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The myths around poverty in India
by Merlot Daruwala Tue Jul 30, 2013 6:50 am
The level of poverty and the rate of its decline are two of the most important yardsticks by which any modern democracy measures its progress. Hence, it is natural to see a spirited debate on the latest poverty numbers estimated by the Planning Commission, which show a sharp decline in poverty levels in recent years.
However, as is the case with many other critical issues in India the debate on the poverty seems to be generating more heat than light. The debate has assumed a sharp edge partly because of the unprecedented scale of the decline in poverty levels. Between 2004-05 and 2011-12, a net of 137 million people or 15% of the population lifted themselves out of poverty, the commission estimated, bringing down the national poverty rate to 22%.
It is important to take stock of these numbers by dispelling some of the myths surrounding the poverty debate.
The first myth is that ...it is the “absurd” poverty line recommended by the late economist Suresh Tendulkar that has inflated the decline in poverty levels.
In reality, the committee led by Tendulkar had only expanded the scope of the poverty line. It is because of his recommendations that nearly 10% of the population in 2004-05, who were not considered poor under the earlier definition, came to be considered as poor. Second, changing the poverty line now will change the poverty levels but will not affect greatly the pace of the decline.
The second myth, propounded by a smaller but shriller set of naysayers, is that the National Sample Survey Office (NSSO) data on which the poverty estimates are based, are fudged. In their support, they point to the sharp differences in the NSSO figures for 2009-10 and 2011-12.
These criticisms tend to overlook the fact that India faced a drought, and witnessed a severe credit crunch in 2009-10, and the sharp rise since then is because of a low base. NSSO’s data quality may have declined over the past three decades but it provides detailed primary data and is quite transparent in that sense. Apart from Bihar and Andhra Pradesh, where the poverty decline is too sharp even by national standards, the data for other states can be taken at its face value.
The third myth is that inequality has been exacerbated even if poverty has declined. Inequality in India operates along four key axes: income, caste, gender and region. The evidence over the past few years suggests a gradual decline in inequality along each of these axes apart from gender. The latest NSSO figures, for instance, show that the growth in consumption expenditure (a proxy for income) has been far more evenly spread in the seven years between 2004-05 and 2011-12 than in the past decades. Also, even though this period saw much higher growth in urban incomes and consumption, rural consumption kept pace. Rural consumption expenditure grew at an average annual pace of 3.3% in the latter period as compared with an anaemic annual pace of 0.8% in the 18-year-period between 1993-94 and 2004-05 (at constant 1987-88 prices). Notwithstanding the curious poverty figures for two major states, the decline in poverty in the recent past has been far more widespread across Indian states than ever before. There are no extreme outliers any more when it comes to poverty ratios. Further, the spike in farm wages in the past few years after years of stagnation has meant that landless labourers at the bottom of the pyramid, belonging mostly to lower castes, have benefited the most from the rural boom.
Does this mean that the economic policies of the United Progressive Alliance (UPA) government have succeeded? That is another myth being propounded by the government’s spokespersons.
The evidence so far suggests that the pull-up effect of growth has been far more efficient in raising incomes than the welfare schemes of the government. For instance, the push provided by the construction boom over the past decade has raised farm wages much more than the Mahatma Gandhi National Rural Employment Guarantee Act, as economist and chairman of the committee of agricultural costs and prices, Ashok Gulati points out in his writings.
In fact, the UPA’s excessive reliance on doles and subsidies rather than on investments in public goods has only stoked the fires of inflation, raising deficits, and slowing growth. The UPA inherited stable finances and witnessed a global boom in its early years. It missed that opportunity to build the base for a sustained attack on poverty.
Given the slowdown in the growth engine and the fall in public resources, India has now run out of ammunition to fight poverty with the same vigour as before. Neither growth nor inclusion will be easy now.
http://www.livemint.com/Opinion/HT2IJAok4iraDsrT5XBhXI/The-myths-around-poverty-in-India.html
However, as is the case with many other critical issues in India the debate on the poverty seems to be generating more heat than light. The debate has assumed a sharp edge partly because of the unprecedented scale of the decline in poverty levels. Between 2004-05 and 2011-12, a net of 137 million people or 15% of the population lifted themselves out of poverty, the commission estimated, bringing down the national poverty rate to 22%.
