The problem of poverty in India

In India, poverty is presently estimated by fixing a poverty line based on a differentiated calorie-norm. This means that the level of poverty depends upon the capacity of a person to purchase food and a person who can buy specific amount of food to cross the poverty line margin for nutrients and calorie intake is above the poverty line. Whereas, the person who cannot buy enough food to meet the required nutrition value of calories and carbohydrates is below the poverty line. This level is not the correct parameter to check the level of poverty.

A task force of the Planning Commission in 1979 defined the poverty line as that per capita expenditure at which the average per capita per day calorie intake was 2400 calories in rural areas and 2100 calories in urban areas. Average per capita expenditures incurred by that population group in each State which consumed these quantities of calories, as per the 1973-74 survey of NSSO, were used as the poverty lines.

The debate on the extent of poverty in India has been a matter of global interest in the recent years. The primary reason for the global interest in the debate is that the levels of poverty in India and China have come to exert significant influence over the trends in world poverty itself.

Within India too, there has been growing contestation around poverty estimates, particularly in the period of economic reforms. First, there are persistent disagreements among economists on whether the rate of poverty decline after economic reforms was slower than in the preceding period. Secondly, the shift to targeted, rather than universal, welfare schemes has witnessed the use of poverty estimates to decide on the number of households eligible to access these schemes. The report of the Expert Group on the estimation of poverty, chaired by Suresh Tendulkar, is the latest input to the “Great Indian Poverty Debate.”

It is to be noted here that many subsidies and programs are launched by the government but these additional increments do not reach the actual people that are in need of them. Instead it is sent back to the businessman and thus a lot of profit is earned on these subsidized goods. Thus, to lower the level of poverty in India, schemes have to be launched in order to directly benefit the people in need.

The Hindu states that, “A final issue with the report, of much long-term consequence, relates to the wisdom of abandoning the calorie norm. It is indeed true that the levels of calorie intakes are not well correlated with nutritional outcomes. However, abandoning the calorie norm altogether and taking solace from the fortuitous fact that calorie intakes appear adequate at the new poverty lines is an arbitrary proposition. It is unclear whether there is any basis, theoretical or empirical, for this relationship to hold true across time.”

the Tendulkar Committee has pitched for a policy position that is stranded between the harsh realities of poverty in India and the fiscal conservativeness of a neo-liberal framework. The real challenge lies in preserving the positives from the report, and strongly persisting with the demand for a universal social security system.