It may shock the Indian middle-class to know that it lives ‘barely or not far above India’s poverty line, and below international poverty lines, especially in rural areas.’ The median rural person in India lives on Rs 15 per day (with a purchasing power parity, or PPP, of $1.30), spending only Rs 3 each day more than a person on the official Indian rural poverty line, write the authors of ‘Perspectives on Poverty in India: Stylized facts from survey data’ from the World Bank (www.oup.com).
The authors add that India’s poverty line is very low by international standards, and that 80 per cent of the rural population lives below the median developing-country poverty line of Rs 22 (PPP $2) a day. “Qualitative surveys show that most Indians think of themselves as poor. Moreover, when the definition of poverty is expanded to include other dimensions of well-being, such as access to education, health care, and basic infrastructure, then poverty clearly continues to afflict more than half of India’s population.”
What can dishearten one further is the observation in the book that definitive views on the pace of poverty decline are hostage to data uncertainties. Suggesting that the revision of official poverty lines and price indexes will help put poverty measurement on a sounder footing, the authors draw attention to the growing divergence between mean consumption per person from the National Sample Survey (NSS) and the private consumption component of the national accounts statistics (NAS), also per person. “In levels, aggregate household consumption implied by the NSS is barely half that of the household component of the NAS. Such a gap is unusually large by international standards.”
Acknowledging that growth has tended to reduce poverty, the authors hasten to remind however that problems with data can cloud any assessment of whether the growth process has become more or less pro-poor in the post-reform period.
A report that merits detailed discussion among the macro measurers.
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