Trickledown Crusaders: Playing With Poverty.

If there are 10 (Ten) and one has 20 (twenty), then that is 100% more. But if one has 2(Two), then that is 500% less. Though everyone talks of numbers as “infallible markers”, they are really mute spectators in the hands of interpreter or manipulator, who unmutes them like a ventriloquist to have them speak almost whatever he wants. One has to verify the truth of this by only carefully looking at what passes for “debates” around the issues of poverty and social sector schemes. Those who are opposed to measures adopted to soften the impact of poverty call them derisively redistribution of wealth (essentially, robbing Paul to pay Peter) and traduce them on the grounds of corruption, which is pandemic in India, and of lack of economic rationale. The latter is justified by saying that if “wealth” is taken away from the “wealth creators”, then they would have fewer resources to create more wealth, and therefore, over all wealth of the country would be reduced from its true “absolute” potential. This loss from the potential incremental wealth forgone would in fact impact poor adversely. Looked from stacist or zero-sum game perspective (gain of 10 to one is loss of 10 to another) it looks a reasonable conjecture. But dynamic systems don’t behave in zero-sum fashion. Poverty has many dimensions; inability to adequately nourish the body is just one of them. Absence or inadequacy of education, skill development, healthcare, or hygienic environment are all drivers of poverty; and affect the participation of large section of the population in economic activity qualitatively and quantitatively. This impacts wealth creation negatively. Growth in a Capitalist economy is essentially about growth in production and productivity of Goods and Services. Growth in production is circumscribed by growth in consumption, which in turn demands growth in numbers and quality of consumers. How is the last possible if poor are left unattended to fend for themselves only through “trickledown effect”? Further, without a healthy and educated labour force, how could one aim for gains in productivity? No wealth creator, except robber barons who have come to dominate India, would dream of brighter tomorrow without Productivity gains and Consumption growth. Therefore, it is pointless to debate whether to have or not to have social sector programs. What could be debated are focus (what is effective) and delivery (what is efficient) of such methods.
This is the context within which the “Poverty of Thought (Indian Express Op-Ed)” of Surjit Bhalla (pun intended) has to be seen. He begins thus, “While the rural poverty line is Rs 27 per day, even the rural rich spend just Rs 105 a day: NSS data are a gross underestimation of total expenditure”. The last assertion, which is left dangled unsupported, he returns to almost at the end, “The NSS surveys capture less than half (46 per cent) of total expenditures recorded in the national accounts”. Even if true, the conclusions he draws, “that the poor have a per capita monthly expenditure about 80 per cent more than stated in the NSS survey, that is, Rs 50 a day or about Rs 7,500 a month for a family of five”, are outlandish. The scope for discretionary expenditure grows with rising incomes that have higher disposable component. The “number of poor” in India are judged by the National Sample Survey Organizations (NSSO) quinquennial canvassing for monthly per capita expenditure (MPCE) data-collection. The gaps between MPCE data and National Accounts data are neither new nor unknown. Mostly these are accounted for by the difference in “data collection” methods, and also by the underreporting by higher decile classes (71-80% to 91-100%), either willfully or due to failures in recall. When the consumption basket is bigger and diverse, the mistakes in recall or errors due to misclassifications are bound to be higher than otherwise. Therefore, his claim that reported MPCE for poor would be higher by 80% does look like a “dirty sleight of hand” despite his prequalification, “The likely reality is.
Then he nitpicked on statements of Amartya Sen: “who stated that “every week that the food security bill was not passed was causing 1,000 deaths”… “There’s no way [of] applying an exact estimation of that, but I would have thought that an order of that magnitude may be relevant””. Officially, India doesn’t have even a single “hunger death”. In an obsolete sense, officialdom may be right about claims that “absolute hunger deaths” are next to nothing; that is someone dying directly as a result of no food or its severe lack. However, chronic hunger causes weakened body and mind that is susceptible to many illnesses, especially in unhygienic conditions and when clean potable water is not available; and such persons would be claimed by diarrhea, dysentery or other such myriad diseases. Officialdom takes extra precaution in treating all such cases as a direct result of disease and disease alone. Such deliberate or even “genuine” “death mis-classifications” are a norm rather than rarity even when “poverty” is nowhere, even remotely, implicated. My mother’s death was about to be recorded as due to “heart failure” –a result that must obtain in every death whatever the cause–despite the caution on the Pune Municipal corporation’s (PMC) reporting form that only when no other cause could be identified it may be used. In her case, the immediate cause of death was pneumonia, which was brought about by various other factors such as advanced age, immobility caused by hip fracture, and weakened state due to stubborn urinary tract infection. If this can happen in developed urban center like Pune, one can only imagine how death classificationworks in rest of the country.  Coming to Sen’s comment, Bhalla makes a fool of himself when he says, “Just who is dying if the food bill is not passed? Does Sen know that the government’s own claim is that the food security bill will only cost Rs 25,000 crore more (it is another story that the government’s claims are just not credible)? So an expenditure of Rs 25,000 crore will save 52,000 deaths, or Rs 50 lakh expenditure to save one life. It does not get much sillier than this”. Yes, it doesn’t get any sillier than this. The point is not about 1000 deaths a week or 52000 deaths an annum; it is an index-indicator about the wider malice of poverty that corrodes the body, mind and even soul of so many people. Even if only 52000 deaths were caused directly by absolute hunger, it is a shame for any country and a grave impediment to an aspiring world power. It may be mentioned here that it was the work of Sen and Jean Dreze that showed why democracy is antithetical to famines (absolute hunger). Therefore, reducing the debate to such churlish criticism bares the one who is afflicted by poverty of thought.
