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Poverty puzzle

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Poverty has many aspects. The ‘subsistence’ factor includes low income, poor consumption of food, and use of  household goods etc. Its ‘inequality’ aspect involves poor access to public services such as clean drinking water, sanitation, healthcare and education. The ‘externality’ factor implies the discomfort and cost to the community ~ indeed, the problem of poverty for those who are not poor ~ JAYDEV  JANA

We think sometimes that poverty is only being hungry, naked and homeless. The poverty of being unwanted, unloved and uncared for is the greatest poverty. We must start in our own homes to remedy this kind of poverty.
 ~ Mother Teresa

Poverty signifies deprivation. Yet the expression is largely misunderstood. At one level, it could mean no food, no clothes, indifferent health, and inadequate shelters, amenities, and services. At another remove, its connotation can be elusive and slippery; it slips through the fingers of those who manipulate figures and reel off statistics.
Objective measurement of poverty is based on income and expenditure. It is dependent on data, and can be susceptible to errors of recording, aggregation, interpretation and reporting.
Within India&’s academic circuit, there is a thriving industry that routinely churns out poverty estimates.  Amartya Sen has asserted that criterion is the primary requirement for the calibration  of poverty. Which segment of the population should be the focus of our concern? The conventional approach specifies a cut-off  ‘poverty line (PL)’, defined as the level of income, below which people are described  as poor.  In 1876,  Dadabhai Naoroji in his paper entitled ‘Poverty of India’ provided the first set of PLs for various regions.   The first rigorously formulated poverty line was defined in 1962, when a Working Group constituted by the Planning Commission came up with a PL of Rs. 20 per month at 1960-61 prices for people living in rural India with a view to assessing how much it costs to get enough calories to live on.
Initially, the PL was just a statistical benchmark, one that was used widely for tracking poverty over time as also for comparing poverty levels in different regions of the country. In recent decades, however, the PL has been transformed from a non-controversial statistical benchmark to a controversial instrument for real-life social divisions. It is officially used for targeting ‘Below the Poverty Line (BPL)’ households for distribution of social benefits. The official PLs were based entirely on the recommendations of the Lakdawala Committee of 1993. The Lakdawala PLs were based on calorie norms and suitably indexed by taking care of changes in the price level to derive those lines for the subsequent years in such a way that anyone above them would be able to afford 2,400 and 2,100 calories worth of consumption in rural and urban areas respectively, in addition to a subsistence level of clothing and shelter. While the Planning Commission used Lakdawala PLs to count the poor, the Ministry of Rural Development used a different method to identify them. This was the beginning of a series of conceptual flaws leading to exclusion and inclusion errors in BPL census and divisions among the populace. Given the change in consumption pattern since 1973-74, the Planning Commission set up another committee with the late Suresh Tendulkar as chairman in 2009 to suggest a modification of the Lakdawala PLs. The committee moved away from anchoring the PLs to ‘calorie intake norm’ and adopted four key elements in an essay towards redefinition. (1) It chose to test the actual food expenditure near the poverty line; (2) It recommended a uniform PL basket for rural and urban areas unlike in the past; (3) It suggested a price adjustment procedure; and (4) It incorporated a provision for private expenditure on health and education. After extensive consultations and careful analysis, the committee concluded that while those living above the Lakdawala urban poverty line continued to be able to afford 2,100 calories, the rural poverty line needed an upward adjustment so as to be aligned to its urban counterpart.
This revised PL was termed as the Tendulkar PL which forms the basis of the latest poverty estimates of the Planning Commission. Accordingly, the PL for 2011-12 has been estimated at Rs. 816 per capita per month in rural areas and Rs. 1000 in urban areas.  This would mean that a  five-member family, subsisting on the edge of poverty, would have to survive on Rs. 4,080 per month in rural areas and Rs. 5,000 per month in urban areas. However, the Tendulkar Committee report further complicated matters by claiming, for the first time, that their estimated PL was suitably accurate in order to cover all necessities.  This is  both a mockery and a fraud; it has been rejected by its opponents.
However, the PL has two objectives.  It is being used as an instrument for measuring our shame ~ the number of people who are below what we, as a nation, consider to be an acceptable standard of consumption. In accordance with the Gadgil formula, policy-makers, particularly those in the Planning Commission, use poverty estimates as an important parameter for resource transfer to States. The Centre tends to underplay poverty. The States are motivated to keep their poverty numbers high in order to spread the allotted revenue resources thinly over a large section of the population and thus fortify the vote-bank. The second objective is that it is used as an instrument for targeting the poor in the task of combating destitution. Using the PL to define who is poor has resulted in exclusion of a large section of the poor from being entitled to benefits of anti-poverty programmes.
The latest poverty estimates released by the National Sample Survey Office (NSSO) showed that the number of people below the official PL in the country had shrunk to around 269 million or 21.9 per cent of the population in 2011-12. In terms of the rate of decline, the poverty level averaged out at 37.2 per cent in 2004-05. It dropped to 21.9 per cent in 2011-12.  The 15.3 percentage point decline in poverty  over the seven-year period seems to be remarkable given that the decline was 8.1 percentage points in the previous 11 years (1993-94 to 2004-05). In absolute terms, the number of people surviving precariously on the edge of poverty had dwindled from around 40.71 crore in 2004-05 to around 26.93 crore in 2011-12. This fall in poverty estimates was orchestrated as a world record. Economists attribute the record decline in the poverty figures to the substantial impact of growth rates and the sharp increase in wages under the Mahatma Gandhi NREGS. Poverty has many aspects. The ‘subsistence’ factor includes low income, poor consumption of food, and use of  household goods etc. Its ‘inequality’ aspect involves poor access to public services such as clean drinking water, sanitation, healthcare and education.  The ‘externality’ factor implies  the discomfort and cost to the community ~ indeed, the problem of poverty for those who are not poor.   As the  former US President, John F. Kennedy, once famously said:  “If a free society cannot help the many who are poor, it cannot save the few who are rich”.