Poverty is big business in a poor country especially on the eve of elections. As poll booths hover over the horizon, ruling parties suddenly discover what a fabulous job they have done, in marked contrast to the parties they displaced from office, and boy, shouldn’t they get another chance?
And so it is, in the year of the 2013.
With the general elections no more than a few months away, the Congress-led UPA, using figures from the national sample survey organisation (NSSO), is putting out the word that under its masterful watch, poverty has come down a full 15 per cent: from 37 per cent in 2004-05 when it took charge to 22 per cent in 2011-12.
Shorn of the jargon, it means there are 15 fewer poorer people amongst every 100 Indians than when the UPA came to power. It means that in a nation of roughly 120 crore people, about 18 crore people have been lifted out of poverty by the policies of Manmohan Singh and his “dream team“.
But, poverty repeats itself in mysterious ways in India.
In 2002, two years before the current calibration began, the BJP-led NDA too made a similar claim. The then finance minister Yashwant Sinha said the poverty ratio had come down from 37 per cent to 26 per cent.
On his blog, the food and trade policy analyst Devinder Sharma writes that soon after the economic reforms were unleashed in 1991, the then deputy chairman of the planning commission Pranab Mukherjee said he had brought down poverty from 37 per cent to 19 per cent in one go.
So, whether it is 1991, 2002 or 2013, the starting point for poverty reduction, it seems, is 37.
After all, as the Wikipedia page for 37 claims, it is the number that most people utter when asked to name a random number between 0 and 100..
Infographic: courtesy Hindustan Times
Also read: Everybody loves a good number: 93, 77, 54, 33…
so the fact remains that Indian poor with growing population has remained at 37%
In fact Economic Times reported this under the heading:
“At Rs 28 daily consumption, India’s poverty declines”
This means if someone is having 840 at hand per month, he/she is above poverty line according to this criteria. This also means some one needs to eat food for Rs.9 at morniing Rs.at night and Rs.9 at noon. And if he goes to market and drink one cup of tea at local “pettiyangadi”, a miracle happens. The government of India would airlift him from below poverty line and place him above poverty line. He/she should never get a fever and if so, never consult a doctor. If he just consult a doctor for fever or cancer, he/she should skip food for the next three days.Forget about taking medicine. That is not recommended. If he/she take medicine for his illness, he/she may have to skip food for one week. In either way, he/she will die.. why take the longer route for going to God Shiva.(or Vishnu, if you are Vaishnavite)
This week a kilogram of tomato and Onion costs approx.Rs.40. Dont enter tomato market. Watch it from distance and come home alive.
“In recent times, various committees led by economists have come up with different ways to measure the extent of poverty. The official line delivers a poverty rate of around 32% of the population. A committee under Suresh Tendulkar estimated it at 37%, while another led by NC Saxena said 50%, and in 2007 the Arjun Sengupta commission identified 77% of Indians as “poor and vulnerable”. The World Bank’s PPP estimate of Indian poverty was higher than 40% in 2005, while the Asian Development Bank arrived at almost 50%. The UNDP’s Multidimensional Poverty Index finds the proportion of the poor to be higher than 55%.”
This is quoted from what Jayati Ghosh has written in guardian.
But what is interesting about Jayati’s article is something else.:
“official sources …have argued that, at that level of expenditure,(that is Rs 28 per day) families could afford to buy minimum food and have simply chosen not to.”
What on earth prompted these Indian “idiots” who went underground to live in the comfort of “Below Poverty line”, decided not to buy the food, despite they having enough money in their hand? (not disrespectful to People of this country).
The answer is obvious. They have other priorities in today’s world which was not the case in 1970s. In 1970s, you can cook the food without further expense in rural area. Tell me where in India where a landless family can find fuel (firewood or kerosine, if not LPG) free of cost? in 1980s my jaundice was treated forless than 200 rupees including doctor fees and medicines.What is the medical cost today?
Please read further– (jayati ghosh’ article)
“How exactly are these numbers (28 rupees) arrived at? The measure was developed in the early 1970s, when ..average monthly ..expenditure of households… 2,400 calories of food per day.”
“Subsequently, the poverty line has simply been updated using consumer price indices.”
“However, (it is) argued that, at that level of expenditure, families could afford to buy minimum food and have simply chosen not to.
