Page 79 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Unit 7: Poverty: Concept, Cause and Government Policies

Some time ago, the government constituted a committee for the unorganized sector under the Notes
chairmanship of Arjun Sengupta, which reported that more than 77 percent of the countrymen are
managing with less than ` 20 a day or less. It is easily understandable that is not possible to meet
minimum requirement of a person’s food, shelter and clothing with so little. It means that more than
77 percent of the countrymen cannot even meet their basic needs, whereas poverty measured as per
the mathematical method gives a figure of merely 36 Per cent. Such varying figures about the number
of poor create confusions and make the task of elimination of poverty difficult. Though Tendulkar’s
report has tried to correct the definition of poverty by including requisite expenditure on education
and health, but even that has failed to address to the realities. To make it real poverty
line, government has to take a realistic view of poverty. If the government has to implement right to
food earnestly, it must correct its assessment of poverty.
The conclusion emerges from the analysis of poverty line. Firstly, the procedure of upgrading poverty
line on the basis of price index needs a review and this would be accompanied by the norm of calorie
intake. Secondly, the basis of poverty line was decided four decades ago in 1969. For a developing
economy with an aspiration of becoming a super-economic power by 2020, it as all the more necessary
to develop a basic needs approach poverty line, instead of a uni-dimensional poverty line based on
calorie intake of food primarily which is only a starvation line. This will entail greater effort on the
part of the state to take steps so that the of rapid economic growth reach ‘aam adami’ (common man)
to use a phrase of the Congress manisto. Then, it will shake us out of our complacency about poverty
in India. We have miles to go before we sleep.
7.5 International Comparison of Poverty

Since the national poverty lines vary sharply from $0.57 a day for China to 32 a day for Mexico, may
be noted that China’s national poverty line has derived from $0.57 day as against that of India at 82
a day, the Chinese national poverty line at $0.57 a the Chinese figure of population below poverty
states the position. This has been sought to be directed by adopting standards of $1 a day and $2 a
day the uniform basis of comparison in the international poverty line on the Purchasing Power Parity
criterion. It would, therefore, be useful to compare international poverty lines for a better comparison
of the relative state below population poverty line in different countries.
Secondly, broadly speaking. $1 a day poverty is based on what may be described as the minimum
required in terms of calories per day, which is described in Indian jargon as the ‘starvation line’, but
$2 a day poverty line takes into account besides food, other items as cloth, education, health or other
minimum needs for life which is described ‘basic needs line’. It may be noted that the World
Development Report does not indicate any basis for both the lines used in its explanatory notes. It
only mentions: “Population below $1 a day and population below $2 a day are the percentages of
population living on less that $ 1.08 a day and $ 2.15 a day at 1993 international prices.”But we are
treating them as ‘starvation line’ or ‘basic needs poverty line’ on the basis of estimation of scholars
that ‘basic needs poverty line’ is approximately double the ‘starvation line’.
On the basis of the data provided in table 24 about 10 selected countries, on the basis of $1 a day, the
performance of Brazil, China, Egypt, Indonesia and Sri Lanka is far better than that of India,
Bangladesh, Nepal and Pakistan. The proportion of population below $1 a day poverty line at 34.4%
for 2004-05 is really a very disappointing considering the impact on reduction of poverty programmes
by over five decades of development planning. This implies that nearly 381 million persons were
living below the poverty line of $1 a day in 2004-05 which is very disturbing. On the basis of $2 a day,
80.4% of our population or about 892 million do not satisfy the basic needs criterion of $2 a day. This
is also in conformity with figure of 77% of Indian population who are poor and vulnerable based on
consumer expenditure level of 20 per day on the basis of purchasing power parity equivalent to
below nearly $2 per day as the criterion in 2004-05 by the National Commission for Enterprises in the
Unorganised Sector. Making a strong indictment of the growth process, the Commission mentions :
“ there is no doubt that this “Shining India” has expanded in the past and is still expanding at a very
high rate. But this picture is spoiled by a virtually stagnant consumption expenditure and miserable

LOVELY PROFESSIONAL UNIVERSITY 73