Poverty numbers are a farce

When the Planning Commission submitted an affidavit to the Supreme Court last week with the purposive cut-off for eligibility to the government's welfare schemes, it could not have reckoned with the flak it would draw from various segments hitting at its idea of the numbers living below the poverty line. Not just commentators but members of the government such as Mr Jairam Ramesh were quick to fault the Plan panel's calculations. The indefatigable Rural Development Minister shot off a missive to Mr Montek Singh Ahluwalia questioning the planning agency's methodology and reminding him that his Ministry was conducting its own BPL census based on criteria approved by the Cabinet.

Not surprisingly, the Planning Commission began backing away from its own affidavit in various ways; one news report quoted members such as Prof Abhijit Sen qualifying the affidavit's policy implications with the assurance that the estimate of Below-the Poverty-Line would not be used to separate the needy from the not-so-needy; those numbers, they are reported to have said, would be arrived at from the socio-economic caste census due in December, conducted by the Ministry of Rural Development.

Underestimations galore

The Planning Commissionhas reportedly announced that it was going to “re-visit” the issue and that a fresh panel would arrive at a more realistic estimate of per capita expenditure on food, health-care, education and transport. What does that unofficial retreat, or refutation of its own affidavit to the apex court, mean in terms of policy?

More than 60 years after Independence, policymakers still do not have reliable estimates of who is really poor. Assuming the idea of per capita expenditure on more than just food, is taken into account, as the Plan panel is reportedly going to consider, the definitional canvas of BPL undergoes radical change from the criterion of food availability to quality-of-life exclusions. It is another matter that the Tendulkar committee went by the ‘cost of living index' rather than calories but still got it all wrong.

You don't need to be a statistician or physicist to know that the numbers will swell beyond the percentages formulated by Suresh Tendulkar that formed the basis for the Planning Commission's affidavit, will speed past Mr. N.C. Saxena's estimate of around 50 per cent, and may just stop ahead of Arjun Sengupta's calculation that more than a third of India's population remains deprived of most basic amenities such as health and medical care.

What the Planning Commission should seek to arrive at is not a policy orientation based on a statistical line but on a set of deprivations that add up to poverty levels beyond the sum of its parts. Looked at this way, the campaign for poverty reduction moves into the realm of abolishing deprivation, from the attempt to satisfy the basic need for immediate survival to nurturing.

Approaching poverty this way requires more than the instrumentalist vision of the Planning Commission that hones in on targets and resource allocation. Lifting Indians out of deprivation of the most basic kind involves commitment to a vision of social democracy that recognises the limited ability of markets to universalise standards of living.

To take an example: the growth in manufacturing witnessed during the period of economic expansion in the five years to 2008 may have increased employment; but what kind of employment was it?

Contract Labour

A study by the United States Department of Labour on factory employment between 1999 and 2005 in the ‘formal sector' showed a trend towards the ‘casualisation' of employment; a sample study of firms across sizes in Karnataka by Meenakshi Rajeev ( Contract Labour Act in India: A Pragmatic View ) showed the preponderance of contract labour and the “collusive agreement” between factory inspectors expected to enforce minimum wages as per the Contract Labour Regulation Act 1970 and employers such that more than half of them got less than Rs 2,000 a month, or a third of what regular workers received. Leave alone the impact of casualisation on productivity in manufacturing. Since contract workers do not enjoy social benefits, the onus of health-care and other welfare benefits falls on the state if the contractual worker is not to slide into poverty, as defined by a set of deprivations flowing from lack of medical insurance and the “safety net” of ‘entitlements' normally enjoyed by permanent (and unionised) workers.

The ‘contractualisation' of the industrial workforce, particularly on the factory floor, in effect, introduces an “informal” segment at the core of the formal manufacturing sector, thus making an increasing number of urban workers more vulnerable than office employees or their predecessors who would have been regular workers.

Leave alone the sorry state of human development indices that should give both Indians, in general, and the government, in particular, pause for thought about the quality of our vaunted prosperity. Along with accumulated deprivation we may now be witnessing a process of deprivation-by-exclusion at work in a sector where one would least expect it — the competitive, formal manufacturing sector.

State's responsibility

From the viewpoint of the policymaker this means that with free markets and liberalisation unable to provide the inclusion expected of them, governments will have to step in. At first glance, it would appear the UPA-II is doing just that with its raft of legislations, from the Food Security Bill to Right to Education. But it cannot legislate the poor into well-being. It cannot expect its Ministries to conform to an idea of welfare unless they are willing to accept the fundamental proposition that their job is to provide that safety net, regardless of the cost, simply to ensure that an increasing number of Indians now and in the future can contemplate a better future. And that vision of universal welfare is missing.