Of course, this begs the question of whether it is really choice or the urgent need to consume other items (energy, healthcare and so on) that determine patterns of spending. Nevertheless, it is precisely this line (annually updated by consumer price indices) that has been used to describe the extent of poverty in India for decades.”
The poverty politics of India is a joke. US census bureau says there are 16% citizens in US who are below Poverty line. So, it must be a miracle that India has only 22% poor right?!!
Forget other statistics, The fact is that the minimum coin that’s in circulation now a days is Rs.1 (which is perhaps the 1990 equivalent of 10paise now). So, if someone want to toss a coin to the beggar it won’t be less than Rs.1. More often it is Rs.2 or Rs.5.Thus even a beggar at a street corner ends up earning more than the poverty line of Rs.28, In fact in traffic junctions they may do that within half hour.
Globally, Poverty is relative.
World bank sets the global poverty threshold is $1.25 (2005 PPP). That would make the poverty line in India to be about Rs.80/-
But in US, poverty level is set at $23,050 (for a family of 4); that means Per capita income of less than $15 (about Rs.900+) a day. In USA extreme poverty is said to be 1.2% people, and that line is set at US$2 (Rs.120) a day.
So, effectively what Indian govt. is doing is using an poverty line to define poor, that is internationally unacceptable even as ‘extreme poverty’ line. Such a poverty baseline lets govt claim only 22% are poor.
If an internationally acceptable level were to be used in India, we’ll find that below Rs.100/day would be poverty line, and a family of 4 living with less than Rs.12,000/ month is poor. And I won’t be surprised with that level we’ll have about 60-80% of India being poor.
The only way we’ll push back poverty is if we improve the economy, export a lot more and reduce our import requirement (Oil/Gold). We can achieve this within couple of decades, if only our leaders do what is needed (infrastructure, liberal manufacturing/industrial policy, high spend on education & health).
But what they are doing – “Feed a fish a day, instead of teaching people how to fish”.
“But what they are doing – “Feed a fish a day, instead of teaching people how to fish”. – harkol, depite all my disagreement with your views, I believe, it represents a honest and sincere response of a middle-class Kannadiga. I question your arguments but I dont consider you as opportunistic.
This is why I quoted your own words above. I believe what you are saying is true. But I disagree with you. According to you, the loan waiver and other so called ‘populist” measures are wastage of our resources and are not productive. According to you, export, industrialization, manufacturing, job creation etc are the solutions to India’s problem. Yes, in theory, all that sound good. But that argument is a flawed one.
You are saying India has to boost export. Agreed.
Next question is this- to where?
There are only two types of countries to which India can export.
a) Countries which are relatively poorer than India and have a inferior technology.
b) Countries which are richer than India and have more sophisticated technology.
What we are witnessing (at least from 1960s) is that American economy grew and as a result of that the living standard of average americans went up and up. It became very difficult for Americans to get manufacturing workers to work at low salaries. As a result of that they started outsourcing their manufacturing jobs to Japan, Singapore, Indonesia, Taiwan, Philippines China and various other countries. That is how Singapore became the electronic hub of the orld during 1960s and 1970s. That is why Chinese economy is fully depended on USA now. 65% of china’s export is to USA and USA alone.
What has happened to China and Singapore in the case of Manufacturing industry has happened to India in the case of Software industry. None of our leaders are responsible for that. Manmohan sing, chidambaram, Devegowda, sm Krishna, chandrababu Naidu et al are not responsible for the export boom ofSingapore in 1970s and perhaps till 1980s. And none of them are responsible for the software boom of India.There are variety of factors which made it possible for India to become software outsourcing hub. If the availability of large number of cheap labour helped China emerged as the manufacturing factory of USA today, would anyone give the credit to its corrupt “communist” (in fact they are devils wearing communist skin) leaders?
One reason is, India has one of the largest number of English speaking, engineering graduates in the world living around one or two cities. Secondly, India was well advanced in electronic business, thanks to the Nehru, Indira Gandhi model (note: I dont praise these individuals. But just indicating an era),assisted by Soviet technology. It was inevitable for Soviet union to give technological assistance to India and Bangalore and Pune had largest number of engineering graduates working in Defence and defence related establishments. Narayana Murthy only wanted to poach the engineers from public sector companies, because an industry with short term goal cant invest in training. They became the first group of management for India’s IT industry. MS Ramaiah acquired large tracts of land legal or illegal way and he got large number of Malayali nurses to work in his hospital.This became possible only because Indira Gandhi started large number of defence related organizations in Bangalore (fearing USA assistance to Pak, which can attack any coastal cities.). If large number of outstation employees were not working in bangalore, Ms Ramaiah’s nursing college may not be a big success. Then he started engineering and other colleges, and many such engineering colleges were started in Bangalore’s private sector, mostly tapping students from Kerala, Tamil nadu and Andhra Pradesh. Dr.Rajasekhar Reddy was a back bencher In Ramaiah’s medical college.
