The poverty line cut off is a kind of benchmark for the Central government to allocate its funds meant for the welfare schemes.
Sangita Jha/New Delhi
The task is not easy as it appears to be in mere drafting of the food guaranty legislation. It was none other than Union Agriculture Minister Sharad Pawar who sounded the warning bell by remarking: "I do not want Soviet Russia happening here".
The poverty-line debate is far from over. The Planning Commission in its affidavit in the Supreme Court set Rs 32 per capita per person in the urban areas and Rs 26 for rural areas. The affidavit has clearly shocked a number of people notwithstanding the clarification by the deputy chairman of the Planning Commission Montek Singh Ahluwalia that this cut off indicates sub-human and starvation level.
The poverty line cut off is a kind of benchmark for the Central government to allocate its funds meant for the welfare schemes. It was Prof. Suresh Tendulkar who did pioneering work to arrive at the absolute number of poor in the country. Union Rural Development Minister Jairam Ramesh wants the people to believe that the ongoing Socio-Economic and Caste Survey would give a more reliable data on the number of people who really need the government's welfare measures.
However, the state governments are not willing to believe the assertions of Ramesh. The reason for skepticism on the parts of the state governments is for the reason the below poverty line cap is already fixed for each of the states. Therefore, the ongoing Socio-Economic and Caste Survey could rather become an exercise in excluding and including people in the poverty bracket, which is already pre-determined on the basis of the Tendulkar Committee report.
It's interesting here to note the contribution and works of Prof. Tendulkar. The Central government in 2009 constituted a Committee under the chairmanship of Prof. Tendulkar to report on methodology of estimation of poverty. Till then poverty in the country and the number of poor people were decided on the basis of calorie intake by individuals in the urban and rural areas of the country.
The Tendulkar Committee, which submitted its report in 2009 and was subsequently accepted by the Planning Commission, made a departure from the methodology based on calorie intake to expenditure incurred by people on food, education, health, electricity, clothing and footwear. This was supposedly a much wider and logical methodology.
The Tendulkar Committee in its report stated that every third Indian is living in poverty. Also, the number of the poor shot up by nearly 10 per cent to over 37 per cent. The report pointed out that 41.8 per cent of the rural population spends a meager sum of Rs 447 a month on essential necessities like food, fuel, light, clothing and footwear.
Mr Ahluwalia had found the Tendulkar Committee reasonable to determine the number of people living below the poverty line (BPL).
The Tendulkar Committee fixed the poverty line for urban areas at a consumption expenditure of Rs 579 per capita per month, and for rural areas at Rs. 447 per capita per month at 2004-05 prices. It was further brought to a daily expenditure by dividing the monthly sum by 30 to Rs 20 per day for urban areas and a per capita consumption of Rs 15 per day for rural areas at 2004-05 prices. These very amounts at June 2011 price have been adjusted to Rs 32 and 26 respectively to take into account the inflation in the intervening period.
However, the worrying aspect is the absolute number of poor in the country who stand at about 40 crores by 2009, though the percentage declined from 37.2 per cent as arrived by Tendulkar Committee based on the 2004-05 National Sample Survey data to to around 32 per cent in 2009-10. As the National Advisory Council (NAC) member N. C. Saxena very rightly pointed out that despite two decades of economic liberalization and high growth India has not been able to reduce the absolute number of poor in the country. This is in contrast to what China and Vietnam have achieved following the same trajectory of economic liberalization and high growth. Therefore, it will not be easy to dismiss the skepticism that something is badly amiss somewhere.
The debate is getting just wider as the Central government is in the process to push through the Food Security Bill. This legislation seeks to make the food entitlement a right and divides the beneficiaries into two parts - "priority group" and "general group". The legislation also banks heavily on the Tendulkar Committee report and adds another 10 per cent in its estimate of poor people by making about 75 per cent people in the rural areas and 50 per cent in the urban areas as the targeted beneficiaries of the Food Security Bill.
However, the task is not easy as it appears to be in mere drafting of the legislation. It was none other than Union Agriculture Minister Sharad Pawar who sounded the warning bell by remarking: "I do not want Soviet Russia happening here". The characteristic remark is full of consequences, as Mr Pawar himself advised the government to first examine the economic consequences of implementing the Food Security Bill. A rough estimate suggests that the Central government may have to spend about Rs 1.15 lakh to Rs 1.25 lakh in the first five years of implementing the legislation apart from the impact of such a huge subsidy on the overall economic activities of the country.
The irony is that while the Tendulkar Committee had pegged the poor at 37.2 per cent, the Planning Commission later revised it to 27.2 and to top all the state governments put the figure at 10.52 crore families or 45 per cent of all Indians. However, the state governments do inflate the number of poor in their states to serve their populist policies. Still, one can not deny the fact that notwithstanding percentage of the poor in the country the Rs 32 per capita per day expenditure in the urban areas and Rs 26 for the rural areas appear to suggest that the country has not succeeded in its famed "trickle down" theory of economic growth.
Though one could be patient to wait for the poverty data to be available by the middle of the next year from the ongoing Socio-Economic and Caste Survey, still the argument could be made that not many people are being made to cross the poverty trap and therefore the government may need to put more focus on making the poor to earn more than feed them for almost free.