Just how many people in India are poor?
The answer to that question is critical for a middle-income country like India, which holds the contrarian distinction of being a rising economic titan as well as being home to the largest number of the world’s poor. Until the results of the comprehensive socio-economic caste census (SECC) 2011 for rural India were released last week, economists had to solely depend on the ‘poverty line’.
As opposed to the erstwhile Planning Commission’s consumption and calorie intake-based poverty line estimates, the SECC analysis uses an ‘exclusion-inclusion’ method. For instance, a family that owns a landline phone or a three-room house with concrete walls and roof were automatically excluded from the list of the poor. Likewise, there were five automatic inclusion parameters such as a household without shelter or from a primitive tribal group, to count a family as poor.
These conceptual issues aside, India can ignore the big conclusions of the study only at its own peril. It would be foolhardy to ignore the fact that the primary breadwinner in three out of four households in rural India earns less than Rs 5,000 a month. Similarly, it would be reckless to disregard the reality that in more than half of the cases (51.8% of the total number of rural families), the main income earners barely manage to keep their kitchen fires burning by working as manual or casual labourers.
The SECC data analysis will help the government to prioritise schemes meant for the most deprived. The central question facing India is how to spin jobs and multiply income. Productive jobs are vital for growth. And a good job is the best form of inclusion. Of India’s 1.2-billion population, 60% are of the working age. And of the 15 million who join the queue of job seekers every year, only 3% undergo vocational training. India’s challenge is to create the conditions for faster growth of productive jobs outside the agrarian sector. There are abundant examples that show how economies that showed potential eventually fell off because of the absence of bipartisan support to critically important policies. The approach to inclusion, therefore, must shift from handouts to more rapid growth of productive enterprises and jobs.