Originally Published 2012-03-27 00:00:00 Published on Mar 27, 2012
According to the Planning Commission, rural poverty has declined faster than urban poverty regardless. If this is true, it would definitely have got reflected in better housing and sanitation. It would also have meant a decline in malnourished children and maternal death. But the census figures show a different picture.
Why a lower poverty line?
Since 1992, "Look East" has been a policy objective which successive Indian governments crafted on stone, only to celebrate it as an archaeological masterpiece. From conception to birth and now baby steps, it has taken close to two decades. But, as they say, it’s never too late.

In October 2011, the Planning Commission received a lot of flak when it declared in an affidavit to the Supreme Court that the poverty line started with incomes below Rs 32 a day for urban and Rs 26 for rural populations. Recently, the poverty line has been further reduced to a ridiculous Rs 28.35 for urban and Rs 22.40 for rural daily incomes. On the basis of this poverty line, between 2004-05 and 2009-10, there has been a marked decline in poverty of 7.3 per cent. The Planning Commission has admitted however that its calculations are based on incomplete data because the Socio Economic and Caste Census is far from complete.

The likely rationale for the absurd placement of the poverty line seems to be to show that the rate of poverty reduction in the past few years has been faster than ever before. Are there many takers for this? No, not even the UPA government!

The government has got scared due to the uproar from the Opposition parties, and has appointed a new ’technical committee’ to estimate poverty. Otherwise the new unrealistic poverty line would have been used for counting the poor who would be entitled for its social-welfare programmes. The Suresh Tendulkar formula for calculating poverty which includes spending on health and education, would now have to be revisited.

According to the Planning Commission, rural poverty has declined faster than urban poverty regardless. If this were true it would have meant an improvement in the standard of living of the rural poor in the past five years. It would definitely have got reflected in better housing and sanitation. It would also have meant a decline in malnourished children and maternal death.

Unfortunately, the latest Census report shows a dismal situation. Only 30 per cent of rural homes have toilets inside their houses and only 2.2 per cent have piped sewerage of which 63.2 has no drainage. If in the villages people are still leading such unhealthy lives, where is the prosperity showing? Similarly, tap water from treated sources in villages is still scarce and only 17.9 per cent have it. The rest have to collect water from wells, streams and tanks. Also, there is continued use of firewood as fuel for household cooking. Around 62.5 per cent of village women still burn wood to cook which is most harmful for women’s health. If the village population is getting better off why aren’t they changing over to LPG? Only 11.4 per cent are using LPG and PNG. All village women would prefer gas cooking to cooking with firewood which carries the additional burden of collection from faraway places. What is preventing the now better off population from buying cars, jeeps and vans? But only 2.3 per cent are using these types of vehicles.

True there has been an increase in consumption of TV sets, radios and cell phones but why are the village poor still pouring into cities daily, seeking jobs? Poverty reduction would definitely mean that village population stays put, enjoying family life, as it is increasingly doing in China.

If there was so much poverty reduction in the villages and towns, why are the primary schools in such dire straits? According to the latest Economic Survey, there has been an increase in absenteeism in rural schools in the past few years and there has been a decline in learning skills. Different classes are still huddled together so that virtually no effective teaching takes place. If parents had a choice and had money, they would opt for private education and see that their children get properly taught. Obviously their poverty leaves them with no other alternative.

Similarly in healthcare, there has hardly been much progress and the UN Millennium goals for malnutrition of under five children and maternal mortality rate cannot be met. More than half (59 percent) of the children are stunted according to the Economic Survey. Most poor have to borrow to treat serious illnesses in the family and India has one of the highest spending on private health care.

The government could use the argument of rapid decline in poverty only to raise fuel prices and cut food subsidy. Already all the poverty alleviation schemes are going to receive a cut as announced in Budget 2012 and will no doubt get diluted. Another argument against the subsidies is that the beneficiaries are non poor and now with less number of poor, the targeting would be easier. This will lighten the fiscal burden specially when revenue collection could be lower due to lower GDP growth next year.

Many would argue that in cities like Delhi there has been a visible decline in slums. It does not mean that the poor are living in respectable housing societies because as many urban specialists have pointed out, it only shows the beautification and gentrification trend in cities in which the poor are shifted away so they cannot be seen. Also, just because the poor have cell phones or smart clothes, it does not mean they are not poor.

The Planning Commission has admitted that there has been less poverty reduction among Muslims, SC/STs and OBCs. Obviously they have been left behind in the growth process and are still suffering from multiple deprivations that include various kinds of discriminations that lead to their low income trap.

The main message of the exercise of a new poverty line seems to be to show that the government is doing a great job with its poverty alleviation schemes like MNERGA, Midday meals and PDS. Many poor are now above poverty line and soon India will be a ’middle income’ country. It is a great story to sell to the MNCs who are waiting to come to India. Foreign investments will increase and people will benefit from it. Also, subsidies that distort prices and cause the fiscal deficit to expand will be reduced. India’s performance on the fiscal front will lead to an upgrade by the international credit rating agencies and India will attract more FIIs!

Now with a new ’technical committee’ in the picture, this dream will have to wait.

(The writer is a Senior Fellow at Observer Research Foundation)
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David Rusnok

David Rusnok

David Rusnok Researcher Strengthening National Climate Policy Implementation (SNAPFI) project DIW Germany

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