Saturday, October 01, 2011

When poverty is a line in the sand

NEW DELHI: Who is India's poor? A national debate is raging after the country's Planning Commission, the top economic body, said anyone earning below 32 rupees (84 Singapore cents) in cities and 25 rupees in villages a day should be classified as poor.
By Nirmala Ganapathy, India Correspondent

Economists, civil society activists and those simply struggling to feed their families slammed the commission's recommendation as too low, at a time when inflation has topped 9 per cent and a kilo of dal - a dietary staple - costs 70 rupees.

The definition is important because it determines who gets benefits like subsidised food grains, fuel coupons and cheap housing. The government is in the midst of revising its current poverty cut-off of 18 rupees in cities and 11 rupees in villages.

'It's a bogus poverty line. The poor are not coming out of the poverty trap. We don't have the right estimates so the money is not reaching the poor,' said Mr Devinder Sharma, an independent food and trade policy analyst and columnist.

By the government's definition, someone like Mr Dinesh Kumar, a construction worker who lives with his family in a Delhi slum, is not poor.

Mr Kumar earns 180 rupees a day and spends almost half on food. He has two small children but milk, which costs 29 rupees a kilo, is an occasional luxury.

He has two changes of clothing and has to think twice even about getting a cup of tea for 8 rupees from the tea stall near his workplace.

'Who cares for the poor? Every day there is some news on corruption that makes me angry... but we have a hand-to-mouth existence with expenses constantly going up,' said the 35-year-old.

Part of the problem is a growing gap between rich urban Indians riding on the country's fast-paced economic growth, and the poor.

The number of billionaires doubled from 24 to 49 in 2009, according to Forbes. The Manmohan Singh government believes that the benefits of growth will slowly seep down to the poor, but those like Mr Kumar say they have yet to feel it.

In India, 32 per cent of the 1.2 billion population were classified as poor by the government last year, down from 37 per cent in 2005.

Experts said millions of others need subsidies but do not get them.

For decades, the government identified the poor by daily calorie consumption - below 2400 calories in rural areas and 2100 calories in urban areas - but now it has moved to a person's income.

The government, which has approved the Planning Commission poverty line, will set the final figure after completing a national survey of Below Poverty Line households next year. But many believe it could indeed end up being 32 rupees and 25 rupees.

'It's quite absurd,' said Mr Biraj Patnaik, adviser to an official commission on the right to food, on the cut-off. 'India is lagging behind Sri Lanka and Bangladesh on every social indicator. So what are we talking about?'

In the face of a storm of criticism, the Planning Commission said the definition was aimed at making the best use of available funds.

Economists say the government needs to come up with a wider definition of poverty for social security schemes to reach those who need it.

'It is quite obvious that the extent of price rise is not being considered nor are some of services like health and education. If you want to understand poverty in terms of quality of life some of these basic aspects have to be included,' said Professor of Economics Arup Mitra at the Institute of Economic Growth, Delhi.

The commission says it does take health and education costs into account.

The Bharatiya Janata Party (BJP), the main opposition party, has asked for a meeting of all chief ministers and leaders of various political parties to discuss the new cut-offs. 'The saddest part is that even after 64 years of Independence we have not arrived at a satisfactory definition of poverty,' BJP leader Yashwant Sinha told Indian reporters.