Tuesday, May 8, 2007

Poverty lines and lives in poverty

Poverty lines and lives in poverty
Monday May 7 2007 06:01 IST

Yoginder K Algah

India's Poverty Line is a fascinating construct. It excites passion and intense scholarly debate, but for development officials it is a tool of trade to channel benefits from dwindling resources for expanding claimants. There are two streams: experts who debate it and practitioners who use it. Unfortunately, the debates of the experts are becoming irrelevant for the practitioners. Since the early nineties experts, largely those outside India, have argued that India’s Poverty Line is analytically deficient. A calorifically fixed basket of goods is not consistent with consumer optimisation, based on taste patterns as prices and incomes change or the income required to meet the consumption of the fixed calorific norm ‘optimally’ would be higher than the Poverty Line.

K.L. Datta, who has been involved in this work for a long time, has recently reviewed these and other academic arguments in an ICRIER monograph. The 1979 Task Force, which developed the Poverty Line, had actually developed income and price response for both poor and rich households separately in rural and urban areas. Global recognition of this work, for example in the Feschtrift to Nobel Prize winner Jan Tinbergen, was not as important as the fact that it was used to replace rationing by systems of dual pricing for goods of mass consumption. Plenty is wrong with the original Poverty Line in India, but not what the critics say. It is set in well-entrenched demand and welfare theory terms and is not a ‘conceptual muddle’. However, critics of the 1979 Poverty Line are correct in stating that it cannot be taken as a laxman rekha, never to be re-examined subsequently.

The original 1979 Task Force, of which I was the chairman, was very clear on the point now common that price approximations can ravage poverty numbers, particularly as time progresses. The Normative Line was to be re-evaluated. It wasn’t. The Lakdawala Expert Group was again asked to do it in the late eighties. It didn’t. In any case, the Lakdawala Report is a misnomer, because Professor Lakdawala had died before it was finalised. Events have however overtaken controversies over economic statistics in India. Policy makers found it impossible to work with odd results like urban poverty being more than in rural areas.

The department of rural development undertook independent studies of Below Poverty Line populations. Also scholars like R. Radhakrishna came out with devastating findings in recent work on very different deprivation levels in specific age groups and sections of the population, like women. A number of interesting efforts have been made at the state level to develop online identification of poor households in states like Gujarat, Kerala, and others. Let me briefly describe the Gujarat effort, since I am more familiar with it.

The Gujarat Rural Development Department created a dynamic Below Poverty Line (BPL) list on the basis of 13 score based socio-economic indicators. These parameters take into account poverty’s multi-dimensional nature. The entire rural population of 6.8 million households across 18,056 villages of Gujarat was surveyed by 20,000 people. Reliability was ensured by displaying the list at every gram panchayat for appeal by the public.This web-based database is user-friendly and can be accessed at: www.ruraldev.gujarat.gov.in Commendable beginnings like these need validation at a national level, otherwise they will remain sporadic acts of activism.

I believe any exercise of this kind will have to unequivocally define the rights of sections of the population. In fact, there will have to be a much greater emphasis on the rights of individuals and groups in response to the demand for protecting the historically underprivileged, or those who are victims of marketisation. It is not going to be automatic or easy. The 1979 Poverty Line has endured, not only on account of the persistence of a few statisticians, but because governments resist attempts at creating new rights and activists will not accept less. An exercise to build a vision in an honest manner can be a mobilisation mechanism and can uncover strengths not known earlier. A transparent social compact has to be embedded in the reform texture in a country which has by now almost a 100-year-old history of permanent rebellion.

Courtesy_
The New Indian Express

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