It is important to take stock of these numbers by dispelling some of the myths surrounding the poverty debate.
The first myth is that ...it is the “absurd” poverty line recommended by the late economist Suresh Tendulkar that has inflated the decline in poverty levels.
In reality, the committee led by Tendulkar had only expanded the scope of the poverty line. It is because of his recommendations that nearly 10% of the population in 2004-05, who were not considered poor under the earlier definition, came to be considered as poor. Second, changing the poverty line now will change the poverty levels but will not affect greatly the pace of the decline.
The second myth, propounded by a smaller but shriller set of naysayers, is that the National Sample Survey Office (NSSO) data on which the poverty estimates are based, are fudged. In their support, they point to the sharp differences in the NSSO figures for 2009-10 and 2011-12.
These criticisms tend to overlook the fact that India faced a drought, and witnessed a severe credit crunch in 2009-10, and the sharp rise since then is because of a low base. NSSO’s data quality may have declined over the past three decades but it provides detailed primary data and is quite transparent in that sense. Apart from Bihar and Andhra Pradesh, where the poverty decline is too sharp even by national standards, the data for other states can be taken at its face value.
The third myth is that inequality has been exacerbated even if poverty has declined. Inequality in India operates along four key axes: income, caste, gender and region. The evidence over the past few years suggests a gradual decline in inequality along each of these axes apart from gender. The latest NSSO figures, for instance, show that the growth in consumption expenditure (a proxy for income) has been far more evenly spread in the seven years between 2004-05 and 2011-12 than in the past decades. Also, even though this period saw much higher growth in urban incomes and consumption, rural consumption kept pace. Rural consumption expenditure grew at an average annual pace of 3.3% in the latter period as compared with an anaemic annual pace of 0.8% in the 18-year-period between 1993-94 and 2004-05 (at constant 1987-88 prices). Notwithstanding the curious poverty figures for two major states, the decline in poverty in the recent past has been far more widespread across Indian states than ever before. There are no extreme outliers any more when it comes to poverty ratios. Further, the spike in farm wages in the past few years after years of stagnation has meant that landless labourers at the bottom of the pyramid, belonging mostly to lower castes, have benefited the most from the rural boom.
Does this mean that the economic policies of the United Progressive Alliance (UPA) government have succeeded? That is another myth being propounded by the government’s spokespersons.
The evidence so far suggests that the pull-up effect of growth has been far more efficient in raising incomes than the welfare schemes of the government. For instance, the push provided by the construction boom over the past decade has raised farm wages much more than the Mahatma Gandhi National Rural Employment Guarantee Act, as economist and chairman of the committee of agricultural costs and prices, Ashok Gulati points out in his writings.
In fact, the UPA’s excessive reliance on doles and subsidies rather than on investments in public goods has only stoked the fires of inflation, raising deficits, and slowing growth. The UPA inherited stable finances and witnessed a global boom in its early years. It missed that opportunity to build the base for a sustained attack on poverty.
Given the slowdown in the growth engine and the fall in public resources, India has now run out of ammunition to fight poverty with the same vigour as before. Neither growth nor inclusion will be easy now.
http://www.livemint.com/Opinion/HT2IJAok4iraDsrT5XBhXI/The-myths-around-poverty-in-India.html
Merlot Daruwala- Posts : 5005
Join date : 2011-04-29
Re: The myths around poverty in India
by truthbetold Tue Jul 30, 2013 7:40 am
Merlot,
Let us keep politics aside.
you have been in India much longer than most of us on this forum.I have asked this question in another thread. I am repeating here to get a better sense of what a reasonable minimum income is for a family of four in India?(I am not trying to compare it with planning commission numbers or such thing). Just trying to get a sense of ground reality. I am also not looking for a data driven number. Just your obsobservations.
include differences between
Urban vs rural
Regional
agri vs building trades
include a bare min 1bed house rent with electricity and some water
Educational opportunity
Some health care, could be self supported
One or two breadwinners
Employed
Tia.
