POVERTY and hunger IN INDIA

Poverty is a socio-economic phenomenon in which a section of society is unable to fulfill even its basic necessities of life.  The countries of the third world exhibit invariably the existence of mass poverty, although poverty also exists even in the developed countries of Europe and America.

The term ‘poverty’ has been defined in different societies in a different way but all of them are conditioned by the version of minimum or good life to be obtained in society.  For instance, the concept of poverty in USA would be significantly different from that in India because the ability to afford a higher living standard is much higher in the United States.

Several economists and organisations have given different estimates of poverty.  Most of them estimated the number of persons below the poverty line on the basis of an average calories intake of 2250 per capita per day.  According to the report of ‘Task Force on Minimum Needs and Effective Consumption Demand’ – an expert group of planning commission, defined poverty line on a nutritional norm of per capita daily intake of 2400 calories in rural areas and 2100 calories for urban areas.  A person who fails to obtain this minimum level of calories is treated as being below the poverty line.

The identification process of persons below the poverty line has been put to a controversy for the last few years. Planning Commission adopted the survey of NSSO as a basis of defining poverty line and determining the number of person below it.  On the basis of this criteria planning commission estimated 18.96% of total population below the poverty line for the year 1993-94.  The expert group under the chairmanship of Prof. D.T. Lakadawala(appointed by Planning Commission which submitted the report in July 1993) found earlier estimates of poverty unreliable and suggested an alternate approach for identifying poor in which different poverty line was determined for different states on the basis of price level of that particular state.

Lakadawala expert group suggested that it will be most suitable to rely on the disaggregated commodity indices for Consumer Price Index for Agricultural Labourers (CPIAL) to update the rural poverty line and a simple average of suitably weighted commodity indices of Consumer.  Price Index for Industrial Workers (CPIIW) for updating urban poverty line.  Adopting this approach the expert group suggested 32 different poverty lines for all different states.  The incidence of poverty expressed as percentage of people below the poverty line is observed to have declined from 56.4% in 1973-74 to 37.3 in 1993-94 in rural areas and from 49% to 32.4% in urban areas. For the country as a whole, the percentage of people below the poverty line declined from 54.9% in 1973-74 to 36% in 1993-94 and 26% in 1999-2000.  According to the latest large sample survey data on consumer expenditure have been made available by the NSSO from its 55th Round Survey (July 1999- June 2000).  The poverty ratio on a 30-day recall basis is estimated at 27.09 per cent in rural areas, 23.62 per cent in urban areas and 26.10 per cent for the county as a whole.  Though the poverty ratio declined, the number of poor remained stable at round 320 million for a fairly long period of two decades (1973-93) due to a countervailing growth in population.  The latest estimates for 1999-2000 reveal a significantly reduced number of poor, at about 260 million out of a total population of 997 million.

POVERTY ESTIMATES

Poverty Line, Poverty Line Basket and Poverty Ratio

• 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).
• Most countries and international institutions (WB, UN) follow similar approach for counting the poor.
• 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: NITI AAYOG task force report 2018

NITI Aayog’s Taskforce constituted in March 2015 under the Chairmanship of Vice Chairman, NITI Aayog. Members include one NITI Member, CEA, experts and Secretaries of the relevant ministries. Parallel Task Forces were to be constituted in all States/Uts. Three meetings of the Task Force were held. Consultations were held with economists, journalists and NGOs. It selected a small number of most important topics instead of being comprehensive.

Broad Issues

Measuring Poverty in India: A Brief History

• Most countries and international institutions (WB, UN) follow similar approach for counting the poor.
• 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)

Socio-Economic Caste Census

SECC 2011 is a unique paperless Census. The enumeration of the data was done using over 6.4 lakh electronic handheld device. Household data was taken from the National Population Register along with the Temporary Identification Number (TIN). At each stage there was an opportunity for transparency and grievance redressal. A total of 1.24 crore claims and objections were received of which 99.7% have already been resolved. Gram Panchayats and Gram Sabhas were involved in this process, besides School Teachers and Data Entry Operators as enumerators. The districts and State Governments have carried out the SECC with the Ministry of Rural Development as the nodal Ministry. Ministry of Housing and Urban Poverty Alleviation carried out the survey in urban areas and the Registrar General, Census of India carried out the caste census.

 The provisional socio-economic data for Rural India has been released today. The survey has been completed in all the 640 districts. It is provisional as the final lists are being uploaded in some districts after addressing all the objections received. It is being released as its use in evidence based planning for rural development and poverty reduction needs to be undertaken immediately. It provides very useful data on households regarding various aspects of their socio-economic status – housing, land-holding/landlessness, educational status, status of women, the differently able, occupation, possession of assets, SC/ST households, incomes, etc. SECC provided for automatic exclusion on the basis of 14 parameters, automatic inclusion on the basis of 5 parameters and grading of deprivation on the basis of seven criteria. The data addresses the multi dimensionality of poverty and provides a unique opportunity for a convergent, evidence based planning with a Gram Panchayat as a unit. The data is an opportunity to make evidence based selection, prioritization and targeting of beneficiaries in different programmes.

The Ministry of Rural Development has taken a decision to use the SECC data in all its programmes. SECC data would have meaningful use in Housing for all, Education and Skills thrust, MGNREGA, National Food Security Act, interventions for differently able, interventions for women led households, and targeting of households/individual entitlements on evidence of deprivation, etc. The household data is also available for planners of programmes at State, district, Block, Gram Panchayat and village level. SECC provides an opportunity to simultaneously address the multi-dimensionality of poverty by addressing the deprivation of households in education, skills, housing, employment, health, nutrition, water, sanitation, social and gender mobilization and entitlement. The use of the NPR TIN Number across programmes affords an opportunity to track the progress of households over the years. SECC truly makes evidence based targeted household interventions for poverty reduction possible. It paves the way for a Mission Antyodaya to work simultaneously in addressing the poverty of households through a Gram Panchayat Poverty Reduction Plan. The Ministry of Rural Development, in consultation with States, is trying to implement a convergent, integrated poverty reduction plan with Gram Panchayats and deprived households as priority.       Key Findings from Rural India

Deprivation Data

Sources of Household income

Characteristics of Poor Households

Generally, households with lowest income per person tend to be large, with many children or economically dependent members. Over a typical year, the poor spend nearly all their income on consumption of one sort or another and half of this consumption is likely to be in the form of food. Naturally the relative prices of food staples (food grains, dhalls, oil, vegetables) are crucial to their welfare. Poor households generally invest in education for boys than for girls. The poor play little part in politics. In one sense they are disenfranchised. Of course, there are some exceptional cases. Crime, ill-health and lack of access to the poor are considered other correlates of poverty.

In many countries, poverty is correlated with caste and race. The scheduled caste and tribal people in India and the Blacks in the USA are classic examples.

The extent of poverty in a country depend mainly on two factors:

1. the average level of national income and
2. the degree of inequality in its distribution.

Targeting Five Poorest Families in Each Village

• SECC based BPL list may be used for selection
• Gram Panchayat to ensure all Government program benefits reach them
• A modest cash transfer for a pre-specified time may top these benefits
• Aim - to ensure the target families become capable of earning & sustaining above-poverty level of income within 5-7 years
• Similar efforts in urban areas – 100 families in a municipality