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A cunning Plan

I hear that the Planning Commission is planning to push the poverty line down a few notches so that a lot of folks can now come out bobbing up to the surface. Indrajit Hazra writes.

columns Updated: Sep 25, 2011 07:52 IST
Indrajit Hazra

I hear that the Planning Commission is planning to push the poverty line down a few notches so that a lot of folks can now come out bobbing up to the surface. This is being considered not out of some malicious attempt to make really poor people look just plain poor so that the real estate price in your area goes up that wee bit, but to “ensure the adequacy of actual private expenditure... on food, education and health”. In other words, to make sure that everybody who has just about enough to go around doesn’t stand in the queue meant for those who don’t have enough to go around.

On paper, this seems to be quite reasonable. Get those who desperately need subsidies and other forms of help first in the line. Those who need it less badly can follow later. But hang on. How do you set out to identify someone who’s desperately needy? How do you describe — never mind define — desperation?

The latest definition sought of being very, very poor (somehow ‘poor’ doesn’t capture the seriousness attached to ‘poverty’) by the Planners is anyone earning less than Rs32 a day if he lives in a city or town, and less than Rs26 if he’s a villager. If you earn Rs33 a day in a city, you won’t be eligible for the State’s tender love and care. So, if you earn Rs33 or, for that matter, Rs50 a month, you’d be better off lying about your income to get yourself a below poverty line (BPL) card — the same way we fib a bit to get tax breaks.

Effectively, the BPL card (that gets one subsidised or free food, the entitlement to live in a pucca house, etc.) becomes the object of desire for the very very poor, the very poor, the poor as well as the not-so-poor. I can see why folks who can afford it are willing to pay decent money to some crooked public distribution system (PDS) official or local party man to get their hands on a BPL card. It’s doubly precious, as eligibility works under a quota system with each state having a certain number of BPL cards to dole out to a certain number of people. So if there’s a non-desperately poor person who’s somehow cut into the BPL line, chances are he’s kept a genuinely desperately poor person out.

So what about measuring BPL according to calorie intake? Surely, that’s a good indicator of poverty: those who can’t afford two square meals a day must be desperately poor. But the rub lies in the word ‘afford’. As economists Abhijit V Banerjee and Esther Duflo write in their remarkably noses-on-the-ground book, Poor Economics: “Most people living with less than 99 cents a day do not seem to act as if they are starving. If they were, surely they would put every available penny into buying more calories. But they do not.” Even among the very poor, food expenditures increase much less in proportion to the budget. “Instead, they buy better tasting, more expensive calories.” The poor, it seems, have developed taste buds.

Economists Angus Deaton and Jean Dreze also found that over the last 25 years, Indians are eating less and less and that the share of household budgets devoted to food has declined across all levels of income. This isn’t necessarily because they are earning less, or because of rising food prices (the decline in calorie consumption coincided with the period when food prices were going down in the 1980s-mid-2000s), but perhaps due to the decline of heavy physical work, improvement in water and sanitation, etc. As (the very thin) Dreze tells me: “Different people have different requirements. I’m not comfortable hitching the idea of BPL targeting with calorie intake.”

There was a time when the PDS was for everyone. (Remember those ration cards we had?) From 1997, the poverty line became the holy yardstick to find out who needs help and who doesn’t.

In May, the Supreme Court had asked the Planning Commission why there should be a cap on the number of beneficiaries under the BPL list. From the earlier cap of Rs20/Rs15 a day four months ago, the Planners sought to up it to Rs32/Rs26. That was its ‘answer’ to the court’s question. I avoid 25% festival discounts from shops selling items at twice the original price. The Planners have a similar ponzi scheme in mind. Because tightening the purse strings for universal social welfare in broad daylight can’t go down well with the aam aadmi, the very aam aadmi and the very very aam aadmi.