Let us keep politics aside.
you have been in India much longer than most of us on this forum.I have asked this question in another thread. I am repeating here to get a better sense of what a reasonable minimum income is for a family of four in India?(I am not trying to compare it with planning commission numbers or such thing). Just trying to get a sense of ground reality. I am also not looking for a data driven number. Just your obsobservations.
include differences between
Urban vs rural
Regional
agri vs building trades
include a bare min 1bed house rent with electricity and some water
Educational opportunity
Some health care, could be self supported
One or two breadwinners
Employed
Tia.
truthbetold- Posts : 6799
Join date : 2011-06-07
Re: The myths around poverty in India
by Merlot Daruwala Tue Jul 30, 2013 8:21 am
Look, these are not easy yardsticks to establish. Eminent economists who produced numbers after extensive surveys have come in for much flak, so what to say of lay people like us? What is "reasonable" to you may be highly unreasonable to me.
Anecdotal evidence of what people actually get by, whether it's reasonable or not, is probably the only realistic way to form an opinion.
Personally, I think 5K / month is a reasonable definition for a national poverty line. I base this on how people make do with 8K per month in an expensive city like Mumbai. The Hindustan Times carries a weekly feature describing a day in the life of various people. Here are some samplers which should give you a good idea:
Sunil Chauhan works 11 hour days and earns 9K/mth, supports ageing parents back home and saves 3K.
Subash Gupta works two jobs and makes 8K. Looks forward to chicken curry and rice on Sunday afternoons and going out with his wife and son in the evenings.
Paul Durai earns Rs 20k/month and supports himself (in Mumbai) and a family back in Kerala consisting of his mother, his wife and their 18-year-old son, an engineering student.
Anecdotal evidence of what people actually get by, whether it's reasonable or not, is probably the only realistic way to form an opinion.
Personally, I think 5K / month is a reasonable definition for a national poverty line. I base this on how people make do with 8K per month in an expensive city like Mumbai. The Hindustan Times carries a weekly feature describing a day in the life of various people. Here are some samplers which should give you a good idea:
Sunil Chauhan works 11 hour days and earns 9K/mth, supports ageing parents back home and saves 3K.
Subash Gupta works two jobs and makes 8K. Looks forward to chicken curry and rice on Sunday afternoons and going out with his wife and son in the evenings.
Paul Durai earns Rs 20k/month and supports himself (in Mumbai) and a family back in Kerala consisting of his mother, his wife and their 18-year-old son, an engineering student.
Merlot Daruwala- Posts : 5005
Join date : 2011-04-29
Re: The myths around poverty in India
by garam_kuta Tue Jul 30, 2013 8:46 am
Merlot Daruwala wrote:Look, these are not easy yardsticks to establish. Eminent economists who produced numbers after extensive surveys have come in for much flak, so what to say of lay people like us? What is "reasonable" to you may be highly unreasonable to me.
Anecdotal evidence of what people actually get by, whether it's reasonable or not, is probably the only realistic way to form an opinion.
Personally, I think 5K / month is a reasonable definition for a national poverty line. I base this on how people make do with 8K per month in an expensive city like Mumbai. The Hindustan Times carries a weekly feature describing a day in the life of various people. Here are some samplers which should give you a good idea:
Sunil Chauhan works 11 hour days and earns 9K/mth, supports ageing parents back home and saves 3K.
Subash Gupta works two jobs and makes 8K. Looks forward to chicken curry and rice on Sunday afternoons and going out with his wife and son in the evenings.
