Thirty-five per cent of urban Indian households qualify as poor, according to a report in this newspaper quoting unreleased data from the Socio-Economic and Caste Census, 2011 (SECC). This is way above earlier estimates of the urban below poverty line (BPL) population for 2011-12, which ranged from 13.7 per cent as per the Tendulkar Committee’s methodology to 26.4 per cent going by the Rangarajan expert panel’s formula. It is also consistent with findings on rural India already released by the SECC, showing roughly 60 per cent of households to be facing “deprivation”. That again is much more than BPL estimates for rural India in 2011-12, at between 25.7 (Tendulkar) and 30.9 per cent.
The SECC numbers probably have greater credibility, as they are based on actual door-to-door enumeration which identifies deprived or poor households by defined parameters of exclusion: government employment, income tax status, ownership of two-wheelers or refrigerators, farming of at least five acres of irrigated land, etc. There may be a tendency for respondents to understate income and asset ownership or, alternatively, overstate deprivation.
Nevertheless, the SECC data is likely to capture indigence or vulnerability much better than rigid poverty lines; to say that a monthly per capita consumption expenditure of Rs 972 in rural areas and Rs 1,407 in urban areas (at 2011-12 prices) would suffice to secure the necessities of life isn’t elegant or convincing. On the whole, a more flexible approach that seeks to identify vulnerable households based on non-fulfilment of clear parameters of exclusion would be both fair and transparent. That being the case, the SECC estimates of urban and rural poverty or deprivation levels at 35 per cent and 60 per cent respectively may be more in line with reality.
But estimation of poverty is only part of the story. Equally important is the means for addressing it. The conventional route of supplying wheat and rice at Rs 2-3 per kg, when it costs 10 times more to procure and stock these, is inherently leaky, apart from being costly and distorting markets. The way ahead is direct cash transfers to the Aadhaar-seeded bank accounts of identified beneficiaries. Such transfers have worked well in the case of LPG subsidy, gradually weeding out those not deserving of the benefit — including through a concerted “GiveItUp” campaign. They can be extended to food and fertiliser subsidies, scholarships and a host of other welfare programmes. India’s poor deserve a new deal in welfare delivery.