Dinesh Kamath's Editorial "Govt should do something drastic about ‘Poverty Line’" that was published in Newsband

Govt should do something drastic about ‘Poverty Line’

Poverty still remains the major problem of India. What is our government doing about it? It is necessary to keep track of whether the policies pursued by the government are helping us pull the people at the bottom of the ladder out of destitution. There is necessity for setting the poverty line at just above subsistence level.

The survey made in 2004-05 had shown 25.7% of the urban population in poverty. It was also found that the rural poverty line was well below this urban poverty line and therefore fell short of ensuring even above-subsistence-level existence. Therefore, it recommended moving the rural poverty line up to align it with the urban poverty line. That adjustment raised the proportion of the rural poor in 2004-05 from 28.3% at the old to 41.8% at the new poverty line.

There was one survey made in which it was found that the poverty-line expenditure is insufficient to buy (in Jor Bagh) even two bananas per meal per person per day. This cannot be true. There is certainly something wrong with the way the survey was made.  

According to another survey, on average, monthly consumption of a poverty-line urban household with five members in 2009-10 included 48 kg of cereals, 3.15 kg of pulses, 17 kg of milk, 20.6 kg of vegetables, 6 kg of eggs, 1.5 kg of meat, 3.1 kg of edible oil, 1.2 kg of fresh and dry fruits, 3.5 kg of sugar, and 2.3 kg of salt and spices. In addition, the household spent Rs 2,250 per month on clothing, rent, transportation, education, health and miscellaneous items.

While nobody would claim that this consumption basket is good for comfortable living, it is a very far cry from less than two bananas per meal per person per day. With some adjustment on the margins, a household can reasonably subsist on this consumption basket. Indeed, 34% of rural population and 21% of urban population could not afford even this basket in 2009-10. Should we not be more concerned about tracking what is happening to this set of households than those who are already around the middle or higher rungs of the income ladder and significantly better off?

Indeed, even if the government must yield to the politics of populism and revise the line significantly upward, it must opt for two poverty lines, one to track the destitute and a higher one to track the somewhat better off.

At 2009-10 prices, nationally, rural and urban poverty lines stood at Rs 22.2 and Rs 28.3 per day, respectively. Raising these lines to just Rs 33.3 and Rs 45.4, respectively, would place 70% of the rural and 50% of the urban population in poverty in 2009-10. How much good will we do to the destitute if we spread the meagre resources available for redistribution over such a large population?

It is necessary for the government to give a serious thought to this ‘poverty line’ issue and do something drastic about it.