It's a double error

The new poverty estimates are both a mockery and a fraud. They prove that the facilitators of India's reform process are making profits at the expense of the aam aadmi. Sitaram Yechury writes.

columns Updated: Mar 26, 2012 23:07 IST

The ongoing debate over the incidence of poverty in India, often assuming surreal proportions, shows that there is indeed a ‘philosophy of poverty’ guiding current economic reforms.

The loot of our country’s resources that is taking place both through these reforms, which continue to widen gross inequalities, and through the open plunder of our resources for private gain — as reflected in the series of mega scams — require the legitimacy of a democratic endorsement. This can come only by manufacturing popular support over the myth that this trajectory has resulted in a significant decline in the incidence of poverty in the country. This, in turn, can only be done by generating grossly fabricated statistics.

Such an exercise has come on March 19 when the Planning Commission released the poverty estimates for 2009-10, which claim an overall reduction in the incidence of poverty by 7.3% between 2004-05 and 2009-10. This is based on the daily per capita consumption of Rs 28 in urban cities and Rs 22 in rural areas in 2009-10.

Such a gigantic fraud has been in the making for some time. The Planning Commission, in May 2011, impleaded in an ongoing public interest litigation before the Supreme Court claiming that a daily expenditure of Rs 20 in urban and Rs 15 in rural areas was sufficient to keep people above the poverty line. According to the Planning Commission, anybody with Rs 578 per month in the cities is not poor, as it includes a monthly expenditure of Rs 31 on rent and conveyance, Rs 18 on education, Rs 25 on medicines and R36.5 on vegetables.

This is both a mockery and a fraud. The Planning Commission itself prescribes a minimum intake of 2,400 calories daily to sustain oneself. In 2010, this would have cost at least Rs 44. Today, it would be much more, at least a double of what the latest figures that have been doled out by the government.

The Planning Commission, on the basis of its reasoning, takes the poverty ratio to have declined from 37.2% in 2004-05 to 29.8% in 2009-10. The National Advisory Council has suggested a ratio of 46%. Both these estimations fall woefully short of the late Arjun Sengupta’s estimation that 77% our population is currently surviving on less than Rs 20 a day. This was based on the actual realities that existed nearly five years ago. The relentless rise in prices of all essential commodities since has, surely, worsened the situation.

It is not only the growth of inequalities but the worsening of livelihood conditions in absolute terms that is worrisome. P Sainath’s recent study shows that on an average, between 1972 and 1991, the per capita net daily availability of cereals and pulses grew from nearly 434 gm to 480 gm. Between 1992 and 2010, this fell to 440 gm. The argument that this is because of population growth is also exploded by the fact that between 1981 and 1991, the population grew at a rate of 2.16% and foodgrain production grew at 3.13%. However, since the reform process began, foodgrain production declined. Between 1991-2001, the population grew at 1.95% and foodgrain production at 1.1%. Between 2001-11, population growth was 1.65% while foodgrain was 1.03%.

Clearly, the issue is not one of growth of relative poverty but that of absolute poverty. The only way in which this situation can be reversed is by providing food security and other required subsidies to ensure a better quality of life for the aam aadmi. But it is precisely such subsidies that are being targeted in the name of containing the burgeoning of fiscal deficit. The current Budget documents show that the fiscal deficit stood at 5.9% — or nearly Rs 5.22 lakh crore. In the same year, the total amount of tax concessions granted to the corporates and the rich stood at Rs 5.28 lakh crore. If these legitimate taxes approved in the last Budget were collected, then there would be no fiscal deficit at all. On the contrary, there would have been a surplus.

The philosophy of neo-liberalism, of course, dictates that the burden of deficit should be brought down not by disbanding such concessions to the rich. These, after all, are ‘incentives’ for growth. This deficit has to be brought down by disbanding the subsidies for the poor which, after all, are ‘burdens’ on the economy.

Thus, the fuel subsidy has been cut by Rs 25,000 crore, fertiliser subsidy by Rs 6,000 crore etc. As most subsidies are targeted to reach people living below the poverty line (BPL), the only way such reductions can be implemented is by reducing the BPL numbers. This is precisely what the Planning Commission’s fraudulent exercises are all about.

In Karl Marx’s classic polemic, The Poverty of Philosophy, with Proudhon’s Philosophy of Poverty, he begins by saying: “M Proudhon has the misfortune of being peculiarly misunderstood in Europe. In France, he has the right to be a bad economist, because he is reputed to be a good German philosopher. In Germany, he has the right to be a bad philosopher, because he is reputed to be one of the ablest of French economists. Being both German and economist at the same time, we desire to protest against this double error.”

Replace the countries appropriately to realise that the cheerleaders of these reform process are neither philosophers nor economists, but mere facilitators for generating super profits through the loot of India at the expense of the vast majority of our people.

(Sitaram Yechury is CPI(M) Politburo member and Rajya Sabha MP)

The views expressed by the author are personal

First Published: Mar 26, 2012 23:02 IST