The employees who were working in Bangalore’s public sector companies send their children to these private engineering colleges (some of them in merit seats, many by paying capitation fees).
Hence Bangalore had highest pool of young engineering graduates to become the second rung professionals in IT companies. No ruler (from BJP, Janata Party or cong) and no IT baron is responsible for this IT Boom. It was a historical necessity.
Historical necessity in the sense, there is no rule that IT outsourcing can happen only with bangalore’s help.
Why IT came to Bangalore? Why it didnt go to China first. There are answers. But it is not within the scope of our discussion.
What has happened to Electronic hub of the world Singapore? It became unviable to run Electronic Industry in Singapore by 1990s. There are various factors. But main thing is that Singapore became very costly and the electronic industry went to Taiwan and China (except may be semi-conductor etc). And average Singapore employee dont want to work in Singapore’s electronic industry. The migrant workers from other countries are more interested to work in electronic industry there. There is no wonder.A man from poor country can temporarily stay in singapore and send money back to his family for educating his children. But an average Singapore guy cant spend his retirement life with what is paid to him by the electronic industry. This is not because, Singapore’s industrial salary didnt go up. But this is because the living expense of Singapore has disproprtionally shot up compared to salary hike.
The same thing is now happening in Bangalore’s IT industry.
There is no wonder. If financial capital flow to a small location for a relatively longer period, it will increase the liquidity of that area.This in turn would trigger the inflation. And finally everything will become costly.
Why electronic Industry became unvialble in Singapore (compared to china for eg:)? If there is some other countries, which are richer than USA, Singapore can now target such export market and get benefited. But the problem is that in the world only a few countries are richer and majority of the countries are poorer.
And in the world’s richest countries, very few population reside and large population struggle and compete each other in the poor nations.
This is why most export can happen from a poor nation to a rich nation.
This is my initial question. To which country you plan to export and what?
if we indians do not want to work for dirt cheap salary, no rich nation would be interested to buy a commodity from India. Rather they would go to China, Taiwan, Philippines, Indonesia, Vietnam and so on.
Tell me which item that we indian can develop in India, that USA doesnt have technology?
In almost all areas, UsA or western companies have control on technology. India’s HAL is manufacturing world’s one of the best figher helicopter not because India’s technology is better than that of USA. But because, the assembling cost of USA is much higher. and if India and USA come with their own locally manufactured helicopters, no one would go for USA ones (unless it has any specialized feature), just because the end product will be cheaper if produced in India. But HAL helicopters use German equipments and we only assemble things here. Exactly what Veluppillai Prabhakaran’s son did in Srilanka.
In simple terms, your argument that by promoting export and industry, India’s can survive is true only in theory. India can not export any product to USA, west or any other country for more than a couple of decade countinuously and feed the rest of the population.
There are 65% of the population living in India’s agriculture. You cant export much unless Indian government subsidize agricultural produce to export. (India is doing that).I know that Bangalore and Punjab actually export food to Canada and USA.My point is that it is not sustainable for long term and cant feed the rest of the population. This is because what ever India produce,can be produced in more than a dozen cheaper countries in the world. India can never beat the cheaper rubber from kampodia, or rice from vietnam etc. Why garment orders are going to Bangladesh is not because Americans love /shekh hasina but because, people are ready to work under inhuman conditions in Bangladesh.
Another interesting thing is that, when ever India export something, actually India is only losing. Why? It may look an absurd argument. but that is true.
I dont want to discuss all those issues here…
37 is chosen because it is a prime number, a number not amenable to division, hence difficult for general public to digest or handle. As we hold the unchallenged world record for highest number of poor people, the percentage of BPL people is more likely to be 73 (another prime).
Lies, damned lies and then there is statistics is so true in Indian context.
37% (or whatever other random number) can not be earning less than 28 rs per day simply because such a person wouldn’t survive for more than a couple of days.