Can you live with Rs 32 a day in Indian cities? This is what everyone is asking after planning commission came up with this figure in its revised estimate to calculate BPL (Below Poverty Line) parameter. What about living with Rs 26 a day in Indian villages? Impossible, you say. That’s the whole debate that has been going on in India for last few days.
There is certainly something missing with the way poverty is measured in India. The Government is not unaware of it fortunately and there have been many initiatives by the Government to assess the right poverty line. Though in the end, Government shudders and chooses the most optimistic estimate of the number below poverty line for various reasons.
Poverty Calculation – A primer
Let’s understand how poverty level is calculated in India. The poverty estimate in India is solely based on calorie intake of food. It is defined as consumption of 2100 calories per day for urban population and 2400 calorie per day for rural population. The difference is because of the perception that villagers need more calories because they do more physical activity. Hence if a person in urban India has enough money to buy 2100 calories worth of food, he or she is supposed to be above poverty line. The money required to buy food worth 2100 calorie a day for a month is Rs 539. Remember that housing, education, and healthcare are not measured. This was measured in 2004-2005.
Does this sound very less? If yes, you are not alone.
Come 2011 – Re-estimation
The poverty line is calculated every 5 years. Hence the new estimation was done few days back taking into account the inflation. This resulted into Rs 962 a month for urban areas and Rs 768 a month in rural areas. If you take daily requirement, it is Rs 32 a day in urban area and Rs 26 a day in rural area. This has attracted criticism from sociologists, human rights activists, and people in general.
The issue became so hot that planning commission Chief Montek Ahluwalia had to meet Jairam Ramesh, rural development minister and Prime Minister Manmohan Singh.
Multidimensional Poverty Index
United Nation Development Program (UNDP) and Oxford Poverty and Human Development Initiative (OPHI) have defined a new poverty measurement index, known as multidimensional poverty index. This index is calculated based on deprivation of a basket of services that are needed to live at a bare minimum level.
This includes standard of living, health services, education, and assets. Education factors number of years in school and child enrolment in school. Health services factors the mortality rate and malnutrition & its consequences. The standard of living factors access to potable water, sanitation, cooking gas, flooring, and physical assets. The multidimensional poverty index looks at the comprehensive picture to define the poverty line. As per this estimate, India’s poverty level is about 55%. This is a huge number.
The rationale behind calculation
There has been much criticism to the process of calculating poverty. Though we can always question the process and the factors that should be included in poverty estimation, there is strong need to estimate poverty line in a country like India. Poverty estimates help the Government to define policies and allocate funds needed to serve people below poverty line. It also provides Government data to judge the efficacy of its policies and poverty elimination programs.