Last we come to Bhalla’s “composition” of what National Advisory Committee (NAC) member, N C Saxena, said, “Civil society is not happy with the low poverty cut-off line of Rs 27 per capita per day for rural areas and Rs 33 for urban areas at 2011-12 prices, as it is difficult to meet one’s basic expenses and survive on such an inadequate income. Economists are questioning the need for subsidised food for 67 per cent of the population if poverty levels are really so low. Estimating the scale of poverty with respect to a fixed poverty line — which was Rs 1.63/ 1.90 per capita per day for rural/urban populations in 1973-74 — and since then has remained unchanged after adjusting it for inflation”. He then terms above as “plain big-time lie” and “simple conceptual (and ideological) error”; simply because in his perception Saxena had failed to or deliberately ignored to take into account that “the Tendulkar committee raised the original 1973-74 rural poverty line by 25.9 per cent and the urban line by 6.4 per cent”. Did Saxena actually claim that 1973-74 poverty line has remained unchanged in 2011-12 at current prices? I do not know, and won’t consider it relevant either. The poverty line in Indian context was first attempted to be defined in 1962 by a working group of economists and social thinkers and it recommended,
(i) The national minimum for each household of 5 persons (4 adult consumption units) should be not less than Rs. 100 per month in terms of 1960-61 prices or Rs.20 per capita. For urban areas, this figure will have to be raised to Rs.125 per month per household or Rs.25 per capita to cover the higher prices of the physical volume of commodities on which the national minimum is calculated.
(ii) This national minimum excludes expenditure on health and education, both of which are expected to be provided by the State according to the Constitution and in the light of its other commitments.
(iii) An element of subsidy in urban housing will have to be included after taking Rs. 10 per month, or 10 per cent as the rent element payable from the proposed national minimum of Rs. 100 per month.
Dandekar and Rath in 1971 attempted another measure of poverty based on minimum calorific intake, “they used an average calorie norm of 2,250 calories per capita per day for both rural and urban areas, as a criterion to define the poverty line. On the basis of National Sample Survey data on consumer expenditure, the study revealed that, in rural area, the households with an annual per capita expenditure of Rs. 170.80 (or equivalently Rs. 14.20 per capita per month) at the 1960-61 prices consumed on an average food with calorie equivalent of 2250 per capita per day together with such non- food items as they chose. The corresponding figures in the urban area were Rs.271.70 and Rs.22.60 at 1960-61 prices. In comparison with the recommendations of the Working Group (1962), the authors observed that the rural minimum determined by them was considerably below, while the urban minimum determined by them was a little above the level recommended by the Group. In view of this, they decided to revise the rural minimum slightly upwards to Rs. 180 per annum or Rs. 15 per month. Similarly, they rounded off the urban minimum to Rs.270 per annum or Rs.22.50 per month, both at 1960-61 prices”. This measure developed by Dandekar and Rath seems to have continued to rule essentially unchanged. The point of quoting this in detail is to show that however reasoned the discussions on the setting of poverty line are in essence setting it at a particular level is an arbitrary exercise; and that the context and considerations of these discussions should and do change with time. Therefore, the adjustments made to 1973-74 poverty line by Tendulkar committee last decade need not be held adequate or sacrosanct if reality doesn’t warrant such faith. Instead, Saxena is roundly abused as a “card carrying member”, whatever that is supposed to mean. Moreover, poverty line can be set at any level according to one’s “taste”, and thus change the headcount (or numbers) of poor; but to talk of “poverty level” moving up or down on its own is idiotic. Poverty level is set arbitrarily; it is the number of poor who may move up or down depending what happens in the economy and to social sector schemes.
The crowning shame of the article lies in this statement, “Even the richest urbanites, in the places where Sibal, Jean Dreze, Sen and TV reporters and anchors live, spend only Rs 40 per person per day on basic food, or in terms of rural prices (22 per cent lower), Rs 33”. Where does Bhalla stay, if not in the neighbourhood of Sibal, Sen or something better still? Does Bhalla eat an Apple or a Pare or a Mango a day? I am sure he does, and probably the choicest quality too, and still it would count as “basic food” in the terminology of NSSO survey. Since he may not be going to the bazar to buy his veggies and fruits, perhaps, he may not know that a single unit of fruit he consumes a day may cost Rs 40 per person per day. But maybe that is the only thing he eats to prove his “poverty of thought”. Just one more poor thought for him to chew upon: “If the poverty reduction has indeed taken place, then it may be due to, in no small measure, thanks to the PDS system, and not despite it”.
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