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Poverty of thought PDF Print E-mail
Tuesday, 04 October 2011 00:00
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Fortunately, the storm over the R32 per capita urban poverty line has blown over with Planning Commission deputy chairman Montek Singh Ahluwalia clarifying that the poverty line was just for academic purposes, to be able to calculate the impact of economic growth on reduction in poverty for instance. As both rural development minister Jairam Ramesh and Ahluwalia pointed out, anti-poverty expenditure in India has been largely divorced from any definition based on poverty lines anyway. Expenses on MGNREGA, for instance, are not related to poverty levels since the jobs can be got by anyone. Similarly, expenses on food security are now defined by a new concept of ‘priority’ households—while the National Advisory Council wanted 90% of rural households to be covered, the Cabinet opted for a slightly lower 75%. The definition of what is a ‘priority’ household which gets a lot more grain at vastly subsidised prices, similarly, has been whittled down, but it’s important to know why. For one, there is the obvious expense—from R56,000 crore being spent right now, even the whittled down food bill could cost R82,000 crore. Two, the food security bill is actually expecting the broken PDS system to handle 2.5 times the grain it handles today!

This is the real problem with the new definition of poverty that is to be implemented now. An expert committee that Jairam and Montek will constitute will decide on this, using the data got from the socio-economic census that is currently in the works. The census will use various parameters, such as land holdings for instance, to come out with various gradations of deprivation, and the states and the Centre will finally freeze on one of them. At one level, this allows a sharp increase in the inherent poverty line. By way of example, if the Tendulkar poverty line for 2004-05 was to be doubled from R487 per month, instead of 37% of the population being poor, you’d get 85% of population being poor! Apart from giving various ministries more to spend on anti-poverty programmes, and politicians to tell voters they were spending more on the poor, what else would this do? Isn’t it better to focus on better delivery of funds to the poor, howsoever they are defined? That means thinking seriously about cash transfers. Devesh Kapur, Partha Mukhopadhyay and Arvind Subramanian estimated that the government spent R1,80,000 crore in 2007-08 on food, fertiliser and fuel subsidies and various central sector schemes—direct cash transfers to the poor would mean each family would get more than the official poverty line in that year. Given how poverty levels fall dramatically once there is greater education and industrialisation (http://www.financialexpress.com/news/column-old-whine/850373/), it’s more important to focus on economic reforms than on just more anti-poverty expenditure. India’s problem is not just poverty. It’s poverty of thought.

Last Updated ( Thursday, 22 March 2012 06:20 )
 

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