Redefining Poverty A New Poverty Line for a New India
The Government of India says that 24% of India’s population is below the poverty line.* * Planning Commission of India, 1999-2000, Government of India
Despite such abysmal figures on India’s development, how can the government claim that only 24% of India is poor? Clearly something is amiss…
The answer lies in how poverty is defined in India
The present poverty line is a conveniently low threshold based largely on only caloric norms.
In fact, it should be called the starvation line .
It does not factor in norms for nutrition, health, clothing, housing, education etc.
Even worse is that the Planning Commission recognizes this shortcoming and yet doesn’t do anything about it.
“ I have learnt to seek my happiness by limiting my desires rather than attempting to satisfy them.” John Stuart Mill
Table 1: Percentage and Number of Poor in India since 1973 * Year Percentage of Poor Number of Poor (crores) Annual Real Rate of Decline in the Number of Poor ^ 1973-74 54.9 % 32.13 - 1977-78 51.3 % 32.89 ( 0.59 %) 1983 44.5 % 32.29 0.31 % 1987-88 38.9 % 30.71 1.25 % 1993-94 36.0 % 32.03 ( 0.70 %) 1999-00 26.1 % 26.02 3.40 % 2004** 23.6 % 24.97 0.82 % * As per the Expert Group Methodology ^ A negative rate of decline means the number of poor increased ** Based on the estimated population of 2004 and poverty ratio calculated using the latest National Sample Survey in 2004. Source: National Institute of Rural Development (2004): Rural Development Statistics, 2002-03 .
Summing up minimum costs for nutrition (Rs. 573), health (Rs. 30), clothing (Rs. 17), energy consumption (Rs. 55) and miscellaneous expenditure (Rs. 164); the poverty line in India should be about Rs. 840 per capita per month*.
* The actual sum is Rs. 839; we round it off for convenience.
A person is poor in India if he or she has a monthly per capita expenditure lesser than Rs. 840 OR does not have access to either drinking water; proper shelter; sanitation; quality secondary education; or an all-weather road with public transport.
Incidence of Poverty Interventions - Program, Technology Natural Resources Institutional/ Social Factor Labour & Capital Flow/Mobility Spatial Integration of Economic activities New Lively hood opportunities ECOLOGICAL AND INCOME POVERTY - DYNAMICS Databases on relationship to examine the direction of policies/interventions? Powerlessness of poor to gain access or use available natural resources Role of economic policies and interventions in altering the relationship Inequitable access land, Information, market and credit
He and She are poor; Not because they are borne so; In fact, it is the failure of the institutions, polices and programme that they continue to be poor and marginalized. - A Perception
Population growth and consequential increase in the labour force. 10 to 12 million persons are entering the labour force every year.
Productivity and income generation from employment are low.
Th ough, open unemployment is only2.3%(11 million)
the percentage of the population below the poverty line is high. The fact of being employed is obviously
no guarantee of escaping from poverty,which in our situation refers to a very basic level of subsistence.
Out of around 470 million work force as many as 130million are working poor. Therefore the problem is of the order of 130+11=141 million.
MAIN ISSUES There are primarily two main issues namely:- Issue no-1 How to provide employment to the new entrant to the labour force and to the unemployed. That is how to create additional employment opportunities needed. Issue no-2 How to improve quality of employment so that productivity and income level of the workforce increases.
Planned Initiative. Tenth Plan envisages creation of around 10 million jobs each year, around 6 million from normal growth process and around 4 million through special employment generation programme proposed for sectors.
Economic growth and employment growth being correlated attempts are made to achieve 8% growth rate of the economy so that anticipated employment generation takes place.
As against a target of 10 million per year around12 million persons per year were provided employment during 2000-2005