Opinion Drawing a new line
Evaluating changes in how we count our poor
In discussing the mid-term prospects of the Eleventh Plan I have argued before that achieving GDP growth targets needs special efforts. The manufacturing and industrial sector responded well to the stimulus,and with policy consolidation,poor growth of manufacturing for more than a decade will be behind us. The agricultural sector is growing although the basic strategies of improving land and water use are as yet not in place. At long last,preparation for a more focused strategy of poverty removal is complete. The Tendulkar Committee report is available for discussion. It is a good report,the kind we should have seen in the early 90s when the issue of revising the present poverty line (developed by a group working with me in the mid-70s) was posed for the first time. The work done by R. Radhakrishna and S. Sengupta under Suresh Tendulkar presents excellent technical backup for a larger consultative,policy-focused process. And,at a more practical level,the N.C. Saxena Committee for identifying beneficiaries through the latest Below Poverty Line Census has with great energy presented a multi-dimensional menu,which is spiced up with seven comments (or minutes of dissent?).
I have been arguing for two decades now that that debate around the 1973-4 poverty line amongst economists is not very relevant to an India which is not living ship-to-mouth,where hunger is much lower and literacy and consciousness much higher. Fortunately both the compulsion of democratic politics and the pressing needs of practitioners lead to the alternate thinking now available and needed and we must now as I have monotonously argued swim with these trends and junk the Poverty Line of which the present author was the founder.
Basically,the Tendulkar Group moved over from a calorie-determined to a food expenditure-determined line. We are all critical of the official poverty line,but they found it desirable in the interest of continuity to situate it in some generally acceptable aspect of the present exercise. Like Banquos ghost,the 1977 Alagh Task Force casts its shadow possibly since both Tendulkar and Radhakrishna were its members. The poverty ratio for urban areas (25.7 per cent) derived from that method now drives the new system.
That ratio was derived from calorie norms. Now the argument is turned on its head and the same ratio in turn determines the cut-off food expenditure. That cut-off expenditure is also suggested for rural areas. So the ratio came from a poverty line basket of food; and now it determines the basket for both rural and urban areas. I will love to teach this in B.A. Honours classes as a detour in logic.
But public policy is not an exercise in logic or causal chain systems and the Tendulkar report has many advantages. For one thing it shifts the emphasis from calories to food demand. The new framework provides purchasing power and lets the poor substitute between food items.
It works in a framework in which government will now not have the full responsibility for education and health needs or for that matter drinking water for the poor. Here the committee is one-sided in stating that the earlier poverty lines assumed that basic social services of health and education would be supplied by the State. It does not clarify that the 1977 Task Force stated that the government must have a basic needs plan and give it the highest priority,in terms of pro-poor priorities in expenditure.
The Tendulkar report has a concept of inclusive growth where the state does not take on itself such pro-poor responsibilities but provides for a concept of income supplements for their expenditures on them. It shows that with these supplements the new poverty line would correspond to standards which would lead to physical nutrition norms,like nutrition for basic metabolic needs and others,being met on an average in fact,exceeded. Statistically this part of the report is tentative,but the approach is creative and more can and (I am sure) will be done. A more serious issue is that if expenditures on education and health are included in the poverty line calculations how do we account for the public expenditures on them? Or are we happy with double counting?
The political economy preferences are just below the surface. Tendulkar and Radhakrishna refer many times to the 1977 Task Force in fact these are the largest number of references but with the current allergy to anything that happened before 1992,do not list it in their references. (The most listed references? The World Bank.) More important,will the present standard dividing the poor and the rich poor,and that too based on the 1977 line in urban areas,be acceptable as a norm? Saxena wants more. But these are expected and the important issue is to get along with the job.
The writer,a former Union minister,is chairman,Institute of Rural Management,Anand
express@expressindia.com
Share
