Vanishing poverty trick

In figures officially released this week, the Planning Commission claims that >poverty incidence had declined from 37.2 per cent of the population in 2004-05 to 21.9 per cent in 2011-12. This 15.3 percentage points decline over a seven-year period amounts to an unprecedented annual decline of 2.2 percentage points in the poverty rate. If that trend is sustained, it would lead to an end to “official” poverty in India in a decade. The previous year for which a comparable estimate based on the Tendulkar Committee’s methodology is available, using data from a similar survey, is 2009-10. In that year, the incidence of poverty was reported at 29.8 per cent, reflecting a 7.4 percentage points reduction relative to 2004-05. A further 8 percentage points reduction over the next two years, when GDP growth in fact slowed, has substantially hiked the annual reduction rate.

The view that this evidence is not the outcome of a routine evaluation of the extent of poverty, but is politically influenced, is not without basis. To start with, despite the recent furore over the appallingly low level at which the Tendulkar committee set the “poverty line” (which works out to Rs. 33.3 in urban areas and Rs. 27.2 in rural areas for 2011-12), the government has chosen to stick officially with that line even though it knows that for all practical purposes the incidence of actual poverty is nearly three times higher. It knows, for example, that the calorie intake figures yielded by the same survey and hunger indices do not tally with the poverty reduction record that the Commission’s methodology yields. Second, the 68th Round National Sample Survey on Household Consumer Expenditure is atypical, if not abnormal, to say the least. From the early 1970s, till 2009-10, the “large sample” consumer expenditure surveys by the NSS were undertaken once in five years. If that schedule had been followed, the next large sample survey should have been in 2014-15. This, however, made the available poverty estimates politically irrelevant. They did not refer to the period after the UPA’s second term started in 2009. They would be superseded only in 2014-15, well after the next election. So in a sudden show of concern for more regular statistical information, the government decided on undertaking a large sample survey after just two years. It obviously knew that if combined with the Planning Commission’s methodology such a survey would point to a significant reduction in poverty. But even the Commission must have been surprised by the actual figure it finally got. The fact that the government is rightly unwilling to base its new food security initiative on these unrealistic numbers suggests the Planning Commission must rethink its formal methodology. But politics requires otherwise.

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Printable version | Jan 28, 2022 4:43:50 PM | https://www.thehindu.com/opinion/editorial/vanishing-poverty-trick/article4949611.ece

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