The great Indian poverty debate- past and future discourse

The conventional approach to measuring poverty is to specify a minimum expenditure (or income) required to purchase a basket of goods and services necessary to satisfy basic human needs. This minimum expenditure is called the poverty line. The basket of goods and services necessary to satisfy basic human needs is the poverty line basket or PLB.
The proportion of population below the poverty line is called the poverty ratio or headcount ratio (HCR). In India, the first official rural and urban poverty lines at the national level were introduced in 1979 by Y. K. Alagh Committee and official poverty counts began for the first time. Later, in 1993, D. T. Lakdawala Committee extended these poverty lines to states and over time allowing official poverty counts over time and in the states. In 2005, recognizing that the rural poverty line was too low, the government appointed the Tendulkar committee to take a fresh look at the poverty lines. Reporting in 2009, the Tendulkar Committee revised upward the rural poverty line. Continued media criticisms led the government to appoint the Rangarajan Committee in 2012. Reporting in June 2014, the committee recommended raising further both the rural and urban poverty lines. Decision is yet to be taken on the Rangarajan Committee recommendations. Therefore, the Tendulkar poverty line remains the official poverty line and is the basis of the current official poverty estimates in 1993-94, 2004-05 and 2011-12.

Measuring Poverty: What Should be the Future Course?
Perceptions of what defines basic human needs vary widely according to income and socio-political beliefs of the observer. Therefore, views on where we must set the poverty line vary widely. This has repeatedly led to contentious debates on poverty line in the media. We need to track progress in poverty reduction. We are also committed to such estimates under the SDGs recently adopted at the United Nations and supported by India.Income or expenditure is the best single summary indicator of the material well being of the population. Having an official poverty line and therefore official poverty estimates helps concentrate the public policy discourse around an agreed set of of numbers.
An Alternative: Track the Progress of the Bottom 30%. If we did not want to commit to a poverty line, an alternative would be to track the economic progress of the bottom 30% of the population over time. Rising incomes of this group would imply declining poverty The World Bank has recently adopted this approach (it tracks the incomes of the bottom 40%). The main limitation of this approach is that it will not allow us to answer questions such as how far are we from eliminating poverty by how much have we reduced it. Any decision the government takes on the poverty line is likely to give rise to similar debate. Perceptions of what defines basic human needs vary widely according to income and socio-political beliefs of the observer. Therefore, views on where we must set the poverty line vary widely. This has repeatedly led to contentious debates on poverty line in the media. Any decision the government takes on the poverty line is likely to give rise to similar debate. We need to track progress in poverty reduction. We are also committed to such estimates under the SDGs recently adopted at the United Nations and supported by India. Income or expenditure is the best single summary indicator of the material well being of the population. Having an official poverty line and therefore official poverty estimates helps concentrate the public policy discourse around an agreed set of numbers. If we did not want to commit to a poverty line, an alternative would be to track the economic progress of the bottom 30% of the population over time. Rising incomes of this group would imply declining poverty. The World Bank has recently adopted this approach (it tracks the incomes of the bottom 40%). The main limitation of this approach is that it will not allow us to answer questions such as how far are we from eliminating poverty r by how much have we reduced it.

DOES SOCIO ECONOMIC CASTE CENSUS (SECC) OFFER AN ALTERNATIVE?
The SECC is useful for identifying potential beneficiaries of social programs such as affordable housing, electricity, water and toilets but not for tracking overall poverty over time
–It does not collect information on the overall income or expenditure of the household
–Over time, there is also high risk of household responses getting biased since the households know that their responses determine whether or not they receive benefits
–So far we have no experience on how this experiment would work out over time.
–After nearly five years, we still have only the rural SECC results with no urban SECC results yet available.

WHAT ARE THE OPTIONS?
•Option 1: Continue with the Tendulkar poverty line
•Option 2: Accept the Rangarajan poverty line or higher rural and urban poverty lines
•Option 3: Track progress of the bottom 30 of the population
•Option 4: Track progress along specific components of poverty such as nutrition, housing, drinking water, sanitation, electricity and connectivity.
(Option 3 and 4 can be complementary to option 1 or 2 but cannot be a substitute for it)

By: Abhishek Sharma