enough to soothe the tortured soul of media. The nation goes to bed with a clear conscience.
What the managers have not told is, although BPL census, not the PC, determines beneficiaries in different states, the number of beneficiaries are to be within a 10% range of the PC figures. This is a simple, nice and arbitrary way to rein in wasteful expenses. You can distribute as much largesse as you like determined by the complicated and convoluted score-based BPL census, so long as the total goodies are tethered to what I decide. The 10% rule has not been scrapped last time I checked. This means the poor and non-poor will be determined in the close neighbourhood of 32 and 26 rupees.
Second, in the debate kicked up by the PC affidavit several ingenious arguments have come to light. E.g., the old approach of determining who is poor is wrong. Poverty line was initially decided by the cost of minimum calorie requirement by an able bodied person. Let us say X is the minimum calorie requirement, cost of purchase of which is Y rupees. If someone is not spending Y rupees per day we call her poor (for the time being let us assume there are no expenses other than food). Detractors point out that if we expect the poor will consume only calorie-containing food once she can afford to spend Y rupees we are living in fool’s paradise. Rather that consuming the calorie containing food she may consume articles which do not meet the minimum calorie requirements. These articles might be consumed because of a host of reasons. The bundle of food articles which minimises cost and satisfies minimum calorie norm may not be appetising at all. The articles consumed in their place are tasty, or might be enhancing social prestige. Therefore identifying someone as poor on the basis of calorie intake is wrong.
The argument misses the point that what is being aimed here is fixing a minimum bench mark. If someone does not spend her disposable income in a calorific way that is her choice. One is not planning to force-feed her the minimum calories. But when she can afford to spend Y she at least has the ability to obtain her minimum calories should she decide to do so.
Third, the strange state of public debate, which refers to the first point of media sensationalism. Debates about poverty are based on which new news hits the audience, what sells. Not on what is, how things stand. One cannot help but feel sorry for the PC. It had done what it had been doing all through. Indeed 32 and 26 are fairly generous numbers compared to how the PC calculated the poor earlier. Take an example: in 2004-05 the poverty line decided by the PC were little less than 12 and 18 rupees in rural and urban areas respectively. Compared to this 26 and 32 are a fortune. The figures of 32 and 26 rupees were obtained by indexing the Tendulkar Committee recommendations with the inflation rate. This committee was appointed because left to its ways the PC would have reduced poverty to zero in an embarrassingly short time through innovative number crunching. For instance, PC’s estimates for head count ratio poverty were 36% and 27.5% for 1993-94 and 2004-05. Tendulkar brought this up to more respectable levels of 45.3% and 37.2%. Even this magnanimity has not satisfied the jholawalahs it appears.
Many researchers have pointed out determining who is poor who is not is a layered exercise. Poverty is a multi-dimensional beast. It cannot be snared in a straightjacket of 26 rupees. To confound matters further, the government has linked entitlements such as PDS or housing to these markers. Two conclusions are inescapable. One, if poor are to be identified as an academic exercise different dimensions of deprivations have to be given proper weight. BPL census, although tries to do this through its scores, falls short of expectations. A recent global study in this direction has found India faring poorly compared to many sub-Saharan African countries. Two, entitlements should best be kept universal and let self-selection do its job. India’s tryst with BPL has rendered half of its poor (official) without a place in the BPL list as exclusion errors shot up. Price of cereals has become more volatile too, compromising another goal of PDS.
In the final analysis, what motivates the stinginess of PC is reluctance to spend on those who constitute the majority; the gigantic subterranean bottom of the society. The top would be granted tax rebates, would be taxed at an ever declining rate, at times would be fully exempted. The State would look the other way as the elite break laws with impunity. Ahluwalia would compare theft of public money in 2G scam with subsidies given to the poor. Food, gainful employment, education, health which are rights that the society owes to the poor for plunder of their resources, for the silent theft of their labour would continue to be treated as charity, to be dispensed at will.
It is a class war.
