Hook, line and stinker

The government was hoping that the N a t i o n a l Sample Survey Office ( NSSO) data it recently released on the percentage of Indians living below the so- called poverty line would convince many that its economic policies were not just working but working rather well. The government’s statistics indicate that 138 million individuals have been “lifted” above the poverty line over a seven- year period between 2004- 05 and 2011- 12, coinciding with the United Progressive Alliance’s term in office. However, instead of receiving compliments, the poverty data has led to further number- crunching that has shown the government’s track record in extremely poor light. What has made matters worse for the incumbent regime are a series of insensitive remarks made by a few ministers and members of Parliament.

Government officials admit that the yardsticks used to measure poverty that were devised by a committee headed by the late professor of economics, Suresh Tendulkar, are inadequate and contentious. Indeed, the inability of these benchmarks to arrive at reasonable indicators of poverty and deprivation in India is an important reason why the government is currently conducting what it describes as a comprehensive socio- economic caste- based survey and has set up another committee headed by C. Rangarajan, head of the Prime Minister’s Economic Advisory Council.

The official line points out that while no poverty indicator can be totally free of controversy, one such indicator ( the poverty line), is nevertheless needed to ascertain changes that have taken place over time and space.

Those who support the government’s claim that the proportion of Indians living below the poverty line has come down dramatically from 37.2 per cent in 2004- 05 to 29.8 per cent in 2009- 10 and further to 21.9 per cent in 2011- 12, based on a daily consumption of ` 33.40 in urban areas and ` 27.20 in rural areas, and argue that these figures are not fudged, put forth sophisticated arguments to justify their position.

They claim that the “internationally accepted” definition of a poverty line is $ 1.25 per person per day on the basis of “purchasing power parity” that better reflects standards of living than exchange rates. Thus, if one uses the current exchange rate of ` 60 to one dollar, the internationally accepted poverty line would be ` 75 per person per day. If one deflates the figure using purchasing power parity norms, the poverty line would be in the region of ` 30 ( or 50 cents) per person per day.

While many believe that the NSSO data was put out by the Planning Commission in anticipation of the discussion on the National Food Security Bill in the forthcoming session of Parliament, the fact is that quite a few in the Congress Party have been acutely embarrassed by the low levels of poverty measured in monetary terms that have been assumed. Even commentators like Swaminathan Anklesaria Aiyar acknowledge that the cut- off line should perhaps be better described as an “extreme poverty” line or even a “distress” line.

What has especially hurt the government are the utterly insensitive remarks made by Rajya Sabha MP Rasheed Masood, Congress MP and party spokesperson Raj Babbar and Union minister for new and renewable energy Farooq Abdullah. Even if these individuals have got used to eating the highly subsidised food that is provided by the Indian Railways in the canteens of Parliament House, they should surely have known better before opening their mouth before television cameras.

Not only were they forced to retract their claims, Congress general secretary Digvijay Singh, minister for law and communications Kapil Sibal and minister of state for parliamentary affairs Rajeev Shukla had to quickly intervene to control the situation by disagreeing with what had been stated by Messrs Masood, Babbar and Abdullah. But the damage to the already- battered image of the government cannot be easily undone.

Soon after the debate on the poverty line was re- ignited, analysts started looking into the latest NSSO data a bit more closely and came out with startling conclusions. In fact, what has been deliberately ignored or left unsaid by government spokespersons acquires greater significance than what has been highlighted by the government and its sympathisers in the media — for example, the performance of relatively poor states like Bihar and Orissa in reducing the incidence of poverty, has been better than others in the latest data on consumption expenditure of the NSSO.

The two significant aspects of the NSSO data that the government would rather not talk about are food inflation and inequality.

The survey on consumption expenditure shows that overall spending by the richest 10 per cent of Indians living in urban areas went up by nearly twothirds ( 63 per cent) between 2000 and 2012, while expenditure by the bottom five per cent rose by just a third ( 33 per cent), the corresponding figures for rural areas being roughly 60 per cent and 30 per cent respectively. The same set of data disclose that the gap in spending by the richest and poorest in urban India went up from 12 times to 15 times in this period, while the gap in rural areas increased from around seven times to nine times between 2000 and 2012.

To use an oft- used cliche differently, it is not as if the rich are getting richer while the poor are getting poorer. The undisputed fact about contemporary India is that the gap between the rich and the poor has widened significantly and continues to do so.

Whereas the calculations about inequality are based on data adjusted for inflation, the NSSO figures state that the per person spending on milk and milk products went up by 58 per cent for the poorest 30 per cent in rural areas and 111 per cent in urban areas, the corresponding figures for the richest five per cent jumped by more than three times ( 331 per cent) in rural areas and over four times ( 422 per cent) in urban areas over this 12- year period ( 2000- 12). The same story gets repeated across other commodity groups ( such as fresh fruits and vegetables, eggs, fish, poultry and meat) as well as expenditure on education and medicines.

Why did the government choose to release the NSSO data at the time it did? Is it because the more detailed study on the poverty line by the Rangarajan committee will not be available before the next general election takes place? The writer is an educator and

commentator