A disturbing look at how poor we really are and the questions we should actually be asking.
By Revati Laul
I DON’T REMEMBER ever eating an apple in my childhood,” remarks an angry Amitabh Kundu, sitting in his office at Jawaharlal Nehru University in Delhi, where he teaches economics. He was reacting to two numbers— Rs 32 and Rs 26 — that are being debated in the media this past fortnight. Numbers the Planning Commission presented in the Supreme Court in reply to a question on what India’s poverty line really is. Rs 32 a day is roughly what they said it works out to in cities and Rs 26 a head in villages.
“WHAT?” is how the nation reacted. Not knowing that this figure is actually 10 times higher than the poverty line figures when they were originally measured by the planning body in 1974. Then, the figures were Rs 56 a month for a person working in a city, which is Rs 1.86 a day; and Rs 49 for villages or Rs 1.60 a day. That’s why Kundu, who said he came from small-town Chhindwara in Madhya Pradesh, from a lower middle-class family, never having eaten an apple as a child, sat in his chair, puzzled. What’s all the fuss about? Can the media not Google the word ‘poverty line’ and track back? Before shocking everyone for possibly the wrong reasons?
But then, the world Kundu inhabits isn’t such a simple one. And this is therefore not at all a simple story to tell. It involves big decisions about whether India’s poor have increased since the 1970s or decreased, whether this government is mapping the poor in a way that answers fundamental questions about why foodgrain doesn’t get to those who are starving. And whether, behind all these numbers, there is a way out of the poverty trap.
In 1971, when the first large-scale and comprehensive mapping of India’s poor was done, the picture was pretty much a snapshot of the absolutely destitute, starving poor. The black-and-white picture of a kwashiorkor bellied kid with protruding ribs. The ‘minimum needs’ below which human survival is impossible. What will keep a child from looking like that, but only just about? That’s what was put down on paper and became the basis for drawing India’s thin, very thin red line. Those who fell below it were below the poverty line. Those above it, survivors. No one was talking about living. Or vitamins. Or a home with a bathing area and proper drainage.
The calculation, mapped by VM Dandekar and M Rath among others, didn’t come out of thin air. It was based on widely accepted international norms. How many calories does a person need every day to have a basic, balanced diet? Two thousand was the figure back then.
So Dandekar and Rath applied basic math to this as follows. They surveyed how much a person consuming 2,000 calories a day earns on an average and used that as the baseline for India’s poverty. With this calculation, a little over 70 percent Indians fell below the red line. In need of urgent attention in the next Five-Year Plan and welfare schemes. Of ration cards for subsidised foodgrain, free healthcare and housing. And if possible, education.
Is to be multiplied by five — the average family size in a city — which then works out to Rs 160 per day and Rs 4,800 per month. That’s the real figure. The number has been arrived at by calculating the minimum calorific intake per head
THIS IS how the red line was measured right up to 1993, two years after the economy had opened up to foreign investment. The start of what people looking back now call India’s growth story. In 1993, Prof DT Lakdawala revised the poverty figures, contending that the goalpost should not be 2,000 calories but 2,400 calories for people in rural areas and 2,200 in urban areas. Prices were revised for inflation and so came revised numbers, slightly. And in December 2005, Prof Suresh Tendulkar was appointed by the Planning Commission and he added another update. Which took the monthly urban figure to roughly Rs 18.60 a day and about Rs 12 for someone in the countryside. At today’s prices, these criterion — cited in the apex court — have yielded the magical, surreal numbers of Rs 32 and Rs 26. What the Rs 32 a day actually means is that a single earning member, providing for an average of five people in a city, actually earns Rs 32 multiplied by five or Rs 160 a day, or about Rs 4,800 a month.
While Rs 4,800 doesn’t look nearly as bad as Rs 32 or Rs 26, what this numbers soup and the resultant controversy has done is to detract from the real picture of India’s poverty and the disturbing questions around it. Questions such as “What is the point of this thin red line and poverty mapping?”
Prof Abhijit Sen, an economist with the Planning Commission, explains calmly: “Yes, the original mapping was ridiculously low. But if we revise these indicators to include the slightly less destitute, how will we ever be able to compare what has happened in India over time? How will we be able to say, as we now can, that the very very poor numbers are down from over 70 percent to 42 percent this year, if we keep shifting the goalposts?”
THAT WOULD make perfect sense if that’s all the numbers along either side of the thin red line were actually doing. But even Sen concedes that the numbers are being used to dictate how the Central government should distribute money to the states for issuing Below Poverty Line (BPL) cards and subsidised grain to the poorest. The poverty line, says Sen, is a bit like India’s GDP figure. It’s useful when you want to compare how wealthy or how poor India is compared to other countries. And interestingly, Sen adds, India’s method for calculating its poor is what the World Bank has taken on board to calculate worldwide poor people numbers.
But just like the GDP, this number was never meant to be used to decide how the state should spend its money. BPL cardholders are never even asked what calories they consume, clarifies Sen. They are asked whether or not they have a proper house or a makeshift one, whether they own land or not, and other such verifiable, tangible questions. But then, in the mid-1990s, when the government moved from a general subsidised grain distribution system through ration cards, to targeting the very poor by issuing them BPL cards, it made, in Sen’s opinion, one big mistake. It used the poverty line figures to decide how taxpayers’ money collected by the Centre would be given out to the states. So if the poverty line figures established that Andhra Pradesh had only 20 percent people in the BPL category, that’s all the money AP would get from the Centre. It was then up to the state to say, “No, we believe 70 percent of our state needs a BPL card,” and then use the state coffers to pay for the remaining 50 percent of BPL rate subsidised foodgrain.