Paul Durai earns Rs 20k/month and supports himself (in Mumbai) and a family back in Kerala consisting of his mother, his wife and their 18-year-old son, an engineering student.
well said - honest, clean and matter of fact
garam_kuta- Posts : 3768
Join date : 2011-05-18
Re: The myths around poverty in India
by truthbetold Tue Jul 30, 2013 10:48 am
http://m.thehindu.com/opinion/lead/the-dishonesty-in-counting-the-poor/article4967454.ece/?secid=3010
here is an article on the dishonesty in counting poverty numbers.read and decide for yourself.
here is an article on the dishonesty in counting poverty numbers.read and decide for yourself.
truthbetold- Posts : 6799
Join date : 2011-06-07
Re: The myths around poverty in India
by truthbetold Tue Jul 30, 2013 10:56 am
Merlot ,
no need to be defensive. it is not a question trying to pin you down.
the fact that it is difficult to define a reasonable number is obvious.
that is why i try to keep it away from political discussion.
your numbers above are what i am looking for. little more explanation would be helpful. your numbers seem to indicate a family monthly income of 5 to 10k is a minimum .
thanks.
no need to be defensive. it is not a question trying to pin you down.
the fact that it is difficult to define a reasonable number is obvious.
that is why i try to keep it away from political discussion.
your numbers above are what i am looking for. little more explanation would be helpful. your numbers seem to indicate a family monthly income of 5 to 10k is a minimum .
thanks.
truthbetold- Posts : 6799
Join date : 2011-06-07
Re: The myths around poverty in India
by Marathadi-Saamiyaar Tue Jul 30, 2013 11:52 am
Merlot Daruwala wrote:Personally, I think 5K / month is a reasonable definition for a national poverty line. I base this on how people make do with 8K per month in an expensive city like Mumbai. The Hindustan Times carries a weekly feature describing a day in the life of various people. Here are some samplers which should give you a good idea:
Would you live with 5K/month or even 20K/month - since you don't call that POVERTY?
Marathadi-Saamiyaar- Posts : 17675
Join date : 2011-04-30
Age : 110
Re: The myths around poverty in India
by truthbetold Tue Jul 30, 2013 11:33 pm
Samiyaar,
the question under discussion is not how you or merlot or someone with our means live in India. What we are trying to understand is what is a decent ors sensible minimum family monthly income?
Merlot number of 5to 8k are on one end .
My perception of 10 to 15k are little higher.
your numbers of 30k are higher but you have used a different criteria.
My hope is to translate these numbers to a percentage of Indian population.
my sense is irrespective of govt the poverty is significantly under counted.
the question under discussion is not how you or merlot or someone with our means live in India. What we are trying to understand is what is a decent ors sensible minimum family monthly income?
Merlot number of 5to 8k are on one end .
My perception of 10 to 15k are little higher.
your numbers of 30k are higher but you have used a different criteria.
My hope is to translate these numbers to a percentage of Indian population.
my sense is irrespective of govt the poverty is significantly under counted.
truthbetold- Posts : 6799
Join date : 2011-06-07
Re: The myths around poverty in India
by Marathadi-Saamiyaar Wed Jul 31, 2013 12:04 am
truthbetold wrote:Samiyaar,
the question under discussion is not how you or merlot or someone with our means live in India. What we are trying to understand is what is a decent ors sensible minimum family monthly income?
Merlot number of 5to 8k are on one end .
My perception of 10 to 15k are little higher.
your numbers of 30k are higher but you have used a different criteria.
My hope is to translate these numbers to a percentage of Indian population.
my sense is irrespective of govt the poverty is significantly under counted.
Marathadi-Saamiyaar- Posts : 17675
Join date : 2011-04-30
Age : 110
Re: The myths around poverty in India
by Merlot Daruwala Wed Jul 31, 2013 12:28 am
Marathadi-Saamiyaar wrote:Merlot Daruwala wrote:Personally, I think 5K / month is a reasonable definition for a national poverty line. I base this on how people make do with 8K per month in an expensive city like Mumbai. The Hindustan Times carries a weekly feature describing a day in the life of various people. Here are some samplers which should give you a good idea:
Would you live with 5K/month or even 20K/month - since you don't call that POVERTY?
Upps Aunty, thank you for making me feel intellectually superior. No, I don't and can't live on 5K or even 20K per month. But there are people in Mumbai who do, without any support from the government. So if we have to draw up some arbitrary income level (aka poverty line) below which families can avail of taxpayer-funded government handouts, 5K is as good a level as any.
Merlot Daruwala- Posts : 5005
Join date : 2011-04-29
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