Sharp fall in poverty numbers recorded

NEW DELHI, SEPT 22: The current gloom over the slowing growth and high oil prices notwithstanding, there's great news for reformers like D...

NEW DELHI, SEPT 22: The current gloom over the slowing growth and high oil prices notwithstanding, there8217;s great news for reformers like Dr Manmohan Singh, P Chidambaram and Yashwant Sinha. Figures just out, though not officially as yet, from the Planning Commission, show a sharp decline of around 10 per cent in the number of people below the poverty line 8211; a strong affirmation that economic reforms have benefitted the poor as well.

This also puts at rest the controversy raging over the past few years, that poverty has gone up during the years of economic reforms. Most of these figures, on the rise in poverty, in fact, were based on small sample surveys done by the National Sample Survey Organisation.

Data just out from the large sample of the National Sample Survey for the period July to December 1999, however, show that 27 per cent of the country8217;s rural population is below the poverty line 8211; this is down from 37 per cent in 1993-94, the last time the NSS used a large sample. For urban India, the poverty level is down to 23 per cent, from 33 per cent earlier.

While the sample results are still to be analysed for the period January to June this year 8211; this will be take another four months 8211; planning minister Arun Shourie proposes to release the data within the next week.

Shourie8217;s decision is somewhat controversial as some experts within the NSS as well as the Planning Commission, feel the data needs to be analysed more thoroughly first, and should be made public only after the full data including January to June is analysed. This is primarily because the NSS full sample data is completely at variance with the results from the large sample. NSS 53rd round, from January to December 1997, for instance, showed that rural poverty was 38.5 per cent and urban 33.8 per cent 8211; up from 37 and 33 per cent in 1993-94. The large sample is based on roughly double the number of households sampled in the thin sample.

Shourie, however, pointed out that the NSS thin sample data was not very reliable, and showed too many wild fluctuations in the past. Thus, for instance, between the 47th and the 48th rounds in 1991 and 1992, rural poverty was supposed to have gone up from 40.7 per cent to 46.4 per cent. And then, just as rapidly, the next year, the next NSS round showed that rural poverty was down to 37.3 per cent!

Says Shourie: The problem is the thin sample data tends to underestimate consumption dramatically 8211; during the 80s, this was around 10 per cent, now it8217;s around 40 per cent. The National Accounts, for instance, show a rising per capita availability of cereals while the NSS shows a declining trend 8211; in theory both should be equal.8217; The NCAER data on consumption, Shourie added, also tends to show that poverty has fallen 8211; as the NSS large sample is showing8217;.

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According to Prof Pravin Visaria, chairman of the Governing Council of the NSSO, the poverty numbers could just go down further when the full analysis is done. This is because we8217;ve found that if you ask households about their consumption in the last week, this shows much lower poverty levels than if you ask them about consumption in the last one month 8211; naturally, the recall for the last one week is much higher.8217; Between 1994 and 1998, according to Visaria, for instance, one a 30-day recall basis, rural poverty was between 36 and 43 per cent 8211; this fell to between 19 and 24 per cent based on a one-week recall basis. Visaria, however, added that data for both 1993-94 and 2000-01 are both comparable as they are both based on a 30-day recall.8217;