Politics of Poverty

The Gandhis in Delhi are in a hurry to get their pet agenda on food security ordinance and Telangana, translated into action. They are designed to address the 2014 polls. So the poor are getting extra attention. And all are busy to show the world how the Congress-led UPA Government has succeeded in reducing poverty. Government agencies are working overtime to present rosy picture before it is too late.

So the Planning Commission announced, on 23rd July 2013, that the poverty ratio has come down to 21.92 percent in 2011-12 (25.70 percent in rural areas and 13.70 percent in urban areas) from 37.2 percent in 2004-05 on account of increase in per capita consumption.

The estimates are based on Tendulkar methodology which has become polemical—a person whose daily consumption exceeds Rs 33.33 per day in urban areas and Rs 27.20 in rural areas will no longer be called poor. Ironically enough the same methodology was rejected by the Planning Commission a year ago. And the poverty ratio for Andhra Pradesh has come down to 9.20 percent. Coupled with the Telangana factor this politics of poverty may play a major role in deciding the outcome of next polls in the state. Maybe the figures are for fun. After all the poor don't bother about those concocted figures. They find it increasingly difficult to cope with price riot.

According to the latest estimates, during the 11-year priod from 1993-94 to 2004-05, the average decline in poverty ratio was 0.74 percentage points per year. It accelerated to 2.18 percentage points per year during the seven-year period from 2004-05 to 2011-12.

The real issue is, how can the poverty ratio come down so drastically when there is severe unemployment, and sharp rise in the prices of essential commodities? What is more the government appointed committee under Prime Minister's chief economic advisor, C Rangarajan has not yet submitted its report on the issue.

However, the Government is now thinking more rationally to arrive at the poverty ratio. It has admitted that 65 percent of the population is below the poverty line. This notional poverty line will stand at a per capita expenditure of around Rs 50 per day in rural areas, and Rs 62 in urban areas. This cor-responds to Rs 1506 monthly per capita expenditure in rural areas, and Rs 1850 in urban areas.

In the Indian context, any anti-poverty strategy should give priority to enhancing productive employment, stepping up output of essential goods, and controlling food inflation. Also, good governance is needed for better implementation of anti-poverty programmes. The ground reality is that nothing is changing for the better. The poor cannot eat statistics.

The credibility of Planning Commission's conclusion is at discount as the Commission is dominated by free market economists. Poverty is a serious issue, and it should not be taken lightly. But for the persons in power what matters is politics, rather poll politics, not poverty as such and failure of so-called poverty alleviation schemes.

Vol. 46, No. 7, Aug 25-31, 2013

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