Poverty line statistics are being used by the government as a tool to limit social spending, says Mander
If the thin red line determines who gets to eat and who doesn’t, suddenly these numbers —Rs 32 and Rs 26 — do matter. And while they shouldn’t throw us into surreal disbelief — as if, like Alice in Wonderland, we have just discovered what the government has been sketching out since the 1970s — the very thin red line must, say economists like Jean Dreze, make us ask, “Why do these numbers leave out more than half the really poor? And what’s the point of numbers if it’s not going to change the lives of the poor for the better?”
According to retired bureaucrat NC Saxena, who was responsible for drawing up the criterion for mapping India’s poor, there is another, more disturbing statistic we need to look at instead of just staring at the poverty line. A report that studied the BPL card distribution in 2004-05 estimated that 60 percent of the cards went to those who weren’t poor. Saxena has another statistic. In Faridabad, a woman had 928 BPL cards registered in her name.
“We never look at the numbers that we should be looking at,” Saxena says in frustration. “The Centre must be forced to evaluate why its schemes like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) isn’t delivering. We, as a people, never put pressure on our government to evaluate its schemes correctly. Those are the numbers we really need to know. For instance, why are state governments allowed to get away with fudged figures such as 1 percent malnutrition, when the figure, if evaluated properly, is actually 46 percent?”
“In the past 30-40 years, the Planning Commission has been a dumping ground,” says Saxena. “A place for IAS officers who couldn’t find any other job.” It’s not the permanent members that matter, he says, but their advisers — a constantly rotating group of administrative staff who can never look at how or why the MGNREGA fund of Rs 40,000 crore pumped in annually is largely disappearing into a huge black hole. And agriculture and our rural economy, despite India’s great big growth story, is now a great big failure.
Sen has a disturbing statistic to add to the real rural poverty figure. The share of agriculture in our nation’s overall national income has fallen from 50 percent to 20 percent in the past 30 years. But the population that’s still dependent on this drastically falling agricultural income is 50 percent — half of India. Where is this half getting its money from, if agricultural incomes have fallen so sharply?
Many hopefuls migrate to cities and become part of the vast unorganised sector, and fewer still make it to the industrial sector. Fewer still? That’s because of another alarming statistic. There are very few jobs in the manufacturing sector. Fifteen years ago, 35 percent of India’s industrial growth was the result of wages — or salaries in the manufacturing sector. Today, Sen points out, salaries account for only 10 percent of India’s industrial growth. Sixty percent comes from profit. Decoded, this means that the rich half are getting richer and ploughing back their money into profits and savings and further profits and driving the growth story. And this profit is being made on the back of sharply reduced wages. So while the overall poverty figures — now at 420 million people — is less than it was in the 1970s when it was first mapped, inequality has grown sharply.
That’s where the mapping of the poverty line, or the fine art and science of poverty statistics, has contributed to “greatly limiting the role of the State”, says Harsh Mander, adviser to the Planning Commission on food security issues. He also runs the Centre for Equity Studies that specialises in studying how the needs of poor should be served. He says that the thin red line of poverty is used increasingly as a tool by the government to “limit social spending and these statistics are not a search for truth but a way of rationalising policy”.
There are ways out of this trap, if we look at the maze of numbers differently, and ask the right questions.
JEAN DREZE, now advising the Planning Commission on drafting the Food Security Bill, has been arguing for years that BPL cards were the wrong way to target the poorest. Evidence has shown over the years that the universal distribution of subsidised grain — which is the older, ration card system — was fairer and yielded better results.Dreze adds important qualifiers. Decentralise the system of buying foodgrain from farmers and make panchayats manage fair price shops.
Mander says the poor should be mapped for schemes not in large, macroeconomic fashion, but by selecting obviously disadvantaged groups and designing schemes for them — like the landless workers in villages, migrant labour in cities, people who sleep on the streets. For these groups, whether they earn more than 32 a day or not is a meaningless question and cannot be used to decide whether they are below the poverty line or not.
If we caricature the poor by asking only how many calories they consume, say economists Esther Duflo and Abhijit Banerjee from the Massachusetts Institute of Technology, we will never get to the bottom of why the poor are poor, and how we can get out of the poverty trap. “The poor often resist the wonderful plans we think up for them because they don’t share our faith that those plans work,” they write in their path-breaking book, Poor Economics. They argue that no large over-arching statistics and generalisations apply in all situations of poverty. Therefore big overall numbers actually give very little direction of what will work and why.
Tricky questions such as “Why don’t the poor save the little money they have, and spend it on seemingly frivolous and harmful products like alcohol and drugs instead of education or better food?” are immaterial. The poor people do so because they have little faith that saving today or getting their children immunised against disease will actually cause any tangible change in their lives.
What we should be doing instead is asking small but significant questions. Like how can we get the poorest of the poor to inoculate their children against disease? Will incentives work better or just giving them the right information? What drives the poor most and how can one big change in their lives break them out of their poverty trap? These are questions, those within the Planning Commission and outside of it, bureaucrats, economists and experts on poverty say, will lead us to answers we can actually use. And it will mean looking beyond just the bare, stark-naked, very very thin red poverty line.
Revati Laul is a Special Correspondent with Tehelka.