January 25, 2020
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Cut Off At The Bottom

The anti-poverty programme politics dictate that the number of poor are kept low.

Cut Off At The Bottom
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I don’t think the Planning Commission’s poverty numbers are credible for several reasons: growth has decelerated; NREGA hasn’t been as successful in targeting the poor as generally asserted; nor has the PDS benefited the poor significantly. The first phase of the UPA saw some macroeconomic reforms but not the second phase. Also, the poverty lines worked out by the Tendulkar Committee (of which I was a dissenting member—but my note of dissent wasn’t included on the specious ground that the report should reflect a consensus) were not realistic given the methodology.

I strongly believe that the key to getting the poverty line right is to link it to a nutritional norm while also making sure that the substitutions between food commodities in resp­onse to changes in relative food prices are taken into consideration. Both iss­ues were glossed over in the Ten­d­ulkar report. The delinking of the poverty cutoff and calorie requirements is unfortunate as a consumption basket of the urban poor lacks normative significance.

An important point is that the concentration of the poor around the poverty cutoffs is so high that a slightly higher poverty cutoff can produce an enormous increase in their numbers. I don’t want to be unkind as Tendulkar is not around but using the urban consumption basket of the poor for rural India and delinking the cutoff from nutritional considerations were deliberately designed to keep the numbers low. An attempt was also made to show that the national poverty cutoff was close to the World Bank poverty cutoff of $1.25 to give it greater credibility. I strongly opposed this and the parity was omitted. Even if coincidental, the parity would have made little sense as the $1.25 cutoff was determined as the median of the poverty cutoffs of the 15 poorest countries in the world from which India was excluded. Yes, this was done in the past too, as reconciliation of poverty estimates with those of the calorie-deficient led to awkward results. And just to illustrate my point about juggling of the nsso data, under (late) Prof Praveen Visaria, the recall period was reduced from a month to a week and that led to a dramatic drop in poverty (this was the 1999 nsso ‘thick’ round). Not just the poverty estimates but also the entire nsso round were later junked.

The politics of anti-poverty progr­ammes dictate that the number of poor is kept low so that their fiscal burden doesn’t become unmanageable. This perverse attitude is reflected in the National Food Security Ordinance in two forms: 67 per cent of the targeted beneficiaries are not unambiguously defined; and related to it is the deliberately lower costs of the food subsidy. This, of course, raises the question whether governments are serious about and committed to helping the poor. The rhetoric and matching numbers often drown what needs to be done for the poor.


Gaiha is senior visiting scientist at Harvard School of Public Health, MIT; E-mail your columnist: gaiha AT mit.edu

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