It just doesn't add up
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It just doesn't add up

The Planning Commission should be consistent on poverty numbers. Dilip D'Souza writes.

india Updated: Mar 22, 2012 23:43 IST

When the Planning Commission releases its estimates of poverty in India, as it did recently, you will find three different reactions.

One welcomes the reduction in poverty - these days, the estimates always show that. The second points to the continuing scale of poverty - there are 360 million poor Indians today, more than there were Indians in 1947. The third is incredulity at the rupee level that defines poverty - if you live in urban India and spend more than Rs28.35 a day, you're not poor.

So foreign is that figure, that most people would be hard put to think of someone who spends less than that per day. Yet every third Indian does. For a week last October, two young professionals, Tushar Vashisht and Matthew Cherian, decided to try to live on the poverty line (then announced as Rs32 a day). "Hardly a day went by [when] we didn't think of food," they wrote when they were done. This was because they found that at that level of spending, "food was the largest component [68%] of our budget."

Note the reduction in the rupee amount, just six months apart: Rs32 to Rs28.35. When you lower the line, you'll find less Indians below it; it's a good way to claim a reduction in poverty. And even so, remember that 360 million Indians spend less than Rs28.35 a day. Those 360 million are the only Indians we can officially call poor.

But the real point about reducing poverty is the way the Planning Commission has juggled its figures over the years. Their latest announcement tells us that in 2004-05, 37.2% of India was poor, and that fraction has reduced to 29.9% in 2009-10. By any standards, seven percentage points over five years is a substantial decline.

Only, it seems that the Commission hoped that nobody would indulge in a little googling about all this. Because if you do indulge, you'll come up with some intriguing things indeed.

First, go all the way back to 1998. On the Commission's website, I found a document titled 'Agriculture Policy: Vision 2020'. The second paragraph in this document says: "Increased agricultural poverty and rapid industrial growth in the recent years have contributed to a significant reduction in poverty level, from 55% in 1973 to 26% in 1998." So if the Commission estimated poverty at 26% in 1998, a number widely cheered at the time, how did it increase to 37.2% in 2004-05? What caused that jump in poverty? What do we say of a drop that hasn't even taken us back to that 1998 level?

Also on the Commission website, I found a document dated March 2007 from the Press Information Bureau, titled, 'Poverty Estimates for 2004-05'. According to Table 2 in this document, the poverty level for the country in 2004-05 was 27.5%. In 2004-05, the Commission estimated poverty at 27.5%. Today, it tells us that it estimated poverty in 2004-05 at 37.2%. Which is it, really?

Why these seeming discrepancies?

Because the Commission has revised the way it defines poverty. In its 2009 report, the Commission's Expert Group under Suresh Tendulkar observed: "The major problem has been the outdated [metric] implicit in the 1973-74 based... poverty line." It referred specifically to 2004-05 data as, therefore, needing correction.

It's good to revise methods. But if the Commission uses different yardsticks - updated, sure - every time it tells us about the poverty line, how do we get a sense of what's really happened to poverty?

(Dilip D'Souza is a Mumbai-based writer and journalist. The views expressed by the author are personal.)

First Published: Mar 22, 2012 23:41 IST