Calculating, and recalculating, the numbers of those who are below the poverty line in the country has never been easy, and the most recent effort has attracted its share of criticism. As some newspapers have been editorialising, this seems an esoteric exercise, an act of indulgence on the part of economists and experts who have played not only with the figures but with the indices as well.
Fixing the number
For many years, the Planning Commission measured poverty in terms of calorie intake. It took the prices of a basic basket of goods and services essential for well being and calculated how many calories were required for such a basket, differentiating between rural and urban areas. It was in the late 1960s that the concept of the 'poverty line' - or garibi rekha - was introduced, based on the calorie intake. This was later fixed at 2400 calories per head per day in rural areas, and 2100 calories in urban areas. It may not be obvious at first glance why there should be this discrepancy. The reason is that city dwellers have access to resources like water and transport which reduce their need for energy.
Last December, the government announced that only 27 per cent were living below the poverty line in 2004-5, based on National Sample Survey data, which is the most authoritative source for such indices. However, the Planning Commission has now put the figure at 37 per cent, based largely on the Committee on Poverty Estimates headed by Suresh Tendulkar, former Chairman of the National Statistical Commission. While this committee estimated the number of BPL families at 80 million, the Planning Commission has fixed it at 74 million, while its own earlier figure was 65 million.
This estimate will now go before the Empowered Group of Ministers on the Food Security Bill early in May. States are not willing to accept the 74 million cut-off figure because to do so invites a political backlash. BPL cards are literally a lifeline to poor families who use them to obtain benefits under the government's range of poverty alleviation programmes, as well as access to cheap foodgrains under the public distribution system (PDS). The numbers issue is complicated by the fact that the states clearly want to up their figures of BPL families. According to Food Ministry sources, the total estimated by states will exceed 100 million families.
Who should get what?
If all this wasn't complicated enough, there is also the issue of whether to issue foodgrains to those above the poverty line. Kerala, for instance, wants to double the entitlement of subsidised rice from 10 kg per family to 20 kg, which will amount to a total bill of Rs.5000 crores for Kerala alone. If this is applicable to other states, the financial consequences are obvious. Earlier, the Planning Commission had ruled out APL families from a scheme for subsidised grain, and limited this to BPL families, because otherwise the government subsidy would rise by 85 per cent.
States are not willing to accept the 74 million cut-off figure because to do so invites a political backlash.
He believes that the BPL is a "disingenuous construct" for policy purposes because it arbitrarily divides the population into two categories. It is also supposed to be based on a survey which puts an upper limit on the number of poor people, which he finds an "intellectual contortion". And, finally, he despairs of the practical difficulty of implementing any criteria for selection. It has led to considerable mistrust between states and the centre. There has been under-inclusion and over-inclusion, sometimes to the extent of 50 per cent. "The lists marginalise the poor rather than empower them," he believes.
Since the methodology for determining poverty numbers is not perfect, the government has to work with a set of figures on which there is broad consensus. One has only to cite the alternative figure of 50 per cent of rural households living below the poverty line arrived at by N C Saxena, who headed an expert group which submitted its report in August 2009. Or, for that matter, how the National Commission for Enterprises in the Unorganized Sector, headed by Arjun Sengupta in 2007, had found that 836 million people in the country - 77 percent of the population - lived on less than Rs.20 a day. If anything, the Tendulkar figure of 37 per cent is an underestimate for the number of BPL families.
As it happens, the economist Jean Dreze and his colleague Reetika Khera have suggested a far simpler method of identifying who really is poor. It is based on five indicators of poverty, which are going to be tried out as a pilot programme in May. The N C Saxena committee had suggested that certain vulnerable households should be automatically included, such as those led by scheduled castes (SC), scheduled tribes (ST), landless and single women, in addition to BPL families.
Dreze has further simplified this categorization of the rural poor. Apart from SC and ST families, he advocates including landless households with no adults educated beyond class 5, households led by single women and families with one adult working as an agricultural labourer. Interestingly enough, he also suggests how certain criteria should disqualify families. Thus, any family which owns a car, scooter, refrigerator, colour TV and landline phone; secondly, any with piped water, power and a flush toilet; thirdly, any which own a multi-room house or multi-storeyed house.
These physical indicators will obviously be far easier to assess. The Saxena committee had suggested that panchayats be roped in to identify the poor, but this is not a perfect solution, since panchayats are usually controlled by upper castes who will tend to discriminate against the poor.
The Right to Information activist Aruna Roy, who served on the Saxena committee, believes that putting caps on the rural poor will work to the disadvantage of those who are really needy, since more influential families will corner the BPL cards. She instead advocates universal public distribution of grain. Bihar Chief Minister Nitish Kumar, on the other hand, advocates cash transfers to BPL households, who should have bank accounts. There could also be food coupons, while another alternative is to route foodgrain through the NREGA system.
Whatever the methods finally decided to determine who the poor are, and how relief to them should be distributed, one thing is clear - the UPA government is making a serious bid to establish its claim that it represents the aam admi. The actual methodology and implementation will be marked by false starts and failures - as was the case with the earlier flagship programme, NREGA, but which is now widely seen to be a success, not least in political payback.