Page 75 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Unit 7: Poverty: Concept, Cause and Government Policies

Mohan Guruswamy and Ronald Joseph Abrabham of the Centre for Policy Alternatives, New Delhi Notes
have highlighted the distinction between poverty and hunger. Guruswamy et.al. state :“Poverty is
an economic condition. Hunger is a physical condition that arises out of severe economic condition.
While the definition of hunger in terms of calories can remain constant, the definition of poverty is
relative to the present levels of general prosperity.... The present official poverty line is based only on
calories and hence accounts for little else but the satiation of one’s hunger. It would have been more
accurate to define this as a starvation line, as that is exactly what it is.” (Emphasis Added)
The official poverty line should be renamed as ‘starvation line’ since apart from providing 650 grams
of foodgrains per day, it makes very little provision for the other essentials of life, such as nutrition
and balanced diet, provision for health, electricity and cooking fuels, clothing and miscellaneous
expenditure pertaining to education, shelter and other minimum levels of expenditure to sustain life,
such as travelling, washing and stitching of clothes, durable consumer goods, some expenditure on
furniture, etc. A realistic and proper definition of poverty line should, therefore, include all the basic
needs of human life so as to ensure a minimum level of quality.
Thus, the claim made by the Government that poverty ratio has declined from 54.9 percent in 1973-74
to about 25 percent in 2004 is spurious and gives a false sense of satisfaction to Indian polity. A
dynamic concept of poverty line should, therefore, incorporate basic human needs approach and
should not limit itself to minimum calorie intake needed for subsistence.
Guruswamy and Abraham have made the following components of basic human needs to arrive at a
new poverty line for India which is claimed to be one of the fastest developing economies of the
world.
1. Nutritional Norms and Cost involved : On the basis of the recommendations of National Institute
of Nutrition (NIN) under the aegis of Indian Council Medical Research, it is highly important
that balance diet be provided so as the prevent underweight children under age 5. It may be
noted that as per Human Development Report (2005), 47 per cent child under age 5 are underweight.
Similarly, 21 per cent total population is undernourished in 2000-02. It is also be observed that
in China, only 10 per cent child are underweight and 11 per cent of total population
undernourished during 2000-02. Obviously, India lagging behind China in nutritional status.
Guruswamy has made an effort to determine the cost a balanced nutritious diet for an average
Indian to be 573 person.
2. Expenditure on Health : India spends of 1.3 percent of GDP on the provision of public health,
the private expenditure on health is 4.8 percent of in 2002. Since according to the Health
Ministry,branch 20 percent of Indian population is covered by healthcare, the poor are forced
to take recourse to private sector. The ‘Universal Insurance Scheme’ which is targeted to meet
the needs of the poor to pay annual Rs 365 per person and an individual can get insured all
inpatient medical-care upto a sum of ` 30,000. The implies that Rs 365 per annum or Rs 30 per
month is cost of health expenditure for the poor in India. Guruswarn includes a sum of ` 30
per person per month as the legitimate expenditure for obtaining healthcare.
3. Expenditure on Clothing : In fact, cloths requirements of children, men and women necessitive
different norms for clothing. Similarly, weather connections necessitate different norms for
summer and winter. In the estimate prepared by Guruswamy, seasonal requirements have
been disregarded for the sake simplicity. The clothing requirements have been calculate at
` 207 per person per annum or ` 17 per amount.
4. Energy consumption : A housing unit with two bedrooms, a kitchen is the basis of Guruswamy
calculate energy consumption. It is assumed that house has an electric connection. On the basis
of minimum needs approach, each home needs a few basic electric fittings - four bulbs and two
fans. It is further assumed the ceiling fans work for 12 hours a day - 8 hours during night and
4 hours during day. On the basis of these minimum requirements, per capita monthly expenditure
on electricity has been calculated as ` 175 per family. Assuming a norm of 5 members of the this
works out to be Rs 35 per month per person.
The other component of energy consumptions is cooking fuel. National Family Planning Survey
(1998-99) shows that at the all- India level nearly 74 percent of the population uses wood, crop

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