Politics over Poverty

Data released by India’s Planning Commission shows that the India’s poverty headcount has substantially reduced to ~ 21% for the entire country. Ideally, this should have been a cause for celebration as only ~ 27 Cr Indians are below the poverty line now down from ~  40 Cr Indians about a decade back when the present government came to power, meaning ~ 13 Cr Indians were lifted above poverty line.

Before moving ahead, lets look at the definition of poverty in India. The so called poverty line segregates the poor from the non – poor. It is based on the monthly per capita expenditure (as is the case globally, since data on income is hard to get in surveys which are conducted to arrive at the conclusion). Various committee’s were appointed by the government to arrive at the poverty definition viz, Alagh Committee, Lakdawala Committee and finally the Tendulkar Committee.

 The latest being the Tendulkar Committee set the poverty cut – off for rural areas as an expenditure (on food and non – food items) of ~ Rs 816 per month per capita and for urban areas Rs 1000 per month per capita. In the US, I believe its about $ 550 per month per capita. As per World Bank standard, the range is $ 30 – $ 75 per month per capita ($ 1 – $ 2.5 per day, $ 1.25 per day being the average of poorest countries) as per 2005 prices. The World Bank estimates are considered as being close to India’s poverty cut – offs.

Based on the numbers released, ~ 13 Cr Indians have been lifted above the poverty line over the tenure of the present government ie. a decline of ~ 2.18% per year, which is more than 3 times the average decline in the poverty headcount ratio over previous periods. Very Impressive!

But instead of tom – tomming this achievement, the governments own ministers are dis – crediting it ? Why ? Well, the answer is the Food Security Bill. The government wants to dole out free food grains (well almost) to 67% of the population which it feels is below the poverty line (and not ~ 21% Indians as per the latest data). These doles, it feels,  will fetch it votes. So how can it on one hand tom tom poverty reduction to 21% and on the other hand dole out free foodgrains to 67% of the population on the pretext that they are poor?

It will be a topic of another of MidNightBreakFast posts that this superb reduction in poverty has coincided with the great economic growth which India experienced in the  past decade.   

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