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STATISTICS

The Politics of Poverty

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Logically, if one reduces the consumption expenses to define the poor, poverty levels will come down. But how does that help?

When it comes to estimating the number of poor households in India, the Planning Commission seems to get it wrong most of the time. Several years ago, it said that just over 28 per cent of India’s rural population was poor. Experts contested this ‘low’ figure; in November 2009, a committee appointed by the Commission concluded that the actual percentage was over 41 per cent.

These days, the Commission is being castigated for saying that only people who spend up to Rs 32 a day in urban areas and Rs 26 in rural ones should be categorised as poor. How can anyone live at this consumption level in Delhi, where the minimum price for a plate of chhole kulche is Rs 10? And we haven’t even added the cost of a second meal, daily transportation and rent.

So, why did the Planning Commission mention these figures in an affidavit given to the Supreme Court?

The one-word answer is politics. One has to remember that Montek Singh Ahluwalia, deputy chairman, Planning Commission, is Prime Minister Manmohan Singh’s Man-Friday. It is in the Government’s interest for him to contend that the number of poor people has considerably reduced over the past few years. Logically, if one reduces the consumption expenses to define the poor, poverty levels will come down.

In fact, Ahluwalia’s ‘poor’ statistics go hand-in-hand with the stance taken by the Prime Minister earlier this week. On 27 September, the latter said that the main reason for high inflation was rising income levels across socio-economic classes, thanks to India’s high economic growth rate. But if this were true, one would surely expect the spending power of the urban poor to be higher than Rs 32 a day. India’s poverty count also has a bearing on economic policy. If the poverty ratio falls, or the number of poor people goes down as a percentage of the overall population, it enables the Government to drastically reduce its expenditure on subsidies and other welfare schemes aimed at the poor. This would have a direct and positive impact on the Centre’s fiscal deficit, the gap between the money it gets and the money it spends, which is expected to zoom this financial year ending 31 March 2012. Anyway, politicians and bureaucrats don’t really care how the other half lives—or dies.