A new line

This column has been arguing that the 1977 poverty line, prepared by a task force I had chaired, which set down a calorific intake standard made sense when more than two-fifths of the population reported that they did not get two square meals a day, but is a travesty now. As plan panel members, we set up a task force under Professor D.T. Lakdawala in 1989 to examine this but he passed away and the expert group’s report in his name only went into statistical questions of updating the calorific poverty line. We argued that the debate around the 1973-74 poverty line amongst economists is not very relevant to an India which is not living from ship to mouth, where hunger is much less, literacy and awareness are much higher and the future is much richer and younger, although not necessarily more equal or caring. Fortunately, both the compulsion of democratic politics and the pressing needs of practitioners are leading to a search for alternatives; I argued that we should follow these trends, junk the poverty line of which I was the author, and operationalise a working vision of a desirable future for the aam aadmi. The junking has been done. The operationalisation must now follow.

The critique one sees in the media and from some experts, that India’s earlier poverty line ignored prices and the markets, is wrong. It was developed in the context of market behaviour of the rich and the poor in rural and urban areas separately. It showed that income supplementation and public distribution policies working through pricing and dual markets (an open market and a rationing system) could be integrated quantitatively into the commodity market and parastatal policies specifically aimed at households below the poverty line. The price elasticities of rich and poor Indians in rural and urban areas attracted Lakadawala immensely for price theory, common sense and a concern for the poor were his forte up to the last day of his life. But the problem lay elsewhere. The line was out of synch with aspirations.

Events have, however, overtaken controversies about the statistics of poverty. Policy-makers found it impossible to work with odd results, such as those suggesting that urban poverty is more than that in rural areas or that poverty in advanced regions is more than that in poor regions. The Planning Commission’s in-house work, as well as other studies, has shown that poverty estimates are very sensitive to price data variation and this feature led to unusable results at state levels. The Department of Rural Development undertook independent studies of Below Poverty Line populations. A number of interesting efforts have been made at the state level to develop online identification of poor households in states like Kerala and others. Scholars like R. Radhakrishna came out with devastating findings on deprivation levels among specific age groups and in sections of the population, like women